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A Practical Guide to Section 16: Reporting and Compliance
The recent spotlight on corporate governance issues and the seemingly never-ending stories of compensation excess and abuse make this book both relevant and timely. Impeccably organized, A Practical Guide to Section 16 gives you complete information on reporting and filing procedures to comply with complex shareholder, SEC, public disclosure and stock exchange requirements.
The book aids you in meeting all Section 16 requirements. It is a practical tool that provides:
- Detailed procedures for reporting all types of insider transactions
- Step-by-step directions for preparing and filing relevant forms
- Crystal-clear explanations of the 2002 and 2003 Section 16 rule amendments
- Ready-to-use checklists, memos, forms and schedules
- Expert analysis of the latest court cases
- Detailed action plan to install a sound compliance program
Trusted by legions of corporate attorneys since 1991, A Practical Guide to Section 16 gives you insights on...
- What information corporate directors can and must release – and when
- All the new Section 16 requirements – including those imposed by the Sarbanes-Oxley Act – and their impact on each type of insider transaction
- How to complete the appropriate forms for filing with the SEC, and where and when to file them
- The latest rules on insider trades involving tax-conditioned plans, executive compensation plans, trusts, derivative securities, mergers, IPOs and more
This guide provides you with dozens of case studies drawn from real-life reporting situations, with the filled-out Form 3, 4 and 5 included. You'll also find model letters, memos and disclosures already written and ready to adapt. Plus, there's a complete compliance program with policies, procedures and practical pointers; an action plan timetable that makes it easy to plan for and meet crucial deadlines; and many examples that illustrate the effects of Section 16 rules on companies like yours.
Benefits and Features
This is a single source reference covering all aspects of filing and reporting requirements for shareholder, SEC, public disclosure and stock exchange information by insider transactions, saving the reader time. Expert authors provide analysis, guidance and practical solutions. In addition, there are charts and timelines for meeting the new reporting requirements for all transactions.
Table of Contents
1. An Overview of the Rules Under Section 16 of the Securities Exchange Act of 1934
a. The Principal Changes
b. Definitions of Officer, Beneficial Ownership and Pecuniary Interest
c. Trusts
d. Section 16(a) Reporting and Forms
e. Derivative Securities
f. Transactions with the Issuer
g. Cash-Only Instruments
2. Definitions of Terms
a. Officer and Director
b. Beneficial ownership
c. Equity Security of the Issuer
3. The Reporting Scheme
a. What Must be Reported
b. Transactions Not Required to be Reported
c. How to Report: Forms 3, 4, 5
4. Disclosure Requirements
a. Required Disclosure Under Item 405
b. Preparing Disclosure Under Item 405
c. Disclosure Format
d. Other Disclosure Issues
5. Compliance Procedures and Programs
a. Elements of a Compliance Program
b. Centralized Control of Information Release
c. Appointment of One or More Compliance Persons
d. Promulgation and Dissemination of Written Policies and Procedures
e. Education Programs
f. Development of Procedures for Trading Company Securities
g. Additional steps
6. Tax-Conditioned Plans
a. Types of Tax-Conditioned Plans
b. Discretionary Transactions
c. Application of Rule 16b-3 to Specific Transactions
d. Participant Reporting Requirements
e. Rules Affecting the Benefit Plan Trust and Trustee
7. Executive Compensation Plans
a. Overview
b. Terminology
c. The Basic Operative Provisions
d. Derivative Securities and Deferred Compensation
e. Reporting
f. Effective Date
8. The Treatment of Trusts
a. Background
b. When is a Trust Required to File?
c. When are Trustees, Beneficiaries, and Settlors to Include Shares for Purposes of Determining if They Are Ten Percent Owners?
d. What Must Be Reported by Trusts, Trustees, Settlors, and Beneficiaries?
e. What Transactions are Subject to Section 16(b) Liability?
9. Tax Implications
a. Types of Plans Affected
b. Application and Operation of Code Section 83
c. Tax Treatment under the Pre-1991 Rules
d. Tax Treatment under the Current Rules
10. Merger and Acquisition Implications
a. The "Forced Sale" Doctrine
b. Rule 16b-7
c. Rule 16b-3
d. Treatment of Employee Stock Options, SARs, and other Stock-Based Compensation Awards
e. Standing to Sue Following a Business Combination
11. Pre-IPO Planning to Avoid Retroactive Effects of Section 16
a. Appendix 1: Section 16 of the Securities Exchange Act of 1934
b. Appendix 2: Rules under Section 16 of the Securities Exchange Act of 1934
c. Appendix 3: SEC Release No. 34-46421
d. Appendix 4: SEC Release No. 34-47809
e. Appendix 5: SEC Release No. 34-37260
f. Appendix 6: SEC Release No. 34-28869
g. Appendix 7: SEC Section 16 Letters by Subject Matter