Corporate Governance: An Overview of Recent and Pending Reforms

Over the past several months, dramatic changes have been made to the rules that govern the conduct of public company directors and officers, and the companies they serve. In an attempt to restore investor confidence in the integrity of the U.S. capital markets and their participants, each of the major stock markets has proposed new standards to strengthen corporate governance requirements for listed companies. For its part, Congress passed the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"), which was signed into law on July 30, 2002. Sarbanes-Oxley imposes significant new disclosure and corporate governance requirements for public companies, and also provides for substantially increased liability under the federal securities laws for public companies, and their executives and directors.

This White Paper summarizes the corporate governance reforms proposed to date by the New York Stock Exchange (the "NYSE"), the Nasdaq Stock Market, Inc. ("Nasdaq"), and the American Stock Exchange ("Amex"), as well as the applicable corporate governance provisions of Sarbanes-Oxley. The rules proposed by the stock exchanges and Nasdaq are in various stages of the formal approval process and have not yet gone into effect. Final rules in substantially the form set forth below are expected to become effective this fall. Certain provisions of Sarbanes-Oxley are effective now, while others will go into effect only after the Securities and Exchange Commission (the "SEC") promulgates and adopts final rules in the coming months.

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