Corporate Governance

Shearman & Sterling LLP SEC Proposes Significant Changes to Share Repurchase Disclosure and Rule 10b5-1 Requirements and Disclosure | 34 SHARE REPURCHASE RELEASE Currently, under Item 703 of Regulation S-K ("Item 703"), companies are required to disclose on a quarterly basis share purchases made by or on behalf of issuers or by someone controlling or acting on behalf of the issuer (referred to as an affiliated purchasers) in a table providing certain high-level information. The disclosure is required in the issuer's Form 10-Q for the first three quarters of its fiscal year and in its Form 10-K covering the fourth quarter. The same disclosure is required in Form 20-F for foreign private issuers on an annual basis. There is no disclosure requirement that mandates current disclosures related to a company's repurchase activity. The Share Repurchase Release would: • require companies to furnish a new Form SR one business day after the issuer or any affiliated purchaser executes a share repurchase of the issuer's equity securities that are registered under Section 12 of the Exchange Act; • revise Item 703 to require significant additional disclosures regarding the structure of a company's repurchase programs and executed share repurchase transactions; and • require information disclosed pursuant to Form SR and Item 703 to be reported using Inline XBRL. Proposed Form SR The Share Repurchase Release calls for a new Form SR to be filed one business day after any repurchase by the issuer or any affiliated purchaser. This new form would require more extensive details about repurchases than are currently captured in the quarterly disclosure. Form SR would include, for each class of securities that are repurchased, the following information in a tabular format by date: • the class of securities purchased; • the total number of shares purchased, whether or not made pursuant to publicly announced plans or programs; • the average price paid per share on such date; • the aggregate number of shares purchased on the open market; • the aggregate number of shares purchased in reliance on the Rule 10b-18 safe harbor 3 ; and • the aggregate number of shares purchased pursuant to a Rule 10b5-1 plan. New Form SR would be "furnished" rather than filed, which would mean companies would not be subject to liability under Section 18 of the Exchange Act, and the information would not be deemed incorporated by reference into a prospectus or other filings under the Securities Act of 1933, and therefore, would not be subject to Section 11 liability. Proposed Revised Item 703 The Share Repurchase Release would also revise Item 703 to expand the required quarterly share repurchase disclosure. The revised disclosure would include: • the company's objective or rationale for repurchasing shares and its process or criteria used to determine the amount of repurchases; • the identification of any Section 16 officer or director that purchased or sold shares subject to the company's repurchase within ten business days before or after the announcement of the company's share repurchase plan or program; • the company's policies, procedures and any restrictions relating to purchases and sales of its securities by its officers and directors during a repurchase program; • whether repurchases were made pursuant to a Rule 10b5-1 plan and, if so, the date(s) that the plan was adopted or terminated; and • whether repurchases were made in reliance on the Rule 10b-18 safe harbor. 3 Rule 10b-18 under the Exchange Act provides a non-exclusive safe harbor from liability under certain market manipulation rules and Rule 10b-5 under the Exchange Act for an issuer and its affiliated purchasers when issuer share repurchases are conducted in accordance with the Rule.

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