Covers SEC practice of reviewing filings
to elicit improved disclosure

• By sending comment letters
• For many years SEC focused on
  registration statement disclosures

• Especially Form S-1s used in IPOs

• SEC wouldn't accelerate effectiveness until
  its comments were adequately addressed

With recent changes, SEC is giving greater attention
to Exchange Act filings

• Sarbanes-Oxley Act §408 (2002)

• Requires SEC to periodically review
  an issuer's Exchange Act reports
• See SEC's Fortune 500 survey

• Securities Offering Reform changes (2005)

• Requires disclosure of unresolved SEC comments

SEC has begun releasing its comment letters

• SEC summary (12.01.05)
• SEC press release (6.24.04)
• Some issuers seek confidential treatment of comment letters to limit public disclosure

• See Confidential Treatment

SEC requires disclosure of unresolved SEC comments

• Applies to

• Large accelerated filers
• Accelerated filers
• WKSIs

• Requires disclosure in Form 10-K / Form 20-F

• Form 10K Item 1B
• Form 20-F Item 4A

Issuer must disclose comments that:

• Were made as part of a review of an Exchange Act report
• Issuer believes are material

• Remain unresolved as of the date of the filing

• Were issued more than 180 days before the end of the fiscal year covered by the annual report

• Prior to 7.05, for 12.31 FYE companies
• Measured from date the SEC Staff originally made the comment

Adopted as part of Securities Offering Reform

• Final release commentary (2005)
• Proposal release commentary (2004)

Unresolved SEC comments

• Viewpoint 10-K  3.20.06
• Amedisys 10-K  3.16.06
• Axonyx 10-K  3.16.06
• Standard Motor Products 10-K  3.16.06 At page 18
• Getty Realty 10-K  3.14.06 At page 10
• iMergent 10-K  3.09.06
• Eastman Kodak 10-K  3.2.06 At page 18
• St. Paul Travelers 10-K  2.27.06
• Leslies Poolmart 10-K  12.20.05

No unresolved SEC comments

• Hot Topic 3.22.06
• Varian  12.09.05
• Walt Disney  12.07.05
• Nutraceutical International  12.01.05
• Estee Lauder  9.02.05

Due to SEC review and comments

• Tuesday Morning  2.16.06

• Auditing standards

• Cagle's  2.24.06

• Auditing standards

• Canargo Energy  2.16.06

• Amends Item 9A disclosures in response to SEC comment

• Energizer Holdings  2.15.06

• Amends Item 9A disclosures in response to SEC comment

• Visage Technology  2.14.06

• Amends Item 9A disclosures in response to SEC comment

• Stage Stores  2.13.06

• Amends Item 9A disclosures in response to SEC comment

• Tiffany  2.08.06

• To amend Item 9A disclosures

• Maxco  2.03.06

• Changes in response to SEC comments
  on going private transaction
• Amended 10-K is incorporated by reference

• Cooper Cameron  1.31.06

• To amend Item 9A disclosures

• Mercer Insurance Group  1.11.06

• Changes to MD&A in response to SEC comments
• Revised MD&A section

• Fedders  1.10.06

• Changes in response to SEC comments
• Disclosure of backlog orders
• Expanded disclosures about internal controls
• Changes to wording of CEO-CFO certifications

• Oracle  12.27.05

• Changes to MD&A in response to SEC comments
• Arose in context of Oracle's acquisition of PeopleSoft
• Revised MD&A section

Corporate action in response to SEC comment letters

• Hastings Entertainment

• Form 10-K/A (1.13.06)
• Restatement followed SEC comment letter about treatment of cash flows for rental assets

Inamed - Allergan (2005)

• Merger agreement representation
• See §4.05 - Reports and Financial Statements
• No outstanding unresolved comment letter issues

Linens N Things LBO (2005)

• Merger agreement representation
• See §3.6 - SEC Reports and Financial Statements
• No outstanding unresolved comment letter issues

2005 Annual Report