SUMMARY OF AMENDMENTS SUBMITTED TO THE RULES COMMITTEE ON H.R. 3574 - STOCK OPTION ACCOUNTING REFORM ACT

Summary of Amendments Submitted to the Rules Committee on
H.R. 3574 - STOCK OPTION ACCOUNTING REFORM ACT

RULE TO PROVIDE FOR CONSIDERATION OF H.R. 3574, AND AMENDMENTS MADE IN ORDER

(in alphabetical order)

Kanjorski/Castle #2
Amendment in the Nature of a Substitute.
Includes findings concerning the Securities and Exchange Commission (SEC) authority over standard setting, the importance of the Financial Accounting Standards Board (FASB) independence and credible accounting standards to the economy and investors, the recent actions of Congress in Sarbanes-Oxley to strengthen the standard-setting process, the comparative advantage provided to the U.S. by high quality accounting standards, and the damage to the standard-setting process of legislative pre-emption. Includes a sense of the Congress that preserving the integrity of the accounting standard-setting process and FASB independence is crucial to the financial reporting system and markets and that the SEC should be permitted to adopt new standards without Congressional intervention. Directs the SEC to oversee the process of setting standards for equity-based compensation to ensure that all comments are appropriately reviewed and that any modifications necessary to insure the highest quality accounting standards are adopted.

Maloney #3
Preserves the authority of the SEC to establish accounting principles or standards on its own initiative as the SEC deems necessary in the public interest or for the protection of investors. It is intended to preserve the SEC's ability to prescribe the contents of public filings.

Oxley #5
Manager's Amendment.
Clarifies the original intent of the bill to ensure that any company that wishes to voluntarily expense stock options in certain filings required under the securities laws may do so.

Sherman #1
Eliminates the requirement in the bill that an assumption of zero volatility be used when calculating the value of stock option expense for the top-five executives.

Stearns #4
Allows companies voluntarily expensing options to continue to do so.

* Summaries derived from information submitted by the amendment sponsors.