This document summarizes a presentation on key financial and reporting developments that companies should be aware of for the 2016 reporting season. The presentation covers the top 10 SEC comments from 2015 that may carry over to 2016, including issues around MD&A, fair value measurements, and non-GAAP financial measures. It also discusses hot topics like cybersecurity disclosures and the top 10 trends in disclosures. Additional sections provide lessons from the 2015 proxy season, best practices for fair disclosure including the use of social media, and preparations companies should make for the upcoming reporting season and uncertainties they may face. The panelists then take questions from the audience.

1. ACC SF Bay Area
Corporate and Securities Committee
Firing Up for the 2016 Reporting Season:
Key financial and reporting developments you should know
November 2, 2015 (Palo Alto)
November 30, 2015 (San Francisco)
presented by
Jason Ainsworth – Partner, Deloitte
Stephen Ballas – Deputy General Counsel, CBRE
Louis Lehot – Partner, DLA Piper
Erin Rinn –Senior Associate Corporate Counsel, vmWare
Yanira Wong – Associate General Counsel, DocuSign

2. 2
Agenda
 Panelists
 Top 10 SEC comments from 2015 that we should anticipate in 2016
 Hot Topic: Cybersecurity disclosures
 Top 10 Next Best Trends in Disclosures
 Lessons learned from the 2015 proxy season
 Best practices in fair disclosures
 What’s all this about social media?
 Getting ready for next season…
 Frequently asked questions…
 Panelists thoughts and audience questions

3. 3
Panelists
VMware Inc.
Senior Associate Corporate
Counsel, Securities and M&A
650 427-5034
erinn@vmware.com
Erin RinnStephen Ballas Louis Lehot
DLA Piper
Partner
650 796-7280
louis.lehot@dlapiper.com
CBRE
Deputy General Counsel
213 613-3740
stephen.ballas@cbre.com

4. 4
Panelists, continued
Yanira Wong
DocuSign
Associate General Counsel
866 219-4318
Jason Ainsworth
Deloitte & Touche LLP
Partner
408 704-2554
jainsworth@deloitte.com

5. 5
Top 10 SEC Comments from 2015
1. MD&A
 Results of operations
 Liquidity
 Business overview
 Critical accounting policies and estimates
 Contractual obligations
1. Fair value measurements
2. Revenue recognition
3. Non-GAAP financial measures
4. Signatures, exhibits and agreements
5. Income taxes – offshore cash
6. Segment reporting
7. Intangible assets and goodwill
8. Acquisitions and business combinations
9. Executive compensation and CD&A

6. 6
Hot Topic: Cybersecurity disclosures
1. Risk factors
2. MD&A
3. Description of Business
4. Legal proceedings
5. Financial statements
6. Disclosure controls and procedures

7. This is a sample presentation title in footer 7
Hypo #1: Sony’s (Previous) Security Breach
Sony’s 2014 cyberattack was preceded by another cybersecurity
breach in April 2011 when hackers took down Sony’s online
PlayStation Network for several weeks. Despite a reported cost of
$171 million, the company never filed a disclosure form with the SEC
about the incident, nor significantly updated its regular SEC cyber risk
assessments.
Did Sony violate disclosure requirements by not disclosing the
hack or updating its cyber risk assessments with the SEC?
What are the practical issues of disclosing vulnerabilities?

8. 1. Predecessor accounting.
2. Focus on metrics – relationship between performance metrics and results
3. Share-based compensation
4. Non-GAAP financial measures
5. Recent developments
6. Unresolved comments
7. Review beyond prospectus – dah – the Internet
8. MD&A – trends, uncertainties and forward-looking information
9. Omnicare
10. Disclosure effectiveness
This is a sample presentation title in footer 8
Top 10 Trends in Disclosures

9. 9
Lessons learned from 2015 Proxy Season
1. Proxy access is here to stay
 88 proposals voted on year to date in 2015, up from 18 in all of 2014
 NYC Comptroller’s Office submitted 75 proxy access proposals
 52 proposals won, almost 60%, up from 5, or 27.8% in 2014
 Proxy access proposals passed by wide margins at each of eBay (May),
Netflix (June) and EA (August), all of the technology companies on the
target list of the NY Comptroller’s Office
1. Granting shareholders the power to nominate directors – Boardroom
Accountability Project
2. Political spending or lobbying

10. This is a sample presentation title in footer 10
Proxy Access Statistics
• Many directors who saw their owners provide majority support to
shareholder proposals (over their boards' opposition) have decided to
switch rather than fight.
• McDonald's (3 percent/3 years/20 percent of board seats/20 shareholder
aggregation limit)
• Chevron (3/3/20/20)
• Occidental Petroleum (3/3/20/20)
• Conoco Phillips (3/3/20/20)
• American Electric Power (3/3/greater of two seats or 20 percent of
board/20)
• TCF Financial (3/3/25/20)

11. 11
Best practices in fair disclosure
1. Issue a press release and distribute through regular channels
2. Provide adequate notice of public events and instructions on how to access
3. Provide information in open manner
 Issuers can provide MNPI to analysts as long as analysts expressly agree to maintain
confidentiality until information is public
 Issuer can comment on analysts model privately without trigger Reg FD if it does not
communicate MNPI
1. What’s all this about social media, FB posts, tweets and live blogging

12. 12
Social media…how to do it…
1. Social media outlets can be used to announce key information
2. In compliance with Reg FD
3. On the condition that investors have been alerted about
4. Which social media will be used to disseminate the information
5. Reed Hastings, Netflix and Facebook…

13. This is a sample presentation title in footer 13
Elon Musk tweeted about a “major new Tesla product line” in March and
the shares of Tesla shot up over a $1 billion.
Does Elon Musk’s tweet count as proper disclosure to the
public under the SEC’s Social Media guidance?
Hypo #2 - Elon Musk’s $1 Billion Tweet

14. 14
CEO Pay Ratio Disclosure Rule
The SEC adopted the new rule on August 5, 2015
Companies required to report the pay ratio disclosure for their first fiscal year beginning on or after
January 1, 2017. Companies will have to disclose:
 Their CEO’s total annual compensation - as reported in the Summary Compensation Table
 The median total annual compensation of all of their employees (other than the CEO) - subject to
limited exceptions, the final rules define “employee” to include all worldwide full-time, part-time,
seasonal, and temporary employees employed by the company or any of its consolidated
subsidiaries
 A ratio comparing the two values - the pay ratio must be expressed either (i) as a ratio in which
the annual total compensation of the median employee is equal to one (e.g., 100 to 1 or 100:1),
or (ii) narratively in terms of the multiple that the CEO’s total annual compensation bears to the
annual total compensation of the median employee

15. This is a sample presentation title in footer 15
SEC Proposes Pay vs. Performance Rule
1. The proposed rule is one of the last Dodd-Frank Act rulemaking responsibilities
of the SEC and would require companies provide in any proxy or information
statement more information about CEO’s and their performance
2. Companies must compare “executive compensation actually paid” to the “total
shareholder return” of the company and its peers, as well as a discussion of the
relationship between these amounts.
3. The proposed rule would not apply to emerging growth companies, foreign
private issuers, or registered investment companies.

16. This is a sample presentation title in footer 16
U.K. Modern Slavery Act Guidance
Transparency Provisions of the U.K. Modern Slavery Act became effective on October 29, 2015
Transitional Period: The first organizations required to produce a statement will be those whose fiscal
year ends on or after March 31, 2016.
Applicability: Commercial organizations that carry on a business or part of a business in the United
Kingdom, supply goods or services and have annual total turnover of at least £36 million
Requirements: Applicable organizations will be required to prepare a slavery and human trafficking
statement that indicates the steps that the organization has taken during the year to ensure that slavery
and human trafficking are not taking place in any of its supply chains and in any part of its own business.
Subsidiaries: Having a U.K. subsidiary does not subject a parent entity to the transparency provisions.
Foreign Entities: If a foreign parent is carrying on a business or part of a business in the U.K., it will be
required to produce a statement.

17. 17
Getting ready for next season…
1. Map out the calendar for 2016…
2. In function of your market cap at 6/30/2015
3. Category of filer
4. D&O Questionnaires
5. Ensure independent directors meet in executive session at least once
6. Circulate self-evaluation questionnaires
7. Dust off the charters and guidelines
8. Is the insider trading policy working
9. Preparing for shareholder proposals
10.Preparing for the unexpected…crisis communications planning

18. This is a sample presentation title in footer 18
Question #1
What was the pay ratio of a CEO to an average worker in 2014?
A) 13 times
B) 33 times
C) 323 times
D) 373 times

19. This is a sample presentation title in footer 19
Question #2
Does Regulation FD prohibit directors from speaking privately with
a shareholder or groups of shareholders?

20. This is a sample presentation title in footer 20
Question #3
How soon must large accelerated filers ($700MM or more) file their
10-Ks?
A) 30 days
B) 45 days
C) 60 days
D) 75 days

21. This is a sample presentation title in footer 21
A) One Year
B) Two Years
C) Three Years
D) Five Years
Based on the Scaled Financial Disclosure of the JOBS Act, how many years of
audited financial statements must Emerging Growth Companies provide to go
public?
Question #4

22. Panelists’ Thoughts and
Audience Questions

23. Thank you for attending!