Attendees:

Mgt- Lisa Lander, OAPM, Donna Hawkins, IM, Jayne Seidman, OED, and
David Pinansky, GC

Labor- Dean Suehiro, CF, Solomon Cromwell, CF, John Grzeskiewicz, IM, and
Michael Piacsek, NTEU

OLD BUSINESS (All Union Agenda Items)

1. Personnel policy and/or practice concerns:

   Staff purchase of computers

   • Discount program described in memo dated 10/18/04 from Adam Ramsey, AD of OHR and Mike Clampitt, President of NTEU
     Chapter 293.

   Telework program

   • Management has no position on the current arbitrary standards (i.e., telework only one day a week, no two persons can be off
     on same day, ad hoc only for Enforcement Division) used by Divisions/Offices in denying recurring telework. Management has not
     and does not intend to evaluate the applicability of the Philadelphia District Office’s 2/17/04 arbitration decision to the
     attorneys and accountants in the Division of Enforcement in all locations including Headquarters.

   • Upper Management has been informed of the Committee’s discussion of allowing bargaining unit employees, with the supervisor’s
     approval, to switch the telework day within the same payperiod for SEC business purposes.

   AWS program including credit hours

   • Upper Managemente has been informed of the Committee’s discussion of allowing bargaining unit employees, with the supervisor’s
     approval, to switch the off day within the same payperiod for SEC business purposes.

   • Upper Management has been informed of the Committee’s discussion of supervisors having the flexibility to approve credit
     hours after the bargaining unit employee earned it if it was for SEC business purposes and advance approval was not possible.

   Upward mobility program

   • A grievance has been filed and arbitration date to be determined in the near future.
   • The only discussion of this program related to the Management’s belief that due to changes in personnel and the SEC's
     Mission, the implementation of a previous upward mobility program will not allow a timely implementation of the program
     currently being considered.

   Training programs (in-house training and external seminars)

   • Management previously informed the Union that the current SEC budget for training is significant.
   • Management will follow-up with the Training Branch to get information about the training programs Management considering for staff.
     We informed Management that it appears that the SEC University training programs this summer was only for Management

   • Management will follow-up whether the SEC University training programs will allow accountants and attorneys to earn CPE/CLE
     credits for their professional licenses and membership to professional organizations. Since the requirements of CLE
     credits vary between States, it is unclear whether cost effective training programs can be implemented for attorneys.

NEW BUSINESS (All Union Agenda Items)

1. Communications between management and bargaining unit employees:

   Merit Pay

   • Management will attempt to notify employees about their merit pay in a timely manner for the performance appraisal period
     ending April 30, 2005.

   2005 Annual Pay Adjustment

   • It appears that Congress will pass a 3.5% COLA for federal employees. Management cannot confirm that we will get the same
     3.5% as federal employees.

   Station Place

   • The move to Station Place is still projected to be March 2005.
   • Management expects to receive from the contractor the right to occupy Station Place in December 2004. After this is
     received, SEC has 60 days to start occupying Station Place.

   • Based on the current plans, all employees except some support staff will have individual offices and not occupy cubicles.
   • This move is currently under negotiation with the Union.
   • Possible tour of Station place by employees is under negotiations.
   • If the employees at 901 E Street is to be moved later, a two-way shuttle service between Station Place and 901 E Street
     is under negotiations.
2. Personnel policy and/or practice concerns:

   Training (in-house training and external seminars)

   • As per pg. 26 & 48 of SEC 2004-2009 Strategic Plan, “Through on-line and in-person classes SEC Staff will be able to
     improve their skills, remain grounded in the SEC’s mission and values, and stay abreast of the developments in rapidly
     evolving markets” and the SEC University will help the agency develop and reinforce a strong operating culture, enhance
     employee performance, and broaden staff knowledge of industry trends.” Mgt. will follow-up with the Training Branch to get
     information about the training programs Mgt. considering for staff and whether the employees can earn CPE/CLE credits from
     these programs.

   • Management’s training policy for external training and the selection of employees to attend it is based on the Merit
     principles (assignment of work). The Union requested Management to tell employees (via email) how the employees were selected to
     attend the external training. Management will discuss this specifically with the appropriate official in the Division of
     Corporation Finance.

   • As per the Training Branch, the SEC plans to telecast the AICPA SEC Conference held on December 6-8 to the Operations
     Center.

   • Requiring the Training Branch to keep track of staff’s required CPE/CLE to maintain State licenses are not cost
     effective. This is the responsibility of employees.

   • All training requests by employees should be on Form 1082. This Form should be submitted to direct supervisor for
     approval. Normally, training related to the SEC’s Mission would be approved for duty time. This includes training that
     allows employees to earn CPE/CLE credits.

   • Employees taking online job-related courses such as the SEC Learning Center courses during regular duty hours should
     get prior approval from supervisors. See approval procedures specific to SEC Learning Center.

   • Investment Management staff accountants have complained that since the last computer upgrade they have not been able to
     access the AICPA Infobytes website take online CPE courses. Management will review this with OIT.

   Telework

   • As per pg. 25 and 48 of SEC 2004-2009 Strategic Plan, SEC planning to have “virtual workforce.”
   • Management does not have a definition of “virtual workforce.”
   • The Union informed Management that if “virtual workforce” means more telework days, we would work with Management to establish a
     pilot program that considers the employees under the current telework program.

   Professional Licenses (e.g., CPA and Attorney)

   • Management believes that the Comptroller General has recently revised the regulations to allow employees to be reimbursed
     for fees to maintain their professional license. Management currently does not have any plans to establish a reimbursement
     program. Per Controller General’s File #B-302548, dated 8/20/04, Re: Scope of Professional Credentials Statute, “Pursuant
     to 5 U.S.C. d5757(a), federal agencies are authorized to use appropriated funds to pay an employee’s expenses to obtain
     professional credentials. However, an agency may pay only the expenses required to obtain the license or official
     certification needed to practice a particular profession, including licensing fees and examinations to obtain credentials.
     Accordingly, section 5757(a) does not authorize the agency to pay for an employee’s membership in a professional
     association unless membership is a prerequisite to obtaining the professional license or certification. Under 5 U.S.C.
     d5946 payment for voluntary memberships in organizations of already-credentialed professionals is prohibited, and section
     5757(a) does not provide any authority to pay such fees.”

   • It is unclear whether this can be incorporated in our bargaining with Management over our compensation.

   Corporation Finance Matters

   • There has been a significant hiring of new accountants and updated FASB/ETIF. Management believes that the updating Staff
     Training Manual 2000 Edition should be referred to the appropriate Division official. Per Carol Stacey, CA-DCAO, her
     office is currently working on updating the Staff Training Manual but the projected completion date is unknown at this time.

   • Management will discuss with the appropriate official in the Enforcement Division concerning the timing to update NRSI for
     closed cases.

   Investment Management Matters

   • Reporting Requirements – Staff are being subject to an increasing number of record keeping requirements, often
     tailored to specific offices/divisions, such as tracking filings, keeping track of new registrants, keeping track of
     hours devoted to certain categories of assignments, keeping track of Sarbanes-Oxley reviews, etc. These are usually
     imposed on an ad hoc basis and the instructions are often conveyed orally through the chain of command rather than in
     writing. What about setting a general policy of requiring such requirements to be in writing, with a written rationale
     for the new report, and a periodic review of all record-keeping and tracking requirements with a view of eliminating
     obsolete report, combining, simplifying, etc., analogous to the Paperwork Reduction Act procedures? Management will discuss this
     with the appropriate Division official.

   Eyemed Plan

   • The standard Blue Cross/Blue Shield plan’s vision plan is more cost effective for the employees than the current
     Eyemed Plan.

   • Employees should use both their primary vision plan, if covered under their current health plan, and the Eyemed Plan.
     What Eyemed will not reimburse may be reimbursed by the employees’ primary plan and vice versa. Employees need to
     evaluate which plan to use as a primary and which plan to use as a secondary to get the most reimbursement. Employees
     should be using both plans together and not using one or the other.

   • Employees will need the specific procedure code(s).

   Designated December SEC Holiday Party

   • It is the SEC practice to have the holiday party begin officially at 2 PM to continue until the rest of the official
     business day and employees are allowed to leave work at their leisure. This does not apply to employees teleworking or
     on leave that day.

   Step 1 Grievance Procedure

   • Management continues to view the 1st Step Grievance meeting as only a process for the grievant to provide additional
     information about the grievance not previously provided. Management will not answer any questions from the grievant or his/her
     representative about the grievance. Management does not consider this meeting as a mediation session.

   • Management does not recommend that employees waive this 1st Step since some grievances have been settled during this Step.
     The meeting may allow employees to clarify their written grievance. An oral explanation of the grievance can be more
     helpful to the 1st Step official in understanding the grievance than the written grievance.

NOTE: Next LMC meeting tentatively scheduled for May 2005