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Rr Donnelley Secht Dallas Significant Sec Interpretations

Jan 24, 2015




  • 1. SIGNIFICANT SEC INTERPRETATIONS AND DEVELOPMENTS David Hollander EDS Glen Hettinger Fulbright & Jaworski L.L.P.

2. Updated Form 8-K Interpretations 3. SEC Updated Interpretations Regarding Form 8-K

  • Issued on April 3, 2008 and June 26, 2008
  • The new set of interpretations issued by the SEC consolidates and replaces interpretations regarding Form 8-K that previously appeared in three different sources:
    • Form 8-K Interpretations in the July 1997 Manual of Publicly Available Telephone Interpretations;
    • June 13, 2003, Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures; and
    • November 22, 2004, Form 8-K Frequently Asked Questions.
  • New guidance focused on departure/appointment of directors/officers and compensatory arrangements with officers

4. Form 8-K

  • Compensatory Arrangements of Certain Officers Item
  • 5.02(e)
  • Equity Compensation Plans and Cash Bonus Plans Adoptiontriggers filing requirement even if Board has not yet informed participants.
  • Establishing specific performance goals No disclosure ifthe goals are materially consistent with the terms of the plan previously disclosed.
  • Specific target levels Disclosure of specific quantitative or qualitative performance levels is not requiredifsuch disclosure would result in competitive harm to the company.

5. Form 8-K

  • Compensatory Arrangements of Certain Officers
  • Item 5.02(e)
  • Cash Awards - Disclosure required if payment inconsistent with previously disclosed terms or if performance criteria not met and payment made on discretionary basis, even if had disclosed that plan provided for Boards exercise of discretion.
  • If a cash bonus is made pursuant to an already disclosed employment contract that provides that the bonus is determined by the compensation committee, there is no filing requirement -- but that disclosure needs to be included in the CD&A.

6. Form 8-K

  • Election and Termination of Directors Item 5.02(b)
  • and (d)
  • Noticegiven to the company of resignation, retirement, or refusal to stand for re-election by a director triggers filing, even if notice is oral or conditional or subject to acceptance.
  • Election of an individual to the board other than by a vote of shareholder must be disclosed as of thedate of such election , even if the date of the directors term begins at a later date.
  • Death of director does not trigger 5.02(b) filing.

7. Form 8-K

  • Departure of Directors Item 5.02(b)
  • NEW Director Resignations to Satisfy Board Governance Policies Do Not Trigger a Form 8-K
    • A company need not file a Form 8-K when a director tenders his resignation in advance to satisfy a corporate governance policy that requires the director to offer to leave the board if certain events should occur, such as failure to receive a majority of the votes cast in an election for directors, changing jobs or reaching a mandatory retirement age.
    • Instead, the company only has to file a Form 8-K within four daysafter the board decides to accept the resignation .

8. Form 8-K

  • Appointment and Termination of Executive Officers
  • Items 5.02(b) & (c)
  • Temporary turnover of dutiesof executive officers triggers a filing requirement and a subsequent re-appointment triggers a new filing.
  • Can delay disclosure of appointment until date company makespublic announcementof appointment, but if replacing a departing officer can not delay a required 8-K for that departure.

9. Form 8-K

  • Other Form 8-K Items
  • 1.01: Material definitive agreements description of material terms required even if filing the agreement as an exhibit.
  • 2.02: The 202(b) safe harbor from Form 8-K filing for results of operations and financial condition, when information is presented orally, telephonically, by webcast, by broadcast, or in a similar manner, applies to disclosures made with48 hours , not two business days.

10. Form 8-K

  • Other Form 8-K Items
  • 2.03: Creation of direct financial obligation under an off-balance sheet arrangement of a registrant even when registrant is not a party to the related transaction.
  • 2.04: Triggering events that accelerate or increase a direct financial obligation or an obligation under an off-balance sheet arrangement, including clarification that the definitive agreement will generally govern whether this disclosure is triggered by the occurrence of an event or notice of such occurrence.

11. Form 8-K

  • Other Form 8-K Items
  • 2.05: Costs associated with exit or disposal activities, including clarification that this goes beyond SFAS 146.
  • 3.01:Notice of delisting or failure to satisfy a continued listing rule or standard triggers filing requirement.Transfer of listing from OTC trading or filing an application to list on an exchange does not trigger filing requirement because the OTC is not an automated inter-dealer quotation system or a registered national securities association or an exchange.

12. Form 8-K

  • Other Form 8-K Items
  • 3.02: Unregistered sales of equity securities, including when issuance of unregistered securities exceed the one-percent volume threshold for the underlying equity securities.This includes agreements to sell warrants, options, convertible notes, etc.
  • 4.02: Non-reliance on a previously issued financial statement or a related audit report or completed interim review, including technical requirement that a Form 8-K is required even if also filing an amended quarterly or annual report disclosing such non-reliance.

13. New Compliance and Disclosure Interpretations 14. Regulation S-K

  • New Compliance and Disclosure Interpretations
    • Released July 3, 2008
    • Replaces prior C&DIs including:
      • The July 1997 Manual of Publicly Available Telephone Interpretations
      • The March 1999 Interim Supplement to the Manual of Publicly Available Telephone Interpretations
      • The November 2000 Current Issues and Rulemaking Project Outline
      • The 2007 C&DIs on Items 201, 402, 403, 404, and 407 of Regulation S-K
      • The March 2008 C&DIs on smaller reporting companies

15. Regulation S-K

  • Smaller reporting companies
    • A corporate parent must meet the requirements of a smaller reporting company, for a majority-owned subsidiary to be considered a smaller reporting company.
    • A smaller reporting company must provide a MD&A even if the smaller reporting company has had no revenues from operations.
    • A smaller reporting company is always required to provide an audit committee report, although the audit committee financial expert disclosure is not required until its first annual report after initial registration.

16. Regulation S-K

  • Executive compensation
    • Performance Targets.Disclosure of performance target levels is not required if the performance targets are not material in the context of executive compensation. If performance targets are a material component of a companys compensation policies, the performance targets must be disclosed unless disclosure would result in competitive-harm.
    • Executive Bonuses.Agreements to pay a named executive officer a cash retention bonus upon satisfaction of a performance condition need only be reported on the Summary Compensation Table in the year in which the performance condition is satisfied.However, the registrant will need to discuss the cash retention bonus in its CD&A from the year the agreement was made through the year the performance condition has been satisfied.

17. Regulation S-K

  • Internal Controls
    • In annual reports for fiscal years ending before December 15, 2009, non-accelerated filers are required to provide managements report on internal control over financial reporting pursuant to Item 308T.
    • The absence of managements report will render the annual report materially deficient and preclude a company from filing a new Form S-3 or Form S-8.
    • Sales under already effective Forms S-3 and S-8 would also have to be suspended and the company would lose the ability to rely upon Rule 144.

18. Regulation S-K

  • Stock repurchases
    • Cashless Exercises.An employees exercise of an option via cashless net exercise does not constitute a repurchase by the issuer; however, any shares withheld over the amount necessary to pay the exercise price and taxes must be re
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