Text of Selected SEC Proposed and Final Rules Under
the Sarbanes-Oxley Act
As of January 29, 2003
This document contains the text of final and proposed changes to selected SEC regulations and
disclosure forms that have resulted from the Sarbanes-Oxley Act of 2002 or SEC initiatives. Final
rules are denoted by shaded text, and delayed effective dates of final rules are noted where applicable.
A topical index is provided below with hyperlinks to relevant sections of this document. In addition,
hyperlinks to relevant SEC proposed or final rule releases follow each section of text.
TABLE OF CONTENTS
FORM 10-K .......................................................................................................................................3
SCHEDULE 14A ...............................................................................................................................9
FORM 10-Q .....................................................................................................................................12
FORM 8-K.......................................................................................................................................17
REGULATION S-K .........................................................................................................................35
RULES UNDER SECURITIES EXCHANGE ACT OF 1934 .............................................................54
REGULATION S-X .........................................................................................................................95
TOPICAL INDEX
Attorney Conduct Rules
Audit Committee Disclosures
Audit Committee Financial Experts
Audit Fees and Services
Auditor Independence
Beneficial Equity Ownership
Certifications
Code of Ethics
Contractual Obligations Table
Critical Accounting Policies
Disclosure Controls and Procedures
Disclosure of Website Access to Reports
Earnings Releases; Other Announcements
Filing Acceleration
Internal Controls
Non-GAAP Disclosures
Off-Balance Sheet Arrangements
“Noisy Withdrawal” proposals
Pension Plan Blackout Periods
Repurchases of Equity Securities
Website Disclosure of Forms 3, 4, and 5
1934 Act Rules
Schedule 14A
Regulation S-K
Form 10-K
1934 Act Rules
1934 Act Rules
Form 10-K (Inst.)
Form 8-K
Regulation S-K
Regulation S-K
Form 10-K
Regulation S-K
Form 8-K
Form 10-K
Form 10-Q
Regulation S-X (def.)
Form 8-K
Regulation S-K
Form 8-K (timing)
Form 8-K (timing)
Form 10-K
1934 Act Rules
Regulation S-K
1934 Act Rules
Schedule 14A
Regulation S-X
Regulation S-X
Form 10-K
Regulation S-K
Form 10-Q
1934 Act Rules
Regulation S-K (Exhibit)
Form 10-Q
Regulation S-K
1934 Act Rules
Form 10-Q
Regulation S-K
1934 Act Rules
1934 Act Rules
Regulation S-X
Regulation S-X
Regulation S-K
Regulation G
Form 8-K
Form 8-K
Form 10-Q
1934 Act Rules
Regulation BTR
Regulation S-K
1934 Act Rules
SEC PROPOSED AND FINAL RULE RELEASES COVERED IN THESE
MATERIALS
Final Rule Releases
Release No.
Date
Details
33-8185
33-8183
Jan. 29, 2003
Jan. 28, 2003
33-8182
Jan. 27, 2003
33-8180
33-8177
Jan. 24, 2003
Jan. 23, 2003
34-47225
33-8176
33-8128
Jan. 22, 2003
Jan. 22, 2003
Sept. 5, 2002
33-8124
34-46421
Aug. 29, 2002
Aug. 27, 2002
Implementation of Standards of Professional Conduct for Attorneys
Strengthening the Commission's Requirements Regarding Auditor
Independence
Disclosure in Management's Discussion and Analysis about Off-Balance
Sheet Arrangements and Aggregate Contractual Obligations
Retention of Records Relevant to Audits and Reviews
Disclosure Required by Sections 406 and 407 of the Sarbanes-Oxley Act of
2002
Insider Trades During Pension Fund Blackout Periods
Conditions for Use of Non-GAAP Financial Measures
Acceleration of Periodic Report Filing Dates and Disclosure Concerning
Website Access to Reports
Certification of Disclosure in Companies' Quarterly and Annual Reports
Ownership Reports and Trading by Officers, Directors and Principal
Security Holders
Proposed Rule Releases
Release No.
Date
Details
33-8186
34-47137
33-8170
33-8160
Jan. 29, 2003
Jan. 8, 2003
Dec. 20, 2002
Dec. 10, 2002
33-8150
Nov. 21, 2002
33-8138
Oct. 22, 2002
34-46685
33-8106
Oct. 18, 2002
June 17, 2002
33-8098
May 10, 2002
Implementation of Standards of Professional Conduct for Attorneys
Standards Relating To Listed Company Audit Committees
Mandated Electronic Filing and Website Posting for Forms 3, 4 and 5
Rule 10b-18 and Purchases of Certain Equity Securities by the Issuer and
Others
Implementation of Standards of Professional Conduct for Attorneys
(provisions relating to “noisy withdrawal” only)
Disclosure Required by Sections 404, 406 and 407 of the Sarbanes-Oxley
Act of 2002 (provisions relating to Section 404 only)
Improper Influence on Conduct of Audits
Additional Form 8-K Disclosure Requirements and Acceleration of Filing
Date
Disclosure in Management's Discussion and Analysis about the Application
of Critical Accounting Policies
FORM 10-K
COVER SHEET
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act). Yes ..... No ......
State the aggregate market value of the voting and non-voting common equity held by non-affiliates
computed by reference to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the registrant’s most recently
completed second fiscal quarter.
http://www.sec.gov/rules/final/33-8128.htm
GENERAL INSTRUCTIONS
A.
Rule as to Use of Form 10-K.
(1)
This Form shall be used for annual reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) (the “Act”) for which no other form is
prescribed. This Form also shall be used for transition reports filed pursuant to Section 13 or 15(d) of
the Act.
(2)
Annual reports on this Form shall be filed within the following period:
(a)
For accelerated filers (as defined in 17 CFR 240.12b-2):
(i)
90 days after the end of the fiscal year covered by the report for
fiscal years ending on or after December 15, 2002 and before December 15, 2003;
(ii)
75 days after the end of the fiscal year covered by the report for
fiscal years ending on or after December 15, 2003 and before December 15, 2004; and
(iii)
60 days after the end of the fiscal year covered by the report for
fiscal years ending on or after December 15, 2004; and
(b)
90 days after the end of the fiscal year covered by the report for all other
registrants.
(3)
Transition reports on this Form shall be filed in accordance with the requirements set
forth in Rule 13a-10 (17 CFR 240.13a-10) or Rule 15d-10 (17 CFR 240.15d-10) applicable when the
registrant changes its fiscal year end.
(4)
Notwithstanding paragraphs (2) and (3) of this General Instruction A., all schedules
required by Article 12 of Regulation S-X (17 CFR 210.12-01 - 210.12-29) may, at the option of the
registrant, be filed as an amendment to the report not later than 30 days after the applicable due date
of the report.
http://www.sec.gov/rules/final/33-8128.htm
3
Form 10-K
D.
Signature and Filing of Report.
(1) * * *
(2)
(a)
The report must be signed by the registrant, and on behalf of the registrant by
its principal executive officer or officers (who also must provide the certification required by Rule
13a-14 (17 CFR 240.13a-14) or Rule 15d-14 (17 CFR 240.15d-14) exactly as specified in this form),
its principal financial officer or officers (who also must provide the certification required by Rule
13a-14 (17 CFR 240.13a-14) or Rule 15d-14 (17 CFR 240.15d-14) exactly as specified in this form),
its controller or principal accounting officer, and by at least the majority of the board of directors or
persons performing similar functions. Where the registrant is a limited partnership, the report must be
signed by the majority of the board of directors of any corporate general partner who signs the report.
http://www.sec.gov/rules/final/33-8124.htm
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
*****
(c)
Furnish the information required by Item 703 of Regulation S-K (§229.703 of this chapter)
for any repurchase made in a month within the fourth quarter of the fiscal year covered by the report.
Provide disclosures covering repurchases made on a rolling-monthly basis. For example, if the fourth
quarter began on January 15 and ended on April 15, the chart would show repurchases for the months
from January 15 through February 14, February 15 through March 14, and March 15 through April
15.
http://www.sec.gov/rules/proposed/33-8160.htm
PART III
Item 10. Directors and Executive Officers of the Registrant.
Furnish the information required by Items 401, 405 and 406 of Regulation S-K (§§229.401, 229.405
and 229.406 of this chapter).
http://www.sec.gov/rules/final/33-8177.htm (effective March 3, 2003; companies must comply in
their annual reports for fiscal years ending on or after July 15, 2003)
Item 14. Controls and Procedures.
Furnish the information required by Item 307 of Regulation S-K (§229.307 of this chapter).
http://www.sec.gov/rules/final/33-8124.htm
Note: Former Item 14 is renumbered as Item 15.
4
Form 10-K
Item 16. Principal Accountant Fees and Services.
Furnish the information required by Item 9(e) of Schedule 14A (§240.14a-101 of this chapter).
(1)
Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last
two fiscal years for professional services rendered by the principal accountant for the audit of the
registrant's annual financial statements and review of financial statements included in the registrant's
Form 10-Q (17 CFR 249.308a) or 10-QSB (17 CFR 249.308b) or services that are normally provided
by the accountant in connection with statutory and regulatory filings or engagements for those fiscal
years.
(2)
Disclose, under the caption Audit-Related Fees, the aggregate fees billed in each of
the last two fiscal years for assurance and related services by the principal accountant that are
reasonably related to the performance of the audit or review of the registrant's financial statements
and are not reported under Item 9(e)(1) of Schedule 14A. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
(3)
Disclose, under the caption Tax Fees, the aggregate fees billed in each of the last two
fiscal years for professional services rendered by the principal accountant for tax compliance, tax
advice, and tax planning. Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
(4)
Disclose, under the caption All Other Fees, the aggregate fees billed in each of the
last two fiscal years for products and services provided by the principal accountant, other than the
services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A. Registrants shall describe the
nature of the services comprising the fees disclosed under this category.
(5)
(i)
Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X.
(ii)
Disclose the percentage of services described in each of Items 9(e)(2)
through 9(e)(4) of Schedule 14A that were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(6)
If greater than 50 percent, disclose the percentage of hours expended on the principal
accountant's engagement to audit the registrant's financial statements for the most recent fiscal year
that were attributed to work performed by persons other than the principal accountant's full-time,
permanent employees.
Instruction to Item 16.
A registrant that is an Asset-Backed Issuer (as defined in §240.13a-14(g) and §240.15d-14(g) of this
chapter) is not required to disclose the information required by this Item.
http://www.sec.gov/rules/final/33-8183.htm (rule effective May 6, 2003; disclosure provisions
effective for fiscal years ending after December 15, 2003)
SIGNATURES
*****
5
Form 10-K
CERTIFICATIONS*
I, [identify the certifying individual], certify that:
1.
I have reviewed this annual report on Form 10-K of [identify registrant];
2.
Based on my knowledge, this annual report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this annual report;
3.
Based on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.
The registrant's other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d14) for the registrant and have:
a)
designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this annual report is being
prepared;
b)
evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation
Date"); and
c)
presented in this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.
The registrant's other certifying officers and I have disclosed, based on our most
recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):
a)
all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b)
any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6.
The registrant's other certifying officers and I have indicated in this annual report
whether there were significant changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
6
Form 10-K
Date: ...............
_______________________
[Signature]
[Title]
* Provide a separate certification for each principal executive officer and principal financial officer of
the registrant. See Rules 13a-14 and 15d-14. The required certification must be in the exact form set
forth above.
http://www.sec.gov/rules/final/33-8124.htm
Note: the form of certification set forth above is currently effective. The form of certification set
forth below is the proposed substitute for the currently effective form of certification, with changes
marked.
CERTIFICATIONS*
I, [identify the certifying individual], certify that:
1.
I have reviewed this annual report on Form 10-K of [identify registrant];
2.
Based on my knowledge, this annual report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this annual report;
3.
Based on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.
The registrant'’s other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures and internal controls and procedures for financial
reporting (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)
designedDesigned such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrantissuer, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this annual report is being
prepared;
b)
Designed such internal controls and procedures for financial reporting, or
caused such internal controls and procedures for financial reporting to be designed under their
supervision, to provide reasonable assurances that the registrant’s financial statements are fairly
presented in conformity with generally accepted accounting principles;
bc)
evaluatedEvaluated the effectiveness of the registrant'’s disclosure controls
and procedures and internal controls and procedures for financial reporting as of a date within 90 days
prior to the filing dateend of the period covered by this annual report (the "“Evaluation Date"”); and
7
Form 10-K
cd)
presentedPresented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures and internal controls and procedures for
financial reporting based on our evaluation as of the Evaluation Date;
5.
The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,e)
Disclosed to the registrant'’s auditors and the audit committee of
registrant'sthe board of directors (or persons performingfulfilling the equivalent functionsfunction):
a(i)
allAll significant deficiencies and material weaknesses in the design
or operation of internal controls and procedures for financial reporting which could adversely affect
the registrant'’s ability to record, process, summarize and report financial data and have identified
forinformation required to be disclosed by the registrant's auditors any material weaknesses in
internal controlsthe reports that it files or submits under the Act (15 U.S.C. 78a et seq.), within the
time periods specified in the U.S. Securities and Exchange Commission’s rules and forms; and
b(ii)
anyAny fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant'’s internal controls and procedures for
financial reporting; and
6.
The registrant's other certifying officers and I have indicatedf) Indicated in
this annual report whether there wereany significant changes in the registrant’s internal controls and
procedures for financial reporting or in other factors that could significantly affect internal controls
subsequent toand procedures for financial reporting made during the date of our most recent
evaluationperiod covered by this report, including any corrective actions with regardtaken to correct
significant deficiencies and material weaknesses in the registrant’s internal controls and procedures
for financial reporting.
Date: ...............
_______________________
[Signature]
[Title]
* Provide a separate certification for each principal executive officer and principal financial officer of
the registrant. See Rules 13a-14 and 15d-14. The required certification must be in the exact form set
forth above.
http://www.sec.gov/rules/proposed/33-8138.htm
8
Form 10-K
SCHEDULE 14A
Item 7. Directors and executive officers. * * *
(d)
(1) * * * Such disclosure need not be provided to the extent it is duplicative of disclosure
provided in accordance with Item 401(h) of Regulation S-K (§ 229.401(h) of this chapter).
*****
(3) * * *
(iv)
(A)
If the registrant is a listed issuer, as defined in § 240.10A-3, disclose
whether the members of the audit committee are independent, as independence for audit committee
members is defined in the listing standards applicable to the listed issuer. If the registrant does not
have a separately designated audit committee, or committee performing similar functions, the
registrant must provide the disclosure with respect to all members of its board of directors.
(B)
If the registrant, including a small business issuer, is not a listed
issuer, disclose whether the registrant has an audit committee established in accordance with section
3(a)(58)(A) of the Act (15 U.S.C. 78c(a)(58)(A)) and, if so, whether the members of the committee
are independent. In determining whether a member is independent, the registrant must use a definition
for audit committee member independence of a national securities exchange or national securities
association that has been approved by the Commission (as such definition may be modified or
supplemented), and state which definition was used. Whichever definition is chosen must be applied
consistently to all members of the audit committee.
http://www.sec.gov/rules/proposed/34-47137.htm
Item 9. Independent public accountants. * * *
*****
(e)
(1)
Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last
two fiscal years for professional services rendered by the principal accountant for the audit of the
registrant's annual financial statements and review of financial statements included in the registrant's
Form 10-Q (17 CFR 249.308a) or 10-QSB (17 CFR 249.308b) or services that are normally provided
by the accountant in connection with statutory and regulatory filings or engagements for those fiscal
years.
(2)
Disclose, under the caption Audit-Related Fees, the aggregate fees billed in each of
the last two fiscal years for assurance and related services by the principal accountant that are
reasonably related to the performance of the audit or review of the registrant's financial statements
and are not reported under paragraph (e)(1) of this section. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
(3)
Disclose, under the caption Tax Fees, the aggregate fees billed in each of the last two
fiscal years for professional services rendered by the principal accountant for tax compliance, tax
advice, and tax planning. Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
9
Schedule 14A
(4)
Disclose, under the caption All Other Fees, the aggregate fees billed in each of the
last two fiscal years for products and services provided by the principal accountant, other than the
services reported in paragraphs (e)(1) through (e)(3) of this section. Registrants shall describe the
nature of the services comprising the fees disclosed under this category.
(5)
(i)
Disclose the audit committee's pre-approval policies and procedures
described in 17 CFR 210.2-01(c)(7)(i).
(ii)
Disclose the percentage of services described in each of paragraphs (e)(2)
through (e)(4) of this section that were approved by the audit committee pursuant to 17 CFR 210.201(c)(7)(i)(C).
(6)
If greater than 50 percent, disclose the percentage of hours expended on the principal
accountant's engagement to audit the registrant's financial statements for the most recent fiscal year
that were attributed to work performed by persons other than the principal accountant's full-time,
permanent employees.
(7)
If the registrant is an investment company, disclose the aggregate non-audit fees
billed by the registrant's accountant for services rendered to the registrant, and to the registrant's
investment adviser (not including any subadviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing services to the registrant for each
of the last two fiscal years of the registrant.
(8)
If the registrant is an investment company, disclose whether the audit committee of
the board of directors has considered whether the provision of non-audit services that were rendered
to the registrant's investment adviser (not including any subadviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant to 17 CFR 210.2-01(c)(7)(ii) is
compatible with maintaining the principal accountant's independence.
Instruction to Item 9(e).
For purposes of Item 9(e)(2), (3), and (4), registrants that are investment companies must disclose
fees billed for services rendered to the registrant and separately, disclose fees required to be approved
by the investment company registrant's audit committee pursuant to 17 CFR 210.2-01(c)(7)(ii).
Registered investment companies must also disclose the fee percentages as required by item
9(e)(5)(ii) for the registrant and separately, disclose the fee percentages as required by item 9(e)(5)(ii)
for the fees required to be approved by the investment company registrant's audit committee pursuant
to 17 CFR 210.2-01(c)(7)(ii).
http://www.sec.gov/rules/final/33-8183.htm (effective May 6, 2003; appears that compliance not
required until annual proxy statement following year ending after December 15, 2003)
Item 22. Information required in investment company proxy statement. * * *
(b)
(14)
State whether or not the Fund has a separately designated audit committee
established in accordance with section 3(a)(58)(A) of the Act (15 U.S.C. 78c(a)(58)(A)). If the entire
board of directors is acting as the Fund's audit committee as specified in section 3(a)(58)(B) of the
Act (15 U.S.C. 78c(a)(58)(B)), so state. If applicable, provide the disclosure required by
10
Schedule 14A
§240.10A3(d) regarding an exemption from the listing standards for audit committees. Identify the
other standing committees of the Fund's board of directors, and provide the following information
about each committee, including any separately designated audit committee:
http://www.sec.gov/rules/proposed/34-47137.htm
11
Schedule 14A
FORM 10-Q
COVER SHEET
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act). Yes ..... No ......
http://www.sec.gov/rules/final/33-8128.htm
GENERAL INSTRUCTIONS
A.
Rule as to Use of Form 10-Q.
1.
Form 10-Q shall be used for quarterly reports under Section 13 or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)), filed pursuant to Rule 13a-13 (17 CFR 240.13a13) or Rule 15d-13 (17 CFR 240.15d-13). A quarterly report on this form pursuant to Rule 13a-13 or
Rule 15d-13 shall be filed within the following period after the end of each of the first three fiscal
quarters of each fiscal year, but no report need be filed for the fourth quarter of any fiscal year:
a.
For accelerated filers (as defined in 17 CFR 240.12b-2):
(i)
45 days after the end of the fiscal quarter for fiscal years ending on or after
December 15, 2002 and before December 15, 2004;
(ii)
40 days after the end of the fiscal quarter for fiscal years ending on or after
December 15, 2004 and before December 15, 2005; and
(iii)
35 days after the end of the fiscal quarter for fiscal years ending on or after
December 15, 2005; and
b.
45 days after the end of the fiscal quarter for all other issuers.
http://www.sec.gov/rules/final/33-8128.htm
G.
Signature and Filing of Report.
If the report is filed in paper pursuant to a hardship exemption from electronic filing (see Item 201 et
seq. of Regulation S-T (17 CFR 232.201 et seq.), three complete copies of the report, including any
financial statements, exhibits or other papers or documents filed as a part thereof, and five additional
copies which need not include exhibits must be filed with the Commission. At least one complete
copy of the report, including any financial statements, exhibits or other papers or documents filed as a
part thereof, must be filed with each exchange on which any class of securities of the registrant is
registered. At least one complete copy of the report filed with the Commission and one such copy
filed with each exchange must be manually signed on the registrant’s behalf by a duly authorized
officer of the registrant and by the principal financial or chief accounting officer of the registrant.
(See Rule 12b-11(d) (17 CFR 240.12b-11(d).) Copies not manually signed must bear typed or printed
signatures. In the case where the principal executive officer, principal financial officer or chief
accounting officer is also duly authorized to sign on behalf of the registrant, one signature is
acceptable provided that the registrant clearly indicates the dual responsibilities of the signatory. In
addition, each principal executive officer and principal financial officer of the registrant must provide
12
Form 10-Q
the certification required by Rule 13a-14 (17 CFR 240.13a-14) or Rule 15d-14 (17 CFR 240.15d-14)
exactly as specified in this form.
http://www.sec.gov/rules/final/33-8124.htm
PART I - FINANCIAL INFORMATION
Item 4. Controls and Procedures.
Furnish the information required by Item 307 of Regulation S-K (§229.307 of this chapter).
http://www.sec.gov/rules/final/33-8124.htm
Note: the form of Item 4 set forth above is currently effective. The form of Item 4 set forth below is
the proposed substitute for the currently effective form of Item 4.
Item 4. Controls and Procedures.
Furnish the information required by Item 307(a) and (b) of Regulation S-K (§229.307(a) and (b) of
this chapter).
http://www.sec.gov/rules/proposed/33-8138.htm
Part II - Other Information
Item 2. Use of Proceeds and Issuer Purchases of Equity Securities.
*****
(b)
Furnish the information required by Item 703 of Regulation S-K (§229.703 of this
chapter) for any repurchase made in the quarter covered by the report. Provide disclosures on a
rolling-monthly basis. For example, if the quarter began on January 15 and ended on April 15, the
charge would show repurchases for the months from January 15 through February 14, February 15
through March 14, and March 15 through April 15.
http://www.sec.gov/rules/proposed/33-8160.htm
SIGNATURES
*****
CERTIFICATIONS*
I, [identify the certifying individual], certify that:
1.
I have reviewed this quarterly report on Form 10-Q of [identify registrant];
2.
Based on my knowledge, this quarterly report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements made, in light of the
13
Form 10-Q
circumstances under which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3.
Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly
report;
4.
The registrant's other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d14) for the registrant and we have:
a)
designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this quarterly report is being
prepared;
b)
evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation
Date"); and
c)
presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.
The registrant's other certifying officers and I have disclosed, based on our most
recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):
a)
all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b)
any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6.
The registrant's other certifying officers and I have indicated in this quarterly report
whether or not there were significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material weaknesses.
Date: ...............
_______________________
[Signature]
[Title]
* Provide a separate certification for each principal executive officer and principal financial officer of
the registrant. See Rules 13a-14 and 15d-14. The required certification must be in the exact form set
forth above.
http://www.sec.gov/rules/final/33-8124.htm
14
Form 10-Q
Note: the form of certification set forth above is currently effective. The form of certification set
forth below is the proposed substitute for the currently effective form of certification, with changes
marked.
CERTIFICATIONS*
I, [identify the certifying individual], certify that:
1.
I have reviewed this quarterly report on Form 10-Q of [identify registrant];
2.
Based on my knowledge, this quarterly report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3.
Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly
report;
4.
The registrant'’s other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures and internal controls and procedures for financial
reporting (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)
designedDesigned such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrantissuer, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this quarterly report is being
prepared;
b)
Designed such internal controls and procedures for financial reporting, or
caused such internal controls and procedures for financial reporting to be designed under their
supervision, to provide reasonable assurances that the registrant’s financial statements are fairly
presented in conformity with generally accepted accounting principles;
bc)
evaluatedEvaluated the effectiveness of the registrant'’s disclosure controls
and procedures and internal controls and procedures for financial reporting as of a date within 90 days
prior to the filing dateend of the period covered by this quarterly report (the "“Evaluation Date"”);
and
cd)
presentedPresented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures and internal controls and procedures for
financial reporting based on our evaluation as of the Evaluation Date;
5.
The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,e)
Disclosed to the registrant'’s auditors and the audit committee of
registrant'sthe board of directors (or persons performingfulfilling the equivalent function):
a(i)
allAll significant deficiencies and material weaknesses in the design
or operation of internal controls and procedures for financial reporting which could adversely affect
the registrant'’s ability to record, process, summarize and report financial data and have identified
forinformation required to be disclosed by the registrant's auditors any material weaknesses in
15
Form 10-Q
internal controlsthe reports that it files or submits under the Act (15 U.S.C. 78a et seq.), within the
time periods specified in the U.S. Securities and Exchange Commission’s rules and forms; and
b(ii)
anyAny fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant'’s internal controls and procedures for
financial reporting; and
6.
The registrant's other certifying officers and I have indicatedf) Indicated in
this quarterly report whether or not there wereany significant changes in the registrant’s internal
controls and procedures for financial reporting or in other factors that could significantly affect
internal controls subsequent toand procedures for financial reporting made during the date of our
most recent evaluationperiod covered by this report, including any corrective actions with regardtaken
to correct significant deficiencies and material weaknesses in the registrant’s internal controls and
procedures for financial reporting.
Date: ...............
_______________________
[Signature]
[Title]
* Provide a separate certification for each principal executive officer and principal financial officer of
the registrant. See Rules 13a-14 and 15d-14. The required certification must be in the exact form set
forth above.
http://www.sec.gov/rules/proposed/33-8138.htm
16
Form 10-Q
FORM 8-K
General Instructions
B.
Events to be Reported and Time for Filing of Reports
1.
A report on this form is required to be filed upon the occurrence of any one or more
of the events specified in Items 1-4, 6 and 10 of this form. A report of an event specified in Items 1-3
is to be filed within 15 calendar days after the occurrence of the event. A report of an event specified
in Item 4, 6 or 10 is to be filed within 5 business days after the occurrence of the event; if the event
occurs on a Saturday, Sunday, or holiday on which the Commission is not open for business then the
5 business day period shall begin to run on and include the first business day thereafter. A report on
this form pursuant to Item 8 is required to be filed within 15 calendar days after the date on which the
registrant makes the determination to use a fiscal year end different from that used in its most recent
filing with the Commission. A registrant either furnishing a report on this form under Item 9 or
electing to file a report on this form under Item 5 solely to satisfy its obligations under Regulation FD
(17 CFR 243.100 and 243.101) must furnish such report or make such filing in accordance with the
requirements of Rule 100(a) of Regulation FD (17 CFR 243.100(a)).
http://www.sec.gov/rules/final/33-8177.htm (effective March 3, 2003)
*** A report on this form pursuant to Item 11 is required to be filed not later than the date prescribed
for transmission of the notice to directors and executive officers required by Rule 104(b)(2) of
Regulation BTR (§245.104(b)(2) of this chapter).
http://www.sec.gov/rules/final/34-47225.htm
*** A report on this form pursuant to Item 13 is required to be filed within two business days after
receipt of an attorney's written notice pursuant to 17 CFR 205.3(d)(1), (d)(2) or (d)(3).
http://www.sec.gov/rules/proposed/33-8186.htm
Note: there is also a proposal under which all Form 8-Ks would have to be filed within two business
days of the event.
http://www.sec.gov/rules/proposed/33-8106.htm
2.
The information in a report furnished pursuant to Item 6.01 (Regulation FD
Disclosure) shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or
otherwise subject to the liabilities of that section, unless the registrant specifically states that the
information is to be considered “filed” under the Exchange Act or incorporates it by reference into a
filing under the Securities Act or the Exchange Act.
3.
If the registrant previously has reported substantially the same information as
required by this form, the registrant need not make an additional report of the information on this
form. To the extent that an item calls for disclosure of subsequent developments concerning a
previously reported event or transaction, any information required in the new report about the
previously reported event or transaction may be provided by incorporation by reference to the
previously filed report. The term “previously reported” is defined in Rule 12b-2 (§240.12b-2 of this
chapter).
17
Form 8-K
4.
When considering current reporting on this form, particularly of other events of
material importance pursuant to Item 6.01 (Regulation FD Disclosure) and Item 7.01(Other Events),
registrants should have due regard for the accuracy, completeness and currency of the information in
registration statements filed under the Securities Act which incorporate by reference information in
reports filed pursuant to the Exchange Act, including reports on this form.
5.
A registrant’s report under Item 6.01 (Regulation FD Disclosure) or Item 7.01 (Other
Events) will not be deemed an admission as to the materiality of any information in the report that is
required to be disclosed solely by Regulation FD.
http://www.sec.gov/rules/proposed/33-8106.htm
6.
A report on this form is required to be furnished upon the occurrence of any of the
events specified in Item 12 of this form. A report of an event specified in Item 12 is to be furnished
within 5 business days after the occurrence of the event; if the event occurs on a Saturday, Sunday or
holiday on which the Commission is not open for business, the 5 business day period shall begin to
run on and include the first business day thereafter. The information in a report furnished pursuant to
Item 12 shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act or otherwise
subject to the liability of that section, except if the registrant specifically states that the information is
to be considered "filed" under the Exchange Act or incorporates it by reference into a filing under the
Securities Act or the Exchange Act.
http://www.sec.gov/rules/final/33-8176.htm (effective March 28, 2003)
Information to be Included in the Report
Section 1 - Registrant’s Business and Operations
Item 1.01. Entry into a Material Agreement.
If the registrant has entered into an agreement that is material to the registrant and not made in the
ordinary course of the registrant’s business, or into any material amendment of such agreement,
furnish the following information:
(a)
the identity of the parties to the agreement and a description of any material relationship
between any of the parties other than in respect of the agreement;
(b)
a brief description of the agreement;
(c)
the rights and obligations of each party to the agreement that are material to the registrant;
(d)
any material conditions to the agreement becoming binding or effective; and
(e)
the duration of the agreement and any material termination provisions.
Instructions.
1.
For purposes of this Item 1.01, an “agreement” means any definitive agreement, whether
unconditionally binding or binding subject to stated conditions, any letter of intent or other nonbinding agreement or any similar document.
2.
Any material agreement not made in the ordinary course of the registrant’s business must be
disclosed under this Item 1.01. An agreement is deemed to be not made in the ordinary course of a
registrant’s business, and therefore must be disclosed under this item, even if the agreement is such as
ordinarily accompanies the kind of business conducted by the registrant, if it involves the subject
18
Form 8-K
matter identified in Item 601(b)(10)(ii)(A) - (D) of Regulation S-K. An agreement involving the
subject matter identified in Item 601(b)(10)(iii)(A) or (B) also must be disclosed unless Item
601(b)(10)(iii)(C) would not require the registrant to file a material contract involving the same
subject matter as an exhibit.
3.
A registrant must provide disclosure under this Item 1.01 if the registrant succeeds as a party
to the agreement by assumption or assignment.
4.
Disclosure of a material amendment is required under this item even if the underlying
agreement previously has not been disclosed because the agreement was entered into prior to the
effective date of this Item 1.01. In such a case, the amendment and the underlying agreement must be
filed as exhibits to the report disclosing the amendment.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 1.02. Termination of a Material Agreement.
If a definitive material agreement, or other material agreement or instrument, which was not made in
the ordinary course of the registrant’s business and to which the registrant is a party, is terminated and
termination of the agreement is material to the registrant, provide the following:
(a)
the identity of the parties to the agreement and a description of any material relationship
between any of the parties other than in respect of the agreement;
(b)
a brief description of the agreement;
(c)
a description of the material circumstances surrounding the termination;
(d)
any material early termination penalties incurred by the registrant; and
(e)
a discussion of management’s analysis of the effect of the termination on the registrant.
Instructions.
1.
No disclosure is required under this Item 1.02 during negotiations or discussions regarding
termination of an agreement unless and until the agreement has been terminated or the registrant
decides to terminate the agreement. If the registrant is not the terminating party, no disclosure is
required until the terminating party has notified the registrant of the termination in writing, unless the
agreement provides for notification in another manner, and all material conditions to termination
other than those within the control of the terminating party or the passage of time have been satisfied.
2.
Disclosure of the termination of a material agreement is required under this item even if the
agreement previously was not disclosed because the agreement was entered into prior to effectiveness
of Item 1.01. In such a case, the terminated material agreement must be filed as an exhibit to the
report disclosing the termination.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 1.03. Termination or Reduction of Business Relationship with Customer.
If the registrant becomes aware that a customer has terminated or reduced the scope of a business
relationship with the registrant and the amount of loss of revenues to the registrant from such
termination or reduction represents an amount equal to 10% or more of the registrant’s consolidated
revenues during the registrant’s most recent fiscal year, identify the customer and discuss
management’s analysis of the effect of the loss or reduction on the registrant. For purposes of this
item, a group of customers under common control or customers that are affiliates of each other would
be regarded as a single customer.
19
Form 8-K
Instruction. No disclosure is required under this Item 1.03 during negotiations or discussions with a
customer or group of related customers unless and until an executive officer of the registrant is aware
that the termination or reduction required to be disclosed has occurred or will occur. A reduction or
suspension of orders will not trigger a disclosure requirement unless and until an executive officer of
the registrant is aware that a termination of reduction of a business relationship requiring disclosure
has occurred.
http://www.sec.gov/rules/proposed/33-8106.htm
Section 2 - Financial Information
Item 2.01. Completion of Acquisition or Disposition of Assets.
If the registrant or any of its majority-owned subsidiaries has completed the acquisition or disposition
of a significant amount of assets, otherwise than in the ordinary course of business, furnish the
following information:
(a)
the date of completion of the transaction;
(b)
a brief description of the assets involved;
(c)
the nature and amount of consideration given or received for the assets and, if applicable, the
formula or principle followed in determining the amount of such consideration;
(d)
the identity of the person(s) from whom the assets were acquired or to whom they were sold
and the nature of any material relationship, other than in respect of the transaction, between such
person(s) and the registrant or any of its affiliates, or any director or officer of the registrant, or any
associate of any such director or officer; and
(e)
if the transaction being reported is an acquisition, the source and the amount of funds or other
consideration used in making the purchases, and if any part of the purchase price is represented by
funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding,
trading or voting the securities, a description of the transaction and the names of the parties to the
transaction, except that if the source of all or any part of the funds is a loan made in the ordinary
course of business by a bank, as defined in Section 3(a)(6) of the Exchange Act, the name of the bank
shall not be made available to the public if the person at the time of filing the report so requests in
writing and files such request, naming such bank, with the Secretary of the Commission.
Instructions.
1.
No information need be given as to (i) any transaction between any person and any whollyowned subsidiary of such person; (ii) any transaction between two or more wholly-owned subsidiaries
of any person; or (iii) the redemption or other acquisition of securities from the public, or the sale or
other disposition of securities to the public, by the issuer of such securities.
2.
The term “acquisition” includes every purchase, acquisition by lease, exchange, merger,
consolidation, succession or other acquisition, except that the term does not include the construction
or development of property by or for the registrant or its subsidiaries or the acquisition of materials
for such purpose. The term “disposition” includes every sale, disposition by lease, exchange, merger,
consolidation, mortgage, assignment or hypothecation of assets, whether for the benefit of creditors or
otherwise, abandonment, destruction, or other disposition.
3.
The information called for by this item is to be given as to each transaction or series of
related transactions of the size indicated. The acquisition or disposition of securities is deemed the
indirect acquisition or disposition of the assets represented by such securities if it results in the
acquisition or disposition of control of such assets.
20
Form 8-K
4.
An acquisition or disposition shall be deemed to involve a significant amount of assets:
(i)
if the registrant’s and its other subsidiaries’ equity in the net book value of such
assets or the amount paid or received for the assets upon such acquisition or disposition exceeded
10% of the total assets of the registrant and its consolidated subsidiaries; or
(ii)
if it involved a business (see §210.11-01(d) of this chapter) that is significant (see
§210.11-01(b) of this chapter).
Acquisitions of individually insignificant businesses are not required to be reported pursuant to this
Item 2.01 unless they are related businesses (see §210.3-05(a)(3) of this chapter) and are significant in
the aggregate.
5.
Attention is directed to the requirements in Item 8.01 (Financial Statements and Exhibits)
with respect to the filing of:
(i)
financial statements of businesses acquired;
(ii)
pro forma financial information; and
(iii)
copies of the plans of acquisition or disposition as exhibits to the report.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 2.02. Bankruptcy or Receivership.
(a)
If a receiver, fiscal agent or similar officer has been appointed for a registrant or its parent, in
a proceeding under the Bankruptcy Act or in any other proceeding under State or Federal law in
which a court or governmental authority has assumed jurisdiction over substantially all of the assets
or business of the registrant or its parent, or if such jurisdiction has been assumed by leaving the
existing directors and officers in possession but subject to the supervision and orders of a court or
governmental authority, disclose the following:
(1)
the name or other identification of the proceeding;
(2)
the identity of the court or governmental authority;
(3)
the date that jurisdiction was assumed; and
(4)
appointment.
the identity of the receiver, fiscal agent or similar officer and the date of his or her
(b)
If an order confirming a plan of reorganization, arrangement or liquidation has been entered
by a court or governmental authority having supervision or jurisdiction over substantially all of the
assets or business of the registrant or its parent, disclose the following;
(1)
(2)
authority;
the identity of the court or governmental authority;
the date that the order confirming the plan was entered by the court or governmental
(3)
a summary of the material features of the plan and, pursuant to Item 8.01 (Financial
Statements and Exhibits), a copy of the plan as confirmed;
21
Form 8-K
(4)
the number of shares or other units of the registrant or its parent issued and
outstanding, the number reserved for future issuance in respect of claims and interests filed and
allowed under the plan, and the aggregate total of such numbers; and
(5)
information as to the assets and liabilities of the registrant or its parent as of the date
that the order confirming the plan was entered, or a date as close thereto as practicable.
Instruction. The information called for in paragraph (b)(5) of this Item 2.02 may be presented in the
form in which it was furnished to the court or governmental authority.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 2.03. Creation of a Direct or Contingent Financial Obligation That Is Material to the
Registrant.
If the registrant or any third party enters into a transaction or agreement that creates any material
direct or contingent financial obligation to which the registrant is subject, furnish the following
information:
(a)
a brief description of the transaction or agreement, including an identification of the parties to
the agreement;
(b)
the nature and amount of the material direct or contingent financial obligation created by the
transaction or agreement, including a description of the events that may cause the obligation to arise,
increase, or become accelerated;
(c)
if applicable, the names of any underwriters or placement or other agents for the transaction,
or any persons performing a similar function in the case of a private transaction, and the amount of
any fees or other compensation paid to them;
(d)
in the case of a transaction or agreement without underwriters or placement or other agents or
persons performing a similar function, the names of any lenders or other persons who are the
beneficiaries of the obligation described in paragraph (b) of this Item 2.03; and
(e)
a discussion of management’s analysis of the effect of the direct or contingent financial
obligation on the registrant.
Instructions.
1.
Disclosure is required if the registrant becomes subject to the direct or contingent financial
obligation, whether or not the registrant is a party to the agreement.
2.
No obligation to make disclosure under this Item 2.03 shall arise until a definitive agreement
that is unconditional or subject only to customary closing conditions exists or, if there is no such
agreement, when settlement of the transaction occurs.
3.
If the transaction or agreement has been or will be disclosed in a prospectus related to a
registrant statement of the registrant filed in the required time period under Securities Act Rule 424
(§230.424 of this chapter), disclosure may be made by reference to that prospectus to the extent the
prospectus contains the required information.
4.
No disclosure is required with respect to the issuance of notes, drafts, acceptances, bills of
exchange or other commercial instruments with a maturity of one year or less issued in the ordinary
course of the registrant’s business.
5.
For purposes of this item, the term “contingent financial obligation” includes guarantees, coobligor arrangements, obligations under keepwell agreements, obligations to purchase assets and any
22
Form 8-K
similar arrangements and all other obligations that exist or may arise under an agreement. For
purposes of this instruction, a “keepwell agreement” means any agreement or undertaking under
which the registrant is, or would be, obligated to provide or arrange for the provision of funds or
property to an affiliate or third party.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 2.04. Events Triggering a Direct or Contingent Financial Obligation That Is Material to
the Registrant.
(a)
If a triggering event as defined in paragraph (b) occurs, furnish the following information:
(1)
occurred;
(2)
a description of the agreement or agreements under which the triggering event
a description of the triggering event;
(3)
the nature and amount of the material direct or contingent financial obligation of the
registrant that may arise, increase or become accelerated as a result of the triggering event, including
obligations under cross-default, cross-acceleration or similar arrangements; and
(4)
a discussion of management’s analysis of the effect on the registrant of the triggering
event and of the obligations that have arisen, increased or been accelerated.
(b)
For purposes of this Item 2.04, a “triggering event” shall be an event, including an event of
default, event of acceleration or similar event, that has occurred and as a consequence of which, either
(i) unconditionally, or subject to no condition other than the passage of time, a material direct or
contingent financial obligation of the registrant has arisen (including as a result of an increase in an
obligation) or been accelerated, or (ii) a party to the agreement shall have the unconditional right to
cause such an obligation to arise or be accelerated, in either case whether or not the registrant is a
defaulting party; provided, however, that no triggering event shall be deemed to have occurred during
negotiations or discussions to which the registrant is a party regarding a determination of whether a
triggering event has occurred, a waiver of the triggering event, an amendment that would cure the
triggering event or a similar arrangement, unless a party to the agreement with the right to do so
notifies to the registrant or otherwise declares that the triggering event has occurred. Such notice or
declaration must be in writing unless the agreement provides for notification in another manner.
Instructions.
1.
So long as the registrant becomes, or will become, subject to a direct or contingent financial
obligation as the result of the occurrence of a triggering event, a report under this item is required.
The registrant need not be a party to the agreement under which the triggering event occurs.
2.
For purposes of this item, “contingent financial obligations” includes guarantees, co-obligor
arrangements, obligations under keepwell agreements, obligations to purchase assets and any similar
arrangements and all other obligations that exist or may arise under an agreement. For purposes of
this instruction, a “keepwell agreement” means any agreement or undertaking under which the
registrant is, or would be, obligated to provide or arrange for the provision of funds or property to an
affiliate or other third party.
http://www.sec.gov/rules/proposed/33-8106.htm
23
Form 8-K
Item 2.05. Exit Activities Including Material Write-Offs and Restructuring Charges.
If the Board of Directors or the registrant’s officer or officers authorized to take such action, if board
approval is not required, definitively commits the registrant to a course of action, including, without
limitation, a plan of termination or plan to exit an activity, under which material write-offs or
restructuring charges will be incurred under generally accepted accounting principles applicable to
the registrant, furnish the following information:
(a)
the date on which such commitment was made;
(b)
a description of the course of action and the reasons for the write-off or restructuring charge;
(c)
a description of the asset or assets subject to write-off;
(d)
the estimated amount of the write-off or restructuring charge;
(e)
the estimated amount of the write-off or restructuring charge that will result in future cash
expenditures; and
(f)
an analysis of the effect of the write-off or restructuring charge on the company, including the
segment affected.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 2.06. Material Impairments.
If the Board of Directors or the registrant’s officer or officers authorized to make the relevant
conclusion, if board approval is not required, concludes that the registrant is required to record a
material charge for impairment to one or more of its assets, including, without limitation, impairments
of securities or goodwill, under generally accepted accounting principles applicable to the registrant,
furnish the following information:
(a)
the date on which the conclusion was reached;
(b)
a description of the asset or assets subject to impairment and the facts and circumstances
leading to the impairment;
(c)
the estimated amount of the impairment charge; and
(d)
an analysis of the effect of the impairment charge on the registrant, including the segment
affected.
http://www.sec.gov/rules/proposed/33-8106.htm
Section 3 - Securities and Trading Markets
Item 3.01. Rating Agency Decisions.
(a)
Furnish the information required by paragraph (b) of this Item 3.01 if the registrant is notified
by, or receives any communication from, any rating agency to whom the registrant provides
information (other than its annual report or reports filed with the Commission) to the effect that the
organization has decided to:
(1)
change or withdraw the credit rating assigned to, or outlook on, the registrant or any
class of debt or preferred security or other indebtedness of the registrant (including securities or
obligations as to which the registrant is a guarantor or has a contingent financial obligation);
24
Form 8-K
(2)
refuse to assign a credit rating to the registrant, to any class of the registrant’s
securities, or to any of the registrant’s indebtedness after being requested to do so by the registrant;
(3)
place the registrant or any class of the registrant’s securities or indebtedness on
“credit watch” or similar status; or
(4)
take any similar action.
(b)
If the registrant has received any notification or other communication as described in
paragraph (a) of this Item 3.01, file the notice as an exhibit to the report on Form 8-K and furnish the
following information:
(1)
the date of the registrant received the notification or communication;
(2)
the name of the rating agency;
(3)
the nature of the rating agency’s decision; and
(4)
a discussion of management’s analysis of the effect of the change or other decision
on the registrant.
Instructions.
1.
No disclosure need be made under this Item 3.01 during any discussions between the
registrant and any rating organization regarding any decision required to be disclosed unless and until
the rating organization notifies the registrant that the rating organization has made a final decision to
take such action.
2.
For purposes of this Item 3.01, the term “rating agency” means an entity whose primary
business is the issuance of credit ratings.
3.
The term “contingent financial obligation” as used in this Item 3.01 has the same meaning as
in the definition included in Instruction 4 to Item 2.03 of this Form.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 3.02. Notice of Delisting or Failure to Satisfy Listing Standards; Transfer of Listing.
(a)
If the registrant has received notice from the national securities exchange or national
securities association that is the principal trading market for a class of the registrant’s common stock
or similar equity securities to the effect that the registrant or a class of the registrant’s securities does
not satisfy the listing requirements or standards of the exchange or association, or that a class of the
registrant’s securities has been delisted from or by the exchange or association, furnish the following
information:
(1)
the date that the registrant received the notice;
(2)
the listing requirement or standard that the registrant failed to satisfy or the reason for
the delisting as indicated by the exchange or association; and
(3)
a discussion of the planned response of the registrant to the notice and management’s
analysis of the effect of the delisting or the failure to satisfy a listing standard on the registrant.
25
Form 8-K
(b)
If the registrant has taken definitive action to cause the listing or quotation of a class of its
common stock or similar equity securities to be terminated from the national securities exchange or
inter-dealer quotation system of a registered national securities association that is the principal trading
market for that class of securities, including by reason of a transfer of the listing or quotation to
another securities exchange or quotation system, furnish a description of the action taken and date of
the action.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 3.03. Unregistered Sales of Equity Securities.
If the registrant sells equity securities in a transaction that is not registered under the Securities Act,
furnish the information set forth in paragraphs (a) through (e) of Item 701 of Regulation S-K
(§229.701(a) through (e) of this chapter). The registrant has no obligation to disclose the information
required by this Item 3.03 until a definitive agreement for the sale of equity securities that is
unconditional or subject only to customary closing conditions exists, or if there is no such agreement,
when settlement of the sale occurs.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 3.04. Material Modification to Rights of Security Holders.
(a)
If the constituent instruments defining the rights of the holders of any class of registered
securities have been materially modified and such modification was not reported in a publicly filed
definitive proxy statement or information statement under Section 14 of the Exchange Act, state the
title of the class of securities involved and describe briefly the general effect of such modification
upon the rights of holders of such securities.
(b)
If the rights evidenced by any class of registered securities have been materially limited or
qualified by the issuance or modification of any other class of securities, state briefly the general
effect of the issuance or modification of such other class of securities upon the rights of the holders of
the registered securities.
http://www.sec.gov/rules/proposed/33-8106.htm
Section 4 - Matters Related to Accountants
Item 4.01. Changes in Registrant’s Certifying Accountant.
(a)
If an independent accountant who was previously engaged as the principal accountant to audit
the registrant’s financial statements, or an independent accountant upon whom the principal
accountant expressed reliance in its report regarding a significant subsidiary, resigns (or indicates that
it declines to stand for re-appointment after completion of the current audit) or is dismissed, provide
the information required by Item 304(a)(1) of Regulation S-K, including compliance with Item
304(a)(3) of Regulation S-K (§229.304(a)(1) and (a)(3) of this chapter).
(b)
If a new independent accountant has been engaged as either the principal accountant to audit
the registrant’s financial statements or as an independent accountant on whom the principal
accountant is expected to express reliance in its report regarding a significant subsidiary, then provide
the information required by Item 304(a)(2) of Regulation S-K (§229.304(a)(2) of this chapter).
Instruction. The resignation or dismissal of an independent accountant, or its declination to stand for
re-appointment, is a reportable event separate from the engagement of a new independent accountant.
On some occasions, two reports on Form 8-K are required for a single change in accountants, the first
26
Form 8-K
on the resignation (or declination to stand for re-appointment ) or dismissal of the former accountant
and the second when the new accountant is engaged. Information required in the second Form 8-K in
such situations need not be provided to the extent that it has been reported previously in the first Form
8-K.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report.
(a)
If the audit committee, or the board of directors in the absence of an audit committee, or the
company’s officer or officers authorized to make such a conclusion, conclude that any previously
issued financial statements, covering one or more years for which the registrant is required to provide
audited financial statements under Regulation S-X or Regulation S-B, should no longer be relied
upon, or if the registrant receives notice from its current or a previously engaged independent
accountant that action should be taken to prevent future reliance on a previously issued report related
to any such financial statements, furnish the following information:
(1)
the date on which the conclusion was reached or the registrant received the notice;
(2)
a description of the events giving rise to the conclusion or notice related to the
reliability of the financial statements;
(3)
a statement of whether the audit committee, or the board of directors in the absence
of an audit committee, discussed with the independent accountant the subject matter giving rise to the
conclusion or notice; and
(4)
(b)
a description of management’s plans to alleviate the issue.
In addition, the registrant must:
(1)
provide the independent accountant with a copy of the disclosures it is making in
response to this Item 4.02 that the independent accountant shall receive no later than the business day
following the day that the registrant files the disclosures with the Commission;
(2)
request the independent accountant to furnish the registrant as promptly as possible
with a letter addressed to the Commission stating whether the independent accountant agrees with the
statements made by the registrant in response to this Item 4.02 and, if not, stating the respects in
which it does not agree; and
(3)
file the independent accountant’s letter with the Commission within two business
days after receipt as an exhibit by amendment to the report on Form 8-K.
http://www.sec.gov/rules/proposed/33-8106.htm
Section 5 - Corporate Governance and Management
Item 5.01. Changes in Control of Registrant.
(a)
If, to the knowledge of management, a change in control of the registrant has occurred,
furnish the following information:
(1)
the identity of the person(s) who acquired such control;
27
Form 8-K
(2)
the date and a description of the transaction(s) which resulted in the change in
control;
(3)
the basis of the control, including the percentage of voting securities of the registrant
now beneficially owned directly or indirectly by the person(s) who acquired control;
(4)
the amount of the consideration used by such person(s);
(5)
the source and the amount of funds or other consideration used in making the
purchases, and if any part of the purchase price is represented by funds or other consideration
borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the securities,
a description of the transaction and the names of the parties to the transaction, except that if the
source of all or any part of the funds is a loan made in the ordinary course of business by a bank, as
defined in Section 3(a)(6) of the Exchange Act, the name of the bank shall not be made available to
the public if the person at the time of filing the report so requests in writing and files such request,
naming such bank, with the Secretary of the Commission;
(6)
the identity of the person(s) from whom control was assumed; and
(7)
any arrangements or understandings among members of both the former and new
control groups and their associates with respect to election of directors or other matters.
(b)
Furnish the information required by Item 403(c) of Regulation S-K.
Instructions. Responses to this Item 5.01 may be given by reference to any earlier filing with the
Commission pursuant to its rules under the Exchange Act.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
(a)
(1)
If a director has resigned or declined to stand for re-election to the board of directors
since the date of the last annual meeting of shareholders because of a disagreement with the
registrant, known to an executive officer of the registrant, on any matter relating to the registrant’s
operations, policies or practices, or if a director has been removed for cause from the board of
directors, the registrant must:
(i)
state the date of such resignation, declination to stand for re-election, or
removal;
(ii)
state any positions held by the director on any committee of the board of
directors before the director’s resignation, declination to stand for re-election, or removal; and
(iii)
briefly describe the circumstances of the director’s resignation, declination to
stand for re-election or removal.
(2)
If the director has furnished the registrant with any written document concerning the
circumstances surrounding his or her resignation, declination, or removal, the registrant shall
summarize the contents of that document and file a copy of the document as an exhibit to the report
on Form 8-K.
(3)
The registrant also must:
28
Form 8-K
(i)
provide the director with a copy of the disclosures it is making in response to
this Item 5.02, which the director shall receive no later than the business day following the day that
the registrant files the disclosures with the Commission;
(ii)
request the director to furnish the registrant as promptly as possible with a
letter addressed to the Commission stating whether he or she agrees with the statements made by the
registrant in response to this Item 5.02 and, if not, stating the respects in which he or she does not
agree; and
(iii)
file the director’s letter with the Commission within two business days after
receipt as an exhibit by amendment to the report on Form 8-K.
(b)
If the registrant’s chief executive officer, president, chief financial officer, chief accounting
officer, chief operating officer, or any person serving an equivalent function, has resigned or been
terminated from that position, or if a director has resigned, been removed, or declined to stand for reelection (except in circumstances described in paragraph (a) of this Item 5.02), furnish the following
information:
(1)
the date when the event occurred; and
(2)
a description of the reasons for the event.
(c)
If the registrant appoints a new principal executive officer, president, principal financial
officer, principal accounting officer, principal operating officer, or person serving an equivalent
function, furnish the following information:
(1)
the name and position of the newly appointed officer and the date of the appointment;
(2)
a brief description of any arrangement or understanding between the newly appointed
officer and any other persons, naming such persons, pursuant to which such officer was selected as an
officer;
(3)
the information required by Items 401(d), 401(e) and 404(a) of Regulation S-K
(§§229.401(d) and (e) and §229.404(a) of this chapter); and
(4)
a brief description of the material terms of any employment agreement between the
registrant and that officer.
(d)
If the registrant elects a new director, except by a vote of security holders at an annual
meeting, furnish the following information:
(1)
the name of the newly elected director and the date of election;
(2)
a brief description of any arrangement or understanding between the new director and
any other persons, naming such persons, pursuant to which such director was selected as a director;
(3)
the committees of the board of directors to which the new director has been, or at the
time of this disclosure is expected to be, named; and
(4)
chapter).
the information required by Item 404(a) of Regulation S-K (§229.404(a) of this
Instruction. To the extent that any information called for in clauses (3) and (4) of paragraph (c) or
29
Form 8-K
clauses (3) and (4) of paragraph (d) of this Item 5.02 is undetermined at the time of the required
filing, that fact shall be stated in the filing and the registrant shall make an amended filing under this
Item 5.02 containing such information within two business days after the information is determined.
http://www.sec.gov/rules/proposed/33-8106.htm
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
(a)
If the registrant amends its articles of incorporation or bylaws and the amendment was not
disclosed in a proxy statement or information statement filed by the registrant, furnish the following
information:
(1)
the effective date of the amendment;
(2)
a description of the provision adopted or changed by amendment and, if applicable,
the previous provision; and
(3)
in the event of an amendment to change the fiscal year of the registrant from that
used in its most recent filing with the Commission, state the date of the new fiscal year end and the
form (for example, Form 10-K, Form 10-KSB, Form 10-Q or Form 10-QSB) on which the report
covering the transition period will be filed.
(b)
If the registrant determines to change the fiscal year from that used in its most recent filing
with the Commission other than by means of:
(1)
otherwise; or
a submission to a vote of security holders through the solicitation of proxies or
(2)
an amendment to its articles of incorporation or bylaws, state the date of such
determination, the date of the new fiscal year end, and the form (for example, Form 10-K, Form 10KSB, Form 10-Q or Form 10-QSB) on which the report covering the transition period will be filed.
http://www.sec.gov/rules/proposed/33-8106.htm
Section 7 - Other Events
Item 7.01. Other Events.
The registrant may, at its option, report under this item any events, with respect to which information
is not otherwise called for by this form, that the registrant deems of importance to security holders.
The registrant may, at its option, file a report under this item disclosing the nonpublic information
required to be disclosed by Regulation FD (§§243.100-243.103 of this chapter).
http://www.sec.gov/rules/proposed/33-8106.htm
Section 8 - Financial Statements and Exhibits
Item 8.01. Financial Statements and Exhibits.
List below the financial statements, pro forma financial information and exhibits, if any, filed as a
part of this report.
(a)
Financial statements of businesses acquired.
30
Form 8-K
(1)
For any business acquisition required to be described in answer to Item 2.01,
financial statements of the business acquired shall be filed for the periods specified in Rule 3-05(b) of
Regulation S-X (§210.3-05(b) of this chapter).
(2)
The financial statements shall be prepared pursuant to Regulation S-X except that
supporting schedules need not be filed. A manually signed accountants’ report should be provided
pursuant to Rule 2-02 of Regulation S-X [§210.2-02 of this chapter].
(3)
With regard to the acquisition of one or more real estate properties, the financial
statements and any additional information specified by Rule 3-14 of Regulation S-X (§210.3-14 of
this chapter) shall be filed.
(4)
Financial statements required by this item may be filed with the initial report, or by
amendment not later than 60 days after the date that the initial report on Form 8-K must be filed. If
the financial statements are not included in the initial report, the registrant should so indicate in the
Form 8-K report and state when the required financial statements will be filed. The registrant may, at
its option, include unaudited financial statements in the initial report on Form 8-K.
(b)
Pro forma financial information.
(1)
For any transaction required to be described in answer to Item 2.01 above, furnish
any pro forma financial information that would be required pursuant to Article 11 of Regulation S-X.
(2)
The provisions of (a)(4) above shall also apply to pro forma financial information
relative to the acquired business.
(c)
Exhibits. The exhibits shall be furnished in accordance with the provisions of Item 601 of
Regulation S-K (§229.601 of this chapter).
Instructions. During the period after a registrant has reported a business combination pursuant to
Item 2.01, until the date on which the financial statements specified by this Item 8.01 must be filed,
the registrant will be deemed current for purposes of its reporting obligations under Section 13(a) or
15(d) of the Securities Exchange Act of 1934. With respect to filings under the Securities Act of
1933, however, registration statements will not be declared effective and post-effective amendments
to registrations statements will not be declared effective unless financial statements meeting the
requirements of Rule 3-05 of Regulation S-X (§210.3-05 of this chapter) are provided. In addition,
offerings should not be made pursuant to effective registration statements or pursuant to Rules 505
and 506 of Regulation D (§§230.501 through 506 of this chapter), where any purchasers are not
accredited investors under Rule 501(a) of that Regulation, until the audited financial statements
required by Rule 3-05 of Regulation S-X (§210.3-05 of this chapter) are filed. Provided, however,
that the following offerings or sales of securities may proceed notwithstanding that financial
statements of the acquired business have not been filed:
(a)
offerings or sales of securities upon the conversion of outstanding convertible securities or
upon the exercise of outstanding warrants or rights;
(b)
dividend or interest reinvestment plans;
(c)
employee benefit plans;
(d)
transactions involving secondary offerings; or
(e)
sales of securities pursuant to Rule 144 (§230.144 of this chapter).
http://www.sec.gov/rules/proposed/33-8106.htm
31
Form 8-K
Item 10. Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code
of Ethics.
(a)
The registrant must briefly describe the nature of any amendment to a provision of its code of
ethics that applies to the registrant's principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in Item 406(b) of Regulations S-K and S-B
(§229.406(b) and §228.406(b) of this chapter).
(b)
If the registrant has granted a waiver, including an implicit waiver, from a provision of the
code of ethics to one of these officers or persons that relates to one or more of the items set forth in
Item 406(b) of Regulations S-K and S-B (§229.406(b) and §228.406(b) of this chapter), the registrant
must briefly describe the nature of the waiver, the name of the person to whom the waiver was
granted, and the date of the waiver.
(c)
The registrant does not need to provide any information pursuant to this Item if it discloses
the required information on its Internet website within five business days following the date of the
amendment or waiver and the registrant has disclosed in its most recently filed annual report its
Internet address and intention to provide disclosure in this manner. If the registrant elects to disclose
the information required by this Item through its website, such information must remain available on
the website for at least a 12-month period. Following the 12-month period, the registrant must retain
the information for a period of not less than five years. Upon request, the registrant must furnish to
the Commission or its staff a copy of any or all information retained pursuant to this requirement.
Instructions.
1.
The registrant does not need to disclose technical, administrative or other non-substantive
amendments to its code of ethics.
2.
For purposes of this Item:
a.
The term "waiver" means the approval by the registrant of a material departure from
a provision of the code of ethics; and
b.
The term "implicit waiver" means the registrant's failure to take action within a
reasonable period of time regarding a material departure from a provision of the code of ethics that
has been made known to an executive officer, as defined in Rule 3b-7 (§240.3b-7 of this chapter) of
the registrant.
http://www.sec.gov/rules/final/33-8177.htm (effective March 3, 2003; companies must comply after
filing their annual reports for fiscal years ending on or after July 15, 2003)
Item 11. Temporary Suspension of Trading Under Registrant's Employee Benefit Plans
Not later than the date prescribed for transmission of the notice required by Rule 104(b)(2) of
Regulation BTR (§245.104(b)(2) of this chapter), provide the information specified in §245.104(b) of
this chapter and the date the registrant received the notice required by section 101(i)(2)(E) of the
Employment Retirement Income Security Act of 1974 (29 U.S.C. 1021(i)(2)(E)).
http://www.sec.gov/rules/final/34-47225.htm
32
Form 8-K
Item 12. Results of Operations and Financial Condition.
(a)
If a registrant, or any person acting on its behalf, makes any public announcement or release
(including any update of an earlier announcement or release) disclosing material non-public
information regarding the registrant's results of operations or financial condition for a completed
quarterly or annual fiscal period, the registrant shall briefly identify the announcement or release and
include the text of that announcement or release as an exhibit;
(b)
A Form 8-K is not required to be furnished to the Commission under this Item 12 in the case
of disclosure of material non-public information that is disclosed orally, telephonically, by webcast,
by broadcast, or by similar means if:
(1)
The information is provided as part of a presentation that is complementary to, and
initially occurs within 48 hours after, a related, written announcement or release that has been
furnished on Form 8-K pursuant to this Item 12 prior to the presentation;
(2)
The presentation is broadly accessible to the public by dial-in conference call, by
webcast, by broadcast, or by similar means;
(3)
The financial and other statistical information contained in the presentation is
provided on the registrant's web site, together with any information that would be required under
§244.100 of Regulation G; and
(4)
The presentation was announced by a widely disseminated press release, that
included instructions as to when and how to access the presentation and the location on the
registrant's web site where the information would be available.
Instructions.
1.
The requirements of this Item 12 are triggered by the disclosure of material non-public
information regarding a completed fiscal year or quarter. Release of additional or updated material
non-public information regarding a completed fiscal year or quarter would trigger an additional Item
12 requirement.
2.
The requirements of paragraph (e)(1)(i) of Item 10 of Regulation S-K (or paragraph (h)(1)(i)
of Item 10 of Regulation S-B in the case of a small business issuer) shall apply to disclosures under
this Item 12.
3.
Issuers that make earnings announcements or other disclosures of material non-public
information regarding a completed fiscal year or quarter in an interim or annual report to
shareholders, are permitted to specify which portion of the report contains the information required to
be furnished under Item 12.
4.
This Item 12 does not apply in the case of a disclosure that is made in a quarterly report filed
with the Commission on Form 10-Q (or 10-QSB) or an annual report filed with the Commission on
Form 10-K (or 10-KSB).
http://www.sec.gov/rules/final/33-8176.htm (effective March 28, 2003)
33
Form 8-K
Item 13. Receipt of an Attorney's Written Notice Pursuant to 17 CFR 205.3(d).
Upon receipt of written notice from an attorney (as defined in 17 CFR 205.3(d)) provide the
information specified in 17 CFR 205.3(e).
http://www.sec.gov/rules/proposed/33-8186.htm
34
Form 8-K
REGULATION S-K
§229.10 (Item 10) General.
*****
(e)
Use of non-GAAP financial measures in Commission filings.
(1)
Whenever one or more non-GAAP financial measures are included in a filing with
the Commission:
(i)
The registrant must include the following in the filing:
(A)
A presentation, with equal or greater prominence, of the most
directly comparable financial measure or measures calculated and presented in accordance with
Generally Accepted Accounting Principles (GAAP);
(B)
A reconciliation (by schedule or other clearly understandable
method), which shall be quantitative for historical non-GAAP measures presented, and quantitative,
to the extent available without unreasonable efforts, for forward-looking information, of the
differences between the non-GAAP financial measure disclosed or released with the most directly
comparable financial measure or measures calculated and presented in accordance with GAAP
identified in paragraph (e)(1)(i)(A) of this section;
(C)
A statement disclosing the reasons why the registrant's management
believes that presentation of the non-GAAP financial measure provides useful information to
investors regarding the registrant's financial condition and results of operations; and
(D)
To the extent material, a statement disclosing the additional
purposes, if any, for which the registrant's management uses the non-GAAP financial measure that
are not disclosed pursuant to paragraph (e)(1)(i)(C) of this section; and
(ii)
A registrant must not:
(A)
Exclude charges or liabilities that required, or will require, cash
settlement, or would have required cash settlement absent an ability to settle in another manner, from
non-GAAP liquidity measures, other than the measures earnings before interest and taxes (EBIT) and
earnings before interest, taxes, depreciation, and amortization (EBITDA);
(B)
Adjust a non-GAAP performance measure to eliminate or smooth
items identified as non-recurring, infrequent or unusual, when the nature of the charge or gain is such
that it is reasonably likely to recur within two years or there was a similar charge or gain within the
prior two years;
(C)
Present non-GAAP financial measures on the face of the registrant's
financial statements prepared in accordance with GAAP or in the accompanying notes;
35
Regulation S-K
(D)
Present non-GAAP financial measures on the face of any pro forma
financial information required to be disclosed by Article 11 of Regulation S-X (17 CFR 210.11-01
through 210.11-03); or
(E)
Use titles or descriptions of non-GAAP financial measures that are
the same as, or confusingly similar to, titles or descriptions used for GAAP financial measures; and
(iii)
If the filing is not an annual report on Form 10-K or Form 20-F (17 CFR
249.220f), a registrant need not include the information required by paragraphs (e)(1)(i)(C) and
(e)(1)(i)(D) of this section if that information was included in its most recent annual report on Form
10-K or Form 20-F or a more recent filing, provided that the required information is updated to the
extent necessary to meet the requirements of paragraphs (e)(1)(i)(C) and (e)(1)(i)(D) of this section at
the time of the registrant's current filing.
(2)
For purposes of this paragraph (e), a non-GAAP financial measure is a numerical
measure of a registrant's historical or future financial performance, financial position or cash flows
that:
(i)
Excludes amounts, or is subject to adjustments that have the effect of
excluding amounts, that are included in the most directly comparable measure calculated and
presented in accordance with GAAP in the statement of income, balance sheet or statement of cash
flows (or equivalent statements) of the issuer; or
(ii)
Includes amounts, or is subject to adjustments that have the effect of
including amounts, that are excluded from the most directly comparable measure so calculated and
presented.
(3)
For purposes of this paragraph (e), GAAP refers to generally accepted accounting
principles in the United States, except that (i) in the case of foreign private issuers whose primary
financial statements are prepared in accordance with non-U.S. generally accepted accounting
principles, GAAP refers to the principles under which those primary financial statements are
prepared; and (ii) in the case of foreign private issuers that include a non-GAAP financial measure
derived from or based on a measure calculated in accordance with U.S. generally accepted accounting
principles, GAAP refers to U.S. generally accepted accounting principles for purposes of the
application of the requirements of this paragraph (e) to the disclosure of that measure.
(4)
For purposes of this paragraph (e), non-GAAP financial measures exclude:
(i)
operating and other statistical measures; and
(ii)
ratios or statistical measures calculated using exclusively one or both of:
(A)
Financial measures calculated in accordance with GAAP; and
(B)
Operating measures or other measures that are not non-GAAP
financial measures.
(5)
For purposes of this paragraph (e), non-GAAP financial measures exclude financial
measures required to be disclosed by GAAP, Commission rules, or a system of regulation of a
government or governmental authority or self-regulatory organization that is applicable to the
registrant. However, the financial measure should be presented outside of the financial statements
36
Regulation S-K
unless the financial measure is required or expressly permitted by the standard-setter that is
responsible for establishing the GAAP used in such financial statements.
(6)
The requirements of paragraph (e) of this section shall not apply to a non-GAAP
financial measure included in disclosure relating to a proposed business combination, the entity
resulting therefrom or an entity that is a party thereto, if the disclosure is contained in a
communication that is subject to § 230.425 of this chapter, § 240.14a-12 or § 240.14d-2(b)(2) of this
chapter or § 229.1015 of this chapter.
(7)
The requirements of paragraph (e) of this section shall not apply to investment
companies registered under Section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8).
Note to paragraph (e). A non-GAAP financial measure that would otherwise be prohibited by
paragraph (e)(1)(ii) of this section is permitted in a filing of a foreign private issuer if:
1.
The non-GAAP financial measure relates to the GAAP used in the registrant's primary
financial statements included in its filing with the Commission;
2.
The non-GAAP financial measure is required or expressly permitted by the standard-setter
that is responsible for establishing the GAAP used in such financial statements; and
3.
The non-GAAP financial measure is included in the annual report prepared by the registrant
for use in the jurisdiction in which it is domiciled, incorporated or organized or for distribution to its
security holders.
http://www.sec.gov/rules/final/33-8176.htm (applies to quarterly or annual reports for fiscal periods
ending after March 28, 2003)
§ 229.101 (Item 101) Description of business.
*****
(e)
Available information. Disclose the information in paragraphs (e)(1), (e)(2) and (e)(3) of this
section in any registration statement you file under the Securities Act (15 U.S.C. 77a et seq.), and
disclose the information in paragraphs (e)(3) and (e)(4) of this section if you are an accelerated filer
(as defined in § 240.12b-2 of this chapter) filing an annual report on Form 10-K (§ 249.310 of this
chapter):
(1)
Whether you file reports with the Securities and Exchange Commission. If you are a
reporting company, identify the reports and other information you file with the SEC.
(2)
That the public may read and copy any materials you file with the SEC at the SEC’s
Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. State that the public may
obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC0330. If you are an electronic filer, state that the SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that file electronically with
the SEC and state the address of that site (http://www.sec.gov).
(3)
You are encouraged to give your Internet address, if available, except that if you are
an accelerated filer filing your annual report on Form 10-K, you must disclose your Internet address,
if you have one.
37
Regulation S-K
(4)
(i)
Whether you make available free of charge on or through your Internet
website, if you have one, your annual report on Form 10-K, quarterly reports on Form 10-Q (§
249.308a of this chapter), current reports on Form 8-K (§ 249.308 of this chapter), and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act (15 U.S.C.
78m(a) or 78o(d)) as soon as reasonably practicable after you electronically file such material with, or
furnish it to, the SEC;
(ii)
If you do not make your filings available in this manner, the reasons you do
not do so (including, where applicable, that you do not have an Internet website); and
(iii)
If you do not make your filings available in this manner, whether you
voluntarily will provide electronic or paper copies of your filings free of charge upon request.
http://www.sec.gov/rules/final/33-8128.htm
§ 229.303 (Item 303) Management's discussion and analysis of financial condition and results of
operations.
(a)
***
(4)
Off-balance sheet arrangements.
(i)
In a separately-captioned section, discuss the registrant's off-balance sheet
arrangements that have or are reasonably likely to have a current or future effect on the registrant's
financial condition, changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to investors. The disclosure shall
include the items specified in paragraphs (a)(4)(i)(A), (B), (C) and (D) of this Item to the extent
necessary to an understanding of such arrangements and effect and shall also include such other
information that the registrant believes is necessary for such an understanding.
(A)
The nature and business purpose to the registrant of such off-balance
sheet arrangements;
(B)
The importance to the registrant of such off-balance sheet
arrangements in respect of its liquidity, capital resources, market risk support, credit risk support or
other benefits;
(C)
The amounts of revenues, expenses and cash flows of the registrant
arising from such arrangements; the nature and amounts of any interests retained, securities issued
and other indebtedness incurred by the registrant in connection with such arrangements; and the
nature and amounts of any other obligations or liabilities (including contingent obligations or
liabilities) of the registrant arising from such arrangements that are or are reasonably likely to become
material and the triggering events or circumstances that could cause them to arise; and
(D)
Any known event, demand, commitment, trend or uncertainty that
will result in or is reasonably likely to result in the termination, or material reduction in availability to
the registrant, of its off-balance sheet arrangements that provide material benefits to it, and the course
of action that the registrant has taken or proposes to take in response to any such circumstances.
38
Regulation S-K
(ii)
As used in this paragraph (a)(4), the term off-balance sheet arrangement
means any transaction, agreement or other contractual arrangement to which an entity unconsolidated
with the registrant is a party, under which the registrant has:
(A)
Any obligation under a guarantee contract that has any of the
characteristics identified in paragraph 3 of FASB Interpretation No. 45, Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others
(November 2002) ("FIN 45"), as may be modified or supplemented, and that is not excluded from the
initial recognition and measurement provisions of FIN 45 pursuant to paragraphs 6 or 7 of that
Interpretation;
(B)
A retained or contingent interest in assets transferred to an
unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to
such entity for such assets;
(C)
Any obligation, including a contingent obligation, under a contract
that would be accounted for as a derivative instrument, except that it is both indexed to the registrant's
own stock and classified in stockholders' equity in the registrant's statement of financial position, and
therefore excluded from the scope of FASB Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging Activities (June 1998), pursuant to paragraph
11(a) of that Statement, as may be modified or supplemented; or
(D)
Any obligation, including a contingent obligation, arising out of a
variable interest (as referenced in FASB Interpretation No. 46, Consolidation of Variable Interest
Entities (January 2003), as may be modified or supplemented) in an unconsolidated entity that is held
by, and material to, the registrant, where such entity provides financing, liquidity, market risk or
credit risk support to, or engages in leasing, hedging or research and development services with, the
registrant.
(5)
Tabular disclosure of contractual obligations.
(i)
In a tabular format, provide the information specified in this paragraph (a)(5)
as of the latest fiscal year end balance sheet date with respect to the registrant's known contractual
obligations specified in the table that follows this paragraph (a)(5)(i). The registrant shall provide
amounts, aggregated by type of contractual obligation. The registrant may disaggregate the specified
categories of contractual obligations using other categories suitable to its business, but the
presentation must include all of the obligations of the registrant that fall within the specified
categories. A presentation covering at least the periods specified shall be included. The tabular
presentation may be accompanied by footnotes to describe provisions that create, increase or
accelerate obligations, or other pertinent data to the extent necessary for an understanding of the
timing and amount of the registrant's specified contractual obligations.
Contractual Obligations
[Long-Term Debt Obligations]
[Capital Lease Obligations]
[Operating Lease Obligations]
[Purchase Obligations]
Payments due by period
Less than 1-3
3-5
More than
Total 1 year
years years
5 years
39
Regulation S-K
Contractual Obligations
[Other Long-Term Liabilities Reflected on the
Registrant's Balance Sheet under GAAP]
Total
(ii)
Payments due by period
Less than 1-3
3-5
More than
Total 1 year
years years
5 years
Definitions: The following definitions apply to this paragraph (a)(5):
(A)
Long-Term Debt Obligation means a payment obligation under longterm borrowings referenced in FASB Statement of Financial Accounting Standards No. 47 Disclosure
of Long-Term Obligations (March 1981), as may be modified or supplemented.
(B)
Capital Lease Obligation means a payment obligation under a lease
classified as a capital lease pursuant to FASB Statement of Financial Accounting Standards No. 13
Accounting for Leases (November 1976), as may be modified or supplemented.
(C)
Operating Lease Obligation means a payment obligation under a
lease classified as an operating lease and disclosed pursuant to FASB Statement of Financial
Accounting Standards No. 13 Accounting for Leases (November 1976), as may be modified or
supplemented.
(D)
Purchase Obligation means an agreement to purchase goods or
services that is enforceable and legally binding on the registrant that specifies all significant terms,
including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions;
and the approximate timing of the transaction.
Instructions to Paragraph 303(a)(4):
1.
No obligation to make disclosure under paragraph (a)(4) of this Item shall arise in respect of
an off-balance sheet arrangement until a definitive agreement that is unconditionally binding or
subject only to customary closing conditions exists or, if there is no such agreement, when settlement
of the transaction occurs.
2.
Registrants should aggregate off-balance sheet arrangements in groups or categories that
provide material information in an efficient and understandable manner and should avoid repetition
and disclosure of immaterial information. Effects that are common or similar with respect to a
number of off-balance sheet arrangements must be analyzed in the aggregate to the extent the
aggregation increases understanding. Distinctions in arrangements and their effects must be discussed
to the extent the information is material, but the discussion should avoid repetition and disclosure of
immaterial information.
3.
For purposes of paragraph (a)(4) of this Item only, contingent liabilities arising out of
litigation, arbitration or regulatory actions are not considered to be off-balance sheet arrangements.
4.
Generally, the disclosure required by paragraph (a)(4) shall cover the most recent fiscal year.
However, the discussion should address changes from the previous year where such discussion is
necessary to an understanding of the disclosure.
40
Regulation S-K
5.
In satisfying the requirements of paragraph (a)(4) of this Item, the discussion of off-balance
sheet arrangements need not repeat information provided in the footnotes to the financial statements,
provided that such discussion clearly cross-references to specific information in the relevant footnotes
and integrates the substance of the footnotes into such discussion in a manner designed to inform
readers of the significance of the information that is not included within the body of such discussion.
*****
Instructions to Paragraph (b) of Item 303:
*****
7.
The registrant is not required to include the table required by paragraph (a)(5) of this Item for
interim periods. Instead, the registrant should disclose material changes outside the ordinary course of
the registrant's business in the specified contractual obligations during the interim period.
(c)
Safe harbor.
(1)
The safe harbor provided in Section 27A of the Securities Act of 1933 (15 U.S.C.
77z-2) and Section 21E of the Securities Exchange Act of 1934 (15 U.S.C. 78u-5) ("statutory safe
harbors") shall apply to forward-looking information provided pursuant to paragraphs (a)(4) and (5)
of this Item, provided that the disclosure is made by: an issuer; a person acting on behalf of the issuer;
an outside reviewer retained by the issuer making a statement on behalf of the issuer; or an
underwriter, with respect to information provided by the issuer or information derived from
information provided by the issuer.
(2)
For purposes of paragraph (c) of this Item only:
(i)
All information required by paragraphs (a)(4) and (5) of this Item is deemed
to be a forward looking statement as that term is defined in the statutory safe harbors, except for
historical facts.
(ii)
With respect to paragraph (a)(4) of this Item, the meaningful cautionary
statements element of the statutory safe harbors will be satisfied if a registrant satisfies all
requirements of that same paragraph (a)(4) of this Item.
http://www.sec.gov/rules/final/33-8182.htm (effective April 6, 2003; Item 303(a)(4) applies for fiscal
years ending on or after June 15, 2003; Item 303(a)(5) applies for fiscal years ending on or after
December 15, 2003)
(c)
The application of critical accounting policies.
(1)
Annual reports, registration statements and proxy and information statements. In an
annual report filed under the Exchange Act, an annual report to shareholders prepared under §
240.14a-3 or § 240.14c-3 of this chapter, a registration statement filed under the Securities Act or the
Exchange Act, or a proxy or information statement filed under the Exchange Act, include a
separately-captioned section in “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” setting forth the disclosure regarding the registrant’s application of critical
accounting policies required by paragraphs (c)(3) and (c)(4) of this section. Except as otherwise
stated, the discussion must cover the financial statements for the most recent fiscal year and any
subsequent period for which interim period financial statements are required to be included.
41
Regulation S-K
(2)
Definitions.
(i)
Accounting estimate. As used in paragraph (c) of this section, the term
accounting estimate means an approximation made by management of a financial statement element,
item or account in the financial statements.
(ii)
Critical accounting estimate. An accounting estimate recognized in the
financial statements presented is a critical accounting estimate for purposes of this section if:
(A)
The accounting estimate requires the registrant to make assumptions
about matters that are highly uncertain at the time the accounting estimate is made; and
(B)
Different estimates that the registrant reasonably could have used in
the current period, or changes in the accounting estimate that are reasonably likely to occur from
period to period, would have a material impact on the presentation of the registrant’s financial
condition, changes in financial condition or results of operations.
(iii)
Near-term. As used in paragraph (c) of this section, the term near-term
means a period of time going forward up to one year from the date of the financial statements.
(iv)
Reasonably possible. As used in paragraph (c) of this section, the term
reasonably possible means the chance of a future transaction or event occurring is more than remote
but less than likely.
(3)
estimate:
Disclosure regarding critical accounting estimates. For each critical accounting
(i)
Identify and describe the accounting estimate. Describe the methodology
underlying the accounting estimate. Describe the assumptions underlying the accounting estimate
that relate to matters highly uncertain at the time the estimate was made. Describe any other
underlying assumptions that are material. Discuss any known trends, demands, commitments, events
or uncertainties that are reasonably likely to occur and materially affect the methodology or
assumptions described. Disclose, if applicable, why different estimates that would have had a
material impact on the registrant’s financial presentation could have been used in the current period.
Describe, if applicable, why the accounting estimate is reasonably likely to change from period to
period with a material impact on the financial presentation;
(ii)
Explain the significance of the accounting estimate to the registrant’s
financial condition, changes in financial condition and results of operations and, where material,
identify the line items in the financial statements affected by the accounting estimate;
(iii)
(A)
Present either:
(1)
A quantitative discussion of changes in overall financial
performance, and to the extent material the line items in the financial statements, assuming that
reasonably possible near-term changes occur, both negative and positive (where applicable), in the
most material assumption or assumptions underlying the accounting estimate; or
(2)
A quantitative discussion of changes in overall financial
performance, and to the extent material the line items in the financial statements, assuming that the
42
Regulation S-K
accounting estimate was changed to the upper end and the lower end of the range of reasonable
possibilities determined by the registrant in the course of formulating its recorded estimate; and
(B)
Discuss the impact, if material, on the registrant’s liquidity or capital
resources if any of the changes being assumed for purposes of satisfying paragraph (c)(3)(iii)(A)(1) or
paragraph (c)(3)(iii)(A)(2) of this section were in effect;
(iv)
Present a quantitative and qualitative discussion of any material changes
made to the accounting estimate in the past three years (or in the past two years for any filing made
before [one year after the effective date of the final rule]), describe the reasons for the changes and
discuss the effect on line items in the financial statements and overall financial performance;
(v)
Disclose whether or not the registrant’s senior management has discussed the
development and selection of the critical accounting estimates, and the MD&A disclosure regarding
them, with the audit committee of the registrant’s board of directors (or the equivalent oversight
group). If the senior management has not had these discussions, disclose the reasons why not; and
(vi)
If the registrant operates in more than one segment, identify the disclosed
segments that the accounting estimate affects. To the extent that the disclosure under the
requirements of paragraph (c) of this section only on a company-wide basis would result in an
omission that renders the disclosure materially misleading, include a separate discussion on a segment
basis for the identified segments of the registrant’s business about which disclosure is otherwise
required.
(4)
Disclosure regarding initial adoption of an accounting policy. If an accounting policy
initially adopted by the registrant (other than those solely resulting from the adoption of new
accounting literature issued by a recognized accounting standard setter) had a material impact on its
financial condition, changes in financial condition or results of operations, disclose:
(i)
The events or transactions that gave rise to the initial adoption;
(ii)
The accounting principle that has been adopted and the method of applying
that principle;
(iii)
The impact, qualitatively, on the financial condition, changes in financial
condition and results of operations of the registrant;
(iv)
If the registrant is permitted a choice between acceptable accounting
principles, an explanation it made such a choice, what the alternatives were, and why it made the
choice that it did (including, where material, qualitative disclosure of the impact on financial
condition, changes in financial condition and results of operations that alternatives would have had);
and
(v)
If no accounting literature exists that governs the accounting for the events or
transactions giving rise to the initial adoption, an explanation of the registrant’s decision regarding
which accounting principle to use and which method of applying that principle to use.
(5)
Quarterly reports. In a quarterly report on Form 10-Q (§ 249.308a of this chapter), in
a separately-captioned section of “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” disclose:
43
Regulation S-K
(i)
For any critical accounting estimate that was not previously discussed as a
critical accounting estimate in the MD&A section of the registrant’s last Form 10-K (§ 249.310 of
this chapter) or any of its subsequent Forms 10-Q, the information required by paragraph (c)(3) of this
section; and
(ii)
For any critical accounting estimate previously discussed as a critical
accounting estimate in the MD&A section of the registrant’s last Form 10-K or any of its subsequent
Forms 10-Q, any material change to that prior disclosure (other than disclosure under paragraph
(c)(3)(iv) of this section) necessary to make that disclosure not materially misleading as of the time
the registrant files its Form 10-Q for the current fiscal quarter.
Instructions to paragraph (c) of § 229.303:
1.
The changes being assumed in connection with paragraph (c)(3)(iii)(A) of this section must
be meaningful and therefore may not be so minute as to avoid, or materially understate, any
demonstration of sensitivity.
2.
Your response to this section requires you to make certain forward-looking statements.
Examples include, but are not limited to: a registrant’s disclosure of the reasonably possible, nearterm changes in its assumptions underlying accounting estimates; a discussion of the assumptions
underlying an estimate that involve, for example, projections of future sales; and a discussion of the
expected effect if a known uncertainty were to come to fruition and result in a change in
management’s assumptions. If the terms and conditions of Section 27A of the Securities Act (15
U.S.C. 77z-2), Section 21E of the Exchange Act (15 U.S.C. 78u-5), § 230.175 of this chapter or §
249.3b-6 of this chapter are satisfied, forward-looking statements would be entitled to the safe harbor
protection. Registrants are encouraged to consider the terms, conditions and scope of those safe
harbors when drafting disclosure, particularly when preparing disclosure under the provisions of
paragraph (c) of this section.
3.
For purposes of paragraph (c)(5) of this section, the registrant preparing the disclosure
required by this paragraph may presume that investors have read or have access to the discussion of
critical accounting estimates in its most recently filed Form 10-K and any of its subsequent Forms 10Q.
4.
All information provided under paragraph (c) of this section must be presented in clear,
concise format and language that is understandable to the average investor. The information provided
in this section must not be presented, for example: only as a general discussion of multiple critical
accounting estimates in the aggregate or of multiple new accounting policies in the aggregate; as
boilerplate disclosures that do not specifically address the registrant’s particular circumstances and
operations; as lists of accounting estimates relating to each material line item in the registrant’s
financial statements; or as disclosures that consist principally of disclaimers of legal liability for the
preparation of the registrant’s critical accounting estimates or initial application of an accounting
policy.
5.
Refer to the Commission’s release number 33- ________ dated ______ __, 200_ (adopting
paragraph (c) of this section) for guidance in preparing the disclosure relating to critical accounting
estimates in this MD&A.
http://www.sec.gov/rules/proposed/33-8098.htm
44
Regulation S-K
§229.307 Controls and Procedures.
(a)
Evaluation of disclosure controls and procedures. Disclose the conclusions of the registrant's
principal executive officer or officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure controls and procedures (as
defined in §§240.13a-14(c) and 240.15d-14(c)) based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of the quarterly or annual report that includes
the disclosure required by this paragraph.
(b)
Changes in internal controls. Disclose whether or not there were significant changes in the
registrant's internal controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
(c)
Asset-Backed Issuers. A registrant that is an Asset-Backed Issuer (as defined in §240.13a14(g) and §240.15d-14(g)) is not required to disclose the information required by this Item.
http://www.sec.gov/rules/final/33-8124.htm
Note: the form of §229.307 set forth above is currently effective. The form of §229.307 set forth
below is the proposed substitute for the currently effective form of §229.307.
§229.307 (Item 307) Controls and Procedures.
(a)
Evaluation of disclosure controls and procedures and internal controls and procedures for
financial reporting. Disclose the conclusions of the registrant's principal executive officer or officers
and principal financial officer or officers, or persons performing similar functions, about the
effectiveness of the registrant's disclosure controls and procedures and internal controls and
procedures for financial reporting based on management's evaluation of these controls and procedures
in accordance with §§240.13a-15 and 240.15d-15 of this chapter as of the end of the period covered
by the quarterly or annual report that includes the disclosure required by this paragraph.
(b)
Changes to internal controls and procedures for financial reporting. Disclose any significant
changes to the registrant's internal controls and procedures for financial reporting made during the
period covered by the quarterly or annual report that includes the disclosure required by this
paragraph, including any actions taken to correct significant deficiencies and material weaknesses in
the registrant's internal controls and procedures for financial reporting.
(c)
Report on management's responsibilities. Furnish an internal control report of management
that includes:
(1)
A statement of management's responsibilities for establishing and maintaining
adequate internal controls and procedures for financial reporting for the registrant;
(2)
Conclusions about the effectiveness of the registrant's internal controls and
procedures for financial reporting based on management's evaluation of those controls and procedures
in accordance with §§240.13a-15 or 240.15d-15 of this chapter as of the end of the registrant's most
recent fiscal year;
(3)
A statement that the registered public accounting firm that prepared or issued the
registrant's audit report relating to the financial statements included in the report containing the
45
Regulation S-K
disclosure required by this Item has attested to, and reported on, management's evaluation of the
registrant's internal controls and procedures for financial reporting; and
(4)
The attestation report of the registered public accounting firm that audited or
reviewed the financial statements included in the annual report containing the disclosure required by
this Item.
Instructions to Item 307
1.
A registrant that is an Asset-Backed Issuer (as defined in §240.13a-14(g) and §240.15d-14(g)
of this chapter) is not required to disclose the information required by this Item.
2.
For purposes of this Item, the terms "disclosure controls and procedures" and "internal
controls and procedures for financial reporting" shall have the meanings specified in §240.13a-14 and
§240.15d-14 of this chapter.
3.
If the conclusions of the registrant's principal executive and financial officers are reflected in
the conclusions disclosed pursuant to paragraph (c)(2) of this Item, the registrant does not have to
include any separate disclosure required by paragraph (a) of this Item regarding the effectiveness of
the registrant's internal controls and procedures for financial reporting as of the end of the registrant's
most recent fiscal year.
4.
The registrant is encouraged, but not required, to include the annual report disclosure required
by paragraph (b) of this Item in the internal control report required by paragraph (c) of this Item,
rather than disclosing it elsewhere in the annual report.
http://www.sec.gov/rules/proposed/33-8138.htm
§229.401 (Item 401) Directors, executive officers, promoters and control persons.
*****
(h)
Audit committee financial expert.
(1)
(i)
registrant either:
Disclose that the registrant's board of directors has determined that the
(A)
Has at least one audit committee financial expert serving on its audit
(B)
Does not have an audit committee financial expert serving on its
committee; or
audit committee.
(ii)
If the registrant provides the disclosure required by paragraph (h)(1)(i)(A) of
this Item, it must disclose the name of the audit committee financial expert and whether that person is
independent, as that term is used in Item 7(d)(3)(iv) of Schedule 14A (240.14a-101 of this chapter)
under the Exchange Act.
(iii)
If the registrant provides the disclosure required by paragraph (h)(1)(i)(B) of
this Item, it must explain why it does not have an audit committee financial expert.
Instruction to paragraph (h)(1) of Item 401
46
Regulation S-K
If the registrant's board of directors has determined that the registrant has more than one audit
committee financial expert serving on its audit committee, the registrant may, but is not required to,
disclose the names of those additional persons. A registrant choosing to identify such persons must
indicate whether they are independent pursuant to Item 401(h)(1)(ii).
(2)
For purposes of this Item, an audit committee financial expert means a person who
has the following attributes:
(i)
An understanding of generally accepted accounting principles and financial
statements;
(ii)
The ability to assess the general application of such principles in connection
with the accounting for estimates, accruals and reserves;
(iii)
Experience preparing, auditing, analyzing or evaluating financial statements
that present a breadth and level of complexity of accounting issues that are generally comparable to
the breadth and complexity of issues that can reasonably be expected to be raised by the registrant's
financial statements, or experience actively supervising one or more persons engaged in such
activities;
(iv)
An understanding of internal controls and procedures for financial reporting;
(v)
An understanding of audit committee functions.
and
(3)
A person shall have acquired such attributes through:
(i)
Education and experience as a principal financial officer, principal
accounting officer, controller, public accountant or auditor or experience in one or more positions that
involve the performance of similar functions;
(ii)
Experience actively supervising a principal financial officer, principal
accounting officer, controller, public accountant, auditor or person performing similar functions;
(iii)
Experience overseeing or assessing the performance of companies or public
accountants with respect to the preparation, auditing or evaluation of financial statements; or
(iv)
(4)
Other relevant experience.
Safe Harbor
(i)
A person who is determined to be an audit committee financial expert will
not be deemed an expert for any purpose, including without limitation for purposes of section 11 of
the Securities Act of 1933 (15 U.S.C. 77k), as a result of being designated or identified as an audit
committee financial expert pursuant to this Item 401.
(ii)
The designation or identification of a person as an audit committee financial
expert pursuant to this Item 401 does not impose on such person any duties, obligations or liability
that are greater than the duties, obligations and liability imposed on such person as a member of the
audit committee and board of directors in the absence of such designation or identification.
47
Regulation S-K
(iii)
The designation or identification of a person as an audit committee financial
expert pursuant to this Item 401 does not affect the duties, obligations or liability of any other
member of the audit committee or board of directors.
Instructions to Item 401(h)
1.
The registrant need not provide the disclosure required by this Item 401(h) in a proxy or
information statement unless that registrant is electing to incorporate this information by reference
from the proxy or information statement into its annual report pursuant to general instruction G(3) to
Form 10-K.
2.
If a person qualifies as an audit committee financial expert by means of having held a
position described in paragraph (h)(3)(iv) of this Item, the registrant shall provide a brief listing of
that person's relevant experience. Such disclosure may be made by reference to disclosures required
under paragraph (e) of this Item 401 (§229.401(e) or this chapter).
3.
In the case of a foreign private issuer with a two-tier board of directors, for purposes of this
Item 401(h), the term board of directors means the supervisory or non-management board. Also, in
the case of a foreign private issuer, the term generally accepted accounting principles in paragraph
(h)(2)(i) of this Item means the body of generally accepted accounting principles used by that issuer
in its primary financial statements filed with the Commission.
4.
A registrant that is an Asset-Backed Issuer (as defined in §240.13a-14(g) and §240.15d-14(g)
of this chapter) is not required to disclose the information required by this Item 401(h).
http://www.sec.gov/rules/final/33-8177.htm (effective March 3, 2003; companies must comply in
their annual reports for fiscal years ending on or after July 15, 2003)
(i)
Identification of the audit committee. If you are a listed issuer, as defined in § 240.10A-3 of
this chapter, filing an annual report on Form 10-K or 10-KSB (17 CFR 249.310 or 17 CFR 249.310b)
or a proxy statement or information statement pursuant to the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) if action is to be taken with respect to the election of directors:
(1)
State whether or not the registrant has a separately-designated standing audit
committee established in accordance with section 3(a)(58)(A) of the Exchange Act (15 U.S.C.
78c(a)(58)(A)), or a committee performing similar functions. If the registrant has such a committee,
however designated, identify each committee member. If the entire board of directors is acting as the
registrant's audit committee as specified in section 3(a)(58)(B) of the Exchange Act (15 U.S.C.
78c(a)(58)(B)), so state.
(2)
If applicable, provide the disclosure required by § 240.10A-3(d) of this chapter
regarding an exemption from the listing standards for audit committees.
http://www.sec.gov/rules/proposed/34-47137.htm
48
Regulation S-K
§229.406 (Item 406) Code of ethics.
(a)
Disclose whether the registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions. If the registrant has not adopted such a code of ethics, explain
why it has not done so.
(b)
For purposes of this Item 406, the term code of ethics means written standards that are
reasonably designed to deter wrongdoing and to promote:
(1)
Honest and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships;
(2)
Full, fair, accurate, timely, and understandable disclosure in reports and documents
that a registrant files with, or submits to, the Commission and in other public communications made
by the registrant;
(3)
Compliance with applicable governmental laws, rules and regulations;
(4)
The prompt internal reporting of violations of the code to an appropriate person or
persons identified in the code; and
(5)
(c)
Accountability for adherence to the code.
The registrant must:
(1)
File with the Commission a copy of its code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions, as an exhibit to its annual report;
(2)
Post the text of such code of ethics on its Internet website and disclose, in its annual
report, its Internet address and the fact that it has posted such code of ethics on its Internet website; or
(3)
Undertake in its annual report filed with the Commission to provide to any person
without charge, upon request, a copy of such code of ethics and explain the manner in which such
request may be made.
(d)
If the registrant intends to satisfy the disclosure requirement under Item 10 of Form 8-K
regarding an amendment to, or a waiver from, a provision of its code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item by posting such information on its Internet
website, disclose the registrant's Internet address and such intention.
Instructions to Item 406.
1.
A registrant may have separate codes of ethics for different types of officers. Furthermore, a
code of ethics within the meaning of paragraph (b) of this Item may be a portion of a broader
document that addresses additional topics or that applies to more persons than those specified in
paragraph (a). In satisfying the requirements of paragraph (c), a registrant need only file, post or
49
Regulation S-K
provide the portions of a broader document that constitutes a code of ethics as defined in paragraph
(b) and that apply to the persons specified in paragraph (a).
2.
If a registrant elects to satisfy paragraph (c) of this Item by posting its code of ethics on its
website pursuant to paragraph (c)(2), the code of ethics must remain accessible on its website for as
long as the registrant remains subject to the requirements of this Item and chooses to comply with this
Item by posting its code on its website pursuant to paragraph (c)(2).
3.
A registrant that is an Asset-Backed Issuer (as defined in §240.13a-14(g) and §240.15d-14(g)
of this chapter) is not required to disclose the information required by this Item.
http://www.sec.gov/rules/final/33-8177.htm (effective March 3, 2003; companies must comply in
their annual reports for fiscal years ending on or after July 15, 2003)
§ 229.601 (Item 601) Exhibits.
(a)
Exhibits and index required.
(1)
Subject to Rule 411(c) (§230.411(c) of this chapter) under the Securities Act and
Rule 12b-32 (§240.12b-32 of this chapter) under the Exchange Act regarding incorporation of
exhibits by reference, the exhibits required in the exhibit table shall be filed as indicated, as part of
the registration statement or report.
*****
Exhibit Table
*****
(6)
Notice of delisting or failure to satisfy listing standards
(7)
Notice or letter on validity of audit or consent
*****
(17)
Letter on departure of director
*****
Footnote 5 to Exhibit Table. Form 8-K Exhibits. A Form 8-K (§249.308 of this chapter) exhibit is
required only if relevant to the subject matter of the Form 8-K. For example, if the Form 8-K pertains
to the departure of a director, only the exhibit described in paragraph (b)(17) of this section need be
filed. A required exhibit may be incorporated by reference from a previous filing.
(b)
Description of exhibits.
*****
(6)
Notice of delisting or failure to satisfy listing standards. Any written notice from a
national securities exchange or national securities association that a class of securities of the registrant
which is listed on the exchange or quoted in an inter-dealer quotation system of the national securities
50
Regulation S-K
association does not satisfy a listing standard of, or has been delisted from, the exchange or
association.
(7)
Notice or letter on validity of audit or consent. Any written notice from the
registrant’s current or previously engaged independent accountant that the independent accountant is
withdrawing a previously issued audit report or that the registrant no longer may rely on a previously
issued audit report covering one or more years for which the registrant is required to provide audited
financial statements under Regulation S-X (part 210 of this chapter), including any letter from the
independent accountant to the Commission stating whether the independent accountant agrees with
the statements made by the registrant describing the events giving rise to the notice.
http://www.sec.gov/rules/proposed/33-8106.htm
(14) Code of ethics. Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 406 of Regulation S-K (§229.406) or Item 10 of Form 8-K (§249.308 of
this chapter), to the extent that the registrant intends to satisfy the Item 406 or Item 10 requirements
through filing of an exhibit.
http://www.sec.gov/rules/final/33-8177.htm (effective March 3, 2003; companies must comply on or
after the date on which they file their first annual report in which the code of ethics is required)
(17)
Letter on departure of director. Any written correspondence from a former director
concerning the circumstances surrounding the former director’s resignation, declination to stand for
re-election, or removal, including a letter from the former director to the Commission stating whether
the former director agrees with statements made by the registrant describing the former director’s
departure.
http://www.sec.gov/rules/proposed/33-8106.htm
(27)
Statement re audit committees for registrants with boards of auditors or similar
bodies. If you are availing yourself of the exemption in § 240.10A-3(c)(2) of this chapter from the
listing standards for audit committees because you have a board of auditors or similar body, a
statement that you are availing yourself of that exemption and a reference to the section of the report
to which the exhibit relates disclosing information regarding your use of that exemption.
http://www.sec.gov/rules/proposed/34-47137.htm
§229.703 (Item 703) Purchases of equity securities by the issuer and affiliated purchasers.
(a)
In the following tabular format, provide the information specified in paragraph (b) of this
Item with respect to any purchase made by or on behalf of the issuer or any "affiliated purchaser," as
defined in §240.10b-18(a)(3) of this chapter, of shares or other units of any class of the issuer's equity
securities that is registered by the issuer pursuant to section 12 of the Exchange Act (15 U.S.C. 781).
51
Regulation S-K
ISSUER PURCHASES OF EQUITY SECURITIES
Period
(a)
Total
Number of
Shares (or
Units)
Purchased
(b)
Average
Price Paid
per Share
(c)
Identity of
Brokerdealer(s) Used
to Effect
Purchases
(d)
Number of Shares
(or Units)
Purchased as Part
of Publicly
Announced Plans
or Programs
(e)
Maximum Number (or
Approximate Dollar
Value) of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
Month #1
(identify
beginning
and ending
dates)
Month #2
(identify
beginning
and ending
dates)
Month #3
(identify
beginning
and ending
dates)
Total
(b)
The table shall include the following information for each class or series of securities for each
month included in the period covered by the report:
(1)
The total number of shares purchased (column (a));
Instructions to paragraph (b)(1) of Item 703
Include in this column all issuer repurchases, including those made pursuant to publicly announced
plans or programs and those not made pursuant to publicly announced plans or programs. Briefly
disclose, by footnote to the table, the number of shares purchased other than through a publicly
announced plan or program and the nature of the transaction. (e.g., whether the purchases were made
in open-market transactions, tender offers, in satisfaction of the company's obligations upon exercise
of outstanding put options issued by the company, or other transactions).
(2)
The average price paid per share (column (b));
(3)
The identity of any broker-dealer(s) that effected the purchases (column (c));
(4)
The number of shares purchased as part of a publicly announced repurchase plan or
program (column (d)); and
(5)
The maximum number (or approximate dollar value) of shares (or units) that may yet
be purchased under the plans or programs (column (e)).
52
Regulation S-K
Instructions to paragraphs (b)(4) and (b)(5) of Item 703
(1)
In the table, disclose this information in the aggregate for all plans or programs publicly
announced.
(2)
By footnote to the table, indicate:
(a)
the date each plan or program was announced;
(b)
the dollar amount (or share amount) approved;
(c)
the expiration date (if any) of each plan or program;
(d)
each plan or program that has expired during the period covered by the table;
(e)
each plan or program the issuer has determined to terminate prior to expiration; and
(f)
each plan or program the issuer has not purchased under during the period covered by
the table and whether the issuer still intends to purchase under that plan or program.
Instruction to Item 703
Disclose all purchases covered by this item, including purchases that do not satisfy the conditions of
the safe harbor of §240.10b-18 of this chapter.
http://www.sec.gov/rules/proposed/33-8160.htm
53
Regulation S-K
RULES UNDER SECURITIES
EXCHANGE ACT OF 1934
§205.1 Purpose and scope.
This part sets forth minimum standards of professional conduct for attorneys appearing and practicing
before the Commission in the representation of an issuer. These standards supplement applicable
standards of any jurisdiction where an attorney is admitted or practices and are not intended to limit
the ability of any jurisdiction to impose additional obligations on an attorney not inconsistent with the
application of this part. Where the standards of a state or other United States jurisdiction where an
attorney is admitted or practices conflict with this part, this part shall govern.
http://www.sec.gov/rules/final/33-8185.htm (effective August 5, 2003)
§205.2 Definitions.
For purposes of this part, the following definitions apply:
(a)
Appearing and practicing before the Commission:
(1)
Means:
(i)
Transacting any business with the Commission, including communications in
any form;
(ii)
Representing an issuer in a Commission administrative proceeding or in
connection with any Commission investigation, inquiry, information request, or subpoena;
(iii)
Providing advice in respect of the United States securities laws or the
Commission's rules or regulations thereunder regarding any document that the attorney has notice
will be filed with or submitted to, or incorporated into any document that will be filed with or
submitted to, the Commission, including the provision of such advice in the context of preparing, or
participating in the preparation of, any such document; or
(iv)
Advising an issuer as to whether information or a statement, opinion, or other
writing is required under the United States securities laws or the Commission's rules or regulations
thereunder to be filed with or submitted to, or incorporated into any document that will be filed with
or submitted to, the Commission; but
(2)
Does not include an attorney who:
(i)
Conducts the activities in paragraphs (a)(1)(i) through (a)(1)(iv) of this
section other than in the context of providing legal services to an issuer with whom the attorney has
an attorney-client relationship; or
(ii)
Is a non-appearing foreign attorney.
(b)
Appropriate response means a response to an attorney regarding reported evidence of a
material violation as a result of which the attorney reasonably believes:
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Rules Under Securities Exchange Act of 1934
(1)
That no material violation, as defined in paragraph (i) of this section, has occurred, is
ongoing, or is about to occur;
(2)
That the issuer has, as necessary, adopted appropriate remedial measures, including
appropriate steps or sanctions to stop any material violations that are ongoing, to prevent any material
violation that has yet to occur, and to remedy or otherwise appropriately address any material
violation that has already occurred and to minimize the likelihood of its recurrence; or
(3)
That the issuer, with the consent of the issuer's board of directors, a committee
thereof to whom a report could be made pursuant to §205.3(b)(3), or a qualified legal compliance
committee, has retained or directed an attorney to review the reported evidence of a material violation
and either:
(i)
Has substantially implemented any remedial recommendations made by such
attorney after a reasonable investigation and evaluation of the reported evidence; or
(ii)
Has been advised that such attorney may, consistent with his or her
professional obligations, assert a colorable defense on behalf of the issuer (or the issuer's officer,
director, employee, or agent, as the case may be) in any investigation or judicial or administrative
proceeding relating to the reported evidence of a material violation.
(c)
Attorney means any person who is admitted, licensed, or otherwise qualified to practice law
in any jurisdiction, domestic or foreign, or who holds himself or herself out as admitted, licensed, or
otherwise qualified to practice law.
(d)
Breach of fiduciary duty refers to any breach of fiduciary or similar duty to the issuer
recognized under an applicable federal or state statute or at common law, including but not limited to
misfeasance, nonfeasance, abdication of duty, abuse of trust, and approval of unlawful transactions.
(e)
Evidence of a material violation means credible evidence, based upon which it would be
unreasonable, under the circumstances, for a prudent and competent attorney not to conclude that it is
reasonably likely that a material violation has occurred, is ongoing, or is about to occur.
(f)
Foreign government issuer means a foreign issuer as defined in 17 CFR 230.405 eligible to
register securities on Schedule B of the Securities Act of 1933 (15 U.S.C. 77a et seq., Schedule B).
(g)
In the representation of an issuer means providing legal services as an attorney for an issuer,
regardless of whether the attorney is employed or retained by the issuer.
(h)
Issuer means an issuer (as defined in section 3 of the Securities Exchange Act of 1934 (15
U.S.C. 78c)), the securities of which are registered under section 12 of that Act (15 U.S.C. 78l), or
that is required to file reports under section 15(d) of that Act (15 U.S.C. 78o(d)), or that files or has
filed a registration statement that has not yet become effective under the Securities Act of 1933 (15
U.S.C. 77a et seq.), and that it has not withdrawn, but does not include a foreign government issuer.
For purposes of paragraphs (a) and (g) of this section, the term "issuer" includes any person
controlled by an issuer, where an attorney provides legal services to such person on behalf of, or at
the behest, or for the benefit of the issuer, regardless of whether the attorney is employed or retained
by the issuer.
55
Rules Under Securities Exchange Act of 1934
(i)
Material violation means a material violation of an applicable United States federal or state
securities law, a material breach of fiduciary duty arising under United States federal or state law, or a
similar material violation of any United States federal or state law.
(j)
Non-appearing foreign attorney means an attorney:
(1)
Who is admitted to practice law in a jurisdiction outside the United States;
(2)
Who does not hold himself or herself out as practicing, and does not give legal advice
regarding, United States federal or state securities or other laws (except as provided in paragraph
(j)(3)(ii) of this section); and
(3)
Who:
(i)
Conducts activities that would constitute appearing and practicing before the
Commission only incidentally to, and in the ordinary course of, the practice of law in a jurisdiction
outside the United States; or
(ii)
Is appearing and practicing before the Commission only in consultation with
counsel, other than a non-appearing foreign attorney, admitted or licensed to practice in a state or
other United States jurisdiction.
(k)
Qualified legal compliance committee means a committee of an issuer (which also may be an
audit or other committee of the issuer) that:
(1)
Consists of at least one member of the issuer's audit committee (or, if the issuer has
no audit committee, one member from an equivalent committee of independent directors) and two or
more members of the issuer's board of directors who are not employed, directly or indirectly, by the
issuer and who are not, in the case of a registered investment company, "interested persons" as
defined in section 2(a)(19) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(19));
(2)
Has adopted written procedures for the confidential receipt, retention, and
consideration of any report of evidence of a material violation under §205.3;
(3)
Has been duly established by the issuer's board of directors, with the authority and
responsibility:
(i)
To inform the issuer's chief legal officer and chief executive officer (or the
equivalents thereof) of any report of evidence of a material violation (except in the circumstances
described in §205.3(b)(4));
(ii)
To determine whether an investigation is necessary regarding any report of
evidence of a material violation by the issuer, its officers, directors, employees or agents and, if it
determines an investigation is necessary or appropriate, to:
(A)
Notify the audit committee or the full board of directors;
(B)
Initiate an investigation, which may be conducted either by the chief
legal officer (or the equivalent thereof) or by outside attorneys; and
56
Rules Under Securities Exchange Act of 1934
(C)
Retain such additional expert personnel as the committee deems
necessary; and
(iii)
At the conclusion of any such investigation, to:
(A)
Recommend, by majority vote, that the issuer implement an
appropriate response to evidence of a material violation; and
(B)
Inform the chief legal officer and the chief executive officer (or the
equivalents thereof) and the board of directors of the results of any such investigation under this
section and the appropriate remedial measures to be adopted; and
(4)
Has the authority and responsibility, acting by majority vote, to take all other
appropriate action, including the authority to notify the Commission in the event that the issuer fails
in any material respect to implement an appropriate response that the qualified legal compliance
committee has recommended the issuer to take.
(l)
Reasonable or reasonably denotes, with respect to the actions of an attorney, conduct that
would not be unreasonable for a prudent and competent attorney.
(m)
Reasonably believes means that an attorney believes the matter in question and that the
circumstances are such that the belief is not unreasonable.
(n)
Report means to make known to directly, either in person, by telephone, by e-mail,
electronically, or in writing.
http://www.sec.gov/rules/final/33-8185.htm (effective August 5, 2003)
§205.3 Issuer as client.
(a)
Representing an issuer. An attorney appearing and practicing before the Commission in the
representation of an issuer owes his or her professional and ethical duties to the issuer as an
organization. That the attorney may work with and advise the issuer's officers, directors, or
employees in the course of representing the issuer does not make such individuals the attorney's
clients.
(b)
Duty to report evidence of a material violation.
(1)
If an attorney, appearing and practicing before the Commission in the representation
of an issuer, becomes aware of evidence of a material violation by the issuer or by any officer,
director, employee, or agent of the issuer, the attorney shall report such evidence to the issuer's chief
legal officer (or the equivalent thereof) or to both the issuer's chief legal officer and its chief
executive officer (or the equivalents thereof) forthwith. By communicating such information to the
issuer's officers or directors, an attorney does not reveal client confidences or secrets or privileged or
otherwise protected information related to the attorney's representation of an issuer.
(2)
The chief legal officer (or the equivalent thereof) shall cause such inquiry into the
evidence of a material violation as he or she reasonably believes is appropriate to determine whether
the material violation described in the report has occurred, is ongoing, or is about to occur. If the chief
legal officer (or the equivalent thereof) determines no material violation has occurred, is ongoing, or
is about to occur, he or she shall notify the reporting attorney and advise the reporting attorney of the
57
Rules Under Securities Exchange Act of 1934
basis for such determination. Unless the chief legal officer (or the equivalent thereof) reasonably
believes that no material violation has occurred, is ongoing, or is about to occur, he or she shall take
all reasonable steps to cause the issuer to adopt an appropriate response, and shall advise the reporting
attorney thereof. In lieu of causing an inquiry under this paragraph (b), a chief legal officer (or the
equivalent thereof) may refer a report of evidence of a material violation to a qualified legal
compliance committee under paragraph (c)(2) of this section if the issuer has duly established a
qualified legal compliance committee prior to the report of evidence of a material violation.
(3)
Unless an attorney who has made a report under paragraph (b)(1) of this section
reasonably believes that the chief legal officer or the chief executive officer of the issuer (or the
equivalent thereof) has provided an appropriate response within a reasonable time, the attorney shall
report the evidence of a material violation to:
(i)
The audit committee of the issuer's board of directors;
(ii)
Another committee of the issuer's board of directors consisting solely of
directors who are not employed, directly or indirectly, by the issuer and are not, in the case of a
registered investment company, "interested persons" as defined in section 2(a)(19) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(19)) (if the issuer's board of directors has no audit
committee); or
(iii)
The issuer's board of directors (if the issuer's board of directors has no
committee consisting solely of directors who are not employed, directly or indirectly, by the issuer
and are not, in the case of a registered investment company, "interested persons" as defined in section
2(a)(19) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(19))).
(4)
If an attorney reasonably believes that it would be futile to report evidence of a
material violation to the issuer's chief legal officer and chief executive officer (or the equivalents
thereof) under paragraph (b)(1) of this section, the attorney may report such evidence as provided
under paragraph (b)(3) of this section.
(5)
An attorney retained or directed by an issuer to investigate evidence of a material
violation reported under paragraph (b)(1), (b)(3), or (b)(4) of this section shall be deemed to be
appearing and practicing before the Commission. Directing or retaining an attorney to investigate
reported evidence of a material violation does not relieve an officer or director of the issuer to whom
such evidence has been reported under paragraph (b)(1), (b)(3), or (b)(4) of this section from a duty to
respond to the reporting attorney.
(6)
An attorney shall not have any obligation to report evidence of a material violation
under this paragraph (b) if:
(i)
The attorney was retained or directed by the issuer's chief legal officer (or the
equivalent thereof) to investigate such evidence of a material violation and:
(A)
The attorney reports the results of such investigation to the chief
legal officer (or the equivalent thereof); and
(B)
Except where the attorney and the chief legal officer (or the
equivalent thereof) each reasonably believes that no material violation has occurred, is ongoing, or is
about to occur, the chief legal officer (or the equivalent thereof) reports the results of the investigation
58
Rules Under Securities Exchange Act of 1934
to the issuer's board of directors, a committee thereof to whom a report could be made pursuant to
paragraph (b)(3) of this section, or a qualified legal compliance committee; or
(ii)
The attorney was retained or directed by the chief legal officer (or the
equivalent thereof) to assert, consistent with his or her professional obligations, a colorable defense
on behalf of the issuer (or the issuer's officer, director, employee, or agent, as the case may be) in any
investigation or judicial or administrative proceeding relating to such evidence of a material violation,
and the chief legal officer (or the equivalent thereof) provides reasonable and timely reports on the
progress and outcome of such proceeding to the issuer's board of directors, a committee thereof to
whom a report could be made pursuant to paragraph (b)(3) of this section, or a qualified legal
compliance committee.
(7)
An attorney shall not have any obligation to report evidence of a material violation
under this paragraph (b) if such attorney was retained or directed by a qualified legal compliance
committee:
(i)
To investigate such evidence of a material violation; or
(ii)
To assert, consistent with his or her professional obligations, a colorable
defense on behalf of the issuer (or the issuer's officer, director, employee, or agent, as the case may
be) in any investigation or judicial or administrative proceeding relating to such evidence of a
material violation.
(8)
An attorney who receives what he or she reasonably believes is an appropriate and
timely response to a report he or she has made pursuant to paragraph (b)(1), (b)(3), or (b)(4) of this
section need do nothing more under this section with respect to his or her report.
(9)
An attorney who does not reasonably believe that the issuer has made an appropriate
response within a reasonable time to the report or reports made pursuant to paragraph (b)(1), (b)(3),
or (b)(4) of this section shall explain his or her reasons therefor to the chief legal officer (or the
equivalent thereof), the chief executive officer (or the equivalent thereof), and directors to whom the
attorney reported the evidence of a material violation pursuant to paragraph (b)(1), (b)(3), or (b)(4) of
this section.
(10)
An attorney formerly employed or retained by an issuer who has reported evidence of
a material violation under this part and reasonably believes that he or she has been discharged for so
doing may notify the issuer's board of directors or any committee thereof that he or she believes that
he or she has been discharged for reporting evidence of a material violation under this section.
(c)
Alternative reporting procedures for attorneys retained or employed by an issuer that has
established a qualified legal compliance committee.
(1)
If an attorney, appearing and practicing before the Commission in the representation
of an issuer, becomes aware of evidence of a material violation by the issuer or by any officer,
director, employee, or agent of the issuer, the attorney may, as an alternative to the reporting
requirements of paragraph (b) of this section, report such evidence to a qualified legal compliance
committee, if the issuer has previously formed such a committee. An attorney who reports evidence
of a material violation to such a qualified legal compliance committee has satisfied his or her
obligation to report such evidence and is not required to assess the issuer's response to the reported
evidence of a material violation.
59
Rules Under Securities Exchange Act of 1934
(2)
A chief legal officer (or the equivalent thereof) may refer a report of evidence of a
material violation to a previously established qualified legal compliance committee in lieu of causing
an inquiry to be conducted under paragraph (b)(2) of this section. The chief legal officer (or the
equivalent thereof) shall inform the reporting attorney that the report has been referred to a qualified
legal compliance committee. Thereafter, pursuant to the requirements under §205.2(k), the qualified
legal compliance committee shall be responsible for responding to the evidence of a material
violation reported to it under this paragraph (c).
(d)
Issuer confidences.
(1)
Any report under this section (or the contemporaneous record thereof) or any
response thereto (or the contemporaneous record thereof) may be used by an attorney in connection
with any investigation, proceeding, or litigation in which the attorney's compliance with this part is in
issue.
(2)
An attorney appearing and practicing before the Commission in the representation of
an issuer may reveal to the Commission, without the issuer's consent, confidential information related
to the representation to the extent the attorney reasonably believes necessary:
(i)
To prevent the issuer from committing a material violation that is likely to
cause substantial injury to the financial interest or property of the issuer or investors;
(ii)
To prevent the issuer, in a Commission investigation or administrative
proceeding from committing perjury, proscribed in 18 U.S.C. 1621; suborning perjury, proscribed in
18 U.S.C. 1622; or committing any act proscribed in 18 U.S.C. 1001 that is likely to perpetrate a
fraud upon the Commission; or
(iii)
To rectify the consequences of a material violation by the issuer that caused,
or may cause, substantial injury to the financial interest or property of the issuer or investors in the
furtherance of which the attorney's services were used.
http://www.sec.gov/rules/final/33-8185.htm (effective August 5, 2003)
Note: there are currently two proposed versions of §205.3(d)
(d)
Notice to the Commission where there is no appropriate response within a reasonable time.
(1)
Where an attorney who has reported evidence of a material violation under paragraph
3(b) of this section rather than paragraph 3(c) of this section does not receive an appropriate response,
or has not received a response in a reasonable time, to his or her report, and the attorney reasonably
believes that a material violation is ongoing or is about to occur and is likely to result in substantial
injury to the financial interest or property of the issuer or of investors:
(i)
An attorney retained by the issuer shall:
(A)
Withdraw forthwith from representing the issuer, indicating that the
withdrawal is based on professional considerations;
(B)
Within one business day of withdrawing, give written notice to the
Commission of the attorney's withdrawal, indicating that the withdrawal was based on professional
considerations; and
60
Rules Under Securities Exchange Act of 1934
(C)
Promptly disaffirm to the Commission any opinion, document,
affirmation, representation, characterization, or the like in a document filed with or submitted to the
Commission, or incorporated into such a document, that the attorney has prepared or assisted in
preparing and that the attorney reasonably believes is or may be materially false or misleading;
(ii)
An attorney employed by the issuer shall:
(A)
Within one business day, notify the Commission in writing that he or
she intends to disaffirm some opinion, document, affirmation, representation, characterization, or the
like in a document filed with or submitted to the Commission, or incorporated into such a document,
that the attorney has prepared or assisted in preparing and that the attorney reasonably believes is or
may be materially false or misleading; and
(B)
Promptly disaffirm to the Commission, in writing, any such opinion,
document, affirmation, representation, characterization, or the like; and
(iii)
The issuer's chief legal officer (or the equivalent) shall inform any attorney
retained or employed to replace the attorney who has so withdrawn that the previous attorney's
withdrawal was based on professional considerations.
(2)
Where an attorney who has reported evidence of a material violation under paragraph
(b) rather than paragraph (c) of this section does not receive an appropriate response, or has not
received a response in a reasonable time, to his or her report under paragraph (b) of this section, and
the attorney reasonably believes that a material violation has occurred and is likely to have resulted in
substantial injury to the financial interest or property of the issuer or of investors but is not ongoing:
(i)
An attorney retained by the issuer may:
(A)
Withdraw forthwith from representing the issuer, indicating that the
withdrawal is based on professional considerations;
(B)
Give written notice to the Commission of the attorney's withdrawal,
indicating that the withdrawal was based on professional considerations; and
(C)
Disaffirm to the Commission, in writing, any opinion, document,
affirmation, representation, characterization, or the like in a document filed with or submitted to the
Commission, or incorporated into such a document, that the attorney has prepared or assisted in
preparing and that the attorney reasonably believes is or may be materially false or misleading;
(ii)
An attorney employed by the issuer may:
(A)
Notify the Commission in writing that he or she intends to disaffirm
some opinion, document, affirmation, representation, characterization, or the like in a document filed
with or submitted to the Commission, or incorporated into such a document, that the attorney has
prepared or assisted in preparing and that the attorney reasonably believes is or may be materially
false or misleading; and
(B)
Disaffirm to the Commission, in writing, any such opinion,
document, affirmation, representation, characterization, or the like; and
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(iii)
The issuer's chief legal officer (or the equivalent) shall inform any attorney
retained or employed to replace the attorney who has so withdrawn that the previous attorney's
withdrawal was based on professional considerations.
(3)
The notification to the Commission prescribed by this paragraph (d) does not breach
the attorney-client privilege.
(4)
An attorney formerly employed or retained by an issuer who has reported evidence of
a material violation under this section and reasonably believes that he or she has been discharged for
so doing may notify the Commission that he or she believes that he or she has been discharged for
reporting evidence of a material violation under this section and may disaffirm in writing to the
Commission any opinion, document, affirmation, representation, characterization, or the like in a
document filed with or submitted to the Commission, or incorporated into such a document, that the
attorney has prepared or assisted in preparing and that the attorney reasonably believes is or may be
materially false or misleading.
http://www.sec.gov/rules/proposed/33-8150.htm
Amend §205.3 by: a. Redesignating paragraph (d) as paragraph (g); and b. Adding paragraphs (d), (e)
and (f).
(d)
Actions required where there is no appropriate response within a reasonable time.
(1)
Where an attorney who has reported evidence of a material violation under paragraph
(b) of this section rather than paragraph (c) of this section:
(i)
reasonable time,
Does not receive an appropriate response, or has not received a response in a
(ii)
Has followed the procedures set forth in paragraph (b)(3) of this section, and
(iii)
Reasonably concludes that there is substantial evidence of a material
violation that is ongoing or is about to occur and is likely to cause substantial injury to the financial
interest or property of the issuer or of investors:
(A)
An attorney retained by the issuer shall withdraw from representing
the issuer, and shall notify the issuer, in writing, that the withdrawal is based on professional
considerations.
(B)
An attorney employed by the issuer shall cease forthwith any
participation or assistance in any matter concerning the violation and shall notify the issuer, in
writing, that he or she believes that the issuer has not provided an appropriate response in a
reasonable time to his or her report of evidence of a material violation under paragraph (b) of this
section.
(2)
An attorney shall not be required to take any action pursuant to paragraph (d)(1) of
this section if the attorney would be prohibited from doing so by order or rule of any court,
administrative body or other authority with jurisdiction over the attorney, after having sought leave to
withdraw from representation or to cease participation or assistance in a matter. An attorney shall
give notice to the issuer that, but for such prohibition, he or she would have taken such action
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pursuant to paragraph (d)(1) or (d)(2), and such notice shall be deemed the equivalent of such action
for purposes of this part.
(3)
An attorney employed or retained by an issuer who has reported evidence of a
material violation under this part and reasonably believes that he or she has been discharged for so
doing shall notify the issuer's chief legal officer (or the equivalent thereof) forthwith.
(4)
The issuer's chief legal officer (or the equivalent thereof) shall notify any attorney
retained or employed to replace an attorney who has given notice to an issuer pursuant to paragraph
(d)(1), (d)(2) or (d)(3) of this section that the previous attorney has withdrawn, ceased to participate
or assist or has been discharged, as the case may be, pursuant to the provisions of this paragraph.
(e)
Duties of an issuer where an attorney has given notice pursuant to paragraph (d). Where an
attorney has provided an issuer with a written notice pursuant to paragraph (d)(1), (d)(2) or (d)(3) of
this section, the issuer shall, within two business days of receipt of such written notice, report such
notice and the circumstances related thereto on Form 8-K, 20-F, or 40-F (§§ 249.308, 220f or 240f of
this chapter), as applicable.
(f)
Additional actions by an attorney. An attorney retained or employed by the issuer may, if an
issuer does not comply with paragraph (e) of this section, inform the Commission that the attorney
has provided the issuer with notice pursuant to paragraph (d)(1), (d)(2), or (d)(3) of this section,
indicating that such action was based on professional considerations.
http://www.sec.gov/rules/proposed/33-8186.htm
§205.4 Responsibilities of supervisory attorneys.
(a)
An attorney supervising or directing another attorney who is appearing and practicing before
the Commission in the representation of an issuer is a supervisory attorney. An issuer's chief legal
officer (or the equivalent thereof) is a supervisory attorney under this section.
(b)
A supervisory attorney shall make reasonable efforts to ensure that a subordinate attorney, as
defined in §205.5(a), that he or she supervises or directs conforms to this part. To the extent a
subordinate attorney appears and practices before the Commission in the representation of an issuer,
that subordinate attorney's supervisory attorneys also appear and practice before the Commission.
(c)
A supervisory attorney is responsible for complying with the reporting requirements in
§205.3 when a subordinate attorney has reported to the supervisory attorney evidence of a material
violation.
(d)
A supervisory attorney who has received a report of evidence of a material violation from a
subordinate attorney under §205.3 may report such evidence to the issuer's qualified legal compliance
committee if the issuer has duly formed such a committee.
http://www.sec.gov/rules/final/33-8185.htm (effective August 5, 2003)
§205.5 Responsibilities of a subordinate attorney.
(a)
An attorney who appears and practices before the Commission in the representation of an
issuer on a matter under the supervision or direction of another attorney (other than under the direct
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supervision or direction of the issuer's chief legal officer (or the equivalent thereof)) is a subordinate
attorney.
(b)
A subordinate attorney shall comply with this part notwithstanding that the subordinate
attorney acted at the direction of or under the supervision of another person.
(c)
A subordinate attorney complies with §205.3 if the subordinate attorney reports to his or her
supervising attorney under §205.3(b) evidence of a material violation of which the subordinate
attorney has become aware in appearing and practicing before the Commission.
(d)
A subordinate attorney may take the steps permitted or required by §205.3(b) or (c) if the
subordinate attorney reasonably believes that a supervisory attorney to whom he or she has reported
evidence of a material violation under §205.3(b) has failed to comply with §205.3.
http://www.sec.gov/rules/final/33-8185.htm (effective August 5, 2003)
§205.6 Sanctions and discipline.
(a)
A violation of this part by any attorney appearing and practicing before the Commission in
the representation of an issuer shall subject such attorney to the civil penalties and remedies for a
violation of the federal securities laws available to the Commission in an action brought by the
Commission thereunder.
(b)
An attorney appearing and practicing before the Commission who violates any provision of
this part is subject to the disciplinary authority of the Commission, regardless of whether the attorney
may also be subject to discipline for the same conduct in a jurisdiction where the attorney is admitted
or practices. An administrative disciplinary proceeding initiated by the Commission for violation of
this part may result in an attorney being censured, or being temporarily or permanently denied the
privilege of appearing or practicing before the Commission.
(c)
An attorney who complies in good faith with the provisions of this part shall not be subject to
discipline or otherwise liable under inconsistent standards imposed by any state or other United States
jurisdiction where the attorney is admitted or practices.
(d)
An attorney practicing outside the United States shall not be required to comply with the
requirements of this part to the extent that such compliance is prohibited by applicable foreign law.
http://www.sec.gov/rules/final/33-8185.htm (effective August 5, 2003)
§205.7 No private right of action.
(a)
Nothing in this part is intended to, or does, create a private right of action against any
attorney, law firm, or issuer based upon compliance or noncompliance with its provisions.
(b)
Authority to enforce compliance with this part is vested exclusively in the Commission.
http://www.sec.gov/rules/final/33-8185.htm (effective August 5, 2003)
§ 240.10b-18 Purchases of certain equity securities by the issuer and others.
Preliminary Notes to § 240.10b-18
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1.
Section 240.10b-18 provides issuers (and their affiliated purchasers) with a "safe harbor"
from liability for manipulation under the Act when they repurchase shares of the issuer's common
stock in the market in accordance with the section's manner, timing, price, and volume conditions. As
a safe harbor, compliance with § 240.10b-18 is voluntary. To come within the safe harbor, however,
an issuer's repurchases must satisfy (on a daily basis) each of the section's four conditions. Failure to
meet any one of the four conditions will remove all of the issuer's repurchases from the safe harbor
for that day. The safe harbor, however, is not available for repurchases that, although made in
technical compliance with the section, are part of a plan or scheme to evade the federal securities
laws.
2.
Regardless of whether the repurchases are effected in accordance with § 240.10b-18,
reporting issuers must comply with Item 703 of Regulations S-K and S-B (17 CFR 229.703 and
228.703) and Item 15(e) of Form 20-F (17 CFR 249.220f) (regarding foreign private issuers), and
closed-end management investment companies that are registered under the Investment Company Act
of 1940 must comply with Item 6 of Form N-CSR (17 CFR 249.331; 17 CFR 274.128). Items 703,
15(e), and 6 require issuers to disclose, on Forms 10-Q/10-QSB, 10-K/10-KSB, 20-F, and Form NCSR, all repurchases (open market and private transactions) of their equity securities during the
previous quarter, including the total number of shares (or units) purchased (sorted by month), the
average price paid per share, the identity of broker-dealer(s) used to effect the purchases (except in
the case of Form 20-F), the number of shares (or units) purchased as part of a publicly announced
repurchase plan or program, and the maximum number (or approximate dollar value) of shares (or
units) that may yet be purchased under the plans or programs.
(a)
Definitions. Unless the context otherwise requires, all terms used in this section shall have the
same meaning as in the Act. In addition, the following definitions shall apply:
(1)
ADTV means the average daily trading volume reported for the security during the
four calendar weeks preceding the week in which the Rule 10b-18 purchase is to be effected.
(2)
Affiliate means any person that directly or indirectly controls, is controlled by, or is
under common control with, the issuer.
(3)
Affiliated purchaser means:
(i)
A person acting, directly or indirectly, in concert with the issuer for the
purpose of acquiring the issuer's securities; or
(ii)
An affiliate who, directly or indirectly, controls the issuer's purchases of such
securities, whose purchases are controlled by the issuer, or whose purchases are under common
control with those of the issuer; Provided , however , that "affiliated purchaser" shall not include a
broker, dealer, or other person solely by reason of such broker, dealer, or other person effecting rule
10b-18 purchases on behalf of the issuer or for its account, and shall not include an officer or director
of the issuer solely by reason of that officer or director's participation in the decision to authorize
Rule 10b-18 purchases by or on behalf of the issuer.
(4)
Agent independent of the issuer has the meaning contained in § 242.100 of this
chapter.
(5)
Consolidated system means a consolidated transaction (or quotation) reporting
system that collects and publicly disseminates on a current and continuous basis transaction (or
quotation) information in common equity securities pursuant to an effective transaction reporting plan
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(as defined in §240.11Aa3-1 of this chapter), the rules of a national securities exchange, or the rules
of a national securities association.
(6)
Highest independent bid means the highest published bid for a regular way trade
(other than a bid by or for the issuer or any affiliated purchaser of the issuer) at the time the Rule 10b18 purchase is effected.
(7)
Last independent transaction price means the price at which the last regular way trade
(other than a trade by or for the issuer or any affiliated purchaser of the issuer) was reported at the
time the Rule 10b-18 purchase is effected.
(8)
more that is:
Market-wide trading suspension means a market-wide trading halt of 30 minutes or
(i)
Imposed pursuant to the rules of a national securities exchange or a national
securities association in response to a market-wide decline during a single trading session; or
(ii)
Declared by the Commission pursuant to its authority under section 12(k) of
the Act (15 U.S.C. 78(k)).
(9)
Plan has the meaning contained in § 242.100 of this chapter.
(10)
Principal market for a security means the single securities market with the largest
reported trading volume for the security during the 6 full calendar months preceding the week in
which the Rule 10b-18 purchase is to be effected.
(11)
Public float value has the meaning contained in § 242.100 of this chapter.
(12)
Purchase price means the price paid per share as reported (exclusive of any
commission paid to a broker acting as agent, or commission equivalent, mark-up, or differential paid
to a dealer).
(13)
Rule 10b-18 purchase means a purchase (or any bid or limit order that would effect
such purchase) of an issuer's common stock (or an equivalent interest, including a unit of beneficial
interest in a trust or limited partnership or a depository share) by or for the issuer or any affiliated
purchaser. However, it does not include any purchase of such security:
(i)
Effected during the restricted period (as specified in § 242.102 of this
chapter) when the issuer or any affiliated purchaser is distributing (as defined in § 242.100 of this
chapter) the issuer's common stock or any other security for which the common stock is a reference
security;
(ii)
Effected by or for an issuer plan by an agent independent of the issuer;
(iii)
Effected as a fractional share purchase (a fractional interest in a security)
evidenced by a script certificate, order form, or similar document;
(iv)
Effected during the period from the time of public announcement of a
merger, acquisition, or similar transaction involving a recapitalization, until the completion of such
transaction;
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(v)
Effected pursuant to § 240.13e-1;
(vi)
Effected pursuant to a tender offer that is subject to § 240.13e-4 or
specifically excepted from § 240.13e-4; or
(vii)
Effected pursuant to a tender offer that is subject to section 14(d) of the Act
(15 U.S.C. 78n(d)) and the rules and regulations thereunder.
(b)
Conditions to be met. Rule 10b-18 purchases shall not be deemed to have violated the antimanipulation provisions of sections 9(a)(2) or 10(b) of the Act (15 U.S.C. 78i(a)(2) or 78j(b)), or §
240.10b-5 under the Act, solely by reason of the time, price, or amount of the Rule 10b-18 purchases,
or the number of brokers or dealers used in connection with such purchases, if the issuer or affiliated
purchaser of the issuer effects the Rule 10b-18 purchases according to each of the following
conditions:
(1)
One broker or dealer. Rule 10b-18 purchases must be made from or through only one
broker or dealer on any single day; Provided , however , that:
(i)
The "one broker or dealer" condition shall not apply to Rule 10b-18
purchases that are not solicited by or on behalf of the issuer or its affiliated purchaser(s); and
(ii)
Where Rule 10b-18 purchases are made by or on behalf of more than one
affiliated purchaser of the issuer (or the issuer and one or more of its affiliated purchasers) on a single
day, the issuer and all affiliated purchasers must use the same broker or dealer.
(2)
Time of purchases.
(i)
Rule 10b-18 purchases must not be the first (opening regular way purchase
reported in the consolidated system; and
(ii)
Rule 10b-18 purchases of an issuer's security that has an ADTV value of $1
million or more and a public float value of $150 million or more must not be effected during any of
the following periods:
(A)
The 10 minutes before the scheduled close of the primary trading
session in the principal market for the security;
(B)
The 10 minutes before the scheduled close of the primary trading
session in the market where the purchase is made; or
(C)
After the termination of the period in which last sale prices are
reported in the consolidated system; and
(iii)
Rule 10b-18 purchases of an issuer's security that does not meet the criteria
described in paragraph (b)(2)(ii) of this section must not be effected during any of the following
periods:
(A)
The 30 minutes before the scheduled close of the primary trading
session in the principal market for the security;
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Rules Under Securities Exchange Act of 1934
(B)
The 30 minutes before the scheduled close of the primary trading
session in the market where the purchase is made, or
(C)
After the termination of the period in which last sale prices are
reported in the consolidated system.
(3)
Price of purchases
(i)
Rule 10b-18 purchases must be effected at a purchase price that does not
exceed the highest independent bid or the last independent transaction price, whichever is higher,
quoted or reported in the consolidated system; and
(ii)
For securities as to which bids and transaction prices are not quoted or
reported in the consolidated system, Rule 10b-18 purchases must be effected at a purchase price that
does not exceed the highest independent bid or the last independent transaction price, whichever is
higher, displayed and disseminated on any national securities exchange or on any inter-dealer
quotation system (as defined in § 240.15c2-11) that displays at least two priced quotations for the
security. For all other securities, Rule 10b-18 purchases must be effected at a price no higher than the
highest independent bid obtained from three dealers.
(4)
Volume of purchases. The total volume of Rule 10b-18 purchases (combining all
Rule 10b-18 purchases by or for the issuer or any affiliated purchaser of the issuer for that day)
effected on any single day must not exceed the higher of 25 percent of the ADTV for that security or
500 shares.
(c)
Alternative conditions. The conditions of paragraph (b) of this section shall apply in
connection with a Rule 10b-18 purchase effected during a trading session following the imposition of
a market-wide trading suspension, except:
(1)
apply, either:
That the time of purchases condition in paragraph (b)(2) of this section shall not
(i)
From the reopening of trading until the scheduled close of trading; or
(ii)
At the opening of trading on the next trading day until the scheduled close of
trading that day, if a market-wide trading suspension was in effect at the close of trading on the
preceding day; and
(2)
The volume of purchases condition in paragraph (b)(4) of this section is modified so
that the amount of Rule 10b-18 purchases must not exceed 100 percent of the ADTV for that security.
(d)
Other purchases. Failure to meet any one of the Rule's conditions with respect to any Rule
10b-18 purchase will remove from the safe harbor all other Rule 10b-18 purchases for that day.
However, no presumption shall arise that an issuer or an affiliated purchaser has violated the antimanipulation provisions of sections 9(a)(2) or 10(b) of the Act (15 U.S.C. 78i(a)(2) or 78j(b)), or §
240.10b-5, if the Rule 10b-18 purchases of such issuer or affiliated purchaser do not meet the
conditions specified in paragraph (b) or (c) of this section.
http://www.sec.gov/rules/proposed/33-8160.htm
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§240.10A-2 Auditor independence.
It shall be unlawful for an auditor not to be independent under §210.2-01(c)(2)(iii)(B), (c)(4), (c)(6),
(c)(7), and §210.2-07.
http://www.sec.gov/rules/final/33-8183.htm (effective May 6, 2003)
§ 240.10A-3 Listing standards relating to audit committees.
(a)
Pursuant to section 10A(m) of the Act (15 U.S.C. 78j-1(m)) and section 3 of the SarbanesOxley Act of 2002 (Pub. L. No. 107-204, sec. 3, 116 Stat. 745):
(1)
National securities exchanges. The rules of each national securities exchange
registered pursuant to section 6 of the Act (15 U.S.C. 78f) must prohibit the initial or continued listing
of any security of an issuer that is not in compliance with the requirements of any portion of
paragraph (b) or (c) of this section.
(2)
National securities associations. The rules of each national securities association
registered pursuant to section 15A of the Act (15 U.S.C. 78o-3) must prohibit the initial or continued
listing in an automated inter-dealer quotation system of any security of an issuer that is not in
compliance with the requirements of any portion of paragraph (b) or (c) of this section.
(3)
Opportunity to cure defects. The rules required by paragraphs (a)(1) and (a)(2) of this
section must provide for appropriate procedures for an issuer to have an opportunity to cure any
defects that would be the basis for a prohibition under paragraph (a) of this section, before the
imposition of such prohibition.
(4)
Notification of noncompliance. The rules required by paragraphs (a)(1) and (a)(2) of
this section must include a requirement that a listed issuer must notify the applicable national
securities exchange or national securities association promptly after an executive officer of the listed
issuer becomes aware of any material noncompliance by the listed issuer with the requirements of this
section.
(5)
Implementation.
(i)
The rules of each national securities exchange or national securities
association meeting the requirements of this section must be operative no later than the first
anniversary of the publication of this section in the Federal Register.
(ii)
Each national securities exchange and national securities association must
provide to the Commission, no later than 60 days after publication of this section in the Federal
Register, proposed rules or rule amendments that comply with this section.
(iii)
Each national securities exchange and national securities association must
have final rule or rule amendments that comply with this section approved by the Commission no
later than 270 days after publication of this section in the Federal Register.
(b)
Required standards.
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Rules Under Securities Exchange Act of 1934
(1)
Independence.
(i)
Each member of the audit committee must be a member of the board of
directors of the listed issuer, and must otherwise be independent.
(ii)
Independence requirements for non-investment company issuers. In order to
be considered to be independent for purposes of this paragraph (b)(1), a member of an audit
committee of a listed issuer that is not an investment company may not, other than in his or her
capacity as a member of the audit committee, the board of directors, or any other board committee:
(A)
Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(B)
Be an affiliated person of the issuer or any subsidiary thereof.
(iii)
Independence requirements for investment company issuers. In order to be
considered to be independent for purposes of this paragraph (b)(1), a member of an audit committee
of a listed issuer that is an investment company may not, other than in his or her capacity as a member
of the audit committee, the board of directors, or any other board committee:
(A)
Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(B)
Be an "interested person" of the investment company as defined in
section 2(a)(19) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(19)).
(iv)
Exemptions from the independence requirements.
(A)
One member of a listed issuer's audit committee may be exempt from
the independence requirements of paragraph (b)(1)(ii) of this section for 90 days from the date of
effectiveness of a registration statement under section 12 of the Act (15 U.S.C. 78l), or a registration
statement under the Securities Act of 1933 (15 U.S.C. 77a et seq.) covering an initial public offering
of securities of the issuer, if the issuer was not immediately prior to such effective date required to file
reports with the Commission pursuant to section 13(a) or 15(d) of the Act (15 U.S.C. 78m(a) or
78o(d)).
(B)
An audit committee member that sits on the board of directors of
both a listed issuer and its direct or indirect consolidated majority-owned subsidiary (or that sits on
the board of both a listed issuer and its parent, if the listed issuer is a direct or indirect consolidated
majority-owned subsidiary of the parent) is exempt from the requirements of paragraph (b)(1)(ii)(B)
of this section if the member, except for sitting on both boards, otherwise meets the independence
requirements of paragraph (b)(1)(ii) of this section for both the parent and the subsidiary, including
the receipt of only ordinary-course compensation for serving as a member of the board of directors,
audit committee or any other board committee of the parent or subsidiary.
(C)
An employee of a foreign private issuer who is not an executive
officer of the foreign private issuer is exempt from the requirements of paragraph (b)(1)(ii) of this
section if the employee is elected or named to the board of directors or audit committee of the foreign
private issuer pursuant to home country legal or listing requirements.
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Rules Under Securities Exchange Act of 1934
(D)
One member of the audit committee of a foreign private issuer may
be exempt from the requirements of paragraph (b)(1)(ii)(B) of this section if that member meets the
following requirements:
(1)
The member is a beneficial owner of more than 50% of the
voting common equity of the foreign private issuer or is a representative or designee of such an owner
or a group of owners that collectively are the beneficial owner of more than 50% of the voting
common equity of the foreign private issuer;
(2)
The member has only observer status on, and is not a voting
member or the chair of, the audit committee; and
(3)
The member is not an executive officer of the foreign private
issuer.
(E)
One member of the audit committee of a foreign private issuer may
be exempt from the requirements of paragraph (b)(1)(ii)(B) of this section if that member meets the
following requirements:
(1)
The member is a representative or designee of a foreign
government or foreign governmental entity that is an affiliate of the foreign private issuer; and
(2)
The member is not an executive officer of the foreign private
issuer.
(F)
In addition to paragraphs (b)(1)(iv)(A) through(E) of this section, the
Commission may exempt from the requirements of paragraphs (b)(1)(ii) or (b)(1)(iii) of this section a
particular relationship with respect to audit committee members, as the Commission determines
appropriate in light of the circumstances.
(2)
Responsibilities relating to registered public accounting firms.
(i)
Except as provided in paragraph (b)(2)(ii) of this section, the audit committee
of each listed issuer, in its capacity as a committee of the board of directors, must be directly
responsible for the appointment, compensation, retention and oversight of the work of any registered
public accounting firm engaged (including resolution of disagreements between management and the
auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related
work or performing other audit, review or attest services for the listed issuer, and each such registered
public accounting firm must report directly to the audit committee.
(ii)
Paragraph (b)(2)(i) of this section does not apply in the case of the selection
of a registered public accounting firm engaged by a listed issuer that is an investment company.
(3)
Complaints. Each audit committee must establish procedures for:
(i)
The receipt, retention, and treatment of complaints received by the listed
issuer regarding accounting, internal accounting controls, or auditing matters; and
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Rules Under Securities Exchange Act of 1934
(ii)
The confidential, anonymous submission by employees of the listed issuer of
concerns regarding questionable accounting or auditing matters.
(4)
Authority to engage advisers. Each audit committee must have the authority to
engage independent counsel and other advisers, as it determines necessary to carry out its duties.
(5)
Funding. Each listed issuer must provide for appropriate funding, as determined by
the audit committee, in its capacity as a committee of the board of directors, for payment of
compensation:
(i)
To any registered public accounting firm engaged for the purpose of
rendering or issuing an audit report or related work or performing other audit, review or attest
services for the listed issuer; and
(ii)
To any advisers employed by the audit committee under paragraph (b)(4) of
this section.
(c)
General exemptions.
(1)
At any time when an issuer has a class of common equity securities (or similar
securities) that is listed on a national securities exchange or national securities association subject to
the requirements of this section, listing of other classes of securities of the issuer, and other classes of
securities of a direct or indirect consolidated majority-owned subsidiary of the issuer (except classes
of equity securities, other than non-convertible, non-participating preferred securities, of the majorityowned subsidiary), is not subject to the requirements of this section.
(2)
(i)
The listing of securities of a foreign private issuer will not be subject to the
requirements of paragraphs (b)(1) or (b)(2) of this section if the foreign private issuer meets the
following requirements:
(A)
The securities of the foreign private issuer are also listed or quoted
on a securities exchange or inter-dealer quotation system outside the United States;
(B)
The foreign private issuer has a board of auditors (or similar body),
or has statutory auditors, separate from the board of directors that are established and selected
pursuant to home country legal or listing provisions requiring or permitting such a board or similar
body;
(C)
The board or body, or statutory auditors, are not elected by
management of such issuer and no executive officer of the foreign private issuer is a member of such
board or body, or statutory auditors;
(D)
Home country legal or listing provisions set forth standards for the
independence of such board or body, or statutory auditors, from the foreign private issuer or the
management of such issuer;
(E)
Such board or body, or statutory auditors, are directly responsible, in
accordance with standards prescribed by home country legal or listing provisions, for the oversight of
the work of any registered public accounting firm engaged (including resolution of disagreements
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Rules Under Securities Exchange Act of 1934
between management and the auditor regarding financial reporting) for the purpose of preparing or
issuing an audit report or related work or performing other audit, review or attest services for the
issuer; and
(F)
Such board or body, or statutory auditors, are responsible, to the
extent permitted by law, for the appointment and retention of any registered public accounting firm
engaged by the issuer. Such responsibility may be vested in such board or body, or statutory auditors,
in any manner, including without limitation by law or listing provision or delegation.
(ii)
For purposes of foreign private issuers relying on the exemption in this
paragraph (c)(2), the term audit committee in paragraphs (b)(3), (b)(4) and (b)(5) of this section refers
to the foreign private issuer's board of auditors or similar body, or its statutory auditors.
(3)
The listing of a security futures product cleared by a clearing agency that is registered
pursuant to section 17A of the Act (15 U.S.C. 78q-1) or that is exempt from the registration
requirements of section 17A pursuant to paragraph (b)(7)(A) of such section is not subject to the
requirements of this section.
(4)
The listing of a standardized option, as defined in § 240.9b-1(a)(4), issued by a
clearing agency that is registered pursuant to section 17A of the Act (15 U.S.C. 78q-1) is not subject
to the requirements of this section.
(5)
The securities of the following listed issuers are exempt from the requirements of this
section:
(i)
Asset-Backed Issuers (as defined in § 240.13a-14(g) and § 240.15d-14(g));
(ii)
Unit investment trusts (as defined in 15 U.S.C. 80a-4(2)).
and
(d)
Disclosure. Any listed issuer availing itself of any exemption from the independence
standards contained in paragraph (b)(1)(iv) of this section, or any general exemption contained in
paragraph (c) of this section, other than the exemptions contained in paragraphs (c)(1) and (c)(5)(ii)
of this section, must:
(1)
Disclose its reliance on the exemption and its assessment of whether, and if so, how,
such reliance would materially adversely affect the ability of the audit committee to act independently
and to satisfy the other requirements of this section in any proxy or information statement for a
meeting of shareholders at which directors are elected that is filed with the Commission pursuant to
the requirements of section 14 of the Act (15 U.S.C. 78n); and
(2)
Disclose the information specified in paragraph (d)(1) of this section in, or
incorporate such information by reference from such proxy or information statement filed with the
Commission into, its annual report filed with the Commission pursuant to the requirements of section
13(a) or 15(d) of the Act (15 U.S.C. 78m(a) or 78o(d)).
(e)
Definitions. Unless the context otherwise requires, all terms used in this section have the
same meaning as in the Act. In addition, unless the context otherwise requires, the following
definitions apply:
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Rules Under Securities Exchange Act of 1934
(1)
(i)
The term affiliate of, or a person affiliated with, a specified person, means a
person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such issuer. A person will be deemed not to be in control of the issuer
for purposes of this section if the person:
(A)
Is not the beneficial owner, directly or indirectly, of more than 10%
of any class of equity securities of the issuer;
(B)
Is not an executive officer of the issuer; and
(C)
Is not a director of the issuer.
(ii)
A director, executive officer, partner, member, principal or designee of an
affiliate will be deemed to be an affiliate.
(2)
In the case of foreign private issuers with two-tier boards of directors, the term board
of directors means the supervisory or non-management board.
(3)
The term control (including the terms controlling, controlled by and under common
control with) means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting securities, by
contract, or otherwise.
(4)
The term executive officer has the meaning set forth in § 240.3b-7.
(5)
The term foreign private issuer has the meaning set forth in § 240.3b-4(c).
(6)
The term indirect acceptance by a member of an audit committee of any consulting,
advisory or other compensatory fee includes acceptance of such a fee by a spouse, a minor child or
stepchild or a child or stepchild sharing a home with the member or by an entity in which such
member is a partner, member or principal or occupies a similar position and which provides
accounting, consulting, legal, investment banking, financial or other advisory services or any similar
services to the issuer.
(7)
The terms listed and listing refer to securities listed on a national securities exchange
or listed in an automated inter-dealer quotation system of a national securities association or to issuers
of such securities.
(8)
Until the Public Company Accounting Oversight Board has established the
registration of independent public accountants, the term registered public accounting firm means an
independent public accountant engaged for the purposes indicated in this section.
Instructions to § 240.10A-3.
1.
The requirement in paragraph (b)(2) or (c)(2)(i)(F) of this section does not conflict with, and
does not affect the application of, any requirement under an issuer's governing law or documents or
other home country requirements that requires shareholders to ultimately elect, approve or ratify the
selection of the issuer's auditor. The requirement instead relates to the assignment of responsibility to
oversee the auditor's work as between the audit committee and management. In such an instance,
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however, if the issuer provides a recommendation or nomination of an auditor to its shareholders, the
audit committee of the issuer, or body performing similar functions, must be responsible for making
the recommendation or nomination. Also, the requirement in paragraph (b)(2) or (c)(2)(i)(F) of this
section does not conflict with any requirement in a company's home jurisdiction that prohibits the full
board of directors from delegating the responsibility to select the company's auditor. In that case, the
audit committee, or body performing similar functions, must be granted advisory and other powers
with respect to such matters to the extent permitted by law, including submitting nominations or
recommendations to the full board.
2.
For the purposes of paragraph (e)(1) of this section, the determination of a person's beneficial
ownership must be made in accordance with § 240.13d-3(d)(1).
http://www.sec.gov/rules/proposed/34-47137.htm
§ 240.12b-2 Definitions.
*****
Accelerated filer.
(1)
The term “accelerated filer” means an issuer after it first meets the following
conditions as of the end of its fiscal year:
(i)
The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the issuer is $75 million or more;
(ii)
The issuer has been subject to the requirements of Section 13(a) or 15(d) of
the Act (15 U.S.C. 78m or 78o(d)) for a period of at least twelve calendar months;
(iii)
15(d) of the Act; and
The issuer has filed at least one annual report pursuant to Section 13(a) or
(iv)
The issuer is not eligible to use Forms 10-KSB and 10-QSB (§ 249.310b and
§ 249.308b) for its annual and quarterly reports.
NOTE to paragraph (1): The aggregate market value of the issuer’s outstanding voting and nonvoting common equity shall be computed by use of the price at which the common equity was last
sold, or the average of the bid and asked prices of such common equity, in the principal market for
such common equity, as of the last business day of the issuer’s most recently completed second fiscal
quarter.
(2)
Entering and Exiting Accelerated Filer Status.
(i)
The determination for whether a non-accelerated filer becomes an
accelerated filer as of the end of the issuer’s fiscal year governs the annual report to be filed for that
fiscal year, the quarterly and annual reports to be filed for the subsequent fiscal year and all annual
and quarterly reports to be filed thereafter while the issuer remains an accelerated filer.
(ii)
Once an issuer becomes an accelerated filer, it will remain an accelerated
filer unless the issuer becomes eligible to use Forms 10-KSB and 10-QSB for its annual and quarterly
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Rules Under Securities Exchange Act of 1934
reports. In that case, the issuer will not become an accelerated filer again unless it subsequently
meets the conditions in paragraph (1) of this definition.
http://www.sec.gov/rules/final/33-8128.htm
§240.12b-15 Amendments.
All amendments must be filed under cover of the form amended, marked with the letter “A” to
designate the document as an amendment, e.g., “10-K/A,” and in compliance with pertinent
requirements applicable to statements and reports. Amendments filed pursuant to this section must
set forth the complete text of each item as amended. Amendments must be numbered sequentially
and be filed separately for each statement or report amended. Amendments to a statement may be
filed either before or after registration becomes effective. Amendments must be signed on behalf of
the registrant by a duly authorized representative of the registrant. In addition, each principal
executive officer and principal financial officer of the registrant must provide a new certification as
specified in §240.13a-14 or §240.15d-14. The requirements of the form being amended will govern
the number of copies to be filed in connection with a paper format amendment. Electronic filers
satisfy the provisions dictating the number of copies by filing one copy of the amendment in
electronic format. See Rule 309 of Regulation S-T (§232.309 of this chapter).
http://www.sec.gov/rules/final/33-8124.htm
§240.13a-11 Current reports on Form 8-K (§249.308 of this chapter).
*****
(b)
This section shall not apply to foreign governments, foreign private issuers required to make
reports on Form 6-K (17 CFR 249.306) pursuant to §240.13a-16, issuers of American Depositary
Receipts for securities of any foreign issuer, or investment companies required to file reports pursuant
to §270.30b1-1 of this chapter under the Investment Company Act of 1940, except where such
investment companies are required to file notice of a blackout period pursuant to §245.104 of this
chapter.
http://www.sec.gov/rules/final/34-47225.htm
(c)
A registrant that fails to file a Form 8-K that is required to be filed shall not be liable under
Sections 13 and 15(d) of the Exchange Act for the failure to file in a timely manner if all of the
following conditions are satisfied:
(i)
On the Form 8-K due date, the company maintained sufficient procedures to provide
reasonable assurances that the registrant is able to collect process and disclose, within the specified
time period, the information required to be disclosed by Form 8-K; and
(ii)
No officer, employee or agent of the registrant knew, or was reckless in not knowing,
that a report on Form 8-K was required to be filed and once an executive officer of the registrant
became aware of its failure to file a required Form 8-K, it promptly (and not later than two business
days after becoming aware of its failure to file) filed a Form 8-K with the Commission containing the
required information and stating the date, or approximate date, on which the report should have been
filed.
Note: This rule does not have any effect on a registrant’s liability under any other provision of the
securities laws, including without limitation Rule 10b-5 (§240.10b-5 of this chapter) under the
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Rules Under Securities Exchange Act of 1934
Exchange Act and Section 11 of the Securities Act. This rule does not apply to Item 3.05 of Form 8K.
http://www.sec.gov/rules/proposed/33-8106.htm
§240.13a-14 Certification of disclosure in annual and quarterly reports.
(a)
Each report, including transition reports, filed on Form 10-Q, Form 10-QSB, Form 10-K,
Form 10-KSB, Form 20-F or Form 40-F (§§249.308a, 249.308b, 249.310, 249.310b, 249.220f and
249.240f of this chapter) under section 13(a) of the Act (15 U.S.C. 78m(a)), other than a report filed
by an Asset-Backed Issuer (as defined in paragraph (g) of this section), must include a certification
containing the information set forth in paragraph (b) of this section in the form specified in the report.
Each principal executive officer or officers and principal financial officer or officers of the issuer, or
persons performing similar functions, at the time of filing of the report must sign the certification.
(b)
The certification included in each report specified in paragraph (a) of this section must be in
the form specified in the report and consist of a statement of the certifying officer that:
(1)
He or she has reviewed the report being filed;
(2)
Based on his or her knowledge, the report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by the report;
(3)
Based on his or her knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the financial condition,
results of operations and cash flows of the issuer as of, and for, the periods presented in the report;
(4)
He or she and the other certifying officers are responsible for establishing and
maintaining disclosure controls and procedures (as such term is defined in paragraph (c) of this
section) for the issuer and have:
(i)
Designed such disclosure controls and procedures to ensure that material
information relating to the issuer, including its consolidated subsidiaries, is made known to them by
others within those entities, particularly during the period in which the periodic reports are being
prepared;
(ii)
Evaluated the effectiveness of the issuer's disclosure controls and procedures
as of a date within 90 days prior to the filing date of the report ("Evaluation Date"); and
(iii)
Presented in the report their conclusions about the effectiveness of the
disclosure controls and procedures based on their evaluation as of the Evaluation Date;
(5)
He or she and the other certifying officers have disclosed, based on their most recent
evaluation, to the issuer's auditors and the audit committee of the board of directors (or persons
fulfilling the equivalent function):
(i)
All significant deficiencies in the design or operation of internal controls
which could adversely affect the issuer's ability to record, process, summarize and report financial
data and have identified for the issuer's auditors any material weaknesses in internal controls; and
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Rules Under Securities Exchange Act of 1934
(ii)
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal controls; and
(6)
He or she and the other certifying officers have indicated in the report whether or not
there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(c)
For purposes of this section and §240.13a-15 of this chapter, the term "disclosure controls
and procedures" means controls and other procedures of an issuer that are designed to ensure that
information required to be disclosed by the issuer in the reports that it files or submits under the Act
(15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Act is accumulated and communicated to the
issuer's management, including its principal executive officer or officers and principal financial
officer or officers, or persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(d)
A person required to provide the certification specified in paragraph (a) of this section may
not have the certification signed on his or her behalf pursuant to a power of attorney or other form of
confirming authority.
(e)
Each annual report filed by an Asset-Backed Issuer (as defined in paragraph (g) of this
section) under section 13(a) of the Act (15 U.S.C. 78m(a)) must include a certification addressing the
following items:
(1)
Review by the certifying officer of the annual report and other reports containing
distribution information for the period covered by the annual report;
(2)
The absence in these reports, to the best of the certifying officer's knowledge, of any
untrue statement of material fact or omission of a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading;
(3)
The inclusion in these reports, to the best of the certifying officer's knowledge, of the
financial information required to be provided to the trustee under the governing documents of the
issuer; and
(4)
standards.
Compliance by the servicer with its servicing obligations and minimum servicing
(f)
With respect to Asset-Backed Issuers, the certification required by paragraph (e) of this
section must be signed by the trustee of the trust (if the trustee signs the annual report) or the senior
officer in charge of securitization of the depositor (if the depositor signs the annual report).
Alternatively, the senior officer in charge of the servicing function of the master servicer (or entity
performing the equivalent functions) may sign the certification.
(g)
For purposes of this section, the term Asset-Backed Issuer means any issuer whose reporting
obligation results from the registration of securities it issued that are primarily serviced by the cash
flows of a discrete pool of receivables or other financial assets, either fixed or revolving, that by their
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Rules Under Securities Exchange Act of 1934
terms convert into cash within a finite time period plus any rights or other assets designed to assure
the servicing or timely distribution of proceeds to security holders.
http://www.sec.gov/rules/final/33-8124.htm
Note: the form of §240.13a-14 set forth above is currently effective. The form of §240.13a-14 set
forth below is the proposed substitute for the currently effective form of §240.13a-14.
Amend §240.13a-14 by:
a.
Revising paragraph (b)(4); b. Redesignating paragraphs (d), (e), (f) and (g) as paragraphs (e),
(f), (g) and (h); and c. Adding new paragraph (d).
§240.13a-14 Certification of disclosure in annual and quarterly reports.
*
* * *
*
(b) * * *
(4)
He or she and the other certifying officers are responsible for establishing and
maintaining disclosure controls and procedures and internal controls and procedures for financial
reporting (as such terms are defined in paragraphs (c) and (d) of this section) for the issuer and have:
(i)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under their supervision, to ensure that material information
relating to the issuer, including its consolidated subsidiaries, is made known to them by others within
those entities, particularly during the period in which periodic reports are being prepared;
(ii)
Designed such internal controls and procedures for financial reporting, or
caused such internal controls and procedures for financial reporting to be designed under their
supervision, to provide reasonable assurances that the registrant's financial statements are fairly
presented in conformity with generally accepted accounting principles;
(iii)
Evaluated the effectiveness of the registrant's disclosure controls and
procedures and internal controls and procedures for financial reporting as of the end of the period
covered by the report ("Evaluation Date");
(iv)
Presented in the report their conclusions about the effectiveness of the
disclosure controls and procedures and internal controls and procedures for financial reporting, in
each case based on their evaluation as of the Evaluation Date;
(v)
Disclosed to the registrant's auditors and the audit committee of the board of
directors (or persons fulfilling the equivalent function):
(A)
All significant deficiencies and material weaknesses in the design or
operation of internal controls and procedures for financial reporting which could adversely affect the
registrant's ability to record, process, summarize and report financial information required to be
disclosed by the registrant in the reports that it files or submits under the Act (15 U.S.C. 78a et seq.),
within the time periods specified in the Commission's rules and forms; and
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Rules Under Securities Exchange Act of 1934
(B)
Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal controls and procedures for
financial reporting; and
(vi)
Indicated in the report any significant changes in the registrant's internal
controls and procedures for financial reporting or in other factors that could significantly affect
internal controls and procedures for financial reporting made during the period covered by the report,
including any actions taken to correct significant deficiencies and material weaknesses in the
registrant's internal controls and procedures for financial reporting.
*
* * *
*
(d)
For purposes of this section and §240.13a-15, the term internal controls and procedures for
financial reporting means controls that pertain to the preparation of financial statements for external
purposes that are fairly presented in conformity with generally accepted accounting principles as
addressed by the Codification of Statements on Auditing Standards §319 or any superseding
definition or other literature that is issued or adopted by the Public Company Accounting Oversight
Board.
http://www.sec.gov/rules/proposed/33-8138.htm
§240.13a-15 Issuer's disclosure controls and procedures related to preparation of required
reports.
(a)
Every issuer that has a class of securities registered pursuant to section 12 of the Act (15
U.S.C. 78l), other than an Asset-Backed Issuer (as defined in §240.13a-14(g) of this chapter), must
maintain disclosure controls and procedures (as defined in §240.13a-14(c) of this chapter).
(b)
Within the 90-day period prior to the filing date of each report requiring certification under
§240.13a-14 and §270.30a-2 of this chapter, an evaluation must be carried out under the supervision
and with the participation of the issuer's management, including the issuer's principal executive
officer or officers and principal financial officer or officers, or persons performing similar functions,
of the effectiveness of the design and operation of the issuer's disclosure controls and procedures.
http://www.sec.gov/rules/final/33-8124.htm
Note: the form of §240.13a-15 set forth above is currently effective. The form of §240.13a-15 set
forth below is the proposed substitute for the currently effective form of §240.13a-15.
Amend §240.13a-15 by: a. Revising the section heading and paragraph (b); and b. Adding paragraph
(c).
§240.13a-15 Controls and procedures.
*
* * *
*
(b)
In connection with each report, including transition reports, filed on Form 10-Q, Form 10QSB, Form 10-K, Form 10-KSB, Form 20-F or Form 40-F (§§249.308a, 249.308b, 249.310,
249.310b, 249.220f or 249.240f of this chapter) under section 13(a) of the Act (15 U.S.C. 78m(a)),
other than a report filed by an Asset-Backed Issuer (as defined in §240.13a-14), the issuer's
management must conduct an evaluation, with the participation of the issuer's principal executive
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Rules Under Securities Exchange Act of 1934
officer or officers and principal financial officer or officers, or persons performing similar functions,
of the effectiveness, as of the end of the period covered by the report, of the design and operation of
the issuer's disclosure controls and procedures and the issuer's internal controls and procedures for
financial reporting.
(c)
In connection with each report, including transition reports, filed on Form N-CSR (§§249.331
and 274.128 of this chapter) or Form N-SAR (§§249.330 and 274.101 of this chapter) that requires
certification under §270.30a-2 of this chapter, the issuer's management must conduct an evaluation,
with the participation of the issuer's principal executive officer or officers and principal financial
officer or officers, or persons performing similar functions, of the effectiveness, as of the end of the
period covered by the report, of the design and operation of the issuer's disclosure controls and
procedures.
http://www.sec.gov/rules/proposed/33-8138.htm
§240.13b2-2 Issuer’s representations and conduct in connection with the preparation of
required reports and documents.
(a)
No director or officer of an issuer shall, directly or indirectly:
(1)
Make or cause to be made a materially false or misleading statement; or
(2)
Omit to state, or cause another person to omit to state, any material fact necessary in
order to make statements made, in light of the circumstances under which such statements were made,
not misleading to an accountant in connection with:
(i)
Any audit or examination of the financial statements of the issuer required to
be made pursuant to this subpart; or
(ii)
The preparation or filing of any document or report required to be filed with
the Commission pursuant to this subpart or otherwise.
(b)
(1)
No officer or director of an issuer, or any other person acting under the direction
thereof, shall directly or indirectly take any action to fraudulently influence, coerce, manipulate, or
mislead any independent public or certified public accountant engaged in the performance of an audit
or review of the financial statements of that issuer that are required to be filed with the Commission if
that person knew or was unreasonable in not knowing that such action could, if successful, result in
rendering such financial statements materially misleading.
(2)
For purposes of paragraphs (b)(1) and (c)(2) of this section, actions that “could, if
successful, result in rendering such financial statements materially misleading” include, but are not
limited to, actions taken at any time with respect to the professional engagement period to
fraudulently influence, coerce, manipulate, or mislead an auditor:
(i)
To issue a report on an issuer’s financial statements that is not warranted in
the circumstances (due to material violations of generally accepted accounting principles, generally
accepted auditing standards, or other standards);
(ii)
Not to perform audit, review or other procedures required by generally
accepted auditing standards or other professional standards;
(iii)
Not to withdraw an issued report; or
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Rules Under Securities Exchange Act of 1934
(iv)
Not to communicate matters to an issuer’s audit committee.
(c)
In addition, in the case of an investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a-8), or a business development company as defined
in section 2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), no officer or
director of the company’s investment adviser, sponsor, depositor, trustee, or administrator (or, in the
case of paragraph (c)(2) of this section, any other person acting under the direction thereof) shall,
directly or indirectly:
(1)
(i)
Make or cause to be made a materially false or misleading statement; or
(ii)
Omit to state, or cause another person to omit to state, any material fact
necessary in order to make statements made, in light of the circumstances under which such
statements were made, not misleading to an accountant in connection with:
(A)
Any audit or examination of the financial statements of the
investment company required to be made pursuant to this subpart; or
(B)
The preparation or filing of any document or report required to be
filed with the Commission pursuant to this subpart or otherwise; or
(2)
Take any action to fraudulently influence, coerce, manipulate, or mislead any
independent public or certified public accountant engaged in the performance of an audit or review of
the financial statements of that investment company that are required to be filed with the Commission
if that person knew or was unreasonable in not knowing that such action could, if successful, result in
rendering such financial statements materially misleading.
http://www.sec.gov/rules/proposed/34-46685.htm
§240.16a-3 Reporting transactions and holdings.
*****
(f)
(1)
***
(i)
***
(A)
Exercises and conversions of derivative securities exempt under
either §240.16b-3 or §240.16b-6(b), and any transaction exempt under §240.16b-3(d), §240.16b-3(e),
or §240.16b-3(f) (these are required to be reported on Form 4);
*****
(g)
(1)
A Form 4 must be filed to report: all transactions not exempt from section 16(b) of
the Act; all transactions exempt from section 16(b) of the Act pursuant to §240.16b-3(d), §240.16b3(e), or §240.16b-3(f); and all exercises and conversions of derivative securities, regardless of
whether exempt from section 16(b) of the Act. Form 4 must be filed before the end of the second
business day following the day on which the subject transaction has been executed.
(2)
Solely for purposes of section 16(a)(2)(C) of the Act and paragraph (g)(1) of this
section, the date on which the executing broker, dealer or plan administrator notifies the reporting
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person of the execution of the transaction is deemed the date of execution for a transaction where the
following conditions are satisfied:
(i)
the transaction is pursuant to a contract, instruction or written plan for the
purchase or sale of equity securities of the issuer (as defined in §16a-1(d)) that satisfies the
affirmative defense conditions of §240.10b5-1(c) of this chapter; and
(ii)
the reporting person does not select the date of execution.
(3)
Solely for purposes of section 16(a)(2)(C) of the Act and paragraph (g)(1) of this
section, the date on which the plan administrator notifies the reporting person that the transaction has
been executed is deemed the date of execution for a discretionary transaction (as defined in §16b3(b)(1)) for which the reporting person does not select the date of execution.
(4)
In the case of the transactions described in paragraphs (g)(2) and (g)(3) of this
section, if the notification date is later than the third business day following the trade date of the
transaction, the date of execution is deemed to be the third business day following the trade date of
the transaction.
(5)
At the option of the reporting person, transactions that are reportable on Form 5 may
be reported on Form 4, so long as the Form 4 is filed no later than the due date of the Form 5 on
which the transaction is otherwise required to be reported.
http://www.sec.gov/rules/final/34-46421.htm
(h)
The date of filing with the Commission shall be the date of receipt by the Commission.
*****
(k)
Any issuer that maintains a corporate website shall post on that website by the end of the
business day after filing any Form 3, 4 or 5 filed under Section 16(a) of the Act as to the equity
securities of that issuer.
http://www.sec.gov/rules/proposed/33-8170.htm
§240.16a-6 Small acquisitions.
(a)
Any acquisition of an equity security or the right to acquire such securities, other than an
acquisition from the issuer (including an employee benefit plan sponsored by the issuer), not
exceeding $10,000 in market value shall be reported on Form 5, subject to the following conditions:
(1)
***
(2)
***
(b)
If an acquisition no longer qualifies for the reporting deferral in paragraph (a) of this section,
all such acquisitions that have not yet been reported must be reported on Form 4 before the end of the
second business day following the day on which the conditions of paragraph (a) of this section are no
longer met.
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§240.16a-8 Trusts.
(a)
Persons subject to section 16.
(1)
Trusts. A trust shall be subject to section 16 of the Act with respect to securities of
the issuer if the trust is a beneficial owner, pursuant to §240.16a-1(a)(1), of more than ten percent of
any class of equity securities of the issuer registered pursuant to section 12 of the Act (“ten percent
beneficial owner”).
(2)
Trustees, beneficiaries and settlors. * * *
http://www.sec.gov/rules/final/34-46421.htm
PART 244 - Regulation G
§ 244.100 General rules regarding disclosure of non-GAAP financial measures.
(a)
Whenever a registrant, or person acting on its behalf, publicly discloses material information
that includes a non-GAAP financial measure, the registrant must accompany that non-GAAP
financial measure with:
(1)
A presentation of the most directly comparable financial measure calculated and
presented in accordance with Generally Accepted Accounting Principles (GAAP); and
(2)
A reconciliation (by schedule or other clearly understandable method), which shall be
quantitative for historical non-GAAP measures presented, and quantitative, to the extent available
without unreasonable efforts, for forward-looking information, of the differences between the nonGAAP financial measure disclosed or released with the most comparable financial measure or
measures calculated and presented in accordance with GAAP identified in paragraph (a)(1) of this
section.
(b)
A registrant, or a person acting on its behalf, shall not make public a non-GAAP financial
measure that, taken together with the information accompanying that measure and any other
accompanying discussion of that measure, contains an untrue statement of a material fact or omits to
state a material fact necessary in order to make the presentation of the non-GAAP financial measure,
in light of the circumstances under which it is presented, not misleading.
(c)
This section shall not apply to a disclosure of a non-GAAP financial measure that is made by
or on behalf of a registrant that is a foreign private issuer if the following conditions are satisfied:
(1)
The securities of the registrant are listed or quoted on a securities exchange or interdealer quotation system outside the United States;
(2)
The non-GAAP financial measure is not derived from or based on a measure
calculated and presented in accordance with generally accepted accounting principles in the United
States; and
(3)
The disclosure is made by or on behalf of the registrant outside the United States, or
is included in a written communication that is released by or on behalf of the registrant outside the
United States.
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(d)
This section shall not apply to a non-GAAP financial measure included in disclosure relating
to a proposed business combination, the entity resulting therefrom or an entity that is a party thereto,
if the disclosure is contained in a communication that is subject to § 230.425 of this chapter, §
240.14a-12 or § 240.14d-2(b)(2) of this chapter or § 229.1015 of this chapter.
Notes to § 244.100:
1.
If a non-GAAP financial measure is made public orally, telephonically, by webcast, by
broadcast, or by similar means, the requirements of paragraphs (a)(1)(i) and (a)(1)(ii) of this section
will be satisfied if:
(i)
The required information in those paragraphs is provided on the registrant's web site
at the time the non-GAAP financial measure is made public; and
(ii) The location of the web site is made public in the same presentation in which the nonGAAP financial measure is made public.
2.
The provisions of paragraph (c) of this section shall apply notwithstanding the existence of
one or more of the following circumstances:
(i)
A written communication is released in the United States as well as outside the
United States, so long as the communication is released in the United States contemporaneously with
or after the release outside the United States and is not otherwise targeted at persons located in the
United States;
(ii)
information;
Foreign journalists, U.S. journalists or other third parties have access to the
(iii)
The information appears on one or more web sites maintained by the registrant, so
long as the web sites, taken together, are not available exclusively to, or targeted at, persons located in
the United States; or
(iv)
Following the disclosure or release of the information outside the United States, the
information is included in a submission by the registrant to the Commission made under cover of a
Form 6-K.
http://www.sec.gov/rules/final/33-8176.htm (applies to all subject disclosures as of March 28, 2003)
§ 244.101 Definitions.
This section defines certain terms as used in Regulation G (§§ 244.100 through 244.102).
(a)
(1)
Non-GAAP financial measure. A non-GAAP financial measure is a numerical
measure of a registrant's historical or future financial performance, financial position or cash flows
that:
(i)
Excludes amounts, or is subject to adjustments that have the effect of
excluding amounts, that are included in the most directly comparable measure calculated and
presented in accordance with GAAP in the statement of income, balance sheet or statement of cash
flows (or equivalent statements) of the issuer; or
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(ii)
Includes amounts, or is subject to adjustments that have the effect of
including amounts, that are excluded from the most directly comparable measure so calculated and
presented.
(2)
A non-GAAP financial measure does not include operating and other financial
measures and ratios or statistical measures calculated using exclusively one or both of:
(i)
Financial measures calculated in accordance with GAAP; and
(ii)
Operating measures or other measures that are not non-GAAP financial
measures.
(3)
A non-GAAP financial measure does not include financial measures required to be
disclosed by GAAP, Commission rules, or a system of regulation of a government or governmental
authority or self-regulatory organization that is applicable to the registrant.
(b)
GAAP. GAAP refers to generally accepted accounting principles in the United States, except
that (1) in the case of foreign private issuers whose primary financial statements are prepared in
accordance with non-U.S. generally accepted accounting principles, GAAP refers to the principles
under which those primary financial statements are prepared; and (2) in the case of foreign private
issuers that include a non-GAAP financial measure derived from a measure calculated in accordance
with U.S. generally accepted accounting principles, GAAP refers to U.S. generally accepted
accounting principles for purposes of the application of the requirements of Regulation G to the
disclosure of that measure.
(c)
Registrant. A registrant subject to this regulation is one that has a class of securities registered
under Section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l), or is required to file reports
under Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)), excluding any
investment company registered under Section 8 of the Investment Company Act of 1940 (15 U.S.C.
80a-8).
(d)
United States. United States means the United States of America, its territories and
possessions, any State of the United States, and the District of Columbia.
http://www.sec.gov/rules/final/33-8176.htm (applies to all subject disclosures as of March 28, 2003)
§ 244.102 No effect on antifraud liability.
Neither the requirements of this Regulation G (17 CFR § 244.100 through 244.102) nor a person's
compliance or non-compliance with the requirements of this Regulation shall in itself affect any
person's liability under Section 10(b) (15 U.S.C. 78j(b)) of the Securities Exchange Act of 1934 or §
240.10b-5 of this chapter.
http://www.sec.gov/rules/final/33-8176.htm (applies to all subject disclosures as of March 28, 2003)
PART 245 - REGULATION BLACKOUT TRADING RESTRICTION (“BTR”)
§245.100 Definitions.
As used in Regulation BTR (§§245.100 through 245.104), unless the context otherwise requires:
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(a)
The term acquired in connection with service or employment as a director or executive
officer, when applied to a director or executive officer, means that he or she acquired, directly or
indirectly, an equity security:
(1)
At a time when he or she was a director or executive officer, under a compensatory
plan, contract, authorization or arrangement, including, but not limited to, an option, warrants or
rights plan, a pension, retirement or deferred compensation plan or a bonus, incentive or profitsharing plan (whether or not set forth in any formal plan document), including a compensatory plan,
contract, authorization or arrangement with a parent, subsidiary or affiliate;
(2)
At a time when he or she was a director or executive officer, as a result of any
transaction or business relationship described in paragraph (a) or (b) of Item 404 of Regulation S-K
(§229.404 of this chapter) or, in the case of a foreign private issuer, Item 7.B of Form 20-F
(§249.220f of this chapter) (but without application of the disclosure thresholds of such provisions),
to the extent that he or she has a pecuniary interest (as defined in paragraph (l) of this section) in the
equity securities;
(3)
At a time when he or she was a director or executive officer, as directors' qualifying
shares or other securities that he or she must hold to satisfy minimum ownership requirements or
guidelines for directors or executive officers;
(4)
Prior to becoming, or while, a director or executive officer where the equity security
was acquired as a direct or indirect inducement to service or employment as a director or executive
officer; or
(5)
Prior to becoming, or while, a director or executive officer where the equity security
was received as a result of a business combination in respect of an equity security of an entity
involved in the business combination that he or she had acquired in connection with service or
employment as a director or executive officer of such entity.
(b)
Except as provided in §245.102, the term blackout period:
(1)
With respect to the equity securities of any issuer (other than a foreign private issuer),
means any period of more than three consecutive business days during which the ability to purchase,
sell or otherwise acquire or transfer an interest in any equity security of such issuer held in an
individual account plan is temporarily suspended by the issuer or by a fiduciary of the plan with
respect to not fewer than 50% of the participants or beneficiaries located in the United States and its
territories and possessions under all individual account plans (as defined in paragraph (j) of this
section) maintained by the issuer that permit participants or beneficiaries to acquire or hold equity
securities of the issuer;
(2)
With respect to the equity securities of any foreign private issuer (as defined in
§240.3b-4(c) of this chapter), means any period of more than three consecutive business days during
which both:
(i)
The conditions of paragraph (b)(1) of this section are met; and
(ii)
(A)
The number of participants and beneficiaries located in the United
States and its territories and possessions subject to the temporary suspension exceeds 15% of the total
number of employees of the issuer and its consolidated subsidiaries; or
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(B)
More than 50,000 participants and beneficiaries located in the United
States and its territories and possessions are subject to the temporary suspension.
(3)
In determining the individual account plans (as defined in paragraph (j) of this
section) maintained by an issuer for purposes of this paragraph (b):
(i)
The rules under section 414(b), (c), (m) and (o) of the Internal Revenue Code
(26 U.S.C. 414(b), (c), (m) and (o)) are to be applied; and
(ii)
An individual account plan that is maintained outside of the United States
primarily for the benefit of persons substantially all of whom are nonresident aliens (within the
meaning of section 104(b)(4) of the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1003(b)(4))) is not to be considered.
(4)
In determining the number of participants and beneficiaries in an individual account
plan (as defined in paragraph (j) of this section) maintained by an issuer:
(i)
The determination may be made as of any date within the 12-month period
preceding the beginning date of the temporary suspension in question; provided that if there has been
a significant change in the number of participants or beneficiaries in an individual account plan since
the date selected, the determination for such plan must be made as of the most recent practicable date
that reflects such change; and
(ii)
The determination may be made without regard to overlapping plan
participation.
(c)
(1)
The term director has, except as provided in paragraph (c)(2) of this section, the
meaning set forth in section 3(a)(7) of the Exchange Act (15 U.S.C. 78c(a)(7)).
(2)
In the case of a foreign private issuer (as defined in §240.3b-4(c) of this chapter), the
term director means an individual within the definition set forth in section 3(a)(7) of the Exchange
Act who is a management employee of the issuer.
(d)
The term derivative security has the meaning set forth in §240.16a-1(c) of this chapter.
(e)
The term equity security has the meaning set forth in section 3(a)(11) of the Exchange Act
(15 U.S.C. 78c(a)(11)) and §240.3a11-1 of this chapter.
(f)
The term equity security of the issuer means any equity security or derivative security
relating to an issuer, whether or not issued by that issuer.
(g)
The term Exchange Act means the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
(h)
(1)
The term executive officer has, except as provided in paragraph (h)(2) of this section,
the meaning set forth in §240.16a-1(f) of this chapter.
(2)
In the case of a foreign private issuer (as defined in §240.3b-4(c) of this chapter), the
term executive officer means the principal executive officer or officers, the principal financial officer
or officers and the principal accounting officer or officers of the issuer.
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(i)
The term exempt security has the meaning set forth in section 3(a)(12) of the Exchange Act
(15 U.S.C. 78c(a)(12)).
(j)
The term individual account plan means a pension plan which provides for an individual
account for each participant and for benefits based solely upon the amount contributed to the
participant's account, and any income, expenses, gains and losses, and any forfeitures of accounts of
other participants which may be allocated to such participant's account, except that such term does not
include a one-participant retirement plan (within the meaning of section 101(i)(8)(B) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021(i)(8)(B))), nor does it include a pension
plan in which participation is limited to directors of the issuer.
(k)
The term issuer means an issuer (as defined in section 3(a)(8) of the Exchange Act (15 U.S.C.
78c(a)(8))), the securities of which are registered under section 12 of the Exchange Act (15 U.S.C. 78
l) or that is required to file reports under section 15(d) of the Exchange Act (15 U.S.C. 78o(d)) or that
files or has filed a registration statement that has not yet become effective under the Securities Act of
1933 (15 U.S.C. 77a et seq .) and that it has not withdrawn.
(l)
The term pecuniary interest has the meaning set forth in §240.16a-1(a)(2)(i) of this chapter
and the term indirect pecuniary interest has the meaning set forth in §240.16a-1(a)(2)(ii) of this
chapter. Section 240.16a-1(a)(2)(iii) of this chapter also shall apply to determine pecuniary interest
for purposes of this regulation.
http://www.sec.gov/rules/final/34-47225.htm
§245.101 Prohibition of insider trading during pension fund blackout periods.
(a)
Except to the extent otherwise provided in paragraph (c) of this section, it is unlawful under
section 306(a)(1) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7244(a)(1)) for any director or
executive officer of an issuer of any equity security (other than an exempt security), directly or
indirectly, to purchase, sell or otherwise acquire or transfer any equity security of the issuer (other
than an exempt security) during any blackout period with respect to such equity security, if such
director or executive officer acquires or previously acquired such equity security in connection with
his or her service or employment as a director or executive officer.
(b)
For purposes of section 306(a)(1) of the Sarbanes-Oxley Act of 2002, any sale or other
transfer of an equity security of the issuer during a blackout period will be treated as a transaction
involving an equity security "acquired in connection with service or employment as a director or
executive officer" (as defined in §245.100(a)) to the extent that the director or executive officer has a
pecuniary interest (as defined in §245.100(l)) in such equity security, unless the director or executive
officer establishes by specific identification of securities that the transaction did not involve an equity
security "acquired in connection with service or employment as a director or executive officer." To
establish that the equity security was not so acquired, a director or executive officer must identify the
source of the equity securities and demonstrate that he or she has utilized the same specific
identification for any purpose related to the transaction (such as tax reporting and any applicable
disclosure and reporting requirements).
(c)
The following transactions are exempt from section 306(a)(1) of the Sarbanes-Oxley Act of
2002:
(1)
Any acquisition of equity securities resulting from the reinvestment of dividends in,
or interest on, equity securities of the same issuer if the acquisition is made pursuant to a plan
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providing for the regular reinvestment of dividends or interest and the plan provides for broad-based
participation, does not discriminate in favor of employees of the issuer and operates on substantially
the same terms for all plan participants;
(2)
Any purchase or sale of equity securities of the issuer pursuant to a contract,
instruction or written plan entered into by the director or executive officer that satisfies the
affirmative defense conditions of §240.10b5-1(c) of this chapter; provided that the director or
executive officer did not enter into or modify the contract, instruction or written plan during the
blackout period (as defined in §245.100(b)) in question, or while aware of the actual or approximate
beginning or ending dates of that blackout period (whether or not the director or executive officer
received notice of the blackout period as required by Section 306(a)(6) of the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7244(a)(6))).
(3)
Any purchase or sale of equity securities, other than a Discretionary Transaction (as
defined in §240.16b-3(b)(1) of this chapter), pursuant to a Qualified Plan (as defined in §240.16b3(b)(4) of this chapter), an Excess Benefit Plan (as defined in §240.16b-3(b)(2) of this chapter) or a
Stock Purchase Plan (as defined in §240.16b-3(b)(5) of this chapter) (or, in the case of a foreign
private issuer, pursuant to an employee benefit plan that either (i) has been approved by the taxing
authority of a foreign jurisdiction, or (ii) is eligible for preferential treatment under the tax laws of a
foreign jurisdiction because the plan provides for broad-based employee participation); provided that
a Discretionary Transaction that meets the conditions of paragraph (c)(2) of this section also shall be
exempt;
(4)
Any grant or award of an option, stock appreciation right or other equity
compensation pursuant to a plan that, by its terms:
(i)
Permits directors or executive officers to receive grants or awards; and
(ii)
Either:
(A)
States the amount and price of securities to be awarded to designated
directors and executive officers or categories of directors and executive officers (though not
necessarily to others who may participate in the plan) and specifies the timing of awards to directors
and executive officers; or
(B)
Sets forth a formula that determines the amount, price and timing,
using objective criteria (such as earnings of the issuer, value of the securities, years of service, job
classification, and compensation levels);
(5)
Any exercise, conversion or termination of a derivative security that the director or
executive officer did not write or acquire during the blackout period (as defined in §245.100(b)) in
question, or while aware of the actual or approximate beginning or ending dates of that blackout
period (whether or not the director or executive officer received notice of the blackout period as
required by Section 306(a)(6) of the Sarbanes-Oxley Act of 2002); and either:
(i)
The derivative security, by its terms, may be exercised, converted or
terminated only on a fixed date, with no discretionary provision for earlier exercise, conversion or
termination; or
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(ii)
The derivative security is exercised, converted or terminated by a
counterparty and the director or executive officer does not exercise any influence on the counterparty
with respect to whether or when to exercise, convert or terminate the derivative security;
(6)
Any acquisition or disposition of equity securities involving a bona fide gift or a
transfer by will or the laws of descent and distribution;
(7)
Any acquisition or disposition of equity securities pursuant to a domestic relations
order, as defined in the Internal Revenue Code or Title I of the Employment Retirement Income
Security Act of 1974, or the rules thereunder;
(8)
Any sale or other disposition of equity securities compelled by the laws or other
requirements of an applicable jurisdiction;
(9)
Any acquisition or disposition of equity securities in connection with a merger,
acquisition, divestiture or similar transaction occurring by operation of law; and
(10)
The increase or decrease in the number of equity securities held as a result of a stock
split or stock dividend applying equally to all securities of that class, including a stock dividend in
which equity securities of a different issuer are distributed; and the acquisition of rights, such as
shareholder or pre-emptive rights, pursuant to a pro rata grant to all holders of the same class of
equity securities.
http://www.sec.gov/rules/final/34-47225.htm
§245.102 Exceptions to definition of blackout period.
The term "blackout period," as defined in §245.100(b), does not include:
(a)
A regularly scheduled period in which participants and beneficiaries may not purchase, sell or
otherwise acquire or transfer an interest in any equity security of an issuer, if a description of such
period, including its frequency and duration and the plan transactions to be suspended or otherwise
affected, is:
(1)
Incorporated into the individual account plan or included in the documents or
instruments under which the plan operates; and
(2)
Disclosed to an employee before he or she formally enrolls, or within 30 days
following formal enrollment, as a participant under the individual account plan or within 30 days after
the adoption of an amendment to the plan. For purposes of this paragraph (a)(2), the disclosure may
be provided in any graphic form that is reasonably accessible to the employee; or
(b)
Any trading suspension described in §245.100(b) that is imposed in connection with a
corporate merger, acquisition, divestiture or similar transaction involving the plan or plan sponsor, the
principal purpose of which is to permit persons affiliated with the acquired or divested entity to
become participants or beneficiaries, or to cease to be participants or beneficiaries, in an individual
account plan; provided that the persons who become participants or beneficiaries in an individual
account plan are not able to participate in the same class of equity securities after the merger,
acquisition, divestiture or similar transaction as before the transaction.
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§245.103 Issuer right of recovery; right of action by equity security owner.
(a)
Recovery of profits. Section 306(a)(2) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7244(a)(2)) provides that any profit realized by a director or executive officer from any purchase, sale
or other acquisition or transfer of any equity security of an issuer in violation of section 306(a)(1) of
that Act (15 U.S.C. 7244(a)(1)) will inure to and be recoverable by the issuer, regardless of any
intention on the part of the director or executive officer in entering into the transaction.
(b)
Actions to recover profit. Section 306(a)(2) of the Sarbanes-Oxley Act of 2002 provides that
an action to recover profit may be instituted at law or in equity in any court of competent jurisdiction
by the issuer, or by the owner of any equity security of the issuer in the name and on behalf of the
issuer if the issuer fails or refuses to bring such action within 60 days after the date of request, or fails
diligently to prosecute the action thereafter, except that no such suit may be brought more than two
years after the date on which such profit was realized.
(c)
Measurement of profit.
(1)
In determining the profit recoverable in an action undertaken pursuant to section
306(a)(2) of the Sarbanes-Oxley Act of 2002 from a transaction that involves a purchase, sale or other
acquisition or transfer (other than a grant, exercise, conversion or termination of a derivative security)
in violation of section 306(a)(1) of that Act of an equity security of an issuer that is registered
pursuant to section 12(b) or 12(g) of the Exchange Act (15 U.S.C. 78l (b) or (g)) and listed on a
national securities exchange or listed in an automated inter-dealer quotation system of a national
securities association, profit (including any loss avoided) may be measured by comparing the
difference between the amount paid or received for the equity security on the date of the transaction
during the blackout period and the average market price of the equity security calculated over the first
three trading days after the ending date of the blackout period.
(2)
In determining the profit recoverable in an action undertaken pursuant to section
306(a)(2) of the Sarbanes-Oxley Act of 2002 from a transaction that is not described in paragraph
(c)(1) of this section, profit (including any loss avoided) may be measured in a manner that is
consistent with the objective of identifying the amount of any gain realized or loss avoided by a
director or executive officer as a result of a transaction taking place in violation of section 306(a)(1)
of that Act during the blackout period as opposed to taking place outside of such blackout period.
(3)
The terms of this section do not limit in any respect the authority of the Commission
to seek or determine remedies as the result of a transaction taking place in violation of section
306(a)(1) of the Sarbanes-Oxley Act.
http://www.sec.gov/rules/final/34-47225.htm
§245.104 Notice.
(a)
In any case in which a director or executive officer is subject to section 306(a)(1) of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7244(a)(1)) in connection with a blackout period (as defined
in §245.100(b)) with respect to any equity security, the issuer of the equity security must timely
notify each director or officer and the Commission of the blackout period.
(b)
For purposes of this section:
(1)
The notice must include:
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(i)
The reason or reasons for the blackout period;
(ii)
A description of the plan transactions to be suspended during, or otherwise
affected by, the blackout period;
(iii)
A description of the class of equity securities subject to the blackout period;
(iv)
The length of the blackout period by reference to:
(A)
The actual or expected beginning date and ending date of the
blackout period; or
(B)
The calendar week during which the blackout period is expected to
begin and the calendar week during which the blackout period is expected to end, provided that the
notice to directors and executive officers describes how, during such week or weeks, a director or
executive officer may obtain, without charge, information as to whether the blackout period has
begun or ended; and provided further that the notice to the Commission describes how, during the
blackout period and for a period of two years after the ending date of the blackout period, a security
holder or other interested person may obtain, without charge, the actual beginning and ending dates of
the blackout period.
(C)
For purposes of this paragraph (b)(1)(iv), a calendar week means a
seven-day period beginning on Sunday and ending on Saturday; and
(v)
The name, address and telephone number of the person designated by the
issuer to respond to inquiries about the blackout period, or, in the absence of such a designation, the
issuer's human resources director or person performing equivalent functions.
(2)
(i)
Notice to an affected director or executive officer will be considered timely if
the notice described in paragraph (b)(1) of this section is provided (in graphic form that is reasonably
accessible to the recipient):
(A)
No later than five business days after the issuer receives the notice
required by section 101(i)(2)(E) of the Employment Retirement Income Security Act of 1974 (29
U.S.C. 1021(i)(2)(E)); or
(B)
If no such notice is received by the issuer, a date that is at least 15
calendar days before the actual or expected beginning date of the blackout period.
(ii)
Notwithstanding paragraph (b)(2)(i) of this section, the requirement to give
advance notice will not apply in any case in which the inability to provide advance notice of the
blackout period is due to events that were unforeseeable to, or circumstances that were beyond the
reasonable control of, the issuer, and the issuer reasonably so determines in writing. Determinations
described in the preceding sentence must be dated and signed by an authorized representative of the
issuer. In any case in which this exception to the advance notice requirement applies, the issuer must
provide the notice described in paragraph (b)(1) of this section, as well as a copy of the written
determination, to all affected directors and executive officers as soon as reasonably practicable.
(iii)
If there is a subsequent change in the beginning or ending dates of the
blackout period as provided in the notice to directors and executive officers under paragraph (b)(2)(i)
of this section, an issuer must provide directors and executive officers with an updated notice
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Rules Under Securities Exchange Act of 1934
explaining the reasons for the change in the date or dates and identifying all material changes in the
information contained in the prior notice. The updated notice is required to be provided as soon as
reasonably practicable, unless such notice in advance of the termination of a blackout period is
impracticable.
(3)
Notice to the Commission will be considered timely if:
(i)
The issuer, except as provided in paragraph (b)(3)(ii) of this section, files a
current report on Form 8-K (§249.308 of this chapter) within the time prescribed for filing the report
under the instructions for the form; or
(ii)
In the case of a foreign private issuer (as defined in §240.3b-4(c) of this
chapter), the issuer includes the information set forth in paragraph (b)(1) of this section in the first
annual report on Form 20-F (§249.220f of this chapter) or 40-F (§249.240f of this chapter) required to
be filed after the receipt of the notice of a blackout period required by 29 CFR 2520.101-3(c) within
the time prescribed for filing the report under the instructions for the form or in an earlier filed report
on Form 6-K (§249.306).
(iii)
If there is a subsequent change in the beginning or ending dates of the
blackout period as provided in the notice to the Commission under paragraph (b)(3)(i) of this section,
an issuer must file a current report on Form 8-K containing the updated beginning or ending dates of
the blackout period, explaining the reasons for the change in the date or dates and identifying all
material changes in the information contained in the prior report. The updated notice is required to be
provided as soon as reasonably practicable.
http://www.sec.gov/rules/final/34-47225.htm (must comply with §245.104(b)(3)(i) and (iii) of
Regulation BTR beginning March 31, 2003)
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Rules Under Securities Exchange Act of 1934
REGULATION S-X
§210.1-02 Definition of terms used in Regulation S-X (17 CFR part 210).
(a)
Accountant’s attestation. The term accountant’s attestation means a document in which a
registered public accounting firm expresses an opinion concerning a registrant’s assertion about the
effectiveness of its internal controls and procedures for financial reporting in accordance with
standards for attestation engagements. The attestation indicates the scope of the accountant’s
examination and sets forth the accountant’s opinion as to whether the registrant’s assertion about the
effectiveness of its internal controls and procedures for financial reporting is fairly stated, in all
material respects, or includes an opinion to the effect that an overall opinion cannot be expressed.
When an overall opinion cannot be expressed, the registered public accounting firm must explain why
it is unable to express such an opinion.
Note: All paragraphs of existing Rule 1-02 are renumbered.
http://www.sec.gov/rules/proposed/33-8138.htm
§ 210.2-01 Qualifications of accountants.
*****
(c)
***
(2)
Employment relationships. * * *
(i)
***
(ii)
***
(iii)
Employment at audit client of former employee of accounting firm.
(A)
A former partner, principal, shareholder, or professional employee of
an accounting firm is in an accounting role or financial reporting oversight role at an audit client,
unless the individual:
(1)
Does not influence the accounting firm's operations or
(2)
Has no capital balances in the accounting firm; and
financial policies;
(3)
Has no financial arrangement with the accounting firm other
than one providing for regular payment of a fixed dollar amount (which is not dependent on the
revenues, profits, or earnings of the accounting firm):
(i)
Pursuant to a fully funded retirement plan, rabbi
trust, or, in jurisdictions in which a rabbi trust does not exist, a similar vehicle; or
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Regulation S-X
(ii)
In the case of a former professional employee who
was not a partner, principal, or shareholder of the accounting firm and who has been disassociated
from the accounting firm for more than five years, that is immaterial to the former professional
employee; and
(B)
A former partner, principal, shareholder, or professional employee of
an accounting firm is in a financial reporting oversight role at an issuer (as defined in section 10A(f)
of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(f)), except an issuer that is an investment
company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8),
unless the individual:
(1)
Employed by the issuer was not a member of the audit
engagement team of the issuer during the one year period preceding the date that audit procedures
commenced for the fiscal period that included the date of initial employment of the audit engagement
team member by the issuer;
(2)
For purposes of paragraph (c)(2)(iii)(B)(1) of this section,
the following individuals are not considered to be members of the audit engagement team:
(i)
Persons, other than the lead partner and the
concurring partner, who provided ten or fewer hours of audit, review, or attest services during the
period covered by paragraph (c)(2)(iii)(B)(1) of this section;
(ii)
Individuals employed by the issuer as a result of a
business combination between an issuer that is an audit client and the employing entity, provided
employment was not in contemplation of the business combination and the audit committee of the
successor issuer is aware of the prior employment relationship; and
(iii)
Individuals that are employed by the issuer due to an
emergency or other unusual situation provided that the audit committee determines that the
relationship is in the interest of investors;
(3)
For purposes of paragraph (c)(2)(iii)(B)(1) of this section,
audit procedures are deemed to have commenced for a fiscal period the day following the filing of the
issuer's periodic annual report with the Commission covering the previous fiscal period; or
(C)
A former partner, principal, shareholder, or professional employee of
an accounting firm is in a financial reporting oversight role with respect to an investment company
registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8), if:
(1)
The former partner, principal, shareholder, or professional
employee of an accounting firm is employed in a financial reporting oversight role related to the
operations and financial reporting of the registered investment company at an entity in the investment
company complex, as defined in (f)(14) of this section, that includes the registered investment
company; and
(2)
The former partner, principal, shareholder, or professional
employee of an accounting firm employed by the registered investment company or any entity in the
investment company complex was a member of the audit engagement team of the registered
investment company or any other registered investment company in the investment company complex
during the one year period preceding the date that audit procedures commenced that included the date
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Regulation S-X
of initial employment of the audit engagement team member by the registered investment company or
any entity in the investment company complex.
(3)
For purposes of paragraph (c)(2)(iii)(C)(2) of this section,
the following individuals are not considered to be members of the audit engagement team:
(i)
Persons, other than the lead partner and concurring
partner, who provided ten or fewer hours of audit, review or attest services during the period covered
by paragraph (c)(2)(iii)(C)(2) of this section;
(ii)
Individuals employed by the registered investment
company or any entity in the investment company complex as a result of a business combination
between a registered investment company or any entity in the investment company complex that is an
audit client and the employing entity, provided employment was not in contemplation of the business
combination and the audit committee of the registered investment company is aware of the prior
employment relationship; and
(iii)
Individuals that are employed by the registered
investment company or any entity in the investment company complex due to an emergency or other
unusual situation provided that the audit committee determines that the relationship is in the interest
of investors.
(4)
For purposes of paragraph (c)(2)(iii)(C)(2) of this section,
audit procedures are deemed to have commenced the day following the filing of the registered
investment company's periodic annual report with the Commission.
*****
(4)
Non-audit services. An accountant is not independent if, at any point during the audit
and professional engagement period, the accountant provides the following non-audit services to an
audit client:
(i)
Bookkeeping or other services related to the accounting records or financial
statements of the audit client. Any service, unless it is reasonable to conclude that the results of these
services will not be subject to audit procedures during an audit of the audit client's financial
statements, including:
(A)
Maintaining or preparing the audit client's accounting records;
(B)
Preparing the audit client's financial statements that are filed with the
Commission or that form the basis of financial statements filed with the Commission; or
(C)
Preparing or originating source data underlying the audit client's
financial statements.
(ii)
Financial information systems design and implementation. Any service,
unless it is reasonable to conclude that the results of these services will not be subject to audit
procedures during an audit of the audit client's financial statements, including:
(A)
Directly or indirectly operating, or supervising the operation of, the
audit client's information system or managing the audit client's local area network; or
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Regulation S-X
(B)
Designing or implementing a hardware or software system that
aggregates source data underlying the financial statements or generates information that is significant
to the audit client's financial statements or other financial information systems taken as a whole.
(iii)
Appraisal or valuation services, fairness opinions, or contribution-in-kind
reports. Any appraisal service, valuation service, or any service involving a fairness opinion or
contribution-in-kind report for an audit client, unless it is reasonable to conclude that the results of
these services will not be subject to audit procedures during an audit of the audit client's financial
statements.
(iv)
Actuarial services. Any actuarially-oriented advisory service involving the
determination of amounts recorded in the financial statements and related accounts for the audit client
other than assisting a client in understanding the methods, models, assumptions, and inputs used in
computing an amount, unless it is reasonable to conclude that the results of these services will not be
subject to audit procedures during an audit of the audit client's financial statements.
(v)
Internal audit outsourcing services. Any internal audit service that has been
outsourced by the audit client that relates to the audit client's internal accounting controls, financial
systems, or financial statements, for an audit client unless it is reasonable to conclude that the results
of these services will not be subject to audit procedures during an audit of the audit client's financial
statements.
(vi)
Management functions. Acting, temporarily or permanently, as a director,
officer, or employee of an audit client, or performing any decision-making, supervisory, or ongoing
monitoring function for the audit client.
(vii)
Human resources.
(A)
Searching for or seeking out prospective candidates for managerial,
executive, or director positions;
(B)
Engaging in psychological testing, or other formal testing or
evaluation programs;
(C)
executive or director position;
Undertaking reference checks of prospective candidates for an
(D)
Acting as a negotiator on the audit client's behalf, such as
determining position, status or title, compensation, fringe benefits, or other conditions of
employment; or
(E)
Recommending, or advising the audit client to hire, a specific
candidate for a specific job (except that an accounting firm may, upon request by the audit client,
interview candidates and advise the audit client on the candidate's competence for financial
accounting, administrative, or control positions).
(viii) Broker-dealer, investment adviser, or investment banking services. Acting as
a broker-dealer (registered or unregistered), promoter, or underwriter, on behalf of an audit client,
making investment decisions on behalf of the audit client or otherwise having discretionary authority
over an audit client's investments, executing a transaction to buy or sell an audit client's investment,
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Regulation S-X
or having custody of assets of the audit client, such as taking temporary possession of securities
purchased by the audit client.
(ix)
Legal services. Providing any service to an audit client that, under
circumstances in which the service is provided, could be provided only by someone licensed,
admitted, or otherwise qualified to practice law in the jurisdiction in which the service is provided.
(x)
Expert services unrelated to the audit. Providing an expert opinion or other
expert service for an audit client, or an audit client's legal representative, for the purpose of
advocating an audit client's interests in litigation or in a regulatory or administrative proceeding or
investigation. In any litigation or regulatory or administrative proceeding or investigation, an
accountant's independence shall not be deemed to be impaired if the accountant provides factual
accounts, including in testimony, of work performed or explains the positions taken or conclusions
reached during the performance of any service provided by the accountant for the audit client.
*****
(6)
Partner rotation.
(i)
Except as provided in paragraph (c)(6)(ii) of this section, an accountant is not
independent of an audit client when:
(A)
Any audit partner as defined in paragraph (f)(7)(ii) of this section
performs:
(1)
The services of a lead partner, as defined in paragraph
(f)(7)(ii)(A) of this section, or concurring partner, as defined in paragraph (f)(7)(ii)(B) of this section,
for more than five consecutive years; or
(2)
One or more of the services defined in paragraphs
(f)(7)(ii)(C) and (D) of this section for more than seven consecutive years;
(B)
Any audit partner:
(1)
Within the five consecutive year period following the
performance of services for the maximum period permitted under paragraph (c)(6)(i)(A)(1) of this
section, performs for that audit client the services of a lead partner, as defined in paragraph
(f)(7)(ii)(A) of this section, or concurring partner, as defined in paragraph (f)(7)(ii)(B) of this section,
or a combination of those services, or
(2)
Within the two consecutive year period following the
performance of services for the maximum period permitted under paragraph (c)(6)(i)(A)(2) of this
section, performs one or more of the services defined in paragraph (f)(7)(ii) of this section.
(ii)
Any accounting firm with less than five audit clients that are issuers (as
defined in section 10A(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(f))) and less than
ten partners shall be exempt from paragraph (c)(6)(i) of this section provided the Public Company
Accounting Oversight Board conducts a review at least once every three years of each of the audit
client engagements that would result in a lack of auditor independence under this paragraph.
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Regulation S-X
(iii)
For purposes of paragraph (c)(6)(i) of this section, an audit client that is an
investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C.
80a-8), does not include an affiliate of the audit client that is an entity in the same investment
company complex, as defined in paragraph (f)(14) of this section, except for another registered
investment company in the same investment company complex. For purposes of calculating
consecutive years of service under paragraph (c)(6)(i) of this section with respect to investment
companies in an investment company complex, audits of registered investment companies with
different fiscal year-ends that are performed in a continuous 12-month period count as a single
consecutive year.
(7)
Audit committee administration of the engagement. An accountant is not independent
of an issuer (as defined in section 10A(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78j1(f))), other than an issuer that is an Asset-Backed Issuer as defined in §240.13a-14(g) and §240.15d14(g) of this chapter, or an investment company registered under section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8), other than a unit investment trust as defined by section 4(2)
of the Investment Company Act of 1940 (15 U.S.C. 80a-4(2)), unless:
(i)
In accordance with Section 10A(i) of the Securities Exchange Act of 1934
(15 U.S.C. 78j-1(i)) either:
(A)
Before the accountant is engaged by the issuer or its subsidiaries, or
the registered investment company or its subsidiaries, to render audit or non-audit services, the
engagement is approved by the issuer's or registered investment company's audit committee; or
(B)
The engagement to render the service is entered into pursuant to preapproval policies and procedures established by the audit committee of the issuer or registered
investment company, provided the policies and procedures are detailed as to the particular service and
the audit committee is informed of each service and such policies and procedures do not include
delegation of the audit committees responsibilities under the Securities Exchange Act of 1934 to
management; or
(C)
With respect to the provision of services other than audit, review or
attest services the pre-approval requirement is waived if:
(1)
The aggregate amount of all such services provided
constitutes no more than five percent of the total amount of revenues paid by the audit client to its
accountant during the fiscal year in which the services are provided;
(2)
Such services were not recognized by the issuer or registered
investment company at the time of the engagement to be non-audit services; and
(3)
Such services are promptly brought to the attention of the
audit committee of the issuer or registered investment company and approved prior to the completion
of the audit by the audit committee or by one or more members of the audit committee who are
members of the board of directors to whom authority to grant such approvals has been delegated by
the audit committee.
(ii)
A registered investment company's audit committee also must pre-approve its
accountant's engagements for non-audit services with the registered investment company's investment
adviser (not including a sub-adviser whose role is primarily portfolio management and is subcontracted or overseen by another investment adviser) and any entity controlling, controlled by, or
100
Regulation S-X
under common control with the investment adviser that provides ongoing services to the registered
investment company in accordance with paragraph (c)(7)(i) of this section, if the engagement relates
directly to the operations and financial reporting of the registered investment company, except that
with respect to the waiver of the pre-approval requirement under paragraph (c)(7)(i)(C) of this
section, the aggregate amount of all services provided constitutes no more than five percent of the
total amount of revenues paid to the registered investment company's accountant by the registered
investment company, its investment adviser and any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing services to the registered
investment company during the fiscal year in which the services are provided that would have to be
pre-approved by the registered investment company's audit committee pursuant to this section.
(8)
Compensation. An accountant is not independent of an audit client if, at any point
during the audit and professional engagement period, any audit partner earns or receives
compensation based on the audit partner procuring engagements with that audit client to provide any
products or services other than audit, review or attest services. Any accounting firm with fewer than
ten partners and fewer than five audit clients that are issuers (as defined in section 10A(f) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j-1(f))) shall be exempt from the requirement stated in
the previous sentence.
*****
(e)
(1)
Transition and grandfathering. Provided the following relationships did not impair
the accountant's independence under pre-existing requirements of the Commission, the Independence
Standards, Board, or the accounting profession in the United States, the existence of the relationship
on [insert the effective date of this final rule] will not be deemed to impair an accountant's
independence:
(i)
Employment relationships that commenced at the issuer prior to [insert the
effective date of this final rule] as described in paragraph (c)(2)(iii)(B) of this section.
(ii)
Compensation earned or received, as described in paragraph (c)(8) of this
section during the fiscal year of the accounting firm that includes the effective date of this section.
(iii)
Until [Insert date 12 months after the effective date of this final rule], the
provision of services described in paragraph (c)(4) of this section provided those services are pursuant
to contracts in existence on [insert the effective date of this final rule].
(iv)
The provision of services by the accountant under contracts in existence on
[insert the effective date of this final rule] that have not been pre-approved by the audit committee as
described in paragraph (c)(7) of this section.
(v)
Until the first day of the issuer's fiscal year beginning after [insert the
effective date of this final rule] by a "lead" partner and other audit partner (other than the
"concurring" partner) providing services in excess of those permitted under paragraph (c)(6) of this
section. An accountant's independence will not be deemed to be impaired until the first day of the
issuer's fiscal year beginning after [insert date 12 months after the effective date of this final rule] by
a "concurring" partner providing services in excess of those permitted under paragraph (c)(6) of this
section. For the purposes of calculating periods of service under paragraph (c)(6) of this section:
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Regulation S-X
(A)
For the "lead" and "concurring" partner, the period of service
includes time served as the "lead" or "concurring" partner prior to [insert the effective date of this
final rule]; and
(B)
For audit partners other than the "lead" partner or "concurring"
partner, and for audit partners in foreign firms, the period of service does not include time served on
the audit engagement team prior to the first day of issuer's fiscal year beginning on or after [insert the
effective date of this final rule].
*****
(f)
***
(1)
Accountant, as used in paragraphs (b) through (e) of this section, means a registered
public accounting firm, certified public accountant or public accountant performing services in
connection with an engagement for which independence is required. References to the accountant
include any accounting firm with which the certified public accountant or public accountant is
affiliated.
*****
(3)
(i)
Accounting role means a role in which a person is in a position to or does
exercise more than minimal influence over the contents of the accounting records or anyone who
prepares them.
(ii)
Financial reporting oversight role means a role in which a person is in a
position to or does exercise influence over the contents of the financial statements or anyone who
prepares them, such as when the person is a member of the board of directors or similar management
or governing body, chief executive officer, president, chief financial officer, chief operating officer,
general counsel, chief accounting officer, controller, director of internal audit, director of financial
reporting, treasurer, or any equivalent position.
*****
(7)
(i)
Audit engagement team means all partners, principals, shareholders and
professional employees participating in an audit, review, or attestation engagement of an audit client,
including audit partners and all persons who consult with others on the audit engagement team during
the audit, review, or attestation engagement regarding technical or industry-specific issues,
transactions, or events.
(ii)
Audit partner means a partner or persons in an equivalent position, other than
a partner who consults with others on the audit engagement team during the audit, review, or
attestation engagement regarding technical or industry-specific issues, transactions, or events, who is
a member of the audit engagement team who has responsibility for decision-making on significant
auditing, accounting, and reporting matters that affect the financial statements, or who maintains
regular contact with management and the audit committee and includes the following:
(A)
The lead or coordinating audit partner having primary responsibility
for the audit or review (the "lead partner");
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Regulation S-X
(B)
The partner performing a second level of review to provide
additional assurance that the financial statements subject to the audit or review are in conformity with
generally accepted accounting principles and the audit or review and any associated report are in
accordance with generally accepted auditing standards and rules promulgated by the Commission or
the Public Company Accounting Oversight Board (the "concurring or reviewing partner");
(C)
Other audit engagement team partners who provide more than ten
hours of audit, review, or attest services in connection with the annual or interim consolidated
financial statements of the issuer or an investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a-8); and
(D)
Other audit engagement team partners who serve as the "lead
partner" in connection with any audit or review related to the annual or interim financial statements of
a subsidiary of the issuer whose assets or revenues constitute 20% or more of the assets or revenues
of the issuer's respective consolidated assets or revenues.
*****
(17)
Audit committee means a committee (or equivalent body) as defined in section
3(a)(58) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)).
http://www.sec.gov/rules/final/33-8183.htm (effective May 6, 2003)
§210.2-02 Accountants’ reports and attestations.
*****
(f)
Accountants’ attestations. Every registered public accounting firm that issues or prepares an
accountant’s report for a registrant, other than an investment company registered under section 8 of
the Investment Company Act of 1940 (15 U.S.C. 80a-8), must examine, attest to, and report
separately on, the internal control report of management concerning the effectiveness of the
registrant’s internal controls and procedures for financial reporting. The accountant’s attestation shall
be dated, signed manually, identify the period covered by the report and clearly state the opinion of
the accountant as to whether the registrant’s disclosure about the effectiveness of its internal controls
and procedures for financial reporting is fairly stated in all material respects, or must include an
opinion to the effect that an overall opinion cannot be expressed. If an overall opinion cannot be
expressed, explain why.
http://www.sec.gov/rules/proposed/33-8138.htm
§ 210.2-06 Retention of audit and review records.
(a)
For a period of seven years after an accountant concludes an audit or review of an issuer's
financial statements to which section 10A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78j1(a)) applies, or of the financial statements of any investment company registered under section 8 of
the Investment Company Act of 1940 (15 U.S.C. 80a-8), the accountant shall retain records relevant
to the audit or review, including workpapers and other documents that form the basis of the audit or
review, and memoranda, correspondence, communications, other documents, and records (including
electronic records), which:
(1)
Are created, sent or received in connection with the audit or review, and
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Regulation S-X
(2)
Contain conclusions, opinions, analyses, or financial data related to the audit or
review.
(b)
For the purposes of paragraph (a) of this section, workpapers means documentation of
auditing or review procedures applied, evidence obtained, and conclusions reached by the accountant
in the audit or review engagement, as required by standards established or adopted by the
Commission or by the Public Company Accounting Oversight Board.
(c)
Memoranda, correspondence, communications, other documents, and records (including
electronic records) described in paragraph (a) of this section shall be retained whether they support
the auditor's final conclusions regarding the audit or review, or contain information or data, relating to
a significant matter, that is inconsistent with the auditor's final conclusions regarding that matter or
the audit or review. Significance of a matter shall be determined based on an objective analysis of the
facts and circumstances. Such documents and records include, but are not limited to, those
documenting a consultation on or resolution of differences in professional judgment.
(d)
For the purposes of paragraph (a) of this section, the term issuer means an issuer as defined in
section 10A(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(f)).
http://www.sec.gov/rules/final/33-8180.htm (effective March 3, 2003; compliance is required for
audits and reviews completed on or after October 31, 2003)
§ 210.2-07 Communication with audit committees.
(a)
Each registered public accounting firm that performs for an audit client that is an issuer (as
defined in section 10A(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(f))), other than an
issuer that is an Asset-Backed Issuer as defined in §240.13a-14(g) and §240.15d-14(g) of this chapter,
or an investment company registered under section 8 of the Investment Company Act of 1940 (15
U.S.C. 80a-8), other than a unit investment trust as defined by section 4(2) of the Investment
Company Act of 1940 (15 U.S.C. 80a-4(2)), any audit required under the securities laws shall report,
prior to the filing of such audit report with the Commission (or in the case of a registered investment
company, annually, and if the annual communication is not within 90 days prior to the filing, provide
an update, in the 90 day period prior to the filing, of any changes to the previously reported
information), to the audit committee of the issuer or registered investment company:
(1)
All critical accounting policies and practices to be used;
(2)
All alternative treatments within Generally Accepted Accounting Principles for
policies and practices related to material items that have been discussed with management of the
issuer or registered investment company, including:
(i)
Ramifications of the use of such alternative disclosures and treatments; and
(ii)
The treatment preferred by the registered public accounting firm;
(3)
Other material written communications between the registered public accounting firm
and the management of the issuer or registered investment company, such as any management letter
or schedule of unadjusted differences;
(4)
If the audit client is an investment company, all non-audit services provided to any
entity in an investment company complex, as defined in §210.2-01(f)(14) of this section, that were
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Regulation S-X
not pre-approved by the registered investment company's audit committee pursuant to §210.201(c)(7) of this section.
(b)
[Reserved]
http://www.sec.gov/rules/final/33-8183.htm (effective May 6, 2003)
§ 210.3-01 Consolidated balance sheets.
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(e)
For filings made after the number of days specified in paragraph (i) of this section, the filing
shall also include a balance sheet as of an interim date within the following number of days of the
date of filing:
(1)
For accelerated filers (as defined in § 240.12b-2 of this chapter):
(i)
December 15, 2004;
135 days for fiscal years ending on or after December 15, 2002 and before
(ii)
130 days for fiscal years ending on or after December 15, 2004 and before
December 15, 2005; and
(iii)
(2)
125 days for fiscal years ending on or after December 15, 2005; and
135 days for all other registrants.
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(i)
(1)
For purposes of paragraph (c) and (d) of this section, the number of days shall be:
(i)
For accelerated filers (as defined in § 240.12b-2 of this chapter):
(A)
before December 15, 2003;
90 days for fiscal years ending on or after December 15, 2002 and
(B)
75 days for fiscal years ending on or after December 15, 2003 and
before December 15, 2004; and
(C)
(ii)
(2)
60 days for fiscal years ending on or after December 15, 2004; and
90 days for all other registrants.
For purposes of paragraph (e) of this section, the number of days shall be:
(i)
For accelerated filers (as defined in § 240.12b-2 of this chapter):
(A)
134 days subsequent to the end of the registrant’s most recent fiscal
year for fiscal years ending on or after December 15, 2002 and before December 15, 2004;
(B)
129 days subsequent to the end of the registrant’s most recent fiscal
year for fiscal years ending on or after December 15, 2004 and before December 15, 2005; and
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(C)
124 days subsequent to the end of the registrant’s most recent fiscal
year for fiscal years ending on or after December 15, 2005; and
(ii)
all other registrants.
134 days subsequent to the end of the registrant’s most recent fiscal year for
http://www.sec.gov/rules/final/33-8128.htm
§ 210.3-09 Separate financial statements of subsidiaries not consolidated and 50 percent or less
owned persons.
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(b)
* * * For purposes of a filing on Form 10-K (§ 249.310 of this chapter):
(1)
If the registrant is an accelerated filer (as defined in § 240.12b-2 of this chapter) but
the 50 percent or less owned person is not an accelerated filer, the required financial statements may
be filed as an amendment to the report within 90 days, or within six months if the 50 percent or less
owned person is a foreign business, after the end of the registrant’s fiscal year.
(2)
If the fiscal year of any 50 percent or less owned person ends within the registrant’s
number of filing days before the date of the filing, or if the fiscal year ends after the date of the filing,
the required financial statements may be filed as an amendment to the report within the subsidiary’s
number of filing days, or within six months if the 50 percent or less owned person is a foreign
business, after the end of such subsidiary’s or person’s fiscal year.
(3)
The term registrant’s number of filing days means:
(i)
If the registrant is an accelerated filer:
(A)
before December 15, 2003;
90 days for fiscal years ending on or after December 15, 2002 and
(B)
75 days for fiscal years ending on or after December 15, 2003 and
before December 15, 2004; and
(C)
(ii)
(4)
60 days for fiscal years ending on or after December 15, 2004; and
If the registrant is not an accelerated filer, 90 days.
The term subsidiary’s number of filing days means:
(i)
If the 50 percent or less owned person is an accelerated filer:
(A)
before December 15, 2003;
90 days for fiscal years ending on or after December 15, 2002 and
(B)
75 days for fiscal years ending on or after December 15, 2003 and
before December 15, 2004; and
(C)
60 days for fiscal years ending on or after December 15, 2004; and
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(ii)
If the 50 percent or less owned person is not an accelerated filer, 90 days.
http://www.sec.gov/rules/final/33-8128.htm
§ 210.3-12 Age of financial statements at effective date of registration statement or at mailing
date of proxy statement.
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(g)
(1)
For purposes of paragraph (a) of this section, the number of days shall be:
(i)
For accelerated filers (as defined in § 240.12b-2 of this chapter):
(A)
before December 15, 2004;
135 days for fiscal years ending on or after December 15, 2002 and
(B)
130 days for fiscal years ending on or after December 15, 2004 and
before December 15, 2005; and
(C)
(ii)
(2)
125 days for fiscal years ending on or after December 15, 2005; and
135 days for all other registrants.
For purposes of paragraph (b) of this section, the number of days shall be:
(i)
For accelerated filers (as defined in § 240.12b-2 of this chapter):
(A)
before December 15, 2003;
90 days for fiscal years ending on or after December 15, 2002 and
(B)
75 days for fiscal years ending on or after December 15, 2003 and
before December 15, 2004; and
(C)
(ii)
60 days for fiscal years ending on or after December 15, 2004; and
90 days for all other registrants.
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