Yesterday, we published an Executive Alert on the SEC's new rules requiring enhanced disclosures regarding risk management in relation to compensation policies, revisions to disclosure of a company's valuation of stock and option awards, and enhanced director and director nominee qualification disclosures. See SEC Adopts Final Rule Requiring Enhanced Proxy Statement Disclosure About Risk, Compensation and Corporate Governance. Our Alert noted that the effective date of the new rules was February 28, 2010 but indicated that the adopting release and the SEC had failed to provide detailed guidance on implementation of the effective date.
Yesterday, the staff of the Division of Corporation Finance issued five new Compliance and Disclosure Interpretations to furnish that guidance:
- If the issuer's fiscal year ends on or after December 20, 2009, the issuer's Form 10-K and proxy statement must be in compliance with the new proxy disclosure requirements if they are filed on or after February 28, 2010. If such an issuer is required to file a preliminary proxy statement and expects to file its definitive proxy statement on or after February 28, 2010, then the preliminary proxy statement must be in compliance with the new proxy disclosure requirements, even if filed before February 28, 2010. If such an issuer files its 2009 Form 10-K before February 28, 2010 and its proxy statement on or after February 28, 2010, the proxy statement must be in compliance with the new proxy disclosure requirements. If the issuer's fiscal year ends before December 20, 2009, its 2009 Form 10-K and related proxy statement are not required to be in compliance with the new proxy disclosure requirements, even if filed on or after February 28, 2010.
- An issuer not required to comply with the new disclosure requirements for its 2009 Form 10-K and related proxy statement may do so on a voluntary and discretionary basis, but an issuer that voluntarily complies with the Summary Compensation Table and Director Compensation Table amendments must also comply with all other Regulation S-K amendments adopted in the Proxy Disclosure Enhancements Release that apply to the form filed. An issuer may provide the other new disclosures without having to comply with all of the new requirements.
- Any shareholder meeting that takes place on or after February 28, 2010 is subject to the new Form 8-K Item 5.07 vote reporting requirement. If the meeting takes place before February 28, 2010, an Item 5.07 Form 8-K is not required.
- Securities Act and Exchange Act registration statements filed by a reporting issuer with a 2009 fiscal year that ends before December 20, 2009 will not be required to comply with the Regulation S-K amendments until the filing of its Form 10-K for fiscal year 2010. As a result, any Securities Act or Exchange Act registration statement for such a registrant filed before the 2010 Form 10-K is required to be filed would not be subject to the Regulation S-K amendments.
- For a new registrant that first files a registration statement (e.g., for an IPO) on or after December 20, 2009, compliance with the Regulation S-K amendments is required in order for it to be declared effective on or after February 28, 2010.