On July 8, 2011, the SEC’s Division of Corporation Finance issued a series of new Compliance and Disclosure Interpretations (CDIs). The CDIs covered the following topics:
- Exchange Act Rule 12b-25(b) – Failure to check box in Part II of Form 12b-25. If after filing Form 12b-25 to provide notice of a late periodic report a registrant files the requisite periodic report within the prescribed extension period, the periodic report will be considered timely even if the registrant failed to check the box in Part II of Form 12b-25.
- Form 8-K, Item 5.07(b) – Disclosure of broker non-votes. Item 5.07(b) does not require disclosure of the number of broker non-votes with respect to the advisory vote on the frequency of shareholder advisory votes on executive compensation.
- Form 8-K, Item 5.07 – Previously reported information. Pursuant to General Instruction B.3 to Form 8-K, a registrant may report Item 5.07 information in a periodic report, including its proxy, that is filed on or before the date that the Form 8-K disclosure under Item 5.07 would otherwise be due. If the registrant elects to disclose its meeting results in a Form 10-K or a 10-Q, it may make the follow-on disclosure of the registrant’s decision of how frequently it will include a shareholder advisory vote on executive compensation in its proxy materials in a new Form 8-K rather than in an amended Form 10-K or 10-Q. However, an amended Form 8-K, instead of a new Form 8-K, will be required to make the follow-on frequency disclosure if the registrant reported its annual meeting results on Form 8-K.
- Regulation S-K, Item 401 – Information for non-continuing directors. If a registrant provides its Form 10-K, Part III information through incorporation by reference from the proxy statement and the registrant files its definitive proxy statement within 120 days of its fiscal year-end, then the registrant may rely on Instruction 3 to Item 401(a) to omit, from both the proxy statement and the Form 10-K, Item 401(a) and Item 401(e) information with respect to directors whose terms will not continue after the annual shareholder’s meeting.
- Regulation S-K, Item 402 – Omission of non-discriminatory disability plan information. So long as a disability plan provides benefits unrelated to termination of employment, a registrant may rely upon Item 402(a)(6)(ii) to omit information regarding the disability plan. If, however, the disability plan provides benefits related to termination of employment, a registrant may rely upon Instruction 5 to Item 402(j) to omit information regarding the disability plan.
- Regulation S-K, Item 402 – Non-GAAP financial matters unrelated to target levels. If non-GAAP financial measures are presented in the CD&A or in any other part of the proxy statement for any purpose other than presentation of target levels, the non-GAAP financial measures are subject to the requirements of Regulation G and Item 10(e) of Regulation S-K. In pay-related circumstances only, the staff will not object if a registrant includes the required GAAP reconciliation in an annex to the proxy statement with a prominent cross-reference to such annex, or to pages of Form 10-K if Part III information is being incorporated by reference.
- Regulation S-K, Item 402 – Grant date fair value for stock and option awards. Regardless of whether the actual outcome of performance conditions related to the grant of stock and option awards are known at the time of the proxy statement, the grant date fair value for stock and option awards subject to performance conditions must be reported based on the probable outcome of the performance conditions as of the grant date.