Revised Form 8-K Requirements Go Into Effect August 23, 2004
Officers of SEC-reporting companies need to come to grips with the revised Form 8-K requirements now. The shortened filing deadline and significant Form 8-K changes go into effect August 23, 2004. It will be very easy for required disclosures to be missed if officers responsible for disclosures wait until August 23 to familiarize themselves with the changes.
Significant Form 8-K changes include:
- New Disclosures and Organization. The revised Form 8-K adds eight new disclosure items, transfers two disclosure items from the periodic reports and expands two existing disclosure items. The new and old Form 8-K disclosure requirements have been reorganized into topical sections with subparts. An outline of the new section and item numbers is at the end of this discussion.
- Four Business Day Reporting Deadline. New reporting deadline of four business days from the date of the reportable event (not applicable to Regulation FD and other voluntary disclosures and certain exhibits).
- Limited Anti-Fraud Safe Harbor. The SEC included a limited safe harbor from anti-fraud liability for late reports until the due date for the next periodic report (this does not protect from antifraud liability for material misstatements or omissions) under seven Form 8-K Items: 1.01, 1.02, 2.03, 2.04, 2.05, 2.06 and 4.02(a).
- Use of Form S-2 or S-3. Eligibility to use registration Forms S-2 or S-3 will not be lost for failures to file Form 8-K on time under the seven safe harbor items if the company becomes current before filing the Form S-2 or S-3.
As noted above, there are both completely new and expanded disclosure items in the revised Form 8-K. Of the eight new events, the most challenging from a disclosure standpoint will be those dealing with:
- entry (including amendment) or termination of a “material definitive agreement” (specifically including, without limitation, material contracts with officers and directors, including certain compensatory arrangements or benefit plans identified by Item 601(b)(10(ii) and (iii)) – Items 1.01 and 1.02;
- creation of a direct financial obligation or an obligation under an off-balance sheet arrangement and related triggering events – Item 2.03; and
- material impairment charges required under GAAP – Item 2.06.
Of the remaining Form 8-K Items, the following may catch those responsible for disclosure off-guard because of accelerated or expanded disclosure:
- unregistered sales of 1% or more of outstanding equity securities on an undiluted basis – Item 3.02;
- material modifications of rights of security holders – Item 3.03;
- expanded disclosure regarding officers and directors – Item 5.02; and
- amendments of articles or bylaws – Item 5.03.
Those responsible for compliance should review the instructions to the revised Form 8-K multiple times between now and August 23, 2004. Reviewing the SEC’s adopting release (Release No. 34-49424) available at www.sec.gov/rules/final/33-8400.pdf will also be helpful.
We would be pleased to discuss with you any questions you may have concerning the new or expanded disclosure items, as well as any practical steps you may want to take to prepare for the changes in disclosure practice when the Form 8-K changes go into effect. For further information, contact any of the following Rhoads & Sinon attorneys:
Charles J. Ferry
Dean H. Dusinberre
Paul F. Wessell