The SEC has finalized rules aimed at improving the disclosure of equity compensation plans, thereby helping investors make better-informed decisions.
The rules will enhance disclosure of the number of outstanding options, warrants and rights granted to participants, as well as the number of securities remaining available for future issuance under these plans.
REFERENCE
Title
Disclosure of Equity Compensation Plan Information
File Number
S7-04-01
Impact
New rules are amendments to Regulations S-B and S-K, and numerous forms and schedules under the Securities Exchange Act of 1934.
Complete Text
Complete text of the rule
SUMMARY
Disclosure Details
The new rules require tabular disclosure of:
The number of securities to be issued upon the exercise of all outstanding options, warrants and rights under a registrant's equity compensation plans;
The weighted-average exercise price of all outstanding options, warrants and rights under those plans; and
The number of securities remaining available for future issuance under these plans, and certain related information.
Types of Plans Impact
Disclosure is to be made in two categories:
Plans that have been approved by security holders; and
Plans that have not been approved by security holders.
Timing
Tables must be included:
In annual reports on Form 10-K or 10-KSB; and
In proxy or information statements in years when compensation plans are submitted for security holder action.
REACTION
Comments
Comments from Ernst & Young LLP
Comments from PricewaterhouseCoopers LLP
Comments from Arthur Andersen LLP
Michael J. Holliday, Corporate Counsel, Lucent Technologies
Lawrence R. Whitman, SVP & Controller, Verizon
Bob Laux, Director External Reporting, Microsoft
Summary of all comments
Your Input
The comment period for this rule has expired.
Questions?
Mark A. Borges, Special Counsel, Office of Rulemaking, Division of Corporation Finance, (202) 942-2910
NOTE: Please note that this is a summary of a rule should not be construed to be the most complete, timely or final rule. Please refer to the SEC's Web site for final rule information.
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