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.