GENERAL DESCRIPTION AND SUMMARY OF 8-K ITEMS
What is Form 8-K?
Form 8-K is the form on which public companies report, on a current basis, the occurrence of significant events. A reportable event is a transaction or occurrence of major significance.
Who must file Form 8-K?
All U.S. "reporting" companies are responsible for filing Forms 8-K. Foreign issuers that report in the United States use a Form 6-K, which has different requirements.
Under what circumstances must a Form 8-K be filed?
Form 8-K identifies events that require the filing of a Form 8-K with the Securities and Exchange Commission (the "SEC") and provides detailed instructions for filing. The following is a list of the events that trigger a filing, along with the corresponding Section and Item references from Form 8-K:
SECTION 1 — REGISTRANT'S BUSINESS AND OPERATIONS
Item 1.01 Entry Into a Material Definitive Agreement.
- See "What makes an agreement "material" and "definitive" for purposes of Items 1.01 and 1.02 of Form 8-K?" below for a discussion of the determination of a "material definitive agreement."
- Many agreements requiring board or shareholder approval would be filed under this Item.
- Filing the agreement itself as an exhibit to the Form 8-K is encouraged but not required. If the agreement is not filed as an exhibit to the Form 8-K, it will be required to be filed with the registrant's periodic report (e.g., its Form 10-Q or Form 10-K) relating to the period in which the agreement was entered into.
- Material employment or other compensatory agreements are usually reported under Item 5.02 rather than Item 1.01. Item 5.02 does not require the filing of the applicable agreement, but such agreements may be required to be filed with a periodic report pursuant to Item 601(b)(10) of Regulation S-K.
Item 1.02 Termination of a Material Definitive Agreement.
- No Form 8-K needs to be filed if the agreement, even if it is material, is terminated in accordance with its terms.
- For purposes of Item 1.02, "material definitive agreement" has the same meaning as that used in Item 1.01.
Item 1.03 Bankruptcy or Receivership.
Item 1.04 Mine Safety — Reporting of Shutdowns and Patterns of Violations.
SECTION 2 — FINANCIAL INFORMATION
Item 2.01 Completion of Acquisition or Disposition of Assets.
- See the related financial statement requirements under Regulation S-X (historical and/or pro forma financials may be required to be filed).
Item 2.02 Results of Operations and Financial Condition.
- A registrant typically provides its earnings press releases pursuant to this item.
- The material included under Item 2.02 generally should be "furnished," rather than "filed" (see below for the significance of this distinction).
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-balance Sheet Arrangement of a Registrant.
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-balance Sheet Arrangement.
- This item would typically include instances where a registrant is no longer in compliance with a covenant under a loan facility or similar agreement.
Item 2.05 Costs Associated With Exit or Disposal Activities.
- This is the item a registrant would use to disclose material write-offs or restructuring costs.
- This item requires an estimate of the dollar amounts of (i) each major cost; (ii) total costs; and (iii) cash expenditures (the estimate portion of the disclosure can be delayed until four business days after estimates are known).
Item 2.06 Material Impairments.
- This item is used to report any material charge for impairment to one or more of a registrant's assets, including, without limitation, impairments of securities or goodwill required under generally accepted accounting principles applicable to the registrant.
- The registrant should disclose: (i) the date of the conclusion that a material charge is required; (ii) a description of the impaired asset or assets; (iii) the facts and circumstances leading to the conclusion that the charge for impairment is required; (iv) the registrant's estimate of the amount or range of amounts of the impairment charge; and (v) the registrant's estimate of the amount or range of amounts of the impairment charge that will result in future cash expenditures.
- If the registrant is unable to estimate the amount of the charge or future expenditures related to the charge at the time of the Form 8-K filing, it should file an amended report on Form 8-K under this Item 2.06 within four business days after it makes a determination of such an estimate or range of estimates.
- If the determination is made in connection with the preparation, review or audit of financial statements required to be included in the registrant's next quarterly or annual report under the Exchange Act, the registrant is permitted to make the disclosure in that periodic report, so long as the report is filed on a timely basis.
SECTION 3 — SECURITIES AND TRADING MARKETS
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
- A registrant would use this item to disclose certain events related to its listing on a securities exchange (e.g., the New York Stock Exchange or Nasdaq).
- Includes the receipt of a notice regarding material non-compliance with the listing rules.
- No filing is required if the delisting is the result of a conversion or redemption of a security.
- The registrant would file twice: first, upon receipt of the first notice from the securities exchange, and again upon effectiveness of delisting.
- The filing date is calculated from receipt of notice from the securities exchange.
Item 3.02 Unregistered Sales of Equity Securities.
- If the registrant sells equity securities in a transaction that is not registered under the Securities Act, it would use this item to disclose: (i) the date of the sale; (ii) the title and amount of securities sold; (iii) the consideration paid for the securities; (iv) which exemption from registration the registrant has relied upon; and (v) if the securities are exchangeable or exercisable for equity securities of the registrant, the terms of exchange or exercise.
- The obligation to make a disclosure under this item is triggered when the registrant enters into an agreement enforceable against the registrant, whether or not subject to conditions, under which the equity securities are to be sold. If there is no such agreement, the registrant should file the Form 8-K within four business days after the closing of the transaction.
- The registrant does not need to file a Form 8-K if the equity securities sold, in the aggregate since its last Form 8-K (if filed under this Item 3.02) or its last periodic report, whichever is more recent, constitute less than 1% of the number of shares outstanding of the class of equity securities sold. This threshold is 5% for smaller reporting companies.
Item 3.03 Material Modification to Rights of Security Holders.
- Includes amendments, changes or additions to preferred stock preferences, limitations on dividends, or the issuance of senior securities affecting junior securities.
SECTION 4 — MATTERS RELATED TO ACCOUNTANTS AND FINANCIAL STATEMENTS
Item 4.01 Changes in Registrant's Certifying Accountant.
- This item is to be used if the registrant's independent accountant resigns (or indicates that it declines to stand for re-appointment) or is dismissed.
- It requires the registrant to describe the circumstances of the accountant's departure and to make certain statements concerning the work of the registrant's independent accountant during the previous two fiscal years (these are contained in Item 304(a)(i) of Regulation S-K).
- Note that the resignation or dismissal of an independent accountant is reportable separate from the engagement of a new independent accountant. On some occasions, two reports on Form 8-K are required for a single change in accountants – the first on the resignation or dismissal of the former accountant and the second when the new accountant is engaged. Information required in the second Form 8-K need not be provided to the extent that it has been reported previously in the first Form 8-K.
- The former auditor must provide a letter in accordance with Item 601(b)(16) stating its concurrence or disagreement with the statements made in the Form 8-K regarding the dismissal. The letter should be filed as an exhibit to the Form 8-K.
Item 4.02 Non-reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
- Triggered when management reaches the conclusion that the registrant's previously issued financial statements should not be relied upon, or the registrant's receipt of a notice from its independent accountant that the independent accountant is withdrawing a previously issued audit report, or informing the registrant that it may not rely on a previously issued audit report.
SECTION 5 — CORPORATE GOVERNANCE AND MANAGEMENT
Item 5.01 Changes in Control of Registrant.
- If the registrant's board of directors becomes aware that a change in control of the registrant has occurred, the registrant must use this item to disclose: (i) the identity of the person(s) who acquired such control; (ii) the date and a description of the transaction(s) that resulted in the change in control; (iii) the basis of the control, including the percentage of voting securities of the registrant now beneficially owned directly or indirectly by the person(s) who acquired control; (iv) the amount of the consideration used by such person(s); and (v) the source(s) of funds used by the person(s).
- This item must also be used to describe any arrangements that the registrant becomes aware of, including any pledge by any person of securities of the registrant or any of its parents, the operation of which may, at a subsequent date, result in a change in control of the registrant.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Item 5.02 requires filing in any of the following situations:
- The resignation or refusal to stand for re-election by a director due to a disagreement with the registrant that is known by an executive officer and that relates to the registrant's operations, policies or practices;
- The election or appointment of a new director (other than at an annual or special meeting of shareholders);
- The departure of any director for any reason;
- The retirement, resignation, or termination of a registrant's principal executive officer, president, principal financial or accounting officer, principal operating officer, or person performing a similar function to any such officers ("Senior Executive Officers"); and
- The appointment of any Senior Executive Officer and the entry into (or amendment of) a compensatory arrangement with a principal executive officer, principal financial officer, or named executive officer.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
- Applies only to registrants with a class of securities registered under Section 12 of the Exchange Act, except that issuers of asset-backed securities are required to report under this item regardless of whether they are reporting pursuant to Section 13 or 15(d) of the Exchange Act.
Item 5.04 Temporary Suspension of Trading Under Registrant's Employee Benefit Plans.
Item 5.05 Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics.
- There is no filing requirement under Item 5.05 if the registrant discloses the required information on its website within four business days following the date of amendment or waiver and the registrant has disclosed in its most recently filed annual report its website address and intention to provide disclosure in this manner. In such case, the required information must remain available on the website for at least a 12-month period.
Item 5.06 Change in Shell Company Status.
Item 5.07 Submission of Matters to a Vote of Security Holders.
- Filed to report the results of a meeting of security holders.
Item 5.08 Shareholder Director Nominations.
- Required to disclose the date by which shareholder nominations for directors must be submitted if the registrant did not hold an annual meeting in the previous year or if the date of the annual meeting has been changed by more than 30 calendar days from the date of the previous year's meeting.
- The triggering event for this item is the determination of the annual meeting date by the registrant.
SECTION 6 — ASSET-BACKED SECURITIES
The items in this Section 6 apply only to issuers of asset-backed securities.
Item 6.01 ABS Informational and Computational Material.
Item 6.02 Change of Servicer or Trustee.
Item 6.03 Change in Credit Enhancement or Other External Support.
Item 6.04 Failure to Make a Required Distribution.
Item 6.05 Securities Act Updating Disclosure.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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