September 16, 2003

Clarification of Item 12 Guidance

As I mentioned on Monday, in the July-August issue of The Corporate Counsel (at pg 2), there was a discussion of the exception from the 8-K filing/furnishing requirement for oral presentations (e.g., the post-earnings release conference call) made within 48 hours after the earnings release is issued, and noted that the exception is available only where the earnings release 8-K is filed “prior to” the oral presentation.

The point intended to be made was that, where an issuer plans to hold an early morning conference call, the “prior to” requirement may mean the earnings release 8-K has to be filed the preceding day, to assure that it is publicly available prior to the conference call. Unfortunately, The Corporate Counsel wasn’t as clear as it should have been, and some readers thought it was a suggestion that the earnings release must in all cases be filed a day in advance of the conference call, regardless of the time of day the call is held.

To be clear, it appears that the Staff’s position is that, to avoid filing a second 8-K, the earnings release 8-K must be “accepted for filing” by EDGAR prior to the conference call (even if only by a nanosecond). Since EDGAR filings made after 5:30 p.m. eastern time are accepted for filing (and available on the SEC’s website) at 8:00 a.m. (6:00 a.m. during the current six-month pilot program that started July 28), issuers who file their earnings release 8-K after 5:30 p.m. – but before 10:00 p.m. – the day before the conference call should be able to conduct their conference call any time after 8:00 a.m. the following morning (6:00 a.m. during the pilot program).

Similarly, an issuer should be able to file an earnings release 8-K on the day of the conference call, so long as the 8-K is accepted for filing before the call. There will be further discussion of this in the next issue of The Corporate Counsel, which should be out in a few weeks.

FASB Issues Exposure Draft on Pension Plans

Yesterday, the FASB issued an exposure draft – Employers’ Disclosures about Pensions and Other Postretirement Benefits – that would improve financial statement
disclosures for defined benefit plans. This new statement would amend SFAS 87, 88, 106 and replace 132.

Under the exposure draft, the FASB would require companies to provide
more disclosure about their plan assets, benefit obligations, cash flows, benefit costs, as well as other relevant information (e.g. companies would be required for the first time to
provide financial statement users with a breakdown of plan assets by category, such as equity, debt, or real estate). In addition, companies would have to provide more information in 10-Qs about their pension costs.

If adopted, the proposal would be effective for fiscal years ending after December 15, 2003 and for the first fiscal quarter of the year following initial application of the annual
disclosure requirements.