This week in the blog, I am taking some time to acknowledge and celebrate 50 years of The Corporate Counsel and all of the related publications. In response to feedback that I received on Monday’s blog, I shared with a reader my experience as a newly-minted lawyer working in the SEC’s Division of Corporation Finance who would anxiously await receipt of the dog-eared “circulation copy” of The Corporate Counsel, with my name always at the bottom of the circulation list! The practical guidance and discussion of unpublished Staff positions that differentiated The Corporate Counsel from other publications really served as my “window to the world” beyond the walls of Corp Fin, and helped me be a better regulator and securities lawyer.

As part of my tribute, I am looking back on some of my favorite articles that I contributed to The Corporate Counsel over the past 18 years. These articles are notable because they address very practical topics that frequently come up in any securities practice.

Today, I highlight an article from the March-April 2018 issue of The Corporate Counsel titled “Revisiting Form 8-K Filing Obligations under Item 5.02(e).” This article reflects my views that were formed as someone who was involved in the rulemaking process for Item 5.02(e) of Form 8-K at the SEC and then reinforced through years of advising clients on the disclosure issues that arise under this requirement. The article notes:

To this day, issuers grapple with the appropriate approach to disclosure required by Item 5.02(e) of Form 8-K, which generally requires current disclosure with respect to an issuer’s principal executive officer, principal financial officer or named executive officers (as such term is defined in Instruction 4 to Item 5.02 of Form 8-K), of any material new compensatory plan, contract or arrangement (or any material modification), including any material grant to award under such a plan, contracts or arrangement (or any material modification), except as discussed below. This disclosure is triggered upon entering into or commencing any of these types of plans, contracts or arrangements, rather than upon any of the other triggering events specified in Item 5.02 of Form 8-K. An instruction to Item 5.02(e) provides that grants or awards (or modifications) will not be required to be disclosed on Form 8-K if they are materially consistent with the previously disclosed terms of such plans, contracts or arrangements, and they are disclosed the next time the issuer is required to provide new disclosure under Item 402 of Reg S-K. The Staff has published several interpretations that have explained the disclosures that are expected to be provided under Item 5.02(e) of Form 8-K, recognizing that disclosure regarding a number of significant developments with respect to compensation arrangements with an issuer’s principal executive officer, principal financial officer and named executive officers is best suited in the executive compensation disclosure of the proxy statement, rather than in a Current Report on Form 8-K. Despite the Staff’s guidance, practice continues to vary in reporting material compensation developments under Item 5.02(e).

I particularly like this article because it focuses on how the regulatory history of the 2006 amendments to Form 8-K came about, as well as how the Staff’s subsequent interpretation of the disclosure requirement developed, and how all of that knowledge should influence one’s interpretation of the operation of a rule that is admittedly pretty hard to decipher on its face. This is why I often refer back to this piece whenever a tricky Item 5.02(e) interpretive question arises!

– Dave Lynn