A Few Form 10-K Tips and Reminders

As year-end reporting ramps up, this post focuses on nine areas that are new or frequently mishandled in the annual reporting and proxy processes.  It will hopefully help:

            Deal with recent changes in Form 10-K and the proxy process, and

            Avoid frequent errors in 10-K form and content.

  1. What to do with old 10-K Item 6?

Anytime the SEC makes changes to the items or item numbers in Form 10-K there is confusion about handling these changes.  This is the case right now with old Item 6 – Selected Financial Data.

The first step to getting this change right is to review the most recent version of the Form 10-K Instructions at the SEC’s webpage.  There you will find Item 6 still included but with a different title:

            Item 6. [Reserved]

The second step is to remember that Exchange Act Rule 12b-13 requires that all item numbers in the instructions must be included in a report:

12b-13 Preparation of statement or report.

The statement or report shall contain the numbers and captions of all items of the appropriate form, but the text of the items may be omitted provided the answers thereto are so prepared as to indicate to the reader the coverage of the items without the necessity of his referring to the text of the items or instructions thereto. However, where any item requires information to be given in tabular form, it shall be given in substantially the tabular form specified in the item. All instructions, whether appearing under the items of the form or elsewhere therein, are to be omitted. Unless expressly provided otherwise, if any item is inapplicable or the answer thereto is in the negative, an appropriate statement to that effect shall be made.

Thus, the right approach is to include Item 6, but use the new title – [Reserved].


  1. Being Sure to Include New Item 9C.

Speaking of new Form 10-K Item numbers, earlier in 2021 the SEC added new Item 9C:

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

This disclosure is related to the Holding Foreign Companies Accountable Act.  You can read more in this blog post.  While this will not apply to many companies, as mentioned above, this new item should be included in your year-end 10-K.


  1. Double-Check Your Exhibit (4)(vi).

You might ask, “Is Exhibit (4)(vi) still an issue?”  Surprisingly, the answer is yes.  When the SEC’s Disclosure Modernization process added this exhibit to Form 10-K to include information about a company’s securities, an omission in the Final Rule language created confusion about the requirement.  You can read more in this post with all the details.  That confusion continues to today, so, to be clear, Form 10-K requires Exhibit (4)(vi), which should include the following from S-K Item 601:

(vi) For each class of securities that is registered under Section 12 of the Exchange Act, provide the information required by Item 202(a) through (d) and (f) of Regulation S-K
(§ 229.202 of this chapter).

Instruction 1 to paragraph (b)(4)(vi). A registrant is only required to provide the information called for by Item 601(b)(4)(vi) if it is filing an annual report under Exchange Act Section 13(a) or 15(d).

(Other instructions are omitted).

The required disclosures are found in S-K Item 202 – Description of registrants securities requirements.


  1. Place the S-K Item 201 Equity Compensation Plan Information in Item 12 or Your Proxy

Another common, although minor, error in many Form 10-K’s is including the S-K Item 201 Equity Compensation Plan Information in Item 5 rather than Item 12.  The 10-K instructions are a bit confusing because both Item 5 and Item 12 refer to this disclosure.  However, the staff has been clear in both a letter to the ABA and a Compliance and Disclosure Interpretation, that the table should be in Item 12 if it is included in Form 10-K.  You can read more details in this blog post.


  1. Consider Placing the Performance Graph in Your Annual Report to Shareholders

Another possible change some companies could consider is moving the performance graph required by S-K Item 201 to their annual report to shareholders or ARS.  The ARS is not filed information but is only furnished.  An instruction to S-K Item 201(e) makes it clear that this information is not required in Form 10-K:

  1. The information required by paragraph (e) of this Item need not be provided in any filings other than an annual report to security holders required by Exchange Act Rule 14a-3 (17 CFR 240.14a-3) or Exchange Act Rule 14c-3 (17 CFR 240.14c-3) that precedes or accompanies a registrant’s proxy or information statement relating to an annual meeting of security holders at which directors are to be elected (or special meeting or written consents in lieu of such meeting). Such information will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

You can read more in this blog post.


  1. Metric and Non-GAAP Reminders

SEC reviews continue to find many companies failing to follow some of the basic non-GAAP measure requirements of Regulation G and S-K Item 10(e).  Year-end is a great time to review Reg G, S-K Item 10(e) and the related Compliance and Disclosure Interpretations if you include non-GAAP measures in MD&A or other documents.


  1. MD&A Quantification

One of the significant changes to MD&A requirements in S-K Item 303 made by the SEC’s November 2020 MD&A Final Rule was the addition of this language:

Where the financial statements reflect material changes from period-to-period in one or more line items, including where material changes within a line item offset one another, describe the underlying reasons for these material changes in quantitative and qualitative terms.

In the last several years the staff has written countless comments requesting companies to discuss changes in both quantitative and qualitative terms.  Here is one example:

Please expand your results of operations discussion to quantify the impact of each factor identified as causing changes in results between periods. For example, we note that Mountain Reported EBITDA increased as a result of strong North American pass sales growth, strong growth in visitation and spending at western U.S. resorts, and recent acquisitions. Please quantify the impact of each factor attributing to the increase, here, and throughout your discussion, in accordance with Item 303(a)(3)(iii) of Regulation S-K and Section III.D of SEC Release No. 33-6835.

Vail Resorts, Inc., February 3, 2020

With this frequent comment topic now part of the regulatory guidance in S-K Item 303, it is likely a good idea to consider adding this kind of analysis to MD&A if it is not already included.


  1. Perks Disclosures

The SEC Enforcement Division continues to keep a watchful eye on how companies are disclosing perks.  As you can read in this post, enforcement cases focus on issues ranging from companies not using the right definition of perks to not disclosing all perks paid to officers.  It would be wise, in advance of developing information for the proxy, to review how your company computes and discloses perks.


  1. Shareholder Proposal Processes

As the Division of Corporation Finance announced on December 13, 2021, it has changed its policy and will now respond in writing to no-action requests regarding shareholder proposals.  This change should be incorporated into the planning schedule for proxy statements and annual meetings.

As always, your thoughts and comments are welcome!  If you have any tips you would like to add, feel free to put them in a comment.

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