New Form 8-K Filing Requirements: Sarbanes-Oxley Disclosure Requirements

General
New Form 8-K requirements will become effective August 23, 2004. The new Form 8-K requirements significantly increase issuers’ reporting obligations by adding eight new items, increasing disclosure requirements under two existing Form 8-K items, and transferring to Form 8-K two items currently required to be disclosed in Forms 10-K and 10-Q. The filing time is shortened to within four business days after the occurrence of a specified event with exceptions for filings to comply with Regulation FD, voluntary disclosures and certain exhibits. No provisions for extensions of the filing times are provided.

The titles and format of the report are as follows.

Section 1 – Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement(a)
Item 1.02 Termination of a Material Definitive Agreement(a)
Item 1.03 Bankruptcy or Receivership

Section 2 – Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets
Item 2.02 Results of Operations and Financial Condition
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant(a)
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance SheetArrangement(a)
Item 2.05 Costs Associated with Exit or Disposal Activities(a)
Item 2.06 Material Impairments(a)

Section 3 – Securities and Trading Markets
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Ruleor Standard; Transfer of Listing
Item 3.02 Unregistered Sales of Equity Securities
Item 3.03 Material Modification to Rights of Security Holders

Section 4 – Matters Related to Accountants and Financial Statements
Item 4.01 Changes in Registrant's Certifying Accountant
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
(a) Company Determination(a)
(b) Advised by Independent Accountants

Section 5 – Corporate Governance and Management
Item 5.01 Changes in Control of Registrant
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
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

Section 6 – [Reserved]

Section 7 – Regulation FD
Item 7.01 Regulation FD Disclosure

Section 8 – Other Events
Item 8.01 Other Events

Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
___________
(a)Limited safe harbor from Rule 10b-5 liability and limited exemption from the current filing requirements for the use of Forms S-2 and S-3 as discussed below.

Issuers will also need to keep in mind SEC Rule 12b-20, which requires that, in addition to information expressly required to be reported, any other material information that is necessary to make the required statements in the form not misleading be included. This means considering whether a reported item needs to be flushed out with additional material information.

Coordination of Filings
We believe the new Form 8-K will require a great deal more attention than the prior Form, not only because of the shortened filing requirements. Some of the triggering events, including those contemplated by certain of the Sections and Items described on the attached outline, namely, Sections 3, 4 and 5 and Item 1.03, will occur infrequently and can be monitored by internal counsel or an executive officer. The financial reporting requirements in Section 2, however, require in many cases the analysis of a financial officer. We recommend that issuers establish lines of responsibility for these reporting obligations by assigning particular persons to particular areas. Many issuers have established disclosure committees, which may be assigned responsibility for compliance with these 8-K requirements. Because of the four-business day business filing requirement, issuers will have to monitor the need for a Form 8-K on a daily basis.

These obligations have been heightened by the enactment of §409 of the Sarbanes-Oxley Act, which has been codified as Section 13(l) of the Securities Exchange Act of 1934. Prior to this enactment, it was clearly established by case law that there was no requirement to disclose material information except in Securities Act Registration Statements, Forms 10-K and 10-Q or in situations in which the issuer or directors and officers wished to trade in the stock. Section 409 of Sarbanes-Oxley changed this process with respect to material changes in financial condition or operations. Section 409 requires such changes to be disclosed “on a rapid and current basis” as implemented by SEC regulation. It is cited by the SEC in its adoption of the new Form 8-K.

Rule 10b-5 Safe Harbor
A safe harbor under Rule 10b-5 for failure to file a Form 8-K for the Form 8-K items footnoted above has been created. The safe harbor, however, does not cover any material misstatements or omissions in the actual filing itself. The safe harbor expires at the due date of filing of the next Form 10-K or 10-Q. Therefore, if a Form 8-K filing is missed, a safe harbor period will exist until the due date of the Form 10-K or 10-Q, giving the company a chance to make the filing in those forms.

Registration Statement Eligibility
The eligibility requirements for use of the short-form registration Forms S-2 and S-3 include the requirement that the company timely file all reports required to be filed during the twelve months preceding the filing of one of those registration statements. The eligibility rules have been modified to state that failure to file timely 8-K reports for the 8-K items footnoted above during the preceding twelve months will not destroy the eligibility to use the forms, but the 8-K filings must be made prior to the time the registration form is filed. Similarly, the failure to file Forms 8-K will not preclude use of Rule 144 for the sale of restricted securities or sales of securities by affiliates of the issuer without registration.

Impact on Certifications
Note that under SEC rules, companies must disclose and the CFOs and CEOs must certify as to the effectiveness of the company’s disclosure controls and procedures. These controls and procedures go beyond financial reporting to cover disclosures in the Form 8-K as well as other filings. However, the certifications are not required with Form 8-K filings.

The following are our attorneys specializing in securities matters who may be of assistance to you in these matters:

Gary P. Kreider
(513) 579-6411
gkreider@kmklaw.com 

Paul V. Muething
(513) 579-6517
pmuething@kmklaw.com 

Mark A. Weiss
(513) 579-6599
mweiss@kmklaw.com 

F. Mark Reuter
(513) 579-6469
freuter@kmklaw.com 

Michael J. Moeddel
(513) 639-3962
mmoeddel@kmklaw.com