Form 8-K Requirements

The SEC recently adapted a new rule related to Form 8-K requirements. The new rule expands the number of events that are reportable on Form 8-K under the Securities Exchange Act of 1934. These amendments add eight new items to the form, transfer two items from the periodic reports and expand disclosures under two existing Form 8-K items. Due to the increase in reportable events under the form, the format of the Form 8-K has been reorganized into topical categories. The amendments also shorten the Form 8-K filing deadline for most items to four business days after the occurrence of an event triggering the disclosure requirements of the form. Finally, the SEC adopted a limited safe harbor from liability for failure to file certain of the required Form 8-K reports. These amendments are responsive to the "real time issuer disclosure" mandate in Section 409 of the Sarbanes-Oxley Act of 2002. They are intended to provide investors with better and faster disclosure of important corporate events.

Reorganized Form and New Reportable Items

Following is the reorganized format of Form 8-K (notes in italics are to highlight new reportable items and other editorial comments).

Section 1 - Registrant's Business and Operations

Item 1.01 Entry into a Material Definitive Agreement (This is a new reportable item. It requires disclosure of material definitive agreements that are not made in the ordinary course of business. This item parallels Item 601(b)(10) of Regulation S-K and S-B.)

Item 1.02 Termination of a Material Definitive Agreement (This is a new reportable item.)

Item 1.03 Bankruptcy or Receivership (Formerly reported under Item 3 of Form 8-K.)

Section 2 - Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets (Formerly reported under Item 2 of Form 8-K.)

Item 2.02 Results of Operations and Financial Condition (Formerly reported under Item 12 of Form 8-K.)

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant (This is a new reportable item. This item includes disclosure of a material long-term debt obligation, capital lease obligation, operating lease obligation, and short-term debt obligation that arises other than in the ordinary course of business.)

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement (This is a new reportable item.)

Item 2.05 Costs Associated with Exit or Disposal Activities (This is a new reportable item. This item requires disclosure when the board of directors, a committee of the board, or an authorized officer commits the company to an exit or disposal plan. It also requires an estimate of the costs expected to be incurred. If an estimate cannot be made at the time of filing, the Form 8-K is nevertheless required to be filed describing the commitment and a separate Form 8-K must be filed within 4 days after the company formulates an estimate.)

Item 2.06 Material Impairments (This is a new reportable item. This item requires disclosure when the board of directors, a committee of the board or an authorized officer concludes that a material charge for impairment to one or more of its assets, including an impairment of securities or goodwill, is required under GAAP.)

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 (This is a new reportable item.)

Item 3.02 Unregistered Sales of Equity Securities (This is a new reportable item that was previously required to be reported pursuant to Forms 10-Q, 10-QSB, 10-K and 10-KSB. A Form 8-K is not required for sales that constitute less than 1% of the company’s outstanding security class, or less than 5% for a small business issuer. However, a company must still disclose on Form 10-Q, 10-QSB, 10-K and 10-KSB any sales of unregistered equity securities that do not meet the numeric thresholds of this new Form 8-K requirement.)

Item 3.03 Material Modifications to Rights of Security Holders (This is a new reportable item that was previously required to be reported pursuant to Forms 10-Q, 10-QSB, 10-K and 10-KSB.)

Section 4 - Matters Related to Accountants and Financial Statements

Item 4.01 Changes in Registrant's Certifying Accountant (Formerly reported under Item 4 of Form 8-K.)

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review (This is a new reportable item. This item requires disclosure when the board of directors, a committee of the board or an authorized officer concludes that any of the company’s previously issued financial statements covering one or more years or interim periods no longer should be relied upon because of an error in such financial statement. Disclosure is also required if a company receives notice from its independent accountant that disclosure should be made or action should be taken to prevent future reliance on a previously issued audit report or interim review related to previously issued financial statements.)

Section 5 - Corporate Governance and Management

Item 5.01 Changes in Control of Registrant (Formerly reported under Item 1 of Form 8-K.)

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers (Formerly reported under Item 6 of Form 8-K. The new rule broadens the disclosure requirements. Previously, the action necessary to trigger disclosure rested solely with the director who requested that the company publicly disclose the matter. Under the revised item, disclosure is required if a director has resigned or refuses to stand for reelection to the board because of a disagreement with the company, known to an executive officer of the company, on any matter relating to the company’s operations, policies or practices, or if a director has been removed for cause. Disclosure is also required under new item 5.02(b) when certain officers retire, resign, are removed or decline to stand for reelection. Disclosure is also required under new item 5.02(c) of information related to the appointment of certain officers and under item 5.02(d) if a new director is elected under certain circumstances.)

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year (Change is fiscal year was formerly reported under Item 8 of Form 8-K. Under this revised item, disclosure requirements are added for amendments to articles of incorporation or bylaws that the company did not propose in a previously filed proxy statement.)

Item 5.04 Temporary Suspension of Trading Under Registrant's Employee Benefit Plans (Formerly reported under Item 11 of Form 8-K.)

Item 5.05 Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics (Formerly reported under Item 10 of Form 8-K.)

Section 6 - [Reserved]

Section 7 - Regulation FD

Item 7.01 Regulation FD Disclosure (Formerly reported under Item 5 of Form 8-K.)

Section 8 - Other Events

Item 8.01 Other Events (Formerly reported under Item 5 of Form 8-K.)

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits (Formerly reported under Item 7 of Form 8-K.)

Filing Deadline

The new rules require filing of a Form 8-K within four business days of a triggering event. For example, if a reportable event occurred on a Wednesday, the Form 8-K filing deadline would typically be the following Tuesday. Financial statements of businesses acquired and pro forma financial information may be filed by amendment not later than 71 calendar days after the date that the initial report on Form 8-K must be filed.

Limited Safe Harbor

The SEC recognized that several of the new Form 8-K disclosure items may require management to quickly assess the materiality of an event or to determine whether a disclosure obligation has been triggered. As a result, the SEC decided to adopt a new limited safe harbor from public and private claims under Exchange Act Section 10(b) and Rule 10b-5 for a failure to timely file a Form 8-K regarding the following items:

Item 1.01 Entry into a Material Definitive Agreement

Item 1.02 Termination of a Material Definitive Agreement

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 under an Off-Balance Sheet Arrangement

Item 2.05 Costs Associated with Exit or Disposal Activities

Item 2.06 Material Impairments

Item 4.02(a) Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review (in the case where a company makes the determination and does not receive a notice described in Item 4.02(b) from its accountant)

Effective Date

The effective date of the new Form 8-K rule is August 23, 2004.

Text of New Rule

The complete text of the new rule can be found at the following URL: http://www.sec.gov/rules/final/33-8400.htm

This is only a brief summary of the requirements of the final SEC rule, and is provided by the GHP Financial Group as a service to clients and other interested individuals. Any action based on this information should be taken only after consulting with your GHP Financial Group advisor or legal counsel. For more information, please contact us at (303) 831-5000