SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 240

[Release No. 34Ä33371; ICÄ19981]

RIN 3235ÄAG01

Elimination of Filing Requirements for Preliminary Proxy Materials Under
Certain Circumstances

AGENCY: Securities and Exchange Commission.

ACTION: Final rules.

SUMMARY: The Securities and Exchange Commission ("Commission'') has adopted
amendments to the proxy and information statement filing requirements. The
amendments broaden the exclusion from the preliminary filing requirement to
include shareholder action on new compensation plans as well as amendments to
existing plans. These amendments codify a prior interpretation regarding
amendments to existing plans and extend this position to the submission of new
compensation plans for shareholder action. The amendments relieve registrants
and the Commission of unnecessary administrative burdens and processing costs
associated with the filing and processing of proxy materials currently the
subject of selective review procedures, but which are not ordinarily selected
for review in preliminary form.

EFFECTIVE DATE: These rules are effective on December 30, 1993.

FOR FURTHER INFORMATION CONTACT: Gregg W. Corso, Paula Dubberly, Brian L.
Henry or Thomas D. Twedt, (202) 272Ä3097, Division of Corporation Finance,
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC
20549.

SUPPLEMENTARY INFORMATION: The Commission has adopted an amendment to Rule
14aÄ61 and Rule 14cÄ52 of the Securities Exchange Act of 1934 ("Exchange
Act'').3 These amendments modify the preliminary filing requirements for proxy
and information statements.

®1¯ 17 CFR 240.14aÄ6.

®2¯ 17 CFR 240.14cÄ5.

®3¯ 15 U.S.C. 78a et seq.

I. Amendments to Rule 14aÄ6 and 14cÄ5

In a companion release to the recently enacted refining amendments to the
executive compensation rules, the Commission proposed to codify a prior
interpretation that a proxy or information statement is not subject to the
preliminary filing requirement because it relates to shareholder action on
amendments to an existing employee benefit plan.4 In addition, the Commission
asked whether this exclusion should be extended to shareholder action on new
plans.5

®4¯ Release No. 34Ä33232 (November 29, 1993) (58 FR 63017). The interpretive
position extending the exclusion to amendments of existing employee benefit
plans was articulated in 1991. Release No. 34Ä28869 [58 FR 7242] at note 244.
See also Thompson Hine and Flory (avail. March 29, 1991) (affirming that plan
amendments do not trigger the preliminary filing requirements of Rule 14aÄ6).

®5¯ Id.

This proposal was intended to relieve registrants and the Commission of
unnecessary administrative burdens and processing costs associated with the
filing and processing of proxy materials currently the subject of selective
review procedures, but which are not ordinarily selected for review in
preliminary form. In light of the support expressed by commenters for these
rule changes, the Commission today is adopting the proposed change and
extending its scope to include new plans.6 The amendments revise Rule 14aÄ6
and Rule 14cÄ5 specifically to include approval or ratification of
compensation plans or amendments to such plans as exclusions from the
preliminary filing requirements.

®6¯ The Commission received 12 letters of comment, which may be inspected and
copied at the Commission's Public Reference Room, 450 Fifth Street, NW.,
Washington, DC 20549, File No. S7Ä31Ä93.

In responding to the Commission's request for comments on extending the
exclusion to new plans, many commenters observed that there is no reason to
differentiate between shareholder action on an amendment to an existing plan
and action on a new plan. The disclosure requirements for both matters under
Regulations 14A and 14C are virtually identical.7 Moreover, the objectives
sought by the adoption of a new plan can generally be achieved through
amendment of an existing plan.

®7¯ Item 10, Schedule 14A (17 CFR 240.14a-101).

The amendment adopted today affects only filing requirements; it does not
affect disclosure requirements. As under current practice, definitive
materials will still be subject to being selected for review. As previously
announced, the staff during the 1994 proxy season plans to review the proxy
statements of those registrants who were requested last year to make changes
in future filings, as well as proxy statements of additional registrants.8

®8¯ Release No. 33Ä7032 (November 29, 1993) (58 FR 63010); see also Procedures
for Early Staff Review of Executive Compensation Disclosure, SEC News Digest,
Issue 93Ä235 (December 8, 1993).

II. Cost Benefit Analysis

No specific data were provided in response to the Commission's request
regarding the costs and benefits of these amendments. The Commission believes
that the benefits to be gained by amending the proxy and information statement
filing requirements outweighs the costs, if any, associated with implementing
the proposals.

III. Final Regulatory Flexibility Analysis

The Commission has prepared the following Final Regulatory Flexibility
Analysis in accordance with 5 U.S.C. 604.

1. The Commission is proposing amendments to Rules 14a-6 and 14c-5 under the
Exchange Act to codify an interpretive position and to eliminate the necessity
to file a preliminary proxy or information statement when a new compensation
plan is submitted for shareholder approval.

2. No comments were received with respect to the Initial Regulatory
Flexibility Analysis.

3. A number of significant alternatives to the proposed amendments have been
considered. One alternative would be to provide differing or simplified
requirements for small businesses that are based on performance rather than
design standards. However, the adoption of performance standards would not be
consistent with the Commission's statutory mandate to require disclosure to
investors of material information necessary to make informed investment
decisions. The amendments clarify and broaden an interpretation that
simplifies reporting requirements for all registrants, including small
businesses. Other alternatives would involve the establishment of different
compliance or reporting requirements or timetables to take into account the
resources available to small businesses and to provide an exemption from
coverage of the provisions for small businesses. Since the amendments impose
no added burden on small business issuers, different treatment is not
warranted.

IV. Effective Date

The amendments to Rules 14aÄ6 and 14cÄ5 shall be effective upon publication in
the Federal Register. This date is less than 30 days after publication in the
Federal Register in accordance with the Administrative Procedures Act, which
allows effectiveness in less than 30 days after publication for, inter alia,
"a substantive rule which grants or recognizes an exemption or relieves a
restriction.'' 5 U.S.C. 553(d)(1).

V. Statutory Basis

The amendments contained herein are being proposed pursuant to sections 12,
13, 14(a), 15(d) and 23(a) of the Exchange Act.

List of Subjects in 17 CFR Part 240

Reporting and recordkeeping requirements, Securities.

Text of Amendment

In accordance with the foregoing, title 17, chapter II of the Code of Federal
Regulations is amended as follows:

PART 240 GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934

1. The authority citation for part 240 continues to read in part as follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77eee, 77ggg, 77nnn, 77sss,
77ttt, 78c, 78d, 78i, 78j, 78l1, 78m, 78n, 78o, 78p, 78s, 78w, 78x, 781l(d),
79q, 79t, 80aÄ20, 80aÄ23, 80aÄ29, 80aÄ37, 80bÄ3, 80bÄ4 and 80bÄ11, unless
otherwise noted.

                                  * * * * *

2. By amending  240.14aÄ6 by revising paragraph (a) and the undesignated
paragraph preceding the notes to read as follows:

 240.14aÄ6 Filing requirements.

(a) Preliminary proxy statement. Five preliminary copies of the proxy
statement and form of proxy shall be filed with the Commission at least 10
calendar days prior to the date definitive copies of such material are first
sent or given to security holders, or such shorter period prior to that date
as the Commission may authorize upon a showing of good cause thereunder. A
registrant, however, shall not file with the Commission a preliminary proxy
statement, form of proxy or other soliciting material to be furnished to
security holders concurrently therewith if the solicitation relates to an
annual (or special meeting in lieu of the annual) meeting, or for an
investment company registered under the Investment Company Act of 1940 (15
U.S.C. 80aÄ1 et seq.) or a business development company, if the solicitation
relates to any meeting of security holders at which the only matters to be
acted upon are:

(1) The election of directors;

(2) The election, approval or ratification of accountant(s);

(3) A security holder proposal included pursuant to Rule 14aÄ8 ( 240.14aÄ8 of
this chapter);

(4) The approval or ratification of a plan as defined in paragraph (a)(7)(ii)
of Item 402 of Regulation SÄK ( 229.402(a)(7)(ii) of this chapter) or
amendments to such a plan;

(5) With respect to an investment company registered under the Investment
Company Act of 1940 or a business development company, a proposal to continue,
without change, any advisory or other contract or agreement that previously
has been the subject of a proxy solicitation for which proxy material was
filed with the Commission pursuant to this section; and/or

(6) With respect to an open-end investment company registered under the
Investment Company Act of 1940, a proposal to increase the number of shares
authorized to be issued.

This exclusion from filing preliminary proxy material does not apply if the
registrant comments upon or refers to a solicitation in opposition in
connection with the meeting in its proxy material.

                                  * * * * *

3. By amending  240.14cÄ5 to revise paragraph (a) and the undesignated
paragraph preceding the notes to read as follows:

 240.14cÄ5 Filing requirements.

(a) Preliminary information statement. Five preliminary copies of the
information statement shall be filed with the Commission at least 10 calendar
days prior to the date definitive copies of such statement are first sent or
given to security holders, or such shorter period prior to that date as the
Commission may authorize upon a showing of good cause therefor. In computing
the 10-day period, the filing date of the preliminary copies is to be counted
as the first day and the 11th day is the date on which definitive copies of
the information statement may be mailed to security holders. A registrant,
however, shall not file with the Commission a preliminary information
statement if it relates to an annual (or special meeting in lieu of the
annual) meeting, of security holders at which the only matters to be acted
upon are:

(1) The election of directors;

(2) The election, approval or ratification of accountant(s);

(3) A security holder proposal identified in the registrant's information
statement pursuant to Item 4 of Schedule 14C ( 240.14cÄ101); and/or

(4) The approval or ratification of a plan as defined in paragraph (a)(7)(ii)
of Item 402 of Regulation SÄK ( 229.402(a)(7)(ii) of this chapter) or
amendments to such a plan.

This exclusion from filing a preliminary information statement does not apply
if the registrant comments upon or refers to a solicitation in opposition in
connection with the meeting in its information statement.

                                  * * * * *

Dated: December 23, 1993.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 93Ä31819 Filed 12Ä29Ä93; 8:45 am]

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