[Federal Register Volume 60, Number 131 (Monday, July 10, 1995)]
[Proposed Rules]
[Pages 35633-35638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16386]



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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 228, 229, 240 and 249

[Release Nos. 33-7184; 34-35894; File No. S7-14-95]
RIN 3235-AG50


Streamlining and Consolidation of Executive and Director 
Compensation Disclosure

AGENCY: Securities and Exchange Commission.
ACTION: Proposed Rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') today 
is proposing amendments that would permit registrants to provide in the 
Form 10-K some of the executive compensation disclosure that is 
currently required in the proxy statement furnished to shareholders. In 
addition, amendments to the format of disclosure regarding director 
compensation are being proposed in order to improve the presentation.

DATES: Comments on the proposed amendments should be received on or 
before September 8, 1995.

ADDRESSES: Comments should be submitted in triplicate to Jonathan G. 
Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, 
N.W., Washington, D.C. 20549. Comment letters should refer to File No. 
S7-14-95. All comments received will be available for public inspection 
and copying in the Commission's Public Reference Room, 450 Fifth 
Street, N.W., Washington, D.C. 20549.

FOR FURTHER INFORMATION CONTACT: Elizabeth M. Murphy or William B. 
Haseltine, Special Counsels, at (202) 942-2910, Division of Corporation 
Finance, Securities and Exchange Commission, 450 Fifth Street, N.W., 
Mail Stop 3-12, Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: The Commission is proposing amendments to 
Item 402 of Regulations S-B and S-K 1 and to Forms 10-K and 10-KSB 
2 and Schedule 14A 3 under the Securities Exchange Act of 
1934 (``Exchange Act'').4 The annual proxy and information 
statement 5 would be streamlined by allowing some of the more 
detailed compensation disclosure required by Item 402 of Regulations S-
B and S-K to be provided in the annual report on Form 10-K 6 filed 
with the Commission rather than included in the proxy or information 
statement furnished to shareholders. The proposals also would affect 
director compensation disclosure, which would remain in the proxy 
statement, by consolidating certain elements of that disclosure into an 
easier-to-read tabular format that provides information for each 
director.7

    \1\ 17 CFR 228.402 and 229.402.
    \2\ 17 CFR 249.310 and 249.310b.
    \3\ 17 CFR 240.14a-101.
    \4\ 15 U.S.C. 78a et seq.
    \5\ Throughout this release, references to proxy statements 
include information statements.
    \6\ The discussion of Form 10-K in this release also includes 
Form 10-KSB.
    \7\ In order to encourage individual investor comments and 
suggestions, a ``plain English'' solicitation of comment is included 
in another release issued today (33-7183), relating to proposals for 
abbreviated financial statements. This ``plain English'' 
solicitation of comment also solicits investor comment on the 
proposed changes to the executive compensation disclosure 
requirements; a copy may be obtained by calling 1-800-SEC-0330.
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I. Discussion of Proposals

A. Annual Proxy Statement Streamlining--Location of Compensation 
Disclosure

    Under the proposal, registrants could reduce the detailed executive 


[[Page 35634]]
compensation information provided in the proxy statement by instead 
furnishing that information in the Form 10-K. The proxy or information 
statement could include only the following items: 8

    \8\ This is the information required by Item 402(b), (c), (g), 
(j), (k), and (l) of Regulation S-K [17 CFR 229.402(b), (c), (g), 
(j), (k) and (l)]. Small business issuers are not required to 
provide interlocks information, the Board Compensation Committee 
Report, or the Performance Graph. Thus, under the proposal, their 
proxy statements would include only the Summary Compensation Table, 
the Option/SAR Grants table, and disclosure of director 
compensation.
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     Summary Compensation Table.
     Option/SAR Grants Table.
     Compensation of Directors (as proposed to be revised).
     Additional Information with Respect to Compensation 
Committee Interlocks and Insider Participation in Compensation 
Decisions.
     Board Compensation Committee Report on Executive 
Compensation.
     Performance Graph.9

    \9\ Comment is specifically solicited on whether the performance 
graph should be moved to the annual report to shareholders. See text 
below at n. 15.
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    Some have suggested that this information is that upon which most 
investors focus, and that provision of all of the other executive 
compensation disclosures required by Item 402 (the ``remaining 
disclosures'') may actually detract from a full understanding of the 
disclosure items listed above, or reduce the likelihood that investors 
will focus on these disclosure items. The remaining disclosures would 
be reported in Item 11 of Part III of Form 10-K. Pursuant to Rule 14a-
3(b)(10),10 registrants must include an undertaking in either 
their proxy statements or their annual reports to security holders to 
provide without charge, upon written request, a copy of the Form 10-K 
for the most recent fiscal year. Therefore, the remaining executive 
compensation disclosure would be available to security holders upon 
request.

    \10\ 17 CFR 240.14a-3(b)(10).
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    Comment is solicited on whether registrants should be permitted to 
move the specified disclosure items to the Form 10-K only if the Form 
10-K containing these items is filed prior to or at the same time as 
the proxy or information statement is first sent to shareholders. 
Comment is also solicited on whether registrants should have to provide 
the Form 10-K containing the remaining executive compensation 
disclosure upon security holders' oral request.
    The following information would be moved from the annual proxy or 
information statement to the Form 10-K:
     Aggregated Option/SAR Exercises and Fiscal Year-End 
Option/SAR Value Table.
     Long-Term Incentive Plan Awards Table.
     Defined Benefit or Actuarial Plan Disclosure.
     Employment Contracts and Termination of Employment and 
Change-in-Control Arrangements.
     Report on Repricing of Options/SARs.11

    \11\ Currently, the Repricing Report is required only in an 
annual election of directors proxy or information statement. Under 
the proposal, this would instead appear in the Form 10-K, with the 
retained proviso that this information is not deemed to be 
incorporated by reference into any other Securities Act or Exchange 
Act filing.
    Comment is requested as to the appropriateness of the proposed move 
of the disclosure to the Form 10-K for each of the above items.12 
Should any or all of the items remain in the annual proxy or 
information statement because they are generally of interest to all 
shareholders in voting on director candidates, and thus warrant an 
annual delivery requirement in connection with the election of 
directors? Are any of the items proposed to be moved necessary or 
helpful to a shareholder understanding of the disclosure provided in 
the Summary Compensation Table or Board Compensation Committee Report? 
Should the Option/SAR Grants Table be kept together with the Aggregated 
Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table, and if 
so, would it be more appropriate to require this information in the 
proxy statement or the Form 10-K?

    \12\ This is the information required by Item 402(d), (e), (f), 
(h) and (i) of Regulation S-K [17 CFR 229.402(d), (e), (f), (h) and 
(i)].
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    The streamlined executive compensation disclosure would apply only 
to proxy statements involving the annual election of directors, but not 
to those involving approval of compensation or retirement plans or 
option grants.13 Comment is solicited on whether the items 
remaining in the proxy statement are the most pertinent ones for 
shareholders considering the election of directors, and whether the 
proposed streamlined disclosure should also apply to proxy statements 
involving the approval of compensation or retirement plans or option 
grants.14 Are there any other types of proxy solicitations or 
shareholder meetings for which any or all of such items should be 
included in the proxy statement? Is it appropriate to retain the proxy 
statement disclosure requirement for the items proposed to be retained 
in the proxy statement?

    \13\ See Item 8(b)-(d) of Schedule 14A.
    \14\ Such proxy statements include information required by Item 
10 of Schedule 14A, which is related to and builds upon the Item 402 
information.
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    Should the company be given the choice of including the performance 
graph in the annual report to security holders delivered to 
investors,15 where it would be placed in the context of the 
company's financial statements, Management's Discussion and 
Analysis,16 and other matters relating to the company's 
performance, rather than in the proxy statement? In that case, if the 
company chooses to include some graphic presentation of performance in 
the annual proxy or information statement, should it be required to 
include the mandated performance graph as well? Should the performance 
graph be required to be included in the annual report to security 
holders, where, as noted, it would be placed in context, even if it is 
also presented in the proxy statement?

    \15\ See Rule 14a-3(b) [17 CFR 240.14a-3(b)].
    \16\ Item 303 of Regulation S-B and S-K [17 CFR 228.303 and 
229.303].
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B. Format of Director Compensation Disclosure

    The Commission proposes to make the presentation of several common 
elements of director compensation disclosure that lend themselves to a 
tabular presentation, e.g., annual retainer fees, meeting fees, and 
stock and option awards, clearer and more concise by replacing the 
current narrative disclosure of such compensation with a new table that 
would be entitled, ``Director Compensation for Last Fiscal Year.'' 
17 The elements of director compensation that do not as readily 
lend themselves to a tabular presentation, e.g., retirement benefits 
and legacy programs, as well as mandated or voluntary explanations of 
amounts presented in the table, would be discussed in notes or 
narrative immediately following the table. Disclosure of director 
compensation would remain a proxy statement requirement in order for 
shareholders to 

[[Page 35635]]
have this information in considering their vote for the election of 
directors.

    \17\ Suggestions have been made that disclosure of director 
compensation should be enhanced in order to assist shareholders who 
rely on board oversight as an accountability mechanism. See ``Report 
of the NACD Blue Ribbon Commission on Director Compensation,'' 
National Association of Corporate Directors (``NACD''), June 19, 
1995. The amendments regarding the presentation of director 
compensation disclosure proposed in this release are intended to 
assist shareholders by making the disclosure more readable and 
easily understood, but are not being proposed in response to the 
recently issued NACD report. Upon a thorough review of the report 
and further study of the issues raised by the NACD, the Commission 
will determine whether additional revisions to director compensation 
disclosure should be proposed.
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    As proposed to be revised, Item 402(g) of Regulation S-K 18 
would contain essentially the same disclosure as currently required, 
but the new table would require individual information for the last 
fiscal year to be given for each director who was not named in the 
Summary Compensation Table. The new table would exclude information 
about directors who also are executive officers named in the Summary 
Compensation Table to avoid repetitive disclosure, since any 
compensation such individuals receive in their capacity as directors 
would be included in the Summary Compensation Table. Comment is 
solicited on whether it would be appropriate to require a description 
of standard arrangements, such as directors' fees, for directors named 
in the Summary Compensation Table, by means of a note to the Director 
Compensation Table.19

    \18\ 17 CFR 229.402(g). Item 402(f) is the analogous provision 
in Regulation S-B [17 CFR 228.402(f)].
    \19\ This is the information currently required by Item 
402(g)(1) of Regulation S-K [17 CFR 229.402(g)(1)].
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    For each director not named in the Summary Compensation Table, the 
new table would require disclosure of both cash and stock compensation 
provided to the director for services rendered during the registrant's 
last fiscal year. The table would consist of six columns requiring 
disclosure of:
     The director's name.
     The amount of any annual retainer fees paid to the 
director for service on the Board and Board Committees.
     The amount of any separate fees paid for attendance at 
Board and Committee meetings.
     The amount of any consulting fees, special assignment fees 
or other special compensatory fees.
     The number of any shares of stock granted.
     The number of securities underlying any stock options/SARs 
granted.
    As is the case with other Item 402 tables, a column could be 
omitted from the table if there was no disclosure required under that 
caption.20 The amounts of annual retainer fees and meeting fees 
set forth in the table would include any premium paid to a director for 
serving as a committee chairperson. With respect to these amounts, 
registrants would have the option of either setting forth the actual 
amount of the annual retainer fee and meeting fees paid to each 
director for services during the last completed fiscal year or simply 
describing any standard compensatory arrangements established by the 
registrant regarding payment of annual retainer and meeting fees, 
similar to the disclosure that currently is required in narrative form.

    \20\ Current Item 402(a)(6) of Regulation S-K [17 CFR 
229.402(a)(6)] and Item 402(a)(5) of Regulation S-B [17 CFR 
228.402(a)(5)] would be revised to permit the omission of the table 
or column.
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    For example, if a director received the registrant's standard 
annual retainer fee of $10,000 and standard committee chair fee of 
$5000, the annual retainer column could state either ``$10,000 annual 
retainer and $5000 committee chair fee,'' or state only ``$15,000.'' 
Similarly, if a director received the registrant's standard $1000 per 
board meeting fee and $500 per committee meeting fee, resulting in 
aggregate meeting fee payments of $7500 for the year, the meeting fee 
column could state either ``$1000 per board meeting fee and $500 per 
committee meeting fee,'' or state only ``$7500.'' Comment is solicited 
on whether the Commission should require, in each column, disclosure of 
the actual aggregate dollar amount compensation paid to each director 
during the last fiscal year, rather than standard compensatory 
arrangements, and if so, whether a note to the table should briefly 
describe the arrangements pursuant to which the compensation was given.
    In cases where some, but not all, of the registrant's directors 
listed in the table received compensation pursuant to standard 
arrangements, the standard fees could be reflected in the table only 
for the directors receiving such fees. The actual amounts of any non-
standard fees would have to be set forth in the table for the directors 
receiving the non-standard fees.
    The following types of compensatory arrangements, whether standard 
or non-standard arrangements, generally would not lend themselves as 
readily to a tabular presentation and would therefore continue to be 
presented in narrative:
     Retirement and pension benefits.
     Death benefits to the director's heirs.
     Insurance benefits.
     Legacy and other charitable programs.
     Other non-cash and non-stock benefits.
    Consistent with current requirements, the material terms of any 
non-standard compensatory arrangement would have to be disclosed, as 
well as the amount paid.21 With respect to consulting contracts 
and other non-standard arrangements for which amounts are presented in 
the new table, the material terms of these arrangements could be set 
forth either in a note to the table or narrative immediately following 
the table.

    \21\ This is the information currently required by Item 
402(g)(2) of Regulation S-K [17 CFR 240.402(g)(2)].
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    Comment is solicited as to whether there are any elements of 
director compensation proposed to be presented in the new table that 
should be discussed narratively, and vice versa. Could any of the 
compensatory items proposed to be described in narrative form be 
readily measured in current dollars (e.g., because they involve current 
cash or stock allocations) and therefore be easily and efficiently 
reported in tabular form?
    Furthermore, as proposed, disclosure would not have to be provided 
regarding the grant date market value of any stock provided to 
directors in consideration for their service on the board, nor would 
the exercise price of any options/SARs granted to directors, or other 
terms of such grants, have to be disclosed. Comment is solicited on 
whether this disclosure should be required. The proposed table also 
does not include information required by Item 404 of Regulations S-B 
and S-K (Certain Relationships and Related Transactions),22 except 
to the extent it is also compensation information required by Item 
402(g). Comment is solicited on whether it would be useful to 
consolidate Item 404 information with respect to directors into the 
Director Compensation Table.23

    \22\ 17 CFR 228.404 and 229.404.
    \23\ The consolidated table would be entitled, ``Director 
Compensation and Transactions for Last Fiscal Year.''
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II. Request for Comment

    Any interested person wishing to submit written comments on the 
proposed amendments to executive and director compensation disclosure, 
as well as other matters that might have an impact on the proposed 
amendments, is requested to do so. Comment is solicited from the point 
of view of registrants, shareholders, and other users of information 
about the compensation of executives and directors. The Commission also 
requests comment on whether the proposed rules, if adopted, would have 
an adverse impact on competition that is neither necessary nor 
appropriate in furthering the purposes of the Exchange Act. Comments 
responsive to this inquiry will be considered by the Commission in 
complying with its responsibilities under Section 23(a) of the Exchange 
Act.24

    \24\ 15 U.S.C. 78w(a). 

[[Page 35636]]

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III. Cost-Benefit Analysis

    To evaluate fully the costs and benefits associated with the 
proposals, the Commission requests commenters to provide views and data 
as to the costs and benefits associated therewith. The proposal to 
permit certain information to be provided in Form 10-K rather than the 
proxy statement is expected to benefit registrants by lowering costs 
associated with printing and mailing of information currently required 
to be furnished to shareholders. The proposal to revise the format of 
director compensation disclosure should not appreciably affect costs to 
the registrants preparing such information.
IV. Summary of Initial Regulatory Flexibility Analysis

    An Initial Regulatory Flexibility Analysis has been prepared in 
accordance with 5 U.S.C. 603 concerning the proposed amendments. The 
analysis notes that the proposed amendments are intended to reduce the 
information regarding executive compensation included in proxy or 
information statements, while keeping in mind the Commission's goal of 
providing useful information to investors at a reasonable cost to 
companies.
    As discussed more fully in the analysis, some of the registrants 
that the proposed amendments would affect are small entities, as 
defined by the Commission's rules. The proposed amendments would 
decrease the cost for all issuers, including small businesses.
    The analysis discusses possible alternatives to the proposed 
amendments including, among others, establishing different compliance 
or reporting requirements for small entities or exempting them from all 
or part of the proposed requirements. Given the fact that small 
business issuers will receive a favorable impact from the proposed 
rules, the Commission does not believe that any of the alternatives are 
preferable at this time.
    Comments are encouraged on any aspect of this analysis. A copy of 
the analysis may be obtained by contacting William B. Haseltine, Office 
of Disclosure Policy, Division of Corporation Finance, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.

V. Statutory Basis

    The amendments to Item 402 of Regulations S-B and S-K are being 
proposed pursuant to Sections 3(b), 6, 7, 8, 10 and 19(a) of the 
Securities Act, Sections 12, 13, 14(a), 15(d) and 23(a) of the Exchange 
Act, and Sections 8, 20, 24, 30 and 38 of the Investment Company Act of 
1940.

List of Subjects in 17 CFR Parts 228, 229, 240 and 249

    Reporting and recordkeeping requirements, and Securities.

Text of the Proposals

    In accordance with the foregoing, Title 17, Chapter II of the Code 
of Federal Regulations is proposed to be amended as follows:

PART 228--INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS

    1. The authority citation for part 228 continues to read as 
follows:

    Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 
77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn, 77sss, 
78l, 78m, 78n, 78o, 78w, 78ll, 80a-8, 80a-29, 80a-30, 80a-37, 80b-
11, unless otherwise noted.

    2. By amending Sec. 228.402 by revising paragraphs (a)(5), (a)(7) 
and (f) to read as follows:


Sec. 228.402  (Item 402) Executive compensation.

    (a) * * *
    (5) Omission of table or column. A table or column may be omitted, 
if there has been no compensation awarded to, earned by or paid to any 
of the named executives or directors required to be reported in that 
table or column in any fiscal year covered by that table.
* * * * *
    (7) Location of specified information. The information required by 
paragraphs (d), (e), (g) and (h) of this item need not be provided in a 
proxy or information statement pursuant to Item 8(a) of Schedule 14A 
(Sec. 240.14a-101 of this chapter), but may instead be provided in the 
registrant's Form 10-KSB (Sec. 249.310b of this chapter). The 
information required by paragraph (h) of this item 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.
* * * * *
    (f) Compensation of directors. (1) The information specified in 
paragraph (f)(2) of this item, regarding certain types of compensation 
paid or provided in the last completed fiscal year to each director of 
the registrant, except a director who is a named executive officer, 
shall be disclosed in the tabular format specified below:

                                   Director Compensation for Last Fiscal year                                   
                                                                                                                
                                                           Cash compensation                 Security grants    
                                                ----------------------------------------------------------------
                                                                                                      Number of 
                      Name                          Annual                  Consulting                securities
                                                   retainer     Meeting     fees/other   Number of    underlying
                                                   fees ($)     fees ($)     fees ($)    shares (#)    options/ 
                                                                                                       SARs (#) 
(a)                                                      (b)          (c)          (d)          (e)          (f)
----------------------------------------------------------------------------------------------------------------
Director A                                                                                                      
Director B                                                                                                      
Director C                                                                                                      

    (2) The Table shall include:
    (i) The name of the director (column (a));
    (ii) Cash and Cash-Equivalent Compensation paid or provided to the 
director (columns (b), (c) and (d)), including:
    (A) The dollar value (cash and non-cash) of any annual retainer 
fees for service on the Board and any Board Committees, including any 
premium for chairing a committee (column (b));
    (B) The aggregate dollar value (cash and non-cash) of any fees for 
attendance at Board and Committee meetings, including any premium for 
chairing a committee (column (c)); and
    (C) The aggregate dollar value (cash and non-cash) of any 
consulting fees paid or provided to the director pursuant to a 
consulting contract 

[[Page 35637]]
entered into in consideration of the director's service on the board, 
as well as any special assignment fees and any other non-stock 
compensation paid or provided to the director in consideration of the 
director's service on the board; and

Instructions to Item 402(f)(2)(ii)

    1. Amounts deferred at the election of a director, whether 
pursuant to a plan established under Section 401(k) of the Internal 
Revenue Code [26 U.S.C. 401(k)], or otherwise, shall be included in 
columns (b), (c), or (d) as appropriate. The fact that the amounts 
have been deferred may be explained in a note to the table.
    2. For any form of non-cash compensation, disclose the fair 
market value at the time the compensation is provided.
    3. In lieu of stating the dollar value of any annual retainer 
fee (column (b)), or aggregate dollar value of any meeting fees 
(column (c)), actually paid or provided to each director for 
services during the last completed fiscal year, the standard 
compensatory arrangement for each individual director receiving the 
registrant's standard fees may be described. For example, if 
Director A received a registrant's standard annual retainer fee of 
$10,000 and standard meeting fees of $1000 per board meeting and 
$500 per committee meeting, ``$10,000'' would be set forth in column 
(b) and ``$1000 per board meeting and $500 per committee meeting'' 
would be set forth in column (c). If Director B received the 
registrant's standard annual retainer fee of $10,000 plus a $5000 
standard premium for serving as a committee chairperson, ``$15,000'' 
would be set forth in column (b). If Director C received non-
standard retainer and/or meeting fees, the actual amount of the fees 
paid or provided to Director C would have to be set forth in columns 
(b) and/or (c).

    (iii) Any grant of securities to the director for any service 
provided as a director, including:
    (A) the number of any shares granted (column (e)); and
    (B) the number of securities underlying any stock options or SARs 
granted (column (f)).

Instruction to Items 402(f)(2)(ii) and (iii)

    The material terms of any non-standard arrangements, including 
consulting contracts, pursuant to which any of the directors named 
in the table was compensated for any service provided as a director 
during the registrant's last completed fiscal year shall be provided 
in a note to the table or in narrative following the table.

    (3) Describe the material terms of any arrangements, standard or 
otherwise, pursuant to which any director of the registrant was 
compensated for services during the last fiscal year for services as a 
director, that are not required to be disclosed in the table required 
by paragraphs (f)(1) and (2) of this Item. Such arrangements include, 
e.g., retirement and pension benefits, insurance benefits, death 
benefits to the director's heirs, legacy and other charitable award 
program benefits. With respect to each arrangement described, state the 
name of the director that received compensation pursuant to the 
arrangement and state any amount paid during the last completed fiscal 
year.
* * * * *

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES 
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND 
CONSERVATION ACT OF 1975--REGULATION S-K

    3. The authority citation for part 229 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 
77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 
77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79e, 79n, 
79t, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11, unless otherwise noted.

    4. By amending Sec. 229.402 by revising paragraphs (a)(6), (a)(8) 
and (g) to read as follows:


Sec. 229.402  (Item 402) Executive compensation.

    (a) * * *
    (6) Omission of table or column. A table or column may be omitted, 
if there has been no compensation awarded to, earned by or paid to any 
of the named executives or directors required to be reported in that 
table or column in any fiscal year covered by that table.
* * * * *
    (8) Location of specified information. The information required by 
paragraphs (k) and (l) of this item need not be provided in any filings 
other than a registrant 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). The 
information required by paragraphs (d), (e), (f), (h), and (i) of this 
item need not be provided in a proxy or information statement pursuant 
to Item 8(a) of Schedule 14A (Sec. 240.14a-101 of this chapter), but 
may instead be provided in the registrant's Form 10-K (Sec. 249.310 of 
this chapter). The information required by paragraphs (i), (k) and (l) 
of this item 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.
* * * * *
    (g) Compensation of directors. (1) The information specified in 
paragraph (g)(2) of this item, regarding certain types of compensation 
paid or provided for the director's service in the last completed 
fiscal year to each director of the registrant, except a director who 
is a named executive officer, shall be disclosed in the tabular format 
specified below:

                                   Director Compensation for Last Fiscal Year                                   
                                                                                                                
                                                           Cash compensation                 Security grants    
                                                ----------------------------------------------------------------
                                                                                                      Number of 
                      Name                          Annual                  Consulting                Securities
                                                   retainer     Meeting     fees/other   Number of    underlying
                                                   fees ($)     fees ($)     fees ($)    shares (#)    options/ 
                                                                                                       SARs (#) 
(a)                                                      (b)          (c)          (d)          (e)          (f)
----------------------------------------------------------------------------------------------------------------
Director A                                                                                                      
Director B                                                                                                      
Director C                                                                                                      

    (2) The Table shall include:
    (i) The name of the director (column (a));
    (ii) Cash and Cash-Equivalent Compensation paid or provided to the 
director (columns (b), (c) and (d)), including: 

[[Page 35638]]

    (A) The dollar value (cash and non-cash) of any annual retainer 
fees for service on the Board and any Board Committees, including any 
premium for chairing a committee (column (b));
    (B) The aggregate dollar value (cash and non-cash) of any fees for 
attendance at Board and Committee meetings, including any premium for 
chairing a committee (column (c)); and
    (C) The aggregate dollar value (cash and non-cash) of any 
consulting fees paid or provided to the director pursuant to a 
consulting contract entered into in consideration of the director's 
service on the board, as well as any special assignment fees and any 
other non-stock compensation paid or provided to the director in 
consideration of the director's service on the board; and

Instructions to Item 402(g)(2)(ii)

    1. Amounts deferred at the election of a director, whether 
pursuant to a plan established under Section 401(k) of the Internal 
Revenue Code [26 U.S.C. 401(k)], or otherwise, shall be included in 
columns (b), (c), or (d) as appropriate. The fact that the amounts 
have been deferred may be explained in a note to the table.
    2. For any form of non-cash compensation, disclose the fair 
market value at the time the compensation is provided.
    3. In lieu of stating the dollar value of any annual retainer 
fee (column (b)), or aggregate dollar value of any meeting fees 
(column (c)), actually paid or provided to each director for 
services during the last completed fiscal year, the standard 
compensatory arrangement for each individual director receiving the 
registrant's standard fees may be described. For example, if 
Director A received a registrant's standard annual retainer fee of 
$10,000 and standard meeting fees of $1000 per board meeting and 
$500 per committee meeting, ``$10,000'' would be set forth in column 
(b) and ``$1000 per board meeting and $500 per committee meeting'' 
would be set forth in column (c). If Director B received the 
registrant's standard annual retainer fee of $10,000 plus a $5000 
standard premium for serving as a committee chairperson, ``$15,000'' 
would be set forth in column (b). If Director C received non-
standard retainer and/or meeting fees, the actual amount of the fees 
paid or provided to Director C would have to be set forth in columns 
(b) and/or (c).

    (iii) Any grant of securities to the director for any service 
provided as a director, including:
    (A) the number of any shares granted (column (e)); and
    (B) the number of securities underlying any stock options or SARs 
granted (column (f)).

Instruction to Items 402(g)(2) (ii) and (iii)

    The material terms of any non-standard arrangements, including 
consulting contracts, pursuant to which any of the directors named 
in the table was compensated for any service provided as a director 
during the registrant's last completed fiscal year shall be provided 
in a note to the table or in narrative following the table.
    (3) Describe the material terms of any arrangements, standard or 
otherwise, pursuant to which any director of the registrant was 
compensated for services during the last fiscal year for services as 
a director, that are not required to be disclosed in the table 
required by paragraphs (g)(1) and (2) of this Item. Such 
arrangements include, e.g., retirement and pension benefits, 
insurance benefits, death benefits to the director's heirs, legacy 
and other charitable award program benefits. With respect to each 
arrangement described, state the name of the director that received 
compensation pursuant to the arrangement and state any amount paid 
during the last completed fiscal year.
* * * * *

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

    5. 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, 78l, 78m, 78n, 78o, 78p, 
78s, 78w, 78x, 78ll(d), 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 
80b-3, 80b-4, and 80b-11, unless otherwise noted.

    6. By amending Sec. 240.14a-101 by designating the existing 
Instruction to Item 8 as Instruction 1 and adding Instruction 2 to read 
as follows:


Sec. 240.14a-101  Schedule 14A. Information required in proxy 
statement.

* * * * *
    Item 8. Compensation of directors and executive officers.
* * * * *
    Instructions.
* * * * *
    2. If action is to be taken with regard to Item 8(a), but not 
with regard to Item 8(b), (c) or (d), only the disclosure specified 
by Item 402(a)(8) of Regulation S-K (Sec. 229.402(a)(8) of this 
chapter) (or, if applicable, Item 402(a)(7) of Regulation S-B 
(Sec. 228.402(a)(7) of this chapter)) need be provided in response 
to this Item.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

* * * * *
    7. The authority for Part 249 continues to read, in part, as 
follows:

    Authority: 15 U.S.C. 78a, et seq., unless otherwise noted.

    8. By amending Form 10-K (referenced in Sec. 249.310) by adding a 
sentence at the end of Item 11 read as follows:

    Note--The text of Form 10-K does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities 
Exchange Act of 1934

* * * * *
    Item 11. Executive Compensation. * * * If the registrant's 
definitive proxy or information statement is incorporated by 
reference pursuant to General Instruction G.3, and does not include 
all of the information required by Item 402 of Regulation S-K 
(Sec. 229.402 of this chapter), as permitted by Item 402(a)(8) of 
Regulation S-K, then the remaining Item 402 information shall be 
included in the annual report on Form 10-K.
* * * * *
    9. By amending Form 10-KSB (referenced in Sec. 249.310b) by adding 
a sentence at the end of Item 10 to read as follows:


    Note--The text of Form 10-KSB does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form 10-KSB

* * * * *
    Item 10. Executive Compensation. * * * If the small business 
issuer's definitive proxy or information statement is incorporated 
by reference pursuant to General Instruction E.3, and does not 
include all of the information required by Item 402 of Regulation S-
B (Sec. 228.402 of this chapter), as permitted by Item 402(a)(7) of 
Regulation S-B, then the remaining Item 402 information shall be 
included in the annual report on Form 10-KSB.
* * * * *
    Dated: June 27, 1995.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-16386 Filed 7-7-95; 8:45 am]
BILLING CODE 8010-01-P