Déclaration Des Options D'Achat D'Actions

L'Utilisateur reconnaît qu'il a examiné le Contrat d'Utilisateur et la Politique de Confidentialité qui régissent ce site et que son utilisation continue constitue une acceptation des termes et conditions qui y sont énoncés. Caractéristiques et Risques des Options Standardisées Avant d'acheter ou de vendre une option, les investisseurs doivent lire une copie des Caractéristiques et Risques des Options Standardisées, également appelé le document d'information sur les options (ODD). Il explique les caractéristiques et les risques des options négociées en bourse. Des copies de ce document peuvent également être obtenues auprès de votre courtier, de tout échange sur lequel les options sont négociées, en passant une commande en ligne. Ou en communiquant directement avec la Société de compensation d'options au 1 N. Wacker Dr. Suite 500, Chicago, Illinois 60606. Vous avez des difficultés à visualiser l'ODD Nous vous recommandons de télécharger et d'installer la dernière version d'Adobe Acrobat Reader. Qui est disponible en téléchargement gratuit. Si vos problèmes persistent, vous pouvez commander une version imprimée ou communiquer avec votre courtier. Commander une version imprimée Cliquez ici pour placer une commande pour la version imprimée du document d'information sur les options. L'ODD est seulement 0.45 plus l'expédition et manipulation. S'il vous plaît permettre 8-10 jours pour la livraison. Ce site Web traite des options négociées en bourse émis par la Société de compensation d'options. Aucune déclaration dans ce site Web ne doit être interprétée comme une recommandation d'achat ou de vente d'un titre ou pour fournir des conseils en matière de placement. Les options comportent des risques et ne conviennent pas à tous les investisseurs. Avant d'acheter ou de vendre une option, une personne doit recevoir une copie des Caractéristiques et Risques des Options Standardisées. Vous pouvez obtenir des exemplaires de ce document auprès de votre courtier, de tout échange sur lequel les options sont négociées ou en communiquant avec la Société de compensation d'options, One North Wacker Dr. Suite 500, Chicago, Illinois 60606 (investisseurs-services). 201 2017 La Société de compensation d'options. Tous droits réservés. Les attributions d'options d'achat d'actions de la CÉO et le calendrier des divulgations volontaires des entreprises David Aboody a, Ron Kasznik b. . École d'études supérieures de gestion, Université de Californie à Los Angeles, Los Angeles, Californie 90095-1481, É.-U. b École d'études supérieures d'affaires, université de Stanford, Stanford, CA 94305-5015, USA Reçu le 3 décembre 1998, révisé le 22 mai 2000, Disponible en ligne 9 Octobre 2000Nous étudions si les PDG gèrent le moment de leurs déclarations volontaires sur les options d'achat d'actions. Nous conjecturons que les PDG gèrent les attentes des investisseurs au sujet des dates d'attribution en retardant les bonnes nouvelles et en précipitant les mauvaises nouvelles. Pour un échantillon de 2 039 octrois d'options de CEO par 572 entreprises avec des horaires fixes de prix, nous documentons les changements dans les cours des actions et les prévisions de bénéfices des analystes autour des attributions d'options qui sont cohérentes avec notre conjecture. Nous fournissons également des preuves plus directes fondées sur les prévisions de bénéfices de la direction publiées avant les dates d'attribution. Nos résultats suggèrent que les PDG prennent des décisions opportunistes de divulgation volontaire qui maximisent leur rémunération en options. Classification JEL Prix d'options d'achat d'actions des dirigeants divulgation volontaire Nous apprécions les commentaires et suggestions utiles des participants à l'atelier de 1998 au Camp d'été de Stanford, Camp de l'automne 1999, Campus d'automne 1999, Université de l'Arizona, Université de l'Arizona, Université de la Colombie-Britannique , Université de Californie à Los Angeles, Université de Columbia, Université d'État de Géorgie, Université du Michigan, Université de New York, Université de Northwestern, Université de Purdue, Université de Rochester, Université du Texas à Austin, Université de Washington et Université de Washington, Kevin Murphy L'arbitre), et Jerry Zimmerman (l'éditeur). Nous apprécions également l'aide à la recherche de Hung-Ken Chien. David Aboody reconnaît le soutien de l'école Anderson à UCLA. Ron Kasznik reconnaît le soutien de l'Initiative de recherche financière, Graduate School of Business, Université de Stanford. Auteur correspondant. Tél. 1-650-725-9740 fax: 1-650-725-6152 Copie de copyright 2000 Elsevier Science BV Tous droits réservés. Règle finale: Information sur le régime de rémunération à base d'actions COMMISSION DES TITRES ET ÉCHANGE 17 CFR Parties 228, 229, 240 et 249 33-8048, 34-45189 No de dossier S7-04-01 DIVULGATION DE L'INFORMATION SUR LE RÉGIME D'INDEMNISATION DES CAPITAUX PROPRES Agence: Commission des valeurs mobilières. Action: Règles finales. Sommaire: Nous adoptons des modifications à la Loi sur les valeurs mobilières de 1934 applicables aux rapports annuels déposés sur les formulaires 10-K et 10-KSB et aux déclarations de procuration et d'information. Les modifications amélioreront la divulgation du nombre d'options, de bons de souscription et de droits en circulation accordés par les participants aux participants aux régimes de rémunération à base de titres de participation, ainsi que le nombre de titres restant à émettre en vertu de ces régimes. Les modifications exigent que les personnes inscrites fournissent ces renseignements séparément pour les régimes de rémunération à base d'actions qui n'ont pas été approuvés par leurs porteurs de titres et qu'ils déposent avec nous des copies de ces régimes, à moins d'importance immatérielle. Dates: Date d'entrée en vigueur: 1er février 2002. Dates de conformité: Les déclarants doivent se conformer aux nouvelles exigences en matière de divulgation pour les rapports annuels sur les formulaires 10-K ou 10-KSB devant être déposés pour les exercices se terminant le 15 mars 2002 ou après De procuration et d'information pour les réunions ou les mesures prises par les porteurs de titres le 15 juin 2002 ou après cette date. Les titulaires peuvent volontairement se conformer aux nouvelles exigences en matière de divulgation avant les dates de conformité. Observations: Les commentaires sur la quotre collection d'informations requises au sens de la Loi sur la réduction de la paperasserie de 1995 doivent être reçus 30 jours après sa publication au Federal Register. Pour plus de renseignements: Mark A. Borges, avocat spécial, Bureau de la réglementation, Division des finances de la Société, par téléphone au (202) 942-2910 ou par écrit à la Securities and Exchange Commission, 450, rue Fifth NW, Washington, DC 20549. Renseignements supplémentaires: Nous adoptons des amendements aux articles 201 1 et 601 2 du Règlement SB, 3 des articles 201 4 et 601 5 du Règlement SK 6 et du Formulaire 10-K, 7 du formulaire 10-KSB 8 et de l'annexe 14A 9 du Règlement sur les valeurs mobilières Exchange Act de 1934. 10 L'annexe 14C 11 de la Loi sur les changes est également touchée par les modifications. 12 I. Introduction Comme l'utilisation de la rémunération en actions a augmenté au cours de la dernière décennie 13, elle a des inquiétudes quant à son impact sur les inscrits et leurs détenteurs de titres. 14 Les subventions et les attributions d'équité peuvent entraîner une réaffectation importante de la propriété entre les détenteurs de titres existants et la direction et les employés. 15 Nos règles actuelles n'exigent pas la divulgation en un seul endroit du nombre total de titres qu'un inscrit a encore disponible pour être émis dans le cadre de tous ses régimes de rémunération à base d'actions. En outre, étant donné que ces régimes peuvent être mis en œuvre sans l'approbation des porteurs de titres, il est possible que les investisseurs ne soient pas en mesure de déterminer la taille totale d'un programme de rémunération à base d'actions de la société. En janvier 2001, nous avons proposé des modifications à nos règles sur la divulgation de la rémunération à base de titres de participation, dans le but de fournir aux investisseurs une présentation plus compréhensible du programme de rémunération à base de titres de participation. 16 Nous avons reçu 31 lettres de commentaires en réponse aux propositions. Bien que la majorité des intervenants a appuyé les propositions, plusieurs ont mis en doute la nécessité d'une divulgation qui, à leur avis, équivalait sensiblement à la divulgation déjà exigée dans les états financiers vérifiés des personnes inscrites. En outre, bon nombre des intervenants de soutien ont offert des suggestions pour affiner les propositions afin de mieux atteindre l'objectif de s'assurer que toute l'information importante sur un programme de rémunération en actions des inscrits est pleinement et clairement divulguée. Nous avons apporté un certain nombre de modifications aux propositions en réponse à ces commentaires. Ces changements sont examinés dans la section II du présent communiqué. Par suite des modifications apportées aujourd'hui, les inscrits doivent inclure un nouveau tableau dans leurs rapports annuels sur formulaire 10-K, 18 ainsi que dans leurs relevés de procuration 19 dans les années où ils soumettent un plan de rémunération pour l'action des porteurs de titres. Ce tableau exige des renseignements sur deux catégories de régimes de rémunération à base d'actions: les régimes qui ont été approuvés par les porteurs de titres et les régimes qui n'ont pas été approuvés par les porteurs de titres. Pour chaque catégorie, l'inscrit doit indiquer le nombre de titres à émettre à l'exercice et le prix d'exercice moyen pondéré de toutes les options, bons de souscription et droits en circulation, ainsi que le nombre de titres restant à émettre Aux termes des régimes de rémunération à base d'actions des inscrits. 20 II. Discussion des modifications A. Contenu de la divulgation 1. Divulgation requise Aux termes des propositions initiales décrites dans la proposition de divulgation, les personnes inscrites devaient divulguer sous forme de tableau plusieurs catégories d'information sur leurs régimes de rémunération à base d'actions, y compris le nombre de titres autorisés pour chaque régime , Le nombre de titres émis, plus le nombre de titres à émettre à l'exercice d'options, de bons de souscription ou de droits en circulation accordés au titre de chaque régime au cours du dernier exercice, le nombre de titres à émettre lors de l'exercice des options en circulation, Des bons de souscription ou des droits octroyés autrement qu'au cours du dernier exercice et le nombre de titres restant disponibles pour une émission future dans le cadre de chaque régime. Les propositions auraient obligé les personnes inscrites à inscrire séparément chaque plan dans le tableau. Nous avons également demandé des commentaires sur la question de savoir si d'autres catégories d'information devraient être incluses dans le tableau. En réponse aux préoccupations selon lesquelles les propositions seraient coûteuses et onéreuses à mettre en œuvre et à reproduire certaines des informations requises dans les états financiers des déclarants, nous avons éliminé les deux premières catégories proposées de divulgation. Nous avons apporté un certain nombre d'autres modifications, y compris un changement qui permet aux personnes inscrites de présenter les informations requises sur une base agrégée. Ces changements sont discutés en détail ci-dessous. En plus des commentaires suggérant que nous réduisions la divulgation proposée, nous avons également reçu des commentaires indiquant la nécessité de nouveaux types de divulgation non proposés à l'origine. Par exemple, plusieurs intervenants ont suggéré d'ajouter une colonne au tableau proposé indiquant le prix d'exercice moyen pondéré des options, des bons de souscription et des droits en circulation. 21 Ces commentateurs ont affirmé que les investisseurs avaient besoin de ces renseignements pour évaluer l'effet dilutif d'un programme de rémunération à base d'actions d'un inscrit. Afin de permettre aux investisseurs de mieux comprendre la dilution et d'améliorer la visibilité de l'information sur les prix d'exercice, nous avons ajouté une colonne au tableau exigeant la divulgation du prix d'exercice moyen pondéré de toutes les options, bons de souscription et droits compensatoires en circulation. 23 Les modifications exigent qu'un inscrit fournisse aux investisseurs la présentation suivante: Information sur le régime de rémunération à base d'actions Les titulaires doivent fournir l'information relative à tout régime de rémunération en actions en vigueur à la fin de l'année financière terminée Prévoit l'attribution de valeurs mobilières d'inscrits ou l'octroi d'options, de bons de souscription ou de droits d'achat des titres des inscrits aux employés de l'inscrit ou de ses sociétés mères, filiales ou affiliées ou à toute autre personne. 26 La divulgation doit également être fournie indépendamment du fait que les titres à émettre en vertu du régime de rémunération à base d'actions soient autorisés mais que les titres non émis de l'inscrit ou les actions rachetées. 2. Divulgation agrégée Plusieurs intervenants ont laissé entendre que nous permettons aux personnes inscrites de fournir la divulgation de données tabulaires requise sur une base agrégée plutôt que plan par plan. 27 Ces commentateurs ont indiqué qu'il serait excessivement onéreux pour de nombreux inscrits si les plans devaient être énumérés séparément dans le tableau. 28 Un autre intervenant a exprimé des préoccupations semblables si les déclarants étaient tenus de ventiler les plans pris en charge à la suite de fusions, de regroupements ou d'autres opérations d'acquisition. 29 Nous sommes persuadés que la divulgation de plan par plan peut être lourde pour de nombreux inscrits. Par conséquent, nous avons révisé le tableau afin de permettre aux personnes inscrites d'agréger la divulgation dans deux catégories générales: les plans de rémunération à base d'actions approuvés par les porteurs de titres et les régimes de rémunération à base d'actions non approuvés par les porteurs de titres. 31 Dans la proposition de divulgation, nous avons demandé comment, lorsqu'une personne inscrite présente un plan de rémunération en actions nouveau ou existant pour l'actionnaire de portefeuille de titres, la divulgation requise du rapport de procuration doit inclure ce plan. Plusieurs intervenants ont suggéré d'élargir le tableau afin d'y inclure des renseignements sur un régime existant sur lequel des mesures supplémentaires sont prises (par exemple, lorsqu'un inscrit demande l'approbation des porteurs de titres pour une augmentation du nombre de titres autorisés en vertu du plan). 33 Ces commentateurs ont indiqué qu'en l'absence de cette exigence, un inscrit qui modifie un régime de rémunération en actions existant pourrait autrement éviter de divulguer des renseignements sur les titres autorisés précédemment aux fins d'émission aux termes du régime. Nous sommes persuadés que les inscrits devraient inclure cette information dans le tableau. Par conséquent, lorsque des mesures sont prises pour modifier un régime existant de rémunération à base d'actions, le tableau devrait inclure des renseignements sur les titres précédemment autorisés à émettre aux termes du régime, soit le nombre de titres à émettre à l'exercice et l'exercice moyen pondéré Le prix, les options en cours, les bons de souscription et les droits accordés antérieurement en vertu du régime et le nombre de titres restant à émettre en vertu du régime. 34 La personne inscrite ne doit pas inclure dans le tableau le nombre de titres additionnels faisant l'objet de la modification du régime pour lesquels l'inscrit demande l'approbation d'un porteur de titres. 3. Dispositions individuelles et plans supposés Dans la proposition de libération, nous avons demandé des commentaires quant à la pertinence de la divulgation agrégée des ententes individuelles de rémunération en actions. Nous avons également demandé si une divulgation agrégée devrait être autorisée lorsqu'un inscrit avait pris un plan de rémunération en actions dans le cadre d'une fusion, d'une consolidation ou d'une autre opération d'acquisition. Plusieurs intervenants se sont prononcés en faveur d'une présentation agrégée des ententes individuelles 36 et un intervenant était favorable à l'agrégation de la divulgation des ententes individuelles avec la divulgation des régimes de rémunération à base d'actions. 37 D'autres intervenants se sont prononcés en faveur d'une divulgation agrégée des plans présumés. 38 Conformément à la notion de divulgation globale des régimes, nous avons révisé le tableau afin de permettre aux déclarants de combiner des renseignements sur les ententes individuelles 39 et sur les plans supposés (où d'autres subventions et attributions peuvent être accordées en vertu de ces régimes) 40, La catégorie de divulgation appropriée. 4. Plans approuvés par un porteur de titres autres que de sécurité Les modifications exigent que la personne inscrite identifie et décrit brièvement, sous forme narrative, les caractéristiques importantes de chaque régime de rémunération en actions en vigueur à la fin du dernier exercice terminé qui a été adopté Sans l'approbation du détenteur de titres. 42 Plusieurs intervenants ont appuyé cette exigence 42, mais un intervenant a laissé entendre que nous permettons aux personnes inscrites de faire un renvoi à la partie de leur déclaration SFAS 123 requise contenant des descriptions de leurs plans approuvés par des détenteurs de titres autres que de titres pour satisfaire à cette exigence. 43 Étant donné qu'elle rationalise la conformité et garantit que les investisseurs ont accès annuellement à ces renseignements, nous permettons aux inscrits de satisfaire aux exigences de divulgation de cette façon. 45 Le renvoi doit indiquer le ou les plans spécifiques dans la divulgation SFAS 123 requise qui n'ont pas été approuvés par les porteurs de titres. Compte tenu de cette modification, nous avons éliminé la disposition qui aurait permis à un inscrit de satisfaire à cette exigence de divulgation en identifiant simplement le dossier contenant une description narrative du régime dans les années suivant la divulgation initiale. 5. Détenteurs étrangers Certains intervenants se sont renseignés sur l'applicabilité des propositions aux inscrits étrangers. Historiquement, nous avons appliqué une norme plus souple aux inscrits étrangers que les inscrits nationaux dans le domaine de la divulgation de la rémunération des cadres supérieurs. Par exemple, les personnes inscrites à l'étranger ne doivent pas divulguer les renseignements sur la rémunération de la haute direction sur une base individuelle, à moins qu'ils ne la divulguent de cette manière en vertu de la législation du pays d'origine ou autrement. 46 Nous ne jugeons pas nécessaire de modifier notre traitement historique de la divulgation de la rémunération des membres de la haute direction 47, et nous n'allons donc pas étendre les modifications aux inscrits étrangers pour le moment. B. Relations avec la divulgation comptable Nous avons apporté des changements importants aux propositions en réponse aux arguments avancés par plusieurs intervenants selon lesquels la documentation comptable actuelle fournit une information adéquate sur la rémunération à base d'actions. 49 Nous convenons que nous devrions nous efforcer de minimiser les divulgations redondantes en vertu des principes comptables généralement reconnus et de nos règles, lorsque c'est possible. En conséquence, nous avons révisé les propositions et n'exigent pas la divulgation du nombre de titres autorisés à émettre aux termes de chaque régime de rémunération en actions 50 et du nombre de titres émis, plus le nombre de titres à émettre lors de l'exercice des options, Droits accordés, dans le cadre de chaque régime au cours du dernier exercice financier. 51 Le tableau révisé fournira des renseignements utiles aux investisseurs qui ne sont pas toujours disponibles dans les états financiers d'une personne inscrite. 52 Indique si un plan de rémunération à base d'actions a été approuvé par les porteurs de titres 53 le nombre total de titres disponibles pour une émission future dans le cadre d'un programme de rémunération en actions 54 d'inscrits et le nombre d'options et d'autres valeurs mobilières accordées ou attribuées à des non - Compensatoires. Étant donné que ces renseignements peuvent être importants pour les investisseurs dans la prise de décisions éclairées en matière de vote et d'investissement, nous croyons qu'il est approprié d'exiger que tous les inscrits assujettis aux rapports de la Loi sur les changes les divulguent régulièrement. Même lorsque des informations telles que le nombre de titres à émettre à l'exercice et le prix d'exercice moyen pondéré des options, bons de souscription et droits en circulation sont disponibles, elles ne sont pas transparentes pour les investisseurs. 56 Les modifications améliorent l'accessibilité de ces renseignements, ce qui facilite l'évaluation par les investisseurs de l'incidence des politiques et des pratiques de rémunération des sociétés inscrites. En outre, les modifications présentent les informations dans les catégories - les plans qui ont été approuvés par les porteurs de titres et les plans qui n'ont pas été approuvés par les détenteurs de titres - que les investisseurs ont demandé. 57 Le tableau ci-dessous illustre les exigences actuelles d'information financière SFAS 123 pour la rémunération à base d'actions 58 et la nouvelle information exigée par les modifications adoptées aujourd'hui, ajustée pour réduire au minimum les redondances entre les deux. Information sur la rémunération en actions Élément requis par le SFAS 123 Obligatoire au titre de l'élément 201 Divulgation par catégorie: les régimes approuvés par les porteurs de titres et les régimes non approuvés par les porteurs de titres. Peut être incorporé par renvoi dans le rapport annuel sur formulaire 10-K en incluant dans la procuration. C. Emplacement de la divulgation Comme il est proposé, les inscrits doivent inclure le tableau dans la procuration chaque fois qu'ils présentent un plan de rémunération pour les actionnaires et dans le rapport annuel sur formulaire 10-K pour toutes les autres années. Dans la proposition de libération, nous avons demandé des commentaires sur la question de savoir si l'emplacement proposé de la divulgation était approprié. La plupart des intervenants ont suggéré que, pour plus de cohérence et pour éviter toute confusion, nous devrions exiger la divulgation dans le même document chaque année. 59 En ce qui a trait à la pertinence de l'information lors de l'élection des administrateurs, plusieurs intervenants ont laissé entendre que nous devions être divulgués dans la procuration dans tous les cas, même si un inscrit ne soumettait pas de plan de rémunération à l'actionnaire. 60 D'autres intervenants ont toutefois recommandé que nous n'exigions la divulgation que dans le rapport annuel sur formulaire 10-K. 61 Bien que l'idée d'exiger la divulgation dans un seul endroit soit attrayante, nous avons choisi de ne pas le faire pour plusieurs raisons. Si nous adoptions une exigence selon laquelle le tableau ne figure que dans les états de procuration, un nombre important de sociétés dont les obligations de déclaration découlent uniquement de l'alinéa 15d) de la Loi sur les bourses62 ne seraient pas assujetties à cette exigence. Ces sociétés ne sont pas tenues de préparer et de déposer des états de procuration. En outre, nous ne sommes pas persuadés qu'en règle générale, la divulgation proposée est importante pour les décisions de vote des porteurs de titres autres que celles relatives aux régimes de rémunération. 63 Nous ne pensons pas non plus que le tableau devrait figurer exclusivement dans le rapport annuel sur formulaire 10-K. Bien que le rapport annuel sur le formulaire 10-K soit déposé auprès de nous, un inscrit n'est pas tenu de le remettre aux porteurs de titres. 64 Ainsi, les détenteurs de valeurs mobilières doivent prendre des mesures positives pour obtenir les renseignements. De plus, limiter le tableau au rapport annuel sur le formulaire 10-K rendrait la divulgation erronée dans les cas où l'information serait utile aux investisseurs pour évaluer le bien-fondé d'un plan de rémunération soumis à l'action des porteurs de titres. 66 Nous avons conclu que la meilleure façon de promouvoir la cohérence, la clarté et le placement pertinent des nouvelles informations consiste à exiger que le tableau soit inclus chaque année dans le rapport annuel d'une personne inscrite sur formulaire 10-K 67 et, La personne inscrite présente un plan de rémunération pour l'action des porteurs de titres. 68 Dans les cas où un inscrit est tenu d'inclure les renseignements dans les deux documents déposés, il peut satisfaire à son obligation de divulgation de renseignements au titre du formulaire 10-K en y incorporant les renseignements exigés par renvoi dans sa déclaration de procuration définitive, Au plus tard 120 jours après la fin de l'exercice visé par le formulaire 10-K. 69 D. Dépôt de copies de plans approuvés par un détenteur de titres non liés à la sécurité Dans la proposition de libération, nous avons demandé si, à la place ou en plus de l'information narrative requise pour un plan de rémunération à base d'actions qui a été adopté sans l'approbation Des porteurs de titres, un inscrit doit être tenu de déposer une copie du plan en pièce jointe au rapport annuel de l'inscrit sur le formulaire 10-K pour l'exercice au cours duquel le régime a été adopté. 70 Plusieurs intervenants se sont prononcés en faveur d'une exigence de dépôt en plus de demander aux inscrits de fournir une description narrative des caractéristiques de certains régimes de rémunération à base d'actions approuvés par des porteurs. 71 L'article 601 (b) (10) du Règlement S-K 72 exige que les personnes inscrites déposent des contrats importants comme pièces jointes à bon nombre de leurs documents déposés en vertu de la Securities Act de 1933 (la Loi sur les valeurs mobilières) et de la Loi sur les changes. La disposition de l'article 601 b) 10) iii) stipule que tout contrat de gestion ou tout autre plan, contrat ou arrangement compensatoire, y compris, mais sans s'y limiter, les plans relatifs aux options, aux bons de souscription ou aux droits, aux pensions, La rémunération différée ou la prime, l'incitatif ou la participation aux bénéfices dans laquelle un administrateur ou l'un des membres de la haute direction visés de l'inscrit participe sont réputés importants et doivent être déposés. quot 73 L'alinéa 601b) (10) iii) Un autre contrat de gestion ou tout autre plan, contrat ou arrangement compensatoire dans lequel un autre membre de la haute direction de l'inscrit participe doit être déposé à moins d'importance ou d'importance significative. quot 74 Certains intervenants ont exprimé leur préoccupation quant au fait que les Qui excluent les dirigeants et les administrateurs, ne relèvent souvent pas de ces dispositions. 75 Nous croyons que cette préoccupation a du mérite. Par conséquent, nous avons modifié l'article 601 (b) (10) afin d'obliger les personnes inscrites à déposer un plan de rémunération à base d'actions adopté sans l'approbation des porteurs de titres auquel un employé (administrateur ou administrateur de l'inscrit) En montant ou en importance. 76 Le respect de cette exigence devrait permettre aux investisseurs de disposer d'importants plans non liés à la sûreté. 77 En plus de la description narrative requise des plans approuvés par les détenteurs de titres autres que de valeurs mobilières, les investisseurs devraient avoir accès à des renseignements complets sur les régimes de rémunération des principaux actionnaires inscrits. III. Analyse de la Loi sur la réduction de la paperasserie Les modifications contiennent une quotcollection d'exigences d'information au sens de la Paperwork Reduction Act de 1995, 78 ou PRA. Nous avons publié un avis demandant des commentaires sur la collecte des renseignements requis dans la proposition de communication et soumis ces exigences au Bureau de la gestion et du budget ou à la CAMO pour examen. 79 Par la suite, la CAMO a approuvé les exigences de collecte d'information proposées. Comme nous l'avons vu dans la section I ci-dessus, nous avons reçu plusieurs lettres de commentaires sur les propositions. Nous avons apporté un certain nombre de modifications aux propositions en réponse à ces commentaires. Par conséquent, nous révisons nos prévisions budgétaires antérieures. Nous soumettons les estimations révisées à la CAMO pour approbation. 80 Une agence ne peut pas mener ou parrainer, et une personne n'est pas tenue de répondre à une collecte d'information, à moins qu'elle ne présente un numéro de contrôle OMB actuellement valide. A. Résumé des modifications Les modifications requièrent la présentation sous forme de tableaux du nombre de titres à émettre à l'exercice et du prix d'exercice moyen pondéré de toutes les options, bons de souscription et droits en circulation dans le cadre des régimes de rémunération des titulaires d'actions, Des titres restant disponibles aux fins d'émission future en vertu de ces régimes et certains renseignements connexes. La divulgation se fait en deux catégories: les plans qui ont été approuvés par les porteurs de titres et les plans qui n'ont pas été approuvés par les porteurs de titres. Les déclarants doivent inclure le tableau dans leurs rapports annuels sur les formulaires 10-K ou 10-KSB et, en outre, dans leurs rapports de procuration ou d'information dans les années où ils soumettent un plan de rémunération pour l'action des porteurs de titres. Les personnes inscrites doivent également déposer auprès de nous des copies de leurs plans approuvés par des détenteurs de titres autres que de sécurité, à moins d'importance ou d'importance. La préparation et le dépôt d'un rapport annuel sur le formulaire 10-K ou 10-KSB est une collection d'information. De même, la préparation, le dépôt et la diffusion d'une procuration ou d'une déclaration d'information constituent une collection d'informations. 81 La collecte de renseignements est obligatoire pour tous les inscrits et il n'y a pas de période de conservation obligatoire pour les renseignements recueillis. La collecte d'informations ne sera pas confidentielle. B. Résumé des lettres de commentaires et des révisions aux propositions Nous avons demandé des commentaires sur l'analyse de l'ARP contenue dans la proposition de rapport. Nous avons reçu six lettres de commentaires traitant spécifiquement du fardeau administratif estimatif associé aux collections d'information. 82 Ces intervenants ont indiqué que le temps requis pour se conformer aux propositions serait important pour de nombreux inscrits et sensiblement supérieur à nos estimations. Un intervenant a estimé que, si elle était adoptée, les propositions ajouteraient au moins quatre pages à ses documents d'information et, si la divulgation apparaissait dans la procuration, entraînerait des coûts d'impression additionnels de 100 000 et des frais supplémentaires de 200 000 pour les pages supplémentaires. 83 Un autre intervenant a suggéré que nous compensions toute augmentation des coûts pour les inscrits en éliminant les exigences actuelles qui n'entraînent pas la divulgation d'informations utiles. 84 Un troisième intervenant a suggéré d'envisager de fournir un modèle de divulgation aux petites entreprises afin de réduire leur fardeau de conformité. 85 En réponse à ces commentaires, nous avons apporté un certain nombre de modifications aux propositions, notamment en éliminant deux des colonnes tabulaires proposées et en permettant la divulgation agrégée. Nous permettons également aux détenteurs de certificats qui ne sont pas des porteurs de titres de décrire les modalités importantes de ces régimes en faisant référence à leur divulgation SFAS 123. Ces changements rationaliseront la conformité et, par conséquent, réduiront le fardeau des inscrits. Bien que les modifications requièrent le dépôt de plans de rémunération à base d'actions approuvés par des détenteurs de titres autres que des titres de créance, à moins d'un montant ou d'une importance significative, cela ne devrait pas augmenter considérablement la charge pour les inscrits, car ces documents sont facilement disponibles et seront déposés par voie électronique. C. Révisions aux estimations des rapports et du fardeau des coûts En raison des changements décrits ci-dessus et d'une modification de l'une de nos hypothèses sous-jacentes 86, les estimations des rapports et du fardeau de coûts pour les collections d'information ont changé. Par conséquent, nous avons révisé les exigences de collecte d'information estimatives qui ont été soumises initialement à la CAMO. En ce qui concerne les formulaires 10-K et 10-KSB, nous avons augmenté notre estimation de 1 174 heures dans le cas du formulaire 10-K et augmenté notre estimation de 707 heures dans le cas du formulaire 10-KSB. En ce qui concerne les annexes 14A et 14C, nous avons réduit notre estimation de 13 139 heures dans le cas de l'annexe 14A et diminué notre estimation de 139 heures dans le cas de l'annexe 14C. Nos estimations sont fondées sur plusieurs hypothèses. Premièrement, nous estimons qu'environ 60 87 des inscrits qui déposent un rapport annuel sur le formulaire 10-K ou 10-KSB maintiennent des plans de rémunération en actions et devront fournir le nouveau tableau de divulgation. 88 Nous estimons également qu'environ 20 89 de ces titulaires d'enregistrements détiennent des régimes de rémunération à base de titres de participation qui ne sont pas des porteurs de titres et qui seront donc tenus de décrire les caractéristiques matérielles de ces régimes et de nous transmettre des copies sans importance ni importance. 90 Nous estimons en outre que, pour une année donnée, 30 91 des titulaires de régimes de rémunération à base d'actions adoptent un nouveau régime ou modifient un régime existant afin d'augmenter le nombre de titres autorisés aux fins d'émission aux termes du régime, . 92 Dans cette situation, nous avons supposé qu'une personne inscrite doit inclure la divulgation requise dans son rapport de procuration ou son énoncé d'information et incorporer cette information par renvoi dans son rapport annuel sur formulaire 10-K ou 10-KSB. Nous estimons qu'environ 28 93 des inscrits qui déposent des rapports annuels sur le formulaire 10-K ou 10-KSB sont assujettis à l'article 13 de la Loi sur les bourses en vertu de l'alinéa 15d) de la Loi sur les bourses et ne déposent donc pas de procuration Ou des déclarations d'information94, et qu'environ 98 95 des inscrits déposent des rapports de procuration plutôt que des renseignements dans le cadre de leur assemblée annuelle des porteurs de titres auxquels les administrateurs doivent être élus. 96 Enfin, nous estimons que la préparation de la divulgation tabulaire requise prendra deux heures de charge et, si nécessaire, la préparation de la description des caractéristiques matérielles d'un plan de rémunération équitable approuvé par un détenteur de titres prendra deux heures de charge. 97 Notre estimation révisée des heures totales de charge des collections d'information requises est présentée dans le tableau suivant. En plus des heures internes qu'ils consacrent, 108 nous nous attendons à ce que les personnes inscrites retiennent un avocat à l'extérieur pour aider à la préparation des divulgations requises. 109 Le coût total en dollars du fait de se conformer au formulaire 10-K et au formulaire 10-KSB, révisé pour inclure les coûts des conseillers juridiques externes attendus des modifications, est estimé à 2 345 268 300 pour le formulaire 10-K, soit une augmentation de 1 758 300 du fardeau annuel actuel de 2 343 510 000 et 562 605 100 pour Form10-KSB, soit une augmentation de 617 100 de la charge annuelle actuelle de 561 988 000. The total dollar cost of complying with Regulations 14A and 14C, revised to include outside counsel costs expected from the amendments, are estimated to be 93,254,500 for Regulation 14A, an increase of 640,500 from the current annual burden of 92,614,000, and 2,382,200 for Regulation 14C, an increase of 13,200 from the current annual burden of 2,369,000. 110 D. Request for Comment We request comment in order to (a) evaluate whether the collections of information are necessary for the proper performance of our functions, including whether the information will have practical utility, (b) evaluate the accuracy of our estimate of the burden of the collections of information, (c) determine whether there are ways to enhance the quality, utility and clarity of the information to be collected and (d) evaluate whether there are ways to minimize the burden of the collections of information on those who respond, including through the use of automated collection techniques or other forms of information technology. 111 Any member of the public may direct to us any comments concerning the accuracy of this burden estimate and any suggestions for reducing this burden. Persons who desire to submit comments on the collection of information requirements should direct their comments to the OMB, Attention: Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Washington, DC 20503, and send a copy of the comments to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street NW, Washington, DC 20549, with reference to File No. S7-04-01. Requests for materials submitted to the OMB by us with regard to this collection of information should be in writing, refer to File No. S7-04-01 and be submitted to the Securities and Exchange Commission, Records Management, Office of Filings and Information Services, 450 Fifth Street NW, Washington, DC 20549. Because the OMB is required to make a decision concerning the collections of information between 30 and 60 days after publication, your comments are best assured of having their full effect if the OMB receives them within 30 days of publication. IV. Costs and Benefits of Final Rules The use of equity compensation, particularly stock options, has grown significantly during the last decade. 112 Consequently, existing security holders may face higher levels of dilution of their ownership interests as some companies issue more shares of their stock to employees. 113 Since the distribution of equity may result in a significant reallocation of ownership in an enterprise between existing security holders and management and employees, investors have a strong interest in understanding a registrants equity compensation program. 114 Until recently, security holder approval was required for most equity compensation plans. However, as approval requirements have been relaxed 115 and as opposition to these plans has grown, 116 an increasing number of registrants have adopted stock option plans without the approval of security holders, 117 thus potentially obscuring investors ability to assess the dilutive effect of a registrants equity compensation program. Our current rules do not require that a registrant disclose specific information about its non-security holder-approved equity compensation plans. 118 Nor do current financial reporting disclosure rules require that non-security holder-approved plans be identified. 119 Consequently, it is often difficult for investors to determine whether they have adequate information about a registrants equity compensation program. In response to ongoing investor concerns, 120 in January 2001 we proposed amendments to our rules to enhance the quality of information available to investors about equity compensation plans. 121 B. Response to Comment Letters In the Proposing Release, we noted that registrants would incur costs in complying with the proposals. We also noted that these costs, to the extent that they could be estimated, would not be significant, as the required disclosure can be derived from information that is readily available to registrants through the routine administration of their equity compensation programs. We requested comment on the costs and benefits of the proposals. Of the comment letters we received, 22 respondents discussed the costs and benefits associated with the proposals. 122 Most of the comment letters addressed these matters in general terms. Several respondents asserted that, because the proposals duplicated disclosure already required in registrants audited financial statements, the cost of providing information to investors would increase without any useful benefit. 123 In response to these comments, we have revised the proposals to eliminate redundant disclosure and to minimize the overlap with financial reporting requirements, thereby reducing the cost of compliance. As discussed in Subsection C below, the amendments will enhance the quality of the disclosure available to investors about the dilutive effect of registrants equity compensation programs. Other respondents, while generally supporting the proposals, suggested that we scale back the required disclosure to reduce compliance costs. For example, some respondents indicated that requiring plan-by-plan disclosure would create an undue burden for registrants without providing an incremental benefit to investors. 124 In response to these comments, we have revised the proposals to permit aggregated disclosure of information about plans and individual equity compensation arrangements and to allow the required narrative summary of a non-security holder-approved stock option plan to be provided by a cross-reference to a description of the plan in a registrants financial statements. 125 Some respondents suggested that we expand the required disclosure to include additional information, such as weighted-average exercise price data and information about existing equity compensation plans being submitted for security holder action. They also requested that we require the filing of non-security holder-approved equity compensation plans. We have made these changes. 126 Most respondents suggested that the proposed disclosure be required in the same document each year, to both streamline compliance and to minimize investor confusion. While we carefully considered this suggestion, ultimately we concluded that these concerns were outweighed by the need for consistent application of the disclosure to all registrants. 127 Accordingly, the required disclosure is to be provided each year in a registrants annual report on Form 10-K or 10-KSB and, additionally, in the proxy or information statement in years when the registrant is submitting a compensation plan for security holder action. 1. Disclosure of Non-Security Holder-Approved Plans New Item 201(d)(1) of Regulation S-K and Regulation S-B requires registrants to disclose whether they have one or more non-security holder-approved stock option plans by separately providing information about the dilutive effects of these plans. New Item 201(d)(3) of Regulation S-K and Regulation S-B requires that this disclosure be accompanied by a narrative summary of the material features of each non-security holder-approved plan. Also, as amended Item 601(b)(10) of Regulation S-K and Regulation S-B requires registrants to file a copy of any non-security holder-approved equity compensation plan with us unless the plan is immaterial in amount or significance. Presently, it is difficult for investors to ascertain whether a registrant has adopted a non-security holder approved stock option plan. 128 If a plan is broad-based, restricts or prohibits the participation of officers and directors and does not permit the grant of tax-qualified stock options, for instance, it is unlikely to require security holder approval. Frequently, investors must examine the required public filings of a registrant made over several years in order to identify the registrants stock option plans and determine if they have been approved by security holders. Even when a non-security holder-approved plan is identified, information about the plan may be limited since it may not be subject to our disclosure rules and may not be filed with us. The amendments will enable investors to ascertain if a registrant has adopted a non-security holder approved plan and highlight a description of the plans material features. 2. Tabular Disclosure New Item 201(d)(1) of Regulation S-K and Regulation S-B requires registrants to disclose, for their entire equity compensation program as in effect as of the end of the last completed fiscal year, the number of securities underlying, and the weighted-average exercise price of, outstanding options, warrants and rights and the number of securities remaining available for future issuance. This disclosure is to be made separately for plans approved by security holders and plans that have not been approved by security holders. The required disclosure will assist investors in assessing the potential dilution from a registrants equity compensation program in two ways. First, the required disclosure of the number of securities to be issued upon the exercise, and weighted-average exercise price, of all outstanding options, warrants and rights will enable investors to view this information in two categories: plans approved by security holders and plans not approved by security holders. While numerical and weighted-average exercise price information is presently available in the footnotes to a registrants audited financial statements, this disclosure does not separately identify the potential dilutive effect of any non-security-holder approved stock option plans. Second, disclosure of the number of securities available for future issuance under a registrants equity compensation plans will enable investors to better calculate the quotoverhangquot 129 resulting from the registrants entire equity compensation program. Under existing disclosure requirements, it is not always possible to make this calculation. 130 This information may be useful to investors where the cost of a registrants equity compensation plan exceeds its incentive effects. The new disclosure also will enhance the ability of investors and others, such as proxy review firms, to monitor the impact of a board of directors actions concerning equity compensation matters. Access to this information will make it easier for investors to determine both the portion of the current value of a business that will be transferred to option holders upon exercise and the potential allocation of future cash flow rights. 131 While the economic impact of outstanding options, warrants and rights is incorporated into the presentation of diluted earnings-per-share under SFAS 128, this calculation differs from the new disclosure in several ways. First, it does not isolate quotcompensatoryquot instruments. Typically, the diluted earnings-per-share figure combines the dilutive effect of compensatory options, warrants and rights with that of other outstanding convertible securities. Second, SFAS 128 employs the so-called quottreasury stock methodquot to compute diluted earnings-per-share. Among other things, this methodology excludes quotout-of-the-moneyquot options and warrants from the computation and requires certain assumptions about the timing of option exercises and the use of the assumed proceeds of exercise to arrive at the total number of potentially dilutive securities. Finally, while weighted-average exercise price information is available for various option groupings under SFAS 123, it does not differentiate between equity compensation plans that have been approved by security holders and plans that have not been approved by security holders. The amendments will increase the cost of preparing annual reports on Form 10-K and 10-KSB and proxy and information statements. Registrants must compile the required information, place it in the appropriate category and prepare the required table. In addition, registrants with non-security holder-approved stock option plans must prepare a narrative summary of the material features of each plan and file a copy of any material plan with us. Registrants also will incur an increase in printing and distribution costs as a result of the amendments. While several respondents indicated that the cost estimates in the Proposing Release were too low, 132 only one provided an alternative cost estimate. This respondent stated that compliance could result in additional costs approximating 300,000 in years when disclosure was required in its proxy statement. 133 The respondents estimate is no longer relevant because of the substantial revisions that we have made to the proposals, as discussed in Subsection B above. The required disclosure will provide investors both with new information and with an alternative means for analyzing currently available information. With respect to the dilution disclosure, we believe that the compliance costs are warranted because this information is not otherwise available to investors. Moreover, these costs should be minimal because this information can be derived from information that is readily available to registrants through the routine administration of their equity compensation programs. With respect to the information concerning non-security holder-approved stock option plans, much of the required tabular disclosure, such as the number of outstanding options, warrants and rights and the related weighted-average exercise price data, is already maintained for purposes of satisfying financial reporting requirements. The amendments merely require registrants to disclose this information on the basis of whether or not the related plan has been approved by security holders. In addition, many registrants summarize the material features of their equity compensation plans to satisfy their SFAS 123 disclosure obligations. Indeed, one respondent indicated that the amendments would result in only minimal additional costs to registrants because, in their experience, most registrants already maintain the required information in order to comply with SRO rules and for effective plan administration. 134 Although the amendments will increase the length of registrants annual reports on Form 10-K and 10-KSB, as well as their proxy and information statements, generally this should not have a major impact on a registrants printing and distribution costs. We have revised the proposals to reduce and standardize the size of the required tabular disclosure. These revisions should ensure that registrants do not incur significant additional printing and postage charges to prepare and distribute their proxy or information statements to security holders. While in most instances, the required disclosure should not exceed one-third of a page, where a registrant has one or more non-security holder-approved stock option plans, the disclosure may be longer. These registrants may incur additional expense to print and distribute their proxy or information statement materials. While we do not expect these costs to be significant, we have estimated these amounts to be approximately 750 per registrant. 135 For the reasons discussed above, we do not believe that the amendments will lead to significant compliance costs for registrants. 136 Notwithstanding the foregoing, we have adjusted our initial cost estimates to reflect the revisions made to the proposals. Because the size and scope of equity compensation programs vary among registrants, it is difficult to provide an accurate cost estimate with which all parties will agree however, we estimate that each of the approximately 8,400 registrants 137 subject to the amendments will spend an average of approximately one to two hours each year and incur an average annual cost of approximately 393 138 to prepare the disclosure. Thus, the aggregate cost of the amendments is estimated to be approximately 3,300,000. Based on the information provided in the comment letters and our own analysis, we believe that the amendments will enhance the quality of disclosure available to investors about registrants equity compensation plans, thereby leading to better-informed investment and voting decisions. These benefits are difficult to quantify. We also believe that these benefits will justify the minimal costs of compliance. V. Final Regulatory Flexibility Analysis This Final Regulatory Flexibility Analysis, or FRFA, has been prepared in accordance with the Regulatory Flexibility Act. 139 This FRFA relates to rule amendments adopted under the Exchange Act that revise the disclosure requirements with respect to registrants equity compensation plans. Specifically, the amendments revise Item 201 of Regulation S-B, Item 201 of Regulation S-K and Form 10-K, Form 10-KSB, Exchange Act Rule 14a-3 and Schedule 14A under the Exchange Act to require tabular disclosure of the number and weighted-average exercise price of all outstanding options, warrants and rights under a registrants equity compensation plans, as well as the number of securities remaining available for future issuance under these plans and certain related information. Disclosure is to be made in two categories: plans that have been approved by security holders and plans that have not been approved by security holders. Registrants must include the table in their annual reports on Form 10-K or 10-KSB, as well as in their proxy or information statements in years when they are submitting a compensation plan for security holder action. Copies of most equity compensation plans will be required to be filed with us for public inspection. A. Need for the Amendments The increased use of equity compensation has raised investor concerns about the potential dilutive effect of a registrants equity compensation plans, the absence of full disclosure to security holders about these plans and the adoption of many plans without the approval of security holders. These concerns may be especially acute for investors in small entities, which use equity compensation in order to attract and retain key employees and to preserve scarce cash resources. 140 The amendments enhance the quality of information available to investors about a registrants equity compensation plans. B. Significant Issues Raised by Public Comment A summary of the Initial Regulatory Flexibility Analysis, or IRFA, appeared in the Proposing Release. 141 We requested comment on any aspect of the IRFA, including the number of small businesses that would be affected by the proposals, the nature of the impact, how to quantify the number of small entities that would be affected and how to quantify the impact of the proposals. We received no comment letters responding to that request. C. Small Entities Subject to the Amendments Exchange Act Rule 0-10 142 defines the term quotsmall businessquot to be an issuer that, on the last day of its most recent fiscal year, has total assets of 5 million or less. 143 There are approximately 770 issuers that are subject to the reporting requirements of Section 13 of the Exchange Act that have assets of 5 million or less. 144 Only small businesses that have a reporting obligation under the Exchange Act and adopt or maintain an equity compensation plan will be subject to the amendments. We estimate that there are approximately 460 entities that have total assets of 5 million or less that meet this criteria. 145 D. Projected Reporting, Recordkeeping and Other Compliance Requirements The amendments impose new reporting requirements by requiring specific annual disclosure by all registrants, including quotsmall businesses, quot concerning their equity compensation plans in effect as of the end of the most recently completed fiscal year. Consequently, the amendments will increase the costs associated with the preparation of the disclosure included in annual reports on Form 10-K or 10-KSB and furnished to security holders in proxy and information statements. Specifically, the amendments require registrants to disclose the number and weighted-average exercise price of all outstanding options, warrants and rights under a registrants equity compensation plans, as well as the number of securities remaining available for future issuance under these plans and certain related information. Disclosure is to be made in two categories: plans that have been approved by security holders and plans that have not been approved by security holders. Since this information can be derived from information that is readily available to registrants through the routine administration of their equity compensation programs, we do not expect these additional costs to be significant. We do not anticipate that the amendments will impose any significant recordkeeping requirements in addition to those already required under the Exchange Act. The information to be disclosed can be derived from information that is readily available to registrants through the routine administration of their equity compensation programs. All registrants with equity compensation plans have various legal, financial reporting and other disclosure obligations that require maintenance of information regarding these plans similar to that covered by the amendments. E. Agency Action to Minimize Effect on Small Entities As required by Sections 603 and 604 of the Regulatory Flexibility Act, we have considered alternatives that would accomplish the stated objectives, while minimizing any significant adverse impact on small entities. In connection with the amendments, we considered several alternatives, including the following: establishing different compliance and reporting requirements that take into account the resources of small entities clarifying, consolidating or simplifying compliance and reporting requirements under the rules for small entities using performance rather than design standards and exempting small entities from all or part of the requirements. Overall, the amendments are intended to assist investors in understanding a registrants equity compensation policies and practices. The quality of information available about the potential dilutive effect of a registrants equity compensation plans is relevant to investors in both small and large entities. Different compliance or reporting requirements for small entities are not appropriate because small entities may use equity compensation plans to a greater extent than large entities to preserve scarce cash resources. 146 In addition, it is not feasible to further clarify, consolidate or simplify the amendments for small entities because the amendments require only minimal information about a registrants equity compensation plans. Because uniformity and comparability are important, especially where small entities have equity compensation plans, we do not propose to use performance standards to specify different requirements for small entities. Finally, we believe that the amendments should apply equally to all entities required to disclose information, in order to safeguard protection of all investors. VI. Analysis of Impact on the Economy, Burden on Competition and Promotion of Efficiency, Competition and Capital Formation Section 23(a)(2) of the Exchange Act 147 requires us, when adopting rules under the Exchange Act, to consider the impact that any new rule will have on competition. In addition, Section 23(a)(2) prohibits us from adopting any rule that will impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act. We have considered the amendments in light of the standards in Section 23(a)(2). We requested comment on any anti-competitive effects of the proposals. We received no comment letters responding to that request. The amendments may have a disparate impact on registrants that use equity compensation extensively, such as smaller firms or registrants in certain industry sectors (such as high-technology companies), as compared to registrants with limited or no equity compensation programs. 148 Thus, we are sensitive to the concern that registrants with a greater compliance obligation will be placed at a competitive disadvantage. In addition, several commenters, while not specifically addressing this issue, did argue that the new disclosure would be duplicative of information currently required to be included in registrants audited financial statements. In response to these concerns, we have revised the proposals to eliminate redundant requirements and to streamline the compliance process. Because these changes should enable registrants to keep compliance costs low, we do not believe that the amendments will impose a significantly disproportionate cost on smaller firms or high-technology companies. Section 2(b) of the Securities Act and Section 3(f) of the Exchange Act 149 require us, when engaging in rulemaking requiring us to consider or determine whether an action is necessary or appropriate in the public interest, to consider, in addition to the protection of investors, whether the action will promote efficiency, competition and capital formation. We have considered the amendments in light of the standards in these provisions. We requested comment on how the proposals would affect efficiency, competition and capital formation. We received no comment letters responding to that request. It is widely believed that equity compensation, particularly instruments such as stock options, can be used to align the interests of employees and security holders, thereby promoting effective corporate governance. 150 Because an equity compensation plan may necessarily have an unintended dilutive effect on the existing ownership interests, however, it is important that the plan be closely monitored to ensure that its cost is commensurate with its benefit to investors. The amendments are intended to enhance the quality of disclosure about registrants equity compensation programs that is available to investors. Increasing the transparency of these programs should result in better monitoring by investors. This should result in better corporate governance, thereby increasing the efficiency of the organization. This should promote capital formation. VII. Statutory Authority The amendments contained in this release are being adopted under the authority set forth in Sections 3(b) and 19(a) of the Securities Act and Sections 12, 13, 14(a), 15(d) and 23(a) of the Exchange Act. List of Subjects in 17 CFR Parts 228, 229, 240 and 249 Reporting and recordkeeping requirements, Securities. TEXT OF RULE AMENDMENTS In accordance with the foregoing, Title 17, Chapter II of the Code of Federal Regulations is amended as follows: PART 228 - INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS 1. The general authority citation for Part 228 continues to read as follows: Authority . 15 U. S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn, 77sss, 78 l . 78m, 78n, 78o, 78u-5, 78w, 78 ll . 80a-8, 80a-29, 80a-30, 80a-37 and 80b-11, unless otherwise noted. 2. Section 228.201 is amended by adding paragraph (d) before the Instruction to read as follows: sect228.201 (Item 201) Market for Common Equity and Related Stockholder Matters. (d) Securities authorized for issuance under equity compensation plans . (1) In the following tabular format, provide the information specified in paragraph (d)(2) of this Item as of the end of the most recently completed fiscal year with respect to compensation plans (including individual compensation arrangements) under which equity securities of the small business issuer are authorized for issuance, aggregated as follows: (i) All compensation plans previously approved by security holders and (ii) All compensation plans not previously approved by security holders. Equity Compensation Plan Information Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders (2) The table shall include the following information as of the end of the most recently completed fiscal year for each category of equity compensation plan described in paragraph (d)(1) of this Item: (i) The number of securities to be issued upon the exercise of outstanding options, warrants and rights (column (a)) (ii) The weighted-average exercise price of the outstanding options, warrants and rights disclosed pursuant to paragraph (d)(2)(i) of this Item (column (b)) and (iii) Other than securities to be issued upon the exercise of the outstanding options, warrants and rights disclosed in paragraph (d)(2)(i) of this Item, the number of securities remaining available for future issuance under the plan (column (c)). (3) For each compensation plan under which equity securities of the small business issuer are authorized for issuance that was adopted without the approval of security holders, describe briefly, in narrative form, the material features of the plan. Instructions to Paragraph (d). 1. Disclosure shall be provided with respect to any compensation plan and individual compensation arrangement of the small business issuer (or parent, subsidiary or affiliate of the small business issuer) under which equity securities of the small business issuer are authorized for issuance to employees or non-employees (such as directors, consultants, advisors, vendors, customers, suppliers or lenders) in exchange for consideration in the form of goods or services as described in Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation . or any successor standard. No disclosure is required with respect to (i) any plan, contract or arrangement for the issuance of warrants or rights to all security holders of the small business issuer as such on a pro rata basis (such as a stock rights offering) or (ii) any employee benefit plan that is intended to meet the qualification requirements of Section 401(a) of the Internal Revenue Code (26 U. S.C. sect401(a)). 2. For purposes of this paragraph, an quotindividual compensation arrangementquot includes, but is not limited to, the following: a written compensation contract within the meaning of quotemployee benefit planquot under sect230.405 of this chapter and a plan (whether or not set forth in any formal document) applicable to one person as provided under Item 402(a)(7)(ii) of Regulation S-B (sect228.402(a)(7)(ii)). 3. If more than one class of equity security is issued under its equity compensation plans, a small business issuer should aggregate plan information for each class of security. 4. A small business issuer may aggregate information regarding individual compensation arrangements with the plan information required under paragraph (d)(1)(i) and (ii) of this item, as applicable. 5. A small business issuer may aggregate information regarding a compensation plan assumed in connection with a merger, consolidation or other acquisition transaction pursuant to which the small business issuer may make subsequent grants or awards of its equity securities with the plan information required under paragraph (d)(1)(i) and (ii) of this item, as applicable. A small business issuer shall disclose on an aggregated basis in a footnote to the table the information required under paragraph (d)(2)(i) and (ii) of this item with respect to any individual options, warrants or rights assumed in connection with a merger, consolidation or other acquisition transaction. 6. To the extent that the number of securities remaining available for future issuance disclosed in column (c) includes securities available for future issuance under any compensation plan or individual compensation arrangement other than upon the exercise of an option, warrant or right, disclose the number of securities and type of plan separately for each such plan in a footnote to the table. 7. If the description of an equity compensation plan set forth in a small business issuers financial statements contains the disclosure required by paragraph (d)(3) of this item, a cross-reference to such description will satisfy the requirements of paragraph (d)(3) of this item. 8. If an equity compensation plan contains a formula for calculating the number of securities available for issuance under the plan, including, without limitation, a formula that automatically increases the number of securities available for issuance by a percentage of the number of outstanding securities of the small business issuer, a description of this formula shall be disclosed in a footnote to the table. 9. Except where it is part of a document that is incorporated by reference into a prospectus, the information required by this paragraph need not be provided in any registration statement filed under the Securities Act. 3. Section 228.601 is amended by redesignating paragraph (b)(10)(ii)(B) as paragraph (b)(10)(ii)(C) and by adding new paragraph (b)(10)(ii)(B) to read as follows: sect228. 601 (Item 601) Exhibits (b) Description of Exhibits (10) Material Contracts (B) Any compensatory plan, contract or arrangement adopted without the approval of security holders pursuant to which equity may be awarded, including, but not limited to, options, warrants or rights (or if not set forth in any formal document, a written description thereof), in which any employee (whether or not an executive officer of the small business issuer) participates shall be filed unless immaterial in amount or significance. A compensation plan assumed by a small business issuer in connection with a merger, consolidation or other acquisition transaction pursuant to which the small business issuer may make further grants or awards of its equity securities shall be considered a compensation plan of the small business issuer for purposes of the preceding sentence. 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 4. The general authority citation for Part 229 is revised to read as follows: Authority . 15 U. S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78 l . 78m, 78n, 78o, 78u-5, 78w, 78 ll (d), 79e, 79n, 79t, 80a-8, 80a-29, 80a-30, 80a-31(c), 80a-37, 80a-38(a), and 80b-11, unless otherwise noted. 5. The authority citation following sect229.201 is removed. 6. Section 229.201 is amended by adding paragraph (d) before the Instructions to Item 201 to read as follows: sect229.201 (Item 201) Market price of and dividends on the registrants common equity and related stockholder matters. (d) Securities authorized for issuance under equity compensation plans . (1) In the following tabular format, provide the information specified in paragraph (d)(2) of this Item as of the end of the most recently completed fiscal year with respect to compensation plans (including individual compensation arrangements) under which equity securities of the registrant are authorized for issuance, aggregated as follows: (i) All compensation plans previously approved by security holders and (ii) All compensation plans not previously approved by security holders. Equity Compensation Plan Information Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders (2) The table shall include the following information as of the end of the most recently completed fiscal year for each category of equity compensation plan described in paragraph (d)(1) of this Item: (i) The number of securities to be issued upon the exercise of outstanding options, warrants and rights (column (a)) (ii) The weighted-average exercise price of the outstanding options, warrants and rights disclosed pursuant to paragraph (d)(2)(i) of this Item (column (b)) and (iii) Other than securities to be issued upon the exercise of the outstanding options, warrants and rights disclosed in paragraph (d)(2)(i) of this Item, the number of securities remaining available for future issuance under the plan (column (c)). (3) For each compensation plan under which equity securities of the registrant are authorized for issuance that was adopted without the approval of security holders, describe briefly, in narrative form, the material features of the plan. Instructions to Paragraph (d). 1. Disclosure shall be provided with respect to any compensation plan and individual compensation arrangement of the registrant (or parent, subsidiary or affiliate of the registrant) under which equity securities of the registrant are authorized for issuance to employees or non-employees (such as directors, consultants, advisors, vendors, customers, suppliers or lenders) in exchange for consideration in the form of goods or services as described in Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation . or any successor standard. No disclosure is required with respect to (i) any plan, contract or arrangement for the issuance of warrants or rights to all security holders of the registrant as such on a pro rata basis (such as a stock rights offering) or (ii) any employee benefit plan that is intended to meet the qualification requirements of Section 401(a) of the Internal Revenue Code (26 U. S.C. sect401(a)). 2. For purposes of this paragraph, an quotindividual compensation arrangementquot includes, but is not limited to, the following: a written compensation contract within the meaning of quotemployee benefit planquot under sect230.405 of this chapter and a plan (whether or not set forth in any formal document) applicable to one person as provided under Item 402(a)(7)(ii) of Regulation S-K (sect229.402(a)(7)(ii)). 3. If more than one class of equity security is issued under its equity compensation plans, a registrant should aggregate plan information for each class of security. 4. A registrant may aggregate information regarding individual compensation arrangements with the plan information required under paragraph (d)(1)(i) and (ii) of this item, as applicable. 5. A registrant may aggregate information regarding a compensation plan assumed in connection with a merger, consolidation or other acquisition transaction pursuant to which the registrant may make subsequent grants or awards of its equity securities with the plan information required under paragraph (d)(1)(i) and (ii) of this item, as applicable. A registrant shall disclose on an aggregated basis in a footnote to the table the information required under paragraph (d)(2)(i) and (ii) of this item with respect to any individual options, warrants or rights assumed in connection with a merger, consolidation or other acquisition transaction. 6. To the extent that the number of securities remaining available for future issuance disclosed in column (c) includes securities available for future issuance under any compensation plan or individual compensation arrangement other than upon the exercise of an option, warrant or right, disclose the number of securities and type of plan separately for each such plan in a footnote to the table. 7. If the description of an equity compensation plan set forth in a registrants financial statements contains the disclosure required by paragraph (d)(3) of this item, a cross-reference to such description will satisfy the requirements of paragraph (d)(3) of this item. 8. If an equity compensation plan contains a formula for calculating the number of securities available for issuance under the plan, including, without limitation, a formula that automatically increases the number of securities available for issuance by a percentage of the number of outstanding securities of the registrant, a description of this formula shall be disclosed in a footnote to the table. 9. Except where it is part of a document that is incorporated by reference into a prospectus, the information required by this paragraph need not be provided in any registration statement filed under the Securities Act. 7. Section 229.601 is amended by redesignating paragraph (b)(10)(iii)(B) as paragraph (b)(10)(iii)(C) and by adding new paragraph (b)(10)(iii)(B) to read as follows: sect229. 601 (Item 601) Exhibits (b) Description of Exhibits (10) Material Contracts (B) Any compensatory plan, contract or arrangement adopted without the approval of security holders pursuant to which equity may be awarded, including, but not limited to, options, warrants or rights (or if not set forth in any formal document, a written description thereof), in which any employee (whether or not an executive officer of the registrant) participates shall be filed unless immaterial in amount or significance. A compensation plan assumed by a registrant in connection with a merger, consolidation or other acquisition transaction pursuant to which the registrant may make further grants or awards of its equity securities shall be considered a compensation plan of the registrant for purposes of the preceding sentence. PART 240 - GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934 8. The general authority citation for Part 240 is revised to read, in part, as follows: Authority . 15 U. S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78 l . 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78 ll . 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 80b-11, unless otherwise noted. 9. The authority citation following sect240.14a-3 is removed. 10. Section 240.14a-3 is amended by revising paragraph (b)(9) to read as follows: sect240.14a-3 Information to be furnished to security holders. (9) The report shall contain the market price of and dividends on the registrants common equity and related security holder matters required by Item 201(a), (b) and (c) of Regulation S-K (sect229.201(a), (b) and (c) of this chapter). 11. In Section 240.14a-101 amend Item 10 of Schedule 14A by adding paragraph (c) before the undesignated heading Instructions and revise Item 14(d)(4) of Schedule 14A to read as follows: sect240.14a-101 Schedule 14A. Information required in proxy statement. Item 10. Compensation Plans. (c) Information regarding plans and other arrangements not subject to security holder action. Furnish the information required by Item 201(d) of Regulation S-K (sect229.201(d) of this chapter). Instructions to paragraph (c). 1. If action is to be taken as described in paragraph (a) of this Item with respect to the approval of a new compensation plan under which equity securities of the registrant are authorized for issuance, information about the plan shall be disclosed as required under paragraphs (a) and (b) of this Item and shall not be included in the disclosure required by Item 201(d) of Regulation S-K (sect229.201(d) of this chapter). If action is to be taken as described in paragraph (a) of this Item with respect to the amendment or modification of an existing plan under which equity securities of the registrant are authorized for issuance, the registrant shall include information about securities previously authorized for issuance under the plan (including any outstanding options, warrants and rights previously granted pursuant to the plan and any securities remaining available for future issuance under the plan) in the disclosure required by Item 201(d) of Regulation S-K (sect229.201(d) of this chapter). Any additional securities that are the subject of the amendments or modification of the existing plan shall be disclosed as required under paragraphs (a) and (b) of this Item and shall not be included in the Item 201(d) disclosure. Item 14. Mergers, consolidations, acquisitions and similar matters. (d) Information about parties to the transaction: registered investment companies and business development companies. (4) Information required by Item 201(a), (b) and (c) of Regulation S-K (sect229.201(a), (b) and (c) of this chapter), market price of and dividends on the registrants common equity and related stockholder matters PART 249 - FORMS, SECURITIES EXCHANGE ACT OF 1934 12. The authority citation for Part 249 continues to read, in part, as follows: Authority . 15 U. S.C. 78a et seq . unless otherwise noted 13. By amending Form 10-K (referenced in sect249.310) by revising Item 12 of Part III to read as follows: Note - The text of Form 10-K does not, and this amendment will not, appear in the Code of Federal Regulations. Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Furnish the information required by Item 201(d) of Regulation S-K (sect229.201(d) of this chapter) and by Item 403 of Regulation S-K (sect229.403 of this chapter). 12. By amending Form 10-KSB (referenced in sect249.310b) by revising Item 11 of Part III 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. Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Furnish the information required by Item 201(d) of Regulation S-B and by Item 403 of Regulation S-B. By the Commission. Item 1 of Schedule 14C requires that a registrant furnish the information called for by all of the items of Schedule 14A (other than Items 1(c), 2, 4 and 5) which would be applicable to any matter to be acted upon at the meeting if proxies were to be solicited in connection with the meeting. A study of stock-based pay practices at the nations 200 largest corporations indicates that these companies allocated 15.2 of outstanding shares (calculated on a fully-diluted basis) for management and employee equity incentives in 2000, compared to only 6.9 in 1989. See Pearl Meyers amp Partners, Inc. 2000 Equity Stake, Study of Management Equity Participation in the Top 200 Corporations (2000). See Eric D. Roiter, The NYSE Wrestles with Shareholder Approval of Stock Option Plans . Corp. Gov. Adv. Vol. 8, No. 1 (Jan. Feb. 2000), at 1. See also, for example, Justin Fox, The Amazing Stock Option Sleight of Hand . Fortune, June 25, 2001, at 86. In its most recent study, the Investor Responsibility Research Center found that the average potential dilution for the 1,500 companies in the quotSampP Super 1,500quot (the combination of the SampP 500, the SampP MidCap 400 and the SampP SmallCap 600) was 14.6 in 2000, compared to 11.6 in 1997 an increase of approximately 26. The increase was even greater for SampP 500 companies, with average potential dilution rising to 13.1 in 2000, compared to 9.2 in 1995. See Investor Responsibility Research Center, Potential Dilution - 2000, The Potential Dilution from Stock Plans at the SampP Super 1,500 Companies (2000) (the quotIRRC Dilution Studyquot). The amendments were proposed in Release No. 33-7944 (Jan. 26, 2001) 66 FR 8732 (the quotProposing Releasequot). The commenters included 11 individual and institutional investors, eight registrants and registrant associations (one registrant submitted two letters), one self-regulatory organization and 10 members of the executive compensation consulting, accounting and legal communities. These comment letters and a summary of comments prepared by our staff are available for public inspection and copying in our Public Reference Room, 450 Fifth Street, NW, Washington, DC 20549, in File No. S7-04-01. Public comments submitted electronically and the summary of comments are available on our website sec. gov . The discussion of Form 10-K in this release also includes Form 10-KSB. The discussion of proxy statements in this release also includes Schedule 14C information statements. To help investors better understand equity compensation, our Office of Investor Education and Assistance will create educational materials about the available disclosure on equity compensation programs (including the information available in financial statements). See, for example, the Letter dated March 26, 2001 from the Council of Institutional Investors (the quotCII Letterquot), the Letter dated April 24, 2001 from the Association for Investment Management and Research and the Letter dated April 16, 2001 from the Association of the Bar of the City of New York (the quotNYC Bar Letterquot). While the impact of outstanding options, warrants and rights is contained in the presentation of diluted earnings-per-share required by Statement of Financial Accounting Standards No. 128, Earnings-Per-Share (Feb. 1997) (quotSFAS 128quot), this disclosure does not necessarily isolate quotcompensatoryquot instruments. Typically, the diluted earnings-per-share figure combines the dilutive effect of compensatory options, warrants and rights with that of other outstanding convertible securities. See new Item 201(d)(2)(ii) of Regulation S-B 17 CFR 228.201(d)(2)(ii) and new Item 201(d)(2)(ii) of Regulation S-K 17 CFR 229.201(d)(2)(ii). This weighted-average exercise price information may be different from that contained in a registrants financial statements as required by Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (Oct. 1995) (quotSFAS 123quot) because the information includes grants and awards to non-employees while the information required by SFAS 123 may not. See n. 55 below. This includes any equity compensation plan that provides for grants and awards to employees or non-employees in exchange for consideration in the form of goods or services as described in SFAS 123. For purposes of the amendments, we consider an equity compensation plan to be in effect as long as securities remain available for future issuance under the plan, or as long as options, warrants or rights previously granted under the plan remain outstanding. Disclosure is required without regard to whether participants are employees (including officers) or non-employees (such as directors, consultants, advisors, vendors, customers, suppliers or lenders). See, for example, the Letter dated May 7, 2001 from the American Bar Association (the quotABA Letterquot), the Letter dated April 2, 2001 from Lucent Technologies Inc. and the Letter dated May 22, 2001 from the New York State Bar Association (the quotNY State Bar Letterquot). One commenter estimated that, based upon the number of equity compensation plans it administers, compliance could cost an additional 300,000 annually for printing and distribution. See the Letter dated April 9, 2001 from Lucent Technologies Inc. (the quotSecond Lucent Letterquot). See the Letter dated February 27, 2001 from Intel Corporation (the quotIntel Letterquot). In addition, information on the number and identity of a registrants equity compensation plans should be available in the footnotes to the registrants financial statements as part of its required SFAS 123 disclosure. See paragraph 46 of SFAS 123. See new Item 201(d)(1) of Regulation S-B 17 CFR 228.201(d)(1) and new Item 201(d)(1) of Regulation S-K 17 CFR 229.201(d)(1). These plans otherwise are subject to the disclosure requirements of Item 10 of Schedule 14A. Item 10 requires a description of the material features of, and tabular disclosure of the benefits receivable or allocable under, the plan being acted upon, as well as additional information regarding specific types of plans. See, for example, the CII Letter, the Letter dated March 28, 2001 from the State of Wisconsin Investment Board (the quotSWIB Letterquot) and the Letter dated March 29, 2001 from the Teachers Insurance and Annuity Association - College Retirement Equities Fund (the quotTIAA-CREF Letterquot). See Instruction 1 to new Item 10(c) of Schedule 14A. For these purposes, an individual equity compensation arrangement includes a quotplanquot for a single person as defined by Item 402(a)(7)(ii) of Regulation S-K 17 CFR 229.402(a)(7)(ii) (quotA plan may be applicable to one person. quot), as well as an individual quotwritten compensation contractquot (see, for example, the Securities Act Rule 405 17 CFR 230.405 definition of the term quotemployee benefit planquot). See, for example, the NY State Bar Letter and the TIAA-CREF letter. See Report of the New York Stock Exchange Special Task Force on Stockholder Approval Policy (Oct. 1999) (the quotNYSE Task Force Reportquot), at 14, available at nysepdfspolicy. pdf . While SFAS 123 requires an entity to provide a description of each stock-based compensation plan, these descriptions need not indicate whether a plan has been approved by security holders. See paragraphs 46 and 362 of SFAS 123. Paragraph 46 of SFAS 123 provides for disclosure of the number of shares authorized for grants of options or other equity instruments pursuant to stock-based compensation plans. It does not specifically require disclosure of the current number of authorized shares available for grant. In addition, it may be difficult for investors to determine this number. Currently, a registrant submitting an equity compensation plan for security holder action need not provide any specific disclosure about its other equity compensation plans. In its annual study on stock plan dilution, the Investor Responsibility Research Center found that approximately 22 of the companies surveyed did not disclose the number of shares available for future issuance under their employee stock plans. See the IRRC Dilution Study. Paragraph 46 of SFAS 123 provides that quotan entity that uses equity instruments to acquire goods or services other than employee services shall provide disclosures similar to those required for employee transactions to the extent that those disclosures are important in understanding the effects of those transactions on the financial statementsquot (emphasis added). Consequently, a registrant has discretion to exclude non-employee grants and awards of equity instruments from its SFAS 123 disclosure. In addition, registrants need not apply the disclosure provisions of SFAS 123 to immaterial items, as determined based on a registrants particular circumstances. See paragraph 244 of SFAS 123. See, for example, the NYSE Task Force Report, n. 52 above, at 14 (quotThe requisite information to make dilution calculations is not consistently available in any one place or format in corporate disclosure documents. ), the Letter dated April 2, 2001 from the Association of Publicly Traded Companies (quotthe sheer volume and complexity of most corporate compensation proposals, coupled with stock option plans, makes it difficult for the average investor to interpret and effectively utilize the information provided. quot) and the TIAA-CREF Letter (quotlack of transparency. limits the ability of shareholders. to protect themselves against plans that can be highly dilutive. quot). See the Proposing Release at n. 17. This table does not describe all of the information that registrants must disclose under SFAS 123. In the Proposing Release, we also sought comment as to whether the table should be required in registration statements filed under the Securities Act of 1933 15 U. S.C. sectsect77a et seq .. While no commenter favored a blanket requirement for all registration statements, two commenters suggested that registrants include the table in registration statements filed in connection with initial public offerings. See the NYC Bar Letter and the NY State Bar Letter. Two commenters expressly opposed a registration statement disclosure requirement. See the ABA Letter and the Letter dated June 11, 2001 from the New York Stock Exchange (the quotNYSE Letterquot). Generally, registrants already include information about the possible effects of future sales of securities, including outstanding options, in registration statements for initial public offerings to the extent that this information is material. Item 506 of Regulation S-K 17 CFR 229.506 requires specific information in a registration statement filed in connection with an initial public offering about dilution, as well as with respect to common equity securities that have been acquired by officers and directors. In addition, Item 201(a)(2) of Regulation S-K 17 CFR 229.201(a)(2) requires disclosure of the amount of common equity that is subject to outstanding options or warrants. Further information is available pursuant to the disclosure required by Item 402 of Regulation S-K. Accordingly, except where the table is part of an annual report on Form 10-K or 10-KSB that is incorporated by reference into a prospectus, we are not extending the disclosure requirements to registration statements at this time. See Instruction 10 to new Item 201(d) of Regulation S-B and Instruction 10 to new Item 201(d) of Regulation S-K. See, for example, the ABA Letter, the CII Letter and the SWIB Letter. See, for example, the Letter dated March 29, 2001 from Ernst ampYoung LLP, the Second Lucent Letter and the NYC Bar Letter. 15 U. S.C. sect78o(d). Some commenters argued that even where a registrant is not submitting a compensation plan for security holder action, the new disclosure contains relevant information with respect to the backgrounds and compensation of directors and executive officers that should be available for evaluation in connection with the election of directors. In general, we find the relevance of the new disclosure to be somewhat attenuated from decisions regarding the election of directors. Moreover, there would be little connection when a nominee has not served previously as a director of the registrant. Finally, the relevance of the new disclosure to decisions concerning the remuneration of directors and officers also is questionable because the table requires general information that does not specifically identify director and executive officer awards. Registrants are required, however, to provide security holders with an annual report to security holders pursuant to Exchange Act Rule 14a-3(b) 17 CFR 240.14a-3(b) when soliciting proxies in connection with an annual meeting of security holders at which directors are to be elected. Typically, this annual report to security holders includes the financial statements of the registrant, including the required SFAS 123 disclosure. In some instances, registrants use their annual report on Form 10-K to satisfy this delivery requirement. See Exchange Act Rule 14a-3(d) 17 CFR 240.14a-3(d). Under Exchange Act Rule 14a-3(b)(10) 17 CFR 240.14a-3(b)(10), a registrant must include in its proxy statement or annual report an undertaking to provide without charge to each security holder solicited, upon written request, a copy of the registrants annual report on Form 10-K. Once filed, the annual report on Form 10-K also is available via our Electronic Data Gathering, Analysis and Retrieval, or EDGAR, system. Another possible location for the table is the annual report to security holders required by Exchange Act Rule 14a-3(b). This alternative has several drawbacks, however. First, because it is not considered a quotfiledquot document, the annual report is not subject to the express civil liability provisions of Section 18 of the Exchange Act 15 U. S.C. sect78r. See Exchange Act Rule 14a-3(c) 17 CFR 240.14a-3(c). Second, as with proxy statements, the disclosure would not apply to registrants subject to reporting solely under Section 15(d) of the Exchange Act. Finally, because principally financial information is required to be included in the annual report, non-financial disclosure such as the table would appear out of place. See revised Item 12 of Part III of Form 10-K and revised Item 11 of Part III of Form 10-KSB. See new Item 10(c) of Schedule 14A. Proxy or information statement disclosure is triggered by the submission of any compensation plan for security holder action, including cash-only plans. Similar incorporation by reference is permitted with respect to the other disclosure items required by Part III of Form 10-K and 10-KSB. See General Instruction E(3) to Form 10-KSB and General Instruction G(3) to Form 10-K. See Section II. A.4 above. See, for example, the CII Letter, the SWIB Letter and the TIAA-CREF Letter. Other commenters suggested that we require registrants to file copies of all equity compensation plans (whether or not approved by security holders). See the ABA Letter and the NYSE Letter. 17 CFR 229.601(b)(10). 17 CFR 229.601(b)(10)(iii)(A). Nondiscriminatory, broad-based compensatory plans, contracts or arrangements are exempt from this requirement. See Item 601(b)(10)(iii)(B)( 4 ) 17 CFR 229.601(b)(10)(iii)(B)( 4 ). See, for example, the CII Letter and the Letter dated March 29, 2001 from the Office of the State Comptroller of the State of New York. See new Item 601(b)(10)(iii)(B) of Regulation S-B 17 CFR 228.601(b)(10)(iii)(B) and new Item 601(b)(10)(iii)(B) of Regulation S-K 17 CFR 229.601(b)(10)(iii)(B). This is consistent with our action in 1981 amending then-Item 7 of Regulation S-K to reformulate the definition of quotmaterial contractsquot as applied to remunerative plans, contracts or arrangements. See Release No. 33-6287 (Feb. 6, 1981) 46 FR 11952. Previously, we had indicated that remuneration plans in which directors or executive officers of the registrant did not participate generally did not need to be filed as exhibits. See Release No. 33-6230, Section II. A.2.b. i. (Aug. 27, 1980) 45 FR 58822. With respect to an existing non-security holder-approved equity compensation plan subject to new Item 601(b)(10)(iii)(B) of Regulation S-B or new Item 601(b)(10)(iii)(B) of Regulation S-K that is in effect as of the effective date of these amendments and that has not been filed previously, a copy of the plan must be filed as an exhibit to the annual report on Form 10-K or 10-KSB filed by the registrant for its first fiscal year ending on or after March 15, 2002. 44 U. S.C. sect3501 et seq . Publication and submission were in accordance with 44 U. S.C. sect3507(d) and 5 CFR 1320.11. The titles for the collections of information affected by the amendments are (1) quotRegulation 14A (Commission Rules 14a-1 through 14b-2 and Schedule 14A),quot (2) quotRegulation 14C (Commission Rules 14c-1 through 14c-7 and Schedule 14C),quot (3) quotForm 10-K, quot (4) quotForm 10- KSB, quot (5) quotRegulation S-Bquot and (6) quotRegulation S-K. quot The likely respondents subject to the collections of information include entities whose reporting obligations arise under the Exchange Act. The reporting requirements of Section 13 of the Exchange Act 15 U. S.C. sect78m, as well as the proxy disclosure requirements of Section 14 of the Exchange Act, apply to entities that have securities registered under Section 12 of the Exchange Act 15 U. S.C. sect78 l . The reporting requirements of Section 15(d) of the Exchange Act apply to entities with effective registration statements under the Securities Act that are not otherwise subject to the registration requirements of Section 12 of the Exchange Act. See the Letter dated April 17, 2001 from the American Institute of Certified Public Accountants (the quotAICPA Letterquot), the Letter dated April 2, 2001 from the Association of Publicly-Traded Companies (the quotAPTC Letterquot), the Letter dated April 2, 2001 from Lucent Technologies Inc. (the quotFirst Lucent Letterquot), the Letter dated May 22, 2001 from the New York State Bar Association, the Letter dated August 17, 2001 from Leonard S. Stein (the quotStein Letterquot) and the Letter dated August 26, 2001 from Hendrick Vater. See the Letter dated April 9, 2001 from Lucent Technologies Inc. See the APTC Letter. See the Stein Letter. We have changed our assumption about the number of registrants with equity compensation plans that, in any year, either adopt a new plan or amend an existing plan to increase the number of securities authorized for issuance under the plan. In the Proposing Release, we estimated that 50 of the registrants with equity compensation plans would either adopt a new plan or amend an existing plan each year. Based on the available survey data, we have revised this assumption to 30. See n. 91 below. This estimate is made after a review of available survey data, which varies widely. For example, in its most recent study of the quotSampP Super 1,500quot (the combination of the SampP 500, the SampP MidCap 400 and the SampP SmallCap 600), the Investor Responsibility Research Center determined that, of the 1,157 companies examined, 1,142 (98.7) awarded equity to some portion of their employees. See Investor Responsibility Research Center, Potential Dilution - 2000, The Potential Dilution from Stock Plans at the SampP Super 1,500 Companies (2000). In contrast, a Pilot Survey conducted by the Bureau of Labor Statistics in 1999 determined that 22 of publicly-held companies offered stock options to their employees. This survey sampled 2,100 quotestablishments, quot of which approximately 1 in 10 were publicly-held companies. See Bureau of Labor Statistics, Pilot Survey on the Incidence of Stock Options in Private Industry in 1999 . (Oct. 11, 2000), available at bls. govncsocsspncnr0001.txt. Further, in the Proposing Release we sought comment as to whether our estimates of the burden of the proposed collections of information were accurate. We received no comment letters responding to that request. Because of variations in the available data, we also have estimated the reporting and cost burdens for the proposed collections of information assuming that 98 of the registrants that file annual reports on Form 10-K or 10-KSB maintain an equity compensation plan and are subject to the required disclosure. See nn. 108 and 110 below. Based on the actual number of registrants filing annual reports on Form 10-K and 10-KSB, we estimate that 6,229 registrants that file on Form 10-K (10,381 times 60) maintain equity compensation plans (quotForm 10-K Filersquot) and 2,185 registrants that file on Form 10-KSB (3,641 times 60) maintain equity compensation plans (quotForm 10-KSB Filersquot). In the Proposing Release, we estimated that this figure was 25. The available survey data does not appear to be representative of the general registrant population. See William M. Mercer, Inc. Equity Compensation Survey (2001) (48 of survey respondents (83 participants) maintained non-security holder-approved stock option plans for employees below management level 60 of such plans most prevalent in large companies (more than 5,000 employees)) iQuantic, Inc. Trends in Equity Compensation 1996-2000 (2000) (27.3 of survey respondents in 1999 (161 participants) maintained non-security holder-approved stock option plans, compared to 3.2 before 1996). After discussions with several compensation professionals, we reduced our estimate to 20. We estimate that of the Form 10-K Filers, 1,246 (6,229 times 20) maintain a non-security holder-approved equity compensation plan (quotForm 10-K Filers with Non-Approved Plansquot) and 4,983 (6,229 times 80) do not (quotForm 10-K Filers with Only Approved Plansquot). We estimate that of the Form 10-KSB Filers, 437 (2,185 times 20) maintain a non-security holder-approved equity compensation plan (quotForm 10-KSB Filers with Non-Approved Plansquot) and 1,748 (2,185 times 80) do not (quotForm 10-KSB Filers with Only Approved Plansquot). This estimate is based on a review of available survey data. In its most recent study, the Investor Responsibility Research Center determined that, of 1,157 companies studied in calendar year 2000, 337 (29) presented proposals for new or amended equity compensation plans to security holders. See Investor Responsibility Research Center, Potential Dilution - 2000, The Potential Dilution from Stock Plans at the SampP Super 1,500 Companies (2000). In its most recent study, Pearl Meyers amp Partners found that new plan authorizations among the top 200 companies were submitted by 58 companies in 2000 (29). See Pearl Meyers amp Partners, Inc. 2000 Equity Stake, Study of Management Equity Participation in the Top 200 Corporations (2000). We estimate that of the Form 10-K Filers with Only Approved Plans, 1,495 (4,983 times 30) submit a new or amended equity compensation plan for security holder approval annually (quotForm 10-K Filers with Only Approved Plans Subject to Section 14quot) and of the Form 10-K Filers with Non-Approved Plans, 374 (1,246 times 30) submit a new or amended equity compensation plan for security holder approval annually (quotForm 10-K Filers with Non-Approved Plans Subject to Section 14quot). Similarly, we estimate that of the Form 10-KSB Filers with Only Approved Plans, 524 (1,748 times 30) submit a new or amended equity compensation plan for security holder approval annually (quotForm 10-KSB Filers with Only Approved Plans Subject to Section 14quot) and of the Form 10-KSB Filers with Non-Approved Plans, 131 (437 times 30) submit a new or amended equity compensation plan for security holder approval annually (quotForm 10-KSB Filers with Non-Approved Plans Subject to Section 14quot). This estimate is based on a comparison of the actual number of registrants filing annual reports on Form 10-K or 10-KSB during the 2000 fiscal year (10,381 3,641 14,022) with the actual number of registrants filing proxy or information statements during the 2000 fiscal year (9,892 253 10,145), or 10,14514,022. Thus, we have subtracted 419 registrants (1,495 times 28) from the group of Form 10-K Filers with Only Approved Plans Subject to Section 14, 105 registrants (374 times 28) from the group of Form 10-K Filers with Non-Approved Plans Subject to Section 14, 147 registrants (524 times 28) from the group of Form 10-KSB Filers with Only Approved Plans Subject to Section 14 and 37 registrants (131 times 28) from the group of Form 10-KSB Filers with Non-Approved Plans Subject to Section 14. This estimate is based on a comparison of the actual number of registrants filing proxy statements during the 2000 fiscal year (9,982) with the actual number of registrants filing information statements during the same period (253), or 9,98210,145. Thus, we estimate that of the 1,076 Form 10-K Filers with Only Approved Plans Subject to Section 14, 1,054 (1,076 times 98) will file proxy statements and 22 will file information statements, of the 269 Form 10-K Filers with Non-Approved Plans Subject to Section 14, 264 (269 times 98) will file proxy statements and five will file information statements, of the 377 Form 10-KSB Filers with Only Approved Plans Subject to Section 14, 369 (377 times 98) will file proxy statements and eight will file information statements and of the 94 Form 10-KSB Filers with Non-Approved Plans Subject to Section 14, 92 (94 times 98) will file proxy statements and two will file information statements. Even though we have streamlined compliance in order to reduce the burden on registrants, we have not reduced the number of estimated burden hours to prepare the required disclosure. This decision is in response to comments that our initial burden hour estimate was too low. See the AICPA Letter and the First Lucent Letter. We estimate that registrants will prepare 50 of the required disclosure and outside counsel will prepare the remaining 50. Accordingly, this estimate reflects the addition of one burden hour to prepare the required tabular disclosure. See n. 97 above and the accompanying text. We estimate that registrants will prepare 50 of the required disclosure and outside counsel will prepare the remaining 50. Accordingly, this estimate reflects the addition of two burden hours to prepare the required tabular and narrative disclosure. See n. 97 above and the accompanying text. We arrived at this estimate by taking the number of Form 10-K Filers (see n. 88 above) and subtracting (a) the number of Form 10-K Filers with Non-Approved Plans (see n. 90 above) and (b) the number of Form 10-K Filers with Only Approved Plans Subject to Section 14 (see nn. 92 and 94 above), or (6,229 - 1,246 - 1,076). We arrived at this estimate by taking the number of Form 10-K Filers with Non-Approved Plans (see n. 90 above) and subtracting the number of Form 10-K Filers with Non-Approved Plans Subject to Section 14 (see nn. 92 and 94 above), or (1,246 - 269). We arrived at this estimate by taking the number of Form 10-KSB Filers (see n. 88 above) and subtracting (a) the number of Form 10-KSB Filers with Non-Approved Plans (see n. 90 above) and (b) the number of Form 10-KSB Filers with Only Approved Plans Subject to Section 14 (see nn. 92 and 94 above), or (2,185 - 437 - 377). We arrived at this estimate by taking the number of Form 10-KSB Filers with Non-Approved Plans (see n. 90 above) and subtracting the number of Form 10-KSB Filers with Non-Approved Plans Subject to Section 14 (see nn. 92 and 94 above), or (437 - 94). We arrived at this estimate by taking the number of Form 10-K Filers with Only Approved Plans Subject to Section 14 that will file proxy statements and adding the number of Form 10-KSB Filers with Only Approved Plans Subject to Section 14 that will file proxy statements (see n. 96 above), or (1,054 369). We arrived at this estimate by taking the number of Form 10-K Filers with Non-Approved Plans Subject to Section 14 that will file proxy statements and adding the number of Form 10-KSB Filers with Non-Approved Plans Subject to Section 14 that will file proxy statements (see n. 96 above), or (264 92). We arrived at this estimate by taking the number of Form 10-K Filers with Only Approved Plans Subject to Section 14 that will file information statements and adding the number of Form 10-KSB Filers with Only Approved Plans Subject to Section 14 that will file information statements (see n. 96 above), or (22 8). We arrived at this estimate by taking the number of Form 10-K Filers with Non-Approved Plans Subject to Section 14 that will file information statements and adding the number of Form 10-KSB Filers with Non-Approved Plans Subject to Section 14 that will file information statements (see n. 96 above), or (5 2). Assuming that 98 of the registrants that file annual reports on Form 10-K or 10-KSB maintain an equity compensation plan and are subject to the required disclosure, the estimated burden hours per year resulting from the amendments would be 16,511 hours, increasing this estimate to 5,735,343 hours. One-half of the total burden resulting from the amendments is reflected as burden hours and the remainder is reflected in the total cost of complying with the information collection requirements. We have used an estimated hourly rate of 300.00 to determine the estimated cost to respondents of the disclosure prepared by outside counsel. We arrived at this hourly rate estimate after consulting with several private law firms. These cost burden increases reflect a change in our assumption of the number of registrants with equity compensation plans that either adopt a new plan or amend an existing plan to increase the number of securities authorized for issuance under the plan (see n. 85 above) and a change in the estimated hourly rate of outside counsel. With respect to Forms 10-K and 10-KSB, we increased our estimate by 937,300 in the case of Form 10-K and increased our estimate by 483,100 in the case of Form 10-KSB. With respect to Schedules 14A and 14C, we decreased our estimate by 8,089,500 in the case of Schedule 14A and decreased our estimate by 209,800 in the case of Schedule 14C. Assuming that 98 of the registrants that file annual reports on Form 10-K or 10-KSB maintain an equity compensation plan and are subject to the required disclosure, the estimated cost burden per year resulting from the amendments would be 4,946,400. Comments are requested pursuant to 44 U. S.C. sect3506(c)(2)(B). A study of stock-based pay practices at the nations 200 largest corporations indicates that these companies allocated 15.2 of outstanding shares (calculated on a fully-diluted basis) for management and employee equity incentives in 2000, compared to only 6.9 in 1989. See Pearl Meyers amp Partners, Inc. 2000 Equity Stake, Study of Management Equity Participation in the Top 200 Corporations (2000). Both the size of individual awards and the number of companies that use equity broadly throughout the organization have increased significantly. See Core, Guay and Larcker, Executive Equity Compensation and Incentives: A Survey . Working Paper, University of Pennsylvania (2001), at 5-7. This question should be considered in the context of any open market stock repurchase program that has been instituted by a registrant. Repurchases by its own securities by a registrant under such a program may mitigate the dilutive effects of the registrants equity compensation program. There is evidence that companies with high levels of dilution earn lower market-adjusted returns in future periods than companies with comparatively lower levels of dilution. See Garvey and Milbourn, Do Stock Prices Incorporate the Potential Dilution of Employee Stock Options . Working Paper, Claremont Graduate University amp Washington University in St. Louis (2001), at 2-3. But see Core, Guay and Larcker, Executive Equity Compensation and Incentives: A Survey . Working Paper, University of Pennsylvania (2001) (discussing the difficulty in documenting a relationship between equity compensation and corporate performance). See Release No. 34-41479 (June 4, 1999) 64 FR 31667 (under NYSE listing standards, security holder approval not required if plan is quotbroadly-basedquot that is, at least a majority of the registrants full-time employees are eligible to participate and at least a majority of the shares underlying options actually granted are to employees who are not officers or directors) Release No. 34-37260 (May 31, 1996) 61 FR 30376 (security holder approval requirement of Exchange Act Rule 16b-3 17 CFR 240.16b-3 eliminated). See also the Proposing Release at n. 21. According to the Investor Responsibility Research Center, the average negative vote on stock option plans submitted for security holder action in 2000 was 20.7, up from 17.4 in 1997. In addition, in 2000 a relatively large number of stock plan proposals were rejected. See Investor Responsibility Research Center, Potential Dilution - 2000, The Potential Dilution from Stock Plans at the SampP Super 1,500 Companies (2000) (the quotIRRC Dilution Studyquot). See Gillan, Option-based Compensation: Panacea or Pandoras Box . Journal of Applied Corporate Finance (2001) 115-128. Our rules require proxy statement disclosure of the material features of a compensation plan being submitted for security holder action. See Item 10(a)(1) of Schedule 14A. This disclosure does not reach a plan that is never submitted for security holder action. While Item 402(c) of Regulation S-B 17 CFR 228.402(c) and Item 402(c) of Regulation S-K 17 CFR 229.402(c) require disclosure of the number of stock options granted during the last fiscal year, this disclosure only covers the named executive officers of the registrant (as defined in the item). See also Item 402(b)(2)(iv)(B) of Regulation S-B 17 CFR 228.402(b)(2)(iv)(B) and Item 402(b)(2)(iv)(B) of Regulation S-K 17 CFR 229.402(b)(2)(iv)(B). Although financial reporting disclosure requirements concerning stock-based compensation are extensive, they do not require the identification of non-security holder-approved equity compensation plans. See paragraph 46 of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (Oct. 1995) (quotSFAS 123quot). Given its recent comprehensive project on accounting for stock-based compensation and its current lengthy agenda, it is not expected that the FASB will revisit this subject in the immediate future. Thus, it is unlikely that the FASB could address this matter through a technical enhancement of its disclosure requirements in the near term. See the Proposing Release at n. 17. See also the Letter dated October 16, 2001 from Sarah A. B. Teslik, Executive Director, Council of Institutional Investors to Jonathan G. Katz. Certain equity awards, such as stock bonuses and restricted stock purchases for a nominal price, may, in some situations, be more dilutive from an economic standpoint than options, warrants and rights. While the amendments apply to all types of equity compensation, for two reasons our discussion focuses primarily on stock options. First, they represent the most popular form of equity compensation used today. It is estimated that more than 80 of the securities reserved for conversion and exercise by U. S. registrants relate to stock options. See Huson, Scott and Wier, Earnings Dilution and the Explanatory Power of Earnings for Returns . The Accounting Review (2001). Second, most alternative forms of equity compensation involve issued securities. Consequently, their dilutive effect may already have occurred and is likely to be reflected in the basic earnings-per-share computation and security holders equity data. These commenters included seven individual and institutional investors, four registrants and registrant associations, one self-regulatory organization and 10 members of the executive compensation consulting, accounting and legal communities. See, for example, the Letter dated April 2, 2001 from Arthur Andersen LLP (the quotAA Letterquot), the Letter dated April 17, 2001 from the American Institute of Certified Public Accountants (the quotAICPA Letterquot), the Letter dated March 29, 2001 from Emerson Electric Co. the Letter dated April 12, 2001 from Microsoft Corporation and the Letter dated April 2, 2001 from PricewaterhouseCoopers LLP (the quotPWC Letterquot). See, for example, the Letter dated March 29, 2001 from Ernst amp Young LLP and the Letter dated April 2, 2001 from Lucent Technologies Inc. See Section II. C above. Available information on non-security holder-approved stock option plans is sparse. See William M. Mercer, Inc. Equity Compensation Survey (2001) (48 of survey respondents (83 participants) maintained non-security holder-approved stock option plan for employees below management level such plans (60) most prevalent in large companies (more than 5,000 employees) iQuantic, Inc. Trends in Equity Compensation 1996-2000 (2000) (27.3 of survey respondents in 1999 (161 participants) maintained non-security holder-approved stock option plans, compared to 3.2 before 1996). This measure may be formulated in different ways. For purposes of this discussion, quotoverhangquot means the sum of the number of securities underlying outstanding options, warrants and rights plus the number of securities remaining available for future issuance under the registrants existing equity compensation plans, and is often expressed as a percentage of the total number of outstanding securities. It may be difficult for investors to calculate the quotoverhangquot of a registrants equity compensation program because the number of securities available for future issuance under the registrants plans may not be disclosed or apparent. Currently, a registrant submitting an equity compensation plan for security holder action need not provide any specific disclosure about its other equity compensation plans. Moreover, in its annual study on stock plan dilution, the Investor Responsibility Research Center found that approximately 22 of the companies surveyed did not disclose the number of shares available for future issuance under their employee stock plans. See the IRRC Dilution Study. While the full dilutive impact of these authorized but unissued securities cannot be assessed until derivative instruments have been granted and the prices for which the underlying securities may be issued can be compared to existing market values, this information, combined with knowledge of the minimum exercise price at which these instruments may be granted, may provide useful insight into the potential future economic consequences of the program. See, for example, the AA Letter, the AICPA Letter, the Letter dated May 22, 2001 from the New York State Bar Association and the PWC Letter. See the ABA Letter. This estimate is based on the Letter dated April 9, 2001 from Lucent Technologies, Inc. in which the commenter estimated that providing four additional pages of disclosure to its over five million security holders would result in additional printing costs of 100,000 and additional mailing costs of 200,000. Assuming that the required disclosure consists of one additional page and that a registrant has 50,000 security holders, the registrant may incur additional costs of 750 to prepare and distribute the additional disclosure. Since all registrants are required to make the same disclosure, the amendments will impose the same dollar costs on each registrant. Accordingly, for small entities the relative burden of compliance will be higher than for large entities. This figure is based on our estimate that 60 of the actual number of registrants filing annual reports on Form 10-K or 10-KSB (14,022 registrants) maintain equity compensation plans. This estimate is made after a review of available survey data, which varies widely. For example, in its most recent study of the quotSampP Super 1,500quot (the combination of the SampP 500, the SampP MidCap 400 and the SampP SmallCap 600), the Investor Responsibility Research Center determined that, of the 1,157 companies examined, 1,142 (98.7) awarded equity to some portion of their employees. See Investor Responsibility Research Center, Potential Dilution - 2000, The Potential Dilution from Stock Plans at the SampP Super 1,500 Companies (2000). In contrast, a Pilot Survey conducted by the Bureau of Labor Statistics in 1999 determined that 22 of publicly-held companies offered stock options to their employees. This survey sampled 2,100 quotestablishments, quot of which approximately 1 in 10 were publicly-held companies. See Bureau of Labor Statistics, Pilot Survey on the Incidence of Stock Options in Private Industry in 1999 . (Oct. 11, 2000), available at bls. govncsocsspncnr0001.txt. We arrived at this estimate by assuming that approximately 80 of these registrants will be required to provide the tabular disclosure only and 20 of these registrants will be required to describe the material features of their non-security holder-approved plans as well. See n. 90 above and the accompanying text. Thus, 80 of the registrants will incur an average annual outside counsel cost of 300 (80 of 8,400 times 300 2,016,000) while 20 will incur an average annual outside cost of 600 (20 of 8,400 times 600 1,008,000). In addition, we estimate that approximately 365 registrants with non-security holder-approved plans will incur additional printing and distribution costs of 750 each, or 273,750. See n. 135 above. The sum of these amounts averaged over 8,400 registrants equals 393. A recent study of approximately 250 companies conducted by the National Center for Employee Ownership found that 55 of the respondents had less than 200 employees (with 17 having less than 31 employees) and that 55 of the respondents had less than 40 million in annual revenue (with 14 having annual revenues of 1.1 million or less). See National Center for Employee Ownership, An Overview of How Companies are Granting Stock Options (2001). See the Proposing Release at Section V.