Securities Act Release No. 6578

Exchange Act Release No. 21982

April 23, 1985

RELEASE NO. 18 Business Combination Transactions Adoption of Registration Form

ACTION: Final rules.

SUMMARY: The Commission announces the adoption of a new form to be used to register securities under the Securities Act of 1933 in connection with business combination transactions. The form applies the principles of the integrated disclosure system to disclosure in the context of mergers and exchange offers. The form is designed to improve the effectiveness of the business combination prospectus by requiring that information be presented in a more accessible and meaningful format. In addition, the Commission announces the adoption of corresponding amendments to existing rules and the adoption of an amendment to Form 8-K relating to the time for filing financial statements of acquired businesses and stating the policy implications of delays in filing required information.

DATES: Effective Date: Form S-4 and these amendments are effective July 1, 1985, for all documents filed on or after that date with respect to transactions begun thereafter. Compliance Date: Registrants are permitted, however, to use Form S-4 immediately and to use the other provisions amended herein in filings made after publication of this release in the FEDERAL REGISTER.

FOR FURTHER INFORMATION CONTACT: Prior to the effective date, questions relating to this action should be directed to Patricia B. Magee, (202) 272-2589, Office of Disclosure Policy, Division of Corporation Finance, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549; after the effective date, contact Mauri L. Osheroff, (202) 272-2573, Deputy Chief Counsel, Division of Corporation Finance, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. For questions concerning accounting matters, contact Howard P. Hodges, Jr., Chief Accountant, Division of Corporation Finance (202) 272-2553, Securities and Exchange Commission, 450 Fifth Street, N.W., Wasington, D.C. 20549.

SUPPLEMENTARY INFORMATION: Form S-4, as adopted, is available for registration under the Securities Act of 1933 ("Securities Act")¹  of securities issued in: (i) transactions of the type specified in Rule 145(a);²  (ii) mergers in which the applicable state law would not require the solicitation of the votes or consents of all of the security holders of the company being acquired; (iii) exchange offers for securities of the issuer or another entity; and (iv) reoffers or resales of securities registered on this Form.³  Form S-4 employs the principles underlying the integrated disclosure system and, thus, permits incorporation by reference of information from reports filed pursuant to the continuous reporting requirements under the Securities Exchange Act of 1934 ("Exchange Act")⁴  to the same extent as is permitted when a company registers securities under the Securities Act in a primary offering not involving a business combination. In addition, the Commission is adopting a number of other amendments in connection with Form S-4, including an amendment to Form 8-K⁵  relating to the financial statements of acquired businesses.⁶

Table of Contents

I. Executive Summary

This rulemaking action is part of the Commission's Proxy Review Program,⁷  and represents the culmination of efforts extending over several years to improve disclosure to investors in business combinations.⁸  Commentators generally supported the Commission's effort and the Commission is adopting the Form and related amendments substantially as proposed.⁹

This area has been the focus of attention because the documents delivered to security holders in the context of business combinations (mergers and exchange offers) are frequently unwieldy, often 150 or more pages. Improvements to the business combination prospectus in certain limited contexts were made in 1980 with the adoption, on an experimental basis, of Form S-15¹⁰  as part of the first phase of the Commission's integrated disclosure system. Form S-4, which will replace Forms S-14¹¹  and S-15, expands upon the limited scope of Form S-15 in several respects. First, Form S-4 extends the principles underlying the integrated disclosure system to all business combination registration statements, not just those involving relatively small transactions. The Form also extends the principles of integration to the full extent to which they are applied in the context of primary offerings not involving business combinations. Second, Form S-4 builds upon the foundation laid by Form S-15 by applying the same disclosure requirements to exchange offers and mergers.¹²  Thus, Form S-4 provides simplified and streamlined disclosure in prospectuses for business combinations whether the transactions are effected by merger or exchange offer.

The integrated disclosure system, on which Form S-4 is based, proceeds from the premise that investors in the primary market need much the same information as investors in the trading market. Integration also specifies the manner in which information should be delivered to investors. Under Forms S-1,¹³  S-2 and S-3,¹⁴  transaction oriented information must be presented in the prospectus. Company oriented information, however, may be presented in, delivered with, or incorporated by reference into the prospectus, depending on the extent to which Exchange Act reports containing the information have been disseminated and assimilated in the market.¹⁵  Thus, for registrants qualified to use Form S-3, the most widely followed companies, company specific information that has been included in Exchange Act reports need not be reiterated in the prospectus, but may be incorporated by reference. Registrants qualified to use Form S-2, reporting companies which are less widely followed, must present certain company information, but may do so either by delivering the annual report to security holders or reiterating that level of company information in the prospectus. Finally, S-1 registrants must present all company information in the prospectus.

The prospectus requirements of Form S-4 are divided into four sections. The first section calls for information about the transaction, which will be presented in the prospectus in all cases, and which is designed to make the presentation of the complex transactions that typify business combinations more easily understood by investors. The next two sections specify the information about the businesses involved and prescribe different levels of prospectus presentation and incorporation by reference depending upon which form under the Securities Act the company could use in making a primary offering of its securities not involving a business combination. The last section sets forth the requirements as to voting and management information. All voting information must be presented in the prospectus, while the amount of prospectus presentation for management information, like company information, depends on which form could be used in a primary offering not involving a business combination.

The use of the S-1-2-3 approach in Form S-4 reflects the premise that decisions made in the context of business combination transactions and those made otherwise in the purchase of a security in the primary or trading market are substantially similar. At the same time, the Commission recognizes that there are significant differences. In particular, business combination decisions are not of the same volitional nature as other investment decisions. Moreover, typically mergers may give rise to a change in security ownership as a consequence of inaction.

To address the differences in the nature of the investment decision, special provisions have been included in the Form. First, a specifically tailored item covering risk factors, ratio of earnings to fixed charges, certain per share data and other information must be presented in the prospectus regardless of the level of disclosure available to the companies involved. This item, as adopted, has been expanded to reflect commentators' suggestions that the item include: (1) certain additional financial data; and (2) information about regulatory approvals.

While the item highlights certain information discussed more fully elsewhere in the prospectus, or in documents incorporated by reference therein, it is not intended to be a summary of all material information concerning the transaction and the parties thereto. In the case of S-3 companies, where company and management information, including historical financial statements, is not presented in the propsectus, such information will have been furnished to security holders and widely disseminated in the market by means of the company's annual report to security holders. Therefore, this information need not be reiterated in the business combination prospectus. As to other companies, the historical financial statements and other company information will be presented in the prospectus.

Second, the Form establishes a minimum time period if incorporation by reference is used. The time period is designed to address the need for documents incorporated by reference to be delivered to security holders on a timely basis. The proposed Form would have required that, where incorporation by reference is used to take the place of presentation in the delivered document, the prospectus must either: (1) be sent at least twenty business days in advance of the date of the meeting of security holders or the date of the final investment decision; or (2) be accompanied by the documents from which information is incorporated. The proposal also would have provided that where a registrant wishes to proceed faster than the twenty day time period, it could do so by delivering to security holders, along with the prospectus, all documents incorporated by reference therein.

Commentators generally supported the concept of the twenty business day period and the adopted Form requires the prospctus to be sent prior to the proposed twenty business day period where incorporation by reference is used. Concern was expressed, however, that the alternative of delivering documents incorporated by reference could result in a cumbersome and unreadable prospectus because of the potential multiplicity of documents delivered. Accordingly, Form S-4 as adopted, provides a different alternative. Registrants still may proceed faster than the twenty business day period,¹⁶  but if they wish to do so, they must furnish the required information to security holders at the S-1 level. The same quantum of information will be delivered as was provided in the proposal's alternative, but the S-1 alternative provides a more readable format.¹⁷  In addition, the Commission has added a legend to encourage security holders to request the incorporated documents promptly and an undertaking¹⁸  to require the registrant to respond within one business day by first class mail or other equally prompt means.

In addition to these disclosure and timing measures, the Commission directed particular commentator attention to whether other possible alternatives, involving greater degrees of delivery of information, would be appropriate in view of the nature of the investment decision involved in business combination transactions. Commentators rejected the alternatives and favored the Form S-4 approach.

The one respect in which some commentators expressed reservations about the full streamlining afforded by the proposed Form was in the area of contested exchange offers. More than half of the commentators who directed specific comments to exchange offers, however, supported the S-4 approach. Moreover, some concerns were directed, at least in part, to the timing aspects of exchange offers which were not addressed in proposed Form S-4.

Form S-4 implements Recommendation Eleven of the Commission's Advisory Committee on Tender Offers ("Advisory Committee")¹⁹ , one of the recommendations intended to: (1) lessen the regulatory disincentives to using securities as consideration in a tender offer; and (2) promote the equivalency of cash and exchange offers. Recommendation Eleven addresses disclosure in exchange offers, recommending that the approach of the integrated disclosure system be used for exchange offers. As noted in the proposing release, the inclusion of exchange offers in Form S-4 does not affect the timetable for exchange offers. Timing for exchange offers is the subject of Recommendation Twelve which would permit an exchange offer to commence on the date the preliminary registration statement is filed rather than the effective date of the registration statement. If adopted, Recommendation Twelve would put exchange offers on the same timetable as cash offers.²⁰  The Commission wishes to emphasize that Recommendation Twelve is not being implemented with adoption of Form S-4. Moreover, the Form as adopted contains an instruction and an undertaking that ensure Form S-4 cannot be used for this purpose.²¹

The Commission has adopted as proposed the modification of the current procedures for filing reports on Form 8-K in the context of acquisitions. The proposing release also contained policy statements about the implications under the Securities Act and the Exchange Act of a delay in filing or failure to file required financial statements for acquired businesses. In response to commentator concerns and suggestions, these policy statements have been revised in some respects, and certain of the revised statements have been included in the amended Form 8-K.²²

II. Synopsis of the Form

The following synopsis is intended to assist interested parties in their understanding of the Form and related amendments. Attention is directed to the text of the Form and amendments for a more complete understanding of this rulemaking action, including certain technical and clarifying changes not described below.

A. Availability and Use of Form

Form S-4 is available for the registration of securities in connection with Rule 145 transactions as well as other mergers,²³  exchange offers and reoffers or resales of securities registered on the Form.²⁴  In addition, registrants that choose to use the incorporation by reference feature of the Form must send the prospectus twenty business days prior to the date of the meeting of security holders or, where no such meeting is held, the date the investment decision would become final.²⁵  For example, in a consent solicitation the prospectus would have to be disseminated at least twenty business days before the consents could be used to effect the proposal.

B. Business Combinations Involving Entities Required to Use Form S-11

Consistent with specific requirements in Form S-11 and administrative practice under Form S-14, special disclosure provisions apply to business combination transactions involving certain real estate entities, described in Instruction A of Form S-11.²⁶  Form S-4 is available to register securities in connection with business combinations involving such entities and the special disclosure provisions that apply have been adopted as proposed.²⁷

C. Relationship with Exchange Act Rules

The Form S-4 prospectus may serve as the proxy or information statement used in connection with the transaction. It would be deemed to meet the informational and filing requirements of the proxy or information statement rules under Section 14 of the Exchange Act and Regulations 14A²⁸  and 14C²⁹  thereunder, where applicable to the transaction. All other provisions of those regulations also apply.

In addition, General Instruction E.3. of the Form provides that if the transaction in which the securities being registered are to be issued is subject to Section 13(e), 14(d) or 14(e) of the Exchange Act, the disclosure and other provisions of those sections and the rules and regulations thereunder shall apply to the transaction in addition to the provisions of Form S-4. Thus, the provision calling for the more extensive disclosure will prevail, as will the time periods and other substantive provisions of the Williams Act and the Commission's going private and tender offer rules and schedules thereunder.³⁰

D. Transactions Involving Foreign Companies

As noted above, the Commission also has adopted new Form F-4,³¹  which may be used by foreign private companies when they are involved in business combination transactions. General Instruction F of Form S-4 describes which of the new Forms may be used when a foreign private issuer is one of the businesses involved. Form F-4 contains a similar instruction.

E. Automatic Effectiveness of Certain Registration Statements

General Instruction G provides for automatic effectiveness of registration statements filed for the sole purpose³²  of the formation of a bank or savings and loan holding company³³  where the provisions of Staff Accounting Bulletin 50 ("SAB 50") are satisfied.³⁴  Under this provision, original registration statements will become effective automatically on the twentieth day after filing, and post-effective amendments will become effective on filing.³⁵  In response to commentators' suggestions that the Instruction specify the conditions and provisions of SAB 50, rather than include a reference to the SAB, the Instruction has been adopted with these provisions set forth specifically therein for clarity and ease of reference. The Instruction only refers to those provisions in SAB 50 which are conditions to the use of automatic effectiveness. Registrants are directed to SAB 50 for further guidance concerning financial statement provisions.³⁶  The Commission believes that the automatic effectiveness of these registration statements will reduce administrative burdens and provide time and cost savings to registrants. In addition, the Commission, in this release, is adopting corresponding amendments to Rules 406, 464, 473, 475a, and 477 to reflect the automatic effectiveness of such registration statements.

F. Rule 415

Registration statements on Form S-4, because they relate to offerings which are continuous over a period of time, are subject to Rule 415(a)(1)(viii) (business combination transactions) and, if they are to be used for reoffers or resales, to Rule 415(a)(1)(i) (secondary offerings).³⁷

General Instruction H has been added to address situations where the registrant uses Form S-4 for an offering of securities in connection with a business combination transaction which will be effected on a delayed basis. In that case, the registrant must furnish information concerning the type of contemplated transaction(s) and the company(ies) being acquired as of the date of initial effectiveness only to the extent practicable. The required information about the specific transaction(s) and the particular company(ies) being acquired generally must be provided by post-effective amendment. For example, where an acquisition will be effected in a multi-step transaction in which there is an exchange offer followed by a merger, the initial registration statement would contain a prospectus that includes information about the exchange offer.³⁸  A post-effective amendment would have to be filed to provide information with respect to the second step merger.

In order to implement the content of General Instruction H, an undertaking has been added to Item 22 of the Form. This undertaking, to file post-effective amendments with respect to transactions contemplated after effectiveness, is required in addition to the undertakings required by Item 512(a) of Regulation S-K.³⁹  The new undertaking will ensure that Rule 415 cannot be used to implement Recommendation Twelve of the Advisory Committee's recommendations,⁴⁰  by using a prospectus supplement to provide for the immediate commencement of an exchange offer.

On the other hand, if the transaction in which the securities are being offered pursuant to a registration statement under the Securities Act would itself qualify for an exemption from Section 5 of the Act, but for the existence of other similar (prior or subsequent) transactions, then a prospectus supplement may be used to provide information necessary in connection with such transaction.⁴¹  General Instruction H codifies this administrative practice with respect to transactions the securities for which currently are registered on Form S-1 or S-14.

G. Structure of the Form

The two part structure of Form S-4, separating the information which must be included in the prospectus (Part I) and that which need not (Part II), is the same as other Securities Act forms. Part I of the Form is divided into four separate sections in order to set forth clearly the requirements relating to the transaction, the companies involved, voting and management information.

1. Information Required in the Prospectus Part I

a. Information about the Transaction Section A

Section A calls for information about the transaction. This information must be presented in the prospectus instead of being incorporated by reference. The items in Section A include: Items 1 and 2, information called for by Items 501⁴²  and 502⁴³  of Regulation S-K; Item 3, risk factors, ratio of earnings to fixed charges and other information; Item 4, terms of the transaction; Item 5, pro forma financial information; Item 6, material contacts between the companies; Item 7, additional information related to resales; and Items 8 and 9, information called for by Items 509⁴⁴  and 510⁴⁵  of Regulation S-K. These items are adopted substantially as proposed; there follows a discussion of areas where changes have been made from the proposal, or that otherwise are highlighted.

(1) Risk Factors, Ratio of Earnings to Fixed Charges and Other Information Item 3

Item 3 is adopted with modifications and additional items that reflect commentators' suggestions. First, the Item has been redesignated "Risk Factors, Ratio of Earnings to Fixed Charges and Other Information," to clarify that the information set forth in this part of the prospectus is not a summary of all material information concerning the transaction. The Item requires the registrant to furnish information required by Item 503 of Regulation S-K;⁴⁶  the name and address of the subject entities; a brief description of business and properties; a brief description of the transaction; certain comparative per share data; a statement concerning dissenters' appraisal rights; a statement comparing the percentage of outstanding voting shares held by directors, officers and their affiliates; the vote required for approval; and a brief statement regarding the tax consequences of the proposed transaction.⁴⁷

Based upon commentators' suggestions, Item 3 has been revised further to require (1) a statement as to whether any federal or state regulatory requirements must be complied with or approvals must be obtained in connection with the transaction, and if so, the status of such compliance or approvals; and (2) a requirement to furnish the information required by Item 301 of Regulation S-K⁴⁸  (condensed financial data for five year trend information) for (1) the registrant; (2) the company being acquired; and (3) if material with respect to the registrant, pro forma data giving effect to the transaction.⁴⁹  As a result of this change, the time period requirements for the comparative per share data and equivalent per share data have been revised to reflect that the Item 301 time periods provide the basis for such comparative data.

(2) Terms of the Transaction Item 4

Item 4 calls for a description of the terms of the transaction, including information about the acquisition agreement, reasons for and consequences of the transaction, description of securities and differences in the rights of security holders. This Item, as adopted, reflects several changes from the proposal in response to commentator suggestions.

Proposed Form S-4 allowed registrants eligible to use Form S-3 to incorporate by reference the description of the securities being issued in the transaction if the same securities are registered under the Exchange Act. The adopted Item has changed the conditions under which the description of securities may be incorporated by reference to require not only that securities of the same class as those being offered must be registered under Section 12 of the Exchange Act, but also that these securities must be listed for trading or admitted to unlisted trading privileges on a national exchange, or be securities for which bid and offer quotations are reported in an automated quotations system operated by a national securities association. This change responds to commentators' concerns by ensuring that security holders receive the description of any class of securities that previously has not been trading.

The proposed Form would have required disclosure of the effect of the transaction on the registrant, the company being acquired and the existing security holders of both. This requirement has been deleted because commentators believed disclosure of the effect of the transaction would be duplicative of the requirement in Item 4(a)(2) for disclosure of the reasons for the transaction. For example, if the registrant plans to dispose of substantial components or assets of the company being acquired, disclosure of such plans would be called for pursuant to Item 4(a)(2).

Item 4 also has been revised to codify existing administrative practice in the area of investment banking and other opinions. The Item requires that if the registrant or the company being acquired has obtained a report, opinion or appraisal from an outside party as to the transaction and refers to such opinion in the prospectus, then the information called for by Item 9(b)(1) of Schedule 13E-3⁵⁰  must be furnished. The Item does not require that such a report be obtained or that there be an affirmative statement as to whether one was obtained. The Item applies only where a report has been obtained and reference to it is made in the prospectus.

In addition, pursuant to commentators' suggestions, a requirement to furnish a brief statement as to the accounting treatment of the transaction has been added. This item will elicit disclosure as to whether the proposed acquisition will be accounted for as a purchase transaction or as a pooling of interests transaction.

Finally, Item 4(b) of the proposed Form would have required incorporation by reference of the acquisition agreement into the prospectus and an undertaking that the agreement be furnished, without charge, by first class mail or other equally prompt means, to security holders that request it. In this regard, the Commission solicited comment as to whether it should: (1) give guidance as to which of the provisions of the acquisition agreement registrants should discuss pursuant to Item 4(a)(1); and (2) in keeping with its goal of streamlining disclosure, take further steps to discourage delivery of the acquisition agreement. Commentators generally supported the incorporation by reference requirement, but indicated that timely delivery of the acquisition agreement to security holders that request it would be essential to the adequacy of the requirement. Commentators did not believe any further steps would be appropriate in this area. The Commission agrees and has adopted Item 4(b) with the one modification that the undertaking to furnish the agreement has been deleted because it is duplicative of the new undertaking added as Item 22(b).⁵¹

(3) Pro Forma Financial Information Item 5

This Item has been adopted as proposed. The pro forma financial information relating to the transaction pursuant to which a Form S-4 is filed, like other transaction information, must be presented in the prospectus and may not be incorporated by reference. However, pro forma information relating to other business combinations besides the transaction pursuant to which this registration statement is filed is treated like company information and, therefore, may be presented in the prospectus or incorporated by reference therein.

(4) Material Contacts Between Companies Item 6

Item 6 of Form S-4, which has been adopted as proposed, calls for information relating to any past, present or proposed material contracts, negotiations, transactions or similar contacts between the registrant and the company being acquired. The Item is designed to elicit information about: (1) possible conflicts of interest and (2) facts relating to transactions such as pre-takeover transactions or purchases by the registrant of significant blocks of the securities of the company being acquired.

b. Information About the Registrant Section B

(1) Reporting Companies

If a registrant is subject to either Section 13(a) or 15(d) of the Exchange Act, the information it would have to present in the prospectus about itself is the same as that required by Form S-1, S-2 or S-3⁵²  if it were making a primary offering of securities not involving a business combination.⁵³  Registrants eligible to use Form S-2 or S-3 are not required to present information at the most streamlined level available, but may elect instead to comply with provisions of the Form calling for greater prospectus presentation. General Instruction B explains the operation of the three-tier system in the context of registration on Form S-4 and, as adopted, reflects certain clarifying language changes.

(2) Non-Reporting Companies

For registrants that are not subject to the reporting requirements of the Exchange Act, Form S-4 requires disclosure of company information at the level prescribed by Form S-1. The majority of the commentators supported this approach and these requirements have been adopted as proposed.

In the proposing release, the Commission also sought comment as to whether the disclosure level of Form S-18⁵⁴  should be made available where te company(ies) involved could use that Form for an initial public offering, i.e., where the company is non-public and the value of the securities being registered does not exceed $7.5 million. While the commentators who addressed this point supported the concept, they also questioned its utility in the business combination context in light of the dollar amount limitation. Moreover, the Form S-4 financial disclosure requirements discussed below with respect to non-reporting companies being acquired are less burdensome for non-reporting companies being acquired than are those of Form S-18, which requires a two year audit. Based upon the questionable utility of the S-18 approach and the complexity its implementation would add to Form S-4, with little concommitant benefit, the Commission has determined not to pursue this approach.

c. Information About the Company Being Acquired Section C

(1) Reporting Companies

Form S-4 generally provides for the same prospectus presentation about a reporting company being acquired that would be required by Form S-1, S-2 or S-3 were such company making a primary offering of securities not involving a business combination. Thus, Form S-4 for the most part requires registrants to provide information about the company being acquired as if that company were the registrant.

(2) Non-Reporting Companies

Form S-4 allows registrants to elect to provide information about non-reporting companies being acquired either at the S-1 level or at a level that is the same as that required under Form S-15 for non-reporting companies being acquired. With respect to financial statement requirements, this approach reflects a change from the proposal, which is discussed below. The Commission believes that these revised requirements strike a more appropriate balance between the cost of collecting and processing information not previously developed, and the investor's need for information. In addition, the definition of a non-reporting company being acquired has been modified, in Item 17(b), to include, in addition to companies not suject to the reporting requirements of either Section 13(a) or 15(d) of the Exchange Act, a public company which, because of Section 12(i) of the Exchange Act, has not furnished an annual report to security holders pursuant to Rule 14a-3⁵⁵  or Rule 14c-3⁵⁶  for its latest fiscal year.

Proposed Form S-4 would have required non-reporting companies being acquired to provide audited financial statements for the periods required to be presented by Rule 3-05 of Regulation S-X.⁵⁷  In addition, the proposed Form carried over the provisions of Item 15 of Schedule 14A⁵⁸  that such financial statements need be certified⁵⁹  only to the extent practicable, but that reoffers to the public by any person who is deemed an underwriter within the meaning of Rule 145(c) would be prohibited until the required certified statements are provided.

Pursuant to commentator suggestion that some minimum level of disclosure should be required in the Form as to both entities, the financial statement requirements of Form S-4 with respect to non-reporting companies being acquired have been changed to incorporate the current requirements of Form S-15. Thus, Item 17(b)(7) provides that a non-reporting company being acquired must provide three year financial statements as would have been required to be included in an annual report furnished to security holders pursuant to Rule 14a-3(b)(1) and (b)(2) or Rule 14c-3(b)(1) or (b)(2), had the company being acquired been required to prepare such report. The balance sheet for the year preceding the latest full fiscal year and the income statements for the two preceding years, however, need not be audited if they have previously not been audited. In addition, the quarterly financial and other information that would have been furnished had the company being acquired been required to file Part I of Form 10-Q⁶⁰  for the most recent quarter prior to the time of effectiveness of the registration statement must be furnished.

d. Voting and Management Information Section D

(1) Voting Information

If a proxy, consent⁶¹  or authorization is to be solicited, Form S-4 requires registrants to present in the prospectus information concerning (1) the vote needed for approval, (2) dissenters' rights of appraisal, (3) revocability of proxies, (4) interest of certain persons in the transaction, (5) persons making the solicitation and (6) the registrant's relationship with independent public accountants. In the absence of a solicitation, the Form requires prospectus presentation of information about (1) the date of the shareholder meeting, (2) the vote required for approval, (3) dissenters' rights of appraisal, (4) the registrant's relationship with independent public accountants and (5) a statement that proxies, consents or authorizations are not being solicited. These requirements have been adopted as proposed, except that Item 19 has been revised to make clear which provisions thereof are not applicable in the case of exchange offers.

(2) Management Information

Whether or not proxies are to be solicited, Form S-4 requires information concerning voting securities and the principal holders of such shares⁶²  with respect to all directors and executive officers of both entities and, with regard to the directors and executive officers of the surviving or acquiring company, information about directors and executive officers,⁶³  certain relationships and related transactions,⁶⁴  and executive compensation.⁶⁵  The Form permits incorporation by reference of management information to the same extent as would be permitted in a primary offering not involving a business combination under Forms S-1, S-2, and S-3.

2. Information Not Required in the Prospectus Part II

Part II of Form S-4 prescribes information called for by: (1) Item 702 of Regulation S-K⁶⁶  indemnification of directors and officers; (2) Item 601 of Regulation S-K, exhibits; and (3) Item 512 of Regulation S-K, undertakings. This information would be included in the registration statement, but could be omitted from the prospectus. These requirements have been adopted as proposed, with the addition of the two new undertakings (compliance with requests for information incorporated by reference and post-effective amendments for delayed business combinations) and the new exhibit requirement for reports, opinions or appraisals materially related to the transaction that are referenced in the prospectus.

H. Other Amendments

1. Corresponding Amendments

a. The Commission also has adopted corresponding amendments to Rule 3-05 of Regulation S-X, Items 502,⁶⁷  512 and 601 of Regulation S-K, Rules 406, 463, 464, 473, 475a and 477 under the Securities Act and Rules 14a-3, 14a-6, 14c-2 and 14c-5 under the Exchange Act. These amendments are necessitated by rescission of Form S-15 and its replacement with Forms S-4 and F-4. The changes delete references to Form S-15 and, where appropriate, replace them with references to Form S-4 or F-4. The Commission notes that although Form F-4 is not being published in this release, the technical amendments necessitated by its adoption are included in this release to avoid unnecessary duplication. The amendment to Rule 145(a)(2) to codify the staff position that the Rule's change in domicile exception does not apply to a change in national jurisdiction is included in the F-4 release, however, because it applies in the foreign context.

2. New Investment Company Merger Proxy Form

The Commission notes that registered investment companies and business development companies, as defined in Section 2(a)(48) of the Investment Company Act of 1940⁶⁸  currently may register securities issued in connection with business combinations on Form S-14. Form S-4 is not available for the registration of securities in connection with a business combination where the registrant is a registered investment company or a business development company. The Commission has proposed a new merger proxy form, Form N-14,⁶⁹  that, if adopted, will be available for use by such companies and will replace Form S-14 for these companies. Form S-14 will be retained only for these companies and business development companies on a temporary basis until the new form is adopted, at which time Form S-14 will be rescinded.

3. Item 502 of Regulation S-K

In addition to the corresponding amendments noted above, a clarifying amendment to Item 502 of Regulation S-K also has been adopted. The amendment clarifies that the undertaking required of registrants to send documents that are incorporated and not delivered extends to beneficial owners.

4. Rule 145 Preliminary Note

The Commission has eliminated from the preliminary note to Rule 145 under the Securities Act certain details concerning the history and application of Rule 133. Rule 133, which contained the Commission's previously existing "no-sale" theory, was rescinded effective January 1, 1973 following the adoption of Rule 145.⁷⁰  The portions of the preliminary note the Commission has deleted pertain to the applicability of Rule 133 and are no longer relevant.

5. Form 8-K Reports of Acquisitions

The Commission has adopted as proposed a modification of the current procedures for filing reports on Form 8-K in the context of acquisitions. Currently, a reporting registrant must file a report on Form 8-K within fifteen days after it has made an acquisition. In that report, the registrant must provide a description of the acquisition pursuant to Item 2, and the financial statements and pro forma financial information prescribed by Rule 3-05 and Article 11 of Regulation S-X pursuant to Item 7. As amended, Item 7 of Form 8-K provides an extension of up to 60 days, from the date the filing initially is due, for filing the financial statements and pro forma financial information regarding an acquired business. The extension is available where: (1) the provision of such information within fifteen days is impracticable; (2) the registrant so states in its filing on Form 8-K and states the date such financial statements are expected to be filed by an amendment; and (3) the registrant provides such financial information as soon as practicable within the 60 day period. Commentators generally supported the proposed amendment.

Under the amended procedure, registrants, upon notice in the initial Form 8-K report filed in connection with the acquisition, would have up to 60 additional days⁷¹  in which to provide Item 7 financial information where the provision of the required audited financial statements and pro forma financial information within fifteen days would be impracticable. In such an instance, the registrant would have to provide within the regular fifteen day deadline as much of the required financial statements as then were available, including where appropriate, unaudited financial statements.

The proposing release also contained policy statements concerning the implications under the Securities Act and the Exchange Act of a delay in filing or failure to file required financial statements for acquired businesses. In response to commentator concerns and suggestions, these policy statements have been revised in some respects. In addition, new instructions have been added to revised Item 7(a)(4) in order to set forth certain of the revised policies in the Form itself.

During the pendency of the extension, registrants would be deemed current for purposes of their reporting requirements under the Exchange Act. With respect to filings under the Securities Act, registration statements and post-effective amendments to effective registration statements would not be declared effective. In addition, offers and sales should not be made pursuant to effective registration statements, or pursuant to Rules 505 and 506 of Regulation D⁷²  where any purchaser is not an accredited investor under Rule 501(a) of that Regulation, until the required audited financial statements are furnished. This prohibition, however, does not affect offerings or sales, made: (1) upon the conversion of outstanding convertible securities, or the exercise of outstanding warrants or rights; (2) pursuant to dividend or interest reinvestment plans on Form S-3; (3) pursuant to employee benefit plans on Form S-8; (4) in transactions involving secondary offerings; or (5) in reofferings or resales of securities pursuant to Rule 144.⁷³  These positions respecting the pendency of the 60 day extension are described in new Instruction 1 to Item 7(a)(4) and reflect changes made: (1) to clarify the status of effective shelf registration statements; (2) to rescind the previous position that affiliates of the registrant would not be permitted to resell securities in reliance on Rule 144;⁷⁴  and (3) to explain the implications of an extension under Regulation D.

As noted in the proposing release, no further extensions of the filing period will be available. A few commentators indicated that this policy should be modified to allow requests for further extensions of time in the most unusual circumstances, such as in the event that unforeseeable delays are encountered during the course of an audit. The Commission believes, however, that the purposes of the Exchange Act, "to insure the maintenance of fair and honest markets in securities transactions ...",⁷⁵  may be better served without a further extension procedure.⁷⁶  Moreover, it should be noted that the notification procedure and the availability of the 60 day extension should not be an invitation to non-timely filing of the required financial information.

Finally, the proposing release stated that in certain rare instances the Division would consider requests for waiver of some or all of the required financial information. The Commission wishes to emphasize that a waiver of the financial statement requirements will be considered only where the circumstances are so rare as to constitute a unique occurrence in the life of the registrant. The waiver process will be administered for the Commission by the Division of Corporation Finance, on a case by case basis. As was stated in the proposing release, in determining whether to grant a waiver, the Division will consider: (1) the size of the acquisition relative to the registrant;⁷⁷  (2) the reasons why the statements cannot be obtained;⁷⁸  and (3) the financial information the registrant can provide.⁷⁹  All three factors will be considered together. The larger the acquisition, the more compelling the reasons must be, and the more important that information which can be provided becomes. While certain commentators suggested the need for explicit guidelines as to the standards to be applied to requests for waiver, the unique facts and circumstances under which such requests would be considered make guidelines impracticable.

Where a waiver is not granted and the required financial statements are not supplied in the time prescribed, registrants are notified that the deficiency may affect the registrant for both Exchange Act and Securities Act purposes. Depending on the circumstances and the relevancy of the information, the registrant may not be considered timely or current in its Exchange Act reporting obligations and, where appropriate, enforcement action would be taken. Once the registrant has furnished audited financial statements of the new combined entity for an appropriate period,⁸⁰  it could, in some cases, be considered current for Exchange Act purposes, and also may be able to register securities under the Securities Act.

Statutory Authority

The Commission is adopting Form S-4 and the related amendments pursuant to Sections 5, 6, 7, 10 and 19(a) of the Securities Act and Sections 14(a), 14(c) and 23(a) of the Exchange Act.

As required by Section 23(a) of the Exchange Act, the Commission has considered specifically the impact that the rulemaking actions revising 17 CFR Parts 210, 229, 230, 239, 240 and 249 taken pursuant to the various provisions of the Exchange Act would have on competition, and has concluded that they would impose no significant burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act.

FINAL REGULATORY FLEXIBILITY ANALYSIS

This final regulatory flexibility analysis, which relates to Form S-4, has been prepared in accordance with 5 U.S.C. 604. The corresponding Initial Regulatory Flexibility Analysis is contained in the proposing release (Release No. 33-6534, May 9, 1984 [49 FR 20833]).

The Need for and Objectives of Form S-4

The Form is designed to improve the effectiveness of the business combinations prospectus by requiring that information be presented in a more accessible and meaningful format, and to simplify the registration of securities issued in such transactions. The Commission is implementing these objectives by applying to business combination transactions the principles of the integrated disclosure system developed in the context of primary offerings of securities. Thus, information about the companies involved is presented in, delivered with, or incorporated by reference into, the prospectus to the same extent as provided when such companies are making primary offerings. Form S-4 together with Form F-4 replaces Form S-15 under the Securities Act of 1933 ("Securities Act") and is available for the registration of all business combination transactions, including exchange offers previously registered on Form S-1 under the Securities Act.

Issues Raised by Public Comment

No commentators referred to the Initial Regulatory Flexibility Analysis in Commenting on proposed Form S-4.

Significant Alternatives

Form S-4 is modeled on the disclosure requirements contained in Forms S-1, S-2 and S-3, the basic forms under the Commission's integrated disclosure system. In developing those Forms, the Commission carefully analyzed whether they should be adapted specially for use by small entities. The Commission concluded that the better approach was to address the needs of small entities separately in the context of Regulation D and Form S-18. The Commission in connection with Form S-4, considered whether the disclosure level of Form S-18 should be made available where a company involved could use that Form for an initial public offering. Although some commentators supported the concept, they questioned its utility in the business combination context in light of the $7.5 million limit on the value of securities registered on Form S-18. Moreover, the fact that the financial disclosure requirements of Form S-4 are less burdensome for non-reporting companies being acquired than those of Form S-18, indicates that the Form S-18 approach would increase the complexity of Form S-4, with little concommitant benefit for small entities. Accordingly, the Commission has determined not to implement this alternative. Form S-4 thus requires disclosure according to the levels represented by Forms S-1, S-2 and S-3 in the primary offering context. The Commission does not believe that other alternatives, including use of a performance rather than a design standard, or exempting small entities from all or part of the requirements of the Form would accomplish the Commission's statutory mandate to protect investors.

Text of Amendments

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

PART 210 FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT COMPANY ACT OF 1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975

1. By revising paragraph (b)(1) introductory text of §210.3-05 to read as follows: * * * [Text omitted.]

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

2. By revising paragraph (c) of §229.502 to read as follows: * * * [Text omitted.]

3. By revising paragraph (h) introductory text of §229.512 to read as follows: * * * [Text omitted.]

4. By revising the Exhibit Table and revising paragraph (b)(4)(ii) of §229.601 to read as follows: * * * [Text omitted.]

PART 230 GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

5. By revising the Preliminary Note to §230.145 to read as follows: * * * [Text omitted.]

6. By revising the section heading and paragraph (a) of §230.406 to read as follows: * * * [Text omitted.]

7. By revising paragraph (d) of §230.463 to include new subparagraphs (8) and (9) as follows: * * * [Text omitted.]

8. By revising the section heading, the introductory paragraph and paragraph (b) of §230.464 to read as follows: * * * [Text omitted.]

9. By revising paragraph (d) of §230.473 to read as follows: * * * [Text omitted.]

10. By revising §230.475a to read as follows: * * * [Text omitted.]

11. By revising paragraph (b) of §230.477 to read as follows: * * * [Text omitted.]

PART 239 FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

12. By removing §239.29

13. By revising the section heading and §239.23 to read as follows: * * * [Text omitted.]

14. By adding §239.25 to read as follows: * * * [Text omitted.]

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

15. By revising paragraph (a) of §240.14a-3 to read as follows: * * * [Text omitted.]

16. By revising paragraph (j) of §240.14a-6 to read as follows: * * * [Text omitted.]

17. By revising paragraph (a) of §240.14c-2 to read as follows: * * * [Text omitted.]

18. By revising paragraph (e) of §240.14c-5 to read as follows: * * * [Text omitted.]

PART 249 FORMS, SECURITIES EXCHANGE ACT OF 1934

19. By revising paragraph (a)(4) of Item 7 of Form 8-K described in §249.308 to read as follows: * * * [Text omitted.]

(Secs. 5, 6, 7, 10, 19(a), 48 Stat. 77, 78, 81, 85; secs. 204, 205, 209, 48 Stat. 906, 908; secs. 7, 8, 66 Stat. 684, 685; sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; 15 U.S.C. 77e, 77f, 77g, 77j, 77s(a); secs. 14(a), 14(c), 23(a), 48 Stat. 805, 901; sec. 203(a), 49 Stat. 704; sec. 8, 49 Stat. 1379; sec. 5, 78 Stat. 569, 570; sec. 18, 85 Stat. 155; 15 U.S.C. 78n(a), (c), 78w(a))

By the Commission.

¹ 15 U.S.C. 77a-77aa (1976 and Supp. V 1981), as amended by Business Regulatory Reform Act of 1982, Pub. L. No. 97-261, §19(d), 96 Stat. 1121 (1982).

² . 17 CFR 230.145. The transactions specified in Rule 145 include certain reclassifications, mergers, consolidations and transfers of assets.

³ In a separate release, the Commission also is announcing the adoption of Form F-4  to be used by certain foreign private issuers to register securities in the context of the same kind of business combination transactions encompassed by Form S-4. See Release No. 33-6579 (April 23, 1985). Form F-4 is to be used by a foreign private issuer, as that phrase is defined in Rule 405 under the Securities Act, eligible to use Form 20-F.

⁴ 15 U.S.C. 78a-78kk (1976 and Supp. V 1981), as amended by Act of June 6, 1983, Pub. L. No. 98-38, 97 Stat. 205 (1983).

⁵  17 CFR 249.308.

⁶ The Commission today is adopting amendments to: (1) Rule 3-05 of Regulation S-X; (2) Items 502, 512 and 601 of Regulation S-K, 512, 601); (3) Rules 145, 406, 463, 464, 473, 475a and 477 under the Securities Act, 406, 463, 464, 473, 475a, 477); (4) Rules 14a-3, 14a-6, 14c-2 and 14c-5 under the Exchange Act , 14a-6, 14c-2, 14c-5); and (5) Form 8-K under the Exchange Act.

⁷ These amendments are the fifth rulemaking initiative in the Commission's program. The first initiative was the adoption of a new uniform Regulation S-K item relating to the disclosure of certain relationships and transactions involving management (Release No. 33-6441 (December 2, 1982) [47 FR 55661]). The second initiative was the adoption of amendments designed to facilitate shareholder communications (Release No. 34-20021 (July 25, 1983) [48 FR 35082]). The third was the adoption of amendments to the Commission's shareholder proposal rule, Rule 14a-8 (Release No. 34-20091 (August 16, 1983) [48 FR 38218]). The fourth initiative was the adoption of amendments to the uniform Regulation S-K item governing the disclosure of executive compensation, Item 402 (Release No. 33-6486 (September 23, 1983) [48 FR 44467]).

⁸ See proposed Form S-14A (Release No. 33-5744 (September 27, 1976) [41 FR 43876]), later withdrawn (Release No. 33-5806 (February 16, 1977) [42 FR 10855]); See also Freund and Greene, Substance Over Form S-14: A Proposal to Reform SEC Regulation of Negotiated Acquisitions, 36 Bus. Law 1483 (1981), which grew out of work done on a consulting basis with the Division of Corporation Finance.

⁹ Release No. 33-6534 (May 9, 1984) [49 FR 20833]. The Commission received 43 comment letters on proposed Form S-4. The comment letters and a summary of the comments prepared by the staff are available for inspection and copying at the Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. See File No. S7-20-84.

¹⁰  17 CFR 239.29. Form S-15 was adopted for the registration of securities in connection with relatively small business combination transactions and requires that the registrant's latest annual report to security holders be delivered to security holders and incorporated by reference into the prospectus (i.e., it provides the same level of disclosure as does Form S-2 under the Securities Act). See Release No. 33-6232 (September 2, 1980) [45 FR 63647], adopting Form S-15.

¹¹  17 CFR 239.23. Form S-14 will be retained for use by registered investment companies and business development companies pending the adoption of Form N-14. See Section H.2. infra, "New Investment Company Merger Proxy Form."

¹² Prior to the adoption of Form S-15 in 1980, exchange offers could be registered on Forms S-1, S-7 or S-11. In 1982, the Commission adopted the final phase of the integrated disclosure system and determined generally that Form S-2, which replaced Form S-7 as the middle-tier form, and Form S-3 would not be available for registration of exchange offers pending this business combinations project. Forms S-1 and F-1 currently are, and will continue to be, available for registration of securities in the context of exchange offers. See fn. 24, infra.

¹³  17 CFR 239.11.

¹⁴   17 CFR 239.13.

¹⁵ Extending the principles of integration to business combinations is, in part, predicated on the fact that annual reports are disseminated to security holders. These annual reports contain the basic information package (financial statements, management's discussion and analysis, selected financial data and market data) adopted in 1980 as the foundation for the integrated disclosure system. See Release No. 33-6321 (September 2, 1980). This company information is the same kind of information that would be required to be included in the prospectus. Because it already has been disseminated to security holders, it need not be repeated in the business combination prospectus involving S-3 companies. The Commission has not sanctioned in this proceeding any revision of the basic information package, such as summary annual reports to security holders.

¹⁶ Of course, Form S-4 makes clear that for exchange offers, there must be compliance with the Williams Act [Sections 13(d)-(f) and 14(d)-(g) of the Exchange Act, 15 U.S.C. §§78m(d)-(f), 78n (d)-(g)], and the regulations thereunder. With respect to mergers, the Commission notes that any accelerated timing must comply with applicable state law. In a recent case, the Delaware Supreme Court stated that "... in an appropriate case, an otherwise candid proxy statement may be so untimely as to defeat its purpose of meeting the needs of a fully informed electorate." Smith v. Van Gorkom, No. 255, 1982, slip op. at 74 (Del. Jan. 29, 1985) opinion revised, March 14, 1985. In this regard, the language in the proposed General Instruction A.2. relating to compliance with applicable federal or state law has been deleted as unnecessary.

¹⁷ This approach is consistent with that of Form S-15, which allowed the S-2 level of disclosure, but provided for 20 day prior delivery.

¹⁸ See Item 22(b) of Form S-4.

¹⁹ Advisory Committee on Tender Offers Report on Recommendations ("Report) (July, 1983). The Advisory Committee was established by the Commission to examine the tender offer process and other techniques for acquiring control of public issuers and to recommend to the Commission legislative and/or regulatory changes the Committee considered appropriate or necessary. See Release No. 34-19528 (February 25, 1983) [48 FR 9111].

²⁰ See Release No. 33-6534 (May 9, 1984) [49 FR 20833, 20834].

²¹ See General Instruction H and Item 22(c) of the Form.

²² See Instructions to revised Item 7(a)(4) of Form 8-K.

²³ Merger transactions to which General Instruction A.1.(2) of Form S-4 would apply include short form mergers pursuant to state corporation laws similar to Section 253 of the Delaware General Corporation Law (the "DGCL") and merger by consent provisions like those found in Section 228 of the DGCL. The former provision authorizes a parent corporation owning at least 90 percent of a subsidiary to merge that subsidiary into the parent pursuant to the unilateral action of the board of directors of the parent with the minority holders not entitled to vote or give an authorization or consent. The latter provision authorizes the taking of corporate action without a meeting, without prior notice and without a vote, if consent in writing setting forth the action is signed by the holders of outstanding stock having not less than the minimum number of votes necessary to authorize or take such action at a meeting. A clarifying amendment has been made to General Instruction A.1.(2) of the Form S-4.

²⁴ Form S-1 will remain available for mergers and exchange offers. For example, registrants may choose to use Form S-1 and to have the company being acquired prepare its own proxy statement so that the company being acquired will assume liability for the information in its own proxy statement. Of course, Forms S-2 and S-3, which are not available for business combination transactions, will remain unavailable for such transactions because registrants qualifying for use of those forms may use the respective forms' disclosure approaches through the use of Form S-4. Form S-4 also will be available for registration of securities in connection with issuer exchange offers.

²⁵ Form S-4 also contains two related provisions:

(1) the requirement in Item 2 of a legend in the prospectus to inform investors that they need to make prompt requests for documents incorporated by reference; and

(2) a requirement in Item 22 for an undertaking by registrants to respond to requests for documents within one business day and to furnish the requested documents by first class mail or other equally prompt means. Where the registration statement incorporates by reference documents at the S-3 level, a request for such documents would include documents filed subsequent to the effective date of the registration statement up to the date of the response to the request. The undertaking would not require delivery of incorporated documents filed subsequent to such request.

²⁶ General Instruction A of Form S-11 provides that the Form shall be used to register securities issued by: (i) a real estate investment trust, as defined in Section 856 of the Internal Revenue Code; or (ii) other issuers whose businesses are primarily that of acquiring and holding for investment real estate or interests in real estate or interests in other issuers whose businesses are primarily that of acquiring and holding real estate or interests in real estate for investment.

²⁷ See General Instruction B.2. with respect to the acquiring entity and General Instruction C.2. concerning the entity being acquired. See also Release No. 33-6534 (May 9, 1984) [49 FR 20833, 20835].

²⁸  17 CFR 240.14a-1 to 14b-1.

²⁹  17 CFR 240.14c-1 to 14c-101.

³⁰ For example, if the transaction is an exchange offer subject to Regulation 14D, the registrant is required to disseminate material changes pursuant to Rule 14d-4(c) if a registrant has delivered requested documents to security holders and those documents reflect the material change, this would constitute compliance with Rule 14d-4(c). If, however, the documents do not reflect the material change or have not been sent to security holders, then the registrant still must comply with Rule 14d-4(c). Similarly, if the transaction is an exchange offer where the vote passes with the tender of shares, then the proxy regulations also will apply to the transaction. The Form S-4 filing may be used to satisfy the Schedule 14D-1 (Tender Offer Statement) and, if the parties so choose, the subject company's Schedule 14D-9 (Tender Offer Solicitation/Recommendation Statement) filing obligation.

³¹ SEC Release No. 33-6579 (April 23, 1985) [ FR ].

³² This Instruction will not apply if there are any other proposals, e.g., antitakeover amendments to a corporate charter.

³³ To date, securities issued in connection with the conversion of banks to bank holding companies and savings and loan associations to savings and loan holding companies have been registered on Form S-1 or S-14, depending upon the nature of the transaction. Legislation that would have exempted such transactions from registration under the Securities Act where only a change in form is contemplated and certain other conditions are satisfied passed the Senate in the 98th Congress as S.2851, 98th Cong., 2d Sess. (1984). No such legislation passed the House of Representatives, however, and the exemptive provision, along with other features of the Senate bill, has not been reintroduced in the 99th Congress.

³⁴ SAB 50 reflects the staff's position regarding the financial statement requirements in filings involving the formation of one-bank holding companies. Release SAB-50 (March 3, 1983) [48 FR 10043].

³⁵ As noted in the proposing release, this provision is similar to the automatic effectiveness provisions of Form S-8 and for certain filings on Form S-3 and F-3. In addition, to assist the proper processing of such filings, the Form includes a box on the cover page indicating the registration in connection with the formation of a holding company and compliance with General Instruction G.

³⁶ Of course, the references to Form S-14 in SAB 50 should be construed to be references to Form S-4 after its adoption.

³⁷ 17 CFR 230.415(a)(1)(i) and (viii). In view of this position, it was not necessary to include a Rule 415 cover page box in Form S-4 as adopted.

³⁸ Where such a second step in a multi-step transaction becomes probable, however, pro forma financial information is required at this point as to the effects of both the exchange offer and the second step merger. See Financial Reporting Release 2, Release No. 33-6413 (June 24, 1982) [47 FR 29832].

³⁹  17 CFR 229.512(a). Item 512(a) requires the registrant, in an offering of securities pursuant to Rule 415 to undertake to update the prospectus by post-effective amendment to reflect: (1) any prospectus required by Section 10(a)(3) of the Securities Act; (2) facts or events arising after the effective date of the registration statement which constitute a fundamental change; and (3) any material information with respect to the plan of distribution not disclosed previously in the registration statement or any material change to such information in the registration statement. The Item also requires an undertaking to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

⁴⁰ See discussion at page 13, infra.

⁴¹ See, e.g., (Letter re Beatrice Foods Co., [1973] Fed. Sec. L. Rep. (CCH) (available January 17, 1973).

⁴²  17 CFR 229.501 (forepart of registration statement and outside front cover page of prospectus).

⁴³  17 CFR 229.502 (inside front and outside back cover page of prospectus).

⁴⁴  17 CFR 229.509 (interests of named experts and counsel).

⁴⁵  17 CFR 229.510 (disclosure of Commission position on indemnification).

⁴⁶ 17 CFR 229.503 (summary information, risk factors and ratio of earnings to fixed charges).

⁴⁷ In view of the complexity of the tax consequences of certain business combination transactions, revised Item 3(j) permits registrants to provide, where appropriate, only a cross reference to the information furnished pursuant to Item 4 of the Form.

⁴⁸  17 CFR 229.301(selected financial data).

⁴⁹ Where S-2 or S-1 companies are involved, this information already is required to be presented pursuant to other items of the Form.

⁵⁰  17 CFR 240.13e-100. Of course, the person rendering such opinion would be an expert within the meaning of Section 7 of the Securities Act and, accordingly, would be required to furnish the required consent. Moreover, a requirement to furnish the report, opinion or appraisal as an exhibit to the registration statement, if it has been referenced in the prospectus, has been added in Item 21(c) of Form S-4.

⁵¹ See fn. 25, infra.

⁵² Application of the Form S-3 level includes the forward incorporation feature of that Form, i.e., the incorporation by reference of subsequently filed Exchange Act reports, including all reports filed subsequent to the effectiveness of the registration statement and prior to the termination of the offering. As the Commission noted in proposing Form S-3, however:

Despite the fact that subsequently filed periodic reports under the Exchange Act are incorporated by reference into a Form S-3 prospectus, registrants should be aware that they may be required to amend the prospectus if the information actually presented therein has become materially false and misleading by reason of subsequent events that are reported in the incorporated Exchange Act documents.

See Release No. 33-6331 (August 6, 1981) [46 FR 41902] at fn. 64. Form S-4 registrants who elect the S-3 level for either entity similarly should be mindful with respect to information actually presented in the prospectus delivered in connection with the transaction. See also Rule 14a-9 if applicable.

⁵³ The language in the introduction to Item 11 of Form S-2 and Item 12(a)(3) of Form S-4, which calls for information prescribed by Article 11 and Rule 3-05 of Regulation S-X "if not reflected in the registrant's latest annual report to security holders ..." is not intended to suggest that the annual report to security holders prescribes the inclusion of such information.

⁵⁴ 17 CFR 239.28.

⁵⁵ 17 CFR 240.14a-3(b) sets forth the information required to be included in the annual report to security holders which must accompany or precede the annual proxy materials.

 
⁵⁶ 17 CFR 240.14c-3(a) sets forth the information to be included in the annual report to security holders which must accompany or precede the annual information statement.

⁵⁷ Generally, Rule 3-05 requires audited financial statements for one, two or three years regarding a business that is being acquired depending upon the relative size of the acquisition.

⁵⁸  17 CFR 240.14a-101.

⁵⁹ In the revised Form S-4 requirements, the word "certified" has been changed to "audited" for consistency.

⁶⁰ 17 CFR 249.308a.

⁶¹ In a consent solicitation, the 20 business day period discussed, infra, operates to require the registrant to send the prospectus to security holders twenty business days in advance of the date on which such consents may be used to effect the transaction, rather than 20 days in advance of the date on which the requisite consents may be received by the soliciting party. This procedure considers the possibility of revocation of consents and establishes a fixed date for calculation of the 20 business day period in this context.

⁶² Item 5 of Schedule 14A.

⁶³ Item 401 of Regulation S-K.

⁶⁴ Item 404 of Regulation S-K.

⁶⁵ Item 402 of Regulation S-K.

⁶⁶ 17 CFR 229.702.

⁶⁷ The Commission also has made clarifying technical changes to the Item 502 references to incorporated material.

⁶⁸ 15 U.S.C. 80a-2(a)(48), as amended by, Pub. L. 96-477 1980.

⁶⁹ Release No. 33-6570 (March 18, 1985) [50 FR 11725].

⁷⁰ See Release No. 33-5316 (October 6, 1972) [37 FR 23631].

⁷¹ Because the number of days (60) available under the extension runs from the date the filing on Form 8-K is due (fifteen days subsequent to the acquisition), rather than the date of the acquisition, the extension provides a maximum of 75 days from the acquisition date for the registrant to furnish the required information.

⁷²  17 CFR 230.501 to 230.506. With respect to sales made only to accredited investors, however, there are no informational requirements under Regulation D.

⁷³ Rule 144 provides a safe-harbor rule by means of which affiliates and nonaffiliates of the registrant can resell their restricted securities without the need for registration under the Securities Act. Availability of the Rule is conditioned, inter alia, on there being adequate current public information concerning the registrant. See Rule 144(c).

⁷⁴ This position is rescinded because the dangers posed by allowing affiliates, who may have non-public information about the registrant, to continue to sell securities during the pendency of the extension are adequately addressed by: (1) Exchange Act Section 10(b) and Rule 10b-5 thereunder; and (2) the representation made by affiliates in filings on Form 144. Form 144 requires the selling affiliate to represent that he does not know any material adverse information about the current or prospective operations of the issuer of the securities which has not been disclosed publicly.

⁷⁵ Section 2 of the Exchange Act of 1934, 15 U.S.C. 78b.

⁷⁶ This position is consistent with that embodied in Rule 12b-25, which provides the procedures for extensions of time for filing all or part of reports on Form 10-K and Form 10-Q. For reports on these Forms, no further extensions beyond that provided under Rule 12b-25 are available.

⁷⁷ See Article 3-05 of Regulation S-X, which establishes the time periods for which financial statements must be furnished based upon the relative size of the acquisition. The sliding scale of Article 3-05 for the evaluation of the significance of a business acquisition was adopted in Securities Act Release No. 33-6413 (June 24, 1982) [47 FR 29832]. It revised and codified the principles applicable to requests for waiver of certain audited financial statement requirements set forth in Securities Act Release No. 4950 (February 20, 1969) [34 FR 4886], "General Requirements for Certified Financial Statements of Companies Acquired or to be Acquired."

⁷⁸ For example, impossibility would be considered relevant. However, cost of an audit alone generally would not be deemed a sufficient basis for a waiver.

⁷⁹ For example, an audit of the most relevant portions of the required financial statements, or an audit of two of the three required years' financial statements, may provide an adequate basis for a waiver of the remaining requirements where the other factors (size and reasons) also support such action.

⁸⁰ In this regard, what constitutes an appropriate time period will be determined by the staff, based upon the particular facts and circumstances of each case.