Registrants Disclosing Amendments or Waiver of a Code of Ethics Provision

Item 5.05 of Form 8-K is reserved for disclosure of amendments to or waiver of a provision of a registrant's code of ethics (this had been Item 10 prior to the Final Rule that reorganized 8-K items effective 8/23/04).  Companies reporting a new, revised or amended code of ethics or conduct under 8-K Item 5.05 are common, including Alliqua Inc., Autoliv Inc., Christopher & Banks Corp. and Symmetricom Inc. all filing on January 5, 2011.

Filings disclosing the waiver of code provisions are much less frequent.  The most recent example would be the Form 8-K filed on 9/3/10 by Nautilus, Inc. when it granted a waiver to their Chairman & CEO regarding his control and interest of purchasers of notes being offered by the company. The waiver was granted "to the extent that [his control] may constitute a 'conflict of interest' within the meaning of" the code.

Sometimes these waivers are discussed using Item 8.01 (Other Events) rather than Item 5.05.  Gran Tierra Energy Inc.'s 8-K on 7/6/10 reported a waiver that permitted its management to negotiate and execute a proposed agreement notwithstanding that one of Gran Tierra's directors was also the CEO of the other company.  In its Form 8-K filed on 3/13/09, Power Integrations, Inc. reported a waiver granted to a newly appointed director regarding his options and stock holdings of a direct competitor that had been a previous employer.

The likely reason that 8-Ks reporting waivers are so few is that filers are not required to provide any information pursuant to Item 5.05 when they have published the information on their website and it has been disclosed in their most recently filed annual report. However, it must be available on the website for at least twelve months and must be retained by the company for a minimum of five years.