TheCorporateCounsel.net

May 5, 2004

More on 703 Open Issues

You should read my revised blog from yesterday below – the SEC staff still is mulling over some open issues on the new Item 703 stock repurchase table. I will revise this blog later today if I hear any developments.

One open issue is whether you need to include the 703 table if you did not make any repurchases during the quarter, but you have a publicly announced repurchase plan under which future repurchases can be made? Some companies apparently think the answer is “yes” – Qualcomm’s 10-Q has a table with zeroes under the columns for repurchases during the quarter, along with the column for future possible repurchases that includes the number of shares available for repurchase and a footnote about the terms of the ongoing repurchase program.

And some companies appear to think the answer is “sort of” – Raytheon’s 10-Q has narrative disclosure about its ongoing repurchase program. I think either approach makes sense and is a much better idea than dropping the table completely – but we await word from the staff as to what is acceptable.

Weaknesses in the Proxy Process

John Wilcox, Vice Chair of Georgeson has been the voice of reason during the shareholder access debate by pointing out how our proxy system might be too broken to accommodate the SEC’s proposed framework. Learn more in my interview with John on Weaknesses in the Proxy Process.

’33 Act Filing Fees Going Down Again for Fiscal ’05

Effective October 1st – or 5 days after the date on which the SEC receives its fiscal year 2005 regular appropriation – whichever date comes later (and the appropriation always comes later), the Section 6(b) fee rate applicable to the registration of securities, the Section 13(e) fee rate applicable to the repurchase of securities, and the Section 14(g) fee rates applicable to proxy solicitations and statements in corporate control transactions will decrease to $117.70 per million from the current rate of $126.70 per million.

As usual, the adjusted fee rates will not affect the amount of funding available to the Commission. A copy of the SEC’s order, including the calculation methodology, is available.