TheCorporateCounsel.net

January 6, 2011

A “Double Wow”: Corp Fin Reverses Position on Golden Parachute Shareholder Proposal

Last month, I blogged that I was “wow’ed” that Corp Fin had allowed the exclusion of a golden parachute shareholder proposal. Since then, I’ve been surprised that my blog is the only piece of writing I’ve seen about that development since I considered it significant.

But apparently folks were tracking it because I got a flood of emails yesterday when Corp Fin reversed course and issued this no-action letter noting that it had reconsidered its position and decided to not allow the exclusion at Navistar. Although the incoming letter is addressed to the SEC’s Secretary, it appears that this reconsideration was made at the Staff level and not at the Commission level (the incoming letter doesn’t “cc” the Commissioners), although it is possible that one or more Commissioners influenced Corp Fin. Rule 14a-8 reconsiderations at any level at the SEC are rare – but as this development proves, they do happen.

Note that we have added shareholder proposals as a topic for next Wednesday’s webcast – “How to Implement Dodd-Frank for This Proxy Season” – so tune in to hear more about this development and others in the Rule 14a-8 area. As all memberships expired at the end of the year, please renew if you haven’t yet to catch this program. If not yet a member, try a no-risk trial now.

The Facebook and Goldman Saga: All About Section 12(g) and Section 12(h) Applications

For securities law geeks, the outpouring of interest in the nuances of when companies are required to register their securities under Section 12(g) of the ’34 Act – and whether Facebook has violated the terms of the exemptive relief granted from Corp Fin back in 2008 – surely is big fun. Back when I served in Corp Fin’s Office of Chief Counsel in the mid-90s, I handled the Division’s Section 12(h) exemptive requests so it has been fun for me (not that there are many; I had never heard of them when I was “asked” to take them on). These requests are fairly technical in nature and require much analysis.

Anyways, I started dabbling in using Quora over the break to check it out and answered a few queries on the ability of new exchanges to trade shares in private companies (eg. SecondMarket, Sharespost and more) because there was so much misinformation out there (eg. that the SEC was “forcing” Facebook to conduct an IPO). And now we have the news about Goldman Sach’s offer to certain clients to invest in Facebook. Rather than repeat my answers from Quora (you can “follow me” there), I share related stories from others:

WSJ’s “Goldman Flooded With Facebook Orders”

Washington Post’s “When it comes to investing, Facebook is not for the masses”

Conglomerate Blog’s “Facebook! Facebook! Facebook!”

Deal Professor’s “Facebook and the 500-Person Threshold

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– SEC Proposes Rules to Increase Oversight of Private Fund Advisers
– His Lips Are Moving: Deception During Conference Calls
– SEC and DOJ Announce Resolutions of FCPA “Industry Sweep”
– European Union Agrees to Economic Governance Changes
– SEC Enhances Centralization of Tip Gathering and Analysis Functions

– Broc Romanek