On Wednesday, Intel caused a stir when it filed its proxy statement which revealed that it included a novel company proposal to replace its expiring shareholder-approved plan and a nonshareholder-approved plan (which still has three years of life in it) with a single equity plan that has a two-year life. The company says that it will seek shareholder approval every year beginning in 2005 to extend the plan for an additional year.
As the analysis on the NASPP’s website reveals, this is a significant development as most companies roll out plans with a ten-year life. In fact, the only company that the NASPP could find with a similar arrangement is Altera.
No-Action ’34 Act Reporting Relief for Bankrupt Companies
As the Corp Fin staff has emphasized for some time – since 1997 with Staff Legal Bulletin 2 – it is hard to obtain no-action relief for modified, reduced ’34 Act reporting for bankrupt or reorganized companies. I bet the staff rejects more requests in this area than it grants.
In fact, as this new no-action letter denying relief reflects, the Chief Counsel’s office will not hesitate to do some sleuthing of its own to rebut a company’s representations that it has few market makers or low trading volume.
Here is an excerpt from the SEC staff’s response: “Specifically, despite the company’s belief that there have been 5 market makers for the company’s common stock, the OTC Bulletin Board reports 17 active market makers for the company’s common stock as of March 22, 2004. In addition, although not included in the company’s letters, the trading volume for the company’s common stock during the months preceding the letters generally ranged in the hundreds of thousands to millions of shares per day.”
By the way, who are these investors that heavily trade a bankrupt company’s securities…
SOX on Sky Radio
So I’m on a cross-country flight yesterday, flipping through United’s radio stations and come across a program on “Corporate Governance and Best Practices.” It featured several vendors (that I never heard of before) who sliced and diced a bunch of Sarbanes-Oxley topics, including internal controls. That’s proof to me that SOX has gone mainstream. [And Michigan won that “other” basketball tourney! Go Blue!]