September 1, 2004

Another Breeden Report The 500+

The 500+ Breeden Report regarding Hollinger International was filed yesterday on a 8-K – and makes very interesting reading! “Summer drinks” that cost $24, 950! What was in those drinks?

As the NY Times and other major business publications explore at length today, the role of each director is closely dissected in the report (e.g. Mr. Perle admitted that he never understood the underlying transactions before signing off on them).

If your compensation committee members can’t understand the basic tally sheets that we are posting on – they will want to hear all about them during our October 20th major compensation conference! And avoid being mentioned adversely in a report like this – not to mention the liability…

The Form N-PX’s are In!

Yesterday was the deadline for investment companies and mutual funds to disclose their voting records for the first time. These disclosures are made on Form N-PX. Over 1000 of these forms were filed during this first mutual fund “proxy season,” with Fidelity alone filing more than 130 of them. Here is a sample if you want to see what they entail,

Nasdaq Proposes Shareholder Approval Requirement Exception for Discounted Private Placements

The SEC has published a Nasdaq proposal to provide an exception from the shareholder approval requirements for purchases of the issuer’s securities by officers, directors, employees or consultants when such issuances are not made as part of a public offering and are for less than the greater of book or market value of the stock. Nasdaq is proposing to amend Rule 4350(i)(A) – and the related interpretation in IM-4350-5 – to provide this de minimis shareholder approval exception solely in these limited circumstances:

1. officers, directors, employees, or consultants are sold discounted stock as part of, or in connection with, sales to third parties, at the same price and on the same terms, and that do not involve any public offering;

2. the total number of shares sold to all such officers, directors, employees or consultants, either individually or in the aggregate, be less than five percent of the total shares to be issued in the transaction, and

3. the shares issued or to be issued in the transaction aggregated with all other discounted sales to officers, directors, employees, or consultants during the preceding 12-month period do not exceed one percent of the total shares outstanding at the beginning of the 12-month period.

Further, although not required by the proposed amendments to the text of Rule 4350(i)(1)(A), the changes to IM-4350-5 state that Nasdaq intends that the new exception will only be used in situations where third parties investing in the company require a minimum level of participation by company insiders as a condition to their investment.