September 18, 2013

Reminder: Smaller Reporting Companies Must File Say-on-Frequency Determination in 8-K/A

As you may recall, when the say-on-pay rules were first implemented in 2011, a number of companies forgot to file the subsequent Form 8-K/A under Item 5.07 disclosing the company’s determination regarding say-on-frequency. (The 8-K/A is due no later than 150 days after the annual meeting, but in no event later than 60 days prior to the deadline for submission of shareholder proposals under Rule 14a-8.) This oversight resulted in, among other things, companies either losing S-3 eligibility for one year or seeking a waiver letter from the SEC Staff.

As this proxy season was the first that smaller reporting companies were required to include say-on-frequency in their proxy statements, here is your friendly reminder for those companies of this 8-K/A filing obligation so that they can avoid the negative consequences that come with missing this required filing. Here is an excerpt from the November-December 2012 issue of The Corporate Counsel:

Timely Reporting of the Issuer’s Ultimate Frequency Determination–S-3 Eligibility. As we have discussed (see, e.g., our March-April 2012 issue at pg 10), a number of issuers failed to timely report (under Form 8-K Item 5.07), within 150 days after the Say-on-Frequency vote, the issuer’s decision as to the frequency of future Say-on-Pay votes. The Staff ended up being relatively understanding when processing Form S-3 eligibility waivers arising from this situation, but that accommodating stance may not be repeated in 2013 for SRCs conducting their first Say-on-Frequency vote. Form S-3 eligibility may be especially important for SRCs, including the General Instruction I.B.6 limited primary shelf eligibility adopted in 2007 for issuers with a public float under $75 million.

We now think the best course for SRCs (and other issuers conducting their Say-on-Frequency vote for the first time) would be to determine up front that the frequency favored by shareholders will be adopted by the SRC as its Say-on-Pay frequency, so that the frequency that is adopted by the SRC can be disclosed in the Item 5.07 Form 8-K reporting the annual meeting voting results within four business days of the meeting. This approach obviously avoids the risk of neglecting to file the Form 8-K amendment within 150 days of the triggering event.

Miss the “More on Reg D Offerings Today” Spreecast? Catch It Now

The technology held up during yesterday’s spreecast on Regulation D – except I had feedback from my microphone this time but luckily I barely spoke. The archive is now available if you care to watch – nearly 400 views!

A new spreecast has been calendared for September 30th: “PCAOB’s Audit Report Proposals: A Big Sleeper?

September-October Issue: Deal Lawyers Print Newsletter

This September-October issue of the Deal Lawyers print newsletter was just sent to the printer and includes articles on:

– Forum Selection Bylaws: The New Frontier
– Checklist: Shareholder Outreach Following M&A Transaction Announcements
– Lock-Ups: When Can They Give Rise to “Affiliate” Status & Potentially Implicate Rule 13e-3?
– Delaware Law: Amended to Provide for Ratification & Validation of Defective Corporate Acts
– A Dozen Take-Aways: In Re: Trados

If you’re not yet a subscriber, try a “Free for Rest of ’13” no-risk trial to get a non-blurred version of this issue on a complimentary basis.

– Broc Romanek