November 28, 2016

Proxy Access: Gamco’s Nominee Rejected By National Fuel!

Wow! It was big news when Gamco Asset Management filed the 1st ever Schedule 14N recently. Now, National Fuel Gas has rejected Gamco’s nominee, as reported in the company’s Form 8-K. Here’s an excerpt from letter from the company to Gamco filed as an exhibit to the 8-K, which lays out the reasoning:

A stockholder that seeks to use the Company’s proxy access By-Law provision must make certain representations and warranties to the Company. If these representations are not correct, the stockholder is not eligible to use proxy access. These representations include that an Eligible Stockholder:

(i) acquired the Proxy Access Request Required Shares in the ordinary course of business and not with the intent to change or influence control of the Corporation, and does not presently have such intent.

Cooley’s Cydney Posner blogged later today that: “In this Schedule 13D/A, filed this morning, GAMCO reported that its nominee had “informed GAMCO this morning that he has decided to withdraw [his] name as a candidate for Director of National Fuel Gas Company. GAMCO will not pursue Proxy Access.” So much for that foray.”

Hat tip to Steve Quinlivan for first reporting on this new development (and see this Ning Chiu blog)! We’re posting memos on this in our “Proxy Access” Practice Area

Disclosure Effectiveness: FAST Act Report on S-K

As also blogged by Steve Quinlivan, Section 72003 of the FAST Act directs the SEC to carry out a study of Regulation S-K’s requirements and to consult with the SEC’s Investor Advisory Committee and Advisory Committee on Small & Emerging Companies. The SEC snuck out this 26-page report to Congress just before the holiday.

Although not directly tied to Corp Fin’s disclosure effectiveness project, there definitely is some overlap. Steve highlights these recommendations in his blog:

– Relocate “Risk Factors” from Item 503(c) to a new, separate item (Item 105) in Subpart 100 of Regulation S-K.
– Eliminate the Item 512(d), (e), and (f) undertakings because they are obsolete.
– Permit the omission of attachments and schedules filed with exhibits, unless they contain information that is material to an investment decision that has not been disclosed otherwise.
– Revise Item 601(b)(21) to require disclosure of legal entity identifiers (“LEIs”) for the registrant and within the list of significant subsidiaries.
– Require machine-readable tagging of all of the information presented on the cover page of a registrant’s periodic and current reports.
– Require the use of hyperlinks whenever the rules call for the inclusion of a web address, provided the appropriate technology is available to prevent such links from jeopardizing the security and integrity of the EDGAR system.

Conflict Minerals: EU (Sorta) Adopts Regulations

Here’s a note from Lawrence Heim of Elm Sustainability Partners:

In a press conference concluded minutes ago, Bernd Lange, Chair of the International Trade Committee, Iuliu Winkler, rapporteur with Cecilia Malmstrom, Member of the EC in charge of Trade and Council presidency and Ivan Lancaric, Ministry of Economy of Slovak Republic announced what is called “informal deal on a regulation” for the EU conflict minerals scheme. This action will be legally binding and is aligned with the June 2016 political understanding. The final text will be voted on by the member states on December 7, 2016, with a vote in the plenary expected in the first half of 2017.

Details are forthcoming, but what is known now is:

– Due diligence is based on the OECD Guidelines.
– The scheme is mandatory for importers of 3TG and applies to companies with more than 500 employees but small volume importers will be exempt from these obligations. The “small” threshold was not provided in the public announcements. Previous reports place the threshold at 100kg for gold.
– The regulation allows companies to become a responsible importer by declaring in writing to the competent authority in a member state that it follows the due diligence obligations set in the regulation. A list of these importers will be published by the Commission. The competent authorities will carry out checks to ensure that EU importers of minerals and metals comply with their due diligence obligations. Details about the checks were not provided in the public announcement.
– The legal deadline for implementation is January 1, 2021 but the EP specifically invites voluntary early entry into the program by EU manufacturers and sellers not otherwise subject to the law.
– The Commission will draft a handbook including non-binding guidelines to help companies, and especially SME’s, with the identification of conflict-affected and high-risk areas.

Broc Romanek