As noted in this blog by Morrison & Foerster’s Anna Pinedo, the House Financial Services Committee recently passed these 9 different bills designed to promote capital formation (also see this blog about flailing US market competitiveness):
– HR 4200, the Small Business Investment Companies (SBICs) Advisers Relief Act, introduced by Rep. Blaine Luetkemeyer (R-MO). The bill was approved 56-0.
– H.R. 4200 amends the Investment Advisers Act of 1940 to reduce unnecessary regulatory costs and eliminate duplicative regulation of advisers to SBICs. Eliminating duplicative regulation will allow the private equity fund money that currently goes to pay for regulatory compliance and fees to flow directly to job-creating small businesses.
– H.R. 4554, the Restricted Securities Relief Act, introduced by Rep. Mick Mulvaney (R-SC). The bill was approved 29-28. H.R. 4554 would streamline the process for reselling restricted securities to the public under a Securities and Exchange Commission (SEC) rule in order to increase liquidity in the private securities markets and the availability of capital for small companies and to reduce its cost. By reducing the regulatory burdens surrounding the offering and resale of private securities offerings by small issuers, this bill will help enhance the liquidity in this space, making it easier for issuers to access capital.
– H.R. 4568 would simplify the SEC registration form for new securities offerings. Simplifying this disclosure regime will lower compliance costs associated with filing redundant paperwork, allowing eligible companies to direct more resources to growing their business.
– H.R. 4571, the Encouraging Employee Ownership Act of 2014, introduced by Rep. Randy Hultgren (R-IL). The bill was approved 36-23. H.R. 4571 modernizes SEC Rule 701, which was last updated in 1996. Updating this rule gives private companies more flexibility to reward employees with a company’s securities and thereby retain valuable employees without having to use other methods to compensate them, such as borrowing money or selling securities.
– H.R. 4569, the Disclosure Modernization and Simplification Act, introduced by Rep. Scott Garrett (R-NJ). The bill was approved 59-0. H.R. 4569 would direct the SEC to simplify its disclosure regime for issuers and help investors more easily navigate very lengthy and cumbersome public company disclosures. Permitting issuers to submit a summary page would enable companies to concisely disclose pertinent information to investors without exposing them to liability. This summary page would also enable investors to more easily access the most relevant information about a company.
– H.R. 4570, the Private Placement Improvement Act, introduced by Rep. Garrett. The bill was approved 31-28.
– H.R. 4570 would amend the Federal securities laws to ensure that small businesses do not face complicated and unnecessary regulatory burdens when attempting to raise capital through private securities offerings issued under SEC Regulation D.
– H.R. 4565, the Startup Capital Modernization Act of 2014, introduced by Rep. Patrick McHenry (R-NC). The bill was approved 31-28. H.R. 4565 would make it easier for issuers to take advantage of registration exemptions under SEC Regulation A to increase capital formation to grow the economy and create jobs.
Also note this Mofo blog summarizing recent remarks by Corp Fin’s Small Business Policy Chief Sebastian Gomez Abero…
Conflict Minerals: More Form SDs Filed
Since I blogged last Thursday about the 3rd & 4th Form SD being filed, these new ones have been filed:
SCOTUS: Awaiting the Halliburton v. Erica P. John Fund Decision
As we await the important fraud standard decision of Halliburton v. Erica P. John Fund from the Supreme Court – expected any day now – check out this Reuters article entitled “Behind major US case against shareholder suits, a tale of two professors.” Here’s an excerpt from the opening:
For two months last summer, Stanford Law School professor Joseph Grundfest locked himself away in his home office in California’s Portola Valley. Grundfest’s house overlooks the Santa Cruz Mountains, but his attention was fixed on the piles of paper – mostly U.S. Supreme Court opinions and Congressional reports from the 1930s – stacked on his desk and the surrounding floor. Grundfest researched and wrote for weeks with monastic obsessiveness, speaking to hardly anyone but his research assistants and his wife, who made sure he was eating.
When he emerged in August, Grundfest – an influential former Commissioner at the U.S. Securities and Exchange Commission who now sits on the board of the private equity firm KKR & Co – had in hand a 78-page paper larded with more than 400 footnotes. His aim was nothing less than to destroy securities fraud class action lawsuits by shareholders, which have been the bane of many businesses in the U.S. since the Supreme Court endorsed the cases 26 years ago.
Grundfest sent the draft around to several other law professors, including the University of Michigan’s Adam Pritchard, another favorite of pro-business groups. Pritchard read Grundfest’s paper with a sense of familiarity: Five years earlier, in a study for the Cato Institute, he had pinpointed the same obscure provision of a 1934 securities law as the means to curtail big settlements in securities fraud class actions. He sent Grundfest an email: “I see you’ve put a new twist on things.”
Here’s food for thought as we await SEC action on the proxy advisor piece of the outstanding proxy plumbing project. This new study by Professors Aggarwal, Erel & Starks entitled “Influence of Public Opinion on Investor Voting & Proxy Advisors” finds that mutual funds voted with management only 54% of the time in 2010 – down from 74% in 2006. The other big finding is that mutual funds are also becoming more independent from ISS recommendations – dropping from a 78% rate in 2006 down to 59% in 2010.
Landmark FCPA Ruling Defining the Term “Instrumentality”
Federal appellate court decisions interpreting the Foreign Corrupt Practices Act (FCPA) are rare. Very rare. Indeed, in the statute’s 36-year history there have been barely more than a handful of appellate court decisions analyzing the meaning of the different provisions of this complex statute with which multinational corporations and scores of business executives must grapple on a daily basis. On Friday, May 16, 2014, the Eleventh Circuit Court of Appeals issued a landmark ruling addressing for the first time the definition of the term “instrumentality” as it appears in the FCPA. That case, captioned United States v. Joel Esquenazi and Carlos Rodriguez, affirmed the convictions and sentences of both defendants, and in so doing, upheld the longest sentence in the FCPA’s history, Esquenazi’s 15-year sentence.
The Department of Justice and the Securities and Exchange Commission understandably view this decision as validating their broad interpretation of who qualifies as a “foreign official” under the FCPA. At a compliance conference held just after the release of this decision, the heads of the FCPA Units at both the DOJ and SEC, Patrick Stokes and Kara Brockmeyer, respectively, described the ruling as an “important,” “seminal” decision on a critical issue and said that they drew comfort from the appellate court embracing the DOJ and SEC’s approach to this issue.
While this is the first time an appellate court has defined the term “instrumentality,” companies hoping for additional clarity through the creation of either a bright-line rule or a clearly defined test will be disappointed, as the Esquenazi court embraced the non-exhaustive multi-factor test endorsed by the government and adopted by a number of district courts that faced the same issue.
PCAOB Staff Guidance: Economic Analysis in Standard-Setting
Recently, the PCAOB issued this Staff Guidance that outlines how it will conduct economic analysis in its standard-setting. The guidance sets forth 4 elements of economic analysis: describing the need for a rule; developing a baseline for measuring the effects of a rule; considering reasonable alternatives to the rule; and analyzing the economic impacts of the rule (and alternatives to the rule), including the benefits and costs. The PCAOB follows the SEC and other federal agencies who have publicly issued this type of guidance in the wake of the proxy access court decision that led us down this path…
As we careen towards the June 2nd deadline for filing Form SDs, I’ll probably be blogging more about conflict minerals than I care to. But it’s the topic of the day. Here are three new items:
1. Share Guidance You Receive from Corp Fin – If you have an interpretive question for Corp Fin and receive a response, please share it with me. I will then share it on this site without naming you and your company. At this point, I don’t believe that Corp Fin will issue more interpretive guidance – so if you receive any guidance on a one-to-one basis, please share it with me in case that may useful to others.
2. Two More Form SDs Filed – The third & fourth Form SDs have been filed: Intel has filed a great one – and here’s this one by CAE Inc. Thanks to Intelligize for the heads up!
3. Companies Still Struggling with Supply Chain – This WSJ article entitled “Companies Unearth Few Answers on ‘Conflict Minerals’” indicates that many companies have spent years trying to determine if their suppliers use conflict minerals but still don’t know…
Proxy Season Trivia: It’s Peak Day for Annual Shareholder Meetings!
ISS informs us that today is the apex of the proxy season, with 237 companies scheduled to hold their annual shareholder meetings. The next biggest days for annual meetings are May 21 (197 meetings), May 20 (165), May 15 (157), May 13 (143)…
Thanks for the Gumball Mickey – Corp Fin Alumni: ’90s (Vol. 1)
Here’s the first installment of SEC alumni who have participated in one of my Gumball videos:
In this 20-second video, Cap’n Cashbags – a CEO – tries to recruit former President Bill Clinton, who would then serve on his company’s compensation committee – a subset of the board who sets his pay:
NYSE Withdraws Proposal to Relax Director Independence Requirements in Spin-Offs
Last month, I blogged that the NYSE has proposed to relax its bright line director independence tests in spin-offs. Weil Gotshal now reports: “Recently, however, the NYSE removed from its website the proposed rule filing for the change, and the NYSE has advised us that the proposal is no longer active. Additionally, the NYSE advised that it is not certain what, if any, rule filing on the subject may be proposed in the future.”
More on our “Proxy Season Blog”
We continue to post new items regularly on our “Proxy Season 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:
– Shareholder Proposals Chart: Exclusion Basis Breakdown
– Shareholder Engagement Codes: A Critique
– Uniform Sustainability Reporting: Ceres Leads Global Stock Exchance Campaign
– Does the Oath of Inspector Need to Be Notarized?
– Shareholder Proposals: Investor Backlash Against Litigation
Recently, I blogged about “No, GCs Should Not Be on the Board” and heard from many members in response. One response was from Zix Corp’s Jim Brashear who noted this recap of a recent Lead Directors Network meeting, highlighting this section that jumped out at him:
There were differing views in the meeting about whether GCs should also be the corporate secretary. Several GCs said that it was important for the GC to serve as corporate secretary: “Without that role, there’s a disconnect between the general counsel and the board,” one GC said. GCs agreed that if another individual was corporate secretary, even if they reported to the GC, that person would naturally spend more time with board directors than the GC.
However, other GCs noted the benefits of separating the two roles. At the meeting, a GC who is not corporate secretary said that the corporate secretary role “is very substantive and demanding if done properly. When someone else handles those responsibilities, it frees me up to be a better member of management.”
Jim gave his ten cents as follows: “I’ve been in situations where I have acted in different roles, such as corporate secretary but without the title; corporate secretary but with a separate GC; and both corporate secretary and GC. The GC should have plenty of engagement with the directors on legal issues even without having the corporate secretary role. The GC should be in the boardroom in that capacity, except during executive sessions. Same with the corporate secretary. It should not be a choose-one-or-the-other decision.
I completely agree with the quote about the corporate secretary role being substantive and it’s quite demanding if done properly. If the GC does not have the expertise to be the chief governance officer and someone else in the organization does, then the GC should not have the title or perform the function. Did you know that there are some highly esteemed folks that serve in the corporate secretary role who are not invited to their board meetings and must draft minutes using someone else’s notes, usually the GC’s? Crazy.
Whether the job should be split also depends in part on: size of the legal department, level of specialization within it and demands of the GC’s other roles in the organization (e.g., Chief Administration Officer, Chief Legal Officer, Chief Compliance Officer, Chief Privacy Officer).”
Webcast: “Big Changes Afoot: How to Handle a SEC Enforcement Inquiry Now”
Tune in tomorrow for the webcast – “Big Changes Afoot: How to Handle a SEC Enforcement Inquiry Now” – to hear Dixie Johnson of King & Spalding; Randall Lee of WilmerHale and Tom Newkirk of Jenner & Block get us up to speed on the latest about the SEC’s Enforcement Division and provide practice pointers on what approaches work for many different types of investigations that exist today. This is a hot topic. Just yesterday, SEC Chair White delivered this speech entitled “Three Key Pressure Points in the Current Enforcement Environment”…
Poll: Should the General Counsel Also Serve as the Corporate Secretary?
As the proxy season ends for many, it’s time to unwind with some trivial pursuit in the “securities law” category. The full answer is probably lost to the bins of history, but a member recently asked the question in our “Q&A Forum” (#7837) about where do the “10” and “K” come from in “Form 10-K,” comparing the logic of the “Q” in “Form 10-Q”? Here is Dave’s answer:
Form 10-K was adopted shortly after the creation of the SEC in 1934. Form 10-Q was adopted many, many years after that in Release 34-9004 (October 28, 1970). When Form 10-Q was adopted, the SEC rescinded Form 9-K, which had required semi-annual reports. I think what happened is the SEC had adopted many reports with a “K” designation over the years, and then moved away from that with 10-Q and some other more recent vintage forms.
When to Register Under the ’34 Act? The Messy Test for # of Shareholders
As noted in this Conglomerate Blog, the Section 12(g) registration test continues to be a topic that is debated. It reminded me of this Keith Bishop blog about how messy the threshold is. And it also reminds me of this note from a member back when Congress was fast-tracking the JOBS Act without any analysis:
500, 1,000, 2,000 – pick a number, any number. I note that the 1964 Special Study conducted a comprehensive survey of companies that traded in the OTC market to support developing (1) what the measure should be and (2) what the threshold under that measure should be. And actually, based on the data, the Study recommended a threshold of 300 holders. Now maybe someone in Congress today could actually develop a basis for their figure, but that would be asking way too much. I think we need a new measure, but Congress seems hell-bent on # of holders. Oh well – lost opportunity.
History Lesson: ’34 Act Reporting Requirements
A member responded to my recent history blog by providing me some background on the Section 12 reporting requirements. This provides some background to my statement: “I just found a reference that only exchange-listed companies in the early ’60s had to file 10-Ks with SEC.” Here’s today’s history lesson:
– Section 12(g) didn’t exist prior to 1964, it was added to the ’34 Act in 1964 by Section 3(c) of the Securities Acts Amendments of 1964.
– The purpose was to bring OTC securities into the ’34 Act reporting regime and put them on same footing as exchange-listed securities.
– A report of the House Committee on Interstate and Foreign Commerce accompanying H.R. 6793, the version of the bill introduced in the House, stated that “Section 3(c) of the bill would .. . provide for registration of securities traded in the over- the-counter market and for disclosure by issuers thereof comparable to the registration and disclosures required in connection with listed securities.”
– A 1981 SEC release cited a report on its study that led to the 1964 Amendments, describing the scope of the registration and reporting provisions of Exchange Act as extending “to all issuers presumed to be the subject of active investor interest in the over-the-counter market.”
– A 1986 SEC release stated that the numerical thresholds contained in Section 12(g) were selected because it was believed “that issuers in these categories had sufficiently active trading markets and public interest and consequently were in need of mandatory disclosure to ensure the protection of investors.”
Danger, Will Robinson! I’ve heard of appointing someone who’s a “tool” or an “empty suit” to a board, but this takes the cake. Recently, I received an email entitled “Venture Capital Appoints Artificial Intelligence to Board,” with a press release that says:
Deep Knowledge Ventures announced today that it formally acknowledges the AI software known as VITAL (Validating Investment Tool for Advancing Life Sciences), an algorithm software focused on a subset of companies in the Regenerative Medical sector, as an equal member of its Board of Directors. VITAL was created by the Moscow Center for Biogerontology and Regenerative Medicine (CBRM) and is licensed by Aging Analytics. DKV considers VITAL such a crucial instrument for investment decision-making, that it has given it a seat at the table.
The press release doesn’t explain how the AI director would handle its fiduciary duties nor how this new director might be compensated. Just kidding. As I understand it, the headline is merely being cute and the “robot” is not actually on the board. Still, it’s bizarre (eg. why does the board need access to AI – shouldn’t management use it and then just report its results to the board?). Although anything is possible these days given the Citizens United’s “corporation as a person” decision. On the other hand, maybe an all-robotic board would solve some of the issues wrought by our existing governance framework…
Transcript: “Latest Developments in IPOs & Capital Raising”
I have posted the transcript for our recent webcast: “Latest Developments in IPOs & Capital Raising.”
Yesterday, the SEC announced that Chief Accountant Paul Beswick is leaving the agency to return to the private sector.
Poll: Your Opinion of an AI Director?
Which of the following best characterizes your reaction to a robot director:
Moonshot denied. In a one-sentence order, as noted in this WSJ article, the US Court of Appeals for DC denied NAM’s emergency motion to stay effectiveness of the SEC’s conflict minerals rules yesterday. This happened the day after NAM filed its reply to the SEC’s brief in the matter. So it looks like the courtroom drama is over and companies should be preparing to file their first Form SDs by the end of June 2nd in accordance with Corp Fin’s latest guidance on the topic (here’s the memos about this guidance from our “Conflict Minerals” Practice Area)…
SEC’s Office of Chief Accountant: Looking for Work?
Gave a double take when I saw the title of this WSJ blog: “SEC Frets It’s Not Getting Enough Accounting Questions.” In it, the Deputy Chief Accountant Dan Murdock notes that questions are down 40% and he wonders what is causing the decline. He did posit a number of possible reasons for the decline such as fewer new accounting rules, decline in transactions with complex accounting, auditor’s national offices receiving fewer requests from fellow auditors in the field and an increasing focus on internal controls by auditors.
My poll results for which celebrity would you buy a piece of? Winner is Bing Crosby (38%); followed by Paris Hilton (23%); Mayor Rob Ford (20%); Smokey the Bear (11%) and DaMar (7% – the Dave & Marty combo)…
What is “DealNexus”?
In this podcast, Tony Hill, the Director of DealNexus at Intralinks, explains DealNexus – a social dealmaking tool specifically designed for deals, including:
– How does DealNexus work?
– How does it differ from AngelList and other online connectors?
– What’s new in the DealNexus 3.0 update?
– Any surprises since you launched?
Below is a series of responses to questions from members over the past month – feel free to ask me anything (“AMA”) as this is a new regular feature of this blog:
1. Value of Virtual-Only Annual Meetings – First I have to give a hat tip to Jon Stewart and “The Daily Show.” My fave quote from that show is – “These are facts based on opinion” – in the midst of impersonating the news channel that it likes to make fun of the most.
Anyways, in my latest blog noting that last year saw a significant rise in the number of virtual annual meetings (courtesy of Broadridge’s turnkey solution) – 100 of them! – I noted that I had been waffling about whether they were a good thing. I am well aware that the bulk of annual meetings are a waste of time and resources as nothing happens and the company meanwhile has gathered a lot of firepower there (ie. senior managers & the full board). This recent DealBook article entitled “Telling Off the C.E.O., Once a Year” bears this out. Where do I stand now on this topic?
I have been wracking my brain for a framework that would allow shareholders to preliminarily indicate whether they desired a physical meeting. The problem with that approach is that something could come up between the time that shareholders indicate on whether a physical meeting is necessary – and the time that the annual meeting is actually held. The recent discovery of a substantial shortfall of regulatory capital at Bank of America recently proves this point. BofA’s annual meeting was last week – so shareholders who were happy the week before might suddenly be unhappy.
So since the annual meeting is the single time per year that management – and more importantly, the board – is forced to potentially face the music, I am leaning towards the “virtual-only meetings are a bad thing” side. The potential waste of resources is a necessary evil to keep management on its toes. Being challenged virtually can’t compare to being challenged in the flesh.
And then there is the real risk of angering shareholders – as well as the media. For example, PNC Financial and BNY Mellon recently amended their bylaws, which drew the ire of the local Pittsburgh press in this article. And CII’s strong opposition to virtual meetings still stands. So all in all, it’s a risky thing to do in my book…
2. Invoking the Safe Harbor at Annual Shareholder Meetings – Recently, I got this question from a member: “We are preparing for our annual meeting and would like to know how other companies incorporate a “forward-looking statements” disclaimer into presentations by management. Presently, we include the disclaimer on a slide and read it prior to the CEO’s message.”
There are two sides of this debate. One is that a reading of a disclaimer is standard operating procedure and that most shareholders are used to it – and even those that aren’t probably won’t even really notice it as legalese is not something that people tend to tune into.
The other is that this type of legalistic opening gets the AM off to a bad start, with the message that “we are here to CYA rather than have an interactive dialogue and (hopefully) celebrate a good year with the shareholders.” This thinking balances the limited benefits (ie. limited risk unless you go way off the track) outweighed by the negativity of it. Double up on the donuts if you do it perhaps.
Playing devil’s advocate again. The counter to that is that the disclaimer is designed to bolster more fulsome disclosure by management (you can talk about prospects, etc, without fear of ultimately being wrong) – whereas without it, you would feel constrained about saying anything that is forward-looking in nature.
My practical solution is a middle ground. Turn the reading of the safe harbor into a cutesy opening. Dress up a kid in a safe harbor t-shirt at the front of the room, show the language scrolling on big screens – and have everyone follow along as the kid sings the safe harbor. The whole “Pledge of Allegiance” type of thing. Only problem is that the kid likely will steal the show…
3. Phone Voting Still Necessary? – Another member asked: “When can we get rid of phone voting? It’s antiquated, cumbersome, etc. and mobile voting now surpasses it based on volume of voting. Less than 2% of shares are now voted by phone. Getting rid of it would take costs out of the system.”
Definitely send in your rants. Getting them off your chest will improve your health. And I would never identify you without your permission. Personally, I think cutting down on voting opportunities is not sound shareholder relations – and certainly not good optics. But I asked the opinion of the person that sent in the question. Here is her response:
“Most people who receive paper proxy materials now vote through Internet, not mail or phone. Anyways, as I understand it, the phone voting option is time-consuming for all involved since the flow of how those calls go can be so messy, particularly now that the one-stop “Vote With Management” option is gone.
Unfortunately, companies don’t have the ability to turn off phone voting as that is a decision between Broadridge and its clients, the brokers. Companies could choose to turn it off for their registered holders, but that is just a drop in the bucket. Another avenue is that companies could opt not to mention phone voting in their proxy statements, but brokers would still probably offer phone voting.
This may not be a real “problem” to solve, but there are costs of maintaining the phone voting infrastructure that seem unnecessary, particularly since phone voting is so confusing for the average person, even with touch-tone prompts. If phone voting can’t end now, there should be some kind of 5-year plan to phase it out, with the blessing of the SEC of course.”
4. Questions About Registration of Warrants – “Why doesn’t anyone ever answer the questions about registering warrants in the “Q&A Forum” on this site?”
I plead the Fifth!
5. Cybersecurity Roundtable Reenactment – “It would be really cool if your tech savvy staff could take the archive of the SEC cybersecurity roundtable and then edit in part of the beginning of the 1960s TV show: ‘The Outer Limits’.”
Glad to see folks getting into the new videos. My tech-savvy staff is merely myself – and I did the next best thing by playing 8 different roles in this reenactment video:
Corp Fin Grants 1st Foreign Issuer Deregistration No-Action Relief Under Rule 12h-6
Last week, Corp Fin gave no-action relief to Sundance Energy Australia Limited, which is the first busted IPO letter that the Staff has given in the Form 15F/Rule 12h-6 context, which is the special deregistration rule for foreign private issuers. It’s not incredibly remarkable, but it’s a first in the area…
More on our “Proxy Season Blog”
We continue to post new items regularly on our “Proxy Season 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:
– Form 10-K Length: Does Size Matter?
– Shareholder Proposals: Novel “Good Job” Proposal
– Disney Trades Proxy Access for Change in Board Leadership
– Will Shareholders Ask About the New COSO Framework at Annual Meetings?
– ISS Talks “Issuer Engagement with ISS”
– Shareholder Proposals: 1-Year Holding Requirement Even Applies to IPOs
In an opinion that may dramatically change the landscape of stockholder litigation, the Delaware Supreme Court upheld – in ATP Tour, Inc. v. Deutscher Tennis Bund – a fee-shifting by-law that required plaintiffs to bear the costs of intra-corporate litigation if the plaintiffs were not successful on the merits or did not achieve “in substance and amount, the full remedy sought.”
In finding that the bylaw was permissible as a matter of law, the court held that “[n]either the DGCL nor any other Delaware statute forbids the enactment of fee-shifting bylaws” and “[m]oreover, no principle of common law prohibits directors from enacting fee-shifting bylaws.” This conclusion follows from the fact that bylaws are a form of contract and that fee-shifting is a well-settled contractual device for allocating risk. The court notes that the adoption and application of such a fee-shifting bylaw must comply with a board’s fiduciary duties, but if the board so complies, such bylaws are facially permissible and enforceable, even for the purpose of deterring litigation. As the court holds, “[f]ee-shifting provisions, by their nature, deter litigation. Because fee-shifting provisions are not per se invalid, an intent to deter litigation would not necessarily render the bylaw unenforceable in equity.”
The opinion addresses a bylaw put in place in the context of a non-stock corporation, but the holding may be read to apply to all Delaware corporations. Whether such a bylaw is appropriate for a particular corporation, will, however, depend on a number of factors specific to such corporation and care should be taken in connection with an adoption of such a bylaw. Because this is the first case addressing fee-shifting bylaws, the reaction of proxy advisory firms and other interested parties in the corporate governance arena is yet to be known. Further, the court was careful to note that such a bylaw may be facially valid, but nevertheless be invalid if adopted or used for an inequitable purpose.
Conflict Minerals: A Second Form SD Filed
Yesterday, Affymetrix became the 2nd company to file a Form SD – see some analysis from Steve Quinlivan and analysis from Elm Consulting. Here’s my blog about the first…
More on our “Proxy Season Blog”
We continue to post new items regularly on our “Proxy Season 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:
– Shareholder Proposals: Trends for the Season & How to Keep Track
– Declassification: 75% of ’14 Engagements Have Already Produced Agreements
– Increasing Use of Nonbinding Shareholder Proposals to Seek Divestitures
– Will Corp Fin Start Objecting to Too Many 10-Q Risk Factors?
– Cere’s Climate Change Disclosure Campaign Continues
– Not Counting “Abstentions”: A Rebuttal
