Recently, the SEC posted the adopting release for its e-forum rulemaking. Even though most of this rulemaking essentially codified what was arguably already permissible under the proxy rules, I believe this rulemaking will spur the investor community to start leveraging the Web more.
During last week’s proxy season webcast, Pat McGurn talked about this topic as well (audio archive and transcript are available now). Although not an e-forum example per se, I pointed out VotePal.com to illustrate the point of how one shareholder can easily get its views known on a shoestring budget (this particular shareholder’s beef relates to omitting the shareholder’s name from certain communications with other shareholders and not properly reporting election results). This site is quite elementary: the shareholder simply has posted a chronological list of any documents related to his agitation at Alaska Air. Note this statement on the left side of the site’s home page: “We’ve Proven Anyone Can Conduct a Proxy Contest…How About You??”
Practice Tip: Votepal.com provides us with a reminder that anything we write these days could surprise you and wind up online. The site contains several letters written by Alaska Air’s law firm (here is an example). Ignore the Web at your own peril!
Pay-for-Performance Disclosure: Transcript from Proxy Season Webcast
We have posted the transcript from last week’s popular webcast with RiskMetrics’ Pat McGurn: “Forecast for 2008 Proxy Season: Wild and Woolly.”
Here is a notable excerpt from Pat’s remarks regarding disclosure of pay-for-performance targets (which dovetails the extensive conversation about this topic with SEC Staffer Mike Reedich and others during last Wednesday’s webcast on CompensationStandards.com):
“If issuers want to stay out of trouble this year, there are a couple of quick ways to do it. The first one on the CD&A side has to do with what I call the “can’t discern alignment” issue. The fact that many companies in 2007 omitted the targets and the hurdles under their performance-based pay programs. I don’t think there is anything that’s going to get you into trouble with investors faster this year than continuing to use stealth over those targets and hurdles.
I think obviously the SEC has now set a bar for confidential treatment of those numbers and that information going forward. But I think it’s something that shareholders are going to judge on their own as well, and if there is one big flash point issue this year, it is going to be on “pay-for-performance” and whether there is enough information for shareholders to figure out how high the bar has been set in the CD&A this year.”
Alan Dye: Keeping Yourself Out of the Section 16 ‘Hot Water’
For members of Section16.net or the NASPP, tune into tomorrow’s webcast – “Alan Dye: Keeping Yourself Out of the Section 16 ‘Hot Water’” – to hear Alan Dye give us guidance on all the latest developments in the Section 16 area. This always is one of the most popular webcasts around. Try a Section16.net no-risk trial to catch this 90-minute program.
Microfinance in Africa
A friend of mine recently launched a microfinance initiative in Buyobo, Uganda, and arranged for a Ugandan charity called FDNC to provide follow up visits to her borrowers. FDNC provides all sorts of health, education and training outreach to women and children in rural villages. FDNC receives funding from a USA charity called Hope for Uganda Students (HUGS).
Now, Parade magazine is holding a charity-giving challenge and will give $50,000 to the 4 USA charities that generate the most new donors by January 31st – and the top 50 will receive $1,000. So my friend is trying to get at least 50 new donors for HUGS during the next three days. You only have to give $10 – the important thing is how many people give – not how much they give. So please go to this web site and donate $10.
Many of you have registered for the upcoming webconference – “New Rule 144: Everything You Need to Know – And Do NOW” – which will be video webcast on Wednesday, January 30th (video archive will be available starting the following day).
Here are instructions to attend the Conference:
1. Test your access now: To watch the Conference, you will need either the Windows Media Player or the Flash Player (which works for a Mac); RealPlayer will not work for this Conference. To test your access, please go to: “Test Your Ability to Access Webconference.”
2. Determine whether CLE credit is available in your state: We expect this Conference to be accredited for CLE in about 15 states – here is the list of CLE states. CLE credit will not be available for states that are not on this list.
3. If you seek CLE credit, you will need to input your contact information in our “Online CLE Tracker”: To comply with certain state bar requirements, we have built a system whereby those in states where this webcast is accredited and want to earn CLE will need to click through a series of periodic prompts (i.e. about every 15-20 minutes) to prove they sat through the webcast. Soon, we will have this “Online CLE Tracker” up and you can input your information in advance of the Conference if you wish.
4. Print out the Course Materials: You can now access these “Course Materials,” including this printable set of model documents. [We just tweaked a few of the rep letters to add a representation about shell companies – so if you already printed out a set of our model documents, you may want to print them out again.]
5. Attend on Wednesday, January 30th starting at noon eastern: If you intend to attend live on Wednesday, the Conference starts at 12:00 noon eastern time (this is earlier than originally announced as the Conference is now longer). Here is the Conference Agenda, which has the schedule of panels (remember that all panels will be archived and you can watch them afterwards).
To attend, go to the home page of TheCorporateCounsel.net and – and click on the large link at the top with the Conference title and input your ID and password when prompted. If you have questions, please email our HQ at info@thecorporatecounsel.net.
Podcast: Impact of Stoneridge
In this podcast, Lisa Wood of Foley Hoag discusses the recent US Supreme Court decision regarding aiding & abetting in Stoneridge Investment Partners v. Scientific-Atlanta, including:
– What did the Supreme Court decide in Stoneridge?
– What does this mean for aiding & abetting allegations going forward?
– What should companies and other market participants do to protect themselves in the wake of Stoneridge?
The Stoneridge Memo Phenomenon
I don’t know why it struck me, but the force and speed by which law firms sent their memos out last week – in the wake of the US Supreme Court’s Stoneridge decision – was truly amazing. So far, we have posted over 40 of these memos, with the bulk of them being drafted within 48 hours of the decision being rendered. So below is a question I ask you:
Catch today’s webcast – “Smaller Companies: How Your 10-K Changes This Proxy Season” – to hear Dave Lynn, John Jenkins and Harry Pangas discuss how to prepare your Form 10-K this proxy season, with a focus on what changes you need to make this year due to the SEC’s new rules and regulations for smaller companies.
Unlike our other webcasts, this one was taped in advance so you can listen to it at anytime (and there will be no transcript). And you will also want to review these “Course Materials,” which consist of practice pointers that the panelists put together. Some good stuff!
Head’s Up for Smaller Companies: Read the Actual Rule Text
A member recently alerted us to a possible glitch in the SEC’s adopting release for smaller company regulatory relief and simplification. In the release, the SEC stated that Item 407 of Regulation S-K was being amended to provide that “smaller reporting companies are: “… Not required to provide an Audit Committee Report until the first annual report after their initial registration statement is filed with the Commission and becomes effective.”
However, the actual amendments to Item 407 don’t refer to the Audit Committee Report – instead, they refer to disclosure regarding the Audit Committee Financial Expert. I think the actual amendments are correct since the intent of the rules is to provide that the disclosure regarding Financial Experts required by Item 407(d)(5) will not be required for a smaller reporting company in its 1st annual report following the effective date of its first registration statement. Smaller reporting companies will be required to provide Audit Committee Reports.
Practice Tip: For both the SEC’s adopting and proposing releases, don’t forget to read the rule text near the end of the releases rather than rely on the narrative description of them in the forepart. After all, the rule text is what we all have to live by, long after the adopting release is mostly forgotten…
News from San Diego: Recap of Corp Fin Efforts
Yesterday, Corp Fin Director John White delivered this speech at the Northwestern Conference in San Diego. It provides a recap of all the SEC’s ongoing efforts. In two weeks, get some expert perspectives from outside the SEC on what the Staff is up to (and has been doing recently) in our webcast: “The ‘Former’ SEC Staff Speaks.”
I hear that Staffer Shelley Parratt had an interesting panel in which she said there have been a lot of questions about how companies can find out which AD group (ie. industry group in Corp Fin’s “operations”) they are in. There is information on the Corp Fin web page – but it can be confusing so the Staff plans to make it easier to use. Don’t forget our handy “Corp Fin Organization Chart.”
With our blockbuster Conference only a week away – “New Rule 144: Everything You Need to Know – And Do NOW” – we have posted our Course Materials so that you can print them out in advance. If you have registered for the Conference, please use your ID and password to access these “Course Materials,” including this printable set of model documents. (Note you need to register for the Conference to access these Materials; members of TheCorporateCounsel.net receive a discounted rate, but the Conference is separate from membership.)
In addition to a “Comprehensive Rule 144 Outline,” nifty charts and useful analysis, the Course Materials include these model documents:
– Model Memorandum to Directors and Executive Officers
– Seller’s Representation Letter #1 – Sales by Affiliate of Reporting Company
– Seller’s Representation Letter #2 – Sales by Affiliate of Non-Reporting Company
– Seller’s Representation Letter #3 – Sales of Restricted Securities by a Non-Affiliate
– Standard Broker’s Representation Letter for Affiliates: “We Will Comply” Letter
– Legend Removal Representation Letter #4.a – to Broker
– Legend Removal Representation Letter #4.b – to Issuer and Transfer Agent
– Legend Removal Broker’s Cover Letter #5 – to Transfer Agent and Issuer
– Broker Instruction/Representation Form
– Letter: Reminder of SEC Restrictions and Company Policy (can be stapled to stock certificate, etc.)
The Course Materials alone are worth the rate of this Conference. You will need all of these documents starting February 15th, when new Rule 144 becomes effective.
New Rule 12h-6: Deregistration Stats So Far
Last week, Corp Fin Director John White gave this speech at PLI’s Annual European conference, which provides a solid recap of the SEC’s international efforts in the corporate finance area. (Chairman Cox also recently delivered this speech entitled “International Business — An SEC Perspective.”)
In his speech, John notes that 100 companies have filed to withdraw from U.S. registration under the SEC’s new deregistration rules during 2007 (which doesn’t include 25 that had previously deregistered under the older exit rules but filed a Form 15F to gain the benefit of new Rule 12h-6). The 100 FPIs represent just under 9% of all FPIs as of the beginning of 2007 and 53% are from the European Union.
It is notable that during 2007, more than 75 new foreign private issuers registered securities in the US. So perhaps it’s too early to tell what the long-term impact of new Rule 12h-6 will be…
Probable Cause for Car Search: No Broker-Dealer License
I’ve heard of getting into trouble driving with a driver’s license – but driving with a broker-dealer license? Keith Bishop notes: I thought that this recent California case was interesting for several reasons:
1. The Court of Appeal found that the police had probable cause that the defendant was selling securities without a broker-dealer license and could lawfully search the defendant’s vehicle in connection with his arrest.
2. The appellate court upheld a burglary conviction based on the fact that the defendant entered the victim’s home to solicit an investment.
3. The court ruled that violation of California’s broker-dealer registration requirement (Cal. Corp. Code Sec. 25210) is a general intent crime. Thus, guilty knowledge is not an element of the crime. (For example, the defendant does not have to know that he or she is selling securities.) However, the defendant’s good faith believe that he or she is not required to be licensed is an affirmative defense.
4. It should be noted that the defendants’ failure to disclose that they lacked a B-D license also supported criminal convictions for selling securities by false statements or omissions (Cal. Corp. Code Sec. 25401).
Among the important topics that will require up-to-the-minute guidance, the Conference will cover:
– What are the SEC Staff’s latest positions from their recent waves of comment letters – and upcoming Staff Report – such as the Staff’s new expectations for the CD&A, including specific suggestions and examples
– How to overcome the unexpected challenges from the Staff’s comment letters
– What are examples of what companies intend to change in this year’s proxy disclosures
– How to analyze and disclose perks, including how to determine whether something is a “perk”
Upcoming House Hearing on Severance Pay
Rep. Henry Waxman (D-Cal.) has asked Charles Prince, Stanley O’Neal, and Angelo Mozilo to testify at a February 7th hearing on severance pay (here are the letters sent to the executives and other requests for testimony). Until recently, Mr. Prince was the CEO of Citigroup and Mr. O’Neal was the CEO of Merrill Lynch; each took home around $40 million and $161 million, respectively, after being forced to retire after their firms suffered heavy losses from mortgage investments. Mr. Mozilo is the CEO of Countrywide Financial, who is expected to receive a $115 million payout if a planned buyout by Bank of America is completed.
According to RiskMetrics: “You should plan to address how [your severance package] aligns with the interests of … shareholders and whether this level of compensation is justified in light of your company’s recent performance and its role in the national mortgage crisis,” Waxman wrote in his letter to the three executives.
On Jan. 17, Waxman’s committee sent out another round of letters–this time to current employees of the three companies, requesting documents and testimony on the process used to decide on severance packages for O’Neal, Prince, and Mozilo. Waxman called on John Thain, Merrill Lynch’s new CEO; Vikram Pandit, the new CEO of Citigroup; and Mozilo himself, who still serves as CEO at least until the Bank of America takeover, to submit to the committee copies of all documents related to drafting the severance agreements at each company – including the names of outside consultants hired to help the board’s compensation committee draft the agreements. The executives will have until Jan. 25 to submit the documents to the oversight committee, the letter states.
Three additional letters, also sent on Jan. 17, went to the respective chairmen of each company’s compensation committee. Harley Snyder of Countrywide, John Finnegan of Merrill Lynch, and Richard Parsons of Citigroup were asked to appear at the Feb. 7 hearing committee hearing to address how the executives’ severance pay was determined, and “on what basis [the] [b]oard of [d]irectors decided to approve [the] pay package,” Waxman wrote.
Survey Results: Compensation Committees and Compensation Consultants
Speaking of Rep. Waxman, given his keen interest in compensation consultant conflicts, it’s a good time to report the survey results from our most recent Quick Survey, repeated below:
1. Does your compensation committee:
– have a policy that it will not employ any compensation consultants who perform services for management – 16.1%
– not have such a policy, but does not intend to employ any of the same compensation consultants as management – 51.6%
– employ some (or all) of the same compensation consultants used by management – 32.3%
2. In practice, how does your compensation committee go about hiring an expert for making recommendations regarding CEO compensation?
– Management offers up a consultant to the compensation committee that it finds acceptable, subject to committee approval – 44.3%
– Compensation committee left completely on its own to find and hire whatever consultant it wants – 50.8%
– Compensation committee has not hired an expert for setting CEO compensation – 4.9%
3. Assume the company already is using consultant A for general compensation advisory purposes, will your compensation committee:
– Use the same consultant to help set executive compensation – 36.1%
– Use a different consultant to help set executive compensation – 37.7%
– Too early to tell what the compensation committee will do going forward – 26.2%
4. Regarding compensation committee charters, the committee has:
– A charter that states that the compensation committee will be the sole entity in the company to hire compensation consultants specifically related to CEO compensation – 59.0%
– A charter that states that both the compensation committee and management have the authority to hire compensation consultants specifically related to CEO compensation – 18.0%
– A charter that does not address who hires compensation consultants – 23.0%
My Ten Cents on Consultant Conflicts: I think Rep. Waxman’s interest in conflicts is somewhat unfounded. My experience is that the relatively few board advisors on CEO pay within big consulting firms really are walled off from the much larger departments doing more general HR work. There are more important processes broken in the CEO pay area that are more worthy of attention, such as the severance pay area for which Rep. Waxman has called this hearing on…
With a hat tip to RiskMetrics, the New York City Comptroller’s office announced in this press release that Par Pharmaceuticals has agreed to adopt an annual shareholder advisory vote on executive pay. In October, a non-binding proposal received 56.8% support at the company’s annual meeting.
Par Pharmaceuticals is the 3rd company to agree to an annual advisory vote on executive pay. On CompensationStandards.com, we are maintaining a list of those companies that have agreed to adopt some form of “say on pay” in the “Advisory Shareholder Vote/Say on Pay” Practice Area.
Deadhead Flights and Incremental Costs
In the CompensationStandards.com “Q&A Forum,” Dave just posted this answer in response to a query about what is the latest thinking about the inclusion of deadhead flights in calculating the incremental cost of personal use of corporate aircraft:
“I think perhaps the most significant development on including deadhead flight costs was John White’s discussion of the issue in his September 6, 2006 “Principles Matter” speech. It was there that he said “[i]n my view, if a deadhead flight leg causes a company to incur incremental costs, those must be included in the calculation of the perk’s value.”
Even with those comments out there, in the 2007 proxy season we saw that few companies disclosed that deadhead flights have been included in the incremental cost calculation. As we noted in the November-December 2007 issue of The Corporate Executive, the inclusion of deadhead costs could increase the reported incremental cost number by as much as two to four times the amount disclosed.
Brink Dickerson of Troutman Sanders did a great presentation on Airplane Perks at our “4th Annual Executive Compensation Conference” back in October. His presentation and materials are archived on CompensationStandards.com, which includes a survey of airplane perks disclosures at many companies. You can also see the “best practice” model disclosure regarding airplane perks in the January-February 2008 issue of The Corporate Executive, where we recommend that deadhead costs and the loss of corporate tax deductions should be factored into the incremental cost calculation.”
– What will be the hot topics for investors in 2008? How do they differ from what was hot this year?
– What changes in governance policies should companies now consider as broker votes may well be gone in 2009?
– What new positions were taken by RiskMetrics in their upcoming 2008 voting guidelines?
Pat always puts together some great course materials – and this year is no exception – please print out these course materials before you listen.
Last week, I was on the road in the Midwest to speak to a few groups about a variety of topics. These topics generally related to what I call the inevitable convergence of a number of disciplines. Before you know it, I believe the IR and corporate governance departments will merge within companies – with disclosure lawyers also becoming a part of that combination. Don’t forget: with the SEC’s e-proxy rulemaking a year ago, the government explicitly recognized that many shareholders will look to corporate websites for information about their investments. I believe many of us will have to develop skill sets that we currently don’t have.
One of these skill sets is broadening our “journalistic eye” and joining the “conversation” that is happening online. I know many of you will chuckle if I predicted that at least 50% of the folks reading this blog will one day be bloggers – but I really feel that’s not too outrageous a statement. (More on all this high-minded theory some other day.)
A case in point is the new “Dell Shares” blog, where members of Dell’s IR department take turns blogging about IR issues. Very interesting and Dell is to be applauded. Taking a page from Sun Microsystems and other tech companies, Dell has a number of employees blogging (and even discussion forums on their site). Here is the popular “Direct2Dell” Blog, which focuses on the company’s products and services (and is available in Spanish, Chinese and Norwegian).
My pet peeve with Dell Shares is the disclaimer that Dell’s IR department forces us to click-through to get to its blog. As I commented on Dell Shares, I find it ironic that the IR department forces us to click through a disclaimer when the other Dell blogs don’t have such a disclaimer – given that Dell’s IR department likely is much more sensitive to what they should or shouldn’t be blogging than others within the company. Don’t let that stubborn lawyer voice within you place unnecessary obstacles to allowing yourself or others to be a part of the growing worldwide “conversation.”
The NYSE’s Annual Letter to Listed Companies
Yesterday, the NYSE sent its annual letter to listed companies to remind them of their of annual compliance requirements (there is a separate letter for foreign private issuers). The letter mentions that the NYSE’s proposed corporate governance rule changes are still pending before the SEC and they continue to discuss them with the Staff.
Wouldn’t it be cool if the FASB codified GAAP? Impossible? No, it’s being done (and I imagine it has to be done if the SEC’s XBRL taxonomy project is to be accurate). On Wednesday, the FASB issued this press release to launch the one-year verification phase of the FASB Accounting Standards CodificationTM (Codification).
During the verification period, constituents are encouraged to use the online Codification Research System to research accounting issues and provide feedback on whether the Codification content accurately reflects existing GAAP. The Codification content is not yet approved as authoritative so take it with a grain of salt. And you have to register as a user to try it out (even though its free).
I’m a simple guy, so I dig the Q&A format of this Home Depot proxy statement from last year. For example, I think the Q&A format made it easier for the company’s audit committee report (pages 66-68) to provide more useful information regarding the activities of the committee as compared to the boilerplate-type language that some companies use.
I’ve seen some companies use Q&A in the forepart of their proxy statement, but not many that use it for the entire document. One usability recommendation: don’t use all caps for the questions (since that is hard for humans to read); rather, place the questions in boldface.
AFSCME’s Proxy Solicitation Expense Proposals
As noted in RiskMetrics’ “Corporate Governance” Blog, AFSCME intends (or has) submitted shareholder proposals seeking reimbursement for short-slate solicitation expenses at a handful of companies this coming proxy season. This is an alternative tactic to shareholder access that could render the access movement obsolete if it catches on.
In addition, according to RiskMetrics, AFSCME has now filed (or co-filed) binding proposals seeking shareholder access at four companies: Countrywide Financial; E*TRADE; Bear Stearns; and JP Morgan Chase. Additionally, CalPERS has submitted one to Kellwood.
Marty Dunn and other former senior Corp Fin Staffers will discuss all the latest types of shareholder proposals during our upcoming webcast: “The Former SEC Staff Speaks.”
Analysis of Distressed Debt Survey
In this podcast, Evan Flaschen of Bracewell & Giuliani provides some thoughts about the survey his firm (along with Debtwire) conducted entitled “Survey: Distressed Debt Creditor Insight,” including
– Why was the study undertaken?
– What were the study’s major findings?
– What were the biggest surprises?
– What is the overall outlook for 2008 and are you seeing any evidence so far?
One of the reasons for the popularity of this blog is because it is one of the very few that covers corporate finance law. Perhaps it’s because litigators love to talk more, but there are far more securities litigators blogging than financiers. Boy, do those litigators love a Supreme Court case – particularly one as tantalizing as Stoneridge, which was decided yesterday by SCOTUS. And in record time, the law firm memos started rolling in – we are posting them in the “Aiding & Abetting” section of the “Securities Litigation” Practice Area; here is a copy of the court opinion.
Here is a case summary from Dave: The theory of “scheme liability” as a basis for recovery against third parties in securities class actions bit the dust yesterday, with the Supreme Court’s 5-3 ruling in Stoneridge Investment Partners v. Scientific-Atlanta. Ultimately, as stated in the majority opinion delivered by Justice Kennedy, the Court concluded that “the private right of action [under Section 10(b) and Rule 10b-5] does not reach the customer/supplier companies because the investors did not rely upon their statements or representations.” In his dissent, Justice Stevens states that the majority’s view of reliance “is unduly stringent and unmoored from authority.”
Without scheme liability, plaintiffs will find it difficult to reach secondary actors involved in a fraud such as customers, suppliers – or perhaps even investment bankers – since the Supreme Court’s Central Bank decision cut off the ability to sue those third parties as aiders and abettors. Stoneridge represents yet another decision in a line of recent Supreme Court rulings that are hostile to plaintiffs and more favorable to business.
And for more detailed analysis, check out these litigation bloggers:
My Ten Cents: Policies Barring Executives from the Web
A few months ago, Whole Foods took the step to amend and restate the company’s code of business conduct to bar top executives and directors from posting messages about Whole Foods, its competitors or vendors on any online forums (broadly defined to include blogs) that aren’t sponsored by the company (unless approved by the board’s nominating and governance committee). The restated code prohibits comments on third-party Web sites so executives will “avoid the actual and perceived improper use of company information. It not only bars postings that are anonymous, but also those under the person’s real name. The bar applies to “company leadership,” which includes directors, executive team members and regional vice presidents. The restated code (scroll to page 13) was disclosed in this Form 8-K.
I understand why the company took such an action, given the revelations that the CEO posted anonymous messages about the company and its competitors from 1999 through 2006 – and the SEC’s and market’s reactions to such revelations. But I hope that no companies would feel the need to follow Whole Food’s “lead” here, because common sense should rein in company leaders from posting anonymous messages of the type made by the company’s CEO (ie. misrepresenting oneself) and this is one area not crying out for yet another corporate policy.
In fact, I believe Whole Food’s policy is too broad and would limit the company’s leadership to engage in the important online “conversation.” Ironically, Whole Foods is one of the few companies currently contributing to that conversation since it has allowed blogging by its leaders (at least the CEO; here is his blog). In today’s world, the importance of being allowed to learn from like-minded individuals can’t be overstated and the easiest way to do to engage them is through the Internet, either by e-mail or the Web.
One of the more influential books on my career is “The Cluetrain Manifesto,” which essentially foretold the social networking/Web 2.0 craze that is here to stay. When the book was published in the late ’90s, I saw the authors present here in DC at a local “Netpreneurs” event, complete with a guy in a Gorilla suit and beach balls being bounced above the crowd. Ah, those glorious ’90s when I still had hair…
Many of the companies I have spoken with continue to have a “wait and see” attitude about whether they will try voluntary e-proxy this year. The latest e-proxy statistics from Broadridge bear this out. Below is a summary of their findings as of the end of December; a more complete set of stats are posted in our “E-Proxy” Practice Area:
– 69 companies have used e-proxy so far (with 2 having to do a second notice); another 40 have committed to do e-proxy
– Size range of companies using e-proxy varies considerably; all shapes and sizes
– 2/3 of companies using e-proxy had routine matters on their meeting agenda; another 30% had non-routine matters proposed by management and 6% had non-routine matters proposed by shareholders
– Retail vote goes down dramatically using e-proxy (based on 51 meeting results); number of retail accounts voting drops from 17.1% to 4.0% (over a 75% drop) and number of retail shares voting drops from 28.0% to 13.3% (over a 50% drop)
– Real money can be saved; aggregate of $17.5 million net savings for the 69 companies
Foreign Private Issuers: May Try to Exclude US GAAP Even Before March 4th
Yesterday, the SEC posted this notice that it will entertain requests to allow foreign private issuers to file Form 20-Fs without US GAAP reconcilation even before the March 4th effective date of the SEC’s new rules on the topic. The request has to be in writing to the SEC Staff (although they can call the Staff in advance to hash out their circumstances). Here is an excerpt from the SEC’s notice:
In response to questions, the staff has advised companies that until this new rule is effective that they are subject to the existing rules regarding the inclusion of U.S. GAAP information in filings with the Commission. However, the staff is aware that some foreign private issuers with a fiscal year ending after November 15, 2007 that prepare their financial statements using IFRS, as issued by the IASB, will want to file their annual report on Form 20-F before March 4, 2008. These companies also want to exclude U.S. GAAP information from that filing. The staff does not want to discourage companies from filing their 20-F before March 4, 2008. Accordingly, these companies are encouraged to contact the staff in the Division of Corporation Finance to discuss this issue. These companies can contact either Craig Olinger – Deputy Chief Accountant (202-551-3547) or Wayne Carnall — Chief Accountant (202-551-3107) to discuss their particular facts or circumstances.
The staff also noted that this same release provides similar relief from the requirement to provide U.S. GAAP information if the financial statements are filed under Rules 3-05, 3-09, 3-10 and 3-16. Likewise, companies that intend to file financial statements with a fiscal year ending after November 15, 2007 that are prepared using IFRS, as issued by the IASB, that exclude U.S. GAAP information in a filing under the Securities Exchange Act of 1934 before March 4, 2008 are similarly encouraged to discuss their fact pattern with the staff.
M&A: The ‘Former’ SEC Staff Speaks
Catch the DealLawyers.com webcast tomorrow – “The ‘Former’ SEC Staff Speaks” – to hear former Senior Staffers from the SEC’s Office of Mergers & Acquisitions weigh in on the latest rulemakings – and interpretations – from the SEC. This webcast will provide a complete “bring-down” of what’s happening at the SEC – and provide practical guidance about what you should be doing as a result. Join:
– Dennis Garris, Partner, Alston & Bird LLP and former Head, SEC’s Office of Mergers & Acquisitions
– Jim Moloney, Partner, Gibson Dunn & Crutcher LLP and former Special Counsel, SEC’s Office of Mergers & Acquisitions
The grace period for DealLawyers.com has expired. As all memberships are on a calendar-year basis, if you haven’t renewed, you won’t be able to catch this webcast or this upcoming one: “MAC Clauses: All the Rage.” So renew your membership today!
