Monthly Archives: April 2015

My take-away from Rep. Hurt’s House Financial Services Committee hearing: if you’re a small-cap still paying $50k for XBRL, “call Vintage”

Yesterday, Rep. Robert Hurt’s Small Company Disclosure Simplification Act (H.R. 1965), was discussed by the House Financial Services Committee at a subcommittee hearing. This is the fourth time Rep. Robert Hurt’s (R-VA) proposal has been brought up – both as standalone legislation and bundled into larger Financial Services packages. It’s failed thrice.

The proposal, which is supported largely by the biotech industry, would exempt over 60% of U.S. public companies from the obligation to file their financial statements with the SEC in XBRL. This proposal will effectively render the entire XBRL requirement moot: a capital markets database must be full market to have value to stakeholders.

Citing a $50,000 price tag, Rep Hurt’s main driver seems to be simply “XBRL is too expensive for emerging growth companies.” He’s correct, it was too expensive… back in 2012 when the highly referenced Columbia Business School white paper, An Evaluation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts, was published.

Plus, per the white paper:

A “White Paper” project is in-depth and comprehensive, aimed towards those familiar with the topic at hand – standard-setters, regulators, CFOs and professional accountants. Because of the nature of these projects, they are time-intensive, and can take up to a year to complete.

So, that may give us a 2011 perspective as Rep Hurt’s baseline.

It’s now 2015, and as Vintage clients appreciate, XBRL costs have become realistic and more importantly – scalable to the fiscal sophistication of the issuing company. That is exactly why we introduced fleXBRL. In 2011 -12, many XBRL solutions were one-size-fits-all, which caused the “aggressive” fees for micro- and small-caps. That is no longer the state of XBRL filing and fees. The House Financial Services Committee must reference current 2015 fee structures. 

Collectively, the XBRL industry understands the frustration that brought this to The Hill, but not having a unified database of financial reporting is not an option. This infographic from The Data Transparency Coalition explains it the best. Click here to see their high-resolution version.  

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Disclosure: I am a registered Independent, generally vote Democrat and make money marketing our intelligent value XBRL services.

Two glass-half-full investor relations lessons from the Twitter early release

Needless to say, yesterday was a bad day for Twitter – and for those of us within the shareholder communications business with empathy. Here is the YAHOO! write-up on the drama. As you’ll read in the Yahoo! article, Twitter is not the first casualty of this type of error.

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Two points:

  • Instead of preemptively issuing your IR website provider a copy of your earnings release for manual set-up and “go live,” enable your IR website to AUTOMATICALLY receive and release material news directly from your newswire provider. This automation prevents the pre-staged “a la’ carte” HTML earnings release webpage from either being hacked or mistakenly taken live.

Automation marks your official newswire powered news release as the core dissemination point for market moving news. Everything else is fed from that: IR site, email alerts, Twitter, StockTwits, RSS, etc. One and done and as simultaneous as the internet can be. Here is a whitepaper that discusses Twitter, StockTwits and your newsflow.

Today, in the IR-product environment, all the IR website vendors have offered news release auto-posting for several years (our IR website solution is called IR Room). It’s not difficult to enable, but it does require configuration and QA testing. Please don’t try to knee-jerk automation in for this quarter.

  • IR departments need to use this as another indication of the strength of social media. It’s unfortunate that it’s a missed expectations example.

Cynically, we could huff this away as another “bad news travels fast in social media” scenario – however, in this case, it is important to understand that (for their marketing purposes I assume) Twitter does not use a newswire – all their material news is sent and $CASHTAGGED via their own network.

Their investor audience was trained, primed and ready to react from any news in their Twitter stream. And react they did. Like it or not, investors are using social media.

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Again, here is a whitepaper that discusses Twitter, StockTwits and your newsflow.

Feel free to dismiss the points above as being newswire biased. The automation feature will prevent this type of error.

Best wishes for a glitch-free earnings season!

WEBINAR REPLAY: The Inner Workings of a Deal: Goals, preparation and hiring an intermediary

The first of our three-part webinar series, The Inner Workings of a Deal: Step-by-Step for Successful M&A Transactions, was held on April 16th and we’re very pleased how well it was received. Vintage is presenting this series in direct response to the increase in clients’ M&A transaction projects.

The discussion, targeted for middle-market companies, offers very tactical, tangible advice.  Click the video below for a quick snippet of Session 1, Goals, preparation and hiring an intermediary.

To listen to the complete Session 1 webinar, CLICK HERE.

You can also download the companion whitepaper at that same link. Sincere thanks to our presenter, Michael Schwerdtfeger, Chapman Associates.

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The-Inner-Workings-of-a-Deal-Webinar-1-Companion-1If you enjoy Session 1, you are invited to pre-register for Seasons 2 & 3. The value of pre-registering is that we’ll send you a reminder email for the individual events.

Session 2:
Marketing your business, early discussions and deeper dives

DATE: May 21, 2015
TIME: 2:00 PM ET
PRE- REGISTRATION:
http://prn.to/1Brfhct

—————

Session 3:
Due diligence, the “docs,” and closing

DATE: June 4, 2015
TIME: 2:00 PM ET
PRE- REGISTRATION:
http://prn.to/1E0y3hQ

—————

PRODUCT PITCH: A video demonstration of the Vintage Data Room, powered by EthosData can be viewed here: http://prn.to/1EUSM4j

IPOs and Transactions: April 20 – 24 / plus video: M&A expert panel

There were 52 transactions filed with the SEC last week.

Congratulations to all of the corporations and law firms that selected our transactions services last week including Energous Corp. w/ K&L Gates LLP, Electrum Special Acquisitions Corp w/ Ellenoff Grossman & Schole LLP and Greenberg Traurig, LLP and China Automotive Systems Inc. w/ Winston & Strawn LLP.

We appreciate that they selected to work with us and we’re pleased that they found us to be the intelligent value.

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Law firm / advisor Registrant Symbol Form Exchange
Akin Gump Strauss Hauer & Feld LLP MEMORIAL PRODUCTION PARTNERS LP MEMP S-4 Nasdaq
Baker Botts L.L.P. GPM PETROLEUM LP ~ S-1 ~
Burns & Levinson LLP HARVARD BIOSCIENCE INC HBIO S-3 Nasdaq
Care Capital Properties, Inc. CARE CAPITAL PROPERTIES, INC. ~ 10-12B ~
Covington & Burling LLP WSFS FINANCIAL CORP WSFS S-4 Nasdaq
Cyberonics, Inc. SAND HOLDCO PLC ~ S-4 ~
Davis Polk & Wardwell LLP FOGO DE CHAO, INC. ~ S-1 ~
Davis Polk & Wardwell LLP AURIS MEDICAL HOLDING AG EARS F-1 Nasdaq
Dechert LLP PRIVATE ADVISORS ALTERNATIVE STRATEGIES FUND ~ N-2 ~
Dechert LLP PRIVATE ADVISORS ALTERNATIVE STRATEGIES MASTER FUND ~ N-2 ~
Dorsey & Whitney LLP PEOPLE’S UTAH BANCORP ~ S-1 ~
Dorsey & Whitney LLP TRI-STATE GENERATION & TRANSMISSION ASSOCIATION, INC. ~ S-4 ~
Dorsey & Whitney LLP PERSEON CORP PRSN S-1 Nasdaq
Ellenoff Grossman & Schole LLP ELECTRUM SPECIAL ACQUISITION CORP ~ S-1 ~
Fifth Avenue Law Group, PLLC VISUALANT INC VSUL S-1 ~
Fox Rothschild LLP BIO KEY INTERNATIONAL INC BKYI S-1 ~
Goodwin Procter LLP AXA EQUITABLE LIFE INSURANCE CO ~ S-3 ~
Goodwin Procter LLP AXA EQUITABLE LIFE INSURANCE CO ~ S-3 ~
Gracin & Marlow, LLP XRPRO SCIENCES, INC. ~ S-1 ~
Graubard Miller PAVMED INC. ~ S-1 ~
Greenberg Traurig LLP STELLAR BIOTECHNOLOGIES, INC. ~ S-3 ~
Greenberg Traurig, LLP ELECTRUM SPECIAL ACQUISITION CORP ~ S-1 ~
Greenberg Traurig, LLP PAVMED INC. ~ S-1 ~
Greenberg Traurig, LLP RMG NETWORKS HOLDING CORP RMGN S-3 Nasdaq
Greenberg Traurig, P.A. SBA COMMUNICATIONS CORP SBAC S-4 Nasdaq
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP ALDEYRA THERAPEUTICS, INC. ALDX S-1 Nasdaq
Haneberg, PLC WHEELER REAL ESTATE INVESTMENT TRUST, INC. WHLRP S-3 Nasdaq
Hartford Life Insurance Company UNION SECURITY INSURANCE CO ~ S-1 ~
Hartford Life Insurance Company UNION SECURITY LIFE INSURANCE CO OF NEW YORK ~ S-1 ~
Haynes and Boone, LLP EXCO RESOURCES INC XCO S-3 NYSE
Hogan Lovells US LLP WESTERN ALLIANCE BANCORPORATION WAL S-4 NYSE
Jill Arlene Robbins P.A. PACIFICORP HOLDINGS LTD. ~ S-1 ~
Jones Day GUIDED THERAPEUTICS INC GTHP S-1 OTC
K&L Gates LLP HECLA MINING CO/DE/ HL S-4 NYSE
K&L Gates LLP ENERGOUS CORP WATT S-3 Nasdaq
Kramer Levin Naftalis & Frankel LLP ARDEN SAGE MULTI-STRATEGY FUND, L.L.C. ~ N-2 ~
Kramer Levin Naftalis & Frankel LLP ARDEN SAGE MULTI-STRATEGY INSTITUTIONAL FUND, L.L.C. ~ N-2 ~
Latham & Watkins LLP FOGO DE CHAO, INC. ~ S-1 ~
Latham & Watkins LLP SAND HOLDCO PLC ~ S-4 ~
Latham & Watkins LLP AURIS MEDICAL HOLDING AG EARS F-1 Nasdaq
Law Office of Andrew Coldicutt APPOINTMED, INC. ~ S-1 ~
Loev Law Firm, PC VERTEX ENERGY INC. VTNR S-3 Nasdaq
LookSmart Group, Inc. LOOKSMART LTD LOOK 10-12G Nasdaq
Lowenstein Sandler LLP VISUALANT INC VSUL S-1 ~
Mayer Brown LLP HUNTINGTON FUNDING, LLC ~ S-3 ~
McDermott Will & Emery LLP PERSEON CORP PRSN S-1 Nasdaq
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. ALDEYRA THERAPEUTICS, INC. ALDX S-1 Nasdaq
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. NEPHROGENEX, INC. NRX S-1 Nasdaq
Morrison & Foerster LLP B. RILEY FINANCIAL, INC. RILY S-3 OTC
Park Avenue Group OWC PHARMACEUTICAL RESEARCH CORP. OWCP S-1 ~
Parker Poe Adams & Bernstein LLP ATLANTA MOTOR SPEEDWAY INC ~ S-4 ~
Perkins Coie LLP OVERSTOCK.COM, INC OSTK S-3 Nasdaq
Pillsbury Winthrop Shaw Pittman LLP WESTERN ALLIANCE BANCORPORATION WAL S-4 NYSE
Randall | Danskin, P.S. HECLA MINING CO/DE/ HL S-4 NYSE
Reed Smith LLP NEPHROGENEX, INC. NRX S-1 Nasdaq
Robinson Brog Leinwand Greene Genovese & Gluck P.C. NXT-ID, INC. NXTD S-3 Nasdaq
Ropes & Gray LLP VOYA PRIME RATE TRUST PPR N-2 NYSE
Silver, Freedman, Taff & Tiernan LLP WSFS FINANCIAL CORP WSFS S-4 Nasdaq
Sorin S.P.A. SAND HOLDCO PLC ~ S-4 ~
Square 1 Financial, Inc. PACWEST BANCORP PACW S-4 Nasdaq
Stoel Rives LLP PEOPLE’S UTAH BANCORP ~ S-1 ~
Stoll Keenon Ogden PLLC KENTUCKY BANCSHARES INC /KY/ KTYB S-4 ~
Sullivan & Cromwell LLP SAND HOLDCO PLC ~ S-4 ~
Sullivan & Cromwell LLP PACWEST BANCORP PACW S-4 Nasdaq
Sutherland Asbill & Brennan LLP HERCULES TECHNOLOGY GROWTH CAPITAL INC HTGC N-2 NYSE
The Law Offices of Thomas C. Cook, Ltd. IPOWORLD IPOW S-1 ~
Thomas J. Craft, Jr., Esq. OWC PHARMACEUTICAL RESEARCH CORP. OWCP S-1 ~
Vinson & Elkins L.L.P. GPM PETROLEUM LP ~ S-1 ~
Vinson & Elkins L.L.P. SUNCOKE ENERGY PARTNERS, L.P. SXCP S-3 NYSE
Voya Retirement Insurance and Annuity Company VOYA RETIREMENT INSURANCE & ANNUITY CO ~ S-3 ~
Wachtell, Lipton, Rosen & Katz PACWEST BANCORP PACW S-4 Nasdaq
Winston & Strawn LLP CHINA AUTOMOTIVE SYSTEMS INC CAAS S-3 Nasdaq
Wyatt, Tarrant & Combs, LLP KENTUCKY BANCSHARES INC /KY/ KTYB S-4 ~

Post IPO, thousands of organizations count on us to assure regulatory compliance and target new investors.

Click here and opt-in to receive this weekly summary via email.

Click here to review the week’s underwriters.

Have a great week.

IPO Underwriters of the Week: April 20 – 24 / plus video: M&A experts panel

Congratulations to the corporations and underwriters that worked with our transaction services team. Whether in-house, your-house or 100% virtual… click here to discover why we are the intelligent value for both traditional and confidential IPOs.

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Registrant Form Underwriter 1 Underwriter 2 Underwriter 3 +
AXA EQUITABLE LIFE INSURANCE CO S-3 AXA Advisors, LLC AXA Distributors, LLC ~
NEPHROGENEX, INC. S-1 Canaccord Genuity Inc. JMP Securities LLC ~
ELECTRUM SPECIAL ACQUISITION CORP S-1 Cantor Fitzgerald & Co. ~ ~
WHEELER REAL ESTATE INVESTMENT TRUST, INC. S-3 Compass Point Research & Trading, LLC ~ ~
ALDEYRA THERAPEUTICS, INC. S-1 Cowen and Company, LLC Canaccord Genuity Inc. Janney Montgomery Scott LLC / Laidlaw & Company (UK) Ltd.
PAVMED INC. S-1 CRT Capital Group LLC ~ ~
PEOPLE’S UTAH BANCORP S-1 D.A. Davidson & Co. Sandler O’Neill & Partners, L.P. FIG Partners, LLC
VOYA RETIREMENT INSURANCE & ANNUITY CO S-3 Directed Services LLC ~ ~
UNION SECURITY INSURANCE CO S-1 Hartford Securities Distribution, Inc. ~ ~
UNION SECURITY LIFE INSURANCE CO OF NEW YORK S-1 Hartford Securities Distribution, Inc. ~ ~
FOGO DE CHAO, INC. S-1 Jefferies LLC J.P. Morgan Securities LLC Credit Suisse Securities (USA) LLC / Deutsche Bank Securities Inc. / Piper Jaffray & Co. / Wells Fargo Securities, LLC
AURIS MEDICAL HOLDING AG F-1 Leerink Partners LLC JMP Securities LLC Needham & Company, LLC
VISUALANT INC S-1 Maxim Group LLC The Benchmark Company LLC ~
PERSEON CORP S-1 Maxim Group LLC ~ ~
GPM PETROLEUM LP S-1 Raymond James & Associates, Inc. ~ ~
VOYA PRIME RATE TRUST N-2 Voya Investments Distributor, LLC ~ ~

Post IPO, thousands of organizations count on us to assure regulatory compliance and target new investors.

Have a great week

What IR and general counsel need to know about Twitter’s new direct message policy change

On Monday, Twitter announced that its direct message (DM) system – which allows connected followers to communicate privately to one another – will now allow anyone to DM to anyone. The pros and cons of this new policy appear to be 50% – 50% from social media pundits.

Investor relations and general counsel need to be aware of this new feature ASAP – especially banks, who have a compliance regulation to report and follow-up on any complaints from their customers… regardless of the media. This point was discussed in depth at the NYSE Governance’s General Counsel Forum.

WHAT THIS MEANS:

Your brand’s Twitter DM can become an inbound box for client (and random) communications even though your corporate Twitter policy is to not “follow back” everyone that follows you. Also, it may become a spam box.

ACTION ITEM:

It’s an optional feature. You can opt-out of this new DM feature. See below. Click to enlarge.

twitter-direct-messeages

You may already be opted-out.  Be sure to confirm that.

Please note, I am not evangelizing “do not communicate with investors via social media.”  I am evangelizing “keep your material communications channels organized.”

Have a nice weekend.

How technology is changing the art of M&A – Part 4, technology and risk

NOTE: This top introduction is redundant from Parts 1 & 2. The new text begins below the experts photo. 

Technology is now widespread throughout all stages of the M&A process, from targeting to due diligence.  It has transformed the way that transactions are done. The use of different platforms is facilitating the quick delivery of deal information to a wider group of participants. As a result, crucial stages in a transaction can now be done remotely and simultaneously by several deal parties.

Technology is also affecting other areas of the deal process. Negotiations between buyers and sellers can be less contentious with access to past data. With advanced technology, it has become easy to compare past deals and take away precedents that these parties can agree on and apply to current transactions.

However, despite the advantages, there remain risks. The proliferation of information has heightened the potential for possible leaks of confidential deal data. On top of this, sector-specific issues, particularly in tech-heavy industries, have their own regulatory nuances dealmakers must navigate.

With all these factors coming into prominence, Mergermarket and Vintage gathered five experts to discuss the growing role of technology in the M&A process. In particular, they look at how the presence of technology has unlocked value in M&A deals while tackling the issues of potential risks and regulatory scrutiny.

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Q: How has technology impacted the due diligence side of a deal? How has technology as an area to scrutinize in due diligence increased in prominence?

Richard Lukaj: Some security tools have been introduced to protect data during the deal process. In the past, a person’s physical presence was needed to protect information from being taken, whereas now parties can decide virtually who gets to see what and who gets to download information by giving those permissions explicitly. In many ways, it has made the due diligence process much more efficient and allowed deals with multiple parties to be conducted much more effectively.

The only questionable element is that it has also reduced the human interaction in deals very dramatically. As a result, there are many transactions now where parties and negotiating counterparties have very little face-to-face interaction. There have even been deals where there has never been a meeting among parties that are transacting in the deal.

Matthew Epstein: The target’s technology has become considerably more important in the due diligence process. Even some non-technology businesses have a significant technology component that has to be closely examined. For instance, businesses dealing with consumer payment data have to deal with the Payment Card Industry compliance requirements.  This means checking whether the target is protecting the consumer data properly becomes a diligence item itself.

Beyond this, it becomes an issue of protecting data from any form of hacking. When it comes to infrastructure, how do companies monitor their operational assets? Are their monitoring and operation systems reliable and protected? If the technology involves corporate data, are they protecting that properly, to not expose trade secrets? Overall, many companies have various obligations to maintain their systems and processes for regulatory purposes. Every company that’s public has the Sarbanes-Oxley requirement. Are they capturing the data appropriately to make sure they’re Sarbanes­Oxley-compliant or are they in compliance with the Anti-Money Laundering rules? These issues are extremely important for companies that have cross-border businesses.

Roger Griesmeyer: Scrutiny during due diligence also usually involves examining a target’s intellectual property (IP). Does a company own IP that is properly licensed? What are the IP risks? From a practical perspective, in running a deal, it is important to ask whether the technology works. There has to be someone independent and unbiased who is an expert and who can really go in and take a good look.

Brian Rich: There is a need to look at the social media aspect as part of the due diligence process as well. When we conduct due diligence on a company, we’re monitoring the company’s online profile, Facebook and Twitter pages, MPF score, and the Glassdoor reviews on its management team.

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Q: What is the focus of regulatory scrutiny in the area of technology risk as it relates to the M&A process? 

Richard Lukaj: In many respects, the regulatory compliance requirements have struggled to keep pace with technological introduction. Many of the rules and regulations, particularly for broker dealers, were designed to prevent the inappropriate use of broadcast capabilities from the investor-risk perspective. In many cases, technology is still struggling to operate in a regulatory regime that is created and governed by the basic principles of protecting the unsophisticated retail investor. But in the commercial or in the mid-market and larger transactional setting, there really aren’t unsophisticated parties involved.

Brian Rich: The type of regulation that applies is totally dependent on the kind of company being bought. The kinds of companies that we invest in are generally not subject to regulatory scrutiny, but we just participated in some wireless spectrums, which are highly regulated. I don’t think that the regulatory scrutiny has changed at all because of the changes in technology. Regulation is sector and size specific. We invest in the data center space and buyers of very large data centers might be subject to regulatory scrutiny, but probably won’t be if they are buying a smaller mid-sized one.

Roger Griesmeyer: Leaks of material, non-public information are important in terms of publicly traded companies. There is technology risk here, whether it is just about people posting deal information on Twitter, or something more nefarious than that. Some parties, including the media, want to report on deals that are in process. If there’s a tip that something’s breaking down in the transaction, they want to be the first to get it out. I don’t think that has changed in the many years of dealmaking, but now it’s an issue of just how quickly the information can be disseminated and impact a deal.

James Rosener: Yes, I agree, so much goes back and forth with the deal process now that obviously regulators are worried about data privacy. The question that needs to be asked is what are people doing to protect that information? If there was a public announcement of a major data breach, regulators would be asking everyone to beef up ways to protect data.

Matthew Epstein: The key regulatory scrutiny that I see relates to information leaking and insider trading by the linking of deals. This is not surprising given the increase in Internet-mediated communication, virtual data, and emails. Deals can also be discussed on cell phones in public spaces. We are, and have to be, very careful about confidential information for client purposes. The use of technology, while it could promote efficiency, also increases the potential for leaks and good processes need to be put in. Parties have to be very careful in sending materials and in granting access to virtual data rooms.

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CLICK HERE to download the complete discussion / whitepaper.

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A quick review on shareholder proposals for proxy materials

This year, proxy access has become “the next big thing” within IR and governance discussions. It seems activism, traditionally targeted to mega-caps, has trickled down to all market capitalizations. As we learned last week, even M&A is on the activists’ radar (watch video here),

PROXYACCESSWe’ve worked with many clients on their proxy materials this year – and although Vintage tends to be on the tactical spectrum of the process, strategic and procedural discussion always arise. We try to have the answers – or at least know where to find them.

In summary, in order to have a shareholder proposal included on a company’s proxy card, and included along with any supporting statement in its proxy statement, a shareholder must be eligible and follow certain procedures. Under a few specific circumstances, the company is permitted to exclude a shareholder proposal, but only after submitting its reasons to the Commission.

What is a shareholder proposal?

A shareholder proposal is a shareholder recommendation or requirement that the company and/or its board of directors take action, which that shareholder intends to present at a meeting of the company’s shareholders. A shareholder proposal should state as clearly as possible the course of action that they believe the company should follow.

If a shareholder proposal is placed on the company’s proxy card, the company must also provide in the form of proxy means for all shareholders to specify by boxes a choice between approval or disapproval, or abstention. Unless otherwise indicated, the word “proposal” as used in this section refers both to a shareholder proposal, and to that shareholder’s corresponding statement in support of their proposal.

Who is eligible to submit a proposal, and how does a shareholder demonstrate to the company that they are eligible?

In order to be eligible to submit a proposal, a shareholder must have continuously held at least $2,000 in market value, or 1%, of the company’s securities entitled to be voted on the proposal at the meeting for at least one year by the date a shareholder submits the proposal. A shareholder must continue to hold those securities through the date of the meeting.

If a shareholder is the registered holder, which means that their name appears in the company’s records as a shareholder, the company can verify the shareholder’s eligibility on its own, although the shareholder will still have to provide the company with a written statement that they intend to continue to hold the securities through the date of the meeting of shareholders.

However, if like many shareholders, the shareholder is not a registered holder, the company likely does not know that they are a shareholder, or how many shares that shareholder owns. In this case, at the time a shareholder submit a proposal, they must prove eligibility to the company via a written statement from the “record” holder of the shareholder’s securities or via a filed a Schedule 13D, Schedule 13G, Form 3, Form 4 and/or Form 5 document. 

How many proposals may a shareholder submit? 

Each shareholder may submit no more than one proposal to a company for a particular shareholders’ meeting.

Order or 2015 SEC Reporting Rules here.

Order your free hardcopy 2015 SEC Reporting
Rules Guidebooks here.

How long can a shareholder proposal be? 

The proposal, including any accompanying supporting statement, may not exceed 500 words. 

What is the deadline for submitting a proposal?

If a shareholderis submitting their proposal for the company’s annual meeting, a shareholder can, in most cases, find the deadline in last year’s proxy statement. However, if the company did not hold an annual meeting last year, or has changed the date of its meeting for this year more than 30 days from last year’s meeting, a shareholder can usually find the deadline in one of the company’s quarterly reports on Form 10–Q, or in shareholder reports of investment companies under Rule 30d–1 of the Investment Company Act of 1940. In order to avoid controversy, shareholders should submit their proposals by means, including electronic means that permit them to prove the date of delivery.

Generally, a shareholder proposal must be received at the company’s principal executive offices not less than 120 calendar days before the date of the company’s proxy statement released to shareholders in connection with the previous year’s annual meeting. However, if the company did not hold an annual meeting the previous year, or if the date of this year’s annual meeting has been changed by more than 30 days from the date of the previous year’s meeting, then the deadline is a reasonable time before the company begins to print and send its proxy materials.

 What if a shareholder fails to follow one of the eligibility or procedural requirements?  

The company may exclude a shareholder proposal, but only after it has notified that shareholder of the problem, and that shareholder has failed adequately to correct it. Within 14 calendar days of receiving a shareholder proposal, the company must notify that shareholder – in writing –  of any procedural or eligibility deficiencies, as well as of the time frame for a response. The response must be postmarked, or transmitted electronically, no later than 14 days from the date a shareholder received the company’s notification. A company need not provide a shareholder such notice of a deficiency if the deficiency cannot be remedied, such as if failure to submit a proposal by the company’s properly determined deadline.

Who has the burden of persuading the Commission or its staff that a shareholder proposal can be excluded? 

Except as otherwise noted, the burden is on the company to demonstrate that it is entitled to exclude a proposal.

Must a shareholder appear personally at the shareholders’ meeting to present the proposal?

The shareholder, or their representative who is qualified under state law to present the proposal on the shareholder’s behalf, must attend the meeting to present the proposal. If the company holds its shareholder meeting in whole or in part via electronic media, and the company permits the shareholder or their representative to present the proposal via such media, then that shareholder may appear through electronic media rather than traveling to the meeting to appear in person.

If a shareholder or their qualified representative fail to appear and present the proposal, without good cause, the company will be permitted to exclude all of that shareholder’s proposals from its proxy materials for any meetings held in the following two calendar years.

Check with counsel that your company won’t .SUCK(S)

Investor relations officers may want to double-check with their I.T. department and General Counsel to assure that your company won’t .suck(s)

vacuum-IRO

Briefly, a new internet domain suffix – .sucks – will be available and, along with .porn and .XXX suffixes, the general public can buy them.

The .sucks domain is being marketed as a “consumer advocate’s extension.” A philanthropic example will be “www.cancer.sucks.” But if you have EVER read a comment section on any blog post, you know exactly what is going to happen. Haters gonna hate… and haters gonna buy your http://www.brand.sucks. Who knows, maybe even your crafty competitors will buy your http://www.brand.sucks URL from under you.

Now is the time to check with your general counsel. Ask if they think whether your organization should proactively register any of these new suffixes to mitigate potential embarrassment, harassment and crisis.

CLICK HERE for a detailed legal overview PDF.

If I am reading the PDF correctly, April and May are a “sunrise” time period – when authorized brands can .sucks up their own suffixes. After June 1, we can all .sucks it.

Um. That sound awkward. Just go talk to counsel!

March’s Top Ten Law Firms: SEC transactions

Being subject matter experts in transactions i.e. IPOs and M&A, we carefully track the capital markets dealflow… daily, weekly and monthly. Congratulations to any and all of our partnering law firms that made this month’s Top Ten.

Have a great week.

CLICK HERE NOW to watch a brief demo of our virtual data room.