Glass Lewis Shares Views on Proxy Access Proposals

Glass Lewis, a prominent proxy advisory firm, has now added its views to the proxy access battlefront. As readers may recall, activist shareholders have launched a national campaign to submit proxy access proposals to public companies, which would enable certain shareholders to nominate directors using the company’s ballot. In January, the SEC announced that it will “express no views” this proxy season on whether a shareholder proposal, including a proxy access proposal, can be excluded because a management proposal on the same issue conflicts with it. As a result, companies must choose at their peril whether to exclude a proxy access shareholder proposal when management has an alternative proposal.   Read More

SEC Okays Five-Day Period for Certain Tender Offers

Typically, a public offer to purchase a substantial amount of a company’s debt or equity securities must remain open for 20 business days, in order to allow holders sufficient time to make an informed decision to participate. An exception has existed for certain tender offers for investment-grade debt securities, allowing an abbreviated period of 7-10 calendar days in some circumstances. Expanding the exception, the SEC recently granted no-action relief to allow a tender offer period of five business days for both investment grade and non-investment grade debt securities (i.e., high-yield debt). The shortened period, which would facilitate debt refinancings, is available so long as the offer meets certain criteria.  Read More

Company’s 10-K Disclosure of Legal Proceedings Leads to Employee Retaliation Claim

A recent Seventh Circuit decision suggests public companies should take care when disclosing employment-related litigation by name in their Form 10-K. In Greengrass v. International Monetary Systems, the court held that a former employee could assert retaliation against a former employer when the company listed her discrimination case by name and described it as “meritless” in the company’s annual report filed with the SEC. This may merit revisiting contingency and legal proceeding disclosures to ensure they say no more than required by law.  Read More

Cybersecurity as a Board Priority

In the wake of headline-making cyber breaches and class action lawsuits for data losses, companies face growing scrutiny and evolving legal and regulatory standards. The SEC recently issued a risk alert summarizing observations from examinations of registered broker-dealers and investment advisers conducted under its cybersecurity examination initiative announced earlier this year. Given the increasing frequency of cybersecurity incidents and the growing impact of those incidents on business, directors’ oversight activities should include understanding the adequacy of a company’s cybersecurity measures and related liability protections and incident response plans. The issues are complicated, and there are no simple solutions. But there are actions that boards and management can take now to begin to quantify and mitigate cybersecurity risks.  Read More

The Ticker shares recent developments in SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors. It is published by Fredrikson & Byron’s Public Companies Group.