Photo of Eric Knox

Eric Knox

Subscribe to Eric Knox's Posts

Working with both national and local companies in the REIT, healthcare, food and hospitality and entertainment sectors, Eric Knox routinely counsels public and private companies on a variety of corporate and securities issues.

Contact:Read more about Eric Knox

Eric KnoxRecently, I provided guidance for an article in Agenda about best practices for conducting virtual board meetings. Some best practices mentioned in the article involve facilitating discussion, completing minutes in a timely manner, and protecting the privacy of the meeting’s discussion.

I’ve advised, “If you’re talking about something that relates to finances, your financial experts are the ones you might want to direct discussion to after you finish the introduction so questions are flowing to people with expertise first. Then, other directors can interject with their questions or thoughts.”Continue Reading Guidance on Conducting Virtual Board Meetings

In a previous blog post, we discussed the availability of virtual shareholder meetings (i.e., “virtual-only” and “hybrid” meetings) as a potential alternative to the traditional in-person meeting during the 2020 proxy season in light of the public health and safety crisis posed by the novel coronavirus (COVID-19) pandemic (we also discussed virtual annual meeting guidance provided by the SEC in a subsequent blog post). In response to COVID-19, states such as Connecticut, Georgia, New Jersey and New York have taken steps to remove barriers to virtual annual meetings under existing state law. Continue reading to learn more about steps these states are taking.
Continue Reading States Remove Barriers to Virtual Annual Meetings in Light of COVID-19 Pandemic

In a previous blog post, we discussed the availability of virtual shareholder meetings (i.e., “virtual-only” and “hybrid” meetings) as a potential alternative to the traditional in-person meeting during the 2020 proxy season in light of the emerging public health and safety crisis posed by the coronavirus pandemic (COVID-19). The Staff of the U.S. Securities and Exchange Commission’s Division of Corporation Finance and Division of Investment Management subsequently issued guidance for conducting virtual annual meetings under these unprecedented circumstances.

Post-Proxy Filing

The Staff confirmed that if a company has already mailed and filed its proxy materials, the company can notify shareholders of a change in the date, time or location of the annual meeting without amending its definitive proxy materials or mailing additional soliciting materials if the company issues a press release announcing the change, files the announcement as definitive additional soliciting material on EDGAR, and takes all reasonable steps necessary to inform other interested parties in the proxy solicitation process (e.g., any proxy service providers and applicable national securities exchanges) of the change. These actions should be taken promptly after the decision to hold a virtual meeting is made and, in any case, sufficiently in advance of the annual meeting. Therefore, companies that have already filed and mailed their definitive proxy materials would not need to mail additional soliciting materials (including new proxy cards) solely to switch to a “virtual” or “hybrid” meeting if they follow the steps described above for announcing a change in the meeting date, time, or location.Continue Reading SEC Staff Provides Guidance for Conducting Virtual Meetings in Light of COVID-19 Pandemic

Across the globe, the coronavirus pandemic (COVID-19) is causing governments, companies, associations and colleges and universities to take unprecedented steps to address the spread and transmission of COVID-19. These steps include imposing restrictions on travel and public life; closing physical offices or campuses; canceling conferences, meetings and other scheduled group activities; restricting the size of gatherings; and encouraging or requiring employees and students to telecommute.

With increasing COVID-19 concerns in the United States and proxy season underway, public companies, including those that have already mailed proxy materials, may need to consider alternatives to conducting in-person shareholder meetings in light of the emerging public health crisis posed by the COVID-19 pandemic. Specifically, companies should assess whether or not a virtual meeting format is a viable alternative to the customary in-person meeting. Virtual meetings are generally divided into the following two categories:

  1. Virtual-only meetings conducted solely using remote communication.
  2. Hybrid meetings conducted in-person with concurrent participation by remote communication.

Continue Reading COVID-19 Pandemic Causes Public Companies to Reevaluate Virtual Meetings

In a previous blog post, we discussed the Delaware Chancery Court’s decision in Saba Capital Master Fund, Ltd. v. Blackrock Credit Allocation Income Trust and its relevance to the interpretation of advance notice bylaw provisions. On appeal, the Delaware Supreme Court reversed the decision of the Chancery Court and strictly applied the deadlines set forth in the defendants’ unambiguous advance notice bylaw provisions.

Background of the Chancery Court Decision

In Saba, the defendants were two affiliated closed-end funds who sought to disqualify the director nominees of an activist shareholder because the activist shareholder did not strictly comply with the requirements of the advance notice provisions of the defendants’ bylaws. As allowed pursuant to the bylaws of the funds, the defendants had requested a response to a supplemental information request from the activist shareholder before a five-business day deadline.Continue Reading Advance Notice Bylaw Provisions Upheld by Delaware Supreme Court

Glass Lewis recently posted its comprehensive 2020 voting guidelines, which are summarized on the first page of the 2020 voting guidelines as well as on the Glass Lewis blog. Among other things, the 2020 voting guidelines update Glass Lewis’ voting guidance regarding excluded shareholder proposals. The updates are in response to the September 2019 guidance by the Staff of the Division of Corporation Finance (the Staff) regarding potential oral rather than written responses to 14a-8 no-action letter requests, as further outlined in recent our blog post.

As a general matter, Glass Lewis believes companies should only exclude a shareholder proposal when the Staff has explicitly concurred with a company’s argument for the exclusion of such shareholder proposal.

Staff Declines to Articulate a View on the Exclusion of a Shareholder Proposal

In instances where the Staff has declined to provide a view on whether the shareholder proposal is ripe for exclusion, Glass Lewis believes such a shareholder proposal should be included in the company’s proxy statement. In the event a company excludes such a shareholder proposal from its proxy statement, Glass Lewis will likely recommend that shareholders vote against the members of the company’s governance committee.Continue Reading Glass Lewis Issues Policy Changes Regarding Excluded Shareholder Proposals

At the end of last year, in an enforcement action brought by the Division of Enforcement of the Securities and Exchange Commission (SEC) against ADT Inc. (ADT), reporting companies were reminded that the SEC continues to focus on noncompliant use of non-GAAP financial measures.

The SEC found that ADT disclosed non-GAAP financial measures in two earnings releases without presenting the most directly comparable GAAP figure with “equal or greater prominence,” as required by Item 10(e) of Regulation S-K.Continue Reading SEC Enforcement Activity – A Reminder Regarding the “Equal or Greater Prominence” Presentation Requirement of Item 10(e)

Advance Notice Bylaw Provisions

A recent Delaware case, Saba Capital Master Fund, Ltd. v. Blackrock Credit Allocation Income Trust, highlights the importance of advance notice bylaws and the careful application of the terms of such bylaws by public companies who may be subject to activist campaigns.

As backdrop, following Delaware cases in 2008 (Jana Master Fund Ltd. vs. CNET Networks, Inc. and Levitt Corp. vs. Office Depot, Inc.) which interpreted ambiguous advance notice bylaw provisions in favor of insurgent shareholders attempting to nominate their own slate of director nominees, a large number of public companies (particularly large-cap companies and public companies incorporated in Delaware) amended their advance notice bylaw provisions to eliminate perceived vulnerabilities in their advance notice bylaws and expand the information required to be provided by shareholder proponents (known as second generation advance notice bylaw provisions).

While the focus on advance notice bylaw provisions (including the law firm commentary on this subject) has waned over the last decade, advance notice bylaws remain an important aspect of a public company’s preparedness for shareholder activism.Continue Reading Revisiting Advance Notice Bylaw Provisions and Proxy Access

The Staff of the Securities and Exchange Commission (the Staff) issued a Public Statement regarding the probable transition away from the London Inter-bank Offered Rate (LIBOR) after December 31, 2021, as a result of the expectation that a number of private-sector banks currently reporting information used to establish LIBOR will cease to do so after 2021 when their reporting commitment ends.

As a result, the publication of LIBOR may cease immediately following the end of 2021 or may result in LIBOR’s regulator determining that the quality of the LIBOR metric has diminished such that it is no longer representative of its underlying market.Continue Reading Managing LIBOR Transition – SEC Considerations

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

Thought Leadership by our Attorneys.