TheCorporateCounsel.net’s Mentor Blog is currently profiling members of its Advisory Board, which consists of lawyers and other industry leaders that act as a sounding board for hot issues, participate in webcasts, and generally help the site as its “eyes & ears” for interesting issues. The past few months the site’s Mentor Blog has been running
As public companies continue to navigate the ongoing economic upheaval caused by the COVID-19 pandemic, opportunistic activist investors may find the resulting economic conditions conducive to accumulating significant ownership positions, agitating for changes in corporate strategy and management, and pursuing public activist campaigns. Although the number of overt activist campaigns were down during the primary 2020 proxy season, as the annual meeting season for most public companies took place during the initial months of the pandemic lockdown, the third and fourth quarters generally tend to see an increase in activist activity as hedge funds make initial preparations for the following year’s proxy season. Given these circumstances, this is an opportune time for public companies to make preparations by reviewing and evaluating their defensive profiles.
The following summarizes most of the common defensive mechanisms that companies utilize when faced with activist campaigns, hostile takeover attempts, and other attempts to influence corporate policy in ways that may not be in the best interest of all shareholders. While there is no one-size-fits-all approach to defensive measures, an evaluation of the existing defensive profile of the company is a critical first step. In our experience advising on behalf of companies and their boards of directors, an analysis of the corporation’s defenses under its organizational documents and applicable law is usually undertaken and summarized for the board in connection with a defensive profile review.
Defensive Measures Related to Stockholder Meetings
Are stockholders able to take action by written consent?
Section 228(a) of the Delaware General Corporation Law (DGCL) generally provides that, unless restricted by the certificate of incorporation, the requisite stockholders needed to approve an action may do so by written consent instead of a meeting—including actions to elect new directors or to approve a takeover proposal. Limiting stockholder action by written consent is particularly important for companies with large blocks of its common stock concentrated among one or several large stockholders, including holdings by large institutional holders, which could otherwise take swift action by written consent and without holding a stockholder meeting.
Please join the Bass, Berry & Sims Corporate & Securities Practice Group for a series of complimentary webinars exploring various public company-related securities law issues. These programs are an extension of our Securities Law Exchange Blog and feature timely and practical guidance to SEC disclosure counsel on key topics of interest.
The COVID-19 global pandemic…
Recently, 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.”
We recently examined key developments at the Securities and Exchange Commission (SEC) during 2019 and consider what to expect in the months ahead for an article in The D&O Diary.
“For public companies and securities practitioners alike, the decade ended with a bang, with changes to certain long-standing practices and several novel,” we explained…
This half-day program will feature timely and practical guidance on the latest developments in corporate and securities matters impacting public company in-house counsel.
Panel discussion topics will include:
- Upcoming proxy season
The Bass, Berry & Sims Corporate & Securities Practice Group recently hosted its first in a series of complimentary webinars exploring various public company-related securities law issues.
The first webinar, Key Insights into Financial Reporting Considerations: MD&A, Earnings Releases & Regulation FD, was held on July 18 and shared guidance on the preparation of the Management Discussion & Analysis (MD&A), key disclosure issues regarding earnings releases and calls, and important considerations for public companies under Regulation FD.
Bass, Berry & Sims attorney Tatjana Paterno will take part in a CLE webinar titled, “Negotiating Earnouts in M&A Transactions: Effective Approaches to Bridging the Valuation Gap” on July 25, 2019. The webinar, hosted by Strafford Publications, will guide deal counsel in negotiating and structuring earnout clauses in M&A agreements that benefit buyers and sellers…
The American Law Institute (ALI) approved a new project last month – Restatement of the Law, Corporate Governance. Over 25 years ago, the ALI approved and published the Principles of Law, Corporate Governance and this new project will examine the evolution of corporate governance over the last 25 years and reflect the current state of…
In response to the mandate of the Economic Growth, Regulatory Relief, and Consumer Protection Act, the Securities and Exchange Commission recently issued final rule amendments permitting companies reporting under Section 13 or 15(d) of the Securities Exchange Act to offer securities pursuant to the registration exemption Regulation A. Previously, offerings pursuant to Regulation A were expressly limited to non-reporting companies. The rule amendments also provide that, so long as the reporting company is current in its Exchange Act periodic reports, the reporting company has no additional periodic reporting obligations under Regulation A. These amendments became effective on January 31, 2019, upon publication in the Federal Register.
Continue Reading SEC Amends Rules to Permit Existing Reporting Companies to Offer Securities Pursuant to Regulation A+; Updated and Revised Regulation A+ FAQs