Hello again Tom,
The Securities and Exchange Commission has established clearcut rules
for distributing tender offers to the shareholders of publicly-held
companies. I've reproduced some information on this from the SEC
site, below, along with the full text of the relevant rule.
The SEC information indicates that individual states may have
additional rules in place (if so, they would contravene the federal
rules, but may provide additional means of distribution). I didn't
look into this aspect since -- although the company is based in
Massachusetts -- I don't know if that's the state in which they are
incorporated. Let me know if you want me to look into this further,
however.
And if you're genuinely planning on buying a company, I would
certainly recommend the services of a lawyer skilled in this
particular area.
As is always the case, if anything here needs elaboration, just post a
Request for Clarification and I'll be happy to assist you.
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From the SEC:
http://www.sec.gov/answers/sharehlist.htm
Shareholder's Lists, When You Can Get Them
Although investors sometimes ask the SEC for a list of a company's
shareholders, the SEC does not maintain shareholder lists. Only the
company itself has access to this information.
Under SEC rules, a company must provide shareholders with a process
for contacting other shareholders in two limited situations. The first
occurs during proxy solicitations – when shareholders solicit proxies
in opposition to a company proposal or for a vote on a proposal they
favor. The second occurs in connection with a tender offer where
persons seek to acquire the company's securities from existing
shareholders. In both cases, the company may choose to either give the
list to the person who requested it or mail the shareholder's
soliciting or tender offer materials to other shareholders at the
requesting shareholder's expense.
State laws or a company's charter and by-laws may provide for access
to shareholder lists in additional circumstances. To find out how you
can obtain more information about a company from the state in which it
was incorporated and does business, you can visit the website of the
National Association of Secretaries of State.
For more information on the SEC rules when shareholders can request a
shareholder list, please read Rule 14d-5 (proxies) and Rule 14a-7
(tender offers) of the Securities Exchange Act of 1934.
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NOTE from pafalafa-ga: Actually, the SEC site got their rules
backwards. It's Rule 14d-5 that deals with tenders. The full text is
below:
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[from the University of California web site]
http://www.law.uc.edu/CCL/34ActRls/rule14d-5.html
General Rules and Regulations
promulgated
under the
Securities Exchange Act of 1934
Rule 14d-5 -- Dissemination of Certain Tender Offers by the Use of
Stockholder Lists and Security Position Listings
--------------------------------------------------------------------------------
Obligations of the subject company. Upon receipt by a subject company
at its principal executive offices of a bidder's written request,
meeting the requirements of paragraph (e) of this section, the subject
company shall comply with the following sub-paragraphs.
The subject company shall notify promptly transfer agents and any
other person who will assist the subject company in complying with the
requirements of this section of the receipt by the subject company of
a request by a bidder pursuant to this section.
The subject company shall promptly ascertain whether the most recently
prepared stockholder list, written or otherwise, within the access of
the subject company was prepared as of a date earlier than ten
business days before the date of the bidder's request and, if so, the
subject company shall promptly prepare or cause to be prepared a
stockholder list as of the most recent practicable date which shall
not be more than ten business days before the date of the bidder's
request.
The subject company shall make an election to comply and shall comply
with all of the provisions of either paragraph (b) or paragraph (c) of
this section. The subject company's election once made shall not be
modified or revoked during the bidder's tender offer and extensions
thereof.
No later than the second business day after the date of the bidder's
request, the subject company shall orally notify the bidder, which
notification shall be confirmed in writing, of the subject company's
election made pursuant to paragraph(a)(3) of this section. Such
notification shall indicate
the approximate number of security holders of the class of securities
being sought by the bidder and, if the subject company elects to
comply with paragraph (b) of this section, appropriate information
concerning the location for delivery of the bidder's tender offer
materials and the approximate direct costs incidental to the mailing
to security holders of the bidder's tender offer materials computed in
accordance with paragraph (g)(2) of this section.
Mailing of tender offer materials by the subject company. A subject
company which elects pursuant to paragraph (a)(3) of this section to
comply with the provisions of this paragraph shall perform the acts
prescribed by the following paragraphs.
The subject company shall promptly contact each participant named on
the most recent security position listing of any clearing agency
within the access of the subject company and make inquiry of each such
participant as to the approximate number of beneficial owners of the
subject company securities being sought in the tender offer held by
each such participant.
No later than the third business day after delivery of the bidder's
tender offer materials pursuant to paragraph (g)(1) of this section,
the subject company shall begin to mail or cause to be mailed by means
of first class mail a copy of the bidder's tender offer materials to
each person whose name appears as a record holder of the class of
securities for which the offer is made on the most recent stockholder
list referred to in paragraph (a)(2) of this section. The subject
company shall use its best efforts to complete the mailing in a timely
manner but in no event shall such mailing be completed in a
substantially greater period of time than the subject company would
complete a mailing to security holders of its own materials relating
to the tender offer.
No later than the third business day after the delivery of the
bidder's tender offer materials pursuant to paragraph (g)(1) of this
section, the subject company shall begin to transmit or cause to be
transmitted a sufficient number of sets of the bidder's tender offer
materials to the participants named on the security position listings
described in paragraph (b)(1) of this section. The subject company
shall use its best efforts to complete the transmittal in a timely
manner but in no event shall such transmittal be completed in a
substantially greater period of time than the subject company would
complete a transmittal to such participants pursuant to security
position listings of clearing agencies of its own material relating to
the tender offer.
The subject company shall promptly give oral notification to the
bidder, which notification shall be confirmed in writing, of the
commencement of the mailing pursuant to paragraph (b)(2) of this
section and of the transmittal pursuant to paragraph (b)(3) of this
section.
During the tender offer and any extension thereof the subject company
shall use reasonable efforts to update the stockholder list and shall
mail or cause to be mailed promptly following each update a copy of
the bidder's tender offer materials (to the extent sufficient sets of
such materials have been furnished by the bidder) to each person who
has become a record holder since the later of
the date of preparation of the most recent stockholder list referred
to in paragraph (a)(2) of this section or the last preceding update.
If the bidder has elected pursuant to paragraph (f)(1) of this section
to require the subject company to disseminate amendments disclosing
material changes to the tender offer materials pursuant to this
section, the subject company, promptly following delivery of each such
amendment, shall mail or cause to be mailed a copy of each such
amendment to each record holder whose name appears on the shareholder
list described in paragraphs (a)(2) and (b)(5) of this section and
shall transmit or cause to be transmitted sufficient copies of such
amendment to each participant named on security position listings who
received sets of the bidder's tender offer materials pursuant to
paragraph (b)(3) of this section.
The subject company shall not include any communication other than the
bidder's tender offer materials or amendments thereto in the envelopes
or other containers furnished by the bidder.
Promptly following the termination of the tender offer, the subject
company shall reimburse the bidder the excess, if any, of the amounts
advanced pursuant toparagraph (f)(3)(iii) over the direct costs
incidental to compliance by the subject company and its agents in
performing the acts required by this section computed in accordance
with paragraph (g)(2) of this section.
Delivery of stockholder lists and security position listings. A
subject company which elects pursuant to paragraph (a)(3) of this
section to comply with the provisions of this paragraph shall perform
the acts prescribed by the following paragraphs.
No later than the third business day after the date of the bidder's
request, the subject company must furnish to the bidder at the subject
company's principal executive office a copy of the names and addresses
of the record holders on the most recent stockholder list referred to
in paragraph (a)(2) of this section; the names and addresses of
participants identified on the most recent security position listing
of any clearing agency that is within the access of the subject
company; and the most recent list of names, addresses and security
positions of beneficial owners as specified in Rule 14a-13(b), in the
possession of the subject company, or that subsequently comes into its
possession. All security holder list information must be in the format
requested by the bidder to the extent the format is available to the
subject company without undue burden or expense.
If the bidder has elected pursuant to paragraph (f)(1) of this section
to require the subject company to disseminate amendments disclosing
material changes to the tender offer materials, the subject company
shall update the stockholder list by furnishing the bidder with the
name and address of each record holder named on the stockholder list,
and not previously furnished to the bidder, promptly after such
information becomes available to the subject company during the tender
offer and any extensions thereof.
Liability of subject company and others. Neither the subject company
nor any affiliate or agent of the subject company nor any clearing
agency shall be:
Deemed to have made a solicitation or recommendation respecting the
tender offer within the meaning of section 14(d)(4) based solely upon
the compliance or noncompliance by the subject company or any
affiliate or agent of the subject company with one or more
requirements of this section;
Liable under any provision of the Federal securities laws to the
bidder or to any security holder based solely upon the inaccuracy of
the current names or addresses on the stockholder list or security
position listing, unless such inaccuracy results from a lack of
reasonable care on the part of the subject company or any affiliate or
agent of the subject company;
Deemed to be an ``underwriter'' within the meaning of section 211 of
the Securities Act of 1933 for any purpose of that Act or any rule or
regulation promulgated thereunder based solely upon the compliance or
noncompliance by the subject company or any affiliate or agent of the
subject company with one or more of the requirements of this section;
Liable under any provision of the Federal securities laws for the
disclosure in the bidder's tender offer materials, including any
amendment thereto, based solely upon the compliance or noncompliance
by the subject company or any affiliate or agent of the subject
company with one or more of the requirements of this section.
Content of the bidder's request. The bidder's written request referred
to in paragraph (a) of this section shall include the following:
The identity of the bidder;
The title of the class of securities which is the subject of the
bidder's tender offer;
A statement that the bidder is making a request to the subject company
pursuant to paragraph (a) of this section for the use of the
stockholder list and security position listings for the purpose of
disseminating a tender offer to security holders;
A statement that the bidder is aware of and will comply with the
provisions of paragraph (f) of this section;
A statement as to whether or not it has elected pursuant to paragraph
(f)(1) of this section to disseminate amendments disclosing material
changes to the tender offer materials pursuant to this section; and
The name, address and telephone number of the person whom the subject
company shall contact pursuant to paragraph (a)(4) of this section.
Obligations of the bidder. Any bidder who requests that a subject
company comply with the provisions of paragraph (a) of this section
shall comply with the following paragraphs.
The bidder shall make an election whether or not to require the
subject company to disseminate amendments disclosing material changes
to the tender offer materials pursuant to this section, which election
shall be included in the request referred to in paragraph (a) of this
section and shall not be revocable by the bidder during the tender
offer and extensions thereof.
With respect to a tender offer subject to section 14(d)(1) of the Act
in which the consideration consists solely of cash and/or securities
exempt from registration under section 3 of the Securities Act of
1933, the bidder shall comply with the requirements of Rule 14d-4(a)3.
If the subject company elects to comply with paragraph (b) of this
section,
The bidder shall promptly deliver the tender offer materials after
receipt of the notification from the subject company as provided in
paragraph (a)(4) of this section;
The bidder shall promptly notify the subject company of any amendment
to the bidder's tender offer materials requiring compliance by the
subject company with paragraph (b)(6) of this section and shall
promptly deliver such amendment to the subject company pursuant to
paragraph (g)(1) of this section;
The bidder shall advance to the subject company an amount equal to the
approximate cost of conducting mailings to security holders computed
in accordance with paragraph (g)(2) of this section;
The bidder shall promptly reimburse the subject company for the direct
costs incidental to compliance by the subject company and its agents
in performing the acts required by this section computed in accordance
with paragraph (g)(2) of this section which are in excess of the
amount advanced pursuant to paragraph (f)(2)(iii) of this section; and
The bidder shall mail be means of first class mail or otherwise
furnish with reasonable promptness the tender offer materials to any
security holder who requests such materials.
If the subject company elects to comply with paragraph (c) of this
section,
The bidder shall use the stockholder list and security position
listings furnished to the bidder pursuant to paragraph (c) of this
section exclusively in the dissemination of tender offer materials to
security holders in connection with the bidder's tender offer and
extensions thereof;
The bidder shall return the stockholder lists and security position
listings furnished to the bidder pursuant to paragraph (c) of this
section promptly after the termination of the bidder's tender offer;
The bidder shall accept, handle and return the stockholder lists and
security position listings furnished to the bidder pursuant to
paragraph (c) of this section to the subject company on a confidential
basis;
The bidder shall not retain any stockholder list or security position
listing furnished by the subject company pursuant to paragraph (c) of
this section, or any copy thereof, nor retain any information derived
from any such list or listing or copy thereof after the termination of
the bidder's tender offer;
The bidder shall mail by means of first class mail, at its own
expense, a copy of its tender offer materials to each person whose
identity appears on the stockholder list as furnished and updated by
the subject company pursuant to paragraphs (c)(1) and (2) of this
section;
The bidder shall contact the participants named on the security
position listing of any clearing agency, make inquiry of each
participant as to the approximate number of sets of tender offer
materials required by each such participant, and furnish, at its own
expense, sufficient sets of tender offer materials and any amendment
thereto to each such participant for subsequent transmission to the
beneficial owners of the securities being sought by the bidder;
The bidder shall mail by means of first class mail or otherwise
furnish with reasonable promptness the tender offer materials to any
security holder who requests such materials; and
The bidder shall promptly reimburse the subject company for direct
costs incidental to compliance by the subject company and its agents
in performing the acts required by this section computed in accordance
with paragraph (g)(2) of this section.
Delivery of materials, computation of direct costs.
Whenever the bidder is required to deliver tender offer materials or
amendments to tender offer materials, the bidder shall deliver to the
subject company at the location specified by the subject company in
its notice given pursuant to paragraph (a)(4) of this section a number
of sets of the materials or of the amendment, as the case may be, at
least equal to the approximate number of security holders specified by
the subject company in such notice, together with appropriate
envelopes or other containers therefor: Provided, however, That such
delivery shall be deemed not to have been made unless the bidder has
complied with paragraph (f)(3)(iii) of this section at the time the
materials or amendments, as the case may be, are delivered.
The approximate direct cost of mailing the bidder's tender offer
materials shall be computed by adding
the direct cost incidental to the mailing of the subject company's
last annual report to shareholders (excluding employee time), less the
costs of preparation and printing of the report, and postage, plus
the amount of first class postage required to mail the bidder's tender
offer materials. The approximate direct costs incidental to the
mailing of the amendments to the bidder's tender offer materials shall
be computed by adding
the estimated direct costs of preparing mailing labels, of updating
shareholder lists and of third party handling charges plus
the amount of first class postage required to mail the bidder's
amendment. Direct costs incidental to the mailing of the bidder's
tender offer materials and amendments thereto when finally computed
may include all reasonable charges paid by the subject company to
third parties for supplies or services, including costs attendant to
preparing shareholder lists, mailing labels, handling the bidder's
materials, contacting participants named on security position listings
and for postage, but shall exclude indirect costs, such as employee
time which is devoted to either contesting or supporting the tender
offer on behalf of the subject company. The final billing for direct
costs shall be accompanied by an appropriate accounting in reasonable
detail.
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Note to Rule 14d-5.
Reasonably prompt methods of distribution to security holders may be
used instead of mailing. If alternative methods are chosen, the
approximate direct costs of distribution shall be computed by adding
the estimated direct costs of preparing the document for distribution
through the chosen medium (including updating of shareholder list)
plus the estimated reasonable cost of distribution through that
medium. Direct costs incidental to the distribution of tender offer
materials and amendments thereto may include all reasonable charges
paid by the subject company to third parties for supplies or services,
including costs attendant to preparing shareholder lists, handling the
bidder's materials, and contacting participants named on security
position listings, but shall not including indirect cost, such as
employee time which is devoted to either contesting or supporting the
tender offer on behalf of the subject company.
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I hope this information is what you were looking for. As I said
earlier, if you need any additional explanation about the material
here, please don't hesitate to post a Request for Clarification, and
I'll be happy to assist you. |
