TENDER OFFERS, PROXIES RECORD KEEPING, DIRECTORS AND OFFICERS'
TRANSACTIONS, MARGIN TRADING
What is a tender offer? Is a publicly announced intention by a person acting alone or in
concert with other persons to acquire equity securities of a public company it is a quick enticing
proposal to the shareholders of a corporation that they tender their shares for purchase by the offer
at a specified term.
Tender offers are regulated to prevent the stockholders of the target company from being
misled by the offered or the target's management therefore a principal requirement of the law is
the disclosure by the offered of certain information about the offer with a copy of such information
being given or sent to the stockholder's section 19 of the SRC and its implementing rules give us
the situations where the person or group of persons would be required to make a tender offer for
sick for equity shares of a public company in an amount equal to the number of shares that the
person intends to acquire these refer to mandatory tender offers and they cover both direct and
indirect acquisitions.
Any person or group of persons acting in concert, who intends to acquire fifteen percent (15 %) of
equity securities in a public company in one or more transactions within a period of twelve (12)
months, shall file a declaration to that effect with the Commission.
Any person or group of persons acting in concert, who intends to acquire thirty-five percent (35%)
of the outstanding voting shares or such outstanding voting shares that is sufficient to gain control
of the board in a public company in one or more transactions within a period of twelve (12) months,
shall disclose such intention and contemporaneously make a tender offer for the percentage sought
to all holders of such securities within the said period. If the tender offer is oversubscribed, the
aggregate amount of securities to be acquired at the close of the such tender offer shall be
proportionately distributed across selling shareholders with whom the acquirer may have been in
private negotiations and other shareholders. For purposes of the SRC Rule, the last sale that meets
the threshold shall not be consummated until the closing and completion of the tender offer. Any
person or group of persons acting in concert, who intends to acquire thirty-five percent (35%) of
the outstanding voting shares or such outstanding voting shares that are sufficient to gain control
of the board in the public company through the Exchange trading system shall not be required to
make a tender offer even if such a person or group of persons acting in concert acquire the
remainder through a block sale.
Proxy solicitation follows the traditional three-way approach okay which first calls for a
brief description of the matters to be considered together with the action proposed to be taken by
the holder of the proxy second it requires the registrant as a condition of its own solicitation to
mail to record owners the proxy material of any stockholder upon their request at their expense
and third adopts a general fraud rule prohibiting the making of any materially false or misleading
statement.
The issuance and solicitation of proxies are regulated in order to minimize if not avoid the abuse
and misuse of the proxy device because this may lead to self-perpetuation and irresponsibility of
management so where an issue where the corporation is going to conduct an annual or any other
stockholder meeting if you remember your corporation law there should also be a notice of
stockholders' meeting given to the stockholders which should also set a date time and place to
validate the proxies okay which should not be less than five days before the actual meeting so the
validation of the proxies should be done no less than five days before the actual meeting.
The issuer must first submit or file its preliminary or definitive information statement proxy form
and all other materials to the SEC for approval before transmitting the same whether in writing or
verifiable soft copy to every security holder of the class entitled to vote at least 15 business days
prior to the meeting okay so send it first to the SEC will approve then when approved send it to
the stockholders at least 15 days before the meeting.
The SRC also says that a broker or dealer cannot give a proxy in respect of any security
that it carries for the account of a customer without the express written authorization of such a
customer in other words if it wants to give a proxy get the authority written authorization of the
customer first the implementing rules contain prohibitions and it says that proxy shall confer
authority:
first to vote for any person to any office for which a bona fide nominee is not named in the
information statement or any material attached to it, second it's not allowed to vote with respect to
more than one meeting and any of its adjournment unless a specific statement is made in the
information statement and proxy form that the proxy is valid for more than one meeting provided
of course that no proxy shall be valid and effective for a period longer than five years from the
date of the proxy and, third, it is also prohibited to consent or authorize any action other than the
action proposed to be taken in the information statement or matters that likewise false or
misleading statements on material facts or the omission of necessary material facts are likewise
prohibited now some final notes on proxies if the name of the proxy is left in blank the person to
whom it is given or the issuer corporation receiving the proxy is at liberty to fill in any name that
they may choose if a dually accomplished and executed proxy is undated the postmark or if it is
not mailed its actual date of presentation shall be considered as the true date a proxy executed by
a corporation shall be in the form of a board resolution dually certified by the corporate secretary
or in a proxy form executed by a duly authorized corporate officer accompanied by a the corporate
secretary certificate.
This is how the law protects the public you know and prevents the unfair use of information
for this purpose for purpose of the issue we're recovering the profit a case will be filed by the issuer
or its representative before the RTC within two years from the date that the profit was realized the
src also makes it unlawful for any beneficial owner director or officer whether directly or indirectly
to sell any equity security of such issuer if the person selling the security or his principal does not
own the security sold or if owning the security does not deliver it within 20 days of the sale or does
not within five days after such sale deposit it in the mail or other usual channel of transportation
he must prove that notwithstanding the exercise of good the faith he was unable to make such
delivery or deposit within such time or that to do so would cause you inconvenience or expense.
The power of the SEC to suspend trading in a security or all trading on a securities
exchange if the SEC in its opinion finds it necessary or appropriate for the protection of investors
and if the public interest so requires the SEC may summarily suspend trading in any list and
security on any exchange or other trading market for a period not exceeding 30 days it may be
longer if it is with the approval of the president in which case the SEC may summarily suspend all
trading on any securities exchange or other trading market for a period of more than 30 days but
not exceeding 90 days. The security transactions manipulation in security prices insider trading
and commodity futures contracts and pre-need plans the SRC to protect investors has also
established a trust fund to be facilitated by the sec and this trust fund is established for the purpose
of compensating investors for extraordinary losses or damages suffered by them due to business
failure fraud or mismanagement of the persons with whom they contract.