(a) Solicitation of proxies in violation of rules and regulations. It shall be unlawful for any person, by the use of the mails or
by any means or instrumentality of interstate commerce or of any facility
of a national securities exchange or otherwise, in contravention of
such rules and regulations as the Commission may prescribe as necessary
or appropriate in the public interest or for the protection of investors,
to solicit or to permit the use of his name to solicit any proxy or
consent or authorization in respect of any security (other than an
exempted security) registered pursuant to section 12 of this title.
5-108
(b) Giving or refraining from
giving proxy in respect of any security carried for account of customer.
(1) It shall be unlawful for
any member of a national securities exchange, or any broker or dealer
registered under this title, or any bank, association, or other entity
that exercises fiduciary powers, in contravention of such rules and
regulations as the Commission may prescribe as necessary or appropriate
in the public interest or for the protection of investors, to give,
or to refrain from giving a proxy, consent, authorization, or information
statement in respect of any security registered pursuant to section
12 of this title, or any security issued by an investment company
registered under the Investment Company Act of 1940, and carried for
the account of a customer.
(2) With respect to banks, the rules and regulations prescribed by
the Commission under paragraph (1) shall not require the disclosure
of the names of beneficial owners of securities in an account held
by the bank on the date of enactment of this paragraph unless the
beneficial owner consents to the disclosure. The provisions of this
paragraph shall not apply in the case of a bank which the Commission
finds has not made a good faith effort to obtain such consent from such
beneficial owners.
5-109
(c) Information to holders of record prior to annual
or other meetings. Unless proxies, consents, or authorizations
in respect of a security registered pursuant to section 12 of this
title, or a security issued by an investment company registered under
the Investment Company Act of 1940, are solicited by or on behalf
of the management of the issuer from the holders of record of such
security in accordance with the rules and regulations prescribed under
subsection (a) of this section, prior to any annual or other meeting
of the holders of such security, such issuer shall, in accordance
with rules and regulations prescribed by the Commission, file with
the Commission and transmit to all holders of record of such security
information substantially equivalent to the information which would
be required to be transmitted if a solicitation were made, but no
information shall be required to be filed or transmitted pursuant
to this subsection before July 1, 1964.
5-110
(d) Tender offer by owner of more than five per
centum of class of securities; exceptions.
(1) It shall be unlawful for any person,
directly or indirectly, by use of the mails or by any means or instrumentality
of interstate commerce or of any facility of a national securities
exchange or otherwise, to make a tender offer for, or a request or
invitation for tenders of, any class of any equity security which
is registered pursuant to section 12 of this title, or any equity
security of an insurance company which would have been required to
be so registered except for the exemption contained in section 12(g)(2)(G)
of this title, or any equity security issued by a closed-end investment
company registered under the Investment Company Act of 1940, if, after
consummation thereof, such person would, directly or indirectly, be
the beneficial owner of more than 5 per centum of such class, unless
at the time copies of the offer or request or invitation are first
published or sent or given to security holders such person has filed
with the Commission a statement containing such of the information
specified in section 13(d) of this title, and such additional information
as the Commission may by rules and regulations prescribe as necessary
or appropriate in the public interest or for the protection of investors.
All requests or invitations for tenders or advertisements making a
tender offer or requesting or inviting tenders of such a security
shall be filed as a part of such statement and shall contain such
of the information contained in such statement as the Commission may
by rules and regulations prescribe. Copies of any additional material
soliciting or requesting such tender offers subsequent to the initial
solicitation or request shall contain such information as the Commission
may by rules and regulations prescribe as necessary or appropriate
in the public interest or for the protection of investors, and shall
be filed with the Commission not later than the time copies of such
material are first published or sent or given to security holders.
Copies of all statements, in the form in which such material is furnished
to security holders and the Commission, shall be sent to the issuer
not later than the date such material is first published or sent or
given to any security holders.
5-111
(2) When two or more persons act as a partnership,
limited partnership, syndicate, or other group for the purpose of
acquiring, holding, or disposing of securities of an issuer, such
syndicate or group shall be deemed a “person” for purposes of this
subsection.
(3) In determining,
for purposes of this subsection, any percentage of a class of any
security, such class shall be deemed to consist of the amount of the
outstanding securities of such class, exclusive of any securities
of such class held by or for the account of the issuer or a subsidiary
of the issuer.
(4)
Any solicitation or recommendation to the holders of such a security
to accept or reject a tender offer or request or invitation for tenders
shall be made in accordance with such rules and regulations as the Commission
may prescribe as necessary or appropriate in the public interest or
for the protection of investors.
5-112
(5) Securities deposited pursuant to a
tender offer or request or invitation for tenders may be withdrawn
by or on behalf of the depositor at any time until the expiration
of seven days after the time definitive copies of the offer or request
or invitation are first published or sent or given to security holders,
and at any time after sixty days from the date of the original tender
offer or request or invitation, except as the Commission may otherwise
prescribe by rules, regulations, or order as necessary or appropriate
in the public interest or for the protection of investors.
5-113
(6) Where any person makes a tender offer,
or request or invitation for tenders, for less than all the outstanding
equity securities of a class, and where a greater number of securities
is deposited pursuant thereto within ten days after copies of the
offer or request or invitation are first published or sent or given
to security holders than such person is bound or willing to take up
and pay for, the securities taken up shall be taken up as nearly as
may be pro rata, disregarding fractions, according to the number of
securities deposited by each depositor. The provisions of this subsection
shall also apply to securities deposited within ten days after notice
of an increase in the consideration offered to security holders, as
described in paragraph (7), is first published or sent or given to
security holders.
5-114
(7) Where
any person varies the terms of a tender offer or request or invitation
for tenders before the expiration thereof by increasing the consideration
offered to holders of such securities, such person shall pay the increased
consideration to each security holder whose securities are taken up
and paid for pursuant to the tender offer or request or invitation
for tenders whether or not such securities have been taken up by such
person before the variation of the tender offer or request or invitation.
5-115
(8) The provisions of this
subsection shall not apply to any offer for, or request or invitation
for tenders of, any security—
(A) if the acquisition of
such security, together with all other acquisitions by the same person
of securities of the same class during the preceding twelve months,
would not exceed 2 per centum of that class;
(B) by the issuer of such security;
or
(C) which the
Commission, by rules or regulations or by order, shall exempt from
the provisions of this subsection as not entered into for the purpose
of, and not having the effect of, changing or influencing the control
of the issuer or otherwise as not comprehended within the purposes
of this subsection.
5-116
(e) Untrue statement of material fact or omission
of fact with respect to tender offer. It shall be unlawful for
any person to make any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
made, in the light of the circumstances under which they are made,
not misleading, or to engage in any fraudulent, deceptive, or manipulative
acts or practices, in connection with any tender offer or request
or invitation for tenders, or any solicitation of security holders
in opposition to or in favor of any such offer, request, or invitation.
The Commission shall, for the purposes of this subsection, by rules
and regulations define, and prescribe means reasonably designed to
prevent, such acts and practices as are fraudulent, deceptive, or
manipulative.
5-117
(f) Election or designation
of majority of directors of issuer by owner of more than five per centum of
class of securities at other than meeting of security holders. If, pursuant to any arrangement or understanding with the person
or persons acquiring securities in a transaction subject to subsection
(d) of this section or subsection (d) of section 13 of this title,
any persons are to be elected or designated as directors of the issuer,
otherwise than at a meeting of security holders, and the persons so
elected or designated will constitute a majority of the directors
of the issuer, then, prior to the time any such person takes office
as a director, and in accordance with rules and regulations prescribed
by the Commission, the issuer shall file with the Commission, and
transmit to all holders of record of securities of the issuer who
would be entitled to vote at a meeting for election of directors,
information substantially equivalent to the information which would
be required by subsection (a) or (c) of this section to be transmitted
if such person or persons were nominees for election as directors
at a meeting of such security holders.
5-117.1
(g) Filing fees.
(1) (A) At the
time of filing such preliminary proxy solicitation material as the
Commission may require by rule pursuant to subsection (a) of this
section that concerns an acquisition, merger, consolidation, or proposed
sale or other disposition of substantially all the assets of a company,
the person making such filing, other than a company registered under
the Investment Company Act of 1940, shall pay to the Commission the
following fees:
(i) for preliminary proxy solicitation material
involving an acquisition, merger, or consolidation, if there is a
proposed payment of cash or transfer of securities or property to
shareholders, a fee at a rate that, subject to paragraph (4), is equal
to $92 per $1,000,000 of such proposed payment, or of the value of
such securities or other property proposed to be transferred; and
(ii) for preliminary proxy
solicitation material involving a proposed sale or other disposition
of substantially all of the assets of a company, a fee at a rate that,
subject to paragraph (4), is equal to $92 per $1,000,000 of the cash
or of the value of any securities or other property proposed to be
received upon such sale or disposition.
(B) The fee imposed under
subparagraph (A) shall be reduced with respect to securities in an
amount equal to any fee paid to the Commission with respect to such
securities in connection with the proposed transaction under section
6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee
paid under that section shall be reduced in an amount equal to the
fee paid to the Commission in connection with such transaction under
this subsection. Where two or more companies involved in an acquisition,
merger, consolidation, sale, or other disposition of substantially
all the assets of a company must file such proxy material with the
Commission, each shall pay a proportionate share of such fee.
5-117.2
(2) At the time of filing such
preliminary information statement as the Commission may require by
rule pursuant to subsection (c) of this section, the issuer shall
pay to the Commission the same fee as required for preliminary proxy
solicitation material under paragraph (1) of this subsection.
5-117.3
(3) At the time of filing such statement
as the Commission may require by rule pursuant to subsection (d)(1)
of this section, the person making the filing shall pay to the Commission
a fee at a rate that, subject to paragraph (4), is equal to $92 per
$1,000,000 of the aggregate amount of cash or of the value of securities
or other property proposed to be offered. The fee shall be reduced
with respect to securities in an amount equal to any fee paid with
respect to such securities in connection with the proposed transaction
under section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)),
or the fee paid under that section shall be reduced in an amount equal
to the fee paid to the Commission in connection with such transaction
under this subsection.
5-117.31
(4) For each fiscal year, the Commission
shall by order adjust the rate required by paragraphs (1) and (3)
for such fiscal year to a rate that is equal to the rate (expressed
in dollars per million) that is applicable under section 6(b) of the
Securities Act of 1933 (15 U.S.C. 77f(b)) for such fiscal year.
(5) Fees collected pursuant
to this subsection for fiscal year 2012 and each fiscal year thereafter
shall be deposited and credited as general revenue of the Treasury
and shall not be available for obligation.
(6) In exercising its authority under this
subsection, the Commission shall not be required to comply with the
provisions of section 553 of title 5, United States Code. An adjusted
rate prescribed under paragraph (4) shall be published and take effect
in accordance with section 6(b) of the Securities Act of 1933 (15
U.S.C. 77f(b)).
(7)
The rates per $1,000,000 required by this subsection shall be applied
pro rata to amounts and balances of less than $1,000,000.
5-117.4
(8) Notwithstanding any other provision
of law, the Commission may impose fees, charges, or prices for matters
not involving any acquisition, merger, consolidation, sale, or other
disposition of assets described in this subsection, as authorized
by section 9701 of title 31, United States Code, or otherwise.
5-117.5
(h) Proxy solicitations and tender offers in connection
with limited partnership rollup transactions.
(1) It shall be unlawful for any person
to solicit any proxy, consent, or authorization concerning a limited
partnership rollup transaction, or to make any tender offer in furtherance
of a limited partnership rollup transaction, unless such transaction
is conducted in accordance with rules prescribed by the Commission
under subsections (a) and (d) as required by this subsection. Such
rules shall—
(A) permit any holder of a security
that is the subject of the proposed limited partnership rollup transaction
to engage in preliminary communications for the purpose of determining
whether to solicit proxies, consents, or authorizations in opposition
to the proposed limited partnership rollup transaction, without regard
to whether any such communication would otherwise be considered a
solicitation of proxies, and without being required to file soliciting
material with the Commission prior to making that determination, except
that—
(i) nothing in this subparagraph shall be
construed to limit the application of any provision of this title
prohibiting, or reasonably designed to prevent, fraudulent, deceptive,
or manipulative acts or practices under this title; and
(ii) any holder of not less than
5 percent of the outstanding securities that are the subject of the
proposed limited partnership rollup transaction who engages in the
business of buying and selling limited partnership interests in the
secondary market shall be required to disclose such ownership interests
and any potential conflicts of interests in such preliminary communications;
(B)
require the issuer to provide to holders of the securities that are
the subject of the limited partnership rollup transaction such list
of the holders of the issuer’s securities as the Commission may determine
in such form and subject to such terms and conditions as the Commission
may specify;
(C)
prohibit compensating any person soliciting proxies, consents, or
authorizations directly from security holders concerning such
a limited partnership rollup transaction—
(i) on the basis of whether
the solicited proxy, consent, or authorization either approves or
disapproves the proposed limited partnership rollup transaction; or
(ii) contingent on the approval,
disapproval, or completion of the limited partnership rollup transaction;
(D)
set forth disclosure requirements for soliciting material distributed
in connection with a limited partnership rollup transaction, including
requirements for clear, concise, and comprehensible disclosure with
respect to—
(i) any changes in the business plan, voting
rights, form of ownership interest, or the compensation of the general
partner in the proposed limited partnership rollup transaction from
each of the original limited partnerships;
(ii) the conflicts of interest, if any, of
the general partner;
(iii)
whether it is expected that there will be a significant difference
between the exchange values of the limited partnerships and the trading
price of the securities to be issued in the limited partnership rollup
transaction;
(iv) the valuation
of the limited partnerships and the method used to determine the value
of the interests of the limited partners to be exchanged for the securities
in the limited partnership rollup transaction;
(v) the differing risks and effects of the
limited partnership rollup transaction for investors in different
limited partnerships proposed to be included, and the risks and effects
of completing the limited partnership rollup transaction with less
than all limited partnerships;
(vi) the statement by the general partner
required under subparagraph (E);
(vii) such other matters deemed necessary
or appropriate by the Commission;
(E) require a statement by the general
partner as to whether the proposed limited partnership rollup transaction
is fair or unfair to investors in each limited partnership, a discussion
of the basis for that conclusion, and an evaluation and a description
by the general partner of alternatives to the limited partnership
roll-up transaction, such as liquidation;
(F) provide that, if the general partner
or sponsor has obtained any opinion (other than an opinion of counsel),
appraisal, or report that is prepared by an outside party and that
is materially related to the limited partnership rollup transaction,
such soliciting materials shall contain or be accompanied by clear,
concise, and comprehensible disclosure with respect to—
(i) the analysis
of the transaction, scope of review, preparation of the opinion, and
basis for and methods of arriving at conclusions, and any representations
and undertakings with respect thereto;
(ii) the identity and qualifications of the
person who prepared the opinion, the method of selection of such person,
and any material past, existing, or contemplated relationships between
the person or any of its affiliates and the general partner, sponsor,
successor, or any other affiliate;
(iii) any compensation of the preparer of
such opinion, appraisal, or report that is contingent on the transaction’s
approval or completion; and
(iv) any limitations imposed by the issuer on the access afforded
to such preparer to the issuer’s personnel, premises, and relevant
books and records;
(G) provide that, if the general partner
or sponsor has obtained any opinion, appraisal, or report as described
in subparagraph (F) from any person whose compensation is contingent
on the transaction’s approval or completion or who has not been given
access by the issuer to its personnel and premises and relevant books
and records, the general partner or sponsor shall state the reasons
therefor;
(H) provide that,
if the general partner or sponsor has not obtained any opinion on
the fairness of the proposed limited partnership rollup transaction
to investors in each of the affected partnerships, such soliciting
materials shall contain or be accompanied by a statement of such partner’s
or sponsor’s reasons for concluding that such an opinion is not necessary
in order to permit the limited partners to make an informed decision
on the proposed transaction;
(I) require that the soliciting material
include a clear, concise, and comprehensible summary of the limited
partnership rollup transaction (including a summary of the matters
referred to in clauses (i) through (vii) of subparagraph (D) and a
summary of the matter referred to in subparagraphs (F), (G), and (H)),
with the risks of the limited partnership rollup transaction set forth
prominently in the fore part thereof;
(J) provide that any solicitation or
offering period with respect to any proxy solicitation, tender offer,
or information statement in a limited partnership rollup transaction
shall be for not less than the lesser of 60 calendar days or the maximum
number of days permitted under applicable State law; and
(K) contain such other
provisions as the Commission determines to be necessary or appropriate
for the protection of investors in limited partnership rollup transactions.
5-117.51
(2) The Commission may,
consistent with the public interest, the protection of investors,
and the purposes of this title, exempt by rule or order any security
or class of securities, any transaction or class of transactions,
or any person or class of persons, in whole or in part, conditionally
or unconditionally, from the requirements imposed pursuant to paragraph
(1) or from the definition contained in paragraph (4).
(3) Nothing in this subsection
limits the authority of the Commission under subsection (a) or (d)
or any other provision of this title or precludes the Commission from
imposing, under subsection (a) or (d) or any other provision of this
title, a remedy or procedure required to be imposed under this subsection.
5-117.52
(4) Except as provided
in paragraph (5), as used in this subsection, the term “limited partnership
rollup transaction” means a transaction involving the combination
or reorganization of one or more limited partnerships, directly or
indirectly, in which—
(A) some or all of the investors in
any of such limited partnerships will receive new securities, or securities
in another entity, that will be reported under a transaction reporting
plan declared effective before the date of enactment of this subsection
by the Commission under section 11A;
(B) any of the investors’ limited partnership
securities are not, as of the date of filing, reported under a transaction
reporting plan declared effective before the date of enactment of
this subsection by the Commission under section 11A;
(C) investors in any of the limited
partnerships involved in the transaction are subject to a significant
adverse change with respect to voting rights, the term of existence
of the entity, management compensation, or investment objectives;
and
(D) any of such
investors are not provided an option to receive or retain a security
under substantially the same terms and conditions as the original
issue.
5-117.53
(5)
Notwithstanding paragraph (4), the term “limited partnership rollup
transaction” does not include—
(A) a transaction that
involves only a limited partnership or partnerships having an operating
policy or practice of retaining cash available for distribution and
reinvesting proceeds from the sale, financing, or refinancing of assets
in accordance with such criteria as the Commission determines appropriate;
(B) a transaction
involving only limited partnerships wherein the interests of the limited
partners are repurchased, recalled, or exchanged in accordance with
the terms of the preexisting limited partnership agreements for securities
in an operating company specifically identified at the time of the
formation of the original limited partnership;
(C) a transaction in which the securities
to be issued or exchanged are not required to be and are not registered
under the Securities Act of 1933;
(D) a transaction that involves only
issuers that are not required to register or report under section
12, both before and after the transaction;
(E) a transaction, except as the Commission
may otherwise provide by rule for the protection of investors, involving
the combination or reorganization of one or more limited partnerships
in which a non-affiliated party succeeds to the interests of a general
partner or sponsor, if—
(i) such action is approved by not less than
66⅔ percent of the outstanding units of each of the participating
limited partnerships; and
(ii) as a result of the transaction, the existing general partners
will receive only compensation to which they are entitled as expressly
provided for in the preexisting limited partnership agreements; or
(F)
a transaction, except as the Commission may otherwise provide by rule
for the protection of investors, in which the securities offered to
investors are securities of another entity that are reported under
a transaction reporting plan declared effective before the date of
enactment of this subsection by the Commission under section 11A,
if—
(i) such other entity was formed, and such
class of securities was reported and regularly traded, not less than
12 months before the date on which soliciting material is mailed to
investors; and
(ii) the
securities of that entity issued to investors in the transaction do
not exceed 20 percent of the total outstanding securities of the entity,
exclusive of any securities of such class held by or for the account
of the entity or a subsidiary of the entity.
(i) Disclosure
of pay versus performance. The Commission shall, by rule, require
each issuer to disclose in any proxy or consent solicitation material
for an annual meeting of the shareholders of the issuer a clear description
of any compensation required to be disclosed by the issuer under section
229.402 of title 17, Code of Federal Regulations (or any successor
thereto), including, for any issuer other than an emerging growth
company, information that shows the relationship between executive
compensation actually paid and the financial performance of the issuer,
taking into account any change in the value of the shares of stock
and dividends of the issuer and any distributions. The disclosure
under this subsection may include a graphic representation of the
information required to be disclosed.
(j) Disclosure of hedging by employees and directors. The Commission shall, by rule, require each issuer to disclose in
any proxy or consent solicitation material for an annual meeting of
the shareholders of the issuer whether any employee or member of the
board of directors of the issuer, or any designee of such employee
or member, is permitted to purchase financial instruments (including
prepaid variable forward contracts, equity swaps, collars, and exchange
funds) that are designed to hedge or offset any decrease in the market
value of equity securities—
(1) granted to the employee or member of
the board of directors by the issuer as part of the compensation of
the employee or member of the board of directors; or
(2) held, directly or indirectly, by the
employee or member of the board of directors.
[15 USC 78n. As amended
by acts of Aug. 20, 1964 (78 Stat. 569); July 29, 1968 (82 Stat. 455);
Dec. 22, 1970 (84 Stat. 1497); June 6, 1983 (97 Stat. 205); Dec. 28,
1985 (99 Stat. 1737); Nov. 15, 1990 (104 Stat. 2721); Dec. 17, 1993
(107 Stat. 2359-2363); Nov. 3, 1998 (112 Stat. 3236); Jan. 16, 2002
(115 Stat. 2396); July 21, 2010 (124 Stat. 1903, 1904, 1953); and
April 5, 2012 (126 Stat. 309).]
