I hope everyone’s summer has been both successful and fun. Before the year is out we will know who our next President will be and can start to plan our next business moves. We look forward to continuing to service your company. Let us know your plans and ideas so that we can better partner with you to help you achieve your goals.
Do you have shareholders who have held onto shares for investment purposes, have NOT responded to letters or proxies but you know the address is correct and they still live at their residence? Did you know these shareholders are at risk of losing their investment to states in which they live just because they haven’t responded and don’t think they have to? How many shares of stocks do YOU have and you’ve never made a pro-active attempt to communicate with that issuer or the brokerage firm where your shares are held?
The economy has negatively impacted many state economies and those states are looking for innovative ways to bring additional money into their coffers. They are looking at sitting pools of monies and other assets that belong to their residents. Two years ago, Arizona tried to shorten the dormancy period for presumption of abandoned property from three years to two, after attempts made by issuers to contact holders (proxy, mailing, etc.) and the mail was returned. Any time mail is returned, it sparks us to do a second mailing and eventually pursue a lost shareholder search, per SEC regulations. If shareholders are not found, then the shares are escheated to the state where the shareholder last lived. But this is not what we are talking about now. (BTW, Arizona returned to the three year dormancy specifically because of lobbying by yours truly and attorney, Gregory Harris of Snell & Wilmer.) Delaware has now interpreted a law in such a manner that makes securities escheatable (able to be turned over) to them just because the shareholder doesn’t ACTIVELY communicate with the issuer, transfer agent or their brokerage firm. No longer can shareholders invest and let their investment sit and grow on its own without paying attention to staying in touch with the issuer or an issuer’s agent. The investment may grow but it may become the state’s property without the shareholder knowing where it went.
We expect lawsuits to arise from these actions by states (so far only Delaware has gone THIS far.) But that may take years to happen. In the meantime, First American Stock Transfer has taken it upon itself to send letters of explanation to all Delaware residents who own shares in any of our companies, asking for their response. You may see a small invoice on your bills equal to the number of Delaware residents you have. But we are receiving responses already. These responses will count as active communication so your shareholders’ shares will not be lost to their state.
New Resolution to Appoint Transfer Agent
As you know, we must follow the regulations of the SEC, the Federal Trade Commission, the Uniform Commercial Code of Commercial, and now the IRS with cost basis. There have been many changes in proxy and unclaimed property administration so we have recently re-written our Resolution to Appoint Transfer Agent agreement. It now includes clarification about unclaimed property, proxies, administrative holds, additional service providers, and termination details. Your account representative will be sending the new agreements out for you to sign. If you do not sign this version, your old one still is in force. However, you may not have the protections and clarifications this one offers. We also have a new fee schedule but the only fees that have increased are our FedEx delivery fees, if you use our account instead of your own. All of you should now have a more concise picture of what we can and cannot do for you as well as what you can and cannot do as a publicly-traded company. When it is sent to you for completion please know that you can call or email your account representative or me with any questions you have. As always, we are here for you.
New Account Representatives
Have you met them yet? We have two new representatives (aka relationship managers!) If you have not yet had the pleasure of speaking with them you probably will in the near future. I am very pleased they have taken on this responsibility as they are both extremely conscientious and will look out for you, your account and your shareholders. Erica Heist has a Bachelor’s in Psychology (but don’t hold that against her!) and is so sharp she learned this field faster than we could teach her. As you know this field is just a bit complex so that’s saying a lot. Robyn Brand has been with us before and we’ve gladly welcomed her back. She had extensive experience in the mortgage and financial fields prior to joining us. You will be very pleased with their addition to our staff.
Engaging Your Shareholders
Many of you have expressed dissatisfaction concerning an industry-wide inability for issuers to make easy contact with shareholders. If this is something you would like to pursue in order to reach more of your shareholders without always going to Broadridge for a NOBO list, please contact Karen Fisher of Shareholder Forum. Karen can be reached at Karen.firstname.lastname@example.org or by phone, 858-461-4886. Their new product allows you to go to your shareholders and for both your registered shareholders and your beneficial side shareholders to be validated and to login for two-way communication.
First American Stock Transfer has been brought into the modern age! Our computers, which had only been about eight years old, have finally gone to the computer graveyard. If you visit our office you will no longer see monster monitors that looked like they should have had vacuum tubes in the back. You will now see sleek monitors and feel the whoosh of fast processing speeds. Some of us will also be able to continue processing in the cloud. Our new computers will allow us to provide more security than ever before to protect your shareholders’ data, to do backups of data and to recover data. Our data recovery system has its own power utility station in case of any city-wide loss of electricity. I’m fairly certain we’ll even be safe if California falls into the ocean but that remains to be seen and, personally, I don’t want to see that anytime soon.
We’re putting in more phone and data lines, too. If you can’t reach your account representative, you’ll be able to leave him or her a message on their direct line. We’ll still have the same friendly voice answering phones (by my choice – I hate electronic answering systems) but we will have phone versatility and options like never before.
Let us know your thoughts! All of you are special to us.