Confirmed.
Question
I write to clarify the acquired person’s obligation to submit “draft” transaction-related documents in the files of a board member. We have a unique situation where the acquired person’s board consists of several representatives from a significant investor who was brought in early in the company’s history to help grow and support the company. Therefore some, but not all, of these board members function as executives of the company in addition to their role as a board member. These quasi-executives regularly participate in operational meetings and are involved in day-to-day decision-making for the company, but do not have titles with the company other than director.
The revised HSR rules state “that any Transaction Related Document … shared with any member of the board of directors (or similar body) is responsive and should not be considered a draft; rather, it should be treated as a final version and submitted with the HSR Filing.” In adopting this position, the statement of basis and purpose explains that drafts sent to the board are more probative based on “the belief that if a document is shared with the board of directors, it is sufficiently reliable to be submitted with the HSR Filing.”
Given that underpinning and guidance from the PNO that clarifies that “only draft documents shared with the individual in their role as a member of the board of directors would be potentially responsive” (see HSR Form Changes Q&A), we therefore seek to confirm that so long as the company is prepared to defend that the board members received a draft of a document while he or she was operating as quasi-executives in his or her operational capacity, those drafts likewise would not need to be submitted.