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Show National Enterprise Page Nine Is Corporate Management Keeping You in the Dark? by Hugh Bradford sell or reduce any assets to keep it going? Is it expanding its operatons and activities or gradually dying on the vine? In other words, can you tell what the companys management is doing for you, the Mr. Bradford is president of First Corporate Finance Corporation. an investment banking firm with offices in Dallas and Salt Lake City. shareholder, to justify its salary? If not, can you give one good reason why you own stock in such a company? While the Securities and Assuming you are a shareholder of a publicly-trade- d company, are you able to say you know what is happening in the companys operations? Is it making or losing money? Are sales increasing or declining? Has the company had to Exchange Commission requires most publicly-helcompanies to file comprehensive reports describing in d detail its operations and financial results, there are unfortunately quite a few states that do not require such reports be furnished to shareholders. For example, neither Texas nor Utah require a company to make a report to its shareholders. Even more difficult to understand, Utah corporate law does not even require the company to have an annual shareholders meeting. There are probably other states also lacking such requirements. The net result of this loophole in states securities and corporate code is that once an individual, or group, installs itself in a control position on the board of directors, it could perpetuate itself for years without the requirement of gaining shareholder approval. Such a board might not own even 5 percent of the companys shares. For example, an individual, or group, upon obtaining control of a public company could vote themselves excessive annual salaries, and gradually sell off the assets of the company to meet their salary requirements. A shareholder would be unaware of this asset drain unless he took it upon 10-himself to get the 10-and Forms from the company, or SEC, or make a formal request to examine the companys books and records. While the cost of 2S to 35 cents each for mailing a report to every shareholder may be undesirable for a very small company, the management of these companies should be more than willing to furnish accurate information to each shareholder upon request. Fortunately, managements com: of many publicly-hel- d panies are not ony honest, but have a strong sense of pride in their desire to build a comK, Going public is tough. Keep ing your seat is even tougher. Going public can be a great opportunity for growth (stock can often facilitate acquisitions) . . . but its not much' consolation if youre left on the outside looking in. We can make your company public and keep you in control. No need to worry about months of delays, either. We move quickly and precisely. Talk to us before you give your company away to a board of directors. You built it; you should keep it. - (Djatfymi j5eruritira (Corporation 25 SOUTH 500 EAST SALT LAKE CITY. UTAH 84102 (801) 531-03- Contact Richard L. Chatham, President 7 Denver (303) Salt Lake City (801) 531-033- 757-016- 5 If you are a shareholder of a publicly-trade- company d which is not making reports to shareholders, and interested in the companys operations and financial condition, you have several options: 1. If the company has $1,000,000, or more, in total assets and more than 500 shareholders, it is required to file Forms 10-(annually), 10-(quarterly) and (material changes in the company's assets, capital ownership and other items) with the K 8-- K Q Securities and Exchange Commission. Write the company requesting copies of these forms. 2. If the company will not furnish copies of these Forms, you may obtain them at a cost of 15 cents per page plus postage from: The Public Reference Section, Securities and Exchange Commission, Washington, D.C. 20549. 3. Most states legal codes provide the right of a share- holder to examine the company's books and records in the office of the company upon formal request. The only problem being that most shareholders would need a strong background in account- - ing, or financial analysis to determine whether a company is going up or downhill. 4. If you are a shareholder of a company not furnishing reports to shareholders, or the SEC, and management is reluctant to furnish you information upon request, you might consider being a shareholder in a company that follows a policy of keeping its stockholders well informed. So, Mr. Shareholder, it may be later than you think. Dont depend on tips, rumors, or information. Try to be fully informed about your companys present status and future prospects. word-of-mou- th Ask yourself if you would put your money in a bank that did not publish its statement of financial condition. If you would not, do you think you should invest you money in a company that does not inform you of its financial condition and operations? Q 8-- K pany. Such managements keep their shareholders informed regularly on the companys operations and financial position. A good management will tell it like it is without trying to tout the company, or its stock by overplaying good news or playing down the bad. Mr. Steak Shows Profits (continued from page 2) Total sales for all of the restaurants that belong to the chain totaled $96 million in fiscal 1975, compared with consolidated sales of $89.1 million in the previous fiscal year. There were three factors that contributed to the growth in sales volume, Shearon said. One, he explained, is that Mr. Steak has been aggressively working on attempts to get more and different items on the restaurant menus. Another factor has been a promotional program by the parent company to try and get the name, Mr. Steak, before the public mote. After these programs are worked out, he said, they are turned over to company-ownerestaurants and franchised restaurants and the parent' firm helps them work out their own advertising d campaign. Another campaign during the year for the company has been a campaign to control the quality of food in all of the restaurants so that the customer can count on the same quality product in California . as in New York. Getting the volume up is the hard part of the business, Shearon told the shareholders. After that, controlling costs is easy. During the latest quarter, he continued, the company took a $94,000 loss because of the need to close losing restaurants. During the same quarter a year earlier, he said, the loss for that reason was $203,000. Losses from closed restaurants would be minimal this year, he said. And, he added, the first and second fiscal quarters traditionally are the lowest for the company. During the meeting, shareholders voting by proxy, the unanimously management slate of directors and elected Robert H. a new member of the re-elect- ed Offering components for complete SOLAR ENERGY HOMES DISTRIBUTION CENTERS NEEDED FOR Swimming Pool Heating Systems Home Heating Systems Water Purification Systems Mac-Lachla- n, board. MacLachlan is president and a director of John H. Hoagland Inc., a management consulting firm and once was an executive with United Brands. |