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Manage Your Account: Corporate Actions

*Note: Depending on your user access level, and if you have an advisor who can access your account, some of the functions described here may not be available to you, or may be performed by your advisor.

What are Corporate Actions?

Corporate actions are events initiated by a public company that affect the securities (equity or debt) issued by the company. Examples of corporate actions include security splits, mergers and rights offerings.

How will I be notified when a corporate action occurs for a security I own?

Unless the corporate action is a cash dividend or optional dividend, you will be notified through the Message Center and the primary email address listed on your account.

How do I vote or make a decision on a corporate action?

To vote or make a decision on a corporate action:

  1. Go to your Accounts page
  2. Next to the account name, select the Corporate Activity Icon
  3. You will be redirected to the Corporate Activities Overview page, where you will see all of the corporate actions available for this account.
  4. If the Status of a corporate action is Undecided you can take action (vote or make a decision) before the deadline date by selecting the link under Security/Activity.
  5. Then by selecting Cast your Vote, you can cast votes or choose to attend corporate meetings.

Note: There may be a charge to the account for acting on voluntary corporate actions, such as tendering shares. If so, we will notify you in advance. There are no charges for placing shareholder votes or taking other actions.

Corporate Activities: Overview

The corporate activities page contains important items affecting the securities you own and your voting rights. From this page, you view corporate activity items with brief descriptions, keep track of deadlines, and take action, such as casting a vote.

If you need to take any actions, you may do so by clicking on the brief activity description. You will not be required to complete any paperwork. Every decision you need to make can be executed from our site.

Security / Activity

This column displays the corporation’s name and a brief description of the activity. Click on it and you will go to a detailed description of the activity.

Deadline

This column displays the date by which you must make a decision. If you are not prompted to make a decision, the column will list the date the company plans to take action on an activity.

Status

This column will list one of the following messages:

  • Important Message  There is important information but you are not required to take action or make a decision.
  • Decided  You have made a decision on what action to take. Keep in mind that you may change your mind as many times as you like up to 11:59 PM on the deadline date.
  • Undecided  You have not made a decision on what action to take. Keep in mind, your decision must be made by 11:59 PM on the deadline date.
  • Attending Meeting  A company vote is taking place, and you have indicated that you will attend the meeting in person by downloading a “Legal Proxy.” If you decide not to attend the meeting after downloading the “Legal Proxy,” you will still be able to vote on our site. To do so, you must let us know by either calling us toll-free or clicking on “Contact” to send us a secured email indicating your intention to vote online.

Corporate Activity

Corporations often take actions that affect their stockholders. The following list defines each type of corporate activity.

Cash Dividend

A cash dividend occurs when a corporation decides to distribute some of its earnings or profits to shareholders in the form of a cash payment. If you own securities in a corporation that declares a cash dividend, you will not receive a notice in advance from us.

The day the dividend is paid, the following will occur:

  • If the security is held in your Non-Folio Holdings, we will credit your Cash and Money Fund.
  • If the security is held in a Folio, and you chose to reinvest dividends of $1 or more, we will purchase more of the security. Fractional shares will be purchased if necessary.
  • If the security is held in a Folio, and you chose to receive dividends as cash,we will credit your Cash & Money Fund.

Cash dividends of less than $1 cannot be automatically reinvested in the securities that paid them. Instead, we will put them in your Cash.

Stock Dividend

A stock dividend occurs when a corporation pays a dividend in security rather than cash. If you own security in a corporation that declares a stock dividend, we will notify you by email. The day the dividend is paid, the stock dividend will be added to your total share value.

Optional Dividend

With an optional dividend, the corporation gives its shareholders the option of receiving the payment in cash, security, or some combination of both.

If you receive an optional dividend for a security held in a Folio, you will not receive advance notice from us. The dividend will be paid in the following ways:

  • If you chose to reinvest dividends, and the dividend amount is $1 or more, you will receive the dividend in security. Fractional shares will be paid.
  • If you chose to reinvest dividends, and the dividend amount is less than $1, you will receive the dividend in cash. We will credit your Cash and Money Funds.
  • If you chose to receive all dividends in cash, we will credit your Cash.

If you receive an optional dividend for a security held in your Non-Folio Holdings, we will notify you by email and ask you to indicate how you would like to receive your dividend.

Stock Split

When a stock splits, a corporation increases its shares outstanding. As a result, the share price usually decreases.

If you own security in a corporation that authorizes a split, we will notify you by email. The number of shares you own will be adjusted on the date the split goes into effect.

Reverse Stock Split

When a reverse stock split occurs, a corporation is decreasing its outstanding shares. As a result, the price per share usually increases.

If you own security in a corporation that authorizes a reverse split, we will notify you by email. The number of shares you own will be adjusted on the date the split takes effect.

Merger / Restructure

A merger occurs when two or more companies combine to form one company. A restructuring occurs when a company internally reorganizes, possibly dividing into separate companies.

If a merger or corporate restructuring applies to a security you own, we will notify you by email. If a ticker symbol changes, we will automatically update your holdings. Similarly, if any shares are exchanged, we will automatically make the adjustment.

Rights Offering

A rights offering occurs when a publicly traded company gives its current stockholders the right to maintain proportionate ownership before offering new shares to the public. For example, assume you own 2% of a company’s outstanding shares. The company decides to issue new shares and issues a rights offering. You are given the right to purchase 2% of the new shares before they are offered to the general public.

If you are offered rights, we will notify you by email. The email will provide instructions for choosing the following options on our site:

  • exercise the rights,
  • let the rights expire,
  • trade the rights if they are transferable,
  • sell the rights back to the company if the option is provided, or
  • select a combination of available options.

If you choose to exercise the rights, you must have the cash available in your Cash to buy the shares.

Tender Offer

A tender offer is an offer to buy shares of one security in exchange for shares of another security, cash, or a combination of both.

If you receive a tender offer, we will notify you by email. The email will provide instructions for choosing the following options on our site:

  • accept the offer,
  • accept part of the offer, or
  • decline the offer.

Proxy

A proxy is a written document that allows a shareholder to vote without attending a company meeting.

If you receive a proxy statement, we will notify you by email. The email will provide instructions for choosing the following options on our site:

  • vote “Yes” on the issue,
  • vote “No” on the issue,
  • vote for a specific board member(s), or
  • abstain from all voting.

Class Action

A class action is a lawsuit filed against a company on behalf of its shareholders. In nearly all cases, your legal right to seek a remedy on your own will be taken away unless you take action and opt-out of the class action.

If a class action is filed, we will notify you by email. If you are uncertain about whether you should be part of the class action or opt-out of it, please seek legal advice.

If a class action covers wrongdoing that causes the price of a security to fall, the class action notice will state that only stockholders over a specified period of time may seek claims. For example, the notice may say, “Anyone owning stock in this company from July 1, 1999 to August 15, 1999 may be entitled to file a claim.”