Deregistration Highlights
Deregistration Highlights
On June 17, 2011, we filed a preliminary proxy statement and a going private transaction statement with the Securities and Exchange Commission (SEC) in connection with our proposed membership unit reclassification and deregistration. The SEC provides comments on these documents, and we must address those comments, before a definitive proxy statement may be sent to members. We received initial comments from the SEC during the week of June 27, 2011 and were encouraged that the SEC completed its initial review so quickly. We continue to move forward in this process and will hold a membership meeting to vote on the reclassification of our membership units as soon as reasonably possible. Additional background information regarding the proposed membership unit reclassification and deregistration follows.
The WIE Board of Directors is continually looking to make the company more efficient and eliminate expenses that detract from the company’s bottom line. After much discussion regarding the burdens associated with the company’s SEC public reporting obligations, the Board approved, subject to final member and SEC approval, reclassifying the company’s membership units into three classes and deregistering the company’s membership units with the SEC.
WIE’s current annual cost of SEC reporting and compliance is estimated at $253,000, and continues to escalate as additional regulations are imposed on reporting companies. This estimate includes approximately $233,000 in direct costs and approximately $20,000 in staff expense. As an SEC reporting company, WIE must file reports that are available to the general public containing the company’s financial results, discussions regarding the company’s activities, and material events impacting the company. This information is available to our competitors, some of whom are not SEC reporting companies and therefore do not have reciprocal disclosure obligations. Additionally, the company’s reporting obligations require the time and attention of our employees and management whose time could instead be utilized to focus on the operations and profitability of the company.
WIE’s Board of Directors is proposing reclassifying its membership units into three classes, Class A, Class B, and Class C, in order to deregister the company’s membership units with the United States Securities and Exchange Commission. The unit reclassification would be based on the number of membership units owned by each member on the date of the reclassification. Class A would be comprised of members that own 40 or more units, Class B would be comprised of members that own 21 to 39 units, and Class C would be comprised of members that own 20 or fewer units. The reclassification would be accomplished pursuant to the members’ adoption of a Second Amended and Restated Operating Agreement.
Once we complete the SEC review process discussed above, members will receive a detailed proxy statement describing the proposed reclassification and the proposed amendments to WIE’s current Operating Agreement.
Members of the company are urged to read the proxy statement and appendices thereto, when available, because they will contain important information about the company and the proposed reclassification of membership units.
Members may obtain a free copy of the proxy statement (when available) and other relevant documents filed by the company with the SEC from the SEC’s website at www.sec.gov. Additionally, members will receive a copy of the definitive proxy statement via mail and will be able to access the proxy materials electronically on WIE’s website.