Tagged: Dorsey eUpdate

All Issuers Eligible to Confidentially Submit Draft IPO Registration Statements

Steven Khadavi

One of the more utilized provisions of the Jumpstart Our Business Startups Act (JOBS Act) has been the confidential submission of IPO registration statements by Emerging Growth Companies (EGCs) to the Securities and Exchange Commission. The nonpublic nature of the SEC review process has allowed EGCs to submit IPO registration statements and respond to SEC comments outside the public eye and without having to alert...

Unexpected Risks of Early Exercise Incentive Stock Options

Jamison Klang

Companies that permit the grant of early exercise incentive stock options (“ISOs”) do so primarily to limit the impact of the alternative minimum tax (“AMT”). However, due to fairly counterintuitive tax regulations, structuring options in this fashion can expose optionees to negative tax consequences in the event of a disqualifying disposition. Read more about the tax effects of early exercise ISOs and how the tax...

SEC Adopts Use of Exhibit Hyperlinks in Filings

Steven Khadavi

We reported in September 2016 on proposed Securities and Exchange Commission rules requiring the use of hyperlinks to exhibits in most registration statements and periodic and current reports. On March 1, 2017, the SEC adopted final rules, largely in line with the proposed rules, amending Item 601 of Regulation S-K and Rules 102 and 105 of Regulation S-T. Read more in our eUpdate here: https://www.dorsey.com/newsresources/publications/client-alerts/2017/03/sec-adopts-use-of-exhibit-hyperlinks-in-filings

SEC Endorses Use of Conditional Offers to Buy Shares in IPOs

Jonathan B. Abram

The SEC recently issued a no-action letter to Morgan Stanley that will streamline the process for its wealth management clients to participate in IPOs. The SEC said it would not object to Morgan Stanley’s proposed use of conditional offers to buy shares (“COBs”) prior to the effectiveness of IPO registration statements under specific conditions. The no-action request and the SEC’s letter confirm that COBs, if...

Guidance Provided by SEC on Abbreviated Debt Tender Offers

Steven Khadavi

On November 18, 2016, the SEC’s Division of Corporation Finance issued a set of compliance and disclosure interpretations (“C&DIs”) pertaining to abbreviated debt tender offers, which were the subject of an SEC no-action letter in early 2015. The new C&DIs offer important clarifications regarding abbreviated debt tender offers and the previous no-action letter guidance. Read more in our full summary here: https://www.dorsey.com/newsresources/publications/client-alerts/2016/11/guidance-provided-by-sec

Recent Developments in Proxy Access

Cam C. Hoang

As the 2017 proxy season begins to unfold, proxy access continues to be a focus of shareholder proposals. Last year, companies that had already adopted mainstream proxy access bylaws, or that were planning to put mainstream proxy access bylaws up for a shareholder vote, were largely successful in being able to exclude shareholder proposals to adopt proxy access bylaws on the grounds that such proposals...

SEC Clarifies Baby Shelf Rules

Michael Newton

The Securities and Exchange Commission (“SEC”) recently issued a new compliance and disclosure interpretation (the “New C&DI”) in Question 116.25 regarding the availability of Form S-3 for the registration and sale of shares by companies with public float less than $75 million. Instruction I.B.6(a) to Form S-3 states that if a registrant has a public float of less than $75 million, the registrant may only...

SEC Proposes Universal Ballots in Contested Elections

Kimberley R. Anderson

On October 26, 2016, in a split vote, the SEC proposed the mandated use of universal ballots in contested director elections at annual meetings. The proposed rules were controversial even before they were proposed – the House of Representatives approved a spending bill this summer that included a provision prohibiting the SEC from proposing or implementing the use of the universal ballots in contested elections....

New CDIs Help Issuers With Pay Ratio Disclosure, A Little

Whitney Holmes

On October 19th, the SEC released five new Compliance and Disclosure Interpretations (“CDIs”) relating to the upcoming “Pay Ratio Disclosure” requirements in Item 402(u) of Regulation S-K. Item 402(u) Pay Ratio Disclosure requirements, mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, require each covered public company to make annual disclosure of the ratio of its principal executive officer’s total annual compensation to...

Nasdaq Doesn’t Require Shareholder Approval of Equity Compensation Plan Amendments to Increase Tax Withholding

Kimberley R. Anderson

Material amendments to equity compensation plans require shareholder approval under Nasdaq rules. Last week, Nasdaq posted a new FAQ #1269 regarding amendments to equity compensation plans to increase the tax withholding rate.  FAQ #1269 is set forth below. “Generally, an amendment to increase the withholding rate to satisfy tax obligations would not be considered a material amendment to an equity compensation plan. Allowing the holder...