Registration Relief for Pre-IPO RSUs; Less risk of being forced into a tight place as companies grow.

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February 14, 2012

Corp Fin's New CDI: How to Present Say-on-Pay on Proxy Cards/VIFs

Yesterday, Corp Fin issued new '34 Act CDI 169.07 to provide clarity about how companies should be listing their say-on-pay proposals on proxy cards and voting instruction forms. The CDI lists four examples that the Staff believes is consistent with Rule 14a-21 - and one example that the Staff believes is not consistent (ie. "To hold an advisory vote on executive compensation"). I believe many companies are going to need to make a tweak to their proxy cards and VIFs as they used the "inconsistent" language last year...

I'm not sure what to make of this NY Post article noting that a whistleblower - someone at an unnamed proxy solicitor - is claiming that a mid-level employee in ISS's Boston office has been exchanging confidential voting data for gifts or cash from solicitors. Allegedly, the whistleblower has complained to the SEC - but whomever it is wouldn't respond to questions from the NY Post reporter. We'll see if this develops or is an urban myth. Among the odd things, it seems like the information could be valuable to arbitragers in a merger vote, but really not worth that much to companies (and their agents). Here's today's WSJ article on the topic...

Section 12(g): Corp Fin Grants Global No-Action Relief for RSUs at Pre-IPO Companies

Yesterday, Corp Fin granted this no-action relief to Fenwick & West regarding the use of restricted stock units for employees at pre-IPO companies under certain conditions without the company needing to register the securities under Section 12(g) of the '34 Act (generally, the conditions are similar to those in Rule 12h-1(f) for options). By granting the letter to a law firm - and not a specific company - this no-action letter serves as broad relief for those pre-IPO companies hoping not to be forced to go public before they are ready, a hot topic as it has even attracted attention on Capitol Hill where proposed legislation is afoot to raise the 12(g) thresholds, etc. Previously, Corp Fin had been granting relief in this area on a case-by-case basis (egs. Twitter, Facebook - see this blog).

Yesterday, Reuters ran this article entitled "Proxy adviser ISS slams Facebook share structure."

Webcast: "Transaction Insurance as a M&A Strategic Tool"

Tune in tomorrow for the DealLawyers.com webcast - "Transaction Insurance as a M&A Strategic Tool" - to hear Keith Flaum of Dewey & LeBoeuf, Mark Thierfelder of Dechert and Craig Schiappo of Marsh's Private Equity and M&A Services Group discuss how the use of insurance in deals is gaining popularity as a tool to bridge the gap on one of the most fundamental deal issues in any M&A transaction: the potential post-closing erosion of value. Please print off these course materials in advance.

- Broc Romanek

Posted by broc at 7:16 AM
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