July 28, 2016

Selling Shareholders: Corp Fin Revises a CDI

A few days ago, as noted in this blog, Corp Fin revised Regulation S-K CDI 140.02 – and withdrew Reg S-K CDI 240.04. Revised CDI 140.02 now states:

Question: If a selling security holder is not a natural person, how does a registrant satisfy the obligation in Item 507 of Regulation S-K to disclose the nature of any position, office, or other material relationship that the selling security holder has had within the past three years with the registrant or any of its predecessors or affiliates?

Answer: In addition to disclosing any material relationships between the registrant and the selling security holder entity, the registrant must disclose the Item 507 information about any persons (entities or natural persons) who have control over the selling entity and who have had a material relationship with the registrant or any of its predecessors or affiliates within the past three years. In such case, the registrant must identify each such person and describe the nature of any relationships. [July 26, 2016]

Executive Compensation: Disclosing Negative Discretion

As part of my “Big Legal Minds” podcast series – check out this 11-minute podcast, during which Shannon Kinney of ConocoPhillips describes how to best disclose a compensation committee’s decision to exercise negative discretion for an annual incentive plan, including:

1. How has the company improved the format & usability of the proxy in recent years?
2. Can you give us the background of how the compensation committee applied negative discretion for its annual incentive plan?
3. How did the company decide to describe its decision to apply negative discretion (pages 49-52 of the 2016 proxy)?

Remember that these podcasts are also available on iTunes or Google Play (use the “My Podcasts” app on your iPhone and search for “Big Legal Minds”; you can subscribe to the feed so that any new podcast automatically downloads…

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Regulation A+: Secondary Market

As noted in this blog by Steve Quinlivan, the SEC has posted this presentation about the secondary market for Regulation A+ offerings – and in this commentary, SEC Chair White noted there have been over 60 Regulation Crowdfunding offerings so far with a total of $4.4 million in funds committed – and 12 funding portals registered with the SEC and become members of FINRA.

Broc Romanek