EGC CORPORATE GOVERNANCE PRACTICES:
A survey and related resources
February 2017
A Survey and Related Resources
TABLE OF CONTENTS
Introduction ...............................................................................................................................................1 PART I ....................................................................................................................................................... 2 Aggregated Data for Period from January 1, 2013, Through December 31, 2016 ................................... 2
The Filers ........................................................................................................................................ 2
Domestic Versus Foreign.....................................................................................................................................3 State of Incorporation..........................................................................................................................................4 Controlled Companies .........................................................................................................................................4 Exchange Listing..................................................................................................................................................5 Industries .............................................................................................................................................................6 Foreign Private Issuers ........................................................................................................................................6
Board Size and Elections................................................................................................................ 9
Size of Board.........................................................................................................................................................9 Staggered Board ...................................................................................................................................................9 Changes to Board Size .......................................................................................................................................10 Board Vacancies .................................................................................................................................................10 Removal for Cause ............................................................................................................................................. 11 Advance Notice Provisions ................................................................................................................................ 11 Type of Voting .................................................................................................................................................... 11 Proxy Access ....................................................................................................................................................... 12
Separation of CEO and Board Chair Roles ...................................................................................13 Board Committees and Corporate Governance ............................................................................14
Independent Directors on Committees ............................................................................................................ 15 "Phase-In" Provisions ........................................................................................................................................ 15 Financial Experts ............................................................................................................................................... 16 Code of Ethics..................................................................................................................................................... 16
Board Composition .......................................................................................................................17
Independent Directors....................................................................................................................................... 17 Gender Diversity ................................................................................................................................................ 17 Limitations on Board Tenure ............................................................................................................................ 17 Limitations on Board Memberships .................................................................................................................18 Mandatory Retirement Age ...............................................................................................................................18 Minimum Equity Ownership............................................................................................................................. 19
Board Compensation and Indemnification ..................................................................................19 Compensation of Officers............................................................................................................. 20
Clawback Policies.............................................................................................................................................. 20
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Use of Compensation Consultants .................................................................................................................... 21 Employment Agreements ................................................................................................................................. 22 Equity Compensation Plans ............................................................................................................................. 22
Relationship with Shareholders................................................................................................... 25
Exclusive Forum Provisions ..............................................................................................................................25 Dual Classes of Stock .........................................................................................................................................25
Anti-Takeover Protections ........................................................................................................... 26
Shareholder Rights Plans ................................................................................................................................. 26 Blank Check Preferred Stock............................................................................................................................ 26 Section 203 of the Delaware General Corporation Law ................................................................................. 26
PART II .................................................................................................................................................... 28 Aggregated Data for Year Ended December 31, 2016............................................................................. 28
The Filers ...................................................................................................................................... 28
Domestic Versus Foreign.................................................................................................................................. 29 State of Incorporation....................................................................................................................................... 29 Controlled Companies ...................................................................................................................................... 30 Exchange Listing............................................................................................................................................... 30 Industries ........................................................................................................................................................... 31 Foreign Private Issuers ...................................................................................................................................... 31
Board Size and Elections.............................................................................................................. 33
Size of Board.......................................................................................................................................................33 Staggered Board ................................................................................................................................................ 34 Changes to Board Size ...................................................................................................................................... 34 Board Vacancies ................................................................................................................................................ 34 Removal for Cause .............................................................................................................................................35 Advance Notice Provisions ................................................................................................................................35 Type of Voting ................................................................................................................................................... 36 Proxy Access ...................................................................................................................................................... 36
Separation of CEO and Board Chair Roles .................................................................................. 37 Board Committees and Corporate Governance ........................................................................... 38
Independent Directors on Committees ........................................................................................................... 38 "Phase-In" Provisions ....................................................................................................................................... 39 Financial Experts .............................................................................................................................................. 39 Code of Ethics.................................................................................................................................................... 40
Board Composition ...................................................................................................................... 40
Independent Directors...................................................................................................................................... 40 Gender Diversity ............................................................................................................................................... 40 Limitations on Board Tenure ........................................................................................................................... 40
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Limitations on Board Memberships ................................................................................................................. 41 Mandatory Retirement Age ............................................................................................................................... 41 Minimum Equity Ownership............................................................................................................................ 42
Board Compensation and Indemnification ................................................................................. 42 Compensation of Officers............................................................................................................. 43
Clawback Policies.............................................................................................................................................. 43 Use of Compensation Consultants ................................................................................................................... 44 Employment Agreements ................................................................................................................................. 44 Equity Compensation Plans ..............................................................................................................................45
Relationship with Shareholders................................................................................................... 47
Exclusive Forum Provisions ..............................................................................................................................47 Dual Classes of Stock .........................................................................................................................................47
Anti-Takeover Protections ........................................................................................................... 47
Shareholder Rights Plans ..................................................................................................................................47 Blank Check Preferred Stock............................................................................................................................ 48 Section 203 of the Delaware General Corporation Law ................................................................................. 48
PART III................................................................................................................................................... 49 Non-GAAP Financial Measures .............................................................................................................. 49 The Influence of Proxy Advisory Services............................................................................................... 50
Appendix A Emerging Growth Company IPOs January 1, 2013 December 31, 2016 .................A-1 Appendix B Emerging Growth Companies......................................................................................... B-1 Appendix C NYSE Versus Nasdaq Global Market Principal Quantitative Listing Requirements..C-1 Appendix D Summary of Differences Between the NYSE and Nasdaq Listing Standards................D-1 Appendix E Controlled Companies.....................................................................................................E-1
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A Survey and Related Resources
EGC CORPORATE GOVERNANCE PRACTICES
Introduction - A Survey and Related Resources
During 2016, there were relatively few companies that completed initial public offerings ("IPOs"). Some commentators attribute the dearth of IPOs in 2016 to volatility arising from, among other things, Brexit and the U.S. Presidential election. Others point to the continuing trend of successful companies remaining private longer and continuing to benefit from attractive valuations in private financing rounds without facing the burdens associated with becoming Securities and Exchange Commission ("SEC")-reporting companies. In this year's survey, we consider the characteristics of the emerging growth companies ("EGCs") that completed IPOs and the corporate governance, compensation and other practices adopted by them. Specifically, we examined the filings of (i) the approximately 680 EGCs (on an aggregated basis) that completed their IPOs in the period from January 1, 2013, through December 31, 2016, and (ii) the 100 EGCs (on a standalone basis) that completed their IPOs during the year ended December 31, 2016. The survey focuses on EGCs that have availed themselves of the provisions of Title I of the Jumpstart Our Business Startups Act ("JOBS Act"). This year is anticipated to be a more active year for IPOs. Our objective is to provide data that will be useful to you in assessing whether your company's current or proposed corporate governance practices are consistent with EGC market practice.
Under the JOBS Act, an issuer will remain an EGC until the earliest of: the last day of the fiscal year during which the issuer has total annual gross revenues of
$1 billion or more; the last day of the issuer's fiscal year following the fifth anniversary of the date of the first sale of
common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act") (for a debt-only issuer that never sells common equity pursuant to a Securities Act registration statement, this five-year period will not run); any date on which the issuer has, during the prior three-year period, issued more than $1 billion in non-convertible debt; or the date on which the issuer becomes a "Large Accelerated Filer," as defined in the rules of the SEC.
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PART I Aggregated Data for Period from January 1, 2013, through December 31, 2016
In this section, we present data on an aggregated basis, considering all of the EGC IPOs undertaken in the last four years, except as noted below for certain data presented for the last two years. Based on these companies, here are our key findings:
85.0% of non-controlled companies had a majority of independent directors at IPO pricing 69.9% had staggered or classified boards 61.5% separated the chief executive officer and board chair positions 67.9% had all independent directors on the audit, compensation, and nominating and corporate
governance committees upon completion of the IPO 93.5% had a "financial expert" on the audit committee at IPO pricing 42.7% had "exclusive forum" provisions in bylaws 71.9% had "super majority" shareholder voting provisions 39.4% allowed shareholders to take action by written consent under specified conditions 77.1% allowed for proxy access* 10.5% had clawback policies for executive officers* * Data presented for the period from January 1, 2015 through December 31, 2016. Below we discuss the observed trends in more detail.
The Filers
We identified the IPOs of 834 issuers in the period from January 1, 2013 through December 31, 2016, of which 110, or 13.2%, were not EGCs, and reviewed 680 EGC IPO filings.1 See Appendix A for a list of the EGC IPOs we reviewed and Appendix B for a summary of the benefits enjoyed by EGCs under the JOBS Act.2
1 We did not review any EGCs that were business development companies ("BDCs") because BDCs are subject to the additional requirements under the Investment Company Act of 1940, as amended. For additional information regarding BDCs, see our Frequently Asked Questions about Business Development Companies, http://www.mofo.com/files/Uploads/Images/FAQBusiness-Development-Companies.pdf. We also excluded 43 master limited partnership ("MLP") IPOs, as well as one IPO that priced but was withdrawn before closing. 2 For additional information, see our Frequently Asked Questions about Initial Public Offerings, http://www.mofo.com/files/Uploads/Images/FAQ-IPOs.pdf and The Short Field Guide to IPOs http://media.mofo.com/docs/pdf/the-short-field-guide-to-ipos.
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EGC Versus Non-EGC IPO Filings (By Frequency) Non-EGC; 110
EGC; 680
EGC Non-EGC
Figure 1: N=790.
Domestic Versus Foreign
Of the 680 EGCs, 154 were foreign private issuers ("FPIs").
An FPI is any foreign issuer (other than a foreign government), unless: (i) more than 50% of the issuer's outstanding voting securities are held directly or indirectly of record by residents of the United States; and (ii) any of the following applies: (x) the majority of the issuer's executive officers or directors are U.S. citizens or residents; (y) more than 50% of the issuer's assets are located in the United States; or (z) the issuer's business is administered principally in the United States. For additional information, see our Frequently Asked Questions about Foreign Private Issuers, available at https://goo.gl/zo1UyV.
Figure 2: N=680.
Domestic Issuers Versus FPIs
(By Frequency)
FPI; 154
Domestic Issuer; 526
Domestic Issuer FPI
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A Survey and Related Resources
State of Incorporation
Of the 526 domestic companies, 87.3% were incorporated in Delaware, followed by Maryland (5.1%), Texas (1.1%), and Nevada (1.0%).
State of Incorporation* (By Frequency)
Nevada; 5 Texas; 6
All Others; 29
Maryland; 27
Delaware; 459
Delaware Maryland Texas Nevada All Others
Figure 3: N=526. * Excludes FPIs.
All of the Maryland-incorporated issuers were real estate investment trusts ("REITs") because Maryland's corporate law has specific accommodations for REITs.3
Controlled Companies
Both the NYSE and the Nasdaq define a "controlled company" as one in which more than 50% of the voting power is controlled by an individual, a group, or another company. Many private equity-backed and venture capital-backed IPO issuers choose to be considered controlled companies, at least for a period following their IPOs while the sponsors remain significant holders. See Appendix E for additional information about controlled companies.
Controlled companies represented 16.9% of the 680 EGCs. The securities exchanges exempt controlled companies from certain requirements. To the extent "control" was relevant, we note that below.
3 For additional information, see our Frequently Asked Questions about Real Estate Investment Trusts http://www.mofo.com/files/Uploads/Images/FAQ_REIT.pdf and our Quick Guide to REIT IPOs http://media.mofo.com/docs/pdf/Quick-Guide-to-REIT-IPOs.
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Frequency of Controlled Companies
Controlled Company; 115
Non-Controlled Company; 565
Non-Controlled Company Controlled Company
Figure 4: N=680.
Thirteen of the controlled companies were controlled by non-U.S. parents, two of which were Chinese entities. Of the 115 controlled companies, four disclosed that they were controlled by venture capital funds, 58 disclosed that they were controlled by private equity funds, and three were controlled by both.
Exchange Listing
Of the 680 EGCs, all but two were listed on markets within the Nasdaq Stock Market ("Nasdaq") or the New York Stock Exchange ("NYSE").4
The following table analyzes the markets within the NYSE, Nasdaq or other markets on which the EGCs listed their equity securities or on which their equity securities were quoted.
U.S. Exchange Listing
(By Frequency)
72
3
NYSE
119 192
NASDAQ Global Select Market NASDAQ Global Market
166 191
NASDAQ Capital Market NYSE MKT OTC
Figure 5: N=680.
4 See Appendix C for a summary of the NYSE and the Nasdaq quantitative listing requirements and Appendix D for a summary description of the differences between the listing requirements of these securities exchanges.
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Industries
Of the 680 EGCs, based on SIC codes,5 24.9% were pharmaceutical preparations companies, 8.1% were prepackaged software companies, 7.4% were "blank check" companies, and 5.3% were biological products companies.
Industries by SIC Code
169 310
55
50
15 20
25 36
Pharmaceutical Preparations Prepackaged Software "Blank Check" Companies Biological Products Surgical & Medical Instruments/Apparatus State Commercial Banks
Figure 6: N=680.
Foreign Private Issuers
The largest percentage of FPI EGCs, 31.8%, were companies incorporated in the Cayman Islands. Approximately 6.5% were companies incorporated in Bermuda. These two jurisdictions are welcoming to foreign companies because they often offer favorable tax and other attributes unrelated to the underlying business operations of the issuer. Based on the sample surveyed, 30 of the 49 Cayman Islands issuers were based in China.
The next largest percentage of FPI EGCs, or 14.3%, were issuers incorporated in Israel, with their primary operations in Israel.
5 A registration statement filed with the SEC must identify the issuer's primary "Standard Industrial Classification," or SIC code, which is a four-digit number that classifies a company by its industry.
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FPI Country of Incorporation (By Frequency)
5 50
5 5
7 8 9
29 49
22 10
Cayman Islands Israel Bermuda Republic of the Marshall Islands United Kingdom British Virgin Islands Canada The Netherlands Belgium France All Others
Figure 7: N=154.
FPIs may choose to issue and sell their shares directly or through American Depositary Shares or Receipts ("ADRs").6 Of the 154 FPI EGC IPOs completed during the period, 61.0% issued common or ordinary shares directly to investors in the IPO, and the balance issued ADRs in their IPOs. Of the 59 FPIs that issued ADRs, 29 of the issuers were incorporated in the Cayman Islands. Approximately 26.0% of the FPI EGCs had securities that were listed on both a foreign exchange as well as a U.S. exchange.
Securities Issued by FPIs
(By Frequency)
Ordinary Shares and ADRs; 4
Warrants; 5
Ordinary Shares ADRs
ADRs; 55 Ordinary Shares; 90
Ordinary Shares and ADRs
Warrants
Figure 8: N=154.
6 An ADR is a negotiable instrument issued by a U.S. depository bank that represents an ownership interest in a specified number of securities that have been deposited with a custodian, typically in the issuer's home country. ADRs can represent one or more shares or a fraction of a share.
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ADR Issuers
(By Country of Incorporation)
All Others; 30 Cayman Islands; 29
Cayman Islands All Others
Figure 9: N=59. 9 8 7 6 5 4 3 2 1 0
FPI Dual-Listing by Exchange
(By Frequency)
Figure 10: N=42.* * Two companies' securities were listed on two foreign exchanges.
The U.S. securities laws permit FPIs to choose to follow U.S. or their own home country governance principles for most matters, although there are specific U.S. requirements relating to audit committees that all FPIs must satisfy. Among other exemptions available to FPIs, FPIs do not have to comply with U.S. proxy rules or ownership reporting pursuant to Sections 14 and 16, respectively, of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"). Of the 154 FPI EGCs that completed IPOs during the period, 94.8% chose to follow home country governance principles.
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Board Size and Elections
Size of Board
The size of the boards of directors ranged from two to 15 members. The number of directors also grew from first filing to closing of the IPO from an average of 6.22 at first filing to 6.69 at pricing to 7.13 at the consummation of the IPO. The growth of the board of directors over time probably reflects the liability and perhaps even reputational concerns that independent directors may have about joining a board of directors before an IPO is consummated.
Growth in Average Number of Directors
(From First Filing Through Closing)
6665657.......886264627
6.69 6.22
7.13
Average Number of Average Number of Average Number of
Directors at First Directors at Pricing Directors at Closing
Filing
Average Number of Directors
Figure 11: N=680.
Staggered Board
Over 69.9% of the issuers (based on 671 companies for which data was available) had a staggered or classified board of directors. That is in sharp contrast to the trend in Fortune 500 companies to eliminate staggered boards of directors in response to shareholder activism and concerns that classified boards entrench management and are a potent anti-takeover device.
Triennial Director Elections Versus Annual Director Elections (By Frequency)
Annual; 202 Triennial; 469
Triennial Annual
Figure 12: N=671.
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Changes to Board Size
Approximately 91.9% of the issuers provided authority for the board to change its size, and 8.1% did not.7
Authority to Change Board Size
(By Frequency)
No; 21
Yes; 238
Yes No
Figure 13: N=259.
Board Vacancies
Approximately 95.8% of the issuers provided authority for the board to fill director vacancies, and 4.2% did not.8
Authority to Fill Director Vacancies
(By Frequency)
No; 11
Yes; 252
Yes No
Figure 14: N=263.
7 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. Data was not available for seven companies. 8 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. Data was not available for three companies.
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Removal for Cause
Approximately 68.2% of the issuers provided that their directors could be removed only for "cause" (based on 647 companies for which data was available). Nearly 84.8% of the issuers gave the board the authority to fill vacancies and change the number of directors.
Advance Notice Provisions
Nearly 87.8% of the issuers had "advance notice" bylaw provisions that require shareholders to follow specific procedures and timelines in order to nominate potential board members.9
In order to provide for an orderly shareholder meeting, a corporation often designates in advance certain procedures to be followed for shareholders to initiate business and specify matters that are appropriate for consideration at the meeting. The procedures typically specify advance notice of intent to bring business before the annual meeting and the contents of the notice. Any business attempted to be brought for consideration at the annual meeting other than in compliance with the advance notice procedures would not be acted upon.
Advance Notice Provisions in Bylaws (By Frequency) Absent; 81
Present; 581
Present Absent
Figure 15: N=662.
Type of Voting
Approximately 65.5% of the issuers required a majority vote in order to elect directors in an uncontested election, consistent with the general market trend towards majority voting.10
9 Data was not available for 18 companies. 10 One Cayman Islands company disclosed that it is not required to hold general or annual shareholder meetings to
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Type of Voting for Director Elections (By Frequency)
Plurality Voting System; 234
Majority Voting System; 445
Majority Voting System Plurality Voting System
Figure 16: N=679.
Proxy Access
Proxy access generally provides shareholders that meet certain requirements (such as minimum stock ownership thresholds) the opportunity to nominate directors to a company's board and include those nominees in the company's proxy materials without going through a typical proxy contest. In August 2010, the SEC adopted a proxy access rule pursuant to the Dodd-Frank Act, which was later vacated by the U.S. Court of Appeals for the District of Columbia in July 2011. However, over the past several years the 3%/3year ownership thresholds (which would have applied under the SEC's proxy access rule) have become the unofficial standards by which proxy access threshold provisions (and subsequently, proxy access proposals) are typically evaluated.
Approximately 77.1% of the issuers had proxy access for director elections, and 22.9% did not.11
elect directors. 11 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs.
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Frequency of Proxy Access
No; 61 Yes; 205
Yes No
Figure 17: N=266.
Separation of CEO and Board Chair Roles
Based on 657 companies for which data was available, 61.5% separated the positions of chief executive officer and board chair.
Companies that do not separate the positions of chief executive officer and board chair must appoint an independent director to the position of lead director and the SEC requires companies to disclose the designation of a lead independent director. Of the 253 companies that did not separate the roles, 32.4% designated a lead independent director.
Frequency of Separation
Figure 18: N=657.
No; 253 Yes; 404
Yes No
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Designated Lead Independent Director (By Frequency)
No; 171
Yes; 82
Yes No
Figure 19: N=253.
Board Committees and Corporate Governance
The three standard committees audit, compensation, and nominating and governance were typically established prior to or upon consummation of the IPO. Audit committees are nearly universal at 99.9% (one Japanese company had a "board of statutory auditors"). Upon completion of the IPO, 86.3% of the 680 EGCs had a nominating and governance committee, and 95.9% had a compensation committee.
Types of Board Committees (By Frequency)
800
700
600 679 500
652
587
400
300
200
100 0 80
Audit Committee Compensation Nominating and Other Committees
Committee
Corporate
Governance
Committee
Number of Companies
Figure 20: N=680.
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Approximately 11.8% of the issuers also identified additional committees in their filings although there are no specific disclosure obligations relating to such committees. The filings reference a range of other committees, including strategic planning, various risk- and compliance-related, executive, finance and investment, conflicts, human resources, M&A, technology, and quality and innovation committees.
Independent Directors on Committees
Upon consummation of the IPO, approximately 67.9% of the companies had appointed all independent directors to the three standard committees, and 32.1% did not.12
All Independent Directors on Committees upon Completion of IPO
(By Frequency)
No; 218 Yes; 461
Yes No
Figure 21: N=679.
"Phase-In" Provisions
Of the 218 companies that did not have all independent directors on the three standard committees, 70.6% relied on the permitted "phase-in" provisions of the applicable securities exchange, and 29.4% did not.13
Reliance on "Phase-in" Provisions (By Frequency)
No; 64 Yes; 154
Yes No
Figure 22: N=218.
12 One company did not disclose information about the independence of members of board committees. 13 The balance of companies that did not have all independent directors on committees upon completion of the IPO were either FPIs relying on home corporate governance standards or controlled companies.
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Financial Experts
Of the 680 EGCs, 93.5% had a "financial expert" on the audit committee by pricing.
"Financial Expert" on Audit Committee at Pricing
(By Frequency) No; 44
Yes; 636
Yes No
Figure 23: N=680.
Code of Ethics
By consummation of the IPO, 88.1% of the companies we reviewed disclosed their code of ethics and/or code of business conduct, and 11.8% did not.14
Code of Ethics and/or Business Conduct Disclosed (By Frequency)
No; 81
Yes No
Yes; 599
Figure 24: N=680.
14 See Appendix D for a summary of differences between the NYSE and the Nasdaq listing requirements, including differences in requirements for a code of ethics and/or a code of business conduct.
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Board Composition
Independent Directors
At or immediately following IPO pricing, 85.0% of the non-controlled company issuers (based on 676 companies for which data was available) had a majority of independent directors.15 The average number of non-independent directors was 2.2 (based on 676 companies for which data was available). Interestingly, only 9.1% of the 680 issuers had the chief financial officer as a member of the board of directors.
Gender Diversity
Women made up on average approximately 9.1% of the board membership of EGCs that we reviewed,16 a little more than half of the overall 16% female board membership of S&P 1500 companies in 2014, as noted in the December 2015 U.S. Government Accountability Office ("GAO") report on the gender diversity of corporate boards.17 The GAO report indicated that small cap companies, such as EGCs, have the lowest representation of women on corporate boards, with a 12% representation rate for S&P SmallCap 600 companies (with an adjusted market capitalization of $400 million to $1.8 billion).
Limitations on Board Tenure
Nine companies, or approximately 3.4%, had limitations on board tenure, and 96.6% did not.18 Seven of these companies are Israeli companies following the Israeli Companies Law, which limits board tenure to three years. The other two companies were Dutch companies following the Dutch Corporate Governance Code, which limited supervisory board tenure to no more than 12 years.
Board Tenure Limitations
(By Frequency)
Yes; 9
No; 257
Yes No
Figure 25: N=266.
15 Generally, the NYSE and the Nasdaq standards for director independence are similar. See Appendix D for a summary of differences between the NYSE and the Nasdaq listing requirements. 16 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. 17 A copy of the GAO report is available at http://www.gao.gov/assets/680/674008.pdf. The GAO has not issued any updated statistics at this time. 18 Data presented for the period from January 1, 2015, through December 31, 2016, during which there 266 EGC IPOs.
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Limitations on Board Memberships
Only eight companies, or approximately 3.0%, imposed limits on the number of boards on which directors can serve.19 Seven of these companies are Israeli companies following the Israeli Companies Law, which prohibits a director of one company from being appointed as an external director of another company if such director is acting as an external director of the first company at such time. The eighth company did not permit any directors to serve on the board of any competitor in its industry.
Board Membership Limitations
(By Frequency)
Yes; 8
No; 258
Yes No
Figure 26: N=266.
Mandatory Retirement Age
Approximately 2.3% of issuers had a mandatory retirement age for directors and 97.7% did not.20 The mandatory retirement age ranged from 70 to 75 years of age. Additionally, all but one of these six companies was an FPI.
Mandatory Retirement Age for Directors
(By Frequency)
Yes; 6
No; 260
Yes No
Figure 27: N=266.
19 Data presented for the period from January 1, 2015, through December 31, 2016, during which there 266 EGC IPOs. 20 Data presented for the period from January 1, 2015, through December 31, 2016, during which there 266 EGC IPOs.
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Minimum Equity Ownership
None of the issuers had a minimum equity ownership requirement for directors and officers.21
Board Compensation and Indemnification
490 of the 680 companies, or 72.1%, provided for cash compensation to be paid to board members. 37 of the 680 companies indicated that they had not yet determined the compensation package for board members, and 153 of the 680 companies indicated that they did not provide for cash compensation to be paid to board members.
Approximately 60.4% of the 490 companies that provided for cash compensation to be paid to board members also provided for supplemental cash compensation to be paid to board members for membership on committees or attendance at board or committee meetings.
Approximately 75.3% of the 490 companies that provided for cash compensation to be paid to board members also provided for supplemental cash compensation for committee chairs.
Compensation Package for Board Members (By Frequency)
Committee Chairperson(s) Committee Membership/ Meeting Attendance
0%
75%
60% 20% 40% 60%
Supplemental cash compensation
80%
Figure 28: N=490.
Stock-based compensation consists of options, restricted stock and restricted stock units. Approximately 12.0% of the issuers (based on 609 companies for which data was available) reported providing stock-based compensation. The companies providing each type of stock-based compensation were roughly equal 45.5% provided for options, 32.2% provided for restricted stock and 34.7% provided for restricted stock units.
There were 464 companies that reported some form of stock-based compensation for directors, with approximately 71 companies reporting that they had not yet determined specific stock-based
21 Data presented for the period from January 1, 2015, through December 31, 2016, during which there 266 EGC IPOs.
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compensation awards. Approximately 11.0% of the companies provided additional stock-based compensation to directors serving on committees, with 5.3% of the companies providing additional compensation to directors serving as committee chairs.
Approximately 85.0% of issuers stated they entered or would enter into separate indemnification agreements for directors and officers, and 15.0% did not.22
Separate Indemnification Agreements
(By Frequency)
No; 40
Yes; 226
Yes No
Figure 29: N=266.
Compensation of Officers
Clawback Policies
Clawback policies require executive officers to pay back incentive-based compensation that they were awarded erroneously. In July 2015, the SEC proposed a new rule pursuant to which listed companies would be required to develop and enforce recovery policies that, in the event of an accounting restatement, "claw back" from current and former executive officers incentive-based compensation they would not have received based on the restatement. Recovery would be required without regard to fault. The proposed rule requires disclosure of listed companies' recovery policies and their actions under those policies. The SEC has not yet adopted a final rule regarding clawback policies.
Approximately 10.5% of issuers had clawback policies for executive officers, and 89.5% did not.23
22 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. 23 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs.
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Clawback Policies for Executive Officers
(By Frequency)
Yes; 28
Yes No
No; 238
Figure 30: N=266.
Use of Compensation Consultants
The SEC requires a listed company to disclose in its proxy statement the role of any compensation consultants in determining or recommending the amount or form of executive and director compensation, identify such consultants, state whether such consultants are engaged directly by the compensation committee (or persons performing the equivalent functions) or any other person, and describe the nature and scope of their assignment and the material elements of the instructions or directions given to the consultants with respect to the performance of their duties under the engagement. Provisions (and, subsequently, proxy access proposals) are typically evaluated.
35 companies, or 13.2%, disclosed the use of compensation consultants, and all but two of the companies disclosed the name of their compensation consultants in their IPO prospectuses.24
Disclosure of Use of Compensation Consultants
(By Frequency)
Yes; 35
No; 231
Yes No
Figure 31: N=266.
24 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. PAGE 21
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Employment Agreements
Approximately 77.1% of issuers adopted one or more employment or similar agreements for their executive officers, and 22.9% did not.25
Employment Agreements for Executive Officers
(By Frequency)
No; 61
Yes No
Yes; 205
Figure 32: N=266.
Equity Compensation Plans
Approximately 70.3% of issuers adopted a new equity compensation plan, and 29.7% did not.26 Of those EGCs that adopted a new equity compensation plan, 56.1% included an evergreen provision, 35.8% included a clawback provision, 36.9% permitted option or stock appreciation rights ("SAR") repricing without shareholder approval, and 1.1% included a stock ownership or retention requirement.
Adoption of New Equity Compensation Plans
(By Frequency)
No; 79 Yes; 187
Yes No
Figure 33: N=266.
25 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. 26 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs.
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A majority of issuers (77.1%) had outstanding equity compensation awards at the time of the IPO.27 We reviewed the number of outstanding awards at the time of the IPO as a percentage of the fully diluted number of common shares post-IPO. Of the 205 EGCs with outstanding equity compensation awards, 27.3% had outstanding awards of less than 5%, 27.8% had outstanding awards between 5% and 10%, 22.9% had outstanding awards between 10% and 15%, 9.8% had outstanding awards between 15% and 20%, 9.8% had outstanding awards between 20% and 50%, and 2.4% had outstanding awards over 50%.
Outstanding Equity Compensation Awards (By Frequency)
70
60 50 61 56 57 40 30 20 10
47 20 20
5
0
None Less than 5% - 10% 10% - 15% 15% - 20% 20% - 50% Over 50% 5%
Number of Companies
Figure 34: N=266.
We also reviewed the number of shares reserved for issuance under the new equity compensation plan adopted as a percentage of the fully diluted number of common shares post-IPO. Of the 179 EGCs that reserved shares for issuance under the new equity compensation plan adopted,28 21.8% had shares reserved for issuance of less than 5%, 39.7% had shares reserved for issuance between 5% and 10%, 26.8% had shares reserved for issuance between 10% and 15%, 8.9% had shares reserved for issuance between 15% and 20%, 2.2% had shares reserved for issuance between 20% and 50%, and 0.6% had shares reserved for issuance over 50%. Additionally, three of the 187 companies that adopted a new equity compensation plan had no shares reserved for issuance under such plans.
27 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. 28 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs.
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Shares Reserved for Issuance Under New Equity
Compensation Plan
(By Frequency)
80
70
60 71
50 40 48
Number of Companies
30 39
20
10
16 4
1
0
Less than 5% - 10% 10% - 15% 15% - 20% 20% - 50% Over 50%
5%
Figure 35: N=179.
In addition, we reviewed the number of outstanding awards at the time of the IPO, combined with the number of shares reserved for issuance under the new equity compensation plan adopted, as a percentage of the fully diluted number of common shares post-IPO. Of the 266 EGCs,29 23.7% had outstanding awards of less than 5%, 14.3% had outstanding awards between 5% and 10%, 19.2% had outstanding awards between 10% and 15%, 15.4% had outstanding awards between 15% and 20%, 24.8% had outstanding awards between 20% and 50%, and 2.6% had outstanding awards over 50%. 42 of the 266 companies, or 15.8%, had neither any outstanding equity compensation awards nor any shares reserved for issuance under a new equity compensation plan adopted.
Outstanding Equity Compensation Awards (Combined with Shares Reserved)
(By Frequency) 70 66
60
50 40 30 42
51 41 38
Number of Companies
20 10 21
7
0
None Less than 5% - 10% 10% - 15% - 20% - Over 50% 5% 15% 20% 50%
Figure 36: N=266.
29 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. PAGE 24
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Relationship with Shareholders
In addition to the majority voting provision for uncontested director elections, the EGC filings we reviewed disclosed other provisions relating to the relationships between the EGCs and their shareholders.
Exclusive Forum Provisions
Nearly three-quarters (71.9%) of the issuers had super-majority voting requirements for certain actions and transactions. Approximately 39.4% of the issuers permitted shareholders to take action by written consent (based on 676 companies for which data was available). Less than one-third (28.5%) permitted shareholders to call special meetings of shareholders with the percentage required to call the meeting varying from 5% to 51%. Last, in light of case law upholding exclusive forum provisions for litigation by shareholders if the requirement is effective before the acquisition of shares,30 approximately 42.7% of the issuers included exclusive forum provisions in their bylaws.
Exclusive Forum Provision in Bylaws (By Frequency)
Absent; 390 Present; 290
Present Absent
Figure 37: N=680.
Dual Classes of Stock
One hundred eighteen of the EGCs we reviewed had dual classes of common stock, including 12 issuers that had more than two classes of common stock. The primary reason for dual classes appears to be as a means for insiders to maintain control. In dual class structures, the classes differed only by the number of votes per share, although in some cases a class might not be entitled to certain economic benefits, such as dividend payments. Thirty-four of the 118 dual-class EGCs were FPIs.
30 Boilermakers Local 154 Retirement Fund v. Chevron Corp., No. 7220-CS (Del. Ch. June 25, 2013). PAGE 25
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Anti-Takeover Protections
Shareholder Rights Plans
A typical shareholder rights plan, or poison pill, grants the existing shareholders of a company (other than a hostile acquiror) the right to acquire a large number of newly issued shares of the company (and of the acquiror if the target company is not the surviving entity in the transaction) at a significant discount to fair market value, if the acquiror becomes an owner of more than a preset amount (typically 10-20%) of the target company's stock without prior board approval. If "blank check" preferred stock can be issued by a company, a shareholder rights plan can usually be adopted at a later time rather than at the IPO.
Approximately 89.8% of issuers had a shareholder rights plan, and 10.2% did not.31
Shareholder Rights Plans
(By Frequency)
No; 27 Yes; 239
Yes No
Figure 38: N=266.
Blank Check Preferred Stock
Five hundred and five of the EGCs we reviewed, or approximately 74.3%, had the authority to issue "blank check" preferred stock, which may be issued with super voting, special approval, dividend or other rights or preferences without a shareholder vote. "Blank check" preferred stock often is used as a protective measure in the context of a hostile take-over attempt by permitting the adoption of a shareholder rights plan at that time.
Section 203 of the Delaware General Corporation Law
Section 203 of the Delaware General Corporation Law ("Section 203") prohibits a Delaware corporation from engaging in a business combination with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder.
31 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs.
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The term "business combination" is broadly defined to include mergers, consolidations, sales and other dispositions of assets having an aggregate market value equal to 10% or more of the consolidated assets of the corporation and other specified transactions resulting in financial benefits to the interested stockholder. Under Section 203, an interested stockholder generally is defined as a person who, together with affiliates and associates, owns (or within the three prior years did own) 15% or more of the corporation's outstanding voting stock.
Of the 195 EGCs that were not FPIs,32 73.8% included Section 203 disclosure that they were subject to Section 203 in their IPO prospectuses, and 26.2% did not.
DGCL Section 203 Disclosure
(By Frequency)
No; 51 Yes; 144
Yes No
Figure 39: N=195.
32 Data presented for the period from January 1, 2015, through December 31, 2016, during which there were 266 EGC IPOs. PAGE 27
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PART II
Aggregated Data for Year Ended December 31, 2016
The following section of this review looks only at the class of 2016 EGC IPOs on a standalone basis. Based on the companies reviewed, here are our key findings:
77.4% of non-controlled companies had a majority of independent directors at IPO pricing 65.0% had staggered or classified boards 58.0% separated the chief executive officer and board chair positions 67.0% had all independent directors on the key audit, compensation, and nominating and
corporate governance committees upon completion of the IPO 96.0% had a "financial expert" on the audit committee at IPO pricing 59.0% had "exclusive forum" provisions in bylaws 63.0% had "super majority" shareholder voting provisions 19.0% allowed shareholders to take action by written consent under specified conditions 76.0% allowed for proxy access 15.0% had clawback policies for executive officers
Below we discuss the observed trends in more detail and provide resources intended to assist companies planning their IPOs.
The Filers
We identified the IPOs of 117 issuers in the period from January 1, 2016 through December 31, 2016, of which 16, or 13.7%, were not EGCs and reviewed 100 EGC IPO filings.33 See Appendix A for a list of the EGC IPOs we reviewed and Appendix B for a summary of the benefits enjoyed by EGCs under the JOBS Act.
EGC Versus Non-EGC IPO Filings (By Frequency)
Non-EGC; 16 EGC; 100
EGC Non-EGC
Figure 40: N=116.
33 We did not review any EGCs that were BDCs, and we also excluded one MLP IPO. PAGE 28
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Domestic Versus Foreign
Of the 100 EGCs, 26 were FPIs.
Domestic Issuers Versus FPIs
(By Frequency)
FPI; 26 Domestic Issuer; 74
Domestic Issuer FPI
Figure 41: N=100.
State of Incorporation
Of the 74 domestic companies, 91.9% were incorporated in Delaware, followed by Nevada (2.7%) and Tennessee (2.7%).
State of Incorporation* (By Frequency)
Nevada; 2
Maryland; 1 Illinois; 1
Tennesse; 2
Delaware; 68
Delaware Tennesse Nevada Maryland Illinois
Figure 42: N=74. * Excludes FPIs.
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Controlled Companies
Controlled companies represented 16.0% of the 100 EGCs.
Frequency of Controlled Companies
Controlled Company; 16
Non-Controlled Company; 84
Non-Controlled Company Controlled Company
Figure 43: N=100.
Three of the controlled companies were controlled by non-U.S. parents. Of the 16 controlled companies, six disclosed that they were controlled by private equity funds and one disclosed that it was controlled by both a private equity fund and a venture capital fund.
Exchange Listing
Of the 100 EGCs, all listed on markets within the Nasdaq or the NYSE.
The following table analyzes the markets within the NYSE and the Nasdaq or other markets on which the EGCs listed their equity securities or on which their equity securities were quoted.
U.S. Exchange Listing (By Frequency)
1
18 29
NASDAQ Global Select Market NASDAQ Global Market
25 27
NASDAQ Capital Market NYSE NYSE MKT
Figure 44: N=100.
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Industries
Of the 100 EGCs, based on SIC codes, 23.0% were pharmaceutical companies, 8.0% were software companies, 7.0% were biological products companies, and 13.0% were "blank check" companies.
Industries by SIC Code
38
2 4
23
13 8 7 5
Pharmaceuticals "Blank Check" Companies Software Biological Products Surgical & Medical Instruments/Apparatus State Commercial Banks Computer Programming/Data Processing Other
Figure 45: N=100.
Foreign Private Issuers
The largest percentage of FPI EGCs, or 46.2%, were companies incorporated in the Cayman Islands. Based on the sample surveyed, seven of the 12 Cayman Islands issuers were based in China. The next largest percentages were incorporated in Bermuda, The Netherlands, the Republic of the Marshall Islands and Switzerland at 7.7% each.
Figure 46: N=26.
FPI Country of Incorporation (By Frequency)
1 1 1 1
2
11
12
2 2
2
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Cayman Islands Switzerland Bermuda Marshall Islands The Netherlands Israel United Kingdom British Virgin Islands France Mauritius Belgium
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Of the 26 FPI EGCs, 42.3% issued common or ordinary shares directly to investors in the IPO, 42.3% issued ADRs, 3.8% issued both common or ordinary shares and ADRs, and 11.5% issued other types of securities such as warrants. Of the 12 FPIs that issued ADRs, seven were incorporated in the Cayman Islands. Approximately 12.0% of the FPI EGCs were listed on both a foreign exchange as well as a U.S. exchange. Of the 12 FPI EGCs that issued ADRs, two were listed on the Nasdaq Capital Market, two were listed on the Nasdaq Global Market, six were listed on the Nasdaq Global Select Market and two were listed on the NYSE.
Securities Issued by FPIs
(By Frequency)
Warrants; 3 Ordinary Shares
and ADRs; 1
Ordinary Shares; 11
ADRs; 11
Ordinary Shares ADRs Ordinary Shares and ADRs Warrants
Figure 47: N=26.
ADR Issuers
(By Country of Incorporation)
All Others; 6 Cayman Islands; 6
Cayman Islands All Others
Figure 48: N=12.
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FPI Dual-Listing by Exchange
(By Frequency) 1.2
1
0.8
0.6
0.4
0.2
0
TASE
London Stock Exchange Euronext Brussels
Bermuda Stock
Exchange
Figure 49: N=4.
Of the 26 FPI EGCs, 92.3% chose to follow home country governance principles.
Board Size and Elections
Size of Board
The size of the boards of directors ranged from one to 12 members. The number of directors also grew from first filing to closing of the IPO from an average of 6.39 at first filing to 6.58 at pricing to 6.91 at closing of the IPO.
Growth in Average Number of Directors
(From First Filing Through Closing)
7
6.9
6.8
6.7
6.6 6.5
6.58
6.4 6.3
6.39
6.2
6.1
Average Number of Average Number of
Directors at First Filing Directors at Pricing
6.91
Average Number of Directors at Closing
Average Number of Directors
Figure 50: N=100.
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Staggered Board
Of the 100 EGCs, 65.0% of the issuers had a staggered or classified board of directors.
Triennial Director Elections vs. Annual Director Elections
(By Frequency)
Annual; 35 Triennial; 65
Triennial Annual
Figure 51: N=100.
Changes to Board Size
Of the 100 EGCs, 92.0% provided authority for the board to change its size, and 8.0% did not.
Authority to Change Board Size
(By Frequency)
No; 8
Yes No
Yes; 92
Figure 52: N=100.
Board Vacancies
Of the 100 EGCs, 96.0% provided authority for the board to fill director vacancies, and 4.0% did not.
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Authority to Fill Director Vacancies
(By Frequency)
No; 4
Yes; 96
Yes No
Figure 53: N=100.
Removal for Cause
Of the 100 EGCs, 65.0% provided that directors could be removed only for "cause." 96.0% of the issuers gave the board the authority to fill vacancies, and 92.0% of the issuers gave the board the authority to change the number of directors.
Advance Notice Provisions
Of the 100 EGCs, 88.0% had "advance notice" bylaw provisions that require shareholders to follow specific procedures and timelines in order to nominate potential board members.
Advance Notice Provisions in Bylaws
Absent; 12
Present; 88
Present Absent
Figure 54: N=100.
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Type of Voting
Of the 100 EGCs, 49.0% required a majority vote in order to elect directors in an uncontested election.
Type of Voting for Director Elections (By Frequency)
Plurality Voting System; 51
Majority Voting System; 49
Majority Voting System Plurality Voting System
Figure 55: N=100.
Proxy Access
Of the 100 EGCs, 76.0% had proxy access for director nominations, and 24.0% did not.
Frequency of Proxy Access
No; 24 Yes; 76
Yes No
Figure 56: N=100.
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Separation of CEO and Board Chair Roles
Based on 100 companies for which data was available, 58.0% separated the positions of chief executive officer and board chair. Of the 42 companies that did not separate the roles, 23.8% designated a lead independent director.
Frequency of Separation
Figure 57: N=100.
No; 42 Yes; 58
Yes No
Designated Lead Independent Director (By Frequency)
Designated Lead Independent Director;
10
No Designated Lead Independent Director;
32
Designated Lead Independent Director
No Designated Lead Independent Director
Figure 58: N=42.
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Board Committees and Corporate Governance
The three standard committees audit, compensation, and nominating and governance were typically established prior to or upon completion of the IPO. Audit committees are universal at 100.0%. Upon completion of the IPO, 82.0% of the 100 EGCs had a nominating and governance committee, and 97.0% had a compensation committee. Of the 100 EGCs, 13.0% also identified additional committees in their filings, although there are no specific disclosure obligations relating to such committees.
Types of Board Committees (By Frequency) 120
100
80 100
97
82
60
40
20
0 13
Audit Committee Compensation Nominating and Other Committees
Committee
Corporate
Governance
Committee
Number of Companies
Figure 59: N=100.
Similar to prior years, in 2016, the filings referenced a large range of committees, including strategic planning, various risk- and compliance-related, executive, finance and investment, conflicts, asset liability management, and research and development steering committees.
Independent Directors on Committees
Upon completion of the IPO, 67.0% of the companies had appointed all independent directors to the three standard committees, and 33.0% did not.
All Independent Directors on Committees upon Completion of IPO
(By Frequency)
No; 33 Yes; 67
Yes No
Figure 60: N=100.
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"Phase-In" Provisions
Of the 33 companies that did not have all independent directors on the three standard committees, 45.5% relied on the permitted "phase-in" provisions of the applicable exchange.34 Out of all 100 companies, 26% reported relying on "phase-in" provisions to comply with applicable exchange requirements.
Reliance on "Phase-in" Provisions (By Frequency)
Yes; 26 No; 74
Yes No
Figure 61: N=100.
Financial Experts
Of the 100 EGCs, 96.0% had a "financial expert" on the audit committee by pricing.
"Financial Expert" on Audit Committee at Pricing
(By Frequency)
No; 4
Yes; 96
Yes No
Figure 62: N=100.
34 The balance of companies that did not have all independent directors on committees upon completion of the IPO were either FPIs relying on home corporate governance standards or controlled companies.
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Code of Ethics
By completion of the IPO, 89.0% of the companies reviewed disclosed their code of ethics and/or code of business conduct, and 11.0% did not.
Code of Ethics and/or Business Conduct Disclosed (By Frequency) No; 11
Yes No
Yes; 89
Figure 63: N=100.
Board Composition Independent Directors
At or immediately following the pricing of the IPO, 77.4% of the non-controlled company issuers (65 of 84 non-controlled companies) had a majority of independent directors. The average number of non-independent directors was 1.6, and only 12.0% of the 100 issuers had the chief financial officer as a member of the board of directors.
Gender Diversity
Women made up on average approximately 11.3% of the board membership of EGCs that went public in 2016.
Limitations on Board Tenure
Of the 100 EGCs, 3.0% had limitations on board tenure, and 97.0% did not.
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Board Tenure Limitations
(By Frequency)
Yes; 3 No; 97
Yes No
Figure 64: N=100.
Limitations on Board Memberships
Of the 100 EGCs, 2.0% imposed limits on the number of boards on which directors can serve, and 98.0% did not.
Board Membership Limitations
(By Frequency)
Yes; 2
No; 98
Yes No
Figure 65: N=100.
Mandatory Retirement Age
Of the 100 EGCs, 3.0% had a mandatory retirement age for directors, and 97.0% did not.
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Mandatory Retirement Age for Directors
(By Frequency)
Yes; 3
No; 97
Yes No
Figure 66: N=100.
Minimum Equity Ownership
Of the 100 EGCs, none had a minimum equity ownership requirement for directors and officers.
Board Compensation and Indemnification
Almost three-quarters (71.3%) of issuers (based on 94 companies that had determined their director compensation plans) provided for cash compensation to be paid to board members. Six of the 100 companies indicated that they had not yet determined the compensation package for board members. Approximately 62.7% (42 of the 67 companies that provided for cash compensation to be paid to board members) provided for supplemental cash compensation to be paid to board members for membership on committees or attendance at board or committee meetings. Approximately 61.2% (41 of the 67 companies that provided for cash compensation to be paid to board members) provided for supplemental cash compensation for committee chairs.
Compensation Package for Board Members (By Frequency)
Committee Chairperson(s)
Committee Membership/
Meeting Attendance
0%
Figure 67: N=67.
61%
63%
20% 40% 60% 80% Supplemental cash compensation
100%
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Approximately 15.6% of the companies reported providing stock-based compensation. The majority of companies provided for options as the preferred type of stock-based compensation 54.4% provided for options, 23.3% provided for restricted stock, and 32.2% provided for restricted stock units.
There were 62 companies that reported some form of stock-based compensation, with ten companies reporting that they had not yet determined specific stock-based compensation awards. Approximately 1.1% of the companies provided additional stock-based compensation to directors serving on committees, with 2.2% of the companies providing additional compensation to directors serving as committee chairs.
Of the 100 EGCs, 84.0% stated they entered or would enter into separate indemnification agreements for directors and officers, and 16.0% did not.
Separate Indemnification Agreements
(By Frequency)
No; 16
Yes No
Yes; 84
Figure 68: N=100.
Compensation of Officers
Clawback Policies
Of the 100 EGCs, 15.0% had clawback policies for executive officers, and 85.0% did not.
Clawback Policies for Executive Officers
(By Frequency)
Yes; 15 No; 85
Yes No
Figure 69: N=100.
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Use of Compensation Consultants
Of the 100 EGCs, 6.0% disclosed the use of a compensation consultants in their IPO prospectuses, and 5.0% disclosed the name of their compensation consultants in their IPO prospectuses.
Disclosure of Use of a Compensation Consultants
(By Frequency)
Yes; 6
Yes No
No; 94
Figure 70: N=100.
Employment Agreements
Of the 100 EGCs, 78.0% adopted one or more employment or similar agreements for their executive officers, and 22.0% did not.
Employment Agreements for Executive Officers
(By Frequency)
No; 22 Yes; 78
Yes No
Figure 71: N=100.
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Equity Compensation Plans
Of the 100 EGCs, 77.0% adopted a new equity compensation plan, and 23.0% did not. Of those EGCs that adopted a new equity compensation plan, 51.9% included an evergreen provision, 35.1% included a clawback provision, 40.3% permitted option or SAR repricing without shareholder approval, and 1.3% included a stock ownership or retention requirement.
Adoption of New Equity Compensation Plans
(By Frequency)
No; 23 Yes; 77
Yes No
Figure 72: N=100.
Of the 100 EGCs, a majority (80.0%) had outstanding equity compensation awards at the time of the IPO. We reviewed the number of outstanding awards at the time of the IPO as a percentage of the fully diluted number of common shares post-IPO. Of the 80 EGCs with outstanding equity compensation awards, 23.8% had outstanding awards of less than 5%, 26.2% had outstanding awards between 5% and 10%, 30.0% had outstanding awards between 10% and 15%, 8.8% had outstanding awards between 15% and 20%, 10.0% had outstanding awards between 20% and 50%, and 1.2% had outstanding awards over 50%.
Outstanding Equity Compensation Awards
(By Frequency) 30
25
20 15
20
19
21
24
10
7
8
Number of Companies
51 0
None Less than 5% - 10% 10% - 15% - 20% - Over 50% 5% 15% 20% 50%
Figure 73: N=100.
We also reviewed the number of shares reserved for issuance under the new equity compensation plan adopted as a percentage of the fully diluted number of common shares post-IPO. Of the 72 EGCs
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with shares reserved for issuance under a new equity compensation plan, 25.0% had shares reserved for issuance of less than 5%, 36.1% had shares reserved for issuance between 5% and 10%, 25.0% had shares reserved for issuance between 10% and 15%, 9.7% had shares reserved for issuance between 15% and 20%, 2.8% had shares reserved for issuance between 20% and 50%, and 1.4% had shares reserved for issuance over 50%.
Shares Reserved for Issuance
(By Frequency) 30
25 20
26
15 18
18
10
5 721
0
Less than 5% - 10% 10% - 15% 15% - 20% 20% - 50% Over 50% 5%
Number of Companies
Figure 74: N=72.
In addition, we reviewed the number of outstanding awards at the time of the IPO, combined with the number of shares reserved for issuance under the new equity compensation plan adopted, as a percentage of the fully diluted number of common shares post-IPO. Of the 100 EGCs, 24.0% had outstanding awards of less than 5%, 12.0% had outstanding awards between 5% and 10%, 18.0% had outstanding awards between 10% and 15%, 14.0% had outstanding awards between 15% and 20%, 30.0% had outstanding awards between 20% and 50%, and 2.0% had outstanding awards over 50%. 16 of the 100 companies, or 16.0%, had neither any outstanding equity compensation awards nor any shares reserved for issuance under a new equity compensation plan.
Outstanding Equity Compensation Awards (Combined with Shares Reserved)
(By Frequency)
35 30 30
25
20 Number of Companies
15 10 16
18 14 12
58 0
2
None Less than 5% - 10% 10% - 15%15% - 20%20% - 50% Over 50%
5%
Figure 75: N=100.
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Relationship with Shareholders
Exclusive Forum Provisions
In addition to the majority voting provision for uncontested director elections, the EGC filings revealed other provisions affecting the relationships between the EGCs and their stockholders. 63.0% of the issuers had super-majority voting requirements for certain actions and transactions. 19.0% of the issuers permitted stockholders to take action by written consent, and 9.0% permitted stockholders to call special meetings of stockholders with the percentage required to call the meeting varying from 5% to 51%. Last, slightly more than one-half of the issuers (59.0%) included exclusive forum provisions in their bylaws.
Exclusive Forum Provision in Bylaws (By Frequency)
Absent; 41 Present; 59
Present Absent
Figure 76: N=100.
Dual Classes of Stock
Twenty-six of the EGCs we reviewed had dual classes of common stock, including three issuers that had more than two classes of common stock. Eleven of the dual-class EGCs were FPIs.
Anti-Takeover Protections
Shareholder Rights Plans
Of the 100 EGCs, 8.0% had a shareholder rights plan, and 92.0% did not.
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Shareholder Rights Plans
(By Frequency)
Yes; 8
No; 92
Yes No
Figure 77: N=100.
Blank Check Preferred Stock
Of the 100 EGCs, 91.0% had the authority to issue "blank check" preferred stock.
Section 203 of the Delaware General Corporation Law
Of the 74 EGCs incorporated in the United States, 78.4% included Section 203 disclosure in their IPO prospectuses, and 21.6% did not.
DGCL Section 203 Disclosure
(By Frequency)
No; 16 Yes; 58
Yes No
Figure 78: N=74.
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PART III
The Use of Non-GAAP Financial Measures
Non-GAAP financial measures include, among others, earnings before interest, tax, depreciation and amortization ("EBITDA"), Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Free Cash Flow, Contribution Margin, and Billings. Recently, the staff of the SEC's Division of Corporation Finance (the "SEC Staff"), has focused on the use of non-GAAP financial measures by registrants in their SEC filings. In May 2016, the SEC Staff issued updated Compliance and Disclosure Interpretations, or C&DIs, on the use of nonGAAP financial measures, which provide further guidance on Regulation G under the Securities Act and Item 10(e) of Regulation S-K under the Securities Act, the two principal rules that address the use of non-GAAP financial measures. The SEC Staff has also issued a significant number of comment letters on the use of non-GAAP financial measures since the issuance of the updated C&DIs. For more information, see our Practice Pointers on Non-GAAP Financial Measures, available at https://goo.gl/zZiI0n.
During the period from January 1, 2015, through December 31, 2016, of the 234 EGCs that prepared their financial statements using U.S. GAAP, 42.3% included non-GAAP financial measures in their IPO prospectuses, and 57.7% did not.
Use of Non-GAAP Financial Measures (2015 and 2016)
(By Frequency)
Yes; 99 No; 135
Yes No
Figure 79: N=234.
During the year ended December 31, 2016, of the 89 EGCs that prepared their financial statements using U.S. GAAP, 46.1% included non-GAAP financial measures in their IPO prospectuses, and 53.9% did not.
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Use of Non-GAAP Financial Measures (2016)
(By Frequency)
No; 48
Yes; 41
Yes No
Figure 80: N=89.
The Influence of Proxy Advisory Services
When designing corporate governance policies and procedures, EGCs must carefully consider the voting policies of institutional investors and the proxy advisory services that provide voting advice to institutional investors. The two principal proxy advisory services are Institutional Shareholder Services Inc. ("ISS") and Glass Lewis & Co. ("Glass Lewis"). ISS is the most influential proxy advisory service, typically influencing 20 percent to 30 percent of the votes at a typical annual meeting. Glass Lewis, on the other hand, has much less influence on the outcome of voting.
Both ISS and Glass Lewis make voting recommendations in accordance with voting guidelines, which provide a roadmap as to how the proxy advisory service will vote on a particular matter. These voting guidelines change over time, as the proxy advisory services seek to improve their approach to particular issues or to add guidelines for dealing with new issues. ISS and Glass Lewis have adopted specific voting guidelines addressing, e.g., voting on: the election of directors; advisory votes on executive compensation; the ratification of auditors; the approval of compensation plans; changes to the certificate of incorporation or bylaws; and shareholder proposals. In many cases, EGCs need to consider what governance policies and procedures should be implemented prior to going public in order to avoid seeking a shareholder vote after going public when the proxy advisory services and institutional investors may be opposed to a particular provision, as well as the impact of governance policies and procedures adopted prior to going public that may negatively impact the EGC's governance profile, leading to potential negative vote recommendations by the proxy advisory services on a wide range of issues.
PAGE 50
A Survey and Related Resources
APPENDIX A
EMERGING GROWTH COMPANY IPOs
JANUARY 1, 2013 DECEMBER 31, 2016 (IN ALPHABETICAL ORDER)
NAME
1347 Capital Corp. 1347 Property Insurance Holdings, Inc. 2U, Inc. 500.com Limited 58.com Inc. A10 Networks, Inc. AAC Holdings, Inc. Abengoa Yield plc Acacia Communications, Inc. Acceleron Pharma Inc. Achaogen, Inc. AC Immune SA Aclaris Therapeutics, Inc. Adamas Pharmaceuticals, Inc. Adaptimmune Therapeutics plc Adeptus Health Inc. Adesto Technologies Corporation ADMA Biologics, Inc. Aduro Biotech, Inc. Advanced Accelerator Applications S.A. Aeglea BioTherapeutics, Inc. Aerie Pharmaceuticals, Inc. Aerohive Networks, Inc. Agile Therapeutics, Inc. Agios Pharmaceuticals, Inc. Aimmune Therapeutics, Inc. Airgain, Inc. Akebia Therapeutics, Inc. Akers Biosciences, Inc. Alarm.com Holdings, Inc.
OFFERING DATE 7/15/2014 3/31/2014 3/27/2014
11/21/2013 10/31/2013 3/21/2014 10/1/2014 6/12/2014 5/12/2016 9/18/2013 3/11/2014 9/22/2016 10/6/2015
4/9/2014 5/5/2015 6/24/2014 10/26/2015 10/16/2013 4/14/2015 11/10/2015 4/6/2016 10/24/2013 3/27/2014 5/22/2014 7/23/2013 8/5/2015 8/11/2016 3/19/2014 1/23/2014 6/25/2015
OFFERING SIZE ($M)
$40.0 $15.1 $119.3 $75.2 $187.0 $187.5 $75.0 $720.7 $103.5 $83.7 $72.0 $66.0 $55.0 $48.0 $191.3 $107.8 $25.0 $28.5 $119.0 $75.0 $50.0 $67.2 $75.0 $55.0 $106.0 $160.0 $12.0 $100.0 $15.0 $98.0
U.S. LISTING
Nasdaq CM Nasdaq CM Nasdaq GSM NYSE NYSE NYSE NYSE Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GM Nasdaq GSM Nasdaq GM Nasdaq GSM NYSE Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq GM NYSE Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq CM Nasdaq GM Nasdaq CM Nasdaq GSM
INCORPORATION
Delaware Delaware Delaware Cayman Islands Cayman Islands Delaware Nevada United Kingdom Delaware Delaware Delaware Switzerland Delaware Delaware United Kingdom Delaware Delaware Delaware Delaware France Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware New Jersey Delaware
PAGE A-1
SIC CODE
6770 6331 7372 7990 7370 3576 8093 4911 3674 2836 2834 2834 2834 2834 2836 8060 3674 2836 2834 2834 2834 2836 7373 2834 2834 2834 3663 2834 2835 7372
A Survey and Related Resources
Alcobra Ltd. Alder BioPharmaceuticals, Inc. Aldeyra Therapeutics, Inc. Allegiance Bancshares, Inc. Amber Road, Inc. Ambit Biosciences Corporation Amedica Corporation American Farmland Company American Homes 4 Rent American Renal Associates Holdings, Inc. American Residential Properties, Inc. Amphastar Pharmaceuticals, Inc. Amplify Snack Brands, Inc. Andina Acquisition Corp. II Antero Resources Corporation Apigee Corporation AppFolio, Inc. Applied Genetic Technologies Corporation Applied Optoelectronics, Inc. Apptio, Inc. Aqua Metals, Inc. AquaVenture Holdings LLC Aquinox Pharmaceuticals, Inc. AR Capital Acquisition Corp. Aratana Therapeutics, Inc. Arcadia Biosciences, Inc. Ardelyx, Inc. Ardmore Shipping Corporation Argos Therapeutics, Inc. Arista Networks, Inc. Armada Hoffler Properties, Inc. Arowana Inc. Artisan Partners Asset Management Inc. Ascendis Pharma A/S Aspen Aerogels, Inc. Atara Biotherapeutics, Inc. Athlon Energy Inc.
5/21/2013 5/7/2014 5/1/2014 10/7/2015 3/20/2014 5/15/2013 2/12/2014 10/19/2015 7/31/2013 4/20/2016 5/8/2013 6/24/2014 8/4/2015 11/24/2015 10/9/2013 4/23/2015 6/25/2015 3/26/2014 9/25/2013 9/22/2016 7/30/2015 10/5/2016 3/6/2014 10/1/2014 6/26/2013 5/14/2015 6/18/2014 7/31/2014 2/6/2014 6/5/2014 5/7/2013 4/30/2015 3/6/2013 1/27/2015 6/12/2014 10/15/2014 8/1/2013
$25.0 $80.0 $12.0 $54.6 $96.1 $65.0 $20.1 $48.0 $705.9 $165.0 $287.7 $56.0 $270.0 $40.0 $1,571.9 $87.0 $74.4 $50.0 $36.0 $96.0 $33.0 $117.0 $46.2 $240.0 $34.5 $65.6 $60.0 $140.0 $45.0 $225.8 $190.0 $72.0 $331.6 $108.0 $82.5 $55.0 $315.8
Nasdaq GM Nasdaq GM Nasdaq CM Nasdaq GM NYSE Nasdaq GM Nasdaq CM NYSE MKT NYSE NYSE NYSE Nasdaq GSM NYSE Nasdaq CM NYSE Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GM Nasdaq GM Nasdaq CM NYSE Nasdaq GM Nasdaq CM Nasdaq GM Nasdaq GM Nasdaq GM NYSE Nasdaq GM NYSE NYSE Nasdaq CM NYSE Nasdaq GSM NYSE Nasdaq GSM NYSE
Israel Delaware Delaware Texas Delaware Delaware Delaware Maryland Maryland Delaware Maryland Delaware Delaware Cayman Islands Delaware Delaware Delaware Delaware Delaware Delaware Delaware British Virgin Islands Delaware Delaware Delaware Delaware Delaware Marshall Islands Delaware Delaware Maryland Cayman Islands Delaware Denmark Delaware Delaware Delaware
PAGE A-2
2834 2834 2834 6022 7372 2834 3841 6798 6798 8090 6798 2834 2000 6770 4922 7372 7372 2836 3674 7372 3341 4941 2834 6770 2834 2870 2834 4412 2834 3576 6500 6770 6282 2834 5030 2836 1311
A Survey and Related Resources
At Home Group Inc. Atlantic Alliance Partnership Corp. Atlas Financial Holdings, Inc. Atlassian Corporation Plc Atomera Incorporated aTyr Pharma, Inc. Audentes Therapeutics, Inc. Auris Medical Holding AG Auspex Pharmaceuticals, Inc. Autohome Inc. Avalanche Biotechnologies, Inc. Avenue Financial Holdings, Inc. AveXis, Inc. Avinger, Inc. Avista Healthcare Public Acquisition Corp. Aviv REIT, Inc. Avolon Holdings Limited Axovant Sciences Ltd. Axsome Therapeutics, Inc. Azure Power Global Limited AzurRx BioPharma, Inc. Bankwell Financial Group, Inc. Baozun Inc. Barington/Hilco Acquisition Corp. Barracuda Networks, Inc. BeiGene, Ltd. Bellerophon Therapeutics LLC Bellicum Pharmaceuticals, Inc. Benefitfocus, Inc. Benitec Biopharma Limited BIND Therapeutics, Inc. Bio Blast Pharma Ltd. BioAmber Inc. Biocept, Inc. BiondVax Pharmaceuticals Ltd. Biotie Therapies Corp. Blackhawk Network Holdings, Inc.
8/3/2016 4/28/2015 2/11/2013 12/9/2015 8/5/2016 5/6/2015 7/19/2016 8/5/2014 2/4/2014 12/10/2013 7/30/2014 2/9/2015 2/10/2016 1/29/2015 10/10/2016 3/20/2013 12/11/2014 6/10/2015 11/19/2015 10/11/2016 10/11/2016 5/15/2014 5/20/2015 2/5/2015 11/5/2013 2/2/2016 2/13/2015 12/17/2014 9/17/2013 8/18/2015 9/19/2013 7/30/2014 5/9/2013 2/4/2014 5/11/2015 6/10/2015 4/18/2013
$130.0 $75.0 $24.1 $462.0 $24.0 $75.0 $75.0 $56.4 $84.0 $132.9 $102.0 $27.5 $95.0 $65.0 $300.0 $264.0 $272.7 $315.0 $51.0 $61.4 $5.3 $48.6 $110.0 $40.0 $74.5 $158.4 $60.0 $139.7 $130.8 $13.8 $70.5 $35.2 $80.0 $19.0 $9.6 $56.0 $230.0
NYSE Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq CM Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GM NYSE Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq CM NYSE NYSE NYSE Nasdaq CM NYSE Nasdaq CM Nasdaq GM Nasdaq GSM Nasdaq CM NYSE Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GM Nasdaq CM Nasdaq GSM Nasdaq GM NYSE Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq GSM
Delaware British Virgin Islands Cayman Islands United Kingdom Delaware Delaware Delaware Switzerland Delaware Cayman Islands Delaware Tennessee Delaware Delaware Cayman Islands Maryland Cayman Islands Bermuda Delaware Mauritius Delaware Connecticut Cayman Islands Delaware Delaware Cayman Islands Delaware Delaware Delaware Australia Delaware Israel Delaware Delaware Israel Finland Delaware
PAGE A-3
5719 6770 6331 7372 3674 2836 2836 2834 2834 7374 2836 6022 2836 3841 6770 6798 -7359 2834 2834 4931 2834 6022 5961 6770 3577 2834 2834 2834 7372 2834 2834 2834 2860 8071 2836 2834 6199
A Survey and Related Resources
BlackLine, Inc. Blue Buffalo Pet Products, Inc. Blue Capital Reinsurance Holdings Ltd. bluebird bio, Inc. Blueprint Medicines Corporation Bojangles', Inc. Boot Barn Holdings, Inc. Borderfree, Inc. Boulevard Acquisition Corp. Boulevard Acquisition Corp. II Box, Inc. Bright Horizons Family Solutions Inc. C1 Financial, Inc. Cachet Financial Solutions, Inc. Calithera Biosciences, Inc. Cambridge Capital Acquisition Corporation Cancer Genetics, Inc. Capitol Acquisition Corp. II Capitol Acquisition Corp. III Capnia, Inc. CapStar Financial Holdings, Inc. Cara Therapeutics, Inc. Carbylan Therapeutics, Inc. Care.com, Inc. CareDx, Inc. Castlight Health, Inc. Catabasis Pharmaceuticals, Inc. CB Pharma Acquisition Corp. Celladon Corporation Cellect Biotechnology Ltd. Cellectis S.A. Cellular Dynamics International, Inc. Celyad SA Century Communities, Inc. Cerecor Inc. Cerulean Pharma Inc. CF Corporation
10/27/2016 7/21/2015 11/5/2013 6/18/2013 4/29/2015 5/7/2015 10/29/2014 3/20/2014 2/12/2014 9/21/2015 1/22/2015 1/24/2013 8/13/2014 7/9/2014 10/1/2014 12/17/2013 4/4/2013 5/10/2013 10/13/2015 11/12/2014 9/21/2016 1/30/2014 4/8/2015 1/23/2014 7/16/2014 3/13/2014 6/24/2015 12/12/2014 1/29/2014 7/29/2016 3/24/2015 7/24/2013 6/18/2015 6/17/2014 10/14/2015 4/10/2014 5/19/2016
$146.2 $676.6 $125.0 $101.0 $146.6 $147.3 $80.0 $80.0 $210.0 $350.0 $175.0 $222.2 $44.7
$6.8 $80.0 $70.0 $6.0 $180.0 $300.0 $10.7 $38.8 $55.0 $65.0 $91.0 $40.0 $177.6 $60.0 $40.0 $44.0 $14.7 $228.3 $46.2 $80.1 $103.0 $26.0 $59.5 $600.0
Nasdaq GSM Nasdaq GSM NYSE Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GM Nasdaq CM Nasdaq CM NYSE NYSE NYSE OTCQB Nasdaq GSM Nasdaq CM Nasdaq CM Nasdaq CM Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq GM Nasdaq GM NYSE Nasdaq GM NYSE Nasdaq GM Nasdaq CM Nasdaq GM Nasdaq CM Nasdaq GM Nasdaq GM Nasdaq GM NYSE Nasdaq CM Nasdaq GM Nasdaq CM
Delaware Delaware Bermuda Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Florida Delaware Delaware Delaware Delaware Delaware Delaware Delaware Tennessee Delaware Delaware Delaware Delaware Delaware Delaware Cayman Islands Delaware Israel France Wisconsin Belgium Delaware Delaware Delaware Cayman Islands
PAGE A-4
7372 2047 6331 2836 2834 5812 5661 7389 6770 6770 7372 8351 6022 6770 2834 6770 8071 6770 6770 3845 6022 2834 2834 7200 8071 7374 2834 -6770 2836 2836 2836 2836 2834 1531 2834 2834 6770
A Survey and Related Resources
ChannelAdvisor Corporation Check-Cap Ltd. Cheetah Mobile Inc. Chegg, Inc. Cherry Hill Mortgage Investment Corporation Chiasma, Inc. Chimerix, Inc. China Commercial Credit, Inc. China Online Education Group Cidara Therapeutics, Inc. City Office REIT, Inc. Clearside Biomedical, Inc. ClubCorp Holdings, Inc. Coherus BioSciences, Inc. Collegium Pharmaceutical, Inc. CoLucid Pharmaceuticals, Inc. Committed Capital Acquisition Corporation II Community Healthcare Trust Inc Conatus Pharmaceuticals Inc. Concert Pharmaceuticals, Inc. ConforMIS, Inc. Conifer Holdings, Inc. ConnectOne Bancorp, Inc. Connecture, Inc. Continental Building Products, Inc. ContraFect Corporation Control4 Corporation Controladora Vuela Compaia de Aviacin, S.A.B. de C.V. Conyers Park Acquisition Corp. Corium International, Inc. Corvus Pharmaceuticals, Inc. Cotiviti Holdings, Inc. County Bancorp, Inc. Coupa Software Incorporated Coupons.com Incorporated Covisint Corporation CPI Card Group Inc.
5/22/2013 2/18/2015 5/7/2014 11/12/2013 10/3/2013 7/15/2015 4/10/2013 8/13/2013 6/9/2016 4/14/2015 4/14/2014 6/1/2016 9/19/2013 11/12/2014 5/6/2015 5/5/2015 4/10/2014 5/20/2015 7/24/2013 2/12/2014 6/30/2015 8/12/2015 2/11/2013 12/11/2014 2/4/2014 7/28/2014 8/1/2013
9/17/2013
7/14/2016 4/2/2014 3/22/2016 5/25/2016 1/15/2015 10/5/2016 3/6/2014 9/26/2013 10/8/2015
$80.5 $12.0 $168.0 $187.5 $130.0 $101.8 $102.5 $8.9 $45.6 $76.8 $72.5 $50.4 $252.0 $85.0 $69.6 $55.0 $35.0 $118.8 $66.0 $84.0 $135.0 $32.5 $44.8 $53.1 $164.7 $36.0 $64.0
NYSE Nasdaq CM NYSE NYSE NYSE Nasdaq GSM Nasdaq GM Nasdaq CM NYSE Nasdaq GM NYSE Nasdaq GM NYSE Nasdaq GM Nasdaq GSM Nasdaq GM OTC Pink NYSE Nasdaq GM Nasdaq GM Nasdaq GSM Nasdaq GM Nasdaq GSM Nasdaq GM NYSE Nasdaq CM Nasdaq GSM
$346.2 NYSE
$375.0 $52.0 $70.5 $237.5 $18.6 $133.2 $168.0 $64.0 $150.0
Nasdaq CM Nasdaq GM Nasdaq GM NYSE Nasdaq GM Nasdaq GM NYSE Nasdaq GSM Nasdaq GSM
PAGE A-5
Delaware Israel Cayman Islands Delaware Maryland Delaware Delaware Delaware Cayman Islands Delaware Maryland Delaware Nevada Delaware Virginia Delaware Delaware Maryland Delaware Delaware Delaware Delaware New Jersey Delaware Delaware Delaware Delaware
Mexico
Delaware Delaware Delaware Delaware Wisconsin Delaware Delaware Michigan Delaware
7372 3844 7372 8200 6798 2834 2834 6021 8200 2836 6798 2834 7997 2836 2834 2834 6770 6798 2834 2834 3841 6331 6022 7372 3270 2834 3670
4512
6770 2834 2834 7389 6022 7372 7310 7374 7374
A Survey and Related Resources
CRISPR Therapeutics AG Criteo S.A. Cvent, Inc. Cyan, Inc. CyberArk Software Ltd. Cynapsus Therapeutics Inc. CyrusOne Inc. CytomX Therapeutics, Inc. Dave & Buster's Entertainment, Inc. DAVIDsTEA INC. DBV Technologies S.A. Dermira, Inc. Diamond Resorts International, Inc. Dicerna Pharmaceuticals, Inc. Dimension Therapeutics, Inc. Dipexium Pharmaceuticals, Inc. Dorian LPG Ltd. Double Eagle Acquisition Corp. DT Asia Investments Limited Duluth Holdings Inc. Eagle Pharmaceuticals, Inc. Easterly Acquisition Corp. Easterly Government Properties, Inc. Eclipse Resources Corporation E-compass Acquisition Corp. Edge Therapeutics, Inc. Editas Medicine, Inc. Egalet Corporation eHi Car Services Limited El Pollo Loco Holdings, Inc. Electrum Special Acquisition Corporation Eleven Biotherapeutics, Inc. e.l.f. Beauty, Inc. Ellington Residential Mortgage REIT Enanta Pharmaceuticals, Inc. EndoChoice Holdings, Inc. Endurance International Group Holdings, Inc.
10/18/2016 11/4/2013 8/8/2013 5/8/2013 9/23/2014 6/17/2015 1/17/2013 10/7/2015 10/9/2014 6/4/2015 10/21/2014 10/2/2014 7/18/2013 1/29/2014 10/21/2015 3/12/2014 5/7/2014 9/10/2015 9/30/2014 11/19/2015 2/11/2014 7/29/2015 2/5/2015 6/19/2014 8/12/2015 9/30/2015 2/2/2016 2/5/2014 11/17/2014 7/24/2014 6/10/2015 2/5/2014 9/21/2016 5/1/2013 3/20/2013 6/4/2015 10/24/2013
$56.0 $250.6 $117.6 $88.0 $85.8 $63.0 $313.5 $80.0 $94.1 $96.9 $92.6 $125.0 $217.0 $90.0 $71.5 $33.0 $135.0 $480.0 $60.0 $80.0 $50.3 $180.0 $180.0 $818.1 $40.0 $80.5 $94.4 $50.4 $120.0 $107.1 $175.0 $50.0 $141.7 $129.0 $56.0 $95.3 $252.6
Nasdaq GM Nasdaq GM NYSE NYSE Nasdaq GSM Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GSM Nasdaq GSM Nasdaq CM NYSE Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq GM Nasdaq CM NYSE NYSE Nasdaq CM Nasdaq GSM Nasdaq GSM Nasdaq GM NYSE Nasdaq GSM Nasdaq CM Nasdaq GM NYSE NYSE Nasdaq GSM NYSE Nasdaq GSM
Switzerland France Delaware Delaware Israel Canada Maryland Delaware Delaware Canada France Delaware Delaware Delaware Delaware Delaware Marshall Islands Cayman Islands British Virgin Islands Wisconsin Delaware Delaware Maryland Delaware Cayman Islands Delaware Delaware Delaware Cayman Islands Delaware British Virgin Islands Delaware Delaware Maryland Delaware Delaware Delaware
PAGE A-6
2836 7311 7372 7373 7372 2834 6798 2834 5812 5499 2836 2834 7011 2834 2836 2834 4412 6770 6770 5600 2834 6770 6798 1311 6770 2834 2836 2834 7510 5812 6770 2834 2844 6798 2834 3841 7372
A Survey and Related Resources
Energous Corporation Entellus Medical, Inc. Enzymotec Ltd. Epizyme, Inc. Equity Bancshares, Inc. Eros International Plc Esperion Therapeutics, Inc. Essent Group Ltd. Etsy, Inc. Euronav NV Everbridge, Inc. Everspin Technologies, Inc. EVERTEC, Inc. Everyday Health, Inc. Evogene Ltd. Evoke Pharma, Inc. Evolent Health, Inc. Extraction Oil & Gas, Inc. Fairway Group Holdings Corp. Farmland Partners Inc. Fate Therapeutics, Inc. FB Financial Corporation FCB Financial Holdings, Inc Fenix Parts, Inc. FibroGen, Inc. Fifth Street Asset Management Inc. FinTech Acquisition Corp. FireEye, Inc. First Hawaiian, Inc. First NBC Bank Holding Company Fitbit, Inc. Five Oaks Investment Corp. Five Prime Therapeutics, Inc. Five9, Inc. Flex Pharma, Inc. Flexion Therapeutics, Inc. FMSA Holdings Inc.
3/27/2014 1/28/2015 9/26/2013 5/30/2013 11/10/2015 11/14/2013 6/25/2013 10/30/2013 4/15/2015 1/22/2015 9/15/2016 10/7/2016 4/11/2013 3/27/2014 11/20/2013 9/24/2013 6/4/2015 10/11/2016 4/6/2013 4/10/2014 9/30/2013 9/15/2016 7/31/2014 5/14/2015 11/13/2014 10/29/2014 2/12/2015 9/19/2013 8/3/2016 5/9/2013 6/17/2015 3/21/2013 9/18/2013 4/3/2014 1/28/2015 2/11/2014 10/2/2014
$24.0 $78.3 $61.8 $77.1 $43.7 $55.0 $70.0 $335.1 $266.7 $199.2 $90.0 $40.0 $505.3 $100.1 $73.8 $25.2 $195.5 $633.3 $177.7 $53.2 $40.0 $111.8 $165.4 $96.0 $145.8 $102.0 $100.0 $303.5 $485.0 $100.0 $731.5 $60.5 $62.4 $70.0 $86.4 $65.0 $400.0
Nasdaq CM Nasdaq GM Nasdaq GSM Nasdaq GM Nasdaq GSM NYSE Nasdaq GM NYSE Nasdaq GSM NYSE Nasdaq GM Nasdaq GSM NYSE NYSE NYSE Nasdaq CM NYSE Nasdaq GSM Nasdaq GM NYSE MKT Nasdaq GM NYSE NYSE Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq CM Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GSM NYSE Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GM
Delaware Delaware Israel Delaware Kansas Isle of Man Delaware Bermuda Delaware Belgium Delaware Delaware Puerto Rico Delaware Israel Delaware Delaware Delaware Delaware Maryland Delaware Tennessee Delaware Delaware Delaware Delaware Delaware Delaware Delaware Louisiana Delaware Maryland Delaware Delaware Delaware Delaware Delaware
PAGE A-7
3663 3841 2834 2834 6022 7822 2834 6351 5961 4412 7372 3674 7374 7389 2870 2834 8090 1311 5411 6798 2836 6022 6021 5010 2834 6282 6770 3577 6022 6022 3571 6798 2834 7374 2834 2834 1400
A Survey and Related Resources
Foamix Pharmaceuticals Ltd. Fogo de Chao, Inc. Fortress Transportation and Infrastructure Investors LLC Forward Pharma A/S Foundation Medicine, Inc. Fox Factory Holding Corp. Freshpet, Inc. Fulgent Genetics, Inc. Galapagos NV Galmed Pharmaceuticals Ltd. Garnero Group Acquisition Company GDS Holdings Limited Gemphire Therapeutics Inc. Gener8 Maritime, Inc. Genocea Biosciences, Inc. GeoPark Limited Gigamon Inc. Gladstone Land Corporation Glaukos Corporation Global Blood Therapeutics, Inc. Global Defense & National Security Systems, Inc. Global Partner Acquisition Corp. Global Water Resources, Inc. Globant S.A. GlobeImmune, Inc. GlycoMimetics, Inc. Gogo Inc. GoPro, Inc. Gores Holdings, Inc. GP Investments Acquisition Corp. Great Ajax Corp. Great Basin Scientific, Inc. Great Western Bancorp, Inc. Green Bancorp, Inc. Gridsum Holding Inc. GrubHub Inc.
9/17/2014 6/18/2015
5/14/2015
10/14/2014 9/25/2013 8/7/2013 11/6/2014 9/28/2016 5/13/2015 3/12/2014 6/25/2014 11/1/2016 8/4/2016 6/24/2015 2/4/2014 2/6/2014 6/11/2013 1/28/2013 6/24/2015 8/11/2015
10/23/2013
7/29/2015 4/28/2016 7/17/2014 7/1/2014 1/9/2014 6/20/2013 6/25/2014 8/13/2015 5/19/2015 2/13/2015 10/8/2014 10/14/2014 8/7/2014 9/22/2016 4/3/2014
$40.2 NYSE $88.2 Nasdaq GSM
$340.0 NYSE
$220.5 $106.0 $128.6 $156.3 $37.8 $210.1 $38.3 $125.0 $192.5 $30.0 $210.0 $66.0 $94.5 $128.3 $50.0 $108.0 $120.0
Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq GSM Nasdaq GM Nasdaq CM Nasdaq GSM Nasdaq GM NYSE Nasdaq CM Nasdaq GM NYSE NYSE NYSE Nasdaq GSM
$60.0 Nasdaq GM
$135.0 $7.3 $58.5 $15.0 $56.0
$187.0 $427.2 $350.0 $150.0 $71.3
$8.1 $288.0 $70.3 $87.1 $192.5
Nasdaq CM Nasdaq GM Nasdaq CM NYSE Nasdaq CM Nasdaq GM Nasdaq GSM Nasdaq CM Nasdaq CM NYSE Nasdaq GSM Nasdaq CM NYSE Nasdaq GSM Nasdaq GSM
Israel Delaware
Delaware
Denmark Delaware Delaware Delaware Delaware Belgium Israel Cayman Islands Cayman Islands Delaware Marshall Islands Delaware Bermuda Delaware Maryland Delaware Delaware
Delaware
Delaware Delaware Luxembourg Delaware Delaware Delaware Delaware Delaware Cayman Islands Maryland Delaware Delaware Texas Cayman Islands Delaware
PAGE A-8
2833 5812
6141
2834 8071 3571 2040 8071 2834 2834 6770 7370 2834 4412 2836 1311 7374 6798 3841 2834
6770
6770 4941 7374 2834 2834 4099 3861 6770 6770 6798 3841 6022 6021 7372 7389
A Survey and Related Resources
GTY Technology Holdings Inc. GW Pharmaceuticals plc Hannon Armstrong Sustainable Infrastructure Harmony Merger Corp. Health Insurance Innovations, Inc. HealthEquity, Inc. Heat Biologics, Inc. Hennessy Capital Acquisition Corp. Hennessy Capital Acquisition Corp. II Heritage Insurance Holdings, Inc. HF2 Financial Management Inc. Histogenics Corporation Hortonworks, Inc. Houlihan Lokey, Inc. HTG Molecular Diagnostics, Inc. HubSpot, Inc. Hunter Maritime Acquisition Corp. Hutchison China MediTech Limited Hydra Industries Acquisition Corp. Ichor Holdings, Ltd Ideal Power Inc. iDreamSky Technology Limited iKang Healthcare Group, Inc. Immune Design Corp. Impinj, Inc. Imprivata, Inc. INC Research Holdings, Inc. Independence Contract Drilling, Inc. Independent Bank Group, Inc. InfraREIT, Inc. Innocoll AG Innovative Industrial Properties, Inc. Inogen, Inc. Inotek Pharmaceuticals Corporation Inovalon Holdings, Inc. Installed Building Products, Inc. Instructure, Inc.
10/26/2016 5/1/2013 4/17/2013 3/23/2015 2/7/2013 8/5/2014 7/23/2013 1/16/2014 7/22/2015 5/22/2014 3/21/2013 12/2/2014
12/11/2014 8/12/2015 5/5/2015 10/9/2014 11/18/2016 3/16/2016 10/24/2014 12/8/2016 11/22/2013 8/6/2014 4/8/2014 7/23/2014 7/20/2016 6/24/2014 11/13/2014 8/7/2014 4/2/2013 1/29/2015 7/25/2014 11/30/2016 2/13/2014 2/17/2015 2/11/2015 2/12/2014 11/12/2015
$480.0 $31.2 $166.7 $100.0 $65.3 $127.4 $25.0 $100.0 $175.0 $66.0 $153.0 $65.0 $100.0 $220.5 $50.0 $125.0 $150.0 $101.3 $80.0 $52.9 $15.0 $115.5 $152.7 $60.0 $67.2 $75.0 $150.0 $110.0 $83.2 $460.0 $58.5 $67.0 $70.6 $40.0 $600.0 $81.8 $70.4
Nasdaq GSM NYSE Nasdaq GM Nasdaq CM NYSE Nasdaq GM Nasdaq GSM Nasdaq CM Nasdaq CM Nasdaq CM NYSE Nasdaq CM Nasdaq GM NYSE Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GSM Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GM NYSE Nasdaq GSM NYSE NYSE Nasdaq GM Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GSM Nasdaq GSM NYSE
Cayman Islands United Kingdom Maryland Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Marshall Islands Cayman Islands Delaware Cayman Islands Delaware Cayman Islands British Virgin Islands Delaware Delaware Delaware Delaware Delaware Texas Maryland Germany Maryland Delaware Delaware Delaware Delaware Delaware
PAGE A-9
6770 2834 6798 6770 6411 7389 2834 3713 6770 6331 6282 3842 7372 6282 3826 7372 6770 2834 6770 3674 3620 7372 8011 2834 3577 7372 8731 1381 3022 6798 2834 6798 3842 2834 7374 1520 7372
A Survey and Related Resources
Insys Therapeutics, Inc. Intec Pharma Ltd. Intellia Therapeutics, Inc. Intersect ENT, Inc. Intrawest Resorts Holdings, Inc. Intrexon Corporation Investar Holding Corporation Invitae Corporation Invuity, Inc. iRadimed Corporation iRhythm Technologies, Inc. Jaguar Animal Health, Inc. James River Group Holdings, Ltd. Jensyn Acquisition Corp. Jernigan Capital, Inc. JGWPT Holdings Inc. JM Global Holding Company Jones Energy, Inc. Jumei International Holding Limited Juno Therapeutics, Inc. Jupai Holdings Limited K2M Group Holdings, Inc. Kadmon Holdings, LLC KaloBios Pharmaceuticals, Inc. Kamada Ltd. Karyopharm Therapeutics Inc. KemPharm, Inc. Kindred Biosciences, Inc. Kinsale Capital Group, Inc. Kite Pharma, Inc. Kitov Pharmaceuticals Holdings Ltd. KLR Energy Acquisition Corp. Kofax Limited Kornit Digital Ltd. La Quinta Holdings Inc. Ladder Capital Corp Landcadia Holdings, Inc.
5/2/2013 8/4/2015 5/5/2016 7/23/2014 1/30/2014 8/7/2013 6/30/2014 2/11/2015 6/15/2015 7/15/2014 10/19/2016 5/13/2015 12/11/2014 3/2/2016 3/26/2015 11/8/2013 7/23/2015 7/23/2013 5/15/2014 12/18/2014 7/15/2015 5/7/2014 7/26/2016 1/31/2013 5/30/2013 11/12/2013 4/15/2015 12/11/2013 7/27/2016 6/19/2014 11/23/2015 3/10/2016 12/5/2013 4/1/2015 4/8/2014 2/5/2014 5/25/2016
$32.0 $30.2 $108.0 $55.0 $187.5 $160.0 $40.3 $101.6 $48.0 $12.6 $107.0 $20.0 $231.0 $39.0 $100.0 $115.5 $50.0 $187.5 $245.1 $246.6 $53.0 $132.4 $75.0 $70.0 $51.6 $108.8 $56.0 $52.5 $105.6 $127.5 $13.1 $80.0 $11.7 $71.0 $650.3 $225.3 $250.0
NYSE Nasdaq CM Nasdaq GSM Nasdaq GM Nasdaq GM NYSE NYSE NYSE Nasdaq GM NYSE Nasdaq GSM Nasdaq CM Nasdaq CM Nasdaq GSM NYSE NYSE Nasdaq CM NYSE NYSE NYSE NYSE Nasdaq GSM NYSE Nasdaq GSM Nasdaq GM Nasdaq GSM Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GSM
Delaware Israel Delaware Delaware Delaware Virginia Louisiana Delaware Delaware Delaware Delaware Delaware Bermuda Delaware Maryland Delaware Delaware Delaware Cayman Islands Delaware Cayman Islands Virginia Delaware Delaware Israel Delaware Delaware Delaware Delaware Delaware Israel Delaware Bermuda Israel Delaware Delaware Delaware
PAGE A-10
2834 2834 2836 3841 7990 8731 6022 8071 3841 3841 3841 2834 6331 6770 6798 6199 6770 1311 5990 2836 8900 3841 2834 2834 2834 2834 2834 2834 6331 2836 2834 6770 7370 3555 7011 6500 6770
A Survey and Related Resources
Lantheus Holdings, Inc. LDR Holding Corporation Leju Holdings Limited Levy Acquisition Corp. LGI Homes, Inc. LightInTheBox Holding Co., Ltd. Liquid Holdings Group, LLC Live Oak Bancshares, Inc. Lombard Medical, Inc. Loxo Oncology, Inc. Luxoft Holding, Inc M I Acquisitions, Inc. M III Acquisition Corp. Macrocure Ltd. MacroGenics, Inc. Malibu Boats, Inc. Mammoth Energy Services, Inc. Marcus & Millichap, Inc. Marin Software Incorporated Marinus Pharmaceuticals, Inc. Marketo, Inc. Markit Ltd. Marrone Bio Innovations, Inc. Match Group, Inc. Materialise NV Mavenir Systems, Inc. MaxPoint Interactive, Inc. MCBC Holdings, Inc. MedEquities Realty Trust, Inc. Medical Transcription Billing, Corp. MediWound Ltd. Medley Management Inc. MEDOVEX Corp. Medpace Holdings, Inc. MedWorth Acquisition Corp. Memorial Resource Development Corp. Merus B.V.
6/24/2015 10/8/2013 4/16/2014 11/13/2013 11/6/2013 6/11/2013 7/25/2013 7/23/2015 4/25/2014 7/31/2014 6/25/2013 9/13/2016 7/7/2016 7/30/2014 10/16/2013 1/30/2014 10/13/2016 10/30/2013 3/21/2013 7/31/2014 5/16/2013 6/18/2014 8/1/2013 11/18/2015 6/24/2014 11/6/2013 3/5/2015 7/16/2015 9/28/2016 7/22/2014 3/19/2014 9/23/2014 12/19/2014 8/10/2016 6/26/2013 6/12/2014 5/18/2016
$65.0 $75.0 $100.0 $150.0 $99.0 $78.9 $28.6 $81.6 $55.0 $68.4 $69.6 $50.0 $150.0 $53.5 $80.0 $100.0 $116.3 $72.0 $105.0 $45.0 $78.8 $1,283.3 $57.0 $400.0 $96.0 $54.5 $74.8 $91.1 $239.1 $20.4 $70.0 $108.0 $8.0 $161.0 $52.8 $813.2 $55.0
Nasdaq GM NYSE Nasdaq GSM NYSE Nasdaq CM Nasdaq GSM NYSE Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE NYSE Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq GSM NYSE Nasdaq GM NYSE NYSE Nasdaq CM Nasdaq GM NYSE Nasdaq GSM Nasdaq CM Nasdaq CM Nasdaq GSM
Delaware Texas Cayman Islands Illinois Delaware Cayman Islands Delaware North Carolina Cayman Islands Delaware Foreign Delaware Delaware Israel Delaware Delaware Delaware Delaware Delaware Delaware Delaware Bermuda Delaware Delaware Belgium Delaware Delaware Delaware Delaware Delaware Israel Delaware Nevada Delaware New York Delaware The Netherlands
PAGE A-11
2834 3841 6500 6770 1531 5961 7372 6022 3841 2834 7371 6770 6770 2836 2834 3730 1389 6531 7374 2834 7372 6200 2870 7389 7372 3576 7370 3730 6798 7372 2833 6282 3841 8731 8082 1311 2834
A Survey and Related Resources
MGM Growth Properties LLC Midland States Bancorp, Inc. Mimecast Limited MINDBODY, Inc. Minerva Neurosciences, Inc. Mirna Therapeutics, Inc. MiX Telematics Limited MobileIron, Inc. Mobileye N.V. Model N, Inc. Moelis & Company MOKO Social Media Limited MOL Global, Inc. Momo Inc. Monster Digital, Inc. Montage Technology Group Limited Motif Bio plc Multi Packaging Solutions International Limited MyoKardia, Inc. Myovant Sciences Ltd. Nabriva Therapeutics AG NanoString Technologies, Inc. Nant Health, LLC NantKwest, Inc. Natera, Inc. National Commerce Corporation National Storage Affiliates Trust Navigator Holdings Ltd. Neff Corporation Neos Therapeutics, Inc. Neothetics, Inc. NephroGenex, Inc. NeuroDerm Ltd. Nevro Corp. New Relic, Inc. Nexvet Biopharma plc Nimble Storage, Inc.
4/19/2016 5/23/2016 5/18/2016 6/18/2015 6/30/2014 9/30/2015 8/9/2013 6/11/2014 7/31/2014 3/19/2013 4/15/2014 6/26/2014 10/9/2014 12/10/2014 7/7/2016 9/25/2013 11/17/2016 10/21/2015 10/28/2015 10/26/2016 9/17/2015 6/25/2013 6/1/2016 7/27/2015 7/1/2015 3/18/2015 4/22/2015 11/20/2013 11/20/2014 7/22/2015 11/19/2014 2/11/2014 11/13/2014 11/5/2014 12/11/2014 2/4/2015 12/12/2013
$1,050.0 $80.1 $55.0 $100.1 $32.7 $43.8 $100.7 $100.0 $889.7 $104.5 $162.5 $8.3 $168.8 $216.0 $9.1 $71.0 $17.0 $214.5 $54.8 $217.5 $92.3 $54.0 $91.0 $207.2 $180.0 $33.2 $260.0 $228.0 $157.1 $72.0 $65.1 $37.2 $45.0 $126.0 $115.0 $40.0 $168.0
NYSE Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq GSM Nasdaq GM Nasdaq GM NYSE Nasdaq GSM NYSE NYSE NYSE Nasdaq GM Nasdaq GM Nasdaq CM Nasdaq GM Nasdaq CM NYSE Nasdaq GSM NYSE Nasdaq GM Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GM NYSE Nasdaq GSM NYSE Nasdaq GM Nasdaq CM Nasdaq GM NYSE Nasdaq GSM NYSE
Delaware Illinois The Netherlands Delaware Delaware Delaware South Africa Delaware Israel Delaware Delaware Australia Cayman Islands Cayman Islands Delaware Cayman Islands England Bermuda Delaware Bermuda Austria Delaware Delaware Delaware Delaware Delaware Maryland Marshall Islands Delaware Delaware Delaware Delaware Israel Delaware Delaware Ireland Delaware
PAGE A-12
6798 6022 2834 7372 2834 2834 7372 7372 7372 7370 6282 7370 7389 7372 3572 3674 2834 2759 2834 2834 2834 2836 7374 2836 8071 6021 6798 4412 7359 2834 2834 2834 2834 3841 7372 2834 3572
A Survey and Related Resources
Nivalis Therapeutics, Inc. NMI Holdings, Inc. Noble Midstream Partners LP Noodles & Company Norcraft Companies, Inc. Nord Anglia Education, Inc. Nordic American Offshore Ltd. North Atlantic Drilling Ltd. Novan, Inc. NovoCure Limited NRG Yield, Inc. Nutanix, Inc. NV5 Holdings, Inc. Oasmia Pharmaceutical AB Obalon Therapeutics, Inc. Ocular Therapeutix, Inc. Ollie's Bargain Outlet Holdings, Inc. Omthera Pharmaceuticals, Inc. Oncobiologics, Inc. On Deck Capital, Inc. OncoMed Pharmaceuticals, Inc. Onconova Therapeutics, Inc Ooma, Inc. OpGen, Inc. Ophthotech Corporation Opower, Inc. Orchid Island Capital, Inc. Otonomy, Inc. Oxford Immunotec Global PLC Pace Holdings Corp. Pacific Special Acquisition Corp. Papa Murphy's Holdings, Inc. Paramount Group, Inc. Parnell Pharmaceuticals Holdings Ltd Parsley Energy, Inc. Patriot National, Inc. Pattern Energy Group Inc.
6/16/2015 11/7/2013 9/14/2016 6/27/2013 11/6/2013 3/25/2014 6/11/2014 1/28/2014 9/20/2016 10/1/2015 7/16/2013 9/29/2016 3/27/2013 10/22/2015 10/5/2016 7/24/2014 7/15/2015 4/11/2013 5/12/2016 12/16/2014 7/17/2013 7/24/2013 7/16/2015 5/4/2015 9/24/2013 4/3/2014 2/14/2013 8/12/2014 11/21/2013 9/10/2015 10/14/2015 5/1/2014 11/18/2014 6/18/2014 5/22/2014 1/15/2015 9/26/2013
$77.0 $27.3 $281.3 $96.4 $102.4 $304.0 $94.1 $125.0 $45.1 $165.0 $430.7 $237.9 $8.4 $9.5 $75.0 $65.0 $142.8 $64.0 $35.0 $200.0 $81.6 $77.5 $65.0 $17.1 $167.2 $115.9 $35.4 $100.0 $64.3 $400.0 $50.0 $64.2 $2,292.5 $50.0 $925.0 $116.4 $352.0
Nasdaq GSM NYSE NYSE Nasdaq GM Nasdaq GSM NYSE NYSE NYSE Nasdaq GM Nasdaq GSM NYSE Nasdaq GSM NYSE Nasdaq CM Nasdaq GM Nasdaq CM Nasdaq GSM Nasdaq GM Nasdaq GM Nasdaq GM NYSE Nasdaq GSM NYSE Nasdaq GSM Nasdaq GM Nasdaq GSM NYSE NYSE MKT Nasdaq GSM Nasdaq GSM Nasdaq CM Nasdaq GM Nasdaq GSM NYSE NYSE NYSE Nasdaq GM
Delaware Delaware Delaware Delaware Delaware Cayman Islands Marshall Islands United Kingdom Delaware New Jersey Delaware Delaware Delaware Sweden Nevada Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Maryland Delaware United Kingdom Cayman Islands Virgin Islands Delaware Maryland Australia Delaware Delaware Delaware
PAGE A-13
2834 6351 4932 5812 2430 8200 4412 1381 2834 3841 4911 7372 7380 2834 3841 2834 5331 2834 2836 6199 2834 2834 7372 8071 2834 7372 6798 2834 2835 6770 6770 5812 6798 2834 1311 6411 4911
A Survey and Related Resources
Paycom Software, Inc. Paylocity Holding Corporation Peak Resorts, Inc. PennyMac Financial Services, Inc. Penumbra. Inc. People's Utah Bancorp Pfenex Inc. PhaseRx, Inc. Phibro Animal Health Corporation Physicians Realty Trust Planet Fitness, Inc. Polar Power, Inc. Portola Pharmaceuticals, Inc. Potbelly Corporation PRA Health Sciences, Inc. Premier, Inc. Presbia PLC Press Ganey Holdings, Inc. Professional Diversity Network, Inc. ProNAi Therapeutics, Inc. ProQR Therapeutics B.V. Prosensa Holding B.V. Protagonist Therapeutics, Inc. Proteon Therapeutics, Inc. Proteostasis Therapeutics, Inc. PTC Therapeutics, Inc. Pulse Biosciences, Inc. Pure Storage, Inc. Q2 Holdings, Inc. QIWI plc QTS Realty Trust, Inc. Quantenna Communications, Inc. Quartet Merger Corp. Quinpario Acquisition Corp. Quinpario Acquisition Corp. 2 Qunar Cayman Islands Limited Quotient Ltd.
3/14/2014 3/18/2014 11/20/2014 5/8/2013 9/17/2015 6/10/2015 7/23/2014 5/17/2016 4/10/2014 7/8/2013 8/5/2015 12/6/2016 5/21/2013 10/3/2013 11/12/2014 9/25/2013 1/28/2015 5/20/2015 3/5/2013 7/15/2015 9/18/2014 6/27/2013 8/10/2016 10/21/2014 2/10/2016 6/19/2013 5/17/2016 10/6/2015 3/19/2014 5/2/2013 10/8/2013 10/27/2016 10/28/2013 8/8/2013 1/15/2015 10/31/2013 4/24/2014
$99.7 $119.8 $90.0 $191.2 $120.0 $36.3 $50.0 $18.5 $191.2 $120.0 $216.0 $16.8 $122.1 $105.0 $305.6 $760.1 $41.7 $222.5 $21.0 $137.7 $97.5 $78.0 $90.0 $61.0 $50.0 $125.6 $20.0 $425.0 $100.9 $212.5 $257.3 $107.2 $84.0 $150.0 $350.0 $166.7 $40.0
NYSE Nasdaq GSM Nasdaq GM NYSE NYSE Nasdaq CM NYSE MKT Nasdaq CM Nasdaq GM NYSE NYSE Nasdaq CM Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE Nasdaq CM Nasdaq GSM Nasdaq GM Nasdaq GSM Nasdaq CM Nasdaq GM Nasdaq GM Nasdaq GSM Nasdaq CM NYSE NYSE Nasdaq GSM NYSE Nasdaq GSM Nasdaq CM Nasdaq CM Nasdaq CM Nasdaq GM Nasdaq GM
Delaware Delaware Missouri Delaware Delaware Utah Delaware Delaware Delaware Maryland Delaware Delaware Delaware Delaware Delaware Delaware Ireland Delaware Delaware Delaware The Netherlands The Netherlands Delaware Delaware DE Delaware Nevada Delaware Delaware Cyprus Maryland Delaware Delaware Delaware Delaware Cayman Islands Bailiwick of Jersey
PAGE A-14
7372 7372 7990 6162 3841 6022 2834 2834 2834 6798 7997 3621 2834 5812 8731 8741 3841 7380 7370 2834 2834 2834 2834 2836 2834 2834 3841 3572 7372 7389 6798 3674 6770 6770 6770 7389 2835
A Survey and Related Resources
Rally Software Development Corp. Ra Pharmaceuticals, Inc. Rapid7, Inc. RCS Capital Corporation Reata Pharmaceuticals, Inc. RE/MAX Holdings, Inc. Receptos, Inc. Recro Pharma, Inc. Regado Biosciences, Inc. REGENXBIO Inc. Relypsa Inc. Resonant Inc. RetailMeNot, Inc. Revance Therapeutics, Inc. ReWalk Robotics Ltd. Rexford Industrial Realty, Inc. Rice Energy Inc. RingCentral, Inc. Ritter Pharmaceuticals, Inc. Rocket Fuel Inc. ROI Acquisition Corp. II Roka Bioscience, Inc. RSP Permian, Inc. Ruthigen, Inc. Saban Capital Acquisition Corp. Sage Therapeutics, Inc. Scorpio Bulkers Inc. SCYNEXIS, Inc. Second Sight Medical Products, Inc. SecureWorks Corp. Selecta Biosciences, Inc. Semler Scientific, Inc. SenesTech, Inc. Senseonics Holdings, Inc. Sensus Healthcare, Inc. Seres Therapeutics, Inc. SFX Entertainment, Inc.
4/11/2013 10/25/2016 7/16/2015
6/5/2013 5/25/2016 10/1/2013 5/8/2013 3/6/2014 8/22/2013 9/16/2015 11/14/2013 6/3/2014 7/18/2013 2/5/2014 9/11/2014 7/18/2013 1/23/2014 9/26/2013 6/24/2015 9/19/2013 9/16/2013 7/16/2014 1/17/2014 3/21/2014 9/15/2016 6/17/2014 12/11/2013 5/2/2014 11/18/2014 4/21/2016 6/21/2016 2/20/2014 12/8/2016 3/17/2016 6/2/2016 6/25/2015 1/8/2014
$84.0 $91.6 $103.2 $50.0 $60.5 $220.0 $72.8 $30.0 $43.0 $138.6 $75.4 $16.2 $190.9 $96.0 $36.0 $224.0 $924.0 $97.5 $20.0 $116.0 $125.0 $60.0 $390.0 $19.2 $235.0 $90.0 $305.2 $62.0 $31.5 $112.0 $70.0 $10.0 $15.0 $45.0 $11.0 $133.8 $260.0
NYSE Nasdaq GSM Nasdaq GM NYSE Nasdaq GM NYSE Nasdaq GM Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq GSM Nasdaq CM Nasdaq GSM Nasdaq GM Nasdaq GM NYSE NYSE NYSE Nasdaq CM Nasdaq GSM Nasdaq CM Nasdaq GM NYSE Nasdaq CM Nasdaq CM Nasdaq GM NYSE Nasdaq GM Nasdaq CM Nasdaq GSM Nasdaq GM Nasdaq CM Nasdaq CM NYSE MKT Nasdaq CM Nasdaq GSM Nasdaq GSM
Delaware Delaware Delaware Delaware Delaware Delaware Delaware Pennsylvania Delaware Delaware Delaware Delaware Delaware Delaware Israel Maryland Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Cayman Islands Delaware Marshall Islands Delaware California Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware
PAGE A-15
7372 2834 7372 6211 2834 6531 2834 2834 2834 2836 2834 3674 7310 2834 3842 6798 1311 7374 2834 7370 6770 3826 1311 2834 6770 2834 4412 2834 3845 7379 2834 3845 2870 3823 3841 2834 7900
A Survey and Related Resources
Shake Shack Inc. Shopify Inc. Sientra, Inc. Signal Genetics, Inc. Silvercrest Asset Management Group Inc. Silver Eagle Acquisition Corp. Silver Run Acquisition Corporation Silver Spring Networks, Inc. Sino Mercury Acquisition Corp. Sky Solar Holdings, Ltd. Smart Sand, Inc. SolarEdge Technologies, Inc. Sophiris Bio Inc. Spark Energy, Inc. Spark Therapeutics, Inc. Sportsman's Warehouse Holdings, Inc. Spring Bank Pharmaceuticals, Inc. Square 1 Financial, Inc. Square, Inc. SteadyMed Ltd. Stellar Acquisition III Inc. Stemline Therapeutics, Inc. Stock Building Supply Holdings, Inc. Stonegate Mortgage Corporation STORE Capital Corporation Strongbridge Biopharma plc Summit Materials, Inc. Summit Therapeutics plc SunEdison Semiconductor Limited Sungy Mobile Limited Sunrun Inc. Superior Drilling Products, Inc. Surgery Partners, Inc. Surgical Care Affiliates, Inc. Syndax Pharmaceuticals, Inc. Syros Pharmaceuticals, Inc. T2 Biosystems, Inc.
1/29/2015 5/20/2015 10/28/2014 6/17/2014 6/26/2013 7/25/2013 2/23/2016 3/12/2013 8/26/2014 11/18/2014 11/3/2016 3/25/2015 8/16/2013 7/28/2014 1/29/2015 4/16/2014 5/5/2016 3/26/2014 11/18/2015 3/19/2015 8/18/2016 1/28/2013 8/8/2013 10/9/2013 11/17/2014 10/16/2015 3/11/2015 3/4/2015 1/28/2013 11/21/2013 8/4/2015 5/23/2014 9/30/2015 10/29/2013 3/2/2016 6/29/2016 8/6/2014
$105.0 $130.9 $75.0
$8.5 $52.7 $300.0 $450.0 $80.8 $40.0 $44.2 $128.7 $126.0 $65.0 $54.0 $161.0 $118.8 $11.0 $104.1 $243.0 $40.0 $65.0 $33.2 $98.0 $113.6 $508.8 $25.0 $400.0 $34.2 $93.6 $78.5 $250.6 $27.0 $271.4 $234.7 $52.8 $50.0 $57.2
NYSE NYSE Nasdaq GSM Nasdaq CM Nasdaq GM Nasdaq CM Nasdaq CM NYSE Nasdaq CM Nasdaq CM Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq CM Nasdaq GSM NYSE Nasdaq GSM Nasdaq CM Nasdaq CM Nasdaq GSM NYSE NYSE Nasdaq GSM NYSE Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq GSM NYSE MKT Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GM
Delaware Canada Delaware Delaware Delaware Delaware Delaware Delaware Delaware Cayman Islands Delaware Delaware British Columbia Delaware Delaware Delaware Delaware Delaware Delaware Israel Republic of Marshall Islands Delaware Delaware Ohio Maryland Ireland Delaware United Kingdom Delaware Cayman Islands Delaware Utah Delaware Delaware Delaware Delaware Delaware
PAGE A-16
5810 7372 3842 8071 6282 6770 6770 3576 6770 4931 1400 3674 2834 4931 2836 5940 2834 6022 7372 2834 6770 2834 5211 6162 6798 2834 1400 2834 2834 7372 3430 3533 8062 8093 2834 2834 3841
A Survey and Related Resources
Tableau Software, Inc. Tabula Rasa HealthCare, Inc. Tactile Systems Technology, Inc. Talend S.A. Talmer Bankcorp, Inc. Tandem Diabetes Care, Inc. Tarena International, Inc. TCP International Holdings Ltd. Teladoc, Inc. TerraForm Global, Inc. TerraForm Power, Inc. Terrapin 3 Acquisition Corporation TetraLogic Pharmaceuticals Corporation Tetraphase Pharmaceuticals, Inc. Textura Corporation The Bank of N.T. Butterfield & Son Limited The Container Store Group, Inc. The ExOne Company The Habit Restaurants, Inc. The Joint Corp. The New Home Company Inc. The Rubicon Project, Inc. The Trade Desk, Inc. Third Point Reinsurance Ltd. TiGenix N.V. Tokai Pharmaceuticals, Inc. Townsquare Media, Inc. TPI Composites, Inc. TRACON Pharmaceuticals, Inc. Transocean Partners LLC Tremor Video, Inc. Trevena, Inc. TRI Pointe Homes, Inc. TriState Capital Holdings, Inc. Triumph Bancorp, Inc. trivago N.V. TriVascular Technologies, Inc.
5/16/2013 9/28/2016 7/27/2016 7/28/2016 2/11/2014 11/13/2013 4/2/2014 6/25/2014 6/30/2015 7/31/2015 7/17/2014 7/16/2014 12/11/2013 3/19/2013 6/6/2013 9/15/2016 10/31/2013 2/6/2013 11/19/2014 11/10/2014 1/30/2014 4/1/2014 9/20/2016 8/14/2013 12/14/2016 9/6/2014 7/23/2014 7/21/2016 1/29/2015 7/31/2014 6/26/2013 1/31/2014 1/30/2013 5/8/2013 11/7/2014 12/15/2016 4/15/2010
$254.2 $51.6 $40.0 $94.5 $202.2 $120.0 $137.7 $78.6 $156.8 $675.0 $501.6 $185.0 $50.1 $75.0 $75.0 $250.0 $225.0 $95.4 $90.0 $19.5 $85.9 $101.6 $84.0 $275.7 $35.7 $97.2 $91.7 $68.8 $36.0 $385.0 $75.0 $64.8 $232.7 $65.6 $80.4 $287.2 $78.0
NYSE Nasdaq GSM Nasdaq GSM Nasdaq GM Nasdaq CM Nasdaq GM Nasdaq GSM NYSE NYSE Nasdaq GSM Nasdaq GSM Nasdaq CM Nasdaq GM Nasdaq GM NYSE NYSE NYSE Nasdaq GM Nasdaq GM Nasdaq CM NYSE NYSE Nasdaq GM NYSE Nasdaq GSM Nasdaq GM NYSE Nasdaq GSM Nasdaq GSM NYSE NYSE Nasdaq GSM NYSE Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GSM
Delaware Delaware Delaware France Michigan Delaware Cayman Islands Switzerland Delaware Delaware Delaware Delaware Delaware Delaware Delaware Bermuda Delaware Delaware Delaware Delaware Delaware Delaware Delaware Bermuda Belgium Delaware Delaware Delaware Delaware Marshall Islands Delaware Delaware Delaware Pennsylvania Texas The Netherlands Delaware
PAGE A-17
7372 8099 3841 7372 6021 3841 8200 3640 7389 4911 4911 6770 2834 2834 7372 6029 5700 3355 5812 6794 1531 7370 7370 6331 2834 2834 4832 3511 2836 1381 7311 2834 1531 6022 6022 7374 3841
A Survey and Related Resources
TrueCar, Inc. Trupanion, Inc. TubeMogul, Inc. Tuniu Corporation Turning Point Brands, Inc. Twilio Inc. Twitter, Inc. UBIC, Inc. UCP, Inc. Ultragenyx Pharmaceutical Inc. Unique Fabricating, Inc. uniQure B.V. Upland Software, Inc. Varonis Systems, Inc. Vascular Biogenics Ltd. Veeva Systems Inc. Veracyte, Inc. Veritex Holdings, Inc. Versartis, Inc. Viking Therapeutics, Inc. Vince Holding Corp. Violin Memory, Inc. Virtu Financial, Inc. Vitae Pharmaceuticals, Inc. Vital Therapies, Inc. Vivint Solar, Inc. voxeljet AG Voyager Therapeutics, Inc. vTv Therapeutics Inc. WAVE Life Sciences Ltd. Wayfair Inc. WCI Communities, Inc Weibo Corporation WildHorse Resource Development Corporation Wingstop Inc. Wix.com Ltd. WL Ross Holding Corp.
5/21/2014 7/17/2014 7/23/2014 5/8/2014 5/10/2016 6/22/2016 11/13/2013 5/15/2013 7/17/2013 1/30/2014 6/30/2015 2/5/2014 11/5/2014 2/27/2014 7/30/2014 10/15/2013 10/29/2013 10/8/2014 3/20/2014 4/28/2015 11/21/2013 9/26/2013 4/15/2015 9/24/2014 4/17/2014 10/1/2014 10/17/2013 11/10/2015 7/29/2015 11/10/2015 10/1/2014 7/24/2013 4/16/2014 12/13/2016 6/11/2015 11/5/2013 6/5/2014
$70.0 $71.3 $43.8 $72.0 $54.0 $150.0 $1,820.0 $9.2 $116.3 $121.0 $22.3 $91.8 $46.2 $105.6 $64.8 $260.9 $65.0 $35.1 $126.0 $24.0 $200.0 $162.0 $314.1 $55.0 $54.0 $329.6 $84.5 $70.0 $117.2 $102.0 $319.0 $102.3 $285.6 $412.5 $110.2 $127.1 $435.0
Nasdaq GSM NYSE Nasdaq GSM Nasdaq GSM NYSE NYSE NYSE Nasdaq GM NYSE Nasdaq GSM NYSE MKT Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GM Nasdaq GM Nasdaq GSM Nasdaq CM NYSE NYSE Nasdaq GSM Nasdaq GM Nasdaq GM NYSE NYSE Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE NYSE Nasdaq GSM NYSE Nasdaq GSM Nasdaq GM Nasdaq CM
Delaware Delaware Delaware Cayman Islands Delaware Delaware Delaware Japan Delaware Delaware Delaware The Netherlands Delaware Delaware Israel Delaware Delaware Texas Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Germany Delaware Delaware Singapore Delaware Delaware Cayman Islands Delaware Delaware Israel Delaware
PAGE A-18
7370 6324 7372 4700 2100 7372 7370 7374 1531 2834 3714 2834 7372 7372 2834 7372 8071 6022 2834 2834 5600 3572 6200 2834 2834 3433 3555 2836 2834 2834 5961 1531 7370 1311 5812 7370 6770
A Survey and Related Resources
Workiva Inc. Wowo Limited Xactly Corporation Xencor, Inc. Xenon Pharmaceuticals Inc. xG Technology, Inc. Xoom Corporation Xtera Communications, Inc. Xunlei Limited Yintech Investment Holdings Limited Yirendai Ltd. Yodlee, Inc. Yulong Eco-Materials Limited YuMe, Inc. Zafgen, Inc. ZAIS Financial Corp. Zendesk, Inc. Zoe's Kitchen, Inc. Zosano Pharma Corporation ZS Pharma, Inc. ZTO Express (Cayman) Inc. Zulily, Inc. Zynerba Pharmaceuticals, Inc.
12/11/2014 4/8/2015 6/25/2015 12/2/2013 11/4/2014 7/22/2013 2/14/2013
11/12/2015 6/23/2014 4/26/2016 12/18/2015 10/2/2014 6/26/2015 8/6/2013 6/18/2014 2/7/2013 5/14/2014 4/10/2014 1/26/2015 6/17/2013 10/26/2016 11/14/2013 8/4/2015
$100.8 $40.0 $56.3 $70.0 $36.0 $7.4 $101.2 $25.0 $87.8 $101.3 $75.0 $75.0 $14.1 $46.1 $96.0 $120.1 $100.0 $87.5 $49.5 $107.0 $1,406.0 $253.0 $42.0
NYSE Nasdaq GSM NYSE Nasdaq GM Nasdaq GM Nasdaq CM Nasdaq GSM Nasdaq GSM Nasdaq GSM Nasdaq GSM NYSE Nasdaq GSM Nasdaq CM NYSE Nasdaq GM NYSE NYSE NYSE Nasdaq CM Nasdaq GM NYSE Nasdaq GSM Nasdaq GSM
Delaware Cayman Islands Delaware Delaware British Columbia Delaware Delaware Delaware Cayman Islands Cayman Islands Cayman Islands Delaware Cayman Islands Delaware Delaware Maryland Delaware Delaware Delaware Delaware Cayman Islands Delaware Delaware
7372 7379 7372 2834 2834 3669 6099 3661 7372 6200 6199 7372 3270 7311 2834 6798 7374 5812 2834 2834 4210 5961 2834
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APPENDIX B
EMERGING GROWTH COMPANIES Emerging Growth Company Benefits
Permits submitting a registration statement with the SEC on a confidential basis. EGCs may engage in oral or written communications with QIBs and institutional accredited investors in
order to gauge their interest in a proposed IPO (i.e., "test-the-waters") either prior to or following the first filing of the IPO registration statement. Requires EGCs to provide only two years of audited financial statements to the SEC (rather than three years), and delays the auditor attestation on internal controls requirement. Permits EGCs to omit financial information for historical periods otherwise required if the EGC reasonably believes such information will not be required at the time of the contemplated offering. Foreign Private Issuers that are EGCs will continue to be entitled to all of the other disclosure benefits available to them as FPIs (such as, for example, reduced compensation disclosure requirements, if permitted by home country practice). EGCs are exempt from: The mandatory say-on-pay vote requirement; The Dodd-Frank Act-required CEO pay ratio rules and may use certain smaller reporting company scaled
disclosure; Any new or revised financial accounting standard until the date that such accounting standard becomes
broadly applicable to private companies; and Any rule requiring mandatory audit firm rotation or a supplement to the auditor's report that would
provide additional information regarding the audit of the company's financial statements (no such requirements currently exist). An EGC may forego reliance on any exemption available to it. However, if it chooses to comply with financial reporting requirements applicable to non-EGCs, it must comply with all such standards and cannot selectively opt in or opt out of requirements. Any election must be made at the time the EGC files its first registration statement or Exchange Act report.
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EGC IPO Process
The SEC must review the draft registration statement
on a confidential basis
SUBMIT DRAFT S-1
The Form S-1 must be filed publicly 15 days before the road
show; at this time, all prior confidential submissions become
available publicly on EDGAR
After filing the Form S-1, the process is the same as a pre-JOBS Act IPO
FILE S-1
ROAD SHOW
S-1 EFFECTIVE
An EGC may remain in the
confidential review process until
required to file Form S-1, with the SEC issuing comments and the EGC responding with draft submissions
An EGC or any other person authorized by the EGC can "test-the-waters" in communications with QIBs and institutional accredited investors before or during the IPO
Broker-dealers, including those participating in the IPO, can publish research before, during or after the IPO without the research being deemed an "offer" under the Securities Act
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Disclosure Requirements
Financial Information in SEC Filings
PRIOR TO JOBS ACT
3 years of audited financial statements 2 years of audited financial statements
for smaller reporting companies Selected financial data for each of 5
years (or for life of issuer, if shorter) and any interim period included in the financial statements
UNDER THE JOBS ACT AND THE FAST ACT
2 years of audited financial statements
Not required to present selected financial data for any period prior to the earliest audited period presented in connection with an IPO
Within 1 year of IPO, EGC would report 3 years of audited financial statements
May omit financial information if there is a reasonable belief such will not be required at time of contemplated offering
Confidential Submissions of Draft IPO Registration Statement
No confidential filing for U.S. issuers
Confidential filing for FPIs only in specified circumstances
EGCs (including FPIs that are EGCs) may submit a draft IPO registration statement for confidential review prior to public filing, provided that the registration statement is publicly filed with the SEC not later than 15 days before the EGC conducts a "road show." This supersedes the SEC's December 2011 position on confidential submissions by FPIs.
Communications Before and During The Offering Process
Limited ability to "test-the-waters"
EGCs, either prior to or after filing a registration statement, may "test-the-waters" by engaging in oral or written communications with QIBs and institutional accredited investors to determine interest in an offering
Auditor Attestation on Internal Controls
Accounting Standards
Auditor attestation on effectiveness of
Transition period for compliance of up to
internal controls over financial reporting 5 years
required in second annual report after IPO
Non-accelerated filers not required to
comply
Must comply with applicable new or revised financial accounting standards
Not required to comply with any new or
revised financial accounting standard until such standard applies to companies that are not subject to Exchange Act public
company reporting EGCs may choose to comply with non-EGC
accounting standards but may not
selectively comply
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Disclosure Requirements (cont'd)
Executive Compensation Disclosure
Say-on-Pay
PRIOR TO JOBS ACT
UNDER THE JOBS ACT AND THE FAST ACT
Must comply with executive compensation May comply with executive compensation disclosure
disclosure requirements, unless a smaller
requirements by complying with the reduced disclosure
reporting company (which is subject to
requirements generally available to smaller reporting
reduced disclosure requirements)
companies
Beginning for fiscal years starting on or
Exempt from requirement to calculate and disclose the
after January 1, 2017, will be required to
median compensation of all employees compared to the
calculate and disclose the median
CEO
compensation of all employees compared FPIs entitled to rely on other executive compensation
to the CEO
disclosure requirements
Must hold non-binding advisory stockholder votes on executive compensation arrangements
Exempt from requirement to hold non-binding advisory stockholder votes on executive compensation arrangements for 1 to 3 years after no longer an EGC
Testing-the-Waters
The Securities Act prohibits all "offers" in whatever form prior to the filing of a registration statement.
Prior to the JOBS Act, non-public companies and most public companies were prohibited from communicating with potential investors about a proposed offering without having filed a registration statement ("gun jumping").
Title I of the JOBS Act expands permissible communications during a securities offering by amending the Securities Act to permit an EGC, or any person authorized to act on behalf of an EGC, either before or after the filing of a registration statement, to test-the-waters by:
engaging in oral or written communications with potential investors that are QIBs or institutions that are accredited investors to determine whether such investors might have an interest in a contemplated securities offering.
This concept changes the communications framework for offerings:
"Test-the-waters communications" will not be considered "gun jumping";
The communications may be oral or written;
If the communications are written, the communications need not comply with the requirements for a prospectus; and
These communications still are subject to securities law liability.
An EGC can use these communications in order to gain important insights into the views of QIBs and institutional accredited investors.
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A Survey and Related Resources During this "test-the-waters" process, the underwriter cannot solicit/confirm an order without a preliminary
prospectus. The content of these conversations should be discussed and perhaps scripted. To the extent that written materials are used, counsel will want to ensure that the materials are consistent
with the disclosures that will ultimately be included in the EGC's registration statement.
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APPENDIX C
NYSE VS. NASDAQ GLOBAL MARKET PRINCIPAL QUANTITATIVE LISTING REQUIREMENTS
The following table summarizes the principal quantitative listing requirements; there are also qualitative requirements.
Selected Listing Requirement
Minimum Number of Shareholders
NYSE 400 round lot holders for U.S. companies and 5,000 round lot holders for non-U.S. companies. 1, 2
Same. 3
Nasdaq Global Market
Minimum Number of Publicly Held Shares
1,100,000 for U.S. companies and 2,500,000 for non-U.S. companies.1,2
Same, with similar exclusions.
Minimum Aggregate Market Value of Publicly Held Shares
$40 million for U.S. companies and $100 million for non-U.S. companies ($60 million if the non-U.S. company has a parent or affiliate that is a listed company and retains control of the company or is under common control with the company). 1,2
Minimum per Price Share At least $4.00 at initial listing.
Any of:
$8 million under the Income Standard; $18 million under the Equity Standard; or $20 million under the Market Value
Standard4 or the Total Assets/Total Revenue Standard.5 Same. 6
Minimum Number of Market Makers
N/A
Four; unless company qualifies for listing under the Income or Equity Standards, which each require three.7
Minimum Financial Standards
For U.S. companies, one of the following:8 Earnings Test: Adjusted pre-tax earnings from continuing operations must total (1) $10
million for the last three fiscal years,9 including a minimum of $2 million in each of the two most recent fiscal years and positive amounts in all three years, or (2) if there is a loss in the third fiscal year, $12 million for the last three fiscal years, including a minimum of $5 million in the most recent fiscal year and $2 million in the next most recent fiscal year;10 or Global Market Capitalization Test: $200 million in global market capitalization (existing public companies must meet the minimum global market capitalization for a minimum of 90 consecutive trading days prior to listing on the NYSE).
One of the following:11 Income Standard: (1) $1 million in
annual pre-tax income from continuing operations in most recently completed fiscal year or in two of the three most recently completed fiscal years; and (2) stockholders' equity of $15 million; or Equity Standard: (1) stockholders' equity of $30 million; and (2) two-year operating history; or Market Value Standard: N/A for IPO; or
1 A foreign private issuer (FPI) may also avail itself of the requirement applicable to U.S. companies. 2 The number of shareholders includes shareholders of record and beneficial holders of shares held in street name. Shares held by directors, officers, or immediate families and other concentrated holdings of 10% or more are excluded. When considering a listing application from a company organized under the laws of Canada, Mexico, or the United States ("North America"), the NYSE will include all North American holders in applying the minimum shareholder requirement. When listing a company from outside North America, the NYSE may, in its discretion, include holders in the company's home country or primary trading market outside the United States in applying the minimum shareholder requirement, provided that such market is a regulated stock exchange. In exercising this discretion, the NYSE will consider all relevant factors including: (i) whether the information is derived from a reliable source, preferably either a government-regulated securities market or a transfer agent that is subject to governmental regulation; (ii) whether there exist efficient mechanisms for the transfer of securities between the company's non-U.S. trading market and the United States; and (iii) the number of shareholders and the extent of trading in the company's securities in the United States prior to the listing. 3 For the Nasdaq Global Select Market, at least 550 total holders and an average monthly trading volume over the prior 12 months of at least 1,100,000 shares; or at least 2,200 total holders; or a minimum of 450 round lot holders. For the Nasdaq Capital Market, a minimum of 300 round lot holders. 4 Market Value Standard is not applicable to IPOs. 5 For the Nasdaq Global Select Market, $45 million. For the Nasdaq Capital Market, $15 million under the Equity or the Market Value of Listed Securities Standards and $5 million under the Net Income Standard. 6 For the Nasdaq Capital Market, $4 bid price or $3 or $2 closing price under certain conditions. 7 For the Nasdaq Capital Market, three. 8 Real estate investment companies (REITs), closed-end management investment companies and business development companies (BDCs) have different requirements. 9 Under certain circumstances, a company may qualify with $10 million in aggregate for two years and nine months. 10 A company that qualifies as an EGC and avails itself of the provisions of the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act permitting EGCs to report only two years of audited financial statements can qualify under the Earnings Test by meeting the following requirements: adjusted pre-tax earnings from continuing operations must total at least $10 million in the aggregate for the last two fiscal years together with a minimum of $2 million in both years. 11 The other tiers (Nasdaq Global Select Market and Nasdaq Capital Market) have different requirements.
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For non-U.S. companies, one of the following:
Earnings Test: Adjusted pre-tax earnings from continuing operations must total $100 million for the last three fiscal years (two years if company is an EGC), including a minimum of $25 million in each of the two most recent fiscal years; or
Valuation/Revenue with Cash Flow Test: (1) $500 million in global market capitalization; (2) $100 million in revenues during the most recent 12-month period; and (3) $100 million aggregate adjusted cash flows for the last three fiscal years with at least $25 million in each of the two most recent fiscal years; or
Pure Valuation/Revenue Test: (1) $750 million in global market capitalization; and (2) $75 million in revenues during most recent fiscal year; or
Affiliated Company Test: (1) $500 million in global market capitalization; (2) parent or affiliated company is a listed company in good standing; (3) parent or affiliated company retains control of, or is under common control with, the entity; and (4) operating history of 12 months.
Total Assets/Total Revenue Standard: Total assets + total revenue of $75 million each for the most recently completed fiscal year or two of the three most recently completed fiscal years.
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APPENDIX D
SUMMARY OF DIFFERENCES BETWEEN THE NYSE AND NASDAQ LISTING STANDARDS
The following chart summarizes some the key differences between the requirements for companies with securities listed on the New York Stock Exchange ("NYSE") and the requirements for companies with securities listed on the NASDAQ Global Select Market ("NASDAQ"). The chart includes sections that summarize the differences between the two exchanges in their qualitative listing requirements, corporate governance standards, website posting requirements and listing costs. Please note that the chart does not necessarily include all of the detailed provisions of such rules.
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Initial Quantitative Listing Standards
INITIAL LISTING STANDARDS
NYSE
For U.S. companies, one of the following:*
Earnings Test: Adjusted pre-tax earnings from continuing operations must total (1) $10 million for the last three fiscal years, including a minimum of $2 million in each of the two most recent fiscal years and positive amounts in all three years, or (2) if there is a loss in the third fiscal year, $12 million for the last three fiscal years, including a minimum of $5 million in the most recent fiscal year and $2 million in the next most recent fiscal year; or
Global Market Capitalization Test: $200 million in global market capitalization (existing public companies must meet the minimum global market capitalization for a minimum of 90 consecutive trading days prior to listing on the NYSE).
*Real estate investment companies (REITs), closed-end management investment companies and business development companies (BDCs) have different requirements.
For non-U.S. companies, one of the following:
Earnings Test: Adjusted pre-tax earnings from continuing operations must total $100 million for the last three fiscal years (two years if company is an EGC)*, including a minimum of $25 million in each of the two most recent fiscal years;** or
Valuation/Revenue with Cash Flow Test: (1) $500 million in global market capitalization; (2) $100 million in revenues during the most recent 12month period; and (3) $100 million aggregate adjusted cash flows for the last three fiscal years with at least $25 million in each of the two most recent fiscal years; or
Pure Valuation/Revenue Test: (1) $750 million in global market capitalization; and (2) $75 million in revenues during most recent fiscal year; or
Affiliated Company Test: (1) $500 million in global market capitalization; (2) parent or affiliated company is a listed company in good standing; (3) parent or affiliated company retains control of, or is under common control with, the entity; and (4) operating history of 12 months.
NASDAQ
One of the following:
Standard 1 (Earnings): Adjusted pre-tax earnings from continuing operations must total (1) $11 million for the last three fiscal years, including a minimum of $2.2 million in each of the two most recent fiscal years and positive amounts in all three years; or
Standard 2 (Capitalization with Cash Flow): (1) Aggregate cash flows in prior three fiscal years greater than or equal to $27.5 million and positive amounts in all three years; (2) average market capitalization greater than or equal to $550 million over the prior 12 months; and (3) revenue for previous fiscal year greater than or equal to $110 million; or
Standard 3 (Capitalization with Revenue): (1) Average market capitalization greater than or equal to $850 million over the prior 12 months; and (2) revenue for previous fiscal year greater than or equal to $90 million; or
Standard 4 (Assets with Equity): (1) $160 million in market capitalization; (2) $80 million in total assets; and (3) $55 million in stockholders' equity.
The company must also meet the following requirements:
At least 2,200 total holders or 450 round lot holders;
Minimum number of publicly held shares of 1,250,000;
Minimum aggregate market value of publicly held shares of $45 million; and
Minimum price per share at least $4.00 at initial listing.
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* Under certain circumstances, a company may qualify with $10 million in aggregate for two years and nine months.
**A company that qualifies as an EGC and avails itself of the provisions of the Securities Act and the Exchange Act permitting EGCs to report only two years of audited financial statements can qualify under the Earnings Test by meeting the following requirements: adjusted pre-tax earnings from continuing operations must total at least $10 million in the aggregate for the last two fiscal years together with a minimum of $2 million in both years.
The company must also meet the following requirements:*
400 round lot holders for U.S. companies and 5,000 round lot holders for non-U.S. companies;
Minimum number of publicly held shares of 1,100,000 for U.S. companies and 2,500,000 for non-U.S. companies;
Minimum aggregate market value of publicly held shares of $40 million for U.S. companies and $100 million for non-U.S. companies ($60 million if the non-U.S. company has a parent or affiliate that is a listed company and retains control of the company or is under common control with the company); and
Minimum price per share at least $4.00 at initial listing.
*An FPI may also avail itself of the requirement applicable to U.S. companies. The number of shareholders includes shareholders of record and beneficial holders of shares held in street name. Shares held by directors, officers, or immediate families and other concentrated holdings of 10% or more are excluded. When considering a listing application from a company organized under the laws of Canada, Mexico, or the United States ("North America"), the NYSE will include all North American holders in applying the minimum shareholder requirement. When listing a company from outside North America, the NYSE may, in its discretion, include holders in the company's home country or primary trading market outside the United States in applying the minimum shareholder requirement, provided that such market is a regulated stock exchange. In exercising this discretion, the NYSE will consider all relevant factors including: (i) whether the information is derived from a reliable source, preferably either a government-regulated securities market or a transfer agent that is subject to governmental regulation; (ii) whether there exist efficient mechanisms for the transfer of securities between the company's non-U.S. trading market and the United States; and (iii) the number of shareholders and the extent of trading in the company's securities in the United States prior to the listing.
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CORPORATE GOVERNANCE STANDARDS
Director Independence Standard46 (Generally, the NYSE and NASDAQ standards for independence are the same, except as noted)
NYSE NASDAQ
The board of directors must make an affirmative determination as to whether or not each director is independent after reviewing each director's relationship with the company. Among other criteria, the board's review includes evaluating whether the director has a relationship with the company or is an officer, partner, or stockholder of a company that has a relationship with the company.
Under the NYSE standard for director independence, a director is not independent if:
The director served as an employee or the immediate family member served as an executive officer for a company that has made or received the greater of $1M or 2% of gross revenues worth of payments to/from the listed company in any of the past three fiscal years.
The board of directors must make an affirmative determination as to whether each director is independent. Among other criteria, the board's review includes evaluating whether the director has a relationship with the company or is an officer, partner, or stockholder of a company that has a relationship with the company.
Under the NASDAQ standard for director independence, a director is not independent if:
The director is or has a Family Member who is a controlling shareholder or an executive officer of a company that has made or received the greater of $200,000 or 5% of gross revenues worth of payments to/from the listed company in any of the past three fiscal years.
For purposes of the above rules, "Family Member" includes a person's spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-inlaw, brothers- and sisters-in-law, and anyone who shares such person's home. References to "company" include any parent or subsidiary in a consolidated group with the company.
For purposes of the above rules, "Family Member" means a person's spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person's home (other than domestic employees).
Disclosure of Independence Determination
The board must disclose the basis for its determination in its annual proxy statement or, if the company does not file an annual proxy statement, in the company's annual report filed with the SEC. Alternatively, the board may adopt and disclose standards for determining director independence and make a general disclosure that a given individual meets those standards.
No disclosure requirement regarding the basis for independence determination; only whether the determination has been made that a director is independent.
Independent Compensation Committee
Required.
Required.
Independent Nominating/Corporate Governance Committee
Required.
Company has the option to have nominating decisions made by a group consisting of a majority of the independent directors.
46 Under the rules of both NYSE and NASDAQ, company listing in connection with its initial public offering has one year to become fully compliant with the independence standards. Each committee must have one independent director at the initial listing, have a majority of independent directors within 90 days of the initial listing, and be fully independent within one year of the initial listing. Additionally, a Company listing in connection with its initial public offering shall have 12 months from the date of listing to comply with the majority independent board requirement.
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Audit Committee Independence and Financial Literacy Requirements
The committee must have at least three members, each of whom is or will become within a reasonable time period after appointment financially literate, as "interpreted by the listed company's board in its business judgment." In addition, at least one member must have accounting or related financial management expertise. Note, while the NYSE does not require such person to be an "audit committee financial expert," a board may "presume that such a person has accounting or related financial management expertise." Further, a listed company must disclose whether an audit committee member serves on more than three audit committees of public companies.
The committee must have at least three members, each of whom is financially literate (unlike the NYSE where members need not be financially literate at the time they begin service). At least one of the members must have past employment experience in finance or accounting field or requisite professional certification in accounting. None of the members may have participated in preparing the listed company's (or any current subsidiary of the company's) financial statements at any time during the past three years.
Audit Committee Charter
The written charter must address:
The written charter must address:
The committee's purpose, which must be to:
Scope of the committee's responsibilities
and how it carries out those responsibilities,
o assist the board with oversight of: the integrity
including its structure, processes, and
of the financial statements; compliance with
membership requirements.
legal and regulatory requirements; the
independent auditor's qualifications and
Responsibility for receiving a formal written
independence; and the performance of the
statement from the outside auditors regarding all
internal audit department and the independent
relationships between the auditor and the
auditors; and
company, discussing with the auditor any
o prepare the disclosure required by Item 407(d)(3)(i) of Regulation S-K (the audit
relationships or services that may affect the objectivity and independence of the auditor, and taking or recommending that the board take
committee report).
action to oversee the independence of the auditor.
Annual performance self-evaluation of the committee.
Committee duties and responsibilities, which must include those set out in Rules 10A-3(b)(2), (3), (4), and (5) of the Exchange Act as well as to:
o at least annually obtain and review a report by the independent auditor regarding the auditor's internal quality control procedures, any material issues raised by the auditor's most recent internal quality control review or any government investigation within the past five years regarding any audits carried out by the auditor and steps taken to deal with any issues, and all relationships between the auditor and the company;
Purpose of overseeing the accounting and financial reporting processes of the company and the audits of the financial statements.
Specific responsibilities and authority to comply with Rules 10A-3(b)(2), (3), (4), and (5) of the Exchange Act regarding:
o oversight of registered public accounting firms;
o complaints relating to accounting, internal accounting controls, or auditing matters;
o authority to engage advisors; and
o funding.
o review and discuss the company's annual audited financial statements and quarterly financial statements with management and the independent auditor;
o discuss the company's earnings press releases and any financial information and earnings guidance provided to analysts and rating agencies;
o discuss risk assessment and risk management policies;
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internal auditors and the independent auditors;
o review any audit problems or difficulties and management's response with the independent auditors;
o set hiring policies for current or former employees of the independent auditor; and
o report regularly to the board.
For those companies that do not yet have an internal audit function (because they are relying on the one-year transition period), the charter must also provide that the committee must:
Assist with board oversight of the design and implementation of an internal audit function.
Meet periodically with the company personnel primarily responsible for designing and implementing the internal audit function.
Review with the independent auditors the company's plans for implementing the internal audit function, including management's plans for internal audit's budget, staff, and responsibilities.
Report regularly to the board regarding the design and implementation of internal audit.
Compensation Committee Charter
The charter must address the following rights and responsibilities:
The compensation committee may, in its sole discretion, retain or obtain advice of a compensation consultant, independent legal counsel, or other adviser.
Each listed company must adopt a formal written charter (or board resolution) for its compensation committee that includes, among other provisions:
The scope of the compensation committee's responsibilities and how it will carry out its responsibilities.
The compensation committee must be directly
The compensation committee's responsibility for
responsible for the appointment, compensation,
determining, or recommending to the board of
and oversight of any compensation adviser.
directors for determination, the compensation of
the CEO and other executive officers.
The listed company must provide appropriate
funding for payment of reasonable compensation to A provision that the CEO may not be present
a compensation adviser, as determined by the
during voting or deliberations on his or her
compensation committee.
compensation.
In selecting compensation advisers, the compensation committee must take into consideration all factors relevant to that person's independence from management, including:
o the provision of other services to the listed company by the person that employs the compensation adviser;
o the amount of fees received from the listed company by the person that employs the compensation adviser, as a percentage of that person's total revenue;
The specific compensation committee responsibilities and authorities set out in NASDAQ Listing Rule 5605(d)(3), which include:
o The responsibility and authority to retain compensation consultants, legal counsel, and other advisors.
o The provision that the listed company must provide appropriate funding for payment of reasonable compensation to a compensation advisor, as determined by the compensation committee.
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o the conflict of interest policies and procedures of the person that employs the compensation adviser;
o any relationship of the compensation adviser with a member of the compensation committee;
o The responsibility and authority to consider the six independence factors itemized in Rule 10C-1(b)(4) under the Exchange Act (same as the six factors enumerated under the NYSE rules) before selecting or receiving advice from any compensation advisor.
o any stock of the listed company owned by the The compensation committee must review and
compensation adviser; and
reassess the adequacy of the compensation committee
charter annually.
o any business or personal relationship of the
compensation adviser with an executive
officer of the company.
Compensation advisers do not need to be independent, but the compensation committee must undertake an evaluation of their independence.
Nominating & Corporate Governance Committee Charter
The written charter must address: Purpose and responsibilities, which must at a
minimum include:
If the company has an N&CG Committee, it must have a written charter addressing the director nominations process and any related matters as may be required under federal securities laws.
o identifying individuals qualified to become board members consistent with criteria approved by the board and select, or recommend that the board select, the director nominees for the next annual meeting of stockholders;
If the company does not have an N&CG Committee, it must certify that it has adopted board resolutions addressing the director nominations process and any related matters as may be required under federal securities laws.
o developing and recommending to the board a set of corporate governance guidelines for the company; and
o overseeing the evaluation of the board and management.
Annual performance self-evaluation of the committee.
The charter should also address:
Committee member qualifications.
Appointment and removal of members.
Structure and operations, including the ability to delegate to subcommittees.
Reporting to the board.
Sole authority to retain and terminate any search firm to be used to identify director candidates, including authority to approve the search firm's fees and other retention terms.
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Internal Audit Function Corporate Governance Guidelines
Code of Conduct/Business Conduct and Ethics
The company must have an internal audit function that provides management and the audit committee with ongoing assessments of the company's risk management processes and internal controls. The company must adopt the internal audit function within one year of listing.
Not required.
Companies must adopt and disclose corporate governance guidelines that must address:
Not required.
Director qualification standards. This should at a minimum reflect the director independence standards in Sections 303A.01 and 303A.02, and may also include other policies such as:
o a limitation on the number of boards on which a director can sit; and
o director tenure, retirement, and succession.
Director responsibilities, including attendance at board meetings and advance review of meeting materials.
Director access to management and, as necessary and appropriate, independent advisors.
Director compensation, including general principles for determining the form and amount of compensation.
Director orientation and continuing education.
Management succession, including policies for:
o selection of the CEO;
o performance review; and
o succession following an emergency or retirement.
Annual performance self-evaluation of the board.
Companies must adopt a code of business conduct and ethics that applies to all directors, officers, and employees. The code must provide the following:
Waiver of the code for executive officers or directors can be made only by the board or a board committee.
Compliance standards and procedures for the effective operation of the code.
The code should also address the following topics:
Conflicts of interest. The code must prohibit conflicts of interest and provide a means for employees, officers, and directors to report
Companies must adopt a code of business conduct and ethics that applies to all directors, officers, and employees. The code must:
Comply with the definition of code of ethics in Section 406 of Sarbanes-Oxley and any related SEC regulations. This means the code must include standards reasonably necessary to promote:
o ethical handling of conflicts of interest;
o full and fair disclosure; and
o compliance with laws, rules, and regulations.
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potential conflicts to the company. Corporate opportunities. Confidentiality. Employees, officers, and directors
must keep information confidential except when disclosure is authorized by the company or legally required. Fair dealing. Employees, officers, and directors must deal fairly with customers, suppliers, competitors, and employees. Protection and proper use of company assets. Compliance with laws, rules, and regulations, including insider trading laws. Encouraging the reporting of any illegal or unethical behavior.
Provide for an enforcement mechanism that ensures: o prompt and consistent enforcement of the code; o protection for persons reporting questionable behavior; o clear standards for compliance; and o a fair process for determining violations.
Require that any waiver of the code for executive officers or directors be made only by the full board.
Waivers from the Code of Conduct/Business Conduct and Ethics
If the board of directors or a board committee grants a waiver of the code for an executive officer or director, the waiver must be disclosed to stockholders within four business days in a press release, on the company's website or by filing a Form 8-K.
Generally the same, except:
Only the full board can grant the waiver.
The reasons for the waiver in addition to the waiver must be disclosed.
If the board of directors approves a waiver of the code for a director or executive officer, the waiver and the reasons for the waiver must be disclosed within four business days by filing a Form 8-K.
Annual CEO Certification
The CEO of a listed company must also annually certify in a written affirmation to the NYSE that he or she is not aware of any violations of NYSE corporate governance listing standards made by the company.
No annual certification process, but must amend initial certification if a change would cause the initial certification to be inaccurate.
Meetings of Independent Directors
The non-management directors (including nonindependent directors) must meet at regularly scheduled executive sessions without management. However, the company can choose instead to hold meetings of only the independent directors. If the company does not choose this option, it should hold an executive session of only independent directors at least once a year.
There must be regularly scheduled meetings of only the independent directors. These should occur at least twice a year.
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Non-independent Members of Board Committees Stockholder Approvals
All committee members must meet SEC and NYSE independence standards.
All committee members must meet SEC independence standards. However, NASDAQ allows a listed company to appoint one non-independent director (one that does not satisfy NASDAQ's definition of independence and is not an executive officer or employee) to the audit, compensation, or nominating committee under certain limited circumstances.
Stockholder approval is required for the following: Equity compensation plans and any material
revisions to those plans. Issuing securities that would result in a
change of control. Issuing common stock or securities convertible
into, or exchangeable for, common stock if:
Stockholder approval is generally required for issuing securities in:
Acquisitions of stock or assets of another company.
Equity-based compensation of officers, directors, employees or consultants.
A change in control of the company.
o the common stock will have voting power of 20% or more of the common stock outstanding before the issuance; or
o the number of shares of common stock to be issued is 20% or more of the number of shares of common stock outstanding before the issuance.
Issuing common stock or securities convertible into, or exchangeable for, common stock to any director, officer, or substantial securityholder, any of their affiliates or subsidiaries, or any entity in which they have a substantial interest in an amount that exceeds either 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance.
Stockholder approval is not required for the following:
Equity plans that are made available to stockholders generally or that allow employees or directors to elect to buy shares on the open market or from the company for current fair market value.
Employment inducement awards, including grants to new employees in connection with a merger or acquisition.
Adjusting existing equity awards to reflect a merger or acquisition.
Private placements.
In particular, stockholder approval is required for the following:
Issuing securities that will result in a change of control.
Issuing securities in an acquisition if any director, officer, or substantial stockholder has a 5% or more interest in the company or assets being acquired and the issuance could result in an increase in outstanding common stock or voting power of 5% or more.
Issuing securities in an acquisition if:
o the common stock to be issued will have voting power of 20% or more of the voting power outstanding before the issuance; or
o the number of shares of common stock to be issued will be 20% or more of the number of shares of common stock outstanding before the issuance.
Stock option plans, stock purchase plans, and other equity compensation arrangements by which officers, directors, employees, or consultants can acquire stock and any material amendments to those plans and arrangements.
Issuances of shares under plans inherited in mergers or acquisitions to employees of the acquired entities.
Equity plans under Section 401(a) (such as employee stock option plans) or Section 423 (employee stock purchase plans) of the Internal Revenue Code (IRC) or "parallel excess plans" under ERISA and the IRC.
Issuing securities in a transaction that is not a public offering where:
o the sale or issuance of common stock or securities convertible into or exchangeable for common stock is at a price less than the greater of book or market value and represents, together with sales by directors, officers, or substantial holders, 20% or more of the number of shares or voting power
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Public offerings of securities for cash.
outstanding before the issuance; or
Private placements of common stock for cash for a price that exceeds each of the market value and
o the sale or issuance of common stock or securities convertible into or exchangeable
book value of the common stock.
for common stock of 20% or more of the number of shares or voting power
Private placements of securities convertible into or exchangeable for common stock if the conversion or exercise price exceeds each of the market value
outstanding before the issuance is at a price less than the greater of book or market value.
and book value of the common stock.
Stockholder approval is not required for the following:
Issuances where the delay in obtaining stockholder approval would seriously jeopardize the company's financial viability and the audit committee approves
Issuance of warrants or rights generally to all securityholders of the company.
reliance on this exception.
Stock purchase plans available on equal terms to
all securityholders of the company (such as
dividend reinvestment plans).
Tax qualified nondiscriminatory employee benefit plans, such as plans under Section 401(a) or Section 423 of the IRC, or parallel non-qualified plans, if these plans are approved by an independent compensation committee or a majority of the independent directors on the board.
Employment inducement awards to someone who was not an employee or director of the company before (including in connection with a merger or acquisition) if the awards are approved by an independent compensation committee or a majority of the independent directors on the board.
Adjusting existing equity awards to reflect a merger or acquisition.
Issuances of shares under plans inherited in mergers or acquisitions to employees of the acquired entities.
Public offerings.
Issuances where the delay in obtaining stockholder approval would seriously jeopardize the company's financial viability and the audit committee or a similar body of independent disinterested directors approves reliance on this exception.
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Website Posting Requirements
Audit Committee Charter
Compensation Committee Charter
Nominating and Corporate Governance Committee Charter
Code of Ethics
NYSE Website posting required. Website posting required.
Website posting required.
Website posting required.
Corporate Governance Guidelines
Changes to Code of Ethics
Website posting required.
The NYSE requires waivers from the code of ethics and business conduct to be disclosed to stockholders. This can be accomplished by, among other options, posting on the company's website.
NASDAQ Website posting not required. Website posting not required.
Website posting not required.
Must be made publically available, but NASDAQ rules do not specify the means to do so. Website posting not required.
NASDAQ requires waivers from the code of conduct to be disclosed. This can be accomplished by, among other options, posting on the company's website in a manner that satisfies Item 5.05(c) of Form 8-K.
Company Contributions to Certain Tax Exempt Organizations
The NYSE requires a listed company to disclose any contributions made by it to any tax exempt organization in which any independent director of the company serves as an executive officer if, within the past three years, contributions in any single fiscal year from the listed company to the organization exceeded the greater of $1M or 2% of the tax exempt organization's consolidated gross revenues. This information can be posted on the company's website or disclosed in the company's proxy statement.
Not required.
Audit Committee Member Service on Other Companies' Boards
If any member of a listed company's audit committee serves on the audit committees of more than three public companies, the NYSE requires the listed company to disclose its board's determination that this simultaneous service would not impair the ability of the director to effectively serve on its audit committee. This information can be posted on the company's website or disclosed in the company's proxy statement.
Not required.
Communications with Directors
Method for interested parties (including stockholders) to communicate with the presiding director or with the company's independent or non-management directors as a group to be posted on the company's website or disclosed in company's proxy statement.
Not required However, under Item 407(f) of Reg. S-K, if a company has adopted a process for security holders to communicate with the board of directors, the company must describe how holders can communicate with the full board or individual directors. This information can be posted on the company's website or disclosed in the company's proxy statement.
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Non-independent Members of Board Committees
N/A
Initial Listing Fee
Listing Fees
NYSE The minimum fee is $125,000, and the maximum is $250,000, based on the number of shares listed.
A company that relies on the exception for its compensation or nominating committee must disclose the member's relationship and reasons for board's determination. This information can be posted on the company's website or disclosed in the company's proxy statement.
NASDAQ The minimum fee is $125,000, and the maximum is $225,000.
Annual Listing Fee Listing of Additional Shares
The minimum annual fee is the greater of $59,500 or $0.00105 per share calculated based on the number of shares listed. The maximum aggregate fee is $500,000 in any year.
The minimum fee is $40,000, and the maximum is $125,500.
$0.0048 per share up to and including 75 million shares.
$0.01 per share for any amount of shares exceeding
49,999 shares issued during a quarter, subject to a
minimum fee of $5,000 per quarter and a maximum fee of $65,000 per year.47
$0.00375 per share for any additional shares over 75 million shares up to and including 300 million shares.
Minimum application fee is $25,000.
$0.0019 per share for any additional shares over 300 million shares.
Minimum application fee is $25,000.
47 NASDAQ has announced its All-Inclusive Annual Listing Fee program, under which the annual fee is higher but there are no fees to issue additional shares, change name or symbol, request a written rule interpretation, or make any other corporate change. Companies under the All-Inclusive program receive just one invoice per year for all listing-related activities. All companies will be subject to the All-Inclusive program beginning in January 2018; listed companies can elect to opt-in to this program earlier.
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APPENDIX E
CONTROLLED COMPANIES
A "controlled company" is a company of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company. 1 The calculation of voting power held by a group can include shares covered under voting agreements between or among shareholders relating to the election of directors. A company elects to be a controlled company in its initial listing application to an exchange. A company that elects to be considered a "controlled company" and relies on the exchange-permitted exemptions must disclose such exemptions in its public filings pursuant to Regulation S-K, Item 407(a), Instruction 1.
A "controlled company" is not required to comply with the following exchange requirements: A company's board of directors is required to have a majority of independent directors.2 Independent directors must determine the compensation of the CEO and other executive officers.3 Independent directors must select or recommend nominees for directors.4
Phase-In Requirements After Losing Controlled Company Status
NASDAQ Rule IM-5615-5
Upon ceasing to be a controlled company, the company must:
have at least one independent director on its Nominating and Corporate Governance Committee and at least one independent director on its Compensation Committee by the date on which the company ceases to be a controlled company (controlled company exemption does not extend to Audit Committee requirements);
have at least a majority of independent directors on each Committee within 90 days of the date on which the company ceases to be a controlled company;
have fully independent committees within one year of the date on which the company ceases to be a controlled company; and
have a majority of independent directors on the Board of Directors within one year of the date on which the company ceases to be a controlled company.
NYSE Rule 303A.00
To the extent a controlled company ceases to qualify as such, the company must: satisfy the majority independent board requirement within one year of the date its status changed; make committee charters available on or through website by the date its status changed; and have at least one independent member on its nominating committee and at least one independent member on its compensation committee by the date its status changed, at least a majority of independent members on each committee within 90 days of the date its status changed, and fully independent committees within one year of the date its status changed.
1 Nasdaq Equity Rule 5615(c)(1) and NYSE Listed Company Manual 303A.00. 2 Nasdaq Equity Rule 5605(b)(1) and NYSE Listed Company Manual 303A.01. 3 Nasdaq Equity Rule 5605(d)(1)(B) and NYSE Listed Company Manual 303A.05. 4 Nasdaq Equity Rule 5605(e)(1) and NYSE Listed Company Manual 303A.04.
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CONTRIBUTORS
Kevin Erspamer KErspamer@mofo.com +1 (212) 336-4135
Alexandra Perry AlexandraPerry@mofo.com +1 (212) 336-4261
David Lichtstein DLichtstein@mofo.com +1 (212) 336-4224
Lailey Rezai LRezai@mofo.com +1 (212) 336-4178
Gena Olan GOlan@mofo.com
+1 (212) 336-4170
CONTACTS
Ze'-ev Eiger ZEiger@mofo.com +1 (212) 468-8222
Anna Pinedo APinedo@mofo.com +1 (212) 468-8179
Brian Hirshberg BHirshberg@mofo.com +1 (212) 336-4199
James Tanenbaum JTanenbaum@mofo.com +1 (212) 468-8163
David Lynn DLynn@mofo.com +1 (202) 887-1563
RESOURCES
We have a number of resources regarding IPOs and EGCs, including the following:
The Short Field Guide to IPOs.
In our recently updated IPO Field Guide we provide an overview of the path to an initial public offering and address a number of recent developments. Our guide is available here: https://goo.gl/Cvxa4S.
MoFo's Quick Guide to REIT IPOs.
Our recently updated Quick Guide to REIT IPOs provides an overview of the path to an IPO for a REIT. The guide also addresses regulatory, tax, and accounting considerations relevant to sponsors considering forming a REIT. Our guide is available here: https://goo.gl/jwrKE1.
IFLR-MoFo JOBS Act Quick Start
The IFLR-MoFo JOBS Act Quick Start provides an overview of the provisions of the JOBS Act and the accommodations provided to EGCs. The quick start guide is available here: https://goo.gl/C5ihUU.
Our MoFo Jumpstarter blog and our dedicated JOBS Act Page is intended to provide entrepreneurs, domestic and foreign companies of all shapes and sizes, and financial intermediaries with up-to-the minute news and commentary on the JOBS Act. Visit www.mofojumpstarter.com and www.mofo.com/jumpstart.
@ThinkingCapMkts www.mofo.com
2017 Morrison & Foerster LLP
