Glossary

 

Accounting Methodologies The methods by which income and expenses are calculated and reported, frequently in compliance with U.S. Generally Accepted Accounting Principles (GAAP).
   
83(b) Elections An election under Section 83(b) of the Internal Revenue Code through which a taxpayer may elect to have restricted shares and other ownership interests that will be subject to vesting treated as income for federal income tax purposes at the time of transfer rather than upon vesting in the future. Generally results in the taxpayer being subject to reduced income tax with any post-election appreciation in value of the equity being subject to lower capital gains, rather than income, tax.
   
A/B Exchange Offers See “Exxon Capital Exchange Offers.”
   
Abandoned Property See “Escheatment.”
   
Accelerated Filers Companies with an aggregate worldwide market value held by non-affiliates of $75 million or more, but less than $700 million, that are subject to accelerated reporting obligations under the U.S. Securities Exchange Act of 1934. (See Exchange Act Rule 12b-2.)
   
   
Accredited Investors Sophisticated investors, as determined by reference to specified SEC criteria, who or which are eligible to participate in certain securities transactions that are exempt from registration under the U.S. Securities Act of 1933. (See Rule 501 of Regulation D.)
   
Acquisition Method Accounting Procedures governing the accounting for the acquisition of one company by another.
   
Acquisition Premiums In connection with an M&A transaction, the amount by which the purchase price exceeds the pre-acquisition valuation of the target.
   
Action by Written Consent Approvals and other actions taken by consents in writing signed by the equityholders, directors, partners, managers or other persons taking the actions representing the minimum number of votes required to take the actions.
   
ADRs American Depositary Receipts, negotiable U.S. securities that generally represent a non-U.S. company’s publicly-traded equity securities.
   
Advance Notice Bylaws Corporate bylaws provisions requiring shareholders to provide notice to the corporation within a specified period of time and containing specified information for the shareholders’ proposals to be brought before a meeting of shareholders.
   
Advancement of Legal Fees Advance payment of, or reimbursement for, personal legal expenses incurred by directors, officers or other employees in connection with proceedings or investigations for which the director, officer or other employee may be entitled to indemnification.
   
Affiliates An “affiliate” of, or a person “affiliated” with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.
   
All-Holders, Best-Price Rule Provisions of Exchange Act Rule 14d-10 requiring consideration paid to any security holder pursuant to a tender offer to be the highest consideration paid to any other security holder during such tender offer.
   
Analysts Financial professionals who perform financial analysis, evaluate investments and make investment recommendations.
   
Angel Financing Financing for early-stage startup companies provided by affluent individuals commonly referred to as angel investors, who usually qualify as “accredited investors” for purposes of the exemption from Securities Act registration pursuant to the Regulation D safe harbor.
   
Annual Reports The principal documents used by most public companies to disclose corporate information to shareholders; usually state-of-the-company reports, including letters from CEOs, financial data, operating results, product plans and R&D activities.
   
Annual Shareholders’ Meetings Meetings of corporations’ shareholders, typically required by the law of a corporation’s jurisdiction of incorporation to be held at least annually, at which directors are elected and other business is considered and acted upon by shareholders.
   
Anti-Dilution Provisions Provisions protecting holders of convertible, exchangeable or exercisable securities from adverse consequences that may result from certain corporate actions taken by an issuer, including the issuance of additional securities at a lower price than the holder’s original acquisition price.
   
Antitakeover Laws Federal and state statutory laws restricting a prospective buyer’s ability to acquire all or a portion of the ownership interests or assets of a target company.
   
Appraisal Rights Shareholders’ right to demand the fair value for shares held by them in connection with a merger, consolidation or similar transaction.
   
Asset Sale or Purchase Acquisition of all or a portion of a business by direct purchase of assets rather than by indirect acquisition of ownership interests in an entity.
   
Asset-Backed Securities Securities collateralized by bundled loans, such as residential mortgage, commercial or student loans.
   
At-the-Market Offerings Registered offerings by a publicly-traded issuer of its listed equity securities directly into the market at other than fixed prices.
   
Attorney-Client Privilege Duty of an attorney not to disclose certain confidential information of a client without the client’s consent.
   
Auctions Sale process designed to elicit competitive bidding by prospective buyers to maximize price and seller-favorable deal terms.
   
Audit Committee Financial Experts Independent directors of the board who meet specified requirements for accounting and financial expertise. (See Item 407(d)(5) of Regulation S-K.)
   
Audit Committees Committees (or equivalent bodies) established by boards of directors of companies for the purpose of overseeing accounting and financial reporting processes and audits of financial statements, frequently composed entirely of independent directors.
   
Audit Documentation / Work Papers Materials created or obtained by an auditor in connection with the conduct of an audit.
   
Audit Firm Periodic Reporting Periodic reporting by registered public accounting firms pursuant to PCAOB rulemaking mandated by Sarbanes-Oxley.
   
Audit Response Letters Lawyers’ responses to auditors’ requests for information.
   
Auditor Engagements Engagements of accounting firms by companies for the purpose of conducting audits.
   
Auditor Independence Capability of an auditor to exercise objective and impartial judgment on all issues encompassed within the audit engagement.
   
Auditor Reports Formal opinions, or disclaimers thereof, issued by internal auditors or independent external auditors as a result of an audit or evaluation.
   
Auditors Persons who conduct audits.
   
Audits Professional examinations and verifications of companies’ accounting documentation and supporting data for the purpose of rendering opinions as to their fairness, consistency and conformity with generally accepted accounting principles (GAAP).
   
Bankruptcy & Reorganization Legal process through which insolvent debtors restructure or discharge indebtedness and other liabilities.
   
Bear Hug Letters A potential buyer’s unsolicited correspondence to a takeover target proposing to acquire it.
   
Beneficial Ownership The exclusive or shared possession, directly or indirectly, of voting or investment power with respect to the security. (See Exchange Act Rule 13d-3.)
   
Big Boy Provisions Specific disclaimers and releases between parties to a negotiated securities transaction where one party, typically the seller, may possess material, nonpublic information relating to the issuer of the securities that it does not want to disclose, or is prohibited from disclosing, but both parties want to complete the transaction and preclude any claims based on misrepresentations or omissions, including claims arising under Exchange Act Rule 10b-5.
   
Blackout Periods (Securities) Periods of time during which a public company’s officers, directors and certain other persons are prohibited from trading the company’s securities, primarily for the purpose of ensuring compliance with insider trading rules.
   
Blasius Standard Standard of review used by Delaware courts when analyzing board actions affecting the shareholders’ franchise; requires directors to provide a “compelling justification” when the primary purpose of the board’s action is to interfere with the shareholders’ franchise rights.
   
Blue Sky Laws State securities laws applicable to transactions in securities with a nexus to individual states; designed to protect the public from fraud and frequently preempted by federal securities laws.
   
Board Committees Committees established by boards of directors of companies for the purpose of overseeing specified aspects of the companies’ businesses and operations.
   
Board Evaluations Performance evaluations of boards of directors of companies.
   
Board Executive Sessions Board of directors or board committee meetings in which only independent or non-management directors participate.
   
Board Meeting Minutes Written record of a meeting of the board of directors of a company, generally describing the time, place, participants and events of the meeting.
   
Board of Directors A body comprised of one or more elected or appointed natural persons that manages the business and affairs of a corporation or other entity.
   
Book-Entry Registration Registration of uncertificated securities in a system of tracking ownership; facilitates transactions in securities, as physical certificates do not need to be conveyed.
   
Books & Records Books of account, minute books and stock record books and other similar records of a company.
   
Breakup Fees Fees payable by a target company to a rejected buyer in an M&A transaction if the target company terminates the acquisition agreement under certain circumstances, typically associated with accepting a superior proposal.
   
Broker Non-Votes Occurs when a broker holding shares in “street name” for a beneficial owner is represented in person or by proxy at a shareholder meeting but does not vote on a particular proposal because the broker has not received voting instructions from the beneficial owner and cannot or chooses not to vote the shares in its discretion for that particular proposal.
   
Broker-Dealers A person or entity who or which trades securities for its own account (i.e., as a “dealer”) or on behalf of others (i.e., as a “broker”).
   
Business Judgment Rule Presumption that in making a business decision the directors of a company acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.
   
Bylaws Written rules adopted by a corporation or other entity defining the rights and obligations of directors, officers, shareholders and other stakeholders and establishing rules for internal governance of the organization.
   
Cash Elections In connection with an M&A transaction, the election by a target company equity-holder to receive cash, securities or some combination thereof as consideration of the sale or exchange of such holder’s equity in the target company.
   
Cashless Exercises Means of exercising stock options in which the option holder borrows the cash necessary to exercise the option and simultaneously sells sufficient shares to cover the loan and any taxes or broker’s commissions.
   
CD&A Compensation Discussion and Analysis; a section of proxy statements or Forms 10-K that is intended to be a narrative overview that provides context for a company’s compensation disclosure.
   
CEO & CFO Certifications Certifications of quarterly and annual reports by the principal executive and principal financial officers of a public company required pursuant to Sections 302 and 906 of Sarbanes-Oxley (Item 601(b)(32) of Regulation S-K and 18 USC Sec. 1350).
   
CEO Evaluations Chief executive officer performance evaluations, typically conducted by a company’s board of directors or board committee.
   
CEO Succession Process of transitioning or planning a transition from one chief executive officer to another.
   
Certificates / Articles of Incorporation Legal instrument representing the commencement of a corporation’s existence and establishing certain fundamental characteristics of the corporation, generally including, among other things, its name, its purpose and terms of equity securities authorized for issuance.
   
Certificates / Articles of Limited Partnership Legal instrument representing the commencement of a limited partnership’s existence.
   
Certificates of Formation / Articles of Organization Legal instrument representing the commencement of a limited liability company’s existence.
   
CFIUS The Committee on Foreign Investment in the United States (CFIUS) is a U.S. federal inter-agency body charged with implementing Exon-Florio.
   
Change in Auditors Change in independent accounting firm engaged by a company to conduct an audit.
   
Change of Control Change in the power to direct or cause the direction of the management and policies of a company, whether through the ownership of voting securities, contract or otherwise.
   
Charter & Bylaws Indemnification Payment of or reimbursement for certain losses incurred by officers or directors of a company pursuant to the company’s certificate of incorporation, bylaws or other organizational documents.
   
Classified / Staggered Board Board of directors with more than one class of directors and each class stands for election in successive years.
   
Clawbacks Requirements that current or former directors, officers or other employees repay a portion of their compensation under specified circumstances, including in the event of a financial restatement, violation of a non-competition agreement or other malfeasance.
   
Close Corporations Corporations the stock of which are held by a single or small group of shareholders that have been formed as “close corporations” in accordance with the requirements of their jurisdictions of incorporation, which enables the corporations to function without adherence to certain corporate formalities.
   
Closing Conditions Future events or circumstances on which the consummation of a transaction is contingent.
   
Codes of Conduct & Ethics Written standards designed to deter wrongdoing and promote ethical conduct by a company’s officers and directors, often addressing good disclosure practices, compliance with laws, internal reporting of code violations, accountability, conflicts of interest, loyalty, confidentiality, fair dealing and use of company assets.
   
Comfort Letters Letters prepared by a company’s accountant providing independent verification of certain financial information in a registration statement, generally required by an underwriter to be delivered as a condition to closing a public offering of securities.
   
Commercial Paper An unsecured promissory note with a fixed maturity of one to 270 days, typically issued at a discount and used to finance accounts receivable, inventory and short-term liabilities; exempt from registration under Section 3(a)(3) of the Securities Act.
   
Commercial Transactions Ordinary course transactions among business entities relating to the sale, license, lease or other conveyance of interests in and of services, goods and other property, including transactions relating to supply, distribution, manufacturing, real and personal property, intellectual property, development and services.
   
Commitment Level (Securities) Level of underwriters’ underwriting commitment (either “best efforts” or “firm commitment”) in connection with a securities offering.
   
Common Stock Baseline equity interest in a corporation entitling the holder to vote on the election of directors and to receive dividends as, if and when declared; typically subordinated to preferred stock and indebtedness of the corporation.
   
Compensation Committees Committees (or equivalent bodies) established by boards of directors of companies for the purpose of overseeing compensation of executives, frequently composed entirely of independent directors.
   
Compensation Consultants Third party service providers who advise companies about their compensation and benefits practices.
   
Compliance Compliance by company personnel with applicable laws and regulations.
   
Confidential Treatment Confidential treatment of information submitted to the SEC, including (1) procedures by which persons submitting information may request that the information be withheld under the Freedom of Information Act and otherwise treated confidentially and (2) the confidential submission by emerging growth companies of registration statements for review pursuant to Securities Act Section 6(e).
   
Confidentiality Provisions governing the use, disclosure and other treatment of confidential or proprietary information of the parties.
   
Conflict Minerals Disclosure Disclosure obligations, risks and practices associated Section 1502 of Dodd-Frank and associated regulations, which require persons to disclose annually whether any conflict minerals that are necessary to the functionality or production of a product of the person originated in the Democratic Republic of the Congo or an adjoining country and, if so, to provide a report describing, among other matters, the measures taken to exercise due diligence on the source and chain of custody of those minerals, which must include an independent private sector audit of the report that is certified by the person filing the report. Certain rules require consultation with other federal agencies, including the State Department, the Government Accountability Office, and the Commerce Department.
   
Conflicts of Interest Where a person’s own interests, or the interests of another person to whom or which such person owes a duty, diverge from the interests of another person to whom or which such person owes a duty.
   
Consent Solicitation Process by which an issuer of securities solicits the consent of security-holders to amend or waive certain of the terms of the securities, frequently occurring in connection with waivers of indenture covenants. May also refer to solicitations of shareholder consents by issuers or activists for the purpose of supporting a proposed transaction or proposal.
   
Consideration – M&A Any rights, interests, profits or other benefits accruing to one party, or some forbearances, detriments, losses or responsibilities given, suffered or undertaken by the other, in each case serving as the cause, price or inducement to enter into the agreements governing the M&A transaction. Typically consists of some combination of fixed and contingent cash, stock, assumption of debt and pre- and post-closing covenants.
   
Contingent Value Rights Derivative instruments issued to target company shareholders as consideration for the sale, exchange or cancellation of such holder’s equity in the target company pursuant to which the shareholders may receive cash or other consideration upon the occurrence of a future event or circumstance.
   
Contract Assignment Direct or indirect transfer by a contracting party of all or any part of such party’s rights and obligations under a contract to one or more third parties.
   
Contract Boilerplate Standard contract provisions, including provisions governing choice of law, amendment, waivers, integration, dispute resolution, notice, counterparts, assignment, force majeure, interpretation, indemnification, confidentiality and limitations of liability.
   
Contract Defaults & Disputes Breaches of contract and disputes and adversarial proceedings among contracting parties and third party beneficiaries relating to compliance with contractual terms and conditions.
   
Contract Drafting The writing, assembly or other preparation of legally binding agreements.
   
Control Securities Securities owned by an affiliate of the issuer.
   
Controlled Company 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; exempt from certain corporate governance requirements of the NYSE and Nasdaq.
   
Controlling Shareholders Shareholders with the power to direct or cause the direction of the management and policies of companies, whether through the ownership of voting securities, contract or otherwise.
   
Convertible Debt (Established Companies) Debt instruments issued by companies other than startups convertible into or exchangeable for another class of securities (typically, common stock or other equity securities) at the option of the holder; cf Convertible Notes (Startups).
   
Convertible Notes (Startups) Debt instruments issued by early-stage startup companies to investors, most often in connection with seed financing transactions, which convert at a discount to preferred stock sold in a subsequent venture capital transaction.
   
Convertible Stock Equity securities convertible into or exchangeable for another class of securities (typically, common stock or other equity securities) at the option of the holder.
   
Corporate Housekeeping Adherence to corporate formalities and administration of day-to-day legal requirements of corporate existence.
   
Corporate Opportunity See “Duty of Loyalty.”
   
Corporate Veil-Piercing The imposition of personal liability on equity-holders in a corporation, limited liability company, limited partnership or similar entity for the debts and obligations of the entity.
   
Corporations Legal persons the rights, purposes and obligations of which are established under state corporation law and the entity’s certificate of incorporation and bylaws (or analogous organizational documents) and ownership of which is embodied in shares of capital stock.
   
Covenants – General Enforceable promises to take or refrain from taking specified actions.
   
Covenants – Post-Closing Enforceable promises to take or refrain from taking specified actions following consummation of a transaction.
   
Covenants – Pre-Closing Enforceable promises to take or refrain from taking specified actions on or prior to consummation of a transaction.
   
Covered Bonds Debt securities collateralized by cash flows from mortgages or public sector loans.
   
Credit Ratings & Ratings Agencies Credit ratings agencies conduct analyses of debt instruments and the issuers thereof and issue credit ratings reflecting the agencies’ assessment of the likelihood of default associated with the underlying instrument or issuer.
   
Crisis Management Process for dealing with emergencies.
   
Critical Accounting Policies Accounting policies of a company that management believes are most important to the portrayal of the company’s financial condition and results, and require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently subjective.
   
Cross-Border M&A M&A transactions involving one or more parties domiciled within the U.S. and one or more parties domiciled outside of the U.S.
   
Cross-Border Tender Offer Rules Exemptions from Securities Act registration and Exchange Act tender offer rules for certain cross-border rights offerings, tender and exchange offers and business combinations.
   
Crowdfunding Raising capital through multiple, smaller investments from communities of investors; usually effected via the internet and structured as investments in a company’s equity securities.
   
Cumulative Voting A type of voting process that helps strengthen the ability of minority shareholders to elect a director by allowing shareholders to cast all of their votes for a single nominee for the board of directors when the company has multiple openings on its board.
   
Cybersecurity Risk & Disclosure Risks and related disclosure obligations and practices associated with cybersecurity and cyber incidents applicable to an issuer, market systems and customer data.
   
D&O Questionnaires Questionnaires provided to a company’s directors and officers soliciting information required to prepare a registration statement or periodic report to be filed with the SEC.
   
Data Rooms / Data Sites A physically secure room or an internet website with controlled access containing large amounts of confidential materials and information relating to a party to an M&A transaction or participant in a securities offering used by other parties to the transaction and their advisers to conduct legal, financial and operational due diligence.
   
De Facto Mergers See “Successor Liability.”
   
Deal Protections Devices contained in the primary transaction agreement or ancillary agreements designed to preserve the transaction in the face of actual or potential competitive acquisition proposals from third parties, including no-shops, matching rights, breakup fees, force the vote provisions, lockups and poison pills.
   
Deal Structure (M&A) The legal ordering of an M&A transaction, whether by forward or reverse parent or subsidiary merger, consolidation, equity conveyance, tender offer, asset purchase or otherwise, as determined by taking into consideration tax implications, risk allocation, the nature of the acquired business, desired post-closing organizational structure, target company change of control restrictions, limitations on target asset assignments, consideration, shareholder approval requirements, timing and other matters.
   
Dealer-Managers Investment banks engaged by issuers to provide financial advisory services in connection with exchange offers, tender offers, rights offerings and certain other transactions; services frequently include soliciting participation by offerees in the transaction, advising on pricing, structuring and other deal terms and providing assistance in preparing presentations and other marketing materials.
   
Debt Financing Raising capital through the incurrence of indebtedness.
   
Debt Securities Instruments of indebtedness that are negotiable or tradeable, including senior or subordinated, secured or unsecured, convertible or nonconvertible bonds, debentures, commercial paper and notes.
   
Defensive Measures Contractual, charter and bylaws provisions designed to restrict a prospective buyer’s ability to acquire all or a portion of the stock, voting rights or assets of a target company, or otherwise to exercise, directly or indirectly, control over a target company.
   
Depository Trust & Clearing Corp. DTCC is a clearinghouse that is the largest securities depository and post-trade financial services company in the world; it settles the majority of securities transactions in the U.S.; through its subsidiary, Depository Trust Company (DTC), records, maintains and transfers securities for member firms by making “book-entry” changes to ownership.
   
Derivative Actions Legal proceedings brought by shareholders to enforce corporate causes of action.
   
Derivatives & Swaps Securities that derive their value from the value of other securities or assets.
   
Direct Plans & DRIPs Direct stock purchase plans are plans through which issuers permit non-employee or employee investors to participate and acquire stock directly from the company; DRIPs, or dividend reinvestment plans, are plans through which existing investors can elect to have dividends paid on their stock automatically reinvested in company securities.
   
Direct Registration Registration of a security in the name of the shareholder on the books of the issuer, with the issuer or its transfer agent holding the security for the shareholder in book-entry form; cf. Street Name Registration.
   
Director & Officer (D&O) Insurance Insurance providing coverage for a company and/or its officers and directors against losses arising out of the performance of the officers’ and directors’ duties.
   
Director & Officer Indemnification Payment of or reimbursement for certain losses incurred by officers or directors of a company pursuant to the company’s organizational documents or negotiated agreements with the officers and directors.
   
Director Education & Orientation Training, education and orientation of members of company boards of directors, generally designed to assist directors in understanding their roles and responsibilities and provide directors with skills necessary to discharge their responsibilities effectively.
   
Director Independence Capacity of corporate directors to exercise independent judgment in carrying out their responsibilities.
   
Disclosure Committees Committees established for the purpose of assisting senior executive officers in fulfilling their responsibilities associated with disclosures of material, non-public information, including establishing appropriate disclosure controls and procedures.
   
Disclosure Controls Disclosure controls and procedures designed to ensure that the information required in reports filed under the Exchange Act is recorded, processed, summarized and reported on a timely basis; required to be developed and maintained by companies subject to Sarbanes-Oxley.
   
Disclosure Schedules Written schedules to M&A transaction agreements containing information that supplements and/or qualifies the representations and warranties of the parties.
   
Discretionary Authority A company’s (or a broker’s) right to exercise discretionary authority to vote proxies with respect to certain proposals being acted upon at a shareholder meeting. (See Exchange Act Rule 14a-4(c) and NYSE Rule 452.)
   
Dissenters’ Rights See “Appraisal Rights.”
   
Dissolution / Liquidation Voluntary or compulsory dissolution or liquidation of an existing corporation, LLC, LLP or other entity; generally requires filing a certificate or articles of dissolution with the applicable jurisdiction’s secretary of state or equivalent governmental authority.
   
Distressed Targets M&A target companies that are insolvent or bankrupt, at heightened risk of becoming insolvent or bankrupt or otherwise experiencing periods of distress.
   
Dividends Distributions by a corporation to shareholders, usually in cash but may be in the form of stock, scrip or other property.
   
Dodd-Frank Act The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010.
   
Down Rounds Startup company financing transactions in which investments are made at a price per share (or per share equivalent) that reflects a lower valuation for the startup company than any valuation underlying one or more prior rounds of financing.
   
Drag-Along Rights Rights of controlling shareholders to compel minority shareholders to participate in a sale of their shares.
   
Due Diligence (M&A) Detailed legal, financial and operational investigation of publicly available and confidential information and materials relating to the business, assets, liabilities, condition, operating results and operations of one party to an M&A transaction by another party to the transaction and its advisers.
   
Due Diligence (Securities) Detailed legal, financial and operational investigation of publicly available and confidential information and materials relating to the business, assets, liabilities, condition, operating results and operations of a prospective issuer of securities undertaken by the prospective investors, dealer-manager, initial purchasers, underwriters or other participants in the transaction.
   
Duties to Creditors Fiduciary duties to creditors, generally arising only when a company enters the zone of insolvency.
   
Duty of Candor / Disclosure Fiduciary duty of directors to disclose material information to shareholders when a board seeks shareholder action, generally considered to be included with directors’ duty of loyalty.
   
Duty of Care Fiduciary duty of directors to act on an informed basis after due consideration of all information; requires directors to reasonably inform themselves of alternatives.
   
Duty of Good Faith Fiduciary duty of directors to make decisions free from self-interest and any interest that diverts them from acting in the best interests of the company.
   
Duty of Loyalty Fiduciary duty of directors to place the interests of the company’s stakeholders ahead of any personal interests; the corporate opportunity doctrine, which is an application of the duty of loyalty, provides that directors, officers and controlling shareholders must not take for themselves any of the company’s business opportunities.
   
Duty to Update Duty of an issuer to update disclosure that was accurate when made but has become inaccurate.
   
Earnouts An M&A financing device through which a buyer makes future payments to the seller, contingent upon the achievement of predefined post-closing financial or operating objectives.
   
EDGAR Electronic Data Gathering, Analysis and Retrieval system; performs automated collection, validation, indexing, acceptance and forwarding of submissions by companies and others who are required by law to file forms with the SEC.
   
Efforts Standards Minimum level of effort required to be exerted in connection with the performance of contractual covenants, including “best efforts,” “commercially reasonable efforts,” “reasonable best efforts” and the like.
   
Emerging Growth Companies Companies with annual gross revenues of less than $1 billion during their most recently completed fiscal year. Under the JOBS Act, emerging growth companies (1) have reduced disclosure requirements and (2) may use test-the-water communications with qualified institutional buyers and institutional accredited investors. The JOBS Act also liberalizes the use of research reports on emerging growth companies.
   
Employee Equity Plans Employee plans offering equity compensation, including stock options, restricted stock, stock appreciation rights and restricted stock units.
   
Employee Stock Purchase Plans Company plans through which employee participants can purchase company securities directly from the company at a discount to the prevailing market price.
   
Enforcement (Securities) The investigation, pursuit, prosecution and settlement of legal actions (civil and criminal) brought to enforce the securities laws.
   
Enforcement Actions Legal actions brought to enforce the law; generally pursued by governmental authorities specifically charged with enforcing the law in question.
   
Enhanced Scrutiny Standard Standard of review used by Delaware courts when analyzing board decisions involving defensive actions taken to block hostile takeover attempts; more rigorous standard than business judgment rule review provides that the invocation of defensive tactics imposes a special burden on directors prior to their enjoying the benefits of the business judgment rule.
   
Enterprise Risk Management A process applied in strategy setting and across an enterprise that is designed (1) to identify potential events that may affect the company, (2) to manage risk to be within a company’s risk appetite and (3) to provide reasonable assurance regarding the achievement of entity objectives; effected by a company’s board of directors, management and other personnel.
   
Entire Fairness Standard of review used by Delaware courts when analyzing board approvals of certain transactions; requires directors to establish affirmatively that, notwithstanding conflicts of interest, reckless conduct or bad faith, a challenged transaction was nonetheless entirely fair to the corporation and its shareholders, including that the transaction was the product of “fair dealing” and reflected a “fair price.”
   
Entity Conversion / Redomestication Conversion of an entity of a particular type, such as a corporation, LLC or LLP, into an entity of a different type, or a migratory transaction of an entity from one jurisdiction, including a U.S. state, a foreign country or a political subdivision thereof, to another jurisdiction.
   
Entity Formation Establishment of a corporation, LLC, LP or other legal person by preparation, execution and, as applicable, filing of organizational documents or, in certain circumstances, through course of conduct.
   
E-Proxy / Notice & Access Electronic availability of proxy statements, annual reports and proxy cards accompanied by delivery of a one-page notice.
   
Equipment Trust Certificates Debt securities that allow an issuer to take possession of assets, which secure the indebtedness, and pay for them over time.
   
Equity Offerings Public or private offering of securities representing an ownership interest in the issuer, including common or preferred stock.
   
Equity Securities Capital stock, membership or partnership interests or similar securities.
   
Escheatment Process of transferring ownership of abandoned or unclaimed property, including cash or other assets, to a governmental authority.
   
Escrow In connection with a private M&A transaction, the portion of the purchase price, in the form of cash, securities or other assets, that is deposited with an independent party (an “escrow agent”) for a specified period of time to secure the seller’s indemnification obligations.
   
Exchange Act U.S. Securities Exchange Act of 1934, which (1) created the SEC, (2) empowered the SEC to register, regulate and oversee market participants and require periodic reporting by public companies and (3) prohibits certain types of conduct in the markets.
   
Exchange Act Registration Registration of securities and market participants, including securities issuers and exchanges, under Sections 12, 15 or 19 of the U.S. Securities Exchange Act of 1934, requiring the filing of specified documents with the SEC.
   
Exchange Offer A form of tender offer in which debt or equity securities are offered as consideration instead of cash.
   
Exchange Offer – Debt A form of tender offer in which debt securities are offered as consideration instead of cash or equity securities.
   
Exchange Offer – Options A form of tender offer in which stock options, restricted stock or restricted stock units are offered as consideration for stock options; generally effected when the exercise price of existing employee stock options is significantly below the fair market value of the underlying stock.
   
Exclusive Forum Clauses Provisions contained in corporate bylaws and other organizational documents establishing an exclusive forum for breach of fiduciary duty claims and derivative actions brought on behalf of the company.
   
Executive Compensation Compensation and benefits awarded to, earned by or paid to executive officers, including all compensation required to be disclosed under Item 402 of Regulation S-K.
   
Exempt Transactions Transactions in securities that are exempt from registration under the Securities Act of 1933.
   
Exon-Florio The Exon-Florio Amendment, enacted as Section 721 of the Defense Production Act of 1950 in 1988, authorized the President to investigate the impact on U.S. national security of M&A that results in foreign control over a U.S. company or certain U.S. assets.
   
Exxon Capital Exchange Offers Practice whereby an issuer performs a private placement (typically a Rule 144A transaction) and, within a short time after completion of the private placement, effects a registered exchange offer for the securities previously offered in the private placement.
   
Fair Value / Mark-to-Market Accounting A financial reporting approach in which companies measure and report on an ongoing basis certain assets and liabilities (generally financial instruments) at estimates of the prices the companies would receive if they were to sell the assets or would pay if they were to be relieved of the liabilities.
   
Fairness Opinions & Valuation Formal opinions of investment banks or other financial advisors, usually delivered to companies’ boards of directors, and based on detailed valuation and other analyses, as to the fairness, from a financial point of view, of consideration to be received by sellers, or paid by buyer, in connection with M&A transactions.
   
FCPA The Foreign Corrupt Practices Act of 1977, which makes it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.
   
Fiduciary Duties Duties to act for the benefit of another person or group, while subordinating personal interests; imposed on corporate officers, directors and, under certain circumstances, controlling shareholders; also imposed on LLC managing members and general partners.
   
Fiduciary Out Acquisition agreement provision allowing a target company board to terminate the agreement to satisfy the directors’ fiduciary duties.
   
Filed vs. Furnished In some circumstances, the information “furnished” to the SEC (rather than “filed”) will be exempted from certain liability provisions of the federal securities laws, including Section 18 of the Exchange Act and liabilities associated with information being incorporated by reference into registration statements.
   
Filing Fees Fees required to be paid by or on behalf of a party (1) making a filing or submission with a governmental authority or self-regulatory organization, including the SEC, FINRA, secretaries of state and state departments of corporations, or (2) listing on a securities exchange, including the NYSE, Nasdaq and the like.
   
FIN 48 / ASC 740 FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, issued in July 2006, was an interpretation of FASB Statement No. 109, Accounting for Income Taxes, and has been codified as Accounting Standards Codification (ASC) 740.
   
Financial Advisor Fees Fixed and contingent fees, expense reimbursements and other compensation payable to investment banks and other financial advisors.
   
Financial Advisors / Investment Banks Professionals who or which provide financial advisory and investment banking services to clients.
   
Finders Persons who or which introduce potential investors to issuers in return for finders’ fees.
   
FINRA Financial Industry Regulatory Authority; the largest independent regulator of securities firms doing business in the U.S.
   
Fiscal Year Change / Transition Reports Change of the ending date of an accounting period typically covering 12 consecutive months and SEC filings associated therewith.
   
Force the Vote Provision Acquisition agreement provision requiring a target company to submit a proposed transaction to a vote of shareholders within a specified period of time.
   
Foreign Private Issuer Any foreign issuer of securities other than a foreign government, except for an issuer meeting the following conditions as of the last business day of its most recently completed second fiscal quarter: (1) More than 50% of the issuer’s outstanding voting securities are directly or indirectly held of record by residents of the U.S.; and (2) any of the following: (a) the majority of the executive officers or directors are U.S. citizens or residents, (b) more than 50% of the assets of the issuer are located in the U.S. or (c) the business of the issuer is administered principally in the U.S. (See Exchange Act Rule 3b-4.)
   
Forensic Accounting Application of accounting concepts and techniques in connection with actual or anticipated disputes or legal proceedings, frequently involving claims of fraud, other financial misconduct or restatements.
   
Form 10 General form for the registration of securities pursuant to Section 12(b) or (g) of the Exchange Act.
   
Form 10-K Annual report pursuant to Section 13 or 15(d) of the Exchange Act.
   
Form 10-K Wrap A summary report of an issuer’s annual performance that bundles the Form 10-K with additional commentary about the company.
   
Form 10-Q Quarterly (or transition) report pursuant to Section 13 or 15(d) of the Exchange Act.
   
Form 11-K Annual report for employee stock purchase, savings and similar plans pursuant to Section 15(d) of the Exchange Act.
   
Form 12b-25 Notification of late filing of periodic report.
   
Form 13F Form requiring information from institutional investment managers pursuant to Section 13(f) of the Exchange Act.
   
Form 13H Large trader registration form.
   
Form 144 Notice of proposed sale of securities pursuant to Rule 144 under the Securities Act.
   
Form 15 / Deregistration Certification and notice of termination of registration under Section 12(g) of the Exchange Act or suspension of duty to file reports under Section 13 and 15(d) of the Exchange Act.
   
Form 20-F Registration statement under Section 12 of the Exchange Act or annual (or transition) report under Section 13(a) or 15(d) of the Exchange Act for foreign private issuers.
   
Form 25 / Deregistration Notification of removal from listing and/or registration under Section 12(b) of the Exchange Act.
   
Form 40-F Registration statement under Section 12 of the Exchange Act or annual (or transition) report under Section 13(a) or 15(d) of the Exchange Act for Canadian foreign private issuers.
   
Form 6-K Report of foreign private issuer pursuant to Rule 13a-16 or 15d-16 under the Exchange Act; mandates disclosures to the extent required by the issuer’s home jurisdiction, made public with a foreign stock exchange or otherwise distributed to security-holders.
   
Form 8-A Form for registration of certain classes of securities pursuant to Section 12(b) or (g) of the Exchange Act.
   
Form 8-K Current reporting form used to make prompt disclosure of specified material events or circumstances affecting issuers of securities registered under the Exchange Act; generally required to be filed or furnished within four business days of the occurrence of the triggering event or circumstance.
   
Form 8-K Item 1.01 Entry into a Material Definitive Agreement.
   
Form 8-K Item 1.02 Termination of a Material Definitive Agreement.
   
Form 8-K Item 1.03 Bankruptcy or Receivership.
   
Form 8-K Item 1.04 Mine Safety – Reporting of Shutdowns and Patterns of Violations.
   
Form 8-K Item 2.01 Completion of Acquisition or Disposition of Assets.
   
Form 8-K Item 2.02 Results of Operations and Financial Condition.
   
Form 8-K Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
   
Form 8-K Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
   
Form 8-K Item 2.05 Costs Associated with Exit or Disposal Activities.
   
Form 8-K Item 2.06 Material Impairments.
   
Form 8-K Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
   
Form 8-K Item 3.02 Unregistered Sales of Equity Securities.
   
Form 8-K Item 3.03 Material Modification to Rights of Security Holders.
   
Form 8-K Item 4.01 Changes in Registrant’s Certifying Accountant.
   
Form 8-K Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
   
Form 8-K Item 5.01 Changes in Control of Registrant.
   
Form 8-K Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
   
Form 8-K Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
   
Form 8-K Item 5.04 Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans.
   
Form 8-K Item 5.05 Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.
   
Form 8-K Item 5.06 Change in Shell Company Status.
   
Form 8-K Item 5.07 Submission of Matters to a Vote of Security Holders.
   
Form 8-K Item 5.08 Shareholder Director Nominations.
   
Form 8-K Item 6.01 ABS Informational and Computational Material.
   
Form 8-K Item 6.02 Change of Servicer or Trustee.
   
Form 8-K Item 6.03 Change in Credit Enhancement or Other External Support.
   
Form 8-K Item 6.04 Failure to Make a Required Distribution.
   
Form 8-K Item 6.05 Securities Act Updating Disclosure.
   
Form 8-K Item 7.01 Regulation FD Disclosure.
   
Form 8-K Item 8.01 Other Events.
   
Form 8-K Item 9.01 Financial Statements and Exhibits.
   
Form D Notice of Exempt Offerings of Securities required to be filed by any issuer selling securities in reliance on an exemption provided in Regulation D or Section 4(a)(5) of the Securities Act.
   
Form S-1 Long form used for registration of securities under the Securities Act when no shorter form is permissible.
   
Form S-3 Simplest form used for registration of securities under the Securities Act; only available for certain issuers and specified transactions.
   
Form S-4 Form used for registration of securities under the Securities Act in the context of an M&A transaction or exchange offer.
   
Form S-8 Form used for registration under the Securities Act of securities to be offered pursuant to an employee equity plan.
   
Form SD Disclosure form for specialized disclosures not included within issuers’ periodic or current reports, requiring disclosures under Section 1504 (Resource Extraction Payments) and Section 1502 (Conflict Minerals) of Dodd-Frank.
   
Forward-Looking Information Statements of projections, intentions, hopes, estimates, beliefs, anticipations, expectations or predictions of the future and other information not constituting historical fact.
   
Founder Equity Common stock or other ownership interests issued to the original organizers of a startup company. Founder equity is typically subordinated in the capital structure after raising outside investor funds and usually does not receive any return until dividends payable to preferred shareholders have been paid out.
   
Franchise Taxes State taxes imposed on a state-chartered entity for the right to conduct business within the state.
   
Free Writing Prospectuses Any writings other than a statutory prospectus after the filing of a registration statement under the Securities Act.
   
Freezeouts Transactions in which a controlling shareholder or a group of controlling shareholders buys out minority shareholders.
   
Fund Formation Formation of private equity and venture capital funds.
   
General Partnerships Legal entities comprised of two or more persons in which all owners are personally liable for the debts and obligations of, and can take actions on behalf of, the entities.
   
Going Concern A company’s ability to continue to operate as a viable enterprise; unless there is significant evidence to the contrary, accountants will base their valuations and reporting on the assumption that a business will remain in existence for an indefinite period.
   
Going Dark Voluntary delisting from a securities exchange and Exchange Act deregistration.
   
Going Private Transactions / Rule 13e-3 Transactions through which a public company deregisters its equity securities; can be effected via tender offer, M&A transaction or reverse stock split.
   
Golden Parachutes Particularly generous severance packages provided to senior executives, frequently upon termination after a change of control.
   
Goodwill An intangible asset used in acquisition accounting equal to the amount by which going-concern value exceeds the value of a company’s assets.
   
Go-Shop Acquisition agreement provision allowing a target company board to solicit bids and negotiate with other prospective buyers for a period of time after signing the agreement.
   
Governance / IR Web Pages Companies’ corporate governance and investor relations web pages.
   
Governance Guidelines Written set of principles and procedures by which a company is governed and which typically set forth the role of the board of directors, board structure, director independence, board leadership structure, director selection and qualifications, board meeting procedures, executive sessions, board committees, director evaluations and related matters.
   
Governance Ratings Ratings reflecting assessments of companies’ corporate governance policies and practices prepared by proxy advisory service providers, such as Institutional Shareholder Services.
   
Governing Law The law that will govern the enforcement of rights and obligations under a contract.
   
Guaranteed Securities A debt security or, less frequently, equity security guaranteed as to principal, interest or dividends by a party other than the issuer.
   
Guarantees & Sureties An enforceable promise by one party (the guarantor or surety) made to an obligee to procure the performance of a covenant or payment of a debt by another party (the principal or primary obligor).
   
Gun-Jumping (Securities) Oral or written offers by an issuer during a quiet period (the period beginning after a decision to proceed with an offering and ending with the filing of the registration statement) or sales or certain oral or written offers by an issuer during a waiting period (the period between the filing and effectiveness of the registration statement).
   
Hedge Accounting Accounting method through which entries for the ownership of a security and an opposing hedge are treated as one entry to reduce the volatility created by adjustment of their respective values.
   
Hedge Funds / Wolf Packs Investment funds that can engage in a wider range of investment activities than certain other types of funds; some hedge funds pursue activist shareholder agendas, including proxy contests and destabilization campaigns, as well as hostile M&A; hedge funds frequently engage in parallel (i.e., “wolf pack”) investing activities.
   
High-Yield Debt Debt instruments with lower credit ratings than investment-grade (S&P and Fitch BB+ and lower; Moody’s Ba1 and lower) and offering a higher yield than investment-grade debt.
   
Holdback A portion of the purchase price, in the form of cash, securities or other assets, retained by a buyer for a specified period of time to secure the seller’s indemnification obligations in connection with a private M&A transaction.
   
Hostile M&A Acquisition transactions that are opposed or not supported by target company control persons.
   
HSR Act Hart-Scott-Rodino Antitrust Improvements Act of 1976.
   
HSR Filing Premerger Notification and Report Form filed pursuant to the HSR Act.
   
Impairment Charge A reduction of the value of goodwill on a company’s balance sheet.
   
Implied Covenant of Good Faith An implied covenant that inheres in contracts and requires that contracting parties refrain from arbitrary or unreasonable conduct that has the effect of preventing the other party from receiving the fruits of the contract.
   
Incorporation by Reference (Disclosure) The inclusion of one document within another document by only identifying the other document.
   
Indemnification & Liability Limits (M&A) Obligations of parties to private M&A transactions to indemnify each other and certain related persons from specified categories of losses, subject to agreed-upon limitations, including, for example, deductibles or thresholds, caps and expiration dates.
   
Indemnification Agreements Contracts between companies and their officers and directors through which the companies agree to indemnify the directors and officers for certain losses incurred in connection with the discharge of their duties.
   
Informal Disclosure Disclosures by companies of non-public information through websites, press releases, speaking engagements, analyst and reporter communications and other means, excluding formal disclosures made pursuant to the requirements of the Exchange Act and Securities Act.
   
Information Statements / Schedule 14C Written documents required to be delivered to shareholders by an issuer in anticipation of shareholder meetings when no solicitation of proxies, consents or authorizations in respect of a registered security is taking place.
   
Initial Public Offering First public offering of equity securities by a company.
   
Insider Trading Engaging in transactions in the securities of an issuer in breach of a fiduciary duty or other relationship of trust and confidence while in possession of material, non-public information about the issuer.
   
Insider Trading Policies Written policies associated with preventing, detecting and mitigating insider trading by company personnel.
   
Insolvency The status of being unable to pay debts when due or having liabilities that exceed the value of one’s assets.
   
Inspection Demands Shareholder demands to access corporate records, including shareholder lists and materials in connection with a derivative action.
   
Inspector of Elections Person or entity appointed by a corporation in accordance with state law requirements to (1) determine the number of shares entitled to vote on each matter before a meeting of shareholders, (2) determine whether a quorum is present, (3) tabulate shareholder votes, (4) determine the validity of proxies or ballots and (5) certify the final results of shareholder votes.
   
Intangible Assets Identifiable assets that cannot be seen, touched or physically measured, except cash and cash equivalents.
   
Integration (Securities) Treatment of two or more purportedly discrete securities offerings as one offering.
   
Interim Financial Statements Financial statements covering a time period less than a full fiscal year.
   
Internal Audit An independent assurance and consulting activity performed by a company’s own personnel designed to improve operations through evaluation and improvement of risk management, control and governance processes.
   
Internal Controls Internal control over financial reporting, a process designed by, or under the supervision of, an issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. (See Rules 13a-15(f) and 15d-15(f) of the Exchange Act.)
   
Internal Investigations Investigations conducted by a company’s own personnel or outside advisors of actual or potential violations of law or policy by company personnel.
   
Internal Pay Equity The ratio of the chief executive officer’s total compensation to the average compensation of other company personnel.
   
International Financial Reporting Standards Accounting standards developed by the Financial Accounting Standards Board and the International Accounting Standards Board intended to constitute a globally accepted set of accounting standards to be used for both domestic and cross-border financial reporting.
   
Investment Advisors Persons or entities that provide professional advisory services with respect to securities investments.
   
Investment Companies Companies the primary business of which is making investments in securities of other companies.
   
Investment-Grade Debt Debt instruments with a relatively low risk of default (S&P and Fitch BBB- or better; Moody’s Baa3 or better).
   
Investor Relations The relationship among companies and their respective current and prospective equityholders, creditors, analysts, journalists and other stakeholders, as determined by direct and indirect, voluntary and mandatory bilateral communications, expectations management, control person responsiveness, company performance and other factors.
   
Investor Rights Agreements Written contract setting forth various rights and obligations of investors, including information rights, registration rights, restrictions on stock transfer, rights of first refusal / offer, tag-along and drag-along rights, antidilution protections and/or voting rights.
   
ISS Institutional Shareholder Services; see also “Proxy Advisors.”
   
Issuer Tender Offers Tender offers for, or requests or invitations for tenders of, any class of equity security made by the issuer of that class of security or by an affiliate of that issuer.
   
JOBS Act U.S. federal legislation enacted in April 2012, the Jumpstart Our Business Startups Act was intended to facilitate fundraising for startups and small businesses.
   
Joint Ventures Commercial undertakings by two or more parties to run a business for profit and share risks, usually created by combining assets, including know-how, often in the form of a jointly-owned entity.
   
Knowledge Minimum level of knowledge required to be possessed by a party to a transaction for that party to be liable for a loss arising from inaccuracies in the representations and warranties of the party that are included in the transaction agreement.
   
Lead Directors Also referred to as “presiding directors,” independent directors who have special authority on the board, typically including setting the agenda for and presiding over executive sessions of independent directors; generally existing when a company’s CEO is also its Chairman of the Board.
   
Leases Transfer of the right to possession and use of tangible assets for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease.
   
Legal Opinions Formal opinions, generally written, of attorneys as to particular issues of law, including, for example, due authorization of a transaction, valid issuance of securities, valid corporate existence and non-contravention.
   
Letters of Intent / Term Sheets Written outlines reflecting key transaction terms that have been preliminarily or conditionally agreed-upon by parties to an M&A transaction; usually non-binding, except with respect to confidentiality, standstills and miscellaneous provisions, and expected to be superseded by more detailed, definitive documentation governing the transaction.
   
Leveraged Buyout Acquisition of controlling interests in companies where a significant portion of the purchase price is financed through debt (i.e., leverage).
   
Limited Liability Companies Legal persons the rights, purposes and obligations of which are established under state limited liability company law, a certificate of formation and an operating agreement (or analogous organizational documents) and ownership of which is embodied in membership interests.
   
Limited Partnerships Legal persons the rights, purposes and obligations of which are established under state limited partnership law, a certificate of formation and a limited partnership agreement (or analogous organizational documents) and ownership of which is embodied in partnership interests.
   
Liquidity & Capital Resources Liquidity is a measure of a company’s ability to discharge current liabilities when due; capital resources are goods, tools, machines and facilities used to produce other goods and services (though the SEC implies in Item 303(a)(2)(ii) of Regulation S-K that capital resources means “sources of capital”).
   
Listing Standards Requirements established by a securities exchange for initial and continued listing on the exchange, including minimum thresholds for the number of publicly traded shares, total market value, stock price, number of shareholders and corporate governance features.
   
LLC Operating Agreements Written agreement among the members of a limited liability company and the LLC itself defining the rights and obligations of the members, managers and other stakeholders and establishing rules for internal governance of the organization.
   
Lockups & Voting Agreements Agreements by shareholders to vote in a predetermined manner with respect to specified matters, including shareholder support agreements through which large target company shareholders commit to vote for, tender shares into or otherwise support a proposed transaction; lockups may also refer to agreements by shareholders and issuers of securities not to sell, acquire or issue, as applicable, securities for an agreed-upon period of time.
   
M&A / Strategic Committees Committees (or equivalent bodies) established by boards of directors of companies for the purpose of considering, usually in consultation with legal and financial advisors, available strategic alternatives and either making recommendations to full boards or approving transactions.
   
M&A Disputes Disputes and adversarial proceedings arising in connection with an M&A transaction, including pre- and post-closing disputes among parties to the transaction as well as derivative and other actions brought by shareholders.
   
M&A Financing The source of funds used to pay the purchase price in an M&A transaction.
   
Majority Voting Approval of a matter being voted on by shareholders by the affirmative vote of at least a majority, as opposed to a plurality, of votes cast.
   
Management The officers of an organization, including any chief executive officer, president, principal financial officer, treasurer, comptroller, chief legal officer, chief operating officer, vice president, secretary, managing member, general partner and other individual performing corresponding functions with respect to the organization.
   
Matching Right Acquisition agreement provision giving the acquiring party the right to match acquisition proposals received by the target company from prospective third party buyers.
   
Material Adverse Change / Material Adverse Effect A provision in an M&A agreement that generally gives the buyer the right to terminate the agreement if a business or economic change occurs that has or could reasonably be expected to have a material adverse effect on the target company before the deal closes.
   
Materiality (Disclosure) For purposes of the federal securities laws, a matter is material if there is a substantial likelihood that a reasonable investor would attach importance in determining whether to purchase the security registered. (See Securities Act Rule 405.)
   
MD&A Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in a company’s annual report and certain other SEC filings, is intended to provide a greater understanding of the company’s business, business strategy and performance, expectations of the future and how the company manages risk and capital resources.
   
Merger The process by which two or more legal entities combine to form a single entity, which may be one of the constituent entities or may be a consolidation into a new entity, pursuant to an agreement of merger or consolidation.
   
Merger of Equals Merger or consolidation between companies of comparable value and bargaining leverage where neither company is designated the “buyer” or “target.”
   
Middle Market M&A M&A transactions involving middle market companies, i.e., those with annual revenues ranging from approximately $50 million to $1 billion.
   
Mine Safety Disclosure Disclosure obligations, risks and practices associated with Section 1503 of Dodd-Frank and associated regulations, which require reporting issuers that are mine operators, or have subsidiaries that are operators, to disclose in each periodic report filed with the SEC information related to health and safety violations, including the number of certain violations, orders and citations received from the Mine Safety and Health Administration (MSHA) among other matters. Issuers must also disclose in their Form 8-K reports the receipt from MSHA of any imminent danger orders or notices indicating that a mine has a pattern or potential pattern of violating mandatory health or safety standards.
   
Minority Acquisition Acquisition of a portion of target company’s equity securities that are not sufficient to exercise control.
   
Minority Equityholder Rights Rights of shareholders, members and limited partners who or which do not have a controlling interest in a company.
   
Missed / Late Filings Failure to timely file reports required under the Exchange Act.
   
Modified Reporting Replacement of Exchange Act periodic reports by companies in bankruptcy proceedings with monthly reports filed under the Bankruptcy Code.
   
Municipal Securities Debt securities issued by local governmental authorities, such as cities, towns and counties.
   
Nasdaq Registered national securities exchange operated by The NASDAQ Stock Market LLC.
   
Nominating & Governance Committees Committees (or equivalent bodies) established by boards of directors of companies for the purpose of overseeing matters of corporate governance and director nominations.
   
Non-Competes – Employee Covenants, binding on current or former employees, not to participate, directly or indirectly, in specified business activities that are competitive with an employer within an agreed-upon geographic area for a predetermined period of time.
   
Non-Competes – Seller Covenants, binding on the seller of a business, not to participate, directly or indirectly, in specified business activities that are competitive with an acquired business in an agreed-upon geographic area for a predetermined period of time.
   
Non-Convertible Debt Debt instruments that are not convertible into or exchangeable for another class of securities.
   
No-Shop Acquisition agreement provision prohibiting a target company from soliciting acquisition proposals or engaging in discussions that could lead to an acquisition proposal.
   
NSMIA The National Securities Markets Improvement Act of 1996 (NSMIA) preempts state registration and review of transactions involving specified classes of “covered securities.”
   
NYSE The New York Stock Exchange, a registered national securities exchange operated by New York Stock Exchange LLC, a subsidiary of NYSE Euronext.
   
NYSE Amex A registered national securities exchange for small and mid-cap growth companies operated by NYSE Amex LLC, a subsidiary of NYSE Euronext.
   
NYSE Euronext A global operator of financial markets and provider of trading solutions, including NYSE and NYSE Amex.
   
Off-Balance Sheet Arrangements Certain transactions, agreements and other arrangements with an unconsolidated entity under which a reporting company has (1) an obligation under a guarantee contract, (2) a retained or contingent interest in assets transferred to the unconsolidated entity or a similar arrangement that serves as credit, liquidity or market risk support to the entity, (3) an obligation under most derivative instruments or (4) an obligation arising out of a variable interest in an unconsolidated entity that is held by and material to the reporting company, where the unconsolidated entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with, the reporting company.
   
Offering Communications Any written or oral communications by or on behalf of an issuer or underwriter prior to, during or otherwise in connection with an offering of securities.
   
Offering Memos / PPMs Disclosure documents distributed to potential investors in private placements of securities, including disclosures of the purposes, risks and terms of investments; often referred to as private placement memoranda (PPMs).
   
Officers Employees who are responsible for managing the day-to-day operations of a company and report, ultimately, to the board of directors or equivalent body.
   
Option A right to purchase (call) or sell (put) a security or other assets at a specified price within an agreed-upon period of time, including employee stock options.
   
Option Agreements (M&A) Contracts between a prospective buyer and a public company target through which the target grants the buyer an option to acquire shares of capital stock of the target (usually up to 19.9%) upon the occurrence of certain triggering events, typically tied to the target’s acceptance of a superior proposal or otherwise terminating the acquisition agreement.
   
Organizational Authority Rights, powers and authority of entities.
   
Organizational Documents Limited liability company agreements, limited partnership agreements, partnership agreements, certificates of formation, articles of incorporation, certificates of incorporation, bylaws, management regulations and other similar documents.
   
Original Issue Discount The difference between the face amount of a debt instrument (reflecting the amount payable at maturity) and the price paid to the borrower at issuance.
   
OTC Bulletin Board An interdealer electronic quotation system that displays real-time quotes, last-sale prices and volume information for many over-the-counter (OTC) equity securities that are not listed on a national securities exchange.
   
OTC Market Provides electronic quoting and trading technology for the U.S. over-the-counter (OTC) market; its interdealer quotation system – OTC Link – is used by broker-dealers to quote and trade OTC securities.
   
OTC Pink / Pink Sheets OTC Market securities that do not qualify as OTCQX or OTCQB securities; Pink Sheets companies are divided into three market tiers based on their financial information disclosure – OTC Pink Current Information, OTC Pink Limited Information and OTC Pink No Information.
   
OTCQX The premier OTC Market Tier for companies that undergo a qualitative review and meet higher financial standards than the other OTC Market Tiers.
   
Over-allotment Options Also referred to as “green shoe options,” rights of underwriters to sell additional securities in registered offerings at the offering price if demand exceeds the original offer amount.
   
Overvoting In connection with a shareholder vote, a situation where a bank or broker communicates to the inspector of elections more votes than its clients are technically entitled to register.
   
Partnership Agreements Written agreements among partners in general or limited partnerships and the partnerships themselves defining the rights and obligations of the partners and other stakeholders and establishing rules for internal governance of the organizations.
   
Pass-Through Certificates Derivative securities representing receivables on debt.
   
Pay for Performance Alignment of executive compensation with company financial performance and shareholder returns.
   
Paying Agents / Exchange Agents Companies responsible for accepting tenders and remitting payments, in the form of cash, securities or a combination thereof, on behalf of an issuer or buyer to securityholders or participants in a tender or exchange offer or public M&A transaction.
   
Pension Fund Blackouts See “Regulation BTR.”
   
Pension Plans An employee plan, usually tax exempt, funded by employer contributions into a pool of assets used to finance employee retirement benefits.
   
PIPEs Private investments in public equity securities.
   
Plain English Writing in plain English using words economically and at a level the audience can understand and tight sentence structure with a welcoming and direct tone; its design is visually appealing, and a plain English document is easy to read.
   
Plurality Voting Approval of a matter being voted on by shareholders by the affirmative vote of the highest number of votes cast irrespective of whether a majority has been achieved.
   
Poison Pills See “Shareholder Rights Plans.”
   
Pre-Approval of Accountant Services Audit committee pre-approval of all permissible non-audit accountant engagements and all audit, review and attestation engagements required under the securities laws.
   
Preemptive Rights Rights to maintain proportionate ownership in a company.
   
Preferred Stock Capital stock with preferential rights to dividends.
   
Private Equity Equity investments in privately-held companies or buyouts of public companies that result in a securities exchange delisting, generally effected by investment companies established for that purpose and without strategic intent.
   
Private Equity – Exits Divestments of private equity investments through secondary buyouts, IPOs and leveraged dividend recapitalizations.
   
Private M&A M&A transactions involving privately-held target companies.
   
Pro Forma Financial Information Financial information prepared in advance of a planned M&A transaction, a capital investment or a change in capital structure such as incurrence of debt or issuance of equity securities.
   
Prospectuses A document produced by an issuer and its advisers setting forth the nature and objects of a public offering of securities, including the purpose, risks and terms of the investment.
   
Proxies Written authorizations given by a shareholder to another person (proxy holder) so that the proxy holder can act for the shareholder at an annual or special meeting of shareholders.
   
Proxy Access Shareholders’ ability to have board nominees and other proposals included in a company’s proxy materials.
   
Proxy Advisors Organizations, such as Institutional Shareholder Services, that provide analyses, voting recommendations and related services to shareholders with respect to public company corporate governance, director elections, M&A transaction approvals and other matters requiring shareholder action.
   
Proxy Contest A campaign to solicit votes (or proxies) in opposition to management at an annual or special meeting of shareholders or through action by written consent.
   
Proxy Season Period of time, typically from February through April every year, during which many companies engage in the solicitation of proxies in anticipation of their annual meetings of shareholders.
   
Proxy Solicitation Solicitation of shareholder votes (or proxies) in support of a particular matter before shareholders at an annual or special meeting of shareholders or being acted upon by written consent.
   
Proxy Statements Written document required to be delivered to company shareholders by an issuer or third party participating in a solicitation of proxies in anticipation of a shareholder meeting.
   
Proxy System The system for solicitations of proxies.
   
Public M&A M&A transactions involving target companies the shares of which are traded on a national securities exchange.
   
Purchase Price Adjustments In connection with an M&A transaction, adjustments to the purchase price paid or payable based upon the occurrence of specified events or the existence of specified circumstances on or prior to closing, including discrepancies between projections and actual net working capital or net asset value at closing.
   
Qualified Legal Compliance Committees Committees that (1) consist of at least one member of an audit committee and at least two additional non-employee directors, (2) have adopted written procedures for appropriate treatment of up-the-ladder reports of evidence of material violations, (3) have investigative authority and (4) have the authority to notify the SEC if a company fails to implement an appropriate response to a material violation that was recommended by the committee.
   
Quorum The minimum number of members of a deliberative body necessary to conduct business; applies to shareholder meetings and meetings of boards of directors and committees thereof.
   
Real-Time Disclosure Requirements under the federal securities laws and securities exchange listing standards to make public disclosures promptly or within short periods of time following the occurrence of certain events or the existence of certain conditions.
   
Record Dates Dates on which persons must possess record ownership of securities to be entitled to certain rights, including rights to vote at a meeting of equityholders, rights to participate in offerings or rights to receive dividends.
   
Record Retention Requirements to preserve for specified periods of time accounts, correspondence, memorandums, tapes, discs, papers, books and other documents, in physical or electronic form; imposed by the federal securities laws and listing requirements of national securities exchanges.
   
Redemption Rights Rights of an issuer of securities to repurchase the securities or rights of holders of securities to require the issuer to repurchase the securities.
   
Registered Directs Public offerings of securities marketed and sold much like PIPE transactions to a finite number of accredited and institutional investors.
   
Registered Offerings Public or private offerings of securities that are registered under the Securities Act.
   
Registration Rights Contractual rights that are intended to provide future liquidity to investors by establishing a mechanism to register securities purchased in a private placement.
   
Regulation 13D-G Regulation under the Exchange Act requiring public disclosure of acquisitions of beneficial ownership of certain classes of equity securities resulting in beneficial ownership of more than 5% of the class.
   
Regulation A Conditional Small Issues Exemption, provides an exemption from Securities Act registration for public offerings of up to $50 million in any 12-month period by non-reporting companies, without any restrictions on the types of investors that can participate in the offering. As with registered offerings, the securities can be offered publicly. The securities are eligible to trade freely, immediately after the offering, in the over-the-counter market.
   
Regulation BTR Periods of time during which plan participants and beneficiaries and, under Regulation Blackout Trading Restriction (BTR), officers and directors are prohibited from engaging in equity securities transactions through their plan accounts (or, in the case of officers and directors, any transactions involving equity securities acquired in connection with their service to the issuer).
   
Regulation D Regulation under the Securities Act containing several rules providing a safe harbor for the private offering exemption of Section 4(a)(2) of the Securities Act.
   
Regulation FD Regulation under the Exchange Act that provides that when an issuer discloses material nonpublic information to certain individuals or entities—generally, securities market professionals, such as stock analysts, or holders of the issuer’s securities who may trade on the basis of the information—the issuer must make public disclosure of that information.
   
Regulation G / Non-GAAP Regulation under the Securities Act and Exchange Act that addresses public companies’ disclosure or release of certain financial information that is calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP).
   
Regulation M Regulation under the Securities Act, Exchange Act and Investment Company Act that governs activities of underwriters, issuers, selling security holders and others that may be employed to manipulate the price of offered securities.
   
Regulation M-A Regulation establishing disclosure requirements for tender offers, going-private transactions, mergers and other extraordinary transactions; comprised of Items 1000 through 1016 of Regulation S-K.
   
Regulation S Regulation under the Securities Act that provides an exemption from Securities Act registration requirements for offerings of securities outside of the U.S.
   
Regulation S-K Regulation under the Securities Act and Exchange Act that sets forth disclosure requirements for various Securities Act and Exchange Act filings; it is the lynchpin of the SEC’s integrated disclosure system.
   
REITs Real estate investment trusts; generally, companies that own—and typically operate—income-producing real estate or real estate-related assets and provide a way for individual investors to earn a share of the income produced through commercial real estate ownership without actually having to purchase commercial real estate.
   
Related-Party Deals Transactions among parties who or which have personal or other relationships that may influence the existence, terms or outcome of the transaction in a manner that is more or less favorable to one or more of the parties than would have been the case in the absence of the relationships.
   
Representations & Warranties Statements of past or present fact, usually contained in written agreements, made by one party to a transaction to another; inaccurate representations and warranties may result in the incurrence of liability by the party that made the statements.
   
Representations & Warranties Insurance Insurance designed to protect buyers and sellers from financial losses resulting from inaccuracies in representations and warranties made in connection with M&A transactions.
   
Resale Registration Registration under the Securities Act of transactions in securities by persons other than issuers, underwriters and dealers.
   
Resales of Securities Offers and sales of equity and debt securities by persons other than the issuer of the securities, including in a transaction registered under the Securities Act or pursuant to an exemption from registration, such as under Rule 144 or the so-called Section 4(a)(1-1/2) exemption.
   
Rescission Offers Offers by issuers to rescind securities offerings in which violations of securities laws have or may have occurred.
   
Resource Extraction Payments Disclosure Disclosure obligations, risks and practices associated with Section 1504 of Dodd-Frank and associated regulations, which require reporting issuers engaged in the commercial development of oil, natural gas or minerals to disclose in an annual report certain payments made to the U.S. or a foreign government.
   
Restatements Corrections of financial statements when they are found to contain material misstatements due to error or accounting irregularity.
   
Restricted Securities & Restrictive Legends Securities acquired in an unregistered, private sale from an issuer or from an affiliate of the issuer; typically bear a legend stating that the securities cannot be resold in the public marketplace unless the sale is exempt from the SEC’s Securities Act registration requirements.
   
Restructuring Reorganization of the legal, capital, operational or other structures of a company to improve profitability, operations or competitive position.
   
Revenue Recognition Recognition, for accounting purposes, or revenues and expenses.
   
Reverse Breakup Fees Fees payable by an acquiring party to a former target company in an M&A transaction if the buyer terminates the acquisition agreement under certain circumstances, typically associated with allocation of antitrust or financing risk.
   
Reverse Merger Acquisition of private operating companies by existing public “shell companies” for the purpose of enabling the operating companies to access the U.S. capital markets without undergoing the traditional IPO process.
   
Reverse Stock Splits The merger of multiple outstanding shares into one share for the purpose of reducing the total number of outstanding shares and increasing the price per share.
   
Revlon Duties Duty imposed on directors of Delaware corporations to seek the highest value reasonably obtainable to the shareholders when a sale of the company becomes inevitable.
   
Rights of First Refusal Contractual rights to elect to purchase a property interest owned by another person upon the occurrence of a triggering event.
   
Rights Offerings Securities offerings involving the issuance to companies’ existing shareholders of rights to elect to purchase a pro rata portion of additional shares of issuers’ stock at a specific price per share, typically set at a discount to the prevailing market price.
   
Risk Allocation (M&A) The allocation of responsibility among parties to a merger or other acquisition transaction for known, unknown, unascertained or contingent liabilities arising during the pendency, or after consummation, of the transation, as reflected in the parties’ respective conditions to closing, representations, warranties and covenants, including indemnification obligations, and other contractual rights and obligations.
   
Risk Committees Committees established for the purpose of assessment and oversight of company policies designed to manage risk, including establishing and implementing standards, controls, limits and guidelines related to risk management.
   
Risk Factors Section of periodic reports and Securities Act registration statements discussing the most significant factors that make an investment in the issuer’s securities speculative or risky.
   
Risk Management The process of identifying, analyzing, monitoring, prioritizing, controlling, mitigating and/or accepting risks.
   
Road Shows Offers of securities to prospective investors (other than statutory prospectuses) involving a presentation made by members of an issuer’s management that includes a discussion of the issuer, management or the securities being offered. (See Rule 433 of the Securities Act.)
   
Rollover Equity Ownership interest in a target company that is retained by selling shareholders in an M&A transaction.
   
Roll-Up Transactions Transactions involving the combination or reorganization of one or more partnerships, directly or indirectly, in which some or all of the investors in any of such partnerships will receive new securities, or securities in another entity.
   
Rule 10b-5 Main anti-fraud rule promulgated under the Exchange Act.
   
Rule 10b5-1 Rule under the Exchange Act that specifies that a purchase or sale constitutes trading “on the basis of” material non-public information, which is prohibited under Rule 10b-5, where the person making the purchase or sale was aware of material non-public information at the time the transaction occurred.
   
Rule 12b-25 Rule under the Exchange Act that requires the filing of a Notification of Late Filing on Form 12b-25 when a reporting company is unable to file its periodic report by the deadline.
   
Rule 13h-1 Rule under the Exchange Act that requires (1) all “large traders” to register with the SEC and (2) broker-dealers to maintain records of large trader securities transactions and provide certain related information to the SEC.
   
Rule 144 Rule under the Securities Act that permits public resales of “control securities” and “restricted securities” without registration.
   
Rule 144A Rule under the Securities Act that provides a safe harbor exemption from registration for certain offers or sales of qualifying securities by certain persons other than the issuer of the securities to qualified institutional buyers (QIBs).
   
Rule 145 Rule under the Securities Act that provides that exchanges of securities in connection with reclassifications of securities, mergers or consolidations, or asset transfers subject to shareholder vote, constitute sales of securities.
   
Rule 701 Rule under the Securities Act that provides an exemption from registration for securities issued under compensatory arrangements by issuers that are not subject to Exchange Act reporting obligations.
   
Sandbagging & Anti-Sandbagging Provisions prohibiting a buyer from seeking indemnification or other reimbursement for any losses arising out of a breached representation or warranty of a seller to the extent the buyer had knowledge of such breach on or prior to closing.
   
Sarbanes-Oxley Act U.S. federal legislation enacted in July 2002 providing for a number of corporate governance reforms, additional financial disclosure requirements and devices designed to prevent corporate and accounting fraud; also created the Public Company Accounting Oversight Board (PCAOB).
   
Say on Pay Shareholder votes required to be solicited in public companies’ proxy statements relating to compensation of named executive officers, the frequency of executive compensation votes and, in connection with solicitations of proxies for M&A transactions, executive golden parachutes.
   
Schedule 13D Beneficial ownership report.
   
Schedule 13E-3 Disclosure filing made in connection with a going private transaction.
   
Schedule 13G Beneficial ownership report available only to specified classes of passive investors and requiring less extensive disclosures than Schedule 13D.
   
Schedule 14A See “Proxy Statements.”
   
Schedule 14D-9 Solicitation / recommendation statement under Section 14(d)(4) of the Exchange Act; filed by an issuer of securities that are subject to a tender offer.
   
Schedule TO Tender offer statement under Section 14(d)(1) or 13(e)(1) of the Exchange Act; filed by a party initiating a tender offer.
   
SEC Comments & Review Selective review and comments by the Division of Corporation Finance of the SEC of filings made under the Securities Act and Exchange Act to monitor and enhance compliance with the applicable disclosure and accounting requirements.
   
SEC Exemptive Authority Authority of the SEC to provide conditional or unconditional exemptions from any Exchange Act provision, rule or regulation.
   
SEC Filings Filings with the U.S. Securities and Exchange Commission.
   
Secondary Actor Liability Liability of secondary actors, including attorneys, underwriters, financial advisors, broker-dealers, dealer-managers, accountants and others, for contributing to securities fraud based on claims of “aiding and abetting” violations or other causes of action.
   
Secondary Offerings Offerings of additional securities by a public company.
   
Section 11 Liability (Securities Act) Liability for all issuers, directors, officers, underwriters and experts who or which intentionally make a material misstatement or omission in a registration statement for publicly offered securities.
   
Section 12 Liability (Securities Act) Civil liability under the Securities Act for securities transactions in violation of Securities Act Section 5 or transactions by means of a prospectus that includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading.
   
Section 16(a) / Forms 3, 4 & 5 Stock ownership disclosure obligations imposed on public company directors, officers and beneficial owners of more than 10% of the company’s stock.
   
Section 16(b) Section of the Exchange Act that requires that any profits earned by insiders through “short-swing” trading in an issuer’s equity securities must be disgorged and returned to the issuer.
   
Section 162(m) Section of the Internal Revenue Code and associated Treasury Regulations that provide that a publicly held corporation may not deduct compensation with respect to its CEO or its three next most highly compensated officers other than its principal financial officer to the extent that the amount of the compensation payable to the covered employee for the taxable year exceeds $1,000,000, unless the compensation qualifies as “performance-based compensation.”
   
Section 18 Liability (Exchange Act) Liability under Exchange Act Section 18 for making or causing to be made any statement in an Exchange Act filing that was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact.
   
Section 3(a)(10) / Fairness Hearings Exemption from Securities Act registration for offers and sales of securities in specified exchange transactions where (1) the securities are offered for consideration other than cash, (2) a court or an authorized governmental agency approves the fairness of the exchange and (3) certain other, primarily procedural, conditions are satisfied. (See Securities Act Section 3(a)(10).)
   
Section 3(a)(9) Section of the Securities Act that provides an exemption from registration for any security exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting the exchange.
   
Section 4(a)(1) Section of the Securities Act that provides an exemption from registration for a transaction by a person other than an issuer, underwriter or dealer. Prior to JOBS Act renumbering, was referred to as Section 4(1).
   
Section 4(a)(1-1/2) Exemption A hybrid exemption from registration for resales of securities by a person other than an issuer, underwriter or dealer not specifically provided for in the Securities Act but recognized by many courts. Sections 4(1) and 4(2) of the Securities Act have been renumbered Sections 4(a)(1) and 4(a)(2), respectively. The Section 4(1-1/2) Exemption, which does not itself refer to a section of the Securities Act, may therefore be recharacterized as the Section 4(a)(1-1/2) Exemption.
   
Section 4(a)(2) Section of the Securities Act that provides an exemption from registration for a transaction by an issuer not involving any public offering. Prior to JOBS Act renumbering, was referred to as Section 4(2).
   
Section 409A Section of the Internal Revenue Code and associated Treasury Regulations that levy an additional 20% penalty tax, accelerated income inclusion and a further additional income tax calculated as interest on income taxes deferred under certain deferred compensation arrangements.
   
Secured Debt Debt guaranteed by the pledge of collateral.
   
Securities Act The U.S. Securities Act of 1933 requires registration of all offers and sales of securities that use the means and instrumentalities of interstate commerce, unless the securities fall within an exempt category.
   
Securities Act “Expert” Designation Designation under Section 11(a) of the Securities Act as a person whose profession gives authority to a statement made by him or her, who has with his or her consent been named as having prepared or certified any part of a registration statement, or as having prepared or certified any report or valuation which is used in connection with a registration statement.
   
Securities Act Registration Registration of offers and sales of securities under the U.S. Securities Act of 1933, requiring the filing of specified documents with the SEC, including registration statements, containing material information about the transactions.
   
Securities and Exchange Commission U.S. federal agency charged with (1) interpreting federal securities laws, (2) issuing and amending rules designed to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation, (3) overseeing the inspection of securities firms, brokers, investment advisers and ratings agencies and (4) overseeing private regulatory organizations in the securities, accounting and auditing fields.
   
Securities Class Actions Class action lawsuits brought by shareholders when alleged negligence, fraud or other violations of law by a company’s directors and officers are claimed to have led to a loss of shareholder value.
   
Securities Exchange Delisting Indefinite discontinuance of trading on a securities exchange.
   
Securities Litigation Legal proceedings involving claims of violations of federal or state securities laws.
   
Securities Offering Process Process of raising capital through the sale of securities to investors, including, as applicable, (1) engaging advisors and agents, (2) preparing financial statements and other disclosure materials, (3) registering the transaction and securities with regulatory authorities or qualifying for applicable exemptions from registration, (4) making required disclosures and regulatory filings, (5) engaging in marketing activities and (6) consummating sales of the securities.
   
Securities Offering Reform Significant reforms to the registration, communications and offering processes applicable to securities offerings registered under the Securities Act; adopted by the SEC in June 2005.
   
Securities Offerings Offerings of securities in transactions registered under the Securities Act or pursuant to applicable exemptions from registration.
   
Securities Repurchase or Redemption Acquisition by an issuer of its own stock or other securities.
   
Securities Trading Trading in securities involving persons other than issuers and underwriters on securities exchanges or pursuant to negotiated transactions.
   
Security Any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. (See Section 2(a)(1) of the Securities Act.)
   
Seed Financing Initial financing provided to startup companies. May be provided by any combination of founders, friends and family, angel investors, seed-stage venture capital firms, startup accelerators or through equity crowdfunding. Frequently raised through issuance of convertible notes, and seed financing deals often involve smaller sums and less formality and complexity (from a contractual and governance perspective) than later-stage venture capital transactions.
   
Segment Disclosure The reporting of the operating segments of a company in the disclosures accompanying its financial statements; required for public companies.
   
Sentencing Guidelines U.S. Federal Sentencing Guidelines, adopted by the U.S. Sentencing Commission, provide policies and practices for federal courts to consult regarding the appropriate form and severity of punishment for offenders convicted of federal crimes.
   
Series A Financing First round of startup company financing after seed and angel financing, typically provided by institutional venture capital funds. Commonly structured as an issuance of preferred stock exempt from Securities Act registration pursuant to the Regulation D safe harbor. Common Series A investor protections include anti-dilution rights, liquidation preferences, voting rights, board representation, registration rights, conversion rights and more.
   
Series B and Later Financing Subsequent rounds of startup company financing after Series A financing, typically provided by institutional venture capital funds. As with Series A financings, these transactions are commonly structured as issuances of preferred stock exempt from Securities Act registration pursuant to the Regulation D safe harbor, and investors are afforded a variety of protections.
   
Severance compensation and benefits provided to executives and other employees in connection with their termination of employment.
   
Shareholder Activism Efforts by public company shareholders to influence the direction of the management and policies of the company.
   
Shareholder Agreements Written agreements among shareholders defining certain rights and obligations of the parties with respect to voting, governance, transfers of stock and other matters.
   
Shareholder Approval Approval of a transaction, a charter amendment, an adoption of an equity compensation plan, an issuance of securities or another matter by shareholders of a corporation, typically by the affirmative vote of a majority of the votes cast on a matter or by the affirmative written consent of holders of a majority of shares entitled to vote on a matter.
   
Shareholder Meeting Procedures Rules of procedure governing meetings of shareholders, frequently addressing attendee registration, adherence to the agenda, the identity of the presiding officer of the meeting, the process for being recognized to address the meeting, the content of shareholder remarks, use of recording devices and grounds for expulsion from the meeting.
   
Shareholder Meetings Annual meetings of shareholders of a corporation, typically required by statute, and special meetings of shareholders called from time to time by boards of directors or other persons at which directors are elected and other binding and precatory actions by shareholders may be taken.
   
Shareholder Proposals Proposals for a corporation to take a specified action submitted by shareholders for consideration at an annual or special meeting of shareholders or by shareholders contemplating action by written consent.
   
Shareholder Representatives Persons who or which are parties to the principal agreement in an M&A transaction and act on behalf of selling shareholders after consummation of the transaction with respect to purchase price adjustments, allocation of liabilities for taxes, administration of escrow, post-closing covenants, earnouts, indemnification claims, disputes and other matters arising from the transaction.
   
Shareholder Rights Rights appurtenant to ownership of equity interests in corporations.
   
Shareholder Rights Plans Protective devices adopted by public company boards of directors that are designed to deter acquisition attempts by threatening to impose an unacceptable level of dilution on buyers who do not secure the target company board’s consent.
   
Shareholder Treaties / Settlements Settlement agreements between activist shareholders and public companies that were subject to proxy contests and destabilization campaigns.
   
Shareholder Vote Tabulation Tabulation of votes by in-person ballot and by proxy at an annual or special meeting of shareholders, usually performed by the inspector of elections.
   
Shareholder-Board Communications Communications between a public company’s shareholders and its board of directors.
   
Shelf Registration Registration of securities under the Securities Act, usually (1) either on a continuous or delayed basis and (2) on Form S-3; permits multiple offerings based on the same registration.
   
Short Sales Sales of stock that an investor does not own or a sale that is consummated by the delivery of a stock borrowed by, or for the account of, the investor; normally settled by the delivery of a security borrowed by or on behalf of the investor.
   
Short-Form Mergers See “Freezeouts.”
   
Short-Swing Trading The purchase and sale, or sale and purchase, of an issuer’s equity securities within any time period of less than six months.
   
Smaller Reporting Companies Companies that (1) have a common equity public float of less than $75 million or (2) are unable to calculate their public float and have annual revenue of $50 million or less, upon entering the system.
   
Social Responsibility / ESG Sustainable investing, or environmental, social and governance investing.
   
SPACs Special purpose acquisition companies formed solely to acquire other companies.
   
Special / Other Committees Committees (or equivalent bodies) established by boards of directors of companies on ad hoc bases for special purposes, including, for example, negotiating proposed transactions as to which certain directors may be conflicted, overseeing particular legal proceedings or conducting internal investigations of alleged misconduct.
   
Special Shareholders’ Meetings Meetings of corporations’ shareholders other than annual shareholders’ meetings.
   
Spin-Offs & Split-Offs Distribution by a parent company of the capital stock of a subsidiary to the parent company’s shareholders, usually on a pro rata basis for no additional consideration.
   
Split CEO / Board Chairman Separation of the positions of Chairman of the Board of Directors and Chief Executive Officer.
   
SROs / Securities Exchanges Self-regulatory organizations, including securities exchanges and clearing agencies.
   
Standstills Provisions typically contained in confidentiality agreements or separate standstill agreements prohibiting a prospective acquiring party from taking specified actions that may be associated with hostile or disruptive acquisition activities.
   
Startup Company A newly-established business generally reflecting some or all of the following characteristics: in the early stages of product or service development, deploying new technologies with potential to disrupt existing markets or create new markets, not yet having achieved profitability, having relatively high growth potential, operating with limited resources and personnel and sourcing all or a substantial portion of their working capital from third-party investors.
   
State Law Filings Filings made with the Secretary of State or other state governmental authorities.
   
Stock Consideration Consideration offered in an M&A transaction consisting in whole or in part of equity securities of a buyer or its parent company or other affiliate.
   
Stock Ownership Guidelines Written set of principles and procedures encouraging or requiring directors and officers of public companies to maintain a certain level of ownership of company stock.
   
Stock Purchase Acquisition of all or a portion of the equity interests of a company.
   
Stock Purchase Plans Plans through which issuers permit non-employee or employee investors to participate and acquire stock directly from the company.
   
Stock Splits The division of outstanding shares into multiple shares, usually to make them more affordable to potential investors.
   
Street Name Registration Registration of a security in the name of a brokerage firm on the books of the issuer, with the brokerage firm holding the security on behalf of the shareholder in “book-entry” form; cf. Direct Registration.
   
Stub Equity Post-closing retention by selling shareholders of a minority stake in a company subject to a going private transaction.
   
Subsequent Events (Disclosure) Events or transactions that may occur for potential recognition or disclosure in a company’s financial statements but occur after the balance sheet date.
   
Subsidiary A “subsidiary” of a specified person is an affiliate controlled by such person directly, or indirectly through one or more intermediaries.
   
Succession Planning Process of identifying and developing internal personnel for the purpose of filling key leadership positions in a company.
   
Successor Liability Liability of a buyer in an asset acquisition for liabilities of the seller that were not specifically assumed in the asset purchase agreement because the transaction satisfied specified criteria for being treated “as-if” it were structured as a merger in which the surviving entity assumes all liabilities of both parties to the transaction.
   
Successor Registrants Status under the Exchange Act enabling a company to consider the Exchange Act reporting history of a predecessor issuer in determining forms eligibility under the Securities Act and eliminating the requirement that the successor file a new Exchange Act registration statement.
   
Superior Proposals Third party transaction proposals received by a target company that the target company board determines, in accordance with the terms of an acquisition agreement, are preferable to the terms of a previously agreed-upon transaction.
   
Super-Majority Voting Requirement that approval of a matter being voted on by shareholders receive the affirmative vote of some percentage of votes cast greater than a majority.
   
Tag-Along Rights Rights of minority shareholders to participate in a sale of shares by a controlling shareholder.
   
Target Integration Legal, financial and operational integration of an acquired company into the structure of the buyer and its affiliates.
   
Tender Offer Broad solicitation by a company or a third party to purchase a substantial percentage of a company’s Exchange Act Section 12 registered equity securities; offers are extended for a limited period of time at a fixed price, usually at a premium over the current market price, and are customarily contingent on shareholders tendering a fixed number of their securities.
   
Termination Rights (M&A) Rights of the parties to an acquisition agreement to terminate the agreement.
   
Top-Up Options Rights of tender offerors, upon successful completion of a tender offer at or above the minimum condition level (usually 50%), to purchase newly issued shares of a target to increase their ownership in the target to greater than 90%. The use of top-up options is expected to decline significantly in light of new Section 251(h) of the DGCL, which became effective August 1, 2013.
   
Treasury Stock Shares of capital stock that have been repurchased or otherwise reacquired by the issuer but not cancelled; it is issued but not outstanding.
   
Trust Indentures / TIA The Trust Indenture Act of 1939, requires corporate bonds and other debt securities to be issued under an indenture compliant with SEC rules and providing for the appointment of a qualified trustee.
   
Underwriters / Initial Purchasers Investment banks, singly or as members of syndicates, that purchase new issuances of securities from issuers and distribute them to investors.
   
Unocal Standard See “Enhanced Scrutiny Standard.”
   
Unsecured Debt Debt not guaranteed by the pledge of collateral.
   
Up-the-Ladder Reporting / Part 205 Obligations of attorneys appearing and practicing before the SEC to report “up-the-ladder” evidence of material violations of federal or state securities laws, material breaches of fiduciary duties or similar material violations of any federal or state law.
   
Variable Interest Entities Entities in which an investor exercises control without holding a majority of voting rights.
   
Venture Capital Financing for startup companies, typically provided by firms that specialize in financing new ventures with capital supplied by investors interested in speculative or high risk investments.
   
Venture Financing Process Process of raising capital for startup companies, including seed, angel, Series A and later-stage financings.
   
Voluntary Filers Companies that voluntarily file periodic reports under the Exchange Act.
   
Warrant A right to purchase a security, usually equity, at a specified price within an agreed-upon period of time.
   
Well-Known Seasoned Issuers / WKSIs Issuers that are eligible to register a primary offering of their securities on Form S-3 or Form F-3 and have either $700 million of public common equity float or, for limited purposes, have issued $1 billion of registered debt in the preceding three years.
   
Whistleblowers Persons who inform the public or applicable authorities about alleged violations of law or other misconduct occurring in a governmental authority, public or private organization or company.
   
Williams Act Amendments to the Exchange Act enacted in 1968 designed to subject tender offers to advance disclosure requirements.
   
XBRL Acronym standing for eXtensible Business Reporting Language, a language for the electronic communication of business and financial data.
   
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