Recently, the NYSE published annual compliance reminders for companies whose shares trade on the exchange. The letter reminds listed companies of the need to submit supplemental listing applications at least two weeks in advance of any issuances of a listed security, listing a new security, and certain other corporate events.

This requirement tends to catch some folks by surprise in the context of equity plans – and maybe that’s why the exchange has highlighted it for at least two years running on the letter’s front page. Here’s more detail:

A listed company is required to file a SLAP to seek authorization from the Exchange for a variety of corporate events, including:

• Issuance (or reserve for issuance) of additional shares of a listed security;

• Issuance (or reserve for issuance) of additional shares of a listed security that are issuable upon conversion or exercise of another security, whether or not the convertible security is listed on the Exchange;

• Change in corporate name, state of incorporation, or par value; and/or

• Listing a new security (e.g., new preferred stock, second class of stock, or bond).

No additional shares of a listed security, or any security convertible into the listed security, may be issued until the Exchange has authorized a SLAP. Such authorization is required prior to issuance, regardless of whether the security is to be registered with the SEC, including if conversion is not possible until a future date. The Exchange requests at least two weeks to review and authorize all SLAPs. It is recommended that a SLAP be submitted electronically through Listing Manager as soon as a listed company’s board approves a transaction.

Section 703 of the Listed Company Manual provides additional information on the timing and content of
SLAPs. Domestic companies should also give particular attention to Sections 303A.08, 312.03 and 313 of the Listed Company Manual (see Shareholder Approval and Voting Rights Requirements below). Generally, FPIs may follow home country practice in lieu of these requirements. Please consult the Exchange if you have any questions.

Check out the letter for additional proxy season reminders – including for shareholder approval requirements and voting standards.

– Liz Dunshee