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ACCS 2007 ANNUAL MEETING ENJOYING THE RIDE ON THE TRACK TO SUCCESS 807 - Managing the IPO Process Gary Hirsch General Counsel IntraLinks, Inc. August Moretti Chief Financial Officer Alexza Pharmecueticals Ken Siegel General Counsel Verigy Mark A. Stachiw Senior Vice President, General Counsel and Secretary MetroPCS Communications, Inc. This material is protected by copyright. Copyright © 2007 various authors and the Association of Corporate Counsel (ACC). Materials may not be reproduced without the consent of ACC. Reproduction permission requests should be directed to the Legal Resources Department at ACC: 202/293-4103, ext. 342; [email protected] ACC's 2007 ANNUAL MEETING Enjoying the Ride on the Track to Success Faculty Biographies ACC Annual Meeting 2007 - Session 807 : Managing the IPO Process Gary Hirsch Materials Gary Hirsch is the chief legal officer of IntraLinks in New York City, a leading software-as-a- 1. Program Outline service company. Throughout his career, Mr. Hirsch has advised corporations on acquisitions, financings, governance matters, and commercial transactions including PART 1 – Planning and Process Overview technology licensing 2. Going Public – Decisions and Process Overview (Heller Ehrman) 3. Responsibility Checklist 4. Org Meeting Binder including Timeline Prior to joining IntraLinks, Mr. Hirsch was general counsel of Currenex, Inc., an 5. Data Room (Due Diligence) Index institutional currency trading platform recently acquired by State Street Bank. Before that he served as assistant counsel in the corporate legal department of Marsh & McLennan PART 2 – Managing Communications: Quiet Period, Analysts and Investor Relations Companies. He began his career as an associate at Willkie Farr & Gallagher in New York. 6. Forms: Quiet Period Guidelines for Employees 7. Summaries of Recent Rule Changes Mr. Hirsch is a graduate of Dartmouth College and the NYU School of Law. 8. Ten Tips on Disclosing Forecasts 9. Sample Public Company Communications Policy 10. Investor Relations White Paper August Moretti Chief Financial Officer PART 3 – Drafting and Comments: S-1 specifics and accounting/SEC/auditor hot buttons 11. Prospectus Contents Alexza Pharmecueticals 12. Bulletin re: Executive Compensation Disclosure Rules (recent changes) PART 4 – Dealing with certain Constituents Ken Siegel 13. Notice to Registration Rights Holders General Counsel 14. Form of Individual Lock Up Agreement Verigy 15. Form of D&O Questionnaire 16. Memorandum re EDGAR codes 17. Audit Committee Charter Mark A. Stachiw 18. Compensation Committee Charter Mark A. Stachiw is senior vice president, general counsel, and secretary of MetroPCS PART 5 - Public Company Governance (selected topics) 19. Memorandum regarding Public Company Corporate Governance (Heller Ehrman) Communications in Dallas. 20. Detailed Compliance Checklist 21. Public Company Handbook (Heller Ehrman) Prior to joining MetroPCS Communications, Mr. Stachiw served as senior vice president 22. Guidance regarding Equity Compensation Plans and general counsel of Allegiance Telecom Company Worldwide for Allegiance Telecom, 23. Sample Insider Trading Policy Inc., and as vice president and general counsel, Allegiance Telecom Company Worldwide 24. Sample Whistleblower Policy when it initiated bankruptcy proceedings. Prior to joining Allegiance Telecom, Inc., Mr. 25. Public Company Guidance (Latham) Stachiw was of counsel at Paul, Hastings, Janofsky and Walker, LLP, and represented national and international telecommunications firms in regulatory and transactional matters. PART 6 – Roadshow, Pricing and Closing Before joining Paul Hastings, Mr. Stachiw was the chief legal officer for Verizon Wireless 26. Sample Roadshow schedule Messaging Services (formerly known as AirTouch Paging and PacTel Paging.) 27. Sample Underwriting Agreement with Issuer Counsel's Changes 28. Memo to Employees regarding Red Herring, Reverse Split and Pricing 29. "Pricing Outside the Range" (Latham) 30. Heller Ehrman Venture Group contacts 2of159 ACC's 2007 ANNUAL MEETING Enjoying the Ride on the Track to Success B. Board – Composition, size and terms; director recruiting and remuneration; D&O questionnaires, ACC Annual Meeting 2007 - Session 807 – Managing the IPO Process NASD questionnaires; committees (Audit, Compensation, Nominating), charters, independence; EDGAR filings; short-swing profits Program Outline C. Management - Explaining what is disclosed; new policies, individual accountability, culture change INTRODUCTIONS and program summary PART 5 - Public Company Governance (selected topics) PART 1 – Planning and Process Overview (some of these topics are covered in more detail later) A. Review of stock option plans and the like, review of corporate records and necessary revisions to A. Decision to go public – lead time, selection of outside counsel, selecting underwriters, organizational articles and bylaws and other corporate housekeeping, coordinating with other capital raising meeting, developing timeline, assignment of responsibilities, auditing legal and regulatory compliance B. Code of Ethics; Insider Trading and Whistleblower policies; Open Door policy; appointment of B. Due diligence, drafting S-1, auditor sign-off, filing, SEC comments compliance officer C. What goes on while S-1 is being done C. Exchange listings and rules 1. Dealing with various constituencies: Board, management and employees, stockholders, analysts, D. 10b5-1 plans regulators E. SOX budget & timetable 2. Getting ready for public company governance PART 6 – Roadshow, Pricing and Closing D. Roadshow, red herring, pricing, announcement, closing, listing A. Underwriting agreement – typical issues; fee structure; signing (after pricing) PART 2 – Managing Communications: Quiet Period, Analysts and Investor Relations B. Roadshow overview, mechanics (who participates, duration, operating while it's happening) A. Rules, recent changes, prefinancing road show; dealing with underwriter firms' analysts, others C. Electronic roadshows B. Authorized spokespersons, management training PART 7 – Last Words C. Preparing for post closing communications and disclosure controls: Use of Investor Relations firms; analyst guidance and issues after closing, IR section of corporate website; disclosure committee A. Don't Wait till the Last Minute – D&O insurance; customer references lined up for U/W due diligence; EDGAR codes for D&O; Form 3s & 4s; stock transfer agent & certificates PART 3 – Drafting and Comments: S-1 specifics and accounting/SEC/auditor hot buttons B. References: websites, Ipovitalsigns.com, management primer, other publications, acknowledgements A. Risk factors, MD&A, executive compensation, beneficial ownership, regulatory environment B. Cheap stock charges /123R C. Option backdating or other red flags in history D. Revenue recognition E. Internal controls F. Restatements and material weaknesses PART 4 – Dealing with certain Constituents A. Stockholders and optionholders – Lock-ups; shareholder agreements; registration rights, secondaries, reverse splits, directed share programs; option grants during registration process 3of159 ACC's 2007 ANNUAL MEETING Enjoying the Ride on the Track to Success ATTORNEY-CLIENT PRIVILEGED WHY GO PUBLIC: ADVANTAGES AND DISADVANTAGES MEMORANDUM The decision to become a public company can be a momentous one for the Company. Although the advantages of going public may seem obvious, the costs and risks of being a public To: Mighty Oak Corporation (the “Company”) company are less so. The Company should carefully consider the pluses and minuses of such a decision before going forward. From: Heller Ehrman LLP Advantages Date: 2007 The advantages of going public include: Re: Going Public Cash: The proceeds of an IPO can be substantial, and can have a significant positive impact on the financial position of the Company. A successful IPO can help the Company grow “Going public” refers to the initial public offering of a class of the Company’s securities, more quickly, hire more employees, and invest more in infrastructure, research and development, typically the common stock, to the public through a registration statement prepared in and business development. compliance with the Securities Act of 1933 (the “Securities Act”) and filed with the Securities and Exchange Commission (the “SEC”). The initial public offering (“IPO”) process involves a Improved Access to Capital: The typical public offering will improve the Company’s net series of steps culminating in the sale of shares and the establishment of a public market for the worth, often making new capital or borrowing available from a broader range of sources and on Company’s common stock. Following the completion of the IPO, the Company will be subject more favorable terms. If the Company’s stock performs well, and market conditions permit, the to the periodic reporting and other obligations of the Securities Exchange Act of 1934 (the Company may have the ability to raise additional money through either public or private “Exchange Act”). financings. This memorandum provides an overview of the IPO process, summarizes the advantages Use of Common Stock as Acquisition Currency: Since following the IPO there will be a and disadvantages of going public, and surveys the key corporate governance decisions that the public market for the Company’s common stock, the Company may use the stock as a form of Company will need to make before proceeding with an IPO. Please note, however, that this “currency” to pursue corporate acquisitions, paying for acquired
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