On October 31, 2018, the NYSE filed a proposed amendment to the Listed Company Manual to modify the price requirements for purposes of determining whether shareholder approval is required for certain issuances of securities. These proposed amendments mirror the recent Nasdaq changes. The new NYSE rule would replace the “market value” test with a new definition known as “Minimum Price.” The Minimum Price would be defined as the lower of (i) the closing price of the issuer’s common stock immediately before the execution of the transaction agreement and (ii) the average closing price of the issuer’s common stock during the five days immediately preceding the transaction agreement. Under the proposal, shareholder approval would be required for transactions that are priced below the Minimum Price. The NYSE proposal eliminates the requirement for shareholder approval of issuances at a price less than book value but greater than market value. The proposed change aligns with Nasdaq’s recent amendment that eliminates “book value” in the determination of whether shareholder approval is needed. A copy of the proposed NYSE rule can be found here.
