A Lawyer's Responsibilities A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having a special responsibility for the quality of justice.
Securities and Exchange Commission. The Securities and Exchange Commission "we" or "Commission" is adopting amendments to Rule under the Securities Act ofwhich provides an exemption from registration for securities issued by non-reporting companies pursuant to compensatory arrangements.
These amendments make Rule more useful and eliminate unnecessary restrictions. Executive Summary and Background Inwe adopted Rule under the Securities Act 3 to allow private companies to sell securities to their employees without the need to file a registration statement, as public companies do.
The rule provides an exemption from the registration requirements of the Securities Act for offers and sales of securities under certain compensatory benefit plans or written agreements relating to compensation.
The exemptive scope covers securities offered or sold under a plan or agreement between a non-reporting "private" company or its parents or majority-owned subsidiaries and the company's employees, officers, directors, partners, trustees, consultants and advisors.
When we adopted the rule, we determined that it would be an unreasonable burden to require these private companies, many of which are small businesses, to incur the expenses and disclosure obligations of public companies when their only public securities sales were to employees.
Further, these sales are for compensatory and incentive purposes, rather than for capital-raising. Over the years, our staff has monitored the use of the rule. The staff concluded that the rule has been popular for both small businesses and larger private companies.
Together, these changes will add greater flexibility for companies to compensate their employees with securities and, at the same time, will provide that essential information be delivered to employees in appropriate situations and in a timely manner.
A number of commenters, however, expressed concerns about the proposed disclosure requirements, particularly as they relate to foreign private issuers. We have considered these comments and believe that we have struck an appropriate balance between the needs of employee-investors and the needs of non-reporting companies.
These revisions to Rule are being adopted pursuant to the exemptive authority provided to the Commission under Section 28 of the Securities Act. Amendments to Rule The amendments to Rule have been adopted in most respects as proposed, with the exceptions discussed below.
The changes to the rule are not retroactive. Offers and sales made in reliance on Rule before the effective date will continue to be valid if they met the conditions of the rule before its revision.
In addition, we are adopting a number of clarifying and simplifying provisions, including the following: Instead, issuers will make calculations based solely on actual sales or amounts to be sold as with options in a month period.
Changing the focus from offers to sales will make it easier for issuers to determine the exempt amount of securities transactions, while continuing to assure that the transactions are not so large as to trigger the need for registration. We believe that these changes, in combination with the other changes adopted, will provide issuers the flexibility they need, without creating opportunities for abuse.
With respect to equity incentives such as restricted stock and compensatory stock purchases, the calculations will be made as of the transaction date. Deferred compensation and similar plans will make measurements based upon the date of an irrevocable election to defer compensation.
With respect to options, calculations will be made as of the date of the option's grant, without regard to whether the option is currently exercisable or "vested. However, this change will greatly simplify the issuer's oversight of outstanding offers and perhaps benefit more employees and others who may participate in the compensatory arrangements.
The rule makes it clear that calculations with respect to options should be based on the exercise price, since the purpose is to measure the securities that will be sold under the exemption.
The point of the revision is to clarify that compensatory arrangements should not be valued at "zero" or treated as a gift. Even when the employee or consultant is not required to pay additional consideration for the securities being issued, these securities typically would have some intrinsic worth, such as book value or a multiple of book value.
The value of services exchanged for securities issued must be measured by reference to the value of the securities issued rather than the employee's salary or consultant's invoice. The rule as revised makes this clear. We therefore proposed to impose a specific disclosure requirement on all transactions under the exemption.
This formulation apparently has worked well to date.
We do not believe the exemption has been misused for fraudulent purposes in its current format. We agree with the commenters that the additional burdens related to mandatory financial and risk disclosure for these limited offerings are unnecessary.
Indeed, a number of commenters with this profile urged the Commission to remove the ceiling quickly so that they can enjoy sooner the benefits of the exemption for their compensatory arrangements.
These commenters appear to be comfortable with a greater disclosure requirement as the tradeoff for greater use of the exemptive rule. Moreover, we believe that many of these companies already have prepared the type of disclosure required in their normal course of business, either for using other exemptions, such as Regulation D, 18 or for other purposes.
As a result, the disclosure requirement generally would be less burdensome for them. In that case, they would continue to provide only the disclosure needed to satisfy the antifraud provisions of the law. We have not witnessed abuse below this threshold, and therefore the burden of preparing and disseminating the new disclosure does not justify the potential benefits to employee-investors.C) Utility maximizing is theoretical and cannot therefor be attained in the real world D) Marginal utility gained from the last dollar spent is equal across all goods and services Answer D.
Explained plainly by the ''most bang for the buck'' idea. Expected utility: Expected utility, in decision theory, the expected value of an action to an agent, calculated by multiplying the value to the agent of each possible outcome of the action by the probability of that outcome occurring and then summing those numbers.
The concept of expected utility is used to. UTILITY MAXIMIZING COMBINATION Algebraic Restatement of the Utility Maximization Rule. MUx/Px = MUy/Py = MUz/Pz. 8 utils$1=16 utils$2. MARGINAL UTILITY-PRICE RATIO: The ratio of the marginal utility obtained from consuming a good to the price of the good.
A Tool for Maximizing Utility. This process of decision making suggests a rule to follow when maximizing timberdesignmag.com the price of T-shirts is twice as high as the price of movies, to maximize utility the last T-shirt chosen needs to provide exactly twice the marginal utility (MU) of the last movie.
Utility Maximization Rule MUx/Px = MUy/Py, where MUx is the marginal utility derived from good x, Px is the price of good x, MUy is the marginal utility of good y and Py is the price of good y.
A consumer should spend his limited money income on the goods which give him the most marginal utility per dollar. The upgrade represents the highest credit rating to date for the division of the agency that provides hydroelectricity to the City’s municipal facilities and renewable energy to residents and businesses.