Earlier this year, Pincus asked a Delaware court to throw out a lawsuit that alleging that he and others had broken their duty to shareholders by waiving lockup agreements
for themselves, while continuing to enforce them for the majority of investors.
Additionally, since lockup agreements
only allow insider selling prior to lockup expiration if the lead underwriters agree with such early release, a lockup may assist the lead underwriter in extracting additional compensation by either making markets for the shares of insiders' block transactions or underwriting seasoned equity offerings (SEOs).
The percentage of locked shares was calculated as the total number of shares part of the lockup agreement
divided by the total number of shares outstanding after the IPO.
Paul Tanner argued that his exercise of the stock option was exempt under IRC section 83(c)(3) since it would have generated a lawsuit under SEA section 16(b), and he argued that the stock received after his exercise of the stock option was nontransferable and subject to a substantial risk of forfeiture because of a two-year lockup agreement
Additionally, Antofagasta has signed a lockup agreement
with all of Duluth Metals' directors and officers, along with Walbridge Mining Company, who together owns 10.
The firm is also extending certain other dates for one week, within the restructuring support and lockup agreement
, and the restructuring term sheet.
The positive average reaction to the IPOs of the firms in our sample suggests that investors do not anticipate that the firm's top managers plan to liquidate their holdings, but an IPO undeniably provides controlling shareholders with an opportunity to sell their restricted shares after the lockup agreement
Our study also shows that because the lockup agreement
removes personal incentives to issue aggressive forecasts, IPO firms tend to issue conservative forecasts.
These shares are subject to a lockup agreement
restricting future sales, subject to the satisfaction of certain price and volume targets, Spherix said.