Corporate Governance

Shearman & Sterling LLP Federal Forum-Selection Provisions in the Wake of Cyan and Salzberg | 45 General Consideration Corporations contemplating public equity offerings or having engaged in such offerings in the recent past should consider adding an FFP to their certificates of incorporation or bylaws. 1 Pre-IPO and Controlled Corporations Because an FFP in a certificate of incorporation is the type of provision that was specifically upheld by the Delaware Supreme Court in Salzberg, this might be the preferred approach for pre-IPO or controlled corporations for which an amendment to the certificate may be a reasonably efficient option. 2 Validity of Provisions Adopted by Non-Delaware Corporations 3 Publicly Held Non-Controlled Corporations For diversely held public corporations, adoption of an FFP in a bylaw may be more efficient. 4 Corporations Incorporated in Other Jurisdictions Non-Delaware corporations — whether incorporated in other states or organized in non- U.S. jurisdictions — should consider adopting FFPs in their organizational documents unless prohibited or apparently unenforceable under applicable law in the relevant jurisdiction. While many states take guidance from Delaware with respect to corporate law, the validity of federal forum-selection provisions for non-Delaware entities will depend on applicable corporate statutes and law in each relevant jurisdiction. A similar analysis would likely apply with respect to a non-U.S. issuer. A state court faced with claims subject to a federal forum- selection provision and involving an entity organized in another state or outside the U.S. would likely make a threshold assessment as to whether the provision is authorized under the laws of the relevant state or foreign jurisdiction. WHAT SHOULD COMPANIES CONSIDER NOW?

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