Page 20 - The CFIUS Book

THE CFIUS BOOK
l The relocation, or substantial alteration of the entity’s production, operational, or research and development facilities of the entity;
l Major expenditures or investments, issuances of equity or debt, or dividend payments by the entity;
l Approval of the operating budget of the entity;
l The selection of new business lines or ventures that the entity will pursue;
l The entry into, termination, or non-fulfillment by the entity of significant contracts;
l The policies or procedures of the entity governing the treatment of non-public technical, financial, or other proprietary information of the entity;
l The appointment or dismissal of officers or senior managers;
l Theappointmentordismissalofemployeeswithaccesstosensitivetechnology
or classified U.S. Government information; and
l TheamendmentoftheArticlesofIncorporation,constituentagreement,orother organizational documents of the entity with respect to the matters described above in this section.
1.1.3.2. Direct or indirect
Single Foreign Person Investor
While direct control of a business’s important matters may be evident, indirect control may be harder to identify. CFIUS states that control may be exercised through any of the following:12
l Ownershipofamajorityoradominantminorityofthetotaloutstandingvoting interest in an entity;
l Board representation;
l Proxy voting;
l Special shares;
l Contractual arrangements;or
l Formal or informal arrangements to act in concert with other owners to exert control.
Of course, this list is not meant to be exhaustive, but it shows that CFIUS will take an interest in the acquisition of many different means of control.
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