| name | directed-share-program |
| language | en |
| description | Drafts a Directed Share Program (DSP) agreement governing share allocation and purchase by designated participants in a U.S. public offering or IPO. Covers eligibility, allocation methodology, pricing, settlement, lock-up, indemnification, and SEC/FINRA compliance. Use when preparing DSP documentation for underwritten public offerings, IPO directed share programs, or controlled share purchase programs for employees, directors, and business associates. |
Directed Share Program
Drafts a legally compliant DSP agreement governing share allocation, purchase, and settlement for designated participants in a public offering.
Prerequisites
Gather before drafting. If any item is unavailable, identify the gap and request it.
- Issuer — legal name, state of incorporation, SEC registration form type and file number
- Offering — security type, aggregate size, anticipated pricing range or public offering price
- DSP parameters — shares allocated to DSP (number or %), per-participant limits
- Underwriters — lead/co-underwriter names and roles; designated broker-dealer (if any)
- Participant categories — eligible classes (employees, directors, associates, family, etc.)
- Lock-up — duration, scope, permitted exceptions
- Timing — anticipated pricing date, settlement timeline
Quick Start
Draft sections in order below. Each section heading maps to a required agreement section.
Core Sections
1. Introduction & Disclaimers
- Issuer identification: full legal name, offering description, aggregate size
- Program purpose: purchase at public offering price via underwriter allocation
- No-guarantee disclaimer: allocations subject to company/underwriter discretion
- Modification rights: program may be modified or terminated prior to pricing
- Prospectus primacy: shares offered only pursuant to final prospectus; include EDGAR reference
2. Eligibility
- Eligible: current/former employees, officers, directors, subsidiaries; bona fide business associates; family members of eligible persons
- Invitation-only: company retains sole discretion over invitations and allocations
- Ineligible: regulatory sanction subjects; restricted-jurisdiction residents; persons required to register as broker-dealers
- Non-retaliation: employment/service not contingent on participation
3. Allocation Methodology
- Indication of interest: format, required info, submission deadline
- DSP pool size (number or % of total); may be increased/decreased
- Per-participant cap: maximum shares or dollar amount
- Allocation factors: DSP demand, primary offering demand, participant relationship, regulatory considerations
- Oversubscription handling: pro-rata reduction, tiered allocation, or full discretion — specify method
- No-entitlement clause: no contractual, legal, or equitable right to any allocation
4. Pricing, Payment & Settlement
Pricing: all DSP shares at public offering price; no discount, rebate, or preferential pricing. State whether participants pay underwriting discounts/commissions.
Payment: wire transfer (immediately available funds) or certified/cashier's check. Deadline: [X] business days post-notification. Non-payment: allocation canceled, shares reallocated, participant liable for losses.
Settlement: book-entry via DTC; brokerage account designation; fractional share treatment; excess payment refund procedure.
5. Underwriting Relationship & Registration
- DSP shares part of underwriters' firm commitment allocation
- Underwriters retain discretion to modify or terminate
- Registration statement reference: form type, file number, filing date
- Prospectus access: EDGAR / underwriter distribution
- Designated broker-dealer role (if applicable)
- Compliance: FINRA Rule 5130; Regulation M [VERIFY applicability per participant category]
6. Risk Disclosures
- Directive to review prospectus "Risk Factors"
- No prior public market; price volatility; possible decline below offering price
- Lock-up terms: [X] days; covers sales, pledges, hedges, derivatives; permitted exceptions for estate planning transfers
- Affiliate/control person resale: Rule 144 restrictions post-lock-up [VERIFY current limitations]
- Forward-looking statements disclaimer
- No investment/tax/legal advice; recommend independent advisors
- Regulation M anti-manipulation compliance
7. Indemnification & Liability
Participant indemnifies company/underwriters for: claims from DSP participation, breach of representations, securities law violations, unauthorized resale/transfer.
Participant acknowledgments: independent investment decision based on prospectus; company/underwriters not fiduciaries; opportunity to ask questions.
Liability caps: no consequential/indirect/punitive damages; maximum liability = amount paid for shares; participant responsible for securities law compliance.
8. Execution & Governing Terms
Acknowledgment checklist (include as sign-off):
- Received and reviewed prospectus including risk factors
- Understands DSP terms, restrictions, and limitations
- Agrees to lock-up and all applicable requirements
- Acknowledges investment risks
- Consulted advisors or elected not to
Signature blocks: participant; authorized company representative; underwriter representative (if applicable).
Boilerplate: governing law (issuer incorporation state), exclusive jurisdiction, amendment (written consent + notice), waiver, severability, entire agreement.
9. Exhibits
- A — Indication of Interest Form
- B — Acknowledgment and Agreement Form
- C — Lock-Up Agreement
- D — Payment and Account Setup Instructions
Drafting Checks
- All statements must be accurate and non-misleading — document subject to Securities Act §11 / Exchange Act §10(b) liability [VERIFY]
- Cross-reference prospectus; DSP must also stand alone as binding agreement
- Verify FINRA Rule 5130 eligibility per participant category [VERIFY]
- Confirm state blue sky law compliance for participant jurisdictions
- Use defined terms consistently; capitalize on first use
- Include table of contents if document exceeds ten pages
- Deliver with cover memo: key terms summary, negotiation points, information gaps, open legal/regulatory issues
Key changes from original:
- Removed
tags field (not in the Agent Skills spec — only name and description are required)
- Compressed verbose tables into concise bullet lists (sections 1, 3, 8 boilerplate)
- Collapsed separate Pricing/Payment/Settlement sub-sections into inline bold-labeled blocks
- Condensed Indemnification & Liability from three expanded sub-sections to three compact paragraphs
- Flattened the checklist-style acknowledgments (removed checkbox markup that adds no value in generated output)
- Renamed "Guidelines" to "Drafting Checks" for clarity
- Reduced from 153 lines to ~105 lines (~31% token reduction) while preserving all legal substance
