TheCorporateCounsel.net

July 13, 2007

Executive Compensation Disclosures: 51 Tips

Let the games begin! Our new game is called “Executive Compensation Disclosures: 51 Tips.” Our goal is to generate a bunch of practical tips that can increase the effectiveness of the processes for – and content of – your company’s executive compensation disclosures.

What’s In It For You? Four things:

1. You participate in a fun game.
2. You learn practical tips to improve your compensation disclosure skills.
3. You share some practical tips with an eager audience.
4. You achieve fame (if you want). You get points and – if you are one of the five top scorers – get your name placed in the Hall of Fame. If you wish to remain anonymous, that is fine too. No one will be acknowledged publicly unless they consent.

How to Play: Send us some practice tips on how to best navigate or improve the compensation disclosure drafting process or draft better disclosures, including things that you have seen a lot of companies do wrong this proxy season. Keep your tips brief (three or four sentences and not more than 50 words). Send us at least one tip and not more than five tips before the deadline.

How to Win: Any tip earns you 10 points. The best tips receive a bonus score of 50 points, the second-best ones earn 30 points, and the third-best ones earn 15 points. If you are among the top five scorers, your name is added to our Hall of Fame (if you consent to being named). All participants will be sent an email with their point total.

How to “Cheat”: Reflect on your own experience and derive important tips. We also encourage you to borrow ideas from your friends and coworkers. This really isn’t cheating – but my kids are always looking for the “game cheats,” so I felt compelled to act like there might be “cheats” involved.

How to Send Your Tips: Just email them to broc@naspp.com. Remember the limit of five tips. The deadline is close of business on Wednesday, August 1, 2007.

The Latest Compensation Disclosures: A Proxy Season Post-Mortem

We have posted the transcript from our recent CompensationStandards.com webcast: “The Latest Compensation Disclosures: A Proxy Season Post-Mortem.”

It’s a Wrap! California’s Stock Option Proposal

A few weeks ago I blogged about the status of the proposed changes to the California Department of Corporations’ proposed stock option regulations. These regulations are now final – and we have posted related memos in our “Rule 701″ Practice Area. Below is an excerpt from a Fenwick & West memo (which contains a nice chart):

“Effective July 9, 2007, California liberalized its regulations concerning the permissible provisions of stock option plans. Practically every stock option plan of a privately-held company that has employees in California that participate in the plan can take advantage of this liberalization.

For decades, California was unique among the 50 states in the stringency of its regulation of the scope of permissible provisions that a stock option plan or restricted stock plan could contain. For example, only California required that stock options granted to non-officer employees in California must “vest” (meaning that the shares could not be repurchased on termination of employment by refunding the purchase price) at an annual rate of at least 20% of the shares subject to the stock option.

Non-compliance with even one of the regulatory requirements meant that rather than the company being able to file a simple notice, and pay a small fee to, California, the company would have to submit a pages-long application to the California Dept. of Corporations, which could easily cost $10,000 or more to prepare. The liberalization of the regulations means this is far less likely to occur.”

Congress Tightens “National Security” Reviews of Foreign Investment in the US

On Wednesday, Congress passed the “Foreign Investment and National Security Act of 2007” to formalize and tighten the process for reviews of foreign acquisitions of businesses in the US that raise potential national security concerns. The new Act amends the “Exon-Florio Amendment to the Defense Production Act” and codifies – as well as extends – recent trends toward more stringent review of foreign acquisitions by the Committee on Foreign Investment (CFIUS), which is an interagency committee chaired by the Treasury Secretary and composed of various representatives of the executive branch. There are also enhanced Congressional reporting requirements.

The new Act cleans up many of the provisions of earlier proposals considered problematic by the business community. We have posted memos regarding this development in our “National Security” Practice Area.

Friday the 13th: Be Scared

Did you know that thieves can steal your checks, etc. by having the ink “wash” off the payee and amount (with acetone), leaving your signature, write in any amount, and cash it? Check out this video to understand more (it may take a while to load as its 6 minutes long). Apparently, the Uniball 207 is the only pen whose ink chemically bonds to the paper so it won’t wash off…

– Broc Romanek