E-Minders March 2010


In This Issue:

E-Minders is our monthly e-mail newsletter containing the latest developments and practical guidance for corporate & securities law practitioners.

We view TheCorporateCounsel.net as the gathering place for the community and encourage those who may not yet be members to take advantage of a 2010 no risk trial to see what you are missing. Here are 10 Good Reasons to try us now.

You can subscribe below to receive a complimentary E-Minders subscription - even if you don't subscribe to TheCorporateCounsel.net. Our hope is that once you get to know us, you will understand the true value of a subscription to TheCorporateCounsel.net. Note that subscribers to TheCorporateCounsel.net should sign up below for E-Minders too, as we don't have the e-mail addresses for many people in our community.

Just Announced: "5th Annual Proxy Disclosure Conference" & "7th Annual Executive Compensation Conference" We just posted the registration information for our popular pair of conferences - "Tackling Your 2011 Compensation Disclosures: The 5th Annual Proxy Disclosure Conference" & "7th Annual Executive Compensation Conference" - to be held September 20-21st in Chicago and via Live Nationwide Video Webcast. Here is the agenda for the Proxy Disclosure Conference (we'll be posting the agenda for the Executive Compensation Conference in the near future).

Special Early Bird Rates - Act by April 15th: With anger over CEO pay at record levels, Congress and the regulators are intent on shaking things up and huge changes are afoot for executive compensation practices and the related disclosures—that will impact every public company. With this in mind, we are doing our part to help you address all these critical changes—and avoid costly pitfalls—by offering a special early bird discount rate so that you can attend these critical conferences (both are bundled together with a single price). So register by April 15th to obtain a discount.

Lynn, Borges & Romanek's "2010 Executive Compensation Disclosure Treatise and Reporting Guide:" Now that we have seen the SEC's rules and Treasury's legislation that will force you to radically change your executive compensation disclosures and practices before next proxy season - we have wrapped up the ‘10 version of Lynn, Borges & Romanek's "Executive Compensation Disclosure Treatise and Reporting Guide" - order your copy now and take advantage of the no-risk trial.

Upcoming Webcasts on TheCorporateCounsel.net: Join us on April 14th for the webcast - "Big Changes Afoot: How to Handle a SEC Enforcement Inquiry Now" – to hear Colleen Mahoney of Skadden Arps, Chris Mixter of Morgan Lewis, Russ Ryan of King & Spalding and Linda Chatman Thomsen of Davis Polk discuss how the Division of Enforcement's investigative process works now that the SEC has dramatically overhauled some of its Enforcement processes and procedures.

And join us on May 18th for the webcast – "Navigating Corp Fin's Comment Process" – to hear former SEC Senior Staffers Linda Griggs of Morgan Lewis & Bockius, John Huber of Latham & Watkins, Dave Lynn of TheCorporateCounsel.net and Morrison & Foerster and Bill Tolbert of Jenner & Block explain the process by which the SEC Staff issues comments as well as provide their practical guidance about how to respond.

There is no cost for these webcasts if you are a member of TheCorporateCounsel.net. If you are not a member, take advantage of our no-risk trial to access the programs. You can sign up for this no-risk trial online, send us an email at info@thecorporatecounsel.net – or call us at 925.685.5111.

Upcoming Webcasts on DealLawyers.com:  Join us on March 23rd for the webcast – "Seller's Key Issues in 2010: Still a Tough Seller's Market" – to hear Wilson Chu of K&L Gates, Mary Korby of Weil Gotshal and Carl Sanchez of Paul Hastings discuss the latest issues for sellers doing deals.

And join us on April 27th for the webcast – “Smaller Company M&A: The Latest Developments” – to hear Diane Holt Frankle of DLA Piper, Mark Filippell of Western Reserve Partners and John Jenkins of Calfee, Halter & Griswold discuss all you need to know about doing deals when smaller companies are both the acquirer as well as the acquiree.

No registration is necessary – and there is no cost – for these webcasts for DealLawyers.com members. If you are not a member, take advantage of our no-risk trial to access the programs. You can sign up online, send us an email at info@deallawyers.com – or call us at 925.685.5111.

Upcoming Webcast on CompensationStandards.com: Join us on March 16th for the webcast – "What the Top Compensation Consultants Are NOW Telling Compensation Committees" – to hear Ira Kay of Ira T. Kay & Company, Mike Kesner of Deloitte Consulting and James Kim of Frederic W. Cook & Co analyze what types of risk assessments companies are putting into place as well as what are companies doing in the areas of equity grants pay-for-performance and 280G gross-ups.

No registration is necessary – and there is no cost – for this webcast for CompensationStandards.com members. If you are not a member, take advantage of our no-risk trial to access the programs. You can sign up online, send us an email at info@compensationstandards.com – or call us at 925.685.5111.

Upcoming Webcasts on Naspp.com: Join us on March 18th for the webcast – "A Closer Look at Leading-Edge Performance-Based Plans" – to hear Terry Adamson of Radford, Brit Wittman of Intel, Kathryn Neel of Frederic W Cook & Co and Doug Friske of Towers Perrin discuss the key design and accounting considerations that you'll need to understand to implement your own successful TSR or MSU program.

And join us on April 20th for the webcast - "25 Ways to Improve Stock Plan Documents" – to hear Mike Melbinger of Winston & Strawn, Howard Dicker of Weil Gotshal and Martha Steinman of LeBoeuf Lamb discuss best practice language to address in your stock plan documents; change-in-control, forfeiture, and non-compete provisions; corporate governance and institutional shareholder concerns that impact your stock plans; and updates you need to make for recent tax law changes, including Sections 162(m) and 409A.

The non-member fee for these webcasts is $595. If you wish to access these valuable programs without paying this fee, you may simply take advantage of a no-risk trial for the NASPP.


We Win Top Blog Honors!

As we blogged a few months ago, this blog was placed in the ABA Law Journal's "Blawg 100" for the second year in a row. The ABA then pitted the top 100 blogs against each other in a voting contest - and we're proud to say that we easily emerged as #1! Thanks to those that bothered to navigate a difficult voting system - registration was required and only one vote was permitted per person (even though many offered to vote as many times as permitted).

Here is a breakdown of the top 10 blogs as voted upon in the contest (culled from these results; here are the vote counts):

1. TheCorporateCounsel.net Blog - 426 votes
2. TechnoLawyer Blog - 388 votes (has an asterisk because cash prizes were offered for votes!)
3. Above the Law - 355 votes
4. The Legal Satyricon - 266 votes
5. E-Lessons Learned - 233 votes
6. Jonathan Turley - 216 votes
7. Patently-O - 204 votes
8. China Law Blog - 158 votes
9. The Volokh Conspiracy - 149 votes
10. Social Media Law Student - 148 votes

Although we're not a big believer in "lists," the honor is humbling and we're glad we were able to prove the widespread loyalty of those who read this blog.


The SEC's Climate Change Guidance: Esta Aqui!

In early February, the SEC finally posted its climate change interpretive guidance in this 29-page interpretive release. The guidance is effective February 8th. We'll continue to post memos analyzing this guidance in our "Climate Change" Practice Area.

Some might ask why the release is only 29 pages. Two related reasons. First is that since this is not a rulemaking, all of the requisite jargon that typically is in the back half of a rulemaking release was not required. Second is that since this is not a rulemaking, the SEC was forced to limit its guidance within its existing disclosure framework. Otherwise, it could be accused of violating the Administrative Procedures Act - something that someone might challenge given the political hot potato nature of this topic.

We have blogged that there was a heated debate about whether the SEC was getting itself into politics with this interpretative release.  As could be expected, some members of Congress have jumped on the SEC's climate change guidance as a hook to add fuel to the fire. Here is a letter to the SEC from Reps. Barton-Walden that serves as Exhibit A - and here is a rebuttal published in late January in the NY Times.  House Republican Spencer Bauchus (R-Ala), ranking member of the Committee on Financial Services (the committee that oversees the SEC), wrote this letter to the SEC recently, asking if the White House pushed the climate guidance.

Don't forget the transcript and audio archive for our recent - and timely - webcast: "ESG Disclosures: Environmental, Climate Change, Social Responsibilities." Even though this webcast was held before the SEC adopted its new interpretive guidance, the panelists covered many topics that can help you meet your new disclosure obligations.


SEC Finally Adopts E-Proxy Rules: Early Adoption Permitted?

As noted in this press release, the SEC issued an adopting release in mid-February to tweak the e-proxy rules it proposed last October (it was adopted via the SEC's seriatim process like the proposal was made). The new rules become effective March 29th.

As calendar year-end companies are in the midst of the proxy season, it's hard to tell if they will take advantage of the new rules this time around - particularly because there is no discussion in the adopting release regarding transition issues (i.e., whether companies can adopt early on a voluntary basis). Many members have already asked us whether they can rely on the new rules early - we don't know the answer.

Here is our math if companies aren't permitted to rely on the rule changes early: the rules become effective in late March - then with notice and access requiring 42-45 days (as the SEC didn't reduce the number of advance notice days to 30 from 40 as proposed and Broadridge needs a few days to process a mailing) in advance of the meeting, companies with annual meetings in mid-May or later would be able to use the new rules. We will follow-up in our blog once we know more specifics.

At the same time, the SEC also made a big splash about a new "Spotlight" page for investors about how they can vote - as well as issued this investor alert on the topic. This is a fine small step - but it's really small potatoes as Broc doubts many investors will get motivated by the SEC's educational content to cast their votes (as few investors are ever likely to come across the content).

Broc thinks the SEC should be taking steps that will have a much greater impact on voter participation. Starting with improving the usability of proxy cards, voting instructions - and the communications that go along with them. Most communications are laden with legalese and use 200 words when 20 will suffice - a critical mistake when using e-mail to get someone to act. Check out Broc's DealLawyers.com blog entry for more on his beef here. And he knows many corporates are unhappy that they still aren't permitted to send a proxy card or voting phone number in their e-proxy notice mailings...

Learn the latest practice pointers on e-proxy - and the factors to consider about how and whether to use it - in the transcript of our recent webcast: "How to Implement E-Proxy in Year Three."


SEC Issues Proxy Solicitation Rule Corrections: Impact on Your Form 10-K

In late February, the SEC issued this technical corrections release related to its proxy disclosure enhancement rules adopted in December. The release corrects Forms 10-Q and 10-K to retain the current numbering of the items appearing in each form to avoid confusion that might otherwise arise from references to the numbering from other rules, etc.

So what does this mean for your Form 10-K? For Form 10-Ks filed on or after March 1st - the title and substance of Part I - Item 4 should be deleted, the word "Reserved" should be inserted in the place thereof and the remaining items of Form 10-K should not be renumbered.

In addition, the SEC made three changes to Form 8-K, including adding an instruction that corresponds to an instruction contained in Forms 10-Q and 10-K that allows certain wholly-owned subsidiaries to omit the disclosure of shareholder voting results and to amend the regulatory text to make it consistent with the discussion of the amendments to that form contained in the adopting release.


SEC Reaffirms Path Toward IFRS Decision by 2011

In late February, highlighting the high profile of the issue, the SEC voted unanimously to issue a Statement at an open Commission meeting regarding its current plans regarding IFRS. It's interesting that the open meeting format was used to approve a statement. Here's Chair Schapiro's opening remarks.

As noted in this press release, the Statement:

-Reaffirms the SEC's support for a single, globally accepted set of accounting standards (although the SEC still hasn't made a final decision to move to IFRS yet)
-Describes six categories of issues that need to be analyzed in an upcoming SEC Staff Workplan (there will be progress reports given on the Workplan, starting no later than this October)
-Describes milestones that need to occur before 2011 (including the SEC's study of certain issues and completion of convergence projects under the FASB-IASB Memorandum of Understanding) if the SEC is to move to IFRS
-Notes the first time that US companies would report under such a IFRS system (if one was adopted) would be no earlier than 2015 (the Work Plan will further evaluate this timeline)


CDIs: Corp Fin Issues Six More on the SEC's New Rules

When the federal government finally opened after the mid-February blizzard in DC, Corp Fin issued six more Compliance & Disclosure Interpretations on the SEC's new rules. They include:

- Item 401 - New Question 116.07
- Item 402(a) - New Question 117.05
- Item 402(c) - New Question 119.21
- Item 402(c) - New Question 119.22
- Item 402(c) - New Question 119.23
- Form 8-K's Item 5.07 - New Question 121A.01


Samples: Companies Complying with the SEC's New Rules

Numerous members are asking which companies have filed proxy materials under the SEC's new rules so that they can see how they addressed the new disclosure requirements related to board qualifications, leadership structure, risk oversight, etc. Here are a few samples we found so far:

- Fortune Brands
- Eli Lilly
- Analog Devices
- Hovanian Enterprises
- Weyerhauser Company
- Synovus Financial Corp.
- AGL Resources
- Huntington Bancshares
- Signature Eyewear
- NetSol Technologies
- Champion Industries
- Frederick's of Hollywood
- Schlumberger Ltd.
- MDU Resources Group
- Covidien Public Limited Company

Note that we present these samples just because they are the first ones filed; we haven't analyzed them to determine if they adequately comply with the new rules nor do we necessarily endorse their approach.


RiskMetrics' FAQs on SEC's New Disclosure Requirements

In mid-February, RiskMetrics posted three FAQs to address how their voting policies apply to the SEC's new rules. These FAQs address:

-What will RiskMetrics be looking for in the new disclosure requirement on risks raised by compensation programs? In particular, how will RMG react to non-disclosure?
-How will RMG analyze compensation consultant fee disclosures? Will RMG apply some type of formula where concerns will be raised if fees for other services exceed fees for compensation consulting?
-Regarding the new disclosures on director qualifications, diversity policies, and board leadership and oversight of risk management, what are RMG's views and the prospects for related voting recommendations?

In his "Proxy Disclosure Blog," Mark Borges discusses these new FAQs.


Proxy Disclosure: How to Explain the Impact of a Failure to Vote

The decrease in the level of voting in recent years by retaiI shareholders (particularly at those companies using e-proxy) - combined with the increasing likelihood of close votes at annual meetings for a variety of reasons - has pushed more companies to realize that they are involved in "real" campaigns this proxy season. This is a topic that Broc has repeatedly warned you about. We recently received the following from an in-house member:

"Due to the loss of the broker vote in director elections, we're probably going to include the following paragraph in the "General Instructions" section of our upcoming proxy statement:

Effect of Not Casting Your Vote. If you hold your shares in street name it is critical that you cast your vote if you want it to count in the election of Directors (Item 1 of this Proxy Statement). In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of Directors, your bank or broker was allowed to vote those shares on your behalf in the election of Directors as they felt appropriate.

Recent changes in regulation were made to take away the ability of your bank or broker to vote your uninstructed shares in the election of Directors on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of Directors, no votes will be cast on your behalf. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company's independent registered public accounting firm (Item 2 of this Proxy Statement). They will not have discretion to vote uninstructed shares on shareholder proposals (Items 3 and 4 of this Proxy Statement). If you are a shareholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the Annual Meeting.

Broadridge has a standardized buckslip on this subject that they are offering to include - for an additional cost - in full set mailings. Some brokers (egs, Goldman Sachs and Morgan Stanley) are sending similar messages to clients - and some law firms and proxy solicitors have been pushing the idea that companies need to be proactive in educating shareholders (eg. see page 3 of this memo)."

Broc's note: This is a good start on the road to real campaigning. However, since many shareholders ignore their proxy materials, companies will need to do more to get the attention of shareholders and communicate the importance of voting. Another cheap and easy step is to build an "annual meeting" home page, as I wrote about in the Spring 2008 issue of InvestorRelationships.com (still available for free).


Delaware Chancery Court's Groundbreaking Decision: "Brokers" as Recordholders

Here is some news from John Grossbauer of Potter Anderson:

In early February, Delaware Vice Chancellor Laster delivered a potentially important opinion in Kurz v. Holbrook. In it, VC Laster finds valid consents delivered without the consenting party having obtained an omnibus proxy from DTC. The Vice Chancellor held this did not invalidate the consents, because the Cede breakdown is part of the stocklist for Section 219 purposes. In other words, brokers are now "record holders" of Delaware corporations for all purposes. This has potentially significant consequences for consent practice and compliance with notice requirements.

He also invalidates a bylaw that purported to reduce the size of the board and to call a special meeting to elect the single remaining common director, finding this would not comport with any of the valid methods for ending the term of an incumbent director. He does say that a bylaw that would reduce the size of the board at an annual meeting could effectively end the term of directors not reelected at that meeting.

We are posting memos analyzing this opinion in our "Stockholder Lists" Practice Area.


Bringing in the Vote: The Need to Get Creative

During his recent snow-in in DC, Broc spent some time pondering how to get more people to vote in corporate elections. As he blogged, Broc believes one necessary first step is enhancing the usability of communications to shareholders. But as we all know, even that will only improve shareholder participation on the margins.

As Broc struggled with this diIemma - so desperate he was perusing old Dale Carnegie books about how to win friends and influence people for inspiration - he just happened to hear from Peggy Foran about a novel program that Prudential is trying this proxy season. Broc thinks what they are trying is pure genius. By tying the act of voting to the environment & sustainability movement, the company is trying to make people feel good about themselves when they vote. It will be interesting to see how it pans out in practice.

In this podcast, Peggy and Ed Ballo of Prudential explain their company's novel initiative that ties its environmental & sustainability program to bringing in the vote for its annual shareholders meeting (here are two items that will be used in Pru's mailings: program notice postcard and proxy materials insert), including:

- How does Pru intend to engage registered holders this season?
- What exactly will be sent to registered holders?
- Is there an online component to this initiative?
- What are the benefits to the company of this initiative?

Speaking of getting creative, this is one of the more unusual promotions we've come across in a while, courtesy of Smith & Wollensky. . .


The IRS' Broad Proposal to Require Tax Uncertainties Disclosure

In late January, the IRS issued a proposed policy (in the form of IRS Announcement 2010-9) that would require corporate taxpayers to make broad disclosures on a schedule regarding their tax uncertainties, pulling information derived from FIN 48. The schedule would require a concise description of each "uncertain tax position" and information about its magnitude, but would not require disclosure of the taxpayer's risk assessments or tax reserve amounts.

If this controversial proposal is adopted, it could impact those of us who have to evaluate these positions to draft disclosures to be flied with the SEC. Notable is IRS Commissioner Doug Shulman's recent speech that discusses this proposal. We have been posting memos regarding this development in our "Tax Uncertainties" Practice Area.


FINRA: Implementing a Same-Day Clearance Option for Shelf Filings

Here is news from Suzanne Rothwell of Skadden Arps:

FINRA's Corporate Financing Department is responsible for the pre-offering review of public offerings of securities for compliance with FINRA's regulations governing underwriting terms and arrangements. In most cases, in order for a shelf takedown to be completed in compliance with FINRA Rule 5110, participating broker/dealers must rely on FINRA's prior issuance of a "conditional no objections" opinion with respect to the base shelf prospectus and also obtain FINRA's opinion of "no objections" with respect to the takedown prospectus.

In an effort to address the timing issues related to shelf offerings, FINRA has announced that on March 1st, it will implement a new "Same-Day Clearance Option" for the issuer's base shelf prospectus and the takedown prospectus for those offerings where counsel can make a number of representations. The FINRA "conditional no objections" opinion on the base shelf prospectus and the "no objections" opinion on the takedown prospectus will be issued automatically once a filing that relies on the Same-Day Clearance Option is accepted by the FINRA's electronic COBRADesk filing system. The base shelf prospectus and the takedown prospectus can be filed separately or simultaneously under the new procedure.

FINRA has not yet issued explanatory materials related to the new procedure. These materials should be available some time in early March and will be distributed. However, based on information made available at a FINRA Roundtable on Shelf Offering Review, it is my understanding that, in order to qualify for Same-Day Clearance Option in the case of a shelf takedown, counsel will be required to represent on behalf of participating members that underwriting compensation will not exceed 8% of the gross offering proceeds, the offering does not include any arrangements specifically prohibited by FINRA Rule 5110(f), all items of underwriting compensation are disclosed in the prospectus supplement, and participating broker/dealers have not received securities that are treated as underwriting compensation (except for fair priced derivatives).

More limited representations are required from issuer's counsel with respect to FINRA filing of the base prospectus. This process will be available for shelf offerings subject to FINRA's conflict of interest rule (NASD Rule 2720) in most circumstances. In such case, an additional representation regarding compliance with Rule 2720 will be required. FINRA staff initially discussed that they will conduct a post-clearance review as to the accuracy of the representations submitted. FINRA materials may further clarify the scope of this review.


BofA Settles with SEC Over Merger Disclosures: Judge Reluctantly Approves

In mid-February – just a few weeks after the SEC announced it had settled (again) with Bank of America over its two actions against the company regarding alleged disclosure deficiencies in connection with BofA's acquisition of Merrill Lynch (one action regarding bonus amounts; the other over operating losses) - Judge Rakoff from the Southern District of New York ended his game of "will he or won't he" and approved the settlement (he rejected a $33 million settlement last September). As noted in this NY Times article, the Judge still expressed displeasure with the settlement - he called it "half-baked justice at best" - even as he issued this order.

Not only will BofA pay $150 million to the SEC (to be distributed to harmed shareholders), it will adopt seven governance reforms. The settlement doesn't levy any penalties on current or former executives. Here's the SEC's litigation release - and here is the SEC's brief supporting the settlement and notice of motion (with Exhibit A to that).

The seven governance reforms that BofA would be required to implement for a period of three years are:

-Provide shareholders with an annual non-binding "say on pay" on executive compensation
-Retain an independent auditor to perform an audit of the company's internal disclosure controls
-Have the CEO and CFO certify they have reviewed all proxy statements
-Retain disclosure counsel who will report to the audit committee on the company's disclosures
-Adopt a "super-independence" standard for the compensation committee that prohibits them from accepting other compensation
-Hire a "super-independent" consultant for the compensation committee
-Implement incentive compensation principles & procedures and prominently post them on the company's site

Below is an excerpt from the "Proxy Disclosure Blog" from Mark Borges that explains the changes to the SEC's announced settlement:

“As part of the Court's order, he modified several of the remedial corporate governance and disclosure measures that BofA must follow for the next three years. Specifically, with respect to the requirements to engage an independent auditor to assess whether BofA's accounting controls and procedures were adequate to assure proper public disclosures and to engage independent disclosure counsel to report solely to the audit committee on the adequacy of the bank's public disclosures, the Bank's choices must be fully acceptable to the SEC (not simply selected in consultation with the SEC), with the Court making the final selection if the parties cannot agree.

Interestingly, the Court also proposed that the selection of an independent compensation consultant to advise BofA's compensation committee be made jointly by the compensation committee, the SEC, and the Court (rather than solely by the compensation committee) The Court gave the following reason for this suggestion:

The reason for this suggestion was the Court's perception that too many compensation consultants have a skewed focus when it comes to executive compensation, concentrating on what they perceive is necessary to attract and keep "talent" (however defined), and more generally favoring ever larger compensation packages, while rarely taking account of limits that a reasonable shareholder might place on such expenditures.

However, in the face of BofA's objection, the Court conceded the point, explaining that the matter should not be a "deal breaker," especially in light of the "Say-on-Pay" vote that the Bank must conduct for the next three years.

While it's possible that some of these remedial measures may be superseded by the legislative initiatives that are currently pending before Congress, the fate of these legislative proposals is still very much up in the air. Consequently, BofA's disclosure practices may prove to be a very interesting "laboratory" over the next three years on the merits of these enhanced disclosure techniques.”

Below is an excerpt from the NY Times' article, noting that BofA still faces a battle with the New York Attorney General:

"The bank still faces a complaint filed last month by Andrew Cuomo, the attorney general of New York. The judge, after studying some of the evidence in Mr. Cuomo's case, left room for that case to reach a different conclusion than the SEC's.

In particular, the judge said the SEC had substantial evidence to support the bank's claim that the dismissal of its general counsel, Timothy Mayopoulos, "was unrelated to the nondisclosures or to his increasing knowledge of Merrill's losses." That is the position the bank and its executives have argued since last spring, but Mr. Cuomo's office asserts that the firing was related to advice from Mr. Mayopoulos.

Judge Rakoff said he had not determined which was right, but he said he was comfortable that the SEC's conclusion was reasonable. "It is important to emphasize, with respect not just to the Mayopoulos termination but with respect to all the events that the attorney general interprets so very differently from the SEC, that the court is not here making any determination as to which of the two competing versions of the events is the correct one," the judge wrote.

Mr. Cuomo's complaint differs from the SEC's in that it charges the bank as well as its former chief financial officer, Joe Price, and the chief executive, Kenneth Lewis, who retired early in part because of the mounting investigations into the merger."


NYSE: Annual Corporate Governance Letters Now Available

In mid-February, the NYSE issued its annual corporate governance letters - one for domestic companies and one for foreign private issuers.


Doing the Math: How Many Proxy Access Comment Letters This Decade?

In a recent speech, SEC Chair Schapiro said "we are nearing a vote" on proxy access rule, but she did not provide a timetable. Last month, Broc conducted a poll on this blog regarding how many comment letters have been submitted to the SEC on its various reiterations of proxy access proposals since 2003 (the total does include form letters). The poll results were:

- 5% thought there were between 100-500
- 4% between 500-1000
- 18% between 1000-3000
- 28% between 3000-10,000
- 26% between 10,000- 50,000
- 20% over 50,000

Well, the last category is the winner. There have been over 50,000 comment letters submitted to the SEC on proxy access over the past 7 years. Unbelievable. That's a lot of hard labor.

Here is the math that leads us to this conclusion:

1. 2003 proposal - The SEC received approximately 500 individually signed comments plus form letters from 12,500 others. The SEC held a roundtable in February 2004, after which it received approximately 200 additional individually-signed comments, plus an additional 2,000 form letters.

2. 2007 proposal (alternative 1) - The SEC received approximately 200 comments on this alternative, plus 9,300 form letters.

3. 2007 proposal (alternative 2) - The SEC received approximately 600 comments on this alternative, plus 26,000 form letters.

4. 2009 proposal - The SEC has received over 500 comments so far, but not much in the way of form letters this time around. The latest extension for this proposal has brought in more than 40 letters.

So the total of these is roughly 51,800 comment letters. And counting. . .


Available Now: Our Guidance on How to Avoid SEC Comment Fallout

As you may recall from Corp Fin Deputy Director Shelley Parratt's speech at our Conference in November, the SEC Staff appears to be drawing a "line in the sand" this year regarding when proxy statement amendments may be necessary. The Staff expects companies to carefully consider the Staff's positions - including those expressed in comments to other companies - when drafting executive compensation disclosure, and that material noncompliance with the rules and the Staff's positions will potentially trigger a request for an amendment of the disclosure (rather than fixing the disclosure in future filings).

We recently mailed the January-February issue of The Corporate Executive, which includes a comprehensive analysis of typical Staff comments and how you may avoid related pitfalls, including:

- Representative Staff Comments--and Our Practical Guidance
- Guidance for Your 2010 Proxy Disclosures: The Staff's Executive Compensation Comments
- How We Got To This Point on Executive Compensation Disclosure
- Getting the Analysis Right
- Revisiting Performance Target Disclosure
- Individual Performance
- Benchmarking

Act Now: Please try a 2010 no-risk trial to have this issue rushed to you.


January-February Issue: Deal Lawyers Print Newsletter

This January-February issue of the Deal Lawyers print newsletter includes articles on:

-Now is the Time for a True Walkaway Number: Model Disclosure for Your CD&A
-Our Model CD&A Walkaway Disclosure
-RiskMetrics Revises Poison Pill Policy; On-the-Shelf Rights Plans on the Rise
-Defining the Rules of the Road for Differential Consideration in M&A Transactions
-SEC Staff's New Guidance: Facilitating Lock-Up Agreements with Registered Exchange Offers
-Earnouts: A Siren Song?

If you're not yet a subscriber, try a 2010 no-risk trial to get a non-blurred version of this issue on a complimentary basis.


More on "The Mentor Blog"

We continue to post new items daily on our blog - "The Mentor Blog" - for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

-Canadian OSC Staff Urges Better IFRS Disclosure
-Social Media Policies: No Paranoia Necessary
-Analysis: Ability to Backdate Board Resolutions
-An Auditor's Claim of Privilege: The Latest
-An Effete Corps of Governance Snobs
-Rule 163 Proposal: Some Have a Beef
-Canadian Companies Show Renewed Interest in US Capital Markets
-Regulation FD: Can You Walk Analysts Down From Too Much Optimism?
-Survey: Corporate Governance and IPOS
-Jail Time: SEC Goes After Scofflaw
-Delaware Court of Chancery Addresses Critical Advancement/Indemnification Question
-SEC v. Cuban: SEC Files Appeals Brief
-Travel Tips: DOT Now Helping Those with Airline Beefs
-Corp Fin's "Common Financial Reporting Issues for Smaller Companies"
-Lessons Learned: Initial Submissions of XBRL Filings


More on our "Proxy Season Blog"

With the proxy season in full gear, we are posting new items regularly on our "Proxy Season Blog" for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

Determining Number of NEOs: Not as Easy as 1, 2, 3
-Examples: Disclosure of Director Nominee Selection Criteria
-Disclosing Pending Litigation: The Challenges
-Australian Companies to Disclose Gender Diversity
-Registered Holders: Broadridge vs. Transfer Agent?
-Shareholder Choice in a World of Proxy Access
-SEC Reverses Omission of Antibiotics Shareholder Proposal


People: Who's Doing What and Where

At the SEC, Rhea Kemble Dignam has been named Director of the SEC's Atlanta Regional Office and Bill Hicks has been named Associate Regional Director for Enforcement in the Atlanta Regional Office.


Conference Calendar


What's New on Our Websites

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