TheCorporateCounsel.net Blog |
|
|
|
Friday, January 09, 2004
Our Server Woes If you have experienced problems accessing content on our sites, we apologize and are working hard to fix them. In the meantime, try using "TheCorporateCounsel.com" instead of "TheCorporateCounsel.net." In many cases, this has solved any inability to access content. NYSE Changes FAQ 19 regarding Shareholder Approval of Equity Comp Plans Just in case you didn't notice, after the FAQs were first released, the NYSE staff confirmed that 401(k) plans, 423's and parallel excess plans are exempt from the shareholder approval requirement portion of the rule (notwithstanding FAQ 1) - but also confirmed that these plans are subject to approval by the independent compensation committee or the majority of independent directors as well as the requirement that NYSE be notified when the exemption is used. The NYSE staff revised FAQ 19 to clarify this through the addition of a second paragraph - below is the revised FAQ 19: "19. When will an amendment to a 401(k) plan be considered a material revision? Only if it affects the company stock aspects of the plan in a way that is otherwise a material revision. For example, adding to or changing investment funds - other than a company stock fund - to such a plan would not be considered a material revision. 401(k) plans are exempt from the shareholder approval requirement of the rule, but the Exchange does require listed companies to seek and obtain approval by their independent compensation committee or a majority of their independent directors for any material revision to an exempt plan. In addition, the Exchange must be notified when a listed company utilizes an exemption (see questions 22 & 26)." Thursday, January 08, 2004
Grace Period Ends This Saturday! So Renew Today! If you have not renewed your subscription to either TheCorporateCounsel.net or Section16.net, please be aware that you won't have access to the sites starting this Saturday. For Section16.net members, this means you won't have access to the upcoming webcast - "Alan Dye on the Latest Section 16 Developments" - next Wednesday. For TheCorporateCounsel.net members, you wouldn't have access to the "50 Nuggets in 50 Minutes II" webcast on the 21st. You can renew online. If you have renewal questions, send an email to info@thecorporatecounsel.net or call our HQ at 925.685.5111. Our New Shareholder/Director Communications Survey We have posted a new Quick Survey on Shareholder Communications with Directors - so please weigh in! The final results are available from our "Director Education/Orientation" survey. IRS Comes to Its Senses Regarding Confidentiality in M&A In February 2003, the IRS issued tax avoidance regulations that created a broad category of transactions for which disclosure was required if they included conditions of confidentiality. In the minds of many practitioners, the category was created too broadly because it included many transactions that couldn't have any tax avoidance consequences, including many M&A transactions. As a result of this bizarre position, many practitioners have been recommending that the confidentiality provisions of most M&A agreements be modified to exclude tax-related matters. On December 29th, the IRS came to its senses and issued new regulations that narrowed the category so that it no longer affects traditional M&A. So, the recommended modification to exclude tax-related matters is no longer needed in most cases. Learn more from recent law firm memos on this topic posted in the "Confidentiality Agreements/Privilege" section of our Mergers & Acquisitions Practice Area. Wednesday, January 07, 2004
U.S. Postal Service Hinders Proxy Material Bulk Mailings If you have read our January E-Minders, you already know about this action that I consider as the early favorite for "craziest action by a regulatory agency" for 2004. ADP Investor Communication Services has been informing companies of a new issue that could affect the ability to deliver proxy materials via bulk mail. According to ADP, the U.S. Postal Service recently changed its interpretation of its rules that determine if mail qualifies for Standard Mail (formerly known as “3rd class bulk”). This change revolves around the inclusion of what is considered personal information when using Standard Mail. ADP provides telephone/Internet voting and householding services by the use of unique control numbers. Apparently, the Postal Service challenged ADP on documents containing instructional language for voting and enrollment processes that referred to these control numbers and deemed this information as personal - thereby disqualifying the materials from being processed as Standard Mail. As a result, ADP is changing its forms to conform to the new interpretations. However, the Postal Service is applying its new interpretations to any reference to personal information contained in any enclosure in the mailing, including the proxy statement. This results in a conflict with the SEC’s plain English movement. For example, the common statement in proxy statements that a shareholder should vote via the telephone or Internet by entering "your" control number on the enclosed form may preclude the mailing from qualifying as Standard Mail. This potentially could force a company to deliver its proxy materials via First Class which would be much more expensive. ADP recently met with John Nolan, Deputy Postmaster General, to address this personal information issue and Mr. Nolan assured ADP that the Postal Service would work with ADP to make them aware of any issues and arrive at a cure. I suspect we will be hearing more on this issue as the proxy season unfolds. Tuesday, January 06, 2004
First Samples of Shareholder Communication Disclosure The first proxy statements addressing the new SEC requirements regarding disclosure of the shareholder/director communication process are starting to be filed. The new requirements are applicable to any proxy statements that are mailed on or after January 1st. For example, here is the disclosure from SunAir Electronics, whose proxy statement was filed yesterday: "The Board provides a process for stockholders to send communications to the Board or any of the Directors. Stockholders may send written communications to the Board or any the Directors c/o Secretary, Sunair Electronics, Inc., 3005 S.W. Third Avenue, Fort Lauderdale, Florida 33315. All communications will be compiled by the Secretary of the Company and submitted to the Board or the individual Directors on a periodic basis. It is the Company's policy that the Directors who are up for election at the Annual Meeting attend the Annual Meeting. All of the nominees up for election at the 2002 Annual Meeting of Stockholders attended the 2002 Annual Meeting of Stockholders." UGI Corp.'s Proxy Statement (also filed yesterday) indicates that this company was not prepared for the SEC's action: "The Company is considering the establishment of procedures by which Shareholders can send communications to the Board of Directors or to the non-management directors as a group. The Company will post those procedures on its website upon their adoption." We will continue to post useful samples in "How Shareholders Can Contact Directors" in our "Shareholder Access" Portal. Bert Denton's View of the World Bert Denton has been one of the more controversial activists for some time - but now some of his ideas have come into their own as part of governance reform. Members can learn more in this interesting interview with Bert Denton on Improving Shareholder Returns With Better Governance. Monday, January 05, 2004
Another One of Those New Year's Lists And yes, I am getting new blogging software this year. This software doesn't allow for columns... Out During 2003/In for 2004 - Harvey Pitt/William Donaldson - CEO Perqs/CEO Certs - AICPA/PCAOB - Peek-a-Boo/P-Cob (nah, just checking to see if you're paying attention) - Reporting "Up"/Reporting "Out" - Private Analyst Meetings/No Earnings Guidance - Walk with Your Feet/"Just Vote No" - "Elevator Music"/MD&A with Feeling - Non-Audit Services/Internal Controls Documentation Services - Weekly Industry Newsletters/Blogs! Of Course, Don't Forget to Renew A New Year means that your membership should be renewed because all of our subscriptions run on a calendar year. You can renew online, fax or regular mail by going to our "Renewal Center" and keep this puppy afloat. And for law firms, its never too late to enter into a firmwide license and avoid the hassle of id's and passwords (and save money to boot). |
