TheCorporateCounsel.net Blog |
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Thursday, July 15, 2004
The True Impact of the Recent Supreme Court Case on New Sentencing Guidelines Yesterday's Wall Street Journal had a great article on how last month's US Supreme Court case has wreaked havoc on the ability to judges to sentence in federal courts. But the article missed one important point - that the Supreme Court case really doesn't change the fact that the new sentencing guidelines impose vastly different compliance criteria on companies. In other words, it is still important to learn the lessons to be imparted in next Wednesday's webcast - "How the New Sentencing Guidelines Impact You." To get up-to-speed before the program, you can check out an excellent article we just posted by one of the panelists, Jeff Kaplan, in our "Compliance Training" Practice Area (which also contains links to a number of law firm memos on the topic at the bottom of that page). Sample Procedures for Filtering Third-Party Communications to Directors If you are working on documenting written processes for collecting, reviewing, sorting, "filtering" and summarizing communications from third parties to independent directors - in their capacity as audit committee members and otherwise - you can check out two new documents that we have posted in our "Sample Document" Library. Both in Word files, we have posted "Internal Process for Handling Communications to the Audit Committee" and "Internal Process for Handling Communications to Directors (Non- Audit Committee)." Compensation Surveys Are Biased The Working Draft of the September-October issue of The Corporate Counsel (which is posted on CompensationStandards.com) includes an excellent piece from veteran consultant Fred Cook on the 12 different types of bias that is present in benchmarking conducted by most compensation consultants. This piece is also posted on CompensationStandards.com as a practice pointer called "Compensation Surveys Are Biased" under "Surveys and Benchmarking—What is Wrong." Wednesday, July 14, 2004
Our "Berlin-Bremen Exchange" Practice Area I still continue to receive quite a bit of correspondence on the issue of delisting from the Berlin-Bremen Exchange. So we have created a "Berlin-Bremen Exchange" Practice Area, that includes two sample delisting responses from the exchange that explains the Exchange's side of the story (including an explanation of why they believe there is no such thing as "delisting" for them). Marching Towards a Paperless World On Monday, the SEC announced that it has approved a rule change of the NYSE that eliminates the requirement for listed companies to make a paper filing of any Form 8-K or Form 6-K (but only if the Form 6-K was electronically submitted to the SEC via EDGAR). Listed companies are still required to continue to provide hard copies of materials to support a listing application as well as copies of proxy materials. This rule change is effective as of July 8th. Cost of Deferred Compensation On CompensationStandardsConference.com,we have posted an excellent practice point by Yale Tauber and Donald Levy on how to best understand the "Cost of Deferred Compensation." Tuesday, July 13, 2004
Disclosure of Voting Results in 10-Qs At last week's ASCS conference, Marty Dunn, Deputy Director of Corp Fin, indicated that some companies didn't appear to be properly disclosing their voting results as required under Item 4 of Form 10-Q. Item 4 doesn't prescribe a specific format for disclosure of voting results. Here are a few examples of companies that we thought appeared to get it right. Last year, Eastman Kodak's 2nd quarter 10-Q disclosed how votes were cast for a staggered board. This year, Walt Disney's 2nd quarter 10-Q has a nice chart to reveal the voting at its controversial annual meeting. Pfizer also has a nice chart in its 2nd quarter 10-Q. New "Income Deposit Securities" Practice Area We have created a new "Income Deposit Securities" Practice Area, including links to the 19 registration statements that have been filed registering Income Deposit Securities, Enhanced Income Securities and Enhanced Yield Securities. I believe only one of these registration statements have been declared effective by the SEC Staff so far. Consider Whether Definition of "Cause" Should Include Failure to Cooperate With Governmental Investigation We received ten new practice pointers yesterday from our task force to post on CompensationStandardsConference.com, including this anonymous one on "Consider Whether Definition of "Cause" Should Include Failure to Cooperate With Governmental Investigation." Monday, July 12, 2004
Novel Regulation S No-Action Letter On April 28th, Corp Fin issued a novel no-action response to europrospectus.com limited on some Regulation S issues. This company intends to make available onine prospectuses and related documents for international securities offerings to subscribers. According to the letter, the company will run a web-based database service that will post prospectuses before distribution is complete for Reg S/144A offerings by non-US issuers. One of the issues addressed is whether the posting will be deemed a "directed selling effort" under Reg S by the issuer of the security. The database site is password-protected, has legends and you need to be a member to use it but here's the rub - unlike prior letters like IPO.net, to get a password you don't need to be a QIB or an IAI. Rather, you only need to be a customer (apparently, there is a high membership fee but still no need to be a QIB or IAI, etc.). My good friend Walter van Dorn of Thatcher Proffitt explains to me that the over-all utility of this response is likely to be limited since the overwhelming majority of international offerings are combined Reg S and Rule 144A offerings - and because the site here does not need to be password-protected to nonQIBs/IAIs (even though no-action was granted based on the interpretation of some pretty arcane Reg S provisions). Most issuers still will have problems with the necessary '33 Act exemption for the 144A/4(2) component of their offering. So for the vast majority of deals that are combined Reg S/144A offerings, this letter may not be of much practical value. 23 Lessons Learned from Disney I love "lessons learned" articles because they tend to be so practical - that's why one of my favorite practice pointers on CompensationStandardsConference.com is "23 Lessons Learned from Disney: Director Liability for Excessive Executive Compensation" by Mike Melbinger. |
