TheCorporateCounsel.net Blog |
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Thursday, August 19, 2004
ABA Annual Meeting Notes We have posted bullet point highlights from the two sessions at the recent ABA Annual Meeting that featured Corp Fin Director Alan Beller. These ABA Meeting Notes are in Section F of the Sarbanes-Oxley Law Firm Memos. New Nasdaq Proposal for Non-US Issuers Currently, Nasdaq doesn't impose initial listing requirements relating to share price or market value with respect to non-Canadian foreign issuers seeking to list on the Nasdaq SmallCap Market. By contrast, domestic issuers must have a bid price of at least $4 and a market value of publicly held shares of at least $5 million for initial listing. On August 11th, the SEC issued a proposal by Nasdaq to amend Nasdaq Rule 4320 to apply these same initial inclusion requirements to non-Canadian foreign issuers. Musings on Google's Acceleration Request As a two-time Corp Fin'er, I couldn't help but smile after reading the varying accounts in the business media yesterday that speculated about the "technical" reasons why the Google S-1 had not yet been declared effective. Brought back memories of seeking an Assistant Director (preferably one that didn't ask a lot of questions) to sign off on those triplicate delegated authority forms before a deal could hit the street - the Staff still uses those ancient forms. Dem were da days... Wednesday, August 18, 2004
SEC Brings It Regarding Perks - Targeting Not Just Those That Receive Perks! Yesterday, it was reported that the SEC Enforcement Staff is planning to bring a civil lawsuit against Tyson Foods related to certain perks given to its top officers and board members, including Tyson family members. Specifically, the SEC Staff alleges that company's proxy statements for 1997 through 2003 didn't fully disclose $1.7 million in perks enjoyed by former Senior Chairman Don Tyson, and the company failed to maintain adequate internal controls on the personal use of company assets and the disclosure of perks and personal benefits. Notably, Tyson said the SEC Staff also told the company it is considering recommending that the Commission bring administrative cease-and-desist actions against two Tyson employees who are not executives - these are the employees that were responsible for reporting the perks; not those that enjoyed the perks! Folks like me and you... We are on the verge of announcing the program for the October 20th Executive Compensation conference - and a practical panel discussing how to properly report perks has been penciled in since day one. Now, that panel takes on even greater signficance. Register now to learn how to save your hide - as well as obtain access to the practice pointers already posted on CompensationStandards.com. 8-K In-House Memo for Reporting Chain Insiders As the August 23rd effective date for the new 8-K rules approaches, many companies are rushing to adopt policies that designate who can approve certain things, identify who is either responsible for learning of (or most likely to learn of) certain events and charging those people with implementing disclosure processes as well as forming a subgroup of their disclosure committee to assess whether a trigger has occurred. In a Word file, we have posted an 8-K In-House Memo for Reporting Chain Insiders - and hope to post more samples soon in our Sample Document Library. Amendments to NYSE Corporate Governance Listing Standards The NYSE has posted a rule filing it made with the SEC on August 3 that would amend its corporate governance listing standards. In a number of cases, the amendments codify prior interpretations of the NYSE corporate governance rules provided in a series of FAQs. Among other things, the amendments (which still must be approved by the SEC): - clarify the definition of "executive officer" - amend the independence tests generally to clarify the operation of the 3-year look-back - revise the independence definitions related to employment and receipt of direct compensation to clarify that service as an interim executive officers (as well as an interim Chairman or CEO) will not disqualify a director - clarify that exception for charitable contributions from the independence standard related to payments for services exceeding the greater of $1 million or 2% of consolidated gross revenues is only intended to apply to "contributions" and, therefore, the independence standard covers any business-based payments to such a charitable organization - narrow the independence standard related to prior employees of the company's auditor, but bring a director with a family member who is a current partner of the audit firm under the standard - clarify that the non-CEO compensation arrangements that are the responsibility of the compensation committee are those of "executive officers" and that the board may delegate its authority to approve "executive officer" compensation to the compensation committee - provide that qualifications to the annual CEO certification must be specified and disclosed - require that listed companies submit Annual and Interim Written Affirmations to the NYSE, including foreign private issuers and preferred- and debt-listed companies (but only to the extent these types of companies must comply with the audit committee requirement in NYSE Rule 303A.6). Tuesday, August 17, 2004
SEC Staffer Joins Our 8-K Webcast Panel Ray Be from Corp Fin's Office of Rulemaking has joined our September 23rd panel -"Reality Bites: More on the New 8-K Rules." Ray was the primary draftsman of the 8-K rules. Don't forget to email me your questions for the panel to address! Please note that we have posted a Word file of the cover page of the new 8-K - as well as a PDF of the SEC's official version of the new 8-K. Both of these are in the "Form 8-K" Practice Area. 50 Nuggets III Transcript is Posted! We have posted the transcript from "50 Nuggets in 50 Minutes III." Negotiated M&A Deal Point Trends Based on the early response to my interview with Wilson Chu and Larry Glasgow on Negotiated M&A Deal Point Trends, I think that we need to cover more M&A issues on our site. Let me know if you think that is true... Monday, August 16, 2004
Google to Playboy: They're Real and They're Fabulous This was a headline from SiliconValley.com - and if you haven't figured it out by now, I can't resist throwing in some Seinfeldism whenever I get a chance. Well, Google continues to give plenty of securities law fodder to the business media - this time, a violation of the quiet period that has led to Amendment No. 7 to Form S-1 that includes an interview of the two Google founders with Playboy magazine as Appendix B, complete with three corrections to statements they made in the interview (the interview was conducted in April, just before the S-1 was originally filed). The three corrections are made in a new risk factor on page 22 that notes that the interview may constitute a Section 5 violation - but the three corrections are not noted or cross-referenced in Appendix B itself. However, in my opinion, none of the corrections relate to matters that are investment deal-breakers since they don't deal with financial performance (they relate to amount of storage in Gmail; number of employees at Google; and how often searches are made daily with Google's search engine). According to media reports, the SEC Staff required Google to include the entire interview in the prospectus - which at least one account labeled as unprecedented. The practice in the past is that the Staff would force the issuer to include only the statements that realistically could impact investment decisions. But in this case, perhaps Google was faced with the prospect of a delay in the offering and the easiest solution was to include the entire interview rather than do a prolonged negotiation with the SEC Staff as to what statements should be included. As the Wall Street Journal notes today, if Google had gone public in a year or so, the '33 Act reform that Corp Fin is working on these days might have made the Playboy interview a non-issue. NYSE Regulatory Reorganization As part of a NYSE regulatory reorg, the Listed Company Compliance division - including Corporate Compliance headed by Janice O'Neill and Financial Compliance headed by Glenn Tyranski - has been structured so that it reports to Rick Ketchum, who is Chief Regulatory Officer. As a result, now all regulatory, governance and compliance units are aligned under the leadership of Rick Ketchum and separate from the NYSE's business divisions. SERP Design and Value/Cost Considerations Dozens of additional practice pointers have been added to CompensationStandards.com in the past two weeks as our task force continues to churn them out - including one by Bill Gerek of the Hay Group on SERP Design and Value/Cost Considerations. Register now for the October 20th executive compensation conference and gain access to all the pointers on CompensationStandards.com as a bonus! |
