February 6, 2004

Analysis of Boilerplate Agreement Provisions

The February edition of “Carl’s Corner” is up – and deals with analysis of boilerplate agreement provisions. If you haven’t checked out Carl Schneider’s musings before, you really should as he applies decades of practical wisdom to provisions that many of us take for granted.

Always Check the Rules Themselves

In law school, my administrative law professor admonished us to “always check the rules.” This is a useful warning as it is not uncommon to find law firm client memos that repeat mistaken law.

A perfect example is a handful of memos on the new SRO standards – some from the more prestigious firms – that state that the Nasdaq IPO transition period is 24 months – which was originally proposed but not adopted (only one year was adopted). The lesson learned when drafting a client memo is to always check the rules – and don’t necessarily rely on the client memos that hit the streets first.

Survey Results of Financial Experts for Small Cap Companies

In our “Audit Committee Portal,” we have posted a study from Haynes & Boone regarding how U.S. small cap issuers (i.e., exchange or Nasdaq-listed issuers with market caps below $75.0 million) are dealing with the new audit committee financial expert disclosure regulations adopted by the SEC.

The study finds that over 67% of U.S. small cap issuers expect to name a financial expert in their next annual report – and that over 82% of U.S. small cap issuers have at least one financial expert serving on their board of directors. I believe these numbers are generally higher than what most experts predicted – and are close to the results of a Fortune 1000 company survey conducted last year.

ISS Hires New CEO

Last week, ISS hired John Connolly, a veteran of IBM Corp. and a Cambridge high-tech start-up as CEO to replace Jamie Heard, who remains an investor in the privately held firm and who will stay on as vice chairman and focus on governance research, rather than day-to-day operations.