December 9, 2005

Preparing for the Proxy Season: Cost Savings Tips and Processing Issues

In this podcast, Glen Wittenberg of ADP Investor Communication Services provides tips and insights into how to save money and avoid processing errors during the proxy season:

– What are the most common methods that companies can use today to save extra money?
– How many companies are leveraging edelivery to their shareholders last year (and other evoting stats)?
– What types of companies are good candidates to take advantage of “drop” mailing?
– What are the most common processing errors that you see companies make?

SEC Posts E-Proxy Proposing Release

Yesterday, the SEC posted its 106-page proposing release regarding E-Proxy.

More on California’s Internal Affairs Doctrine

Keith Bishop provides us with an update on California’s internal affairs doctrine that made news six months ago when VantagePoint v. Examen was decided. Last week, a new case was decided: Friese v. Superior Court. We have posted the court opinion in the “California Corporations” Practice Area – and here is an article about the case.

Keith notes: You may recall that when the SEC adopted Rule 10b5-1, there was no corresponding safe harbor in California law – but ultimately a California regulation was adopted (10 CCR 260.402). The Friese decision is interesting because it is the second published opinion issued by the California Courts of Appeal since the VantagePoint decision that considers the internal affairs doctrine. In this case, the court does not mention the VantagePoint decision – but it instead discusses the same State Farm case that the VantagePoint court used to support its decision.

This case also distinguishes the second case, Grosset v. Wenaas. In that case, the Court of Appeal decided that the issue of whether a stockholder can maintain a derivative action on behalf of a corporation is governed by the internal affairs doctrine. In this case, the court found that the insider trading law is a securities law and not governed by the internal affairs doctrine.

While neither case resolves the question of what a California court will do with respect to the California’s pseudo-foreign corporation statute (Corp. Code Sec. 2115), they certainly demonstrate that the courts won’t be taking a “one-size-fits-all” approach to the application of the internal affairs doctrine. Therefore, it is fair to say we don’t know yet whether the smoke is black or white as to whether Section 2115 will be upheld by the California courts.

Another Latrell Sprewell Moment?

Yesterday’s Washington Post reports: “’No, the Ballmer children don’t have their Xbox 360 yet . . . unfortunately, thanks to the wonders of Sarbanes-Oxley, management does not get a free Xbox 360 anymore,’ Steve Ballmer, chief executive of Microsoft Corp., told a crowd of 500 local technology executives who gathered at the Capital Hilton yesterday to hear him speak.

Sarbanes-Oxley has been blamed for a lot of things, but the deprivation of Steve Ballmer’s kids is certainly a new one. ‘If I get an XBox 360 from the company, that’s income to me, and it’s got to be disclosed,’ he said. ‘And our audit committee decided it wasn’t worth it.’ Thankfully, Santa doesn’t answer to the same regulators.”

My response: Basketball fans might feel a hint of Latrell Sprewell in these remarks. Latrell told journalists last year that he wouldn’t play hard because the team wasn’t trying hard enough to extend his contract when they only offered $21 million over three years. His response to that offer: “I’ve got a family to feed.” Latrell was making $14.6 million per year at the time (now he is out of work because no team will sign him). Read Dick Vitale’s thoughts and this humor piece about Latrell’s attitude.

Anyways, maybe Mr. Ballmer’s comments were taken out of context – but if not, I don’t see the harm in him taking a few hundred out of the millions he makes annually and buy the Xbox for his kids himself…