December 19, 2006

Sample CEO Succession Plan

Yesterday’s WSJ carried an interesting article regarding interim CEOs and CEO succession planning (or more accurately, lack thereof). As I have pointed out a few times, the last remaining key area of corporate governance untouched by the reform wave of the past 5 years is CEO succession planning. It’s such a critical task for boards to perform, yet it is rarely done – and it was very hard for me to locate a company that actually had something in writing! I have added this sample CEO succession plan (in a Word file) to our “CEO Succession” Practice Area and our “Sample Documents” Portal.

404 Extension: Traps for the Unwary

Regarding last week’s release that further postpones the 404 compliance date for non-accelerated filers, thanks to Mike Kaplan of Davis Polk and John Newell of Goodwin Procter for the following traps for the unwary:

– If you become accelerated or large accelerated during the extension period, the postponement relief no longer applies (the same caution the SEC gave us last time)

– The extension for non-accelerated filers is for companies who are not accelerated filers at the end of the applicable year (so if you have a $55 million float in May, you need to decide whether you think your float may go up to $75 million by June 30th, in which case you now have just 6 months to finish 404 compliance – or you need to decide to spend money now, just in case your stock goes up)

– If you go public early in a year (pre-2/15 for US companies; pre-3/31 for FPIs) off of 9-month numbers, your first annual report (on which you get a pass) is the one you file within a few months after you go public; you are then subject to 404 in your next annual report, which is due the following year and covers a period before you went public (this may force people to delay 1st quarter IPOs or to spend money on SOX work before they are even public)

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