October 21, 2009

Board’s Rejection of Plurality-Plus Director Resignation: Delaware Weighs In

A few weeks ago, the WSJ ran an article about how some boards were rejecting resignations by directors after they failed to achieve a majority vote “for” at an annual shareholders meeting.

A day later, Delaware Vice Chancellor Noble held – in City of Westland Police v. Axcelis Technologies – that, among other things, if a company adopts a plurality-plus voting policy (ie. Pfizer-style) and several directors do not receive a majority of the vote in the election, the board’s subsequent rejection of the directors’ resignation letters is not, by itself, enough to serve as a credible basis of wrongdoing in a books and records request brought under Section 220 of the Delaware General Corporation Law. I imagine this type of issue will become more common as withhold vote campaigns continue to gain traction. Fyi, Professor Jay Brown blogged about this case today and yesterday in “The Race to the Bottom” Blog.

In reading the opinion, note that VC Noble really focused on the plurality aspect, as the directors were, in fact, re-elected. There is the potential for a plaintiff to try to make a distinction if this arises for a company with a majority vote standard. I don’t think this should make a difference, but a plaintiff may disagree…

Understanding the Impact of FASB’s Codification on Disclosures in SEC Filings

Unfortunately, lawyers who draft disclosure for a living are impacted by the FASB’s recent codification of accounting standard project. In this podcast, Larry Bard of Morrison & Foerster explains how the Codification impacts disclosures in SEC filings, including:

– What is the Codification and when is it effective?
– What effect will the Codification have on public companies?
– What about all the SEC rules and interpretative material that reflects the pre-Codification Literature?
– What should lawyers be doing to get up to speed with the Codification?

In FEI’s “Financial Reporting Blog,” Edith Orenstein reports on the dozen items on the PCAOB’s ambitious standard-setting agenda going forward. Edith notes “Different from prior years, however, the agenda includes ‘milestones’ for projected dates of finalization of these projects, and the dates go out to 2011.”

Last Day for San Fran Registration: “4th Annual Proxy Disclosure Conference”

Due to unprecedented demand and limited space at our conference hotel for the “17th Annual NASPP Conference,” we were forced to end Conference Registrations last week for that Conference. It’s sold out! However, we are still accepting San Fran registrations through the end of today for the paired Conferences, the “4th Annual Proxy Disclosure Conference” (11/9) – and the “6th Annual Executive Compensation Conference” (11/10). You automatically get to attend both Conferences for the price of one. Here is the agenda for both Conferences.

You Can Still Attend Via Video Webcast: In the alternative, note you can attend the “4th Annual Proxy Disclosure Conference” and the “6th Annual Executive Compensation Conference” – by video webcast.

Order Audio from NASPP Conference: In addition, you can still hear each – and any – of the 36 panels you wish from the NASPP Conference by ordering the downloadable audio and course materials.

– Broc Romanek