We just posted the registration information for our popular conferences – “Tackling Your 2011 Compensation Disclosures: The 5th Annual Proxy Disclosure Conference” & “7th Annual Executive Compensation Conference” – to be held September 20-21st in Chicago and via Live Nationwide Video Webcast. Here is the agenda for the Proxy Disclosure Conference (we’ll be posting the agenda for the Executive Compensation Conference in the near future).

Special Early Bird Rates – Act by April 15th: With anger over CEO pay at record levels, Congress and the regulators are intent on shaking things up and huge changes are afoot for executive compensation practices and the related disclosures – that will impact every public company. We are doing our part to help you address all these changes – and avoid costly pitfalls – by offering a special early bird discount rate to help you attend these critical conferences (both of the Conferences are bundled together with a single price). So register by April 15th to take advantage of this discount.

Corp Fin Revises the Non-GAAP Section of Its “Financial Reporting Manual”

Yesterday, Corp Fin posted a revised version of its “Financial Reporting Manual” with revisions to “Topic 8: Non-GAAP Measures of Financial Performance, Liquidity and Net Worth” to include “Section 9500: Critical Accounting Estimates-Goodwill Impairment” and other changes.

On Friday, the SEC posted the 334-page adopting release related to amending Regulation SHO and short selling.

Delaware Chancery Court Finally Rules in Selectica

Below is news from Steven Haas of Hunton & Williams (we are posting memos analyzing this decision in our DealLawyers.com “Poison Pills” Practice Area):

On Friday, the Delaware Court of Chancery issued its long-awaited opinion in Selectica v. Versata Enterprises, addressing the first modern triggering of a rights plan. The court provided judicial validation of NOL poison pills, upholding the directors’ adoption and implementation of the rights plan and their subsequent decision to dilute an acquiring person who deliberately crossed the pill’s threshold.

The court delivered a well-reasoned opinion that employed a very straightforward Unocal analysis. It found that the NOLs were a valuable corporate asset and, therefore, an “ownership change” which might jeopardize their value constituted a valid threat to corporate policy and effectiveness. It made clear that because “NOL value is inherently unknowable ex ante, a board may properly conclude that the company’s NOLs are worth protecting where it does so reasonably and in reliance upon expert advice.” Central to the Court’s analysis was the board’s reliance on outside financial, tax, and legal advisors.

The Court then found that the plan, with a 4.9% trigger, was not preclusive or coercive, notwithstanding the acquiring person’s argument that no stockholder would run a proxy contest against Selectica’s staggered board. The Court explained that “[t]o find a measure preclusive…, the measure must render a successful proxy contest a near impossibility or else utterly moot….”

The Court went on to find that the use of the rights plan fell within Unocal‘s “range of reasonableness.” It rejected the acquiring person’s argument that, among other things, the Selectica board should have adopted a more narrowly tailored response. “[O]nce a siege has begun,” the court stated,” the board is not constrained to repel the threat to just beyond the castle walls.” It concluded that “[w]ithin this context, it is not for the Court to second-guess the Board’s efforts to protect Selectica’s NOLs.”

While Selectica is not the Chancery Court ‘s first foray into the world of poison pills, this opinion marks the first time the Court has upheld a modern pill that has been actually triggered by an acquiror.

– Broc Romanek

Yesterday, RiskMetrics announced it had been sold to MSCI at a price not far from RiskMetrics’ IPO price level when it went public two years ago. Based on the conference call related to the deal, MSCI’s CEO stated in response to questions that the ISS corporate governance services are considered a “non-core” unit that will be operated to generate cash flow for debt reduction. MSCI is a provider of investment decision support tools.

My guess is that nothing much will change for those of us that deal with ISS – but you never know. I do think the ISS branding will come back to where it used to be (ie. without the “MSCI” label before it). By my count, this is the fourth sale of ISS during this decade…

One thing that could change now that RiskMetrics will no longer be a public company is a company that pushed the envelope with it’s own corporate governance practices. RiskMetrics really help itself up to high governance standards once it went public. As one member noted: “Did you know that MSCI’s CGQ is better than 2.3% of S&P 400 companies and 22.7% of Diversified Financials companies?”

US Sentencing Commission Proposes New Requirements

Below is news taken from Sullivan & Cromwell‘s memo on the topic:

On January 21st, the U.S. Sentencing Commission proposed important amendments to the Sentencing Guidelines applicable to organizations, including the definition of what constitutes an effective corporate compliance program. Because the Sentencing Guidelines serve as a principal reference point under federal law for minimum standards in the design and structure of compliance programs, corporations should examine their programs to determine whether they comply with these proposed standards.

As described in our memo, the proposed amendments address four important areas: (1) the steps a corporation should take when responding to the discovery of criminal conduct; (2) document retention policies; (3) the use of independent corporate monitors; and (4) the governance of corporate compliance functions.

Our March Eminders is Posted!

We have posted the March issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!

– Broc Romanek

Now that the SEC’s new rules went into effect over the weekend (ie. February 28th), Corp Fin cleaned up all of their Compliance & Disclosure Interpretations this morning that deal with the old Summary Compensation Table reporting scheme. It’s unusual to see CDI activity so early in the morning. That certainly woke me up!

Here’s the changes:

– Withdrawn Question 119.04
– Withdrawn Question 119.05
– Withdrawn Question 119.11
– Withdrawn Question 119.12
– Withdrawn Question 119.15
– Revised Question 119.16
– New Question 119.24
– Withdrawn Question 120.05
– Revised Interpretation 220.01

Understanding Investor Perception Studies

In this podcast, David Calusdian of Sharon Merrill Associates explains the importance of investor perception studies, including:

– In a nutshell, what is an investor perception study?
– What types of companies should conduct one?
– Can you provide more details about how one is conducted?
– What ways do you recommend that a company use the study once it’s conducted?
– Should there be a follow-up study?

More on our “Proxy Season Blog”

With the proxy season in full gear, we are posting new items regularly on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– More on “Registered Holders: Broadridge vs. Transfer Agent?”
– Proponents Wanted: Blatant Online Ads for Alter Egos
– Survey Results: Proxy Access Issues
– Now Available: Glass Lewis’ Policies
– Diversity Policies: Do You Need One? Samples Available
– More on “Shareholder Proposals: Chevedden Sued Over Eligibility”
– Determining Who is “Most Highly Compensated”: More Complicated Than You Think

– Broc Romanek