January 12, 2011

Survey Results: Rule 10b5-1 Plan Practices

We have posted the results from our recent survey regarding Rule 10b5-1 plan practices, repeated below:

1. Does your company require insiders to sell shares only pursuant to a Rule 10b5-1 trading plan?
– Yes, insiders are required to use Rule 10b5-1 plans in order to sell shares – 3.9%
– No, but they are strongly encouraged – 30.8%
– No, and they are not explicitly encouraged – 65.4%
– Not sure, it hasn’t come up – 0%

2. Does your company review and approve each insider’s Rule 10b5-1 trading plan?
– Yes, it is subject to prior review and approval by the company pursuant to the insider trading policy – 78.9%
– Yes, but only the template plan is reviewed and not the actual trading schedule – 13.5%
– No, but we have a broker that we require to be used and have reviewed that brokers template – 0%
– No, and there is no requirement to go through a specific broker – 7.7%

3. Does your company allow sales of shares through Rule 10b5-1 trading plans during blackout periods?
– Yes – 84.6%
– No – 5.8%
– Not sure, it hasn’t come up – 9.6%

4. Does your company require a waiting period between execution of Rule 10b5-1 trading plans and time of first sale?
– Yes, it is a two week waiting period or less – 13.5%
– Yes, it is a one month waiting period (or close to it) – 23.1%
– Yes, it is a two month waiting period (or close to it) – 5.8%
– Yes, it is a waiting period until the next open window – 11.5%
– No – 36.5%
– Not sure, it hasn’t come up – 9.6%

5. Does your company allow insiders to voluntarily terminate a Rule 10b5-1 plan?
– Yes – 74.5%
– No, only terminations dictated by the trading plan are allowed – 25.5%

6. Does your company make public disclosure of the insiders’ Rule 10b5-1 trading plans?
– Yes, but only for directors and/or one or more officers – 30.8%
– Yes, for all directors and employees – 3.9%
– No – 65.9%

7. If your company makes public disclosure, how does it do it?
– Form 8-K – 55.0%
– Press release – 5.0%
– Website posting – 0%
– Combination of above – 15.0%
– Other – 25.0%

Please take a moment to participate on this “Quick Survey on Director Recruitment & Training.”

Webcast: How to Implement Dodd-Frank for This Proxy Season

Tune in tomorrow for the webcast – “How to Implement Dodd-Frank for This Proxy Season” – to hear Ning Chiu of Davis Polk, Howard Dicker of Weil Gotshal, Marty Dunn of O’Melveny & Myers, Amy Goodman of Gibson Dunn and Dave Lynn of and Morrison & Foerster discuss how to implement the SEC’s new rules regarding proxy access as well as all the Dodd-Frank changes (note there is a companion January 26th webcast to cover how to handle the new executive compensation requirements).

As all memberships expired at the end of the year, please renew if you haven’t yet to catch this program. If not yet a member, try a no-risk trial now.

GAO Report: US Government Has Material Internal Control Weaknesses

As noted in this press release, the GAO can’t render an opinion on the US Government’s financials because of material internal control weaknesses and other serious fiscal mismanagement issues.

In the Blog, Steve Quinlivan of Leonard, Street & Deinard notes that the SEC has delivered its first “supervisory controls” report required under Section 961 of Dodd-Frank to the Senate Banking Committee.

– Broc Romanek