Broc Romanek is Editor of CorporateAffairs.tv, TheCorporateCounsel.net, CompensationStandards.com & DealLawyers.com. He also serves as Editor for these print newsletters: Deal Lawyers; Compensation Standards & the Corporate Governance Advisor. He is Commissioner of TheCorporateCounsel.net's "Blue Justice League" & curator of its "Deal Cube Museum."
As a result of amendments to the disclosure rules for “smaller reporting companies” adopted in December and effective last week – February 4th – there are changes to Form 10-K that all reporting companies need to make in their Form 10-K reports. For companies that are not eligible (and do not elect) to report under the new “smaller reporting company” framework, these changes are minor – essentially amounting to changes in the check boxes relating to the company’s status on the cover page of Form 10-K.
Courtesy of John Newell of Goodwin Procter, we have posted “Comparison of Changes to Form 10-K,” which is a redline comparison of the newly-effective cover page of Form 10-K compared to the old version (this is a Word file and should help you tweak the Form you saved from last year; here is a PDF version if you need it).
On Monday, the SEC finally posted an updated Form 10-K – even though the new Form had been effective for a week – and as several members have e-mailed me, the SEC mistakenly reverted back to an old version of the Form for the Part III in its PDF…
More Glitches in Smaller Company Reporting
Recently, I blogged about a glitch in the SEC’s smaller company reporting scheme relating to audit committee reports – and there have been a few others identified in our “Q&A Forum.” Thanks to Steve Amen and Grant Leach of Kutak Rock, here is another:
“We’ve been working on a Form 10-Q for a company with a September 30th year end that qualifies as a “smaller reporting company.” As we looked at the SEC’s adopting release regarding changes to Form 10-Q resulting from the new smaller reporting company rules, we noticed that the familiar paragraph in which registrant’s indicate their filing status has been modified (as expected) to include the new option for “smaller reporting company”. However, in the adopting release, the whole thing looks like this:
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
– Large accelerated filer
– Accelerated filer
– Non-accelerated filer
– Smaller Reporting Company
(Do not check if a smaller reporting company)
We could not make any sense out the parenthetical language at the bottom and we finally decided to call the Corp Fin Staff for clarification. Turns out it’s a glitch and we were told we could delete it from the cover page.”
Let The Trades Begin: New Rule 144 Is Now Effective
Starting today, new Rule 144 is effective. The SEC has posted a copy of the new Form 144 in a PDF; we have a Word version available in our “Rule 144″ Practice Area.
As noted by Ron Orol in this The Deal.com article, as much as $35 billion in restricted securities will suddenly be available to trade – so you can expect a sudden uptick in Rule 144 activity. So I posit this reminder: have you sent your memo to all our officers and directors explaining the new rule changes?
During our recent “Rule 144 Conference,” it was stressed that all companies need to get their officers and directors up to speed, particularly with the new potential pitfalls now facing affiliates. If you have not yet done so, we encourage you to furnish all your officers and directors with the model memorandum provided in the Conference “Course Materials.” It will get your key executives and directors updated on what they need to know now—and prevent costly violations.
By the way, I just posted a podcast with Ron Orol on DealLawyers.com regarding his new book: “Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking On The World.”
As part of its executive compenation review project, the SEC Staff has issued many comments on change-of-control and severance disclosures. We have urged companies to improve the clarity of disclosures in this area by providing full walk-away values in a table this year – including not just unvested grants, but previously exercised grants and projecting out future grants (here is a model table; learn more how to do this in our “4th Annual Exec Comp Conf” Archive). This is something that shareholders clearly want to see – and can help companies shorten their executive compensation section.
Below is a recent blurb from Mark Borges’ “Proxy Disclosure” Blog on CompensationStandards.com (and since Mark posted the blog below, he has added another one about a different company):
Out on the speaking circuit, one of the more provacative executive compensation disclosure topics is whether companies should be reporting the “walk-away” number as part of their termination and change-in-control disclosure. While I can’t say that I’ve seen any trend start to emerge yet, it’s a subject that never fails to stimulate strong positions and lively debate.
Recently, Scott Spector pointed me to the Starbucks proxy statement (filed on January 24th) which contains the first “walk away” numbers I’ve seen this year. As part of its “Potential Payments Upon Termination or Change in Control” disclosure, the company provides a table showing the fiscal year-end value of outstanding vested stock options, aggregate deferred compensation plan account balances, and unvested stock options that would accelerate upon the occurrence of certain specified triggering events. It also totals these amounts, with and without the accelerated vesting portion, essentially showing what its named executive officers would receive if they left the company under any circumstance.
Since this is Starbucks’ first filing under the new rules, I can’t tell if they elected to provide this disclosure to get out ahead of the issue or because this level of transparency made sense given the relative simplicity of their executive compensation program. In any event, it will be interesting to see whether other companies follow their lead this proxy season.
How Many Companies Will Disclose Performance Targets This Year?
A recent poll by Watson Wyatt Worldwide got a bit of play in the mainstream press; in the poll, the consulting firm found only 42% of companies plan to disclose the specific goals used in their executive compensation plans for the 2007 fiscal year; 31% have no plans to reveal the goals and the remaining 27% are unsure.
However, this “poll” was far from being scientific – just like our “Quick Surveys” aren’t – since it encompassed only 135 representatives from companies that were listening to a Watson Wyatt webcast. So I would take these numbers with a grain of salt – particularly given the SEC Staff’s continued strong interest in this area (see our recent webcast where a SEC Staffer addressed this topic at length) and institutional investors very strong interest in improved performance target disclosure this year. This was a hot topic during RiskMetric’s Conference last week and those companies that don’t adequately disclose performance targets should expect to become targets themselves during ’09.
Update: We now have over 80 comment letters (and their responses) posted in the “SEC Comments” Practice Area on CompensationStandards.com.
Directors Speak Out on Internal Pay Equity
According to a recent survey by Heidrick & Struggles and the Center for Effective Organizations, 90% of director respondents said CEO pay should be no more than two to three times higher than the next highest paid executive. And 85% said the mix was right at their company right now.
But I wonder whether these directors truly conduct an internal pay analysis since only a few hundred companies (out of 10,000; thus a small fraction) disclosed last year that they consider this benchmarking tool as a factor in their decisionmaking – and even those few companies that truly do consider internal pay equity don’t always conduct the analysis properly (eg. neglecting to include equity grants in the calculation). This issue of the Compensation Standards print newsletter from last year has an article explaining “How to Implement Internal Pay Equity.”
Also in the survey: 32% of the director respondents said CEOs are overpaid; up from 25% in the past – the respondents blamed it on compensation consulting firms and the creation of new incentive compensation programs.
A Rememberance: Sadly, Anita Karu passed away on Sunday after a brief illness. As many of you know, Anita was a senior attorney that worked in Corp Fin for over 25 years (much of it in Chris Owings group). She was a true believer in the Commission’s mission – very dedicated. We will all miss her!
Many of the memos analyzing the recent Private Letter Ruling – which reverses the IRS’ long-standing position on the effect of standard severance arrangements on the deductibility of performance-based compensation under Section 162(m) – have raised questions about the magnitude of the change (eg. whether there is a retroactive impact). Come hear Ken provide some guidance about the latest IRS’ positions. This webcast promises to be a “biggie.”
The following panelists will address the tax, accounting, plan design and disclosure issues raised by this PLR:
– Ken Griffin, Associate Chief Counsel, Executive Compensation Branch, IRS
– Elizabeth Drigotas, Principal, Washington National Tax, Deloitte Tax LLP
– Mike Kesner, Head of Deloitte Consulting’s Executive Compensation Practice
– Mike Melbinger, Partner, Winston & Strawn
– Paula Todd, Managing Principal, Towers Perrin
– Jeremy Goldstein, Partner, Wachtell Lipton Rosen & Katz
– Dave Lynn, Editor, CompensationStandards.com
Corp Fin Rejects “Proxy Access” Proposals: AFSCME to Sue Next?
As expected – given the SEC’s recent rulemaking to “stay the course” on how it wants Corp Fin to handle “proxy access” proposals – Corp Fin agreed with five companies on Monday to allow them to exclude proposals submitted by AFSCME that would amend the bylaws to require that the companies include in their proxy materials the name, along with certain disclosures and statements, of any person nominated for election to the board by a shareholder who has beneficially owned 3% or more of the company’s outstanding common stock for at least two years.
Given the SEC’s rulemaking, AFSCME expected this response and said as much when it announced last month that it was submitting these proposals. It is expected that AFSCME will sue like it did two years ago in the AFSCME v. AIG case, where it won in the 2nd Circuit.
We should be grateful to the SEC for posting these no-action responses, since they made a special effort to post them. Typically, shareholder proposal responses are not posted because there are so many that it would drain the Staff’s limited resources. Fyi, Corp Fin posted these on its “Frequently Requested Materials” page.
Pro or Troll #5: Risk Management and Governance Trends in 2008
Courtesy of Jennifer Meiselman, Managing Director of Risk Advisory Services, BDO Consulting, come try your hand at our newest “Pro or Troll” game – this one focusing on risk management.
Last week, I spoke at the annual RiskMetrics’ Conference (my panel was on executive pay, more on that later) and I hung around for most of the program since I have always enjoyed the Conference because it’s slant is different than the traditional legal fare. I was there when Carl Icahn announced he was thinking of starting a blog (although he didn’t call it a blog – nor was he really sure what it was gonna be, if anything). Perhaps Carl’s blog will look something like this blog – seeking change in companies he feels are undervalued. Carl also noted he would blog about governance more generally. At the Conference, he spoke out about outsized executive pay, as did nearly every speaker at the Conference.
For me, Carl’s announcement was just another wake-up call that we are truly in the infancy of how the Web will be leveraged by activists to place pressure on boards and management. And I say “wake up call” because I think that most companies are nowhere near ready to handle what is coming. They don’t view their IR web pages as a “campaign” tool and in fact, most companies outsource their IR web page to third-parties who have no clue about how to run a campaign because they merely provide simple tools to allow companies the bare minimum online.
I also think that most proxy solicitors don’t have a real handle on how to leverage the Web either. I understand that personal relationships with one’s largest shareholders is the best route to handling a tough vote. But I think we will find that the Web is a necessary adjunct to the traditional means by which proxy solicitors do their job. E-proxy plays a big role in this (and don’t take it just from me, check out this interesting paper from Professor Jeffrey Gordon entitled “Proxy Contests in an Era of Increasing Shareholder Power: Forget Issuer Proxy Access and Focus on E-Proxy.”)
All Marty Lipton, All The Time
At the RiskMetrics conference, Marty Lipton talked about some of his grander moments over the years (eg. original label for the poison pill was the “warrant dividend plan”) and provided his views on the current state of affairs (he’s not really a professional entrencher of management; rather, he’s an entrencher of allowing the board to exercise its fiduciary duties). It was good stuff. During the Q&A, there was some heated moments between Marty regarding his views on “say on pay” and some in the predominantly investor audience.
By the way, a member points out a “Poison Pill” blog dedicated solely to Marty Lipton (albeit the blog may be defunct; it has been silent for a few months). It’s definitely different and I guess even corporate attorneys can have their own paparazzi…
RiskMetrics Goes Public
Speaking of RiskMetrics, its IPO occurred a few weeks back (and yes, I bought a few shares). Here is the IPO prospectus. It will be interesting to see their voting recommendations for their own annual meeting. Given their governance principles – which includes providing a say on pay and allowing for proxy access – they likely will get high marks. Here is a snapshot of some key governance principles:
– Annual Election of Directors – All of our directors will stand for election annually to create greater alignment between the directors’ and stockholders’ interests and to promote greater accountability to our stockholders.
– “Proxy Access” – Our bylaws set forth the provisions by which we will include in our proxy materials the name of a person nominated by one of our stockholders, or group of our stockholders, who meets specified requirements for election as a director. Generally, a nominating stockholder must have owned at least 4% of our outstanding common stock continuously for at least 2 years and must provide notice to us in accordance with our bylaws.
– Majority Voting – Our bylaws provide that in uncontested elections, our directors must be elected by majority vote and directors must submit a contingent resignation in advance of each annual stockholders meeting to help effectuate this process.
– Say on Pay – Our stockholders will be given the opportunity to vote on an advisory management resolution at each annual meeting to approve our Executive Compensation Policies and Practices as outlined in our annual proxy statement.
– Separation of Chairman/CEO; Lead Director – Our policy is that the role of our chairman should be filled by someone other than our chief executive officer and that our chairman should come from the ranks of our independent directors. If our board of directors ever concludes that it is in the best interests of our stockholders to have a chairman who is not an independent member of our board of directors, then we will disclose this reasoning in our proxy statement and we will appoint a lead independent director to provide appropriate independent management of our board of directors and its processes. Since 2004, the roles of our chairman and chief executive officer have been filled by the same individual. Our board of directors believes it is prudent and in the best interests of our stockholders to leave this arrangement in place until additional independent directors join our board of directors following our initial public offering. In the interim we have appointed Stephen Thieke as our lead independent director.
– Director Stock Ownership – In order to more strongly align the interests of our directors with those of our stockholders, non-vested stock grants will be a significant component of our directors’ compensation. We will also require our directors to maintain certain levels of equity ownership.
– Poison Pills – Our board of directors’ policy is that it will not adopt a shareholders’ rights plan, or poison pill, without first seeking and obtaining stockholder approval.
The ‘Former’ M&A SEC Staff Speaks
We have posted the transcript from our recent DealLawyers.com webcast: “The ‘Former’ SEC Staff Speaks.”
After I blogged recently about Broadridge’s latest e-proxy stats, a number of members asked how many shareholders were requesting paper. Based on the stats provided by Broadridge, only an average of 0.79% were requesting paper from companies doing e-proxy so far.
We’re receiving so many queries about e-proxy that I created this new “Quick Survey on Voluntary E-Proxy.” Please take a moment to complete the three questions (note that the third question asks you to estimate even if your company doesn’t intend to e-proxy this year).
And after you take the Quick Survey, check out Dominic Jones’ IR Web Report blog about an e-proxying company adjourning their annual meeting because they missed quorum (note it’s an atypical situation because this particular’s company has shareholders that consist solely of veterinarian customers. Sounds like a dream I recently had; you see, there were these two pigs and a goat.).
E-Proxy & California Conflict: An Update
As I noted above, lots of e-proxy questions being posted in our “Q&A Forum” recently; one of them asked if there were any new developments regarding the California law conflict that I blogged about a while back. Here is an update from Keith Bishop:
No new developments to report. The Corporations Committee of the Business Law Section of the California State Bar is working on legislation but I don’t think any legislative fix will be made in time for this year’s proxy season. I don’t believe that there is much basis for a preemption argument and I don’t think that obtaining stockholder consents is a practical option for a public company.
How to Create an Online Annual Report – Free and in 5 Minutes!
Dominic Jones provides us with a real find – as described in his blog – by illustrating how easy it is to use the free software on Issuu.com. However, I second his big caveat: I do not recommend that you convert your online annual report to Flash or images – but if you are going to do so (as too many companies are), then free is the only way to go.
Many of you have registered for the big webconference – “New Rule 144: Everything You Need to Know – And Do NOW” – which will be video webcast today starting at noon eastern (video archive will be available starting tomorrow).
Remember you need to register to attend; members of TheCorporateCounsel.net get a discount – but the Conference is not automatically part of the site’s membership. It’s not too late to register, even if the Conference has started since everything will be archived.
Here are instructions on how to attend the Conference:
1. Ensure you have the proper “Player”: To watch the Conference, you will need either the Windows Media Player or the Flash Player (which works for a Mac); RealPlayer will not work for this Conference. You can download a free player if you need to.
2. Determine whether CLE credit is available in your state: This Conference is accredited for CLE in 15 states – here is the list of CLE states. CLE credit will not be available for states that are not on this list.
3. If you seek CLE credit, you will need to input your contact information in our “Online CLE Tracker”: To comply with certain state bar requirements, we have built a system whereby those in states where this webcast is accredited and want to earn CLE will need to click through a series of periodic prompts (i.e. about every 15-20 minutes) to prove they sat through the webcast. When you go to the webconference, you will see a link in a red box to go to the “Online CLE Tracker.”
5. Attend today starting at noon eastern: If you intend to attend live today, the Conference starts at 12:00 noon eastern time. Here is the Conference Agenda, which has the schedule of panels (remember that all panels will be archived and you can watch them afterwards).
To attend, go to the home page of TheCorporateCounsel.net and – and click on the large link at the top with the Conference title and input your ID and password when prompted. If you have questions, please email our HQ at info@thecorporatecounsel.net.
Part II: “The Latest Developments: Your Upcoming Proxy Disclosures —What You Need to Do Now!
Over 50 Executive Compensation Comment Letters: Our Updated List
In the “SEC Comments” Practice Area on CompensationStandards.com, we continue to update our list of links to the SEC’s executive compensation comment letters and responses.
We have now posted 50 comment letters and responses (some companies have more than one letter and response available). During last week’s CompensationStandards.com webcast, Staffer Mike Reedich noted that about 70% of the 350 companies that received comment letters had received a second comment letter – so my guess is that the number of letters being posted to the SEC’s site will continue to trickle rather than flood.
By the way, these letters and responses were the inspiration for an article in yesterday’s WSJ entitled “SEC Unhappy With Answers on Executive Pay.” It still strikes me as odd whenever the mainstream media writes a piece about the SEC comment process…
House’s Severance Hearing Postponed
Perhaps because Countrywide CEO Anthony Mozilo agreed to forego the $37.5 million in cash severance and other benefits that he stood to receive if the company’s acquisition by Bank of America is completed, the hearing before the House Oversight and Government Reform Committee on severance packages – originally scheduled for next week – has been postponed until Thursday, February 28th.
I heard Professor Bob Howell do his thing a few weeks back and he is quite the entertainer. In this podcast, the Professor explains how to best approach drafting disclosure for proxy materials, including:
– What are desired practices for MD&A?
– How should companies draft their risk factors?
– What is the best way that companies can get their message across in the “letter to shareholders” in the annual report?
– How should companies be disclosing “economic (e.g. cash) performance”?
1. Start with a blank sheet of paper – Uh, yeah, OK. No one ever does this. It’s just something SEC staffers like to say because it sounds good in theory. I guess they have visions of us sitting down with our CEOs, CFOs, GCs and Controllers at off-site locations with nothing on the agenda except for brainstorming about what story we want to tell this year. But in reality, unlike Richard Nelson Bolles, the author of “What Color Is Your Parachute,” none of us has time to completely re-write our disclosures every year. Our senior officers’ calendars are too packed to get everyone to be in the same room for more than 10 minutes (particularly if they know lawyers will be in the room). That’s not what they are getting paid those “Holy Cow” numbers to do. Plus, none of us in the in-house world are paid enough to put ourselves through that exercise every year!
2. Consider filing under XBRL – Again, not something many of us are going to do unless we’re forced to, but I thought I’d throw it in to receive “brownie” points from Chairman Cox in case he reads this!
3. Start early – Ha! Another one that sounds good, but no one ever does it. It’s just like the papers we were assigned to write in high school and college–we started doing all of the research and writing the papers the night before the due date (and after “Late Night with David Letterman”). I guess life would be too boring without last minute fire drills.
8. Analysis, analysis, analysis – As they say in New Jersey, “Puh-leeze!” Ever notice that the words “analysis” and “analyst” start with the letters A-N-A-L.
5. “All” means all – NOT! All means everything you are required to disclosed based on the rules. Anything over and above that is just voluntary stuff that could potentially lead to a post on one of those blogs like Footnoted.org whose only real goal is to embarrass you and your executives, or worse, could get you fired!
265. Don’t use generic risk factors that don’t apply to your company’s business – Are you kidding me? If risk factors constitute your insurance policy, as we are all so fond of saying, and it only costs whatever the printer charges for your document to be a couple of pages longer, throw in the kitchen sink! Too many risk factors can’t possibly get you in trouble. No one ever got sued for having too many risk fators.
7. Check the numbering on your exhibits list – Seriously, misnumbering is a tell-tale sign of sloppy lawyering! (Note the misnumbering of this list!)
Jan-Feb Issue of The Corporate Counsel
We recently mailed the Jan-Feb issue of The Corporate Counsel. For those that haven’t tried a no-risk trial, here is a blurred version of the issue so you can get a sense of it. This issue includes analysis of:
– The Commission’s Useful Integration (Rule 152, etc.) Guidance in August’s Reg D Proposing Release
– Yet Another Statutory Basis for a Reg D Offering: Section 28
– This Year, Preliminary Proxy Filing Can Lead to Real-Time Review of 402/404 Disclosures
– S-K Item 404(a) Follow-Up—More on Which In-Laws are Related Persons
– Audit Committee Involvement in Drafting the CD&A—Why Pile On?
– “Proxy Access”
– Bebchuk Shareholder Proposal Follow-Up
– Google’s TSOs—S-3 Registration Rather Than S-8—Follow-Up
– Stoneridge!@#$%
– Enforcement Staff Busy Advising Backdaters and Others When Investigation Has Closed
– Bulletin Board Companies Left Out of S-3 Expansion
– Cheap Stock—IPO Disclosure Overkill
– Management Blogs—Reg FD Dissemination?
– 8-K Amendment Coming to Clarify that 4.02 Reporting Cannot Be (Buried) in 10-Q/K
– FASB Re-Examining FAS 5 Disclosure Criteria—Eventual Impact on the Audit Letter Process
– Fixed 1934 Act Fees?
– Annual Salary Survey
– New Staff 144 Positions on Gifts and Pledges by Affiliates—and Blockbuster Position On Hedging
Recently, the SEC posted the adopting release for its e-forum rulemaking. Even though most of this rulemaking essentially codified what was arguably already permissible under the proxy rules, I believe this rulemaking will spur the investor community to start leveraging the Web more.
During last week’s proxy season webcast, Pat McGurn talked about this topic as well (audio archive and transcript are available now). Although not an e-forum example per se, I pointed out VotePal.com to illustrate the point of how one shareholder can easily get its views known on a shoestring budget (this particular shareholder’s beef relates to omitting the shareholder’s name from certain communications with other shareholders and not properly reporting election results). This site is quite elementary: the shareholder simply has posted a chronological list of any documents related to his agitation at Alaska Air. Note this statement on the left side of the site’s home page: “We’ve Proven Anyone Can Conduct a Proxy Contest…How About You??”
Practice Tip: Votepal.com provides us with a reminder that anything we write these days could surprise you and wind up online. The site contains several letters written by Alaska Air’s law firm (here is an example). Ignore the Web at your own peril!
Pay-for-Performance Disclosure: Transcript from Proxy Season Webcast
We have posted the transcript from last week’s popular webcast with RiskMetrics’ Pat McGurn: “Forecast for 2008 Proxy Season: Wild and Woolly.”
Here is a notable excerpt from Pat’s remarks regarding disclosure of pay-for-performance targets (which dovetails the extensive conversation about this topic with SEC Staffer Mike Reedich and others during last Wednesday’s webcast on CompensationStandards.com):
“If issuers want to stay out of trouble this year, there are a couple of quick ways to do it. The first one on the CD&A side has to do with what I call the “can’t discern alignment” issue. The fact that many companies in 2007 omitted the targets and the hurdles under their performance-based pay programs. I don’t think there is anything that’s going to get you into trouble with investors faster this year than continuing to use stealth over those targets and hurdles.
I think obviously the SEC has now set a bar for confidential treatment of those numbers and that information going forward. But I think it’s something that shareholders are going to judge on their own as well, and if there is one big flash point issue this year, it is going to be on “pay-for-performance” and whether there is enough information for shareholders to figure out how high the bar has been set in the CD&A this year.”
Alan Dye: Keeping Yourself Out of the Section 16 ‘Hot Water’
For members of Section16.net or the NASPP, tune into tomorrow’s webcast – “Alan Dye: Keeping Yourself Out of the Section 16 ‘Hot Water’” – to hear Alan Dye give us guidance on all the latest developments in the Section 16 area. This always is one of the most popular webcasts around. Try a Section16.net no-risk trial to catch this 90-minute program.
Microfinance in Africa
A friend of mine recently launched a microfinance initiative in Buyobo, Uganda, and arranged for a Ugandan charity called FDNC to provide follow up visits to her borrowers. FDNC provides all sorts of health, education and training outreach to women and children in rural villages. FDNC receives funding from a USA charity called Hope for Uganda Students (HUGS).
Now, Parade magazine is holding a charity-giving challenge and will give $50,000 to the 4 USA charities that generate the most new donors by January 31st – and the top 50 will receive $1,000. So my friend is trying to get at least 50 new donors for HUGS during the next three days. You only have to give $10 – the important thing is how many people give – not how much they give. So please go to this web site and donate $10.
Many of you have registered for the upcoming webconference – “New Rule 144: Everything You Need to Know – And Do NOW” – which will be video webcast on Wednesday, January 30th (video archive will be available starting the following day).
Here are instructions to attend the Conference:
1. Test your access now: To watch the Conference, you will need either the Windows Media Player or the Flash Player (which works for a Mac); RealPlayer will not work for this Conference. To test your access, please go to: “Test Your Ability to Access Webconference.”
2. Determine whether CLE credit is available in your state: We expect this Conference to be accredited for CLE in about 15 states – here is the list of CLE states. CLE credit will not be available for states that are not on this list.
3. If you seek CLE credit, you will need to input your contact information in our “Online CLE Tracker”: To comply with certain state bar requirements, we have built a system whereby those in states where this webcast is accredited and want to earn CLE will need to click through a series of periodic prompts (i.e. about every 15-20 minutes) to prove they sat through the webcast. Soon, we will have this “Online CLE Tracker” up and you can input your information in advance of the Conference if you wish.
4. Print out the Course Materials: You can now access these “Course Materials,” including this printable set of model documents. [We just tweaked a few of the rep letters to add a representation about shell companies – so if you already printed out a set of our model documents, you may want to print them out again.]
5. Attend on Wednesday, January 30th starting at noon eastern: If you intend to attend live on Wednesday, the Conference starts at 12:00 noon eastern time (this is earlier than originally announced as the Conference is now longer). Here is the Conference Agenda, which has the schedule of panels (remember that all panels will be archived and you can watch them afterwards).
To attend, go to the home page of TheCorporateCounsel.net and – and click on the large link at the top with the Conference title and input your ID and password when prompted. If you have questions, please email our HQ at info@thecorporatecounsel.net.
Podcast: Impact of Stoneridge
In this podcast, Lisa Wood of Foley Hoag discusses the recent US Supreme Court decision regarding aiding & abetting in Stoneridge Investment Partners v. Scientific-Atlanta, including:
– What did the Supreme Court decide in Stoneridge?
– What does this mean for aiding & abetting allegations going forward?
– What should companies and other market participants do to protect themselves in the wake of Stoneridge?
The Stoneridge Memo Phenomenon
I don’t know why it struck me, but the force and speed by which law firms sent their memos out last week – in the wake of the US Supreme Court’s Stoneridge decision – was truly amazing. So far, we have posted over 40 of these memos, with the bulk of them being drafted within 48 hours of the decision being rendered. So below is a question I ask you:
Catch today’s webcast – “Smaller Companies: How Your 10-K Changes This Proxy Season” – to hear Dave Lynn, John Jenkins and Harry Pangas discuss how to prepare your Form 10-K this proxy season, with a focus on what changes you need to make this year due to the SEC’s new rules and regulations for smaller companies.
Unlike our other webcasts, this one was taped in advance so you can listen to it at anytime (and there will be no transcript). And you will also want to review these “Course Materials,” which consist of practice pointers that the panelists put together. Some good stuff!
Head’s Up for Smaller Companies: Read the Actual Rule Text
A member recently alerted us to a possible glitch in the SEC’s adopting release for smaller company regulatory relief and simplification. In the release, the SEC stated that Item 407 of Regulation S-K was being amended to provide that “smaller reporting companies are: “… Not required to provide an Audit Committee Report until the first annual report after their initial registration statement is filed with the Commission and becomes effective.”
However, the actual amendments to Item 407 don’t refer to the Audit Committee Report – instead, they refer to disclosure regarding the Audit Committee Financial Expert. I think the actual amendments are correct since the intent of the rules is to provide that the disclosure regarding Financial Experts required by Item 407(d)(5) will not be required for a smaller reporting company in its 1st annual report following the effective date of its first registration statement. Smaller reporting companies will be required to provide Audit Committee Reports.
Practice Tip: For both the SEC’s adopting and proposing releases, don’t forget to read the rule text near the end of the releases rather than rely on the narrative description of them in the forepart. After all, the rule text is what we all have to live by, long after the adopting release is mostly forgotten…
News from San Diego: Recap of Corp Fin Efforts
Yesterday, Corp Fin Director John White delivered this speech at the Northwestern Conference in San Diego. It provides a recap of all the SEC’s ongoing efforts. In two weeks, get some expert perspectives from outside the SEC on what the Staff is up to (and has been doing recently) in our webcast: “The ‘Former’ SEC Staff Speaks.”
I hear that Staffer Shelley Parratt had an interesting panel in which she said there have been a lot of questions about how companies can find out which AD group (ie. industry group in Corp Fin’s “operations”) they are in. There is information on the Corp Fin web page – but it can be confusing so the Staff plans to make it easier to use. Don’t forget our handy “Corp Fin Organization Chart.”
