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MBBP Welcomes New Attorneys to the Team 12/08/2016

Posted by Morse, Barnes-Brown Pendleton in Attorney News, MBBP news.
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Morse, Barnes-Brown, and Pendleton has welcomed three new attorneys: Joshua H. Watson, William R. Schmidt II, and Kelly L. Hinkel.

Josh and Kelly have become members of the Corporate Practice group, while Bill has joined the Patent Practice group. Josh is an experienced private funds attorney and has joined the Corporate Practice group’s Private Investment Funds & Advisers (PIFA) team. Bill is a registered patent attorney whose practice focuses on patent prosecution, opinions, and related counseling. Kelly’s practice includes advising companies on financings, corporate governance, and entity formation.

Details can be found in the formal announcement.

SEC Chair Speaks on Corporate Governance 07/10/2014

Posted by Morse, Barnes-Brown Pendleton in Public Companies.
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By: Mark Tarallo

On June 23, 2014, SEC Chair Mary Jo White spoke to the Twentieth Annual Stanford Directors’ College held at the Stanford University Rock Center for Corporate Governance.  Chair White’s remarks focused on the SEC’s view of the role of the board of directors in a corporation.

Chair White characterized her remarks as covering three topics-one attitudinal, one advisory, and one descriptive.  The “attitudinal” topic was the view that the SEC takes regarding directors as the most important “gatekeepers” of a corporation.  She noted that “it is essential for directors to establish expectations for senior management and the company as a whole, and exercise appropriate oversight to ensure that those expectations are met.  It is up to directors, along with senior management under the purview of the board, to set the all-important “tone at the top” for the entire company.”  From an advisory perspective, Chair White spoke to the obligation of the board to engage in self-reporting when they learn of any wrongdoing and working cooperatively with regulators.  She referred to prior decisions and press releases to show how self-reporting and cooperation is viewed favorably by the SEC, and called on directors to “[m]ake it clear from the outset that the board’s expectation is that any internal investigation will search for misconduct wherever and however high up it occurred; that the company will act promptly and report real-time to the Enforcement staff on any misconduct uncovered; and that the company will hold its responsible employees to account.”  Last, Chair White described the workings of the SEC’s Whistleblower program and why it is necessary for the board to take any tips or accusations seriously.  It is clear from her remarks that the SEC plans to hold boards accountable for compliance failures, and while her remarks were targeted at public reporting companies, they are instructive for private companies as well, and directors of private companies should take note of the increasing obligations to ensure compliance.

A full copy of the text of Chair White’s comments can be found here.

Please feel free to contact Mark with any questions on this topic.

Action Items for Smaller Reporting Companies: Nasdaq Changes Compensation Committee Requirements 01/31/2013

Posted by Morse, Barnes-Brown Pendleton in Legal Developments, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

The SEC recently approved changes to Nasdaq’s corporate governance requirements regarding compensation committees. These changes apply to any company whose stock is listed on Nasdaq – with certain significant exceptions. Smaller reporting companies, or SRCs, are exempt from many, but not all, of the new requirements. Here is a brief summary of how the changes will affect SRCs.

All Nasdaq listed companies, including SRCs, are now required to have a compensation committee consisting of at least two members each of whom qualify as independent under Nasdaq’s current listing standards. The compensation committee must adopt a formal written charter which includes specific provisions noted here:

  • the scope of the compensation committee’s responsibilities, and how it carries out those responsibilities, including structure, processes and membership requirements;
  • the compensation committee’s responsibility for determining, or recommending to the board for determination, the compensation of the chief executive officer and all other Executive Officers of the Company; and
  • that the chief executive officer may not be present during voting or deliberations on his or her compensation.

Alternatively, in the absence of a compensation committee charter, a SRC may have the Board adopt resolutions specifying the committee’s responsibilities and authority. The compensation committee is required to review and reassess its charter on an annual basis.

Action Item: SRCs that do not have a compensation committee should begin identifying potential compensation committee members.

Action Item: SRCs who do not have a compensation committee charter should begin drafting a charter. SRCs who already have a charter in place should review their charter to determine whether modifications are required.

SRCs have until the earlier of their first annual meeting after January 14, 2014, or October 31, 2014 to comply with the provisions set forth above, Each listed company must certify to Nasdaq that it has met the requirements described above no later than 30 days after such date.

For more information on this topic, please contact Daniele Levy.

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