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The following excerpt is taken from Fund Director's Guidebook, Third Edition by the Federal Regulation of Securities Committee,
Copyright 2006 by the ABA Section of Business Law. Reprinted here with permission. The material contained herein represents the
opinions of the authors and editors and should not be construed to be the action of either the
American Bar Association or the Section of Business Law unless adopted pursuant to the bylaws of
the Association. Nothing contained herein is to be considered as the rendering of legal advice for
specific cases, and readers are responsible for obtaining such advice from their own legal counsel.
To request reprint permission, contact the Manager, Copyrights and Licensing, at (312) 988-6102.
For the complete excerpt, click here
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Message from the Chair, Alvin W. Thompson
"To Preserve and Enhance the Ideals of the Profession and Its
Dedication to Public Service"
Goal X of the American Bar Association is "To preserve and enhance the
ideals of the profession and its dedication to public service." This
year there is an ABA-wide initiative to bring about a Renaissance of
Idealism in the Legal Profession. Those members of the Section who
attended the Spring Meeting in Tampa earlier this month saw this initiative
come to life through a number of events that served as particular reminders
of the importance of idealism to our profession and our profession's
dedication to public service. I would like those members who were not able
to attend the Spring Meeting to also be aware of some of the events that
took place in Tampa.
The keynote speaker at our Section Luncheon was Robert K. Goodwin,
President and CEO of The Points of Light Foundation. Mr. Goodwin gave a
truly inspirational address, speaking eloquently about the impact of
idealism on our profession. Also, as you will see below, we recognized the
2006 National Public Service Award winners who serve as excellent examples
of idealism in action.
The Committee on Pro Bono hosted a breakfast at which Bay Area Legal
Services provided vivid examples of how we as business law practitioners
can get involved in public service. The committee also sponsored a CLE
program on "Microfinance: Leveraging Capital to Reduce Poverty in
Developing Countries." The audio of this program will be available
free of charge through the Section website in the coming weeks. Attendees
had an opportunity on Saturday afternoon to personally get involved in a
public service project in Tampa by volunteering at a field-day-style event
organized for children temporarily living at The Spring of Tampa, a
domestic abuse shelter for women and children. It was an uplifting event
for both The Spring's clients and the attendees who volunteered.
Finally, attendees were asked to show their support for the ideals of our
profession by wearing an "I am an Idealist" button. On
Sunday afternoon, I went to brunch with a number of our Tampa area members.
One of our members was still wearing her button, and a server at the
restaurant asked her what it signified. She explained, in substance, that
we were attorneys and that one of the goals of the profession is to enhance
the ideals of the profession and its dedication to public service, and
explained further that the reason she was wearing the button was to let
people know that we as lawyers believe in the ideals of our profession.
The server responded in substance "That's really good." I hope
that as you move about in your hometowns, each of you will do and say
things that will cause members of your communities to look at what lawyers
are doing and also say "That's really good."
Thanks for an Excellent Spring Meeting
The 2006 Spring Meeting was a tremendous success. The beautiful city of
Tampa served as a fabulous host to 1642 attendees, making this the third
largest meeting in the Section's history. Special thanks to Nat Doliner,
David Gemunder, Len Gibert, and Lynn Howell for their excellent work on the
Host Committee.
Thanks to all of our sponsors, especially our Gold Sponsors, who helped make all this possible
The Section also congratulates our 2006 award winners...
Pro Bono Public Service Awards
The individual winner of the 2006 ABA Section of Business Law National
Public Service Award is David R. Punzak of the Carlton Fields law firm.
David is a partner in the Tampa office of Carlton Fields. David was
nominated by the staff and the Board of Directors of the Florida Community
Loan Fund ("FCLF"). David has donated several hundred hours of time to
FCLF, and has made himself available to FCLF without hesitation for over
eight years.
The law firm winner of the 2006 ABA Section of Business Law National Public
Service Award is the law firm of Skadden, Arps, Slate, Meagher & Flom LLP
("Skadden"). Skadden was nominated by the Lawyers Alliance for New York,
New York Lawyers for the Public Interest, and The Legal Aid Society (of New
York) in recognition of their many years providing business law and
transactional legal assistance to nonprofit organizations.
Jean Allard Glass Cutter Award
The Section recognized Dixie Johnson as the recipient of the Jean Allard
Glass Cutter Award. This award recognized Dixie's significant
contributions to the profession and the Section of Business Law,
professional excellence in her field, dedication to the work of the
Section, and work to advance opportunities for other women in the
profession and the Section.
If you attended the meeting and haven't had a chance to complete the online
Spring Meeting evaluation, please take a moment to do so by
clicking here.
As a reminder, materials from all the CLE programs in Tampa are available
in the Program Library and
the audio of all programs is available on CD or in MP3 format. Click here
for an audio recording order form.
And finally, plan now to attend the 2007 ABA Spring Meeting, March 15-18 in
Washington DC.
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Alvin W. Thompson
Chair, Section of Business Law
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Internal Investigations. In the post Sarbanes-Oxley world, Section
10A of the Securities Exchange Act of 1934 is creating greater pressure for
internal investigations at financial institutions.
Civil Penalties. Recently a federal banking agency had imposed a
substantial civil money penalty on a national bank operating subsidiary for
violating information security guidelines regarding customer information.
This article questions whether it is fair for a civil penalty to be imposed
for violating a general "guideline".
Arbitration Agreements. Arbitration clauses are common in corporate
agreements. Counsel should carefully consider the choice of law governing
the arbitration clause to avoid unintended consequences in the event a
dispute arises.
Self-Audit of Employment Practices. Corporations often find it
desirable to conduct a self-audit of employment policies and practices to
minimize the likelihood of employee claims and to limit potential
liability. If such self-audits are not conducted properly, privilege can be
lost and self-audits can become a roadmap for plaintiff's counsel.
Fiduciary Duties. The decision of the Delaware Court of Chancery in
the Disney case provides practical guidance for transactional
lawyers advising directors in connection with mergers, acquisitions and
other significant corporate transactions.
Private Placements in Canada. Recently Canada's provincial
securities regulators adopted National Instrument 45-106 to consolidate and
harmonize to a significant extent the provincial prospectus and dealer
registration exemptions that apply to private placements. Nonetheless
local exemptions remain and must be considered for private placements
offered in multiple provinces.
Valuation of Stock Options and Other Equity Compensation. New
Section 409A of the Internal Revenue Code imposes a 20% penalty on
non-qualified deferred compensation arrangements unless specific
requirements are met. Section 409A applies to not just traditional deferred
cash compensation plans, but to stock options issued at less than fair
market value at the time of grant. It is important for privately-held
companies to adopt reasonable valuation methods to avoid potential
liability for inaccurate tax reporting.
Employment Agreements and Severance Plans. Not only does new
Section 409A of the Internal Revenue Code result in potential liability for
in-the-money stock option grants, it also applies to certain employment
agreement and severance plans that do not meet specific requirements.
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On April 3, 2006 the Public Target M&A Deal Points Study
conducted by the M&A Market Trends Subcommittee of the Section's
Committee on Negotiated Acquisitions was released and is available to
Committee members, free of charge at:
http://www.abanet.org/dch/committee.cfm?com=CL560003.
This study analyzes
key negotiated deal points from publicly-available acquisition agreements
involving nearly 100 negotiated transactions in which the target was a
public company, providing key information on what is in fact "the
market" for deal terms in the acquisition of a public company. The
companion Private Target M&A Deal Points Study was released in
March and is also available, free of charge, to Committee members at the
same web address. These two studies are expected to become indispensable
resources for M&A lawyers.
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Committee Spotlight
To learn more about or join the committees that contributed to this month's practice points, just click on the committee name below.
Section members are eligible to join the Section's committees at no
additional cost. Become involved or simply stay in the information
flow. It's FREE!
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The goal of the Program is to increase the participation
of young lawyers in Section activities. The Section is committed to
investing dollars in young lawyers who are expected to participate actively
in the substantive work of the Section and to grow into future leadership
positions within the Section. The Program is designed not only to develop
future leaders of the Section but also to enhance the image of the Section
among members of the YLD in order to attract young lawyers into Section
membership. The Section will select five Fellows and will fund their
expenses to participate in Section activities for two years. Applications
are due June 1, 2006. For more information about the program, click here.
The goal of the Program is to increase the
participation of lawyers of color in Section activities. The Section is
committed to investing dollars in lawyers of color who are expected to
participate actively in the substantive work of the Section and to grow
into future leadership positions within the Section. The Program is
designed not only to develop future leaders of the Section but also to
enhance the image of the Section among members of the national minority bar
organizations in order to attract lawyers of color into Section membership.
The Section will select five Ambassadors and will fund their expenses to
participate in Section activities for two years. Applications are due June
1, 2006. For more information about the program, click here.
The Section is committed to encouraging the
participation of lawyers with disabilities in Section activities. To do so,
the Section's Committee on Diversity has created the Business Law Diplomat
Program designed to demonstrate that commitment and in the process, develop
future Section leaders, facilitate the full participation of lawyers with
disabilities in Section activities, and draw more lawyers with disabilities
into active membership. Applications are due June 1, 2006. For more
information about the program, click here.
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