September 2012

CONTRIBUTED BY

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Andrew Ledbetter
andrew.ledbetter@dlapiper.com
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Sanjay Shirodkar
sanjay.shirodkar@dlapiper.com

The SEC recently issued new rules requiring various disclosures concerning “conflict minerals” that originate in the Democratic Republic of the Congo (DRC) or an adjoining country. 

After considering thousands of comments and conducting a public roundtable, the SEC adopted (by a narrow 3 – 2 vote) new rules and a new form relating to the use of conflict minerals.  The new rules apply to substantially all issuers that file reports under Section 13(a) or Section 15(d) of the Exchange Act and impose additional disclosure requirements on issuers that use conflict minerals in, or to produce, their products.  Because the rules apply broadly to public companies, they are also important for private companies with aspirations of becoming public.

The reporting requirements are based on a three-step analytic process, with each step building on the prior step.  Depending on the outcome of the three-step analytic process, an issuer may have to submit a report to the SEC that includes a description of the measures it took to exercise due diligence on the conflict mineral’s source and chain of custody. To facilitate the new disclosure required by the rules, the SEC has also adopted a new Form SD.Continue Reading SEC Conflict Minerals Rules Impact Many Public Companies

CONTRIBUTED BY

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Tyson Harper
tyson.harper@dlapiper.com 
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John Wolfe
john.wolfe@dlapiper.com

Everyone knows that if your company is being sued (or wants to sue somebody else), then they need the assistance of a qualified litigator.  But there are several other important points in the life of a startup where a visit to your friendly neighborhood litigator is an excellent idea, and can help your company avoid unnecessary legal headaches down the road.  This is especially helpful when the litigator works hand-in-glove with your corporate and transactional counsel to predict and prevent problems, including at the following six key events in your business:

1. Contract/Deal Formation:  Are your service providers, vendors, or business partners asking for special terms, exclusivity deals, or most-favored-nation clauses?  Should your contracts include an arbitration clause and, if so, on what terms?  Experienced litigators have seen a thousand ways that a contract can go wrong, and business-savvy litigators can quickly shape contract language to prevent problems without slowing down the deal.  Continue Reading When Should My Startup Get a Litigator Involved?

DLA Piper is currently fielding its 2012 DLA Piper Technology Leaders Forecast Survey, which examines the thoughts and opinions of technology, private equity and venture capital leaders on a range of critical issues impacting the technology sector.  The survey includes these topics:

  • Who will win the Presidential election? 
  • What impact will the election result have on policy and the tech economy? 
  • What impact could the “Fiscal Cliff” have on the global economy? 
  • How will China’s role in the technology industry evolve? 
  • What are the most promising and challenging areas

…
Continue Reading Take our Survey – 2012 Tech Leaders Forecast

Many severance and other compensation arrangements provide for payment only if and when the employee signs a release of claims and the release has become irrevocable.

For a general release of claims to be valid under federal employment law, the employer may be required to give the employee a specified number of days to consider the release and then an additional period of time in which to revoke the release after signing it.

The IRS believes that a release contingency for payment of severance or other deferred compensation could violate Section 409A of the Internal Revenue Code if not drafted correctly.

The IRS has given employers until the end of this year to correct the release contingency language in arrangements subject to Section 409A.Continue Reading December 31 is IRS deadline to correct Section 409A violation due to severance conditioned on release of claims

Batts, Ed_Headshot.jpgCONTRIBUTED BY
Ed Batts
ed.batts@dlapiper.com

Managing leadership succession in the misnomered “merger of equals” or the more common combination of two large public companies of different sizes can often be tricky. To the extent that both the buyer and the target agree that one or more members of a target’s management team are to transition to management positions in the combined company, merger contracts often specify who shall become what.

But such provisions are rarely drafted to be effective for any period of time beyond the closing. Further, buyers are loath…

Continue Reading When Public Companies Combine – Managing Leadership Succession

CONTRIBUTED BY
Trent Dykes and Kerra Melvin

Selling your company can be an exciting and overwhelming process. In addition to the complexity of negotiating the terms of your merger or asset sale, you will inevitably be bombarded with tons of deal-related jargon. Enter one such term, Internal Revenue Code (IRC) Section 280G (280G) or the “golden parachute payment” rules, a federal tax provision that comes into play when there is a change in control of a corporation. 280G impacts both the corporate entity and its executives, shareholders, and other “highly compensated individuals” associated with the corporation and imposes harsh tax consequences if not properly addressed. This post will provide a high-level summary of 280G, discuss when 280G applies, ways to avoid 280G liability, and how to calculate individual tax liability (under IRC § 4999) if 280G does apply.Continue Reading Understanding Section 280G and Golden Parachute Payments