ALI-ABA Course of Study Executive Compensation: Strategy, Design, and Implementation June 19-20, 2008 New York, New York PROGRAM FACULTY PARTICIPANTS TABLE OF CONTENTS Page ix xi STUDY MATERIALS 1. Overview of Executive Compensation and Director Compensation Practices and Trends By Steven E. Hall 2. Section 409A Compliance Employment and Severance Arrangements By Daniel L. Hogans 3. Section 409A What Will Violations Cost and What Can Be Expected of the Correction Program? By David A. Mustone 4. The Compensation Committee Process: What Has Changed? What's a Best Practice? By Pamela Baker and Jeannie Leahy 5. Equity Compensation in Corporate Transactions By Susan P. Serota and Peter J. Hunt 6. Accounting Issues Update By Nick Bubnovich and Steven A. Seelig 7. Executive Compensation Litigation 79 By John L. Utz Table of Contents 80 Study Material 85 Appendix A: CEOs Beware: Don't Overreach in Comp Negotiations 241 Appendix B: Tell the Truth! 243 Appendix C: Mouse-Proofing Noncompetes 245 Appendix D: Nonqualified Plan Disputes: The Importance of Process, Precedent and Intent 248 Appendix E: Disclosure of Executive Misconduct: Defamation and Contract Claims 250 Appendix F: Arbitration of Executive Disputes: Benefit Eligibility 252 Appendix G: Changing Stock Plan Administrators: Handling the Transition 254 Appendix H: Forfeiture of Nonqualified Benefits for Violating Noncompete: Burden of Proof 257 1 9 25 33 41 65 vii
Appendix I: Option Exercise Following Termination of Employment: Employment Agreement Which Conflicts with Option Agreement 258 Appendix J: Stock Options: The Power of the Plan Document 260 Appendix K: Termination Without Cause?: Written Notice Requirement Saves Employer Severance Pay 262 Appendix L: Implied Right to Reduce Deferred Compensation for Bad Behavior 264 Appendix M: Stock Options: Blackout Necessary under Securities Laws 267 Appendix N: Executive Compensation and Bankruptcy: Retention Payment Rules 269 Appendix O: Stock Option Backdating and Spring-Lodading: Ominous Signs for Directors 271 Appendix P: Executive Misconduct: Recovering Amounts from Beneficiary Following Death 274 Appendix Q: SERP Compensation Definition: Counting Severance Pay 276 Appendix R: SOX Section 304 Clawbacks for Backdated Options 278 Appendix S: Top-Hat Plans: Appeals Court Rejects Department of Labor Standard 281 8. The New Disclosure Rules: What Changed from Round One? By Mark A. Borges and Anne Krauskopf 9. Thoughtful Pay Alert By Mark A. Borges 10. Baker--New Merger & Acquisition Issues for Executive Compensation Practitioners.ppt (Handout) By Pamela Baker 11. Late Breaking Developments in Executive Compensation (Handout) By A. Richard Susko 12. Section 409A-SERPs, 401(k)Wrap Plans and Other Nonqualified Retirement Arrangements: What Are the Design Issues and How to Cope With Them (Handout) By Stuart M. Lewis 13. SERP Plans Outline of Issues (Handout) By Stuart M. Lewis 14. A Road Map for Complying with the Final Regulations Under Code Section 409A (Handout) By Keith A. Mong 15. Can We Expect New Templates for Executive Severance and CIC Agreements Due to Shareholder Activism and/or IRC 162(m) and 409A Impacts? (Handout) By Brian T. Foley 16. "Say on Pay" Shareholder Proposals (Handout) By Ronald O. Mueller 17. Executive Compensation Litigation.ppt (Handout) By John L. Utz viii 283 293 299 313 339 347 351 407 463 491
ALI-ABA Course of Study Executive Compensation: Strategy, Design, and Implementation June 19-20, 2008 New York, New York PROGRAM Thursday, June 19, 2008 8:00 a.m. Registration and Continental Breakfast Webcast Segment A 9:00 a.m. Overview of Executive Compensation and Director Compensation Practices and Trends Mr. Hall 9:45 a.m. Section 409A - Drafting an Employment Contract under the New Rules Ms. Morrison and Messrs. Hogans and Schmidt 10:45 a.m. Networking Break 11:00 a.m. Section 409A SERPS, 401(k) Wrap Plans and Other Non-Qualified Retirement Arrangements: What Are the Design Issues and How To Cope with Them Ms. Morrison and Messrs. Lewis and Schmidt 11:45 a.m. Section 409A What Will Violations Cost and What Can Be Expected of the Correction Program? Ms. Morrison and Messrs. Mustone and Schmidt 12:30 p.m. Lunch Break Webcast Segment B 2:00 p.m. Can We Expect a New Template for Executive Severance and Change of Control Agreements? Scope and Design of Severance in the Teeth of Shareholder Activism and Section 409A Mr. Foley 2:45 p.m. New Merger and Acquisition Issues for Executive Compensation Practitioners Ms. Baker 3:30 p.m. Networking Break 3:45 p.m. Executive Compensation Accounting Issues Messrs. Bubnovich and Seelig 4:30 p.m. Questions and Answers 5:00 p.m. Adjournment for the Day Friday, June 20, 2008 8:30 a.m. Continental Breakfast Webcast Segment C 9:00 a.m. Executive Compensation Litigation Mr. Utz 10:00 a.m. Late Breaking Developments Mr. Susko 10:45 a.m. Networking Break 11:00 a.m. Say on Pay (What Can We Learn From the Foreign Experience) and the Most Popular Other Shareholder Proposals Mr. Mueller 12:00 noon Questions and Answers 12:30 p.m. Lunch Break ix
Webcast Segment D 2:00 p.m. New Disclosure Rules: What Changed from Round One? Mr. Borges and Ms. Krauskopf 3:15 p.m. New Disclosure Rules: From the Public and Investor Point of View Mss. Baker and Yerger 3:45 p.m. Networking Break 4:00 p.m. The Compensation Committee Process after the Option Fiasco: What Has Changed Mss. Baker and Leahy 4:30 p.m. Questions and Answers 5:00 p.m. Adjournment Note: The discussions include at least one full hour on ethics and professional responsibility issues, accepted as such by most, but not all, MCLE jurisdictions. Total 60-minute hours of instruction: 12 x
ALI-ABA Course of Study Executive Compensation: Strategy, Design, and Implementation June 19-20, 2008 New York, New York PLANNING CHAIRS Max J. Schwartz, Esquire Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004 Scott P. Spector, Esquire Fenwick & West LLP 801 California Street Mountain View, CA 94041 FACULTY Pamela Baker, Esquire Sonnenschein Nath & Rosenthal LLP Suite 7800, Sears Tower 233 South Wacker Drive Chicago, IL 60606 Mark A. Borges, Esquire Compensia, Inc. Suite 207 770 Tamalpais Drive Corte Madera, CA 94925 Mr. Nick Bubnovich Watson Wyatt Worldwide Suite 2100 191 N. Wacker Drive Chicago, IL 60606 Mr. Brian T. Foley Managing Director Brian T. Foley & Company, Inc. Suite 411 1 North Broadway White Plains, NY 10601 Mr. Steven E. Hall Managing Director Steven Hall & Partners, LLC 6th Floor 645 Fifth Avenue New York, NY 10022 Daniel L. Hogans, Esquire Morgan Lewis & Bockius LLP Room 4028 1111 Pennsylvania Avenue, NW Washington, DC 20004 Anne Krauskopf, Esquire Senior Special Counsel Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Jeannie Leahy, Esquire Managing Counsel Hewlett-Packard Company MS 1050 3000 Hanover Street Palo Alto, CA 94304 xi
Stuart M. Lewis, Esquire Buchanan, Ingersoll & Rooney PC Suite 300 1700 K Street, N.W. Washington, DC 20006 Helen H. Morrison, Esquire Acting Deputy Benefits Tax Counsel Office of Benefits Tax Counsel U.S. Department of the Treasury Room 4124 1500 Pennsylvania Avenue, NW Washington, DC 20220 Ronald O. Mueller, Esquire Gibson, Dunn & Crutcher LLP Suite 900 1050 Connecticut Avenue, NW Washington, DC 20036 David Albert Mustone, Esquire Hunton & Williams LLP Suite 1700 1751 Pinnacle Drive McLean, VA 22102 Steven A. Seelig, Esquire Executive Compensation Counsel Watson Wyatt Worldwide 901 North Glebe Road Arlington, VA 22203 A. Richard Susko, Esquire Cleary Gottlieb Steen & Hamilton LLP 36th Floor One Liberty Plaza New York, NY 10006 John L. Utz, Esquire Utz Miller Kuhn & Eickman LLC Suite 320 7285 West 132nd Street Overland Park, KS 66213 Ms. Ann Yerger Executive Director Council of Institutional Investors Suite 500 888 17th Street, NW Washington, DC 20006 William C. Schmidt, Esquire Senior Counsel Office of Division Counsel Associate Chief Counsel Tax Exempt and Government Entities Executive Compensation Branch Internal Revenue Service Room 4016, CC:TEGE:EB:EC 1111 Constitution Avenue, NW Washington, DC 20224 xii