Rules for Executive Compensation

The federal securities laws require clear, concise disclosure about compensation paid to CEOs, CFOs, and certain other high-ranking executive officers of public companies.

Rules for executive compensation are governed by the federal securities laws. Several types of documents that a company must file regarding their executive compensation policies and practices should be organized within a company’s proxy statement, annual report on Form 10-K, within registration statements filed by the company established to register securities for sale to the public, and also should be contained within the company’s current report on Form 8-K.

In the annual proxy statement, companies must disclose information revealing the amount and type of compensation paid to its chief executive officer and the three other most highly compensated executive officers. Companies must also disclose the criteria used in reaching executive compensation decisions and the type of relationship existing between the firm’s executive compensation practices and company performance.

The cornerstone of the Security and Exchange Commission’s required discourse on executive compensation is The Summary Compensation Table (SCT). In a single location, the SCT provides a comprehensive overview of a company’s executive compensation practices. In larger multinational corporations, these can become somewhat complex in their structure, but will always bear a superficial resemblance to a flow chart. SCTs must include the total compensation paid the firm’s chief executive officer, chief financial officer, and three other most highly compensated officers for at least three previous fiscal years. The SCT is succeeded in order by other tables and precise disclosures containing increasingly detailed information about the various facets of compensation used during the most recently completed fiscal year. Essential to include are grants of stock options, stock appreciation rights, long-term incentive plan awards, pension plans, employment contracts, and related arrangements.

An additional component of a company’s executive compensation dossier is the Compensation Discussion and Analysis (CD & A). Functioning in the manner of an appendix, this section should explain all material elements of the relevant executive compensation programs not yet addressed.

Jack Zinda is an Austin business lawyer with Heselmeyer Zinda, PLLC. To learn more about Austin business attorney Jack Zinda visit Texasbusinessattorneys.net.

New Businesses Need Good Legal Representation

When starting a new business it’s critical to have effective legal representation.

While it may be nice to think about starting a new business and making a small fortune over a period of time, don’t forget the nuts and bolts of what makes a good business viable. One of those fundamental things is having access to a skilled business attorney who keeps the business on track.

A lot of first time entrepreneurs make the mistake of thinking they are able to handle their business affairs on their own. Unfortunately the bankruptcy statistics tell another story. It only makes good common sense to have a business attorney who is able to offer advice every step of the way as the venture grows. Without this kind of expertise, business owners may well find themselves in deep waters in mere months.

Some small business owners or would-be entrepreneurs wonder if they need to spend the time and money to find an attorney so early in the game. It may seem simple to try to handle things on your own but it gets complicated quickly. The problem is that there are many issues with any new business and these can only be answered by a competent business lawyer.

It’s a fact of business life that the laws that apply to running a business are often complex and confusing. Trying to muddle through the legal jargon is something best left to a highly qualified business attorney. While the attorney’s costs up front may be more than a business owner was thinking to spend, the long-term savings by following solid legal advice will more than make up for the initial outlay. A good business attorney is worth their weight in gold, not only for their skills, but for their invaluable knowledge.

Knowing the laws that govern a business is often a smart business move. This isn’t to say that as a business owner, there is a requirement to know the fine print in all situations. This is the business attorney’s forte. Running a business and trying to keep up with the various codes, restriction and laws is a headache best left to the attorney who deals with those items on a daily basis. Business lawyers are skilled in sifting through the morass of information and providing options in plain English.

Attorneys will coach a new venture in the differences in setting up a company as an S corporation, a partnership or another structure, or perhaps an LLC. Having the attorney provide the outline of which route would likely work best for the company being proposed, the entrepreneur has one more thing off their plate in setting up their business entity.

In light of today’s volatile business markets, entrepreneurs need the best advice available on how to set up their business. Only a fully qualified business attorney will fit the bill and deliver what the small business needs to start growing.

To learn more about Austin business attorney Jack Zinda visit Texasbusinessattorneys.net.

Employment Agreements Are Critical

If you run a business, never be without an employment agreement. It will be the best thing that you ever do to protect the business.

At one time people used to be hired to work somewhere with very little in the way of formal paperwork. Sometimes it was even just a handshake hiring where the employer’s word ruled and the employee did what was requested of them as part of their job.

These days the times have changed drastically, and in addition to it being essential to have an employment agreement, the workplace has changed to one where adversity and employment issues often seem to be the flavors of the month.

If you own and operate a business in the 21st century, one of the first things you will need to have in place is a binding agreement for work between your company and any executive you may choose to hire. The bottom line is that the person is agreeing to perform various services in trade for a wage. This kind of an agreement is not to be confused with an executive compensation agreement. The executive employment agreement, as outlined by an expert business attorney, is binding and once the agreement has been signed by both parties, they are promising to live up to the terms of the agreement.
Generally speaking an executive employment agreement has what is referred to as a recitals section that speaks to the purpose of the agreement. In most instances, the first recital refers to the company wanting to hire a certain person in an executive position, and that person wants to be hired in the position. In other words, although the language may be legal, the intent is straightforward enough.

Common elements usually found in an executive employment agreement are compensation and benefits offered, the term of employment, the duties to be performed by the executive, the duties the employer has to perform, a section dealing with keeping information confidential, a non-competition agreement and what happens in the event of termination clause.

Typically these types of agreements are best drafted with the assistance of a skilled business attorney who will outline the “must have” sections in agreements of this nature.

Jack Zinda is an Austin business lawyer with Heselmeyer Zinda, PLLC. To learn more about Austin business attorney Jack Zinda visit Texasbusinessattorneys.net.

The Helmet Saves Lives in Motorcycle Crashes

While it might not be the most chic apparel you will ever wear, a motorcycle crash helmet may save your life.

Most states have their own rules about helmets and if you have any questions about those laws, it is best to consult with a qualified motorcycle attorney with experience in this area. The laws are there for a reason, and that reason is to save lives, which may include yours. Of course if you happen to live in New Hampshire, Iowa, Illinois or Colorado there is no helmet law.

States that mandate riders must wear a full helmet are West Virginia, Washington, Virginia, Vermont, Tennessee, Oregon, North Carolina, New York, New Jersey, Nevada, Nebraska, Missouri, Mississippi, Michigan, Massachusetts, Maryland, Louisiana, Georgia, California and Alabama.

The other states have laws that exempt adult riders, meaning those that are 18 and over. Then there are seven states that insist adult bikers (18-20 years old) wear helmets. Texas is one of those states, which has raised some questions about possible discrimination issues.

Actually, the bottom line has nothing to do with discrimination, and everything to do with saving lives and protecting people from severe and debilitating injuries. The fact is that younger riders also do not have as much experience as older riders and tend to get into more crashes. It's similar to the fact that younger drivers, particularly males, tend to get into more auto accidents.

The major reason for wearing a helmet has to do with protecting the brain from coup and contrecoup injuries. DOT approved helmets act as a cushion and reduce the chances of your brain getting slammed about inside your skull. While the skull may be tough, the brain is the most fragile organ in the whole body, and thumping it around causes severe problems, often for the lifetime of the injured biker.

If you or a loved one has been involved in a motorcycle crash that was caused by someone else, whether you were wearing a helmet or not, you may be entitled to compensation for your personal injuries and damage to your bike. Consult with a highly skilled motorcycle crash attorney who knows how to get you the settlement you deserve.

Jack Zinda is an Austin business lawyer with Heselmeyer Zinda, PLLC. To learn more about Austin business attorney Jack Zinda visit Texasbusinessattorneys.net.

To Compete or Not to Compete, That Is the Question

Non-compete agreements have been a troublesome item to understand for many people. However they are relatively straightforward.

A great many people don’t truly understand the ramifications of a non-compete agreement, but if caught in a situation where the issue raises its head, they usually get the drift fairly quickly. It all boils down to the basic fact that a person selling a business agrees not to compete or participate with the buyer of that business in the same niche, area, industry or market for a certain period of time.

The long and short of it is this agreement is alternatively referred to as a covenant not to compete or a non-compete agreement. This document, provided it meets certain conditions, may be defined as an acquired intangible asset accruing to the buyer. Be aware that this means it will be subject to cost recovery requirements from the IRS.

These agreements are far more common than people think, and it is customary when a business buyer and business seller iron out the terms of their agreement that they include a non-compete agreement. It’s a smart thing to do if it may be amortized for cost recovery for federal tax purposes.

The business of buying an enterprise generally breaks down into asset classifications: hard and soft assets. The hard assets are things like the equipment on the premises, etc, and the soft assets are intellectual property, the goodwill of the business and the non-compete agreement (often also called a covenant). The difficult task for the buyer often becomes trying to evaluate the price of the non-compete agreement. This has to do with the IRS mandating that intangible assets have to be depreciated over 15 years – much longer than those tangible assets.

Figuring out precisely what the non-compete agreement is worth is a headache of monumental proportions if done alone without the expert guidance of a skilled business attorney. In general the attorney will assist the buyer in determining how much damage the seller may be able to inflict on the buyer’s new business without a non-compete agreement. If the term confusion comes to mind, it’s time to speak with an expert business attorney and get on with running the business.

To learn more about Austin business attorney Jack Zinda visit Texasbusinessattorneys.net.

Defective Drugs Take Their Toll

Anyone who has been made sick by taking a drug with ghastly side effects knows full well they can take their deadly toll.

Getting sick means putting your trust in the hands of doctors, pharmacists and drug manufacturers. Sometimes that trust is betrayed in a way that results in serious injuries or death by taking defective drugs. If someone takes a defective drug, there are product liability laws designed to hold people responsible.

A defective drug is one that has severe adverse side effects. "It isn't only a prescription drug, it may also be one sold over the counter," indicated Jack Zinda, a partner at the law firm of Heselmeyer Zinda PLLC, in Austin, Texas.

In some instances, drug companies know about the side effects and market the drug anyway. In other cases, they find out about the side effects later and either choose to keep the drug on the market, or have it recalled by the Food and Drug Administration (FDA).

"The bottom line in cases involving a defective drug is that if the drug caused harm to a person, and the drug company knew about the dangerous side effects and chose to do nothing, they may be found liable for the consequences," added Zinda. Drug companies are responsible to test their drugs for side effects before taking them to market. Additionally, they are required to advise people about those side effects.

"Despite the fact that the U.S. FDA is mandated to safeguard public safety and health, there are far too many instances where defective drugs with deadly side effects are approved and remain on the market despite reported severe drug reactions and deaths," stated Jack Zinda, a partner at the law firm of Heselmeyer Zinda PLLC, in Austin, Texas.

The FDA doesn’t have enough manpower to keep track of all the drugs brought to the marketplace, and they often find out about the side effects later. This is often too late for people who took the drug(s) believing that they were safe.

If faced with a situation where a drug has caused devastating side effects or death, contact a defective product attorney post haste and have the case assessed. Jack Zinda, partner at the law firm of Heselmeyer Zinda PLLC, in Austin, Texas, handles these types of cases.

Jack Zinda is an Austin personal injury lawyer. To learn more about Austin injury lawyer Jack Zinda visit Hzfirm.com.

Pssst, the Secret Is Out

When a trade secret gets out or is stolen, the ramifications are enormous; proof positive that trade secrets are valuable assets to be protected.

If you haven’t seen the news in the last little while, you may be astounded at the damage awards in two controversial trade secret cases. One in California came in with a jury verdict of $36.3 million in damages in a trade secret and breach of contract case. In Georgia, there was another settlement of $37.3 million. There may be another chapter written in both of these cases, as they may be appealed.

Having said that, the staggering amount of the awards serves to point out something very important to the business community – trade secrets are invaluable to businesses. The fact is that companies with trade secrets they don’t want to lose to another company need to ensure they are protected through non-disclosure agreements (NDA). There is more than one way to protect secrets and it’s for this reason that an expert Austin business lawyer is the best person to turn to when those secrets need to be kept.

Non-disclosure agreements are not standard, run of the mill pieces of paper that an employee signs. They are, in most instances, tailor-made for a specific situation and in some instances for the people who need to sign them. No business should consider operating without a non-disclosure agreement if they have trade secrets that are critical to their industry. For this reason they need to discuss with the lawyer the categories of individuals who need to become acquainted with an NDA as a prerequisite of their employment.

Within and outside of any corporation there are a wide variety of individuals who may have access to a trade secret, and those include, but are not limited to employees, consultants, customers, suppliers, other existing or potential partners and angel investors or merger and/or acquisition aspirants.

Struggling to keep a lid on that secret is of primary importance to the company who will need to consider other methods of secrecy such as encrypted password protection, storing critical material under lock and key, limiting distribution of the crucial information and reminding employees frequently that they need to keep what they know to themselves.

Ironically, many a company that does have secrets to keep finds themselves in the position of wanting to hire someone who used to work for their competitors. This potentially awkward scenario is best addressed by having the new employee sign specific employment agreements to not divulge what they know. Obviously this would be a sticky situation that may have the potential to blow up later should the worker choose to talk about what they know despite having an agreement in place.

Often when an employee is leaving a company and has had access to trade secrets, they need to consider how to handle the potential possibility of being sued for leaking those secrets. Whether or not they are going to work for the competition or start their own business, if they’re smart, they need to have a clear understanding in writing about what they may take when they leave. The trick of course is living up to that agreement.

Jack Zinda is an Austin business lawyer with Heselmeyer Zinda, PLLC. To learn more about Austin business attorney Jack Zinda visit Texasbusinessattorneys.net.