Businesses Looking For Investment Without Registration Should Ensure Accredited Investor & Other Security Practices Up-To-Date

Public companies trading on national securities exchanges may need to update proxy disclosures on the use of consultants and adjust Board compensation committee practices in response to new rules implementing Section 10C of the Securities and Exchange Act (SEC) enacted as part of the the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) to retain their company’s listing on a national securities exchanges.

New rules published by the SEC today (June 27, 2012) require the national securities exchanges and national securities associations to prohibit the listing of any equity security of an issuer that is not in compliance with the compensation committee and compensation adviser requirements of Section 10C of the Securities Exchange Act of 1934 (SEA), enacted under Dodd-Frank.

Among other things, New Rule 10C–1 available for review here (Rule 10C-1):

  • Directs the national securities exchanges to establish listing standards that, among other things, require each member of a listed issuer’s compensation committee to be a member of the board of directors and to be ‘‘independent,’’ as defined in the listing standards of the national securities exchanges adopted in accordance with the final rule; and
  • Amends the SEC’s proxy disclosure rules concerning issuers’ use of compensation consultants and related conflicts of interest.

Issuers must comply with the disclosure changes in Item 407 of Regulation S–K in any proxy or information statement for an annual meeting of shareholders (or a special meeting in lieu of the annual meeting) at which directors will be elected occurring on or after January 1, 2013.

Rule 10C-1 also requires each national securities exchange and national securities association to provide the SEC proposed rule change submissions that comply with the requirements of Exchange Act Rule 10C–1 by September 25, 2012.  Additionally, each national securities exchange and national securities association must have  final rules or rule amendments that comply with Rule 10C–1 approved by the Commission no later than June 27, 2012.

Public companies should act quickly to ensure that their current compensation review, establishment, reporting, shareholder appoval, and other requirements  Dodd-Frank. 

If your business needs help planning for or managing the legal or operational risks associated with these activities or business management, human resources, corporate ethics, and compliance practices, or other related challenges or opportunities, please contact the author of this  article, attorney Cynthia Marcotte Stamer.

Ms. Stamer is experienced with assisting businesses and other organizations, their leaders, bankruptcy creditors and trustees, investors, purchasers and others about performance, change and risk management and other related concerns involved with distressed businesses or benefit plans, bankruptcy and restructuring transactions and other corporate or business management related events. Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a Joint Committee on Employee Benefit Council Member, Ms. Stamer has advised and represented these and other business clients on employee benefit, labor and employment, compensation, employee benefit and other personnel and staffing matters for more than 24 years. Her experience includes significant experience representing and advising clients about the planning, implementation, risk management and defense of reductions in force and other labor and employment, employee benefits, compensation, insurance, compliance and other concerns affecting transactions involving bankrupt or distressed corporations. Ms. Stamer also speaks and writes extensively on these and other related matters. Among her many publications are her recent November, 2009 publication, Calculation of Minimum Contributions Required For Single Employer Pension Plans: The Final Rules for The Measurement of Assets and Liabilities For Pension Funding Purposes under Final Treasury Regulation Section 1.430(d)” and A Proactive Approach To Hr And Benefits Planning For Mergers, Acquisitions, Downsizing, Reengineering And Other Organizational Changes.” Persons interested in a copy of either of these publications may contact Ms. Stamer. For more information about Ms. Stamer and her experience see

We hope that this information is useful to you.  Solutions Law Press offers a variety of updates, publications, training and other resources to help its businesses and their leaders meet their legal and operational challenges.  If you or someone else you know would like to receive future updates about developments on these and other concerns, please register at  If you or someone else you know would like to receive future updates about developments on these and other concerns, please register at here.

©2012 Solutions Law Press.  All rights reserved.

About Cynthia Marcotte Stamer

Management attorney and operations consultant Cynthia Marcotte Stamer uses a client objective oriented approach to help businesses, governments, associations and their leaders manage people, performance, risk, legislative and regulatory affairs, data, and other essential elements of their operations.
This entry was posted in Bankruptcy, CEO, D&O, Director Liabiloity, Employment, Internal Controls, Reengineering, Shareholder Liability, Tax, Uncategorized and tagged , , , , , , , . Bookmark the permalink.

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