Author: jfortenberry@fortenberrylaw.com

This article by Matt Marshall for the MercuryNews.com: “Top VC at odds with valley on options.” The article reports that Vinod Khosla, a very prominent and successful venture capitalist, has broken ranks with the rest of Silicon Valley and come out in favor of stock option expensing. He argues that requiring companies to expense stock options would “level the playing field for young private start-ups that he says are so important to the nation’s economy.”

Bloomberg.com reports here: “Intel, Dell May Award Fewer Options, More Cash to Pay Workers.”

And “The battle heats up over stock options” reports Paul Taylor for FT.com. The article points out the tension between FASB’s accounting proposals which would make stock options less appealing to employers and the tax advantages of stock options brought about by JAGTRRA.

Today’s Federal Register is here.

Read this article by James Dawn for the Toronto Star at TheStar.com for a pleasant surprise: “Fairy godmother bails out staff.” The story details how TransCanada PipeLines Ltd. of Calgary is dumping its defined contribution plan (“DC plan”) and reinstating employees in its defined benefit plan, at a cost of nearly $92,000 per employee. The article reports that the company is abandoning its DC plan due to poor perfomance by employees’ investments and also because it felt that the defined contribution plan contributed to a “culture of transience” and a “lack of loyalty.” The article reports that the company’s intent in taking this giant step is to “tie its highly skilled employees to their jobs and remove any distractions or concerns related to retirement income.”

“Fear of losing insurance keeps workers from moving on”: this article at SFGate.com on how health insurance coverage is affecting worker mobility.

The Washington Times has this article by Stephen Dinan: “House GOP seeks $82 billion tax cut.” The article reports that House Republicans will try to pass a $82 billion tax-cut bill today, “sending back to the Senate a much broader tax cut than the $10 billion bill senators passed last week.” The bill extends the $1,000 per child tax credit through 2010, eliminates the eligibility disparity between married couples and individuals in qualifying income for the child credit, and includes several smaller tax cuts for military families.

This article from the ABA Journal–“Court Surprises with Family Leave Act Ruling: Rehnquist Opinion Marks Exception in Trend Toward Empowering States” by David L. Hudson, Jr. The article discusses the May 27th U.S. Supreme Court case of Nevada Department of Human Resources v. Hibbs discussed previously in this post and reports that Georgetown law professor Nina Pillard, who argued for William Hibbs, was told by a colleague that she had a 95% chance of losing the case. The article reports Pillard as saying that a major significance of the case is that it is the first decision in which the court has upheld Congress’ power under Section 5 of the 14th Amendment since 1996 when the court ruled in Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996), that individuals were limited from suing states under various federal laws.

Attorneys who leave big firms to practice solo are highlighted in this article by Tania Anderson for Washington Business Journal at MSNBC.com: “Solo attorneys like their decision–For those who say big is better, solo attorneys offer a dissenting opinion.” (via MyShingle.com.)

This just in from Reuters: “Siebel shareholders vote against option expensing.” The article reports that TIAA-CREF’s proposal to tie executive compensation to performance was also defeated. Both items were discussed in an earlier post here today.

Ropes & Gray has published this article on the 11-K 906 Certification issue discussed here in previous posts.

AccountingWeb.com has this article (provided by CCH, Inc) regarding the tax implications of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (“JAGTRRA”): “Industry Sector Implications of Tax Cuts.”

In addition, today’s edition of the Wall Street Journal reports on important implications of JAGTRRA on margin accounts. The article discusses how investors who own margin accounts may be in for a surprise when they discover that the dividends they receive in these accounts may not be eligible for the new lower tax on dividends and refers us to the very helpful site for the Securities Industry Association (Wall Street’s trade group), SIA.com, which has a brochure explaining the implications of JAGTRRA. You can access the brochure here. Two more articles today in the Journal discuss JAGTRRA as well: “Tax Plan Puts Crimp in Short Selling” by Allison Bisbey Colter, and “New Law Leaves Recapture Tax Rate Unchanged” by Roy A. Smith.

Thanks Benefitslink for this article by Watson Wyatt at WatsonWyatt.com: “Ratification of U.S.-U.K. Tax Treaty Is Good News for Expatriate Employees.” As discussed here in previous posts, there is a growing movement of outsourcing to other countries, so that companies will have to grapple more and more with the tax treatment of pension benefits for expatriate employees. The article discusses how the United States has agreed under this treaty with the U.K. not to tax U.S. citizen employees working in the United Kingdom on their current benefit accruals or contributions to U.K. pension schemes. Apparently, according to the article, this is the first time the United States has agreed not to tax its citizens on foreign pension income.

McDermott, Will & Emery has posted an excellent article on the new proposed COBRA regulations.

Today’s edition of the Wall Street Journal has a very good article about a shareholder proposal for Siebel Systems, Inc., submitted by TIAA-CREF, that advocates stock options issued to Siebel senior executives be tied to the company’s performance. The article describes the battle that has been waged by TIAA-CREF over the proposal which will be voted on today. Another article at CBSMarketWatch.com reports that representatives of the American Federation of State, County and Municipal Employees union pension plan are picketing outside the shareholder meeting site today to register their complaints against Siebel’s stock option compensation for executives.