Upload
armstrong-teasdale
View
243
Download
0
Embed Size (px)
DESCRIPTION
As a business owner, you are a special breed -- unafraid to dream big and take risks, despite being faced with numerous laws and regulations. Whether planning, starting or operating an existing family or closely held business, you need to stay grounded to both boost sales and limit your liability. As you review, you will gain insights and practical guidance to grow and protect your business. Subjects discussed are: -Tools for protecting the family's equity interests -Protecting patents, trademarks, and copyrights -Protecting against unfair competition -Avoiding employment law claims and suits
Citation preview
© 2013 Armstrong Teasdale LLP
© 2013 Armstrong Teasdale LLP
The Importance of Being Earnest How to Dodge Legal Pitfalls that Confront Family and Closely Held Businesses
Bob Kaiser, Jennifer Hoekel, Steve Pozaric, Bill Corrigan
October 30, 2013
© 2013 Armstrong Teasdale LLP
© 2013 Armstrong Teasdale LLP
Evading Employment Law LandminesBob KaiserOctober 30, 2013
© 2013 Armstrong Teasdale LLP
Things You Need to Say Out Loud 99% of Lawsuits are controllable before the
plaintiff files suit. I Don’t Want the Government in My Business. My Employees Know their rights and they all
have Lawyers. The Courts Don’t Really Want to Run My
Business. I Don’t Want to Invite them In.
© 2013 Armstrong Teasdale LLP
Sexual Harassment Fix the Problem before the Court makes you Have Clear and Understandable Policies Follow them Make sure your Supervisors do, too
© 2013 Armstrong Teasdale LLP
Americans with Disabilities Act Engage in the “Interactive Process” Create a record of trying to help the
disabled person do the job.
© 2013 Armstrong Teasdale LLP
Hiring and Firing Tell the truth and nothing but the truth,
even when your goal is to “protect” the applicant or employee from the truth.
Make sure your documents tell the same story you do
Invest the time and energy in your investigation
© 2013 Armstrong Teasdale LLP
© 2013 Armstrong Teasdale LLP
Protecting Your Business with Patents, Trademarks and Copyrights
Jennifer HoekelOctober 30, 2013
© 2013 Armstrong Teasdale LLP
Patents Consists of a set of exclusive rights granted
to an inventor for limited duration In exchange for the public disclosure of an
invention. Utility patent v Design patent
© 2013 Armstrong Teasdale LLP
Copyrights Gives the creator of an original work
exclusive rights for a limited time (decades). Registered at the Library of Congress
© 2013 Armstrong Teasdale LLP
Trademarks A distinctive name, word, phrase, logo,
symbol, design, image, or a combination Identifies source Unlimited duration Applied for at the USPTO
© 2013 Armstrong Teasdale LLP
© 2013 Armstrong Teasdale LLP
Protecting Your Equity in the BusinessSteve PozaricOctober 30, 2013
© 2013 Armstrong Teasdale LLP
The Issue:
Alignment of Incentives: • A desire to reward key members of
management (other than the founders or family members) based on the success of the business.
The “easy” solution: • Equity stake in the company.
© 2013 Armstrong Teasdale LLP
Equity Ownership includes a Bundle of Rights
Economic Rights
Notice and Voting Rights
Information and Inspection Rights
Fiduciary Duties
© 2013 Armstrong Teasdale LLP
The Challenges Two main challenges:
• What powers or rights do you really want to give these individuals if they own equity?
• What to do when these individuals leave the business (voluntarily or not) or are impacted by events such as divorce?
© 2013 Armstrong Teasdale LLP
Tools to Protect Family or Founder Equity Mechanisms to issue equity:
• Restricted stock grants or purchases
• Stock options
© 2013 Armstrong Teasdale LLP
Tools to Protect Family Equity (con’t) Mechanisms to control rights
• Separate class of equity for non-Family holders/Founders to vary economic, voting and other rights
• Shareholder Agreements−Voting agreements / trusts; appointment of
directors and managers by certain equity holders
−Transfer Provisions
© 2013 Armstrong Teasdale LLP
Transfer Provisions Typical Transfer Restrictions and Obligations
• General restriction on transfer except pursuant to the agreement
• Permitted transfers to controlled entities and trusts, so long as control is maintained
• “ROFR” (Right of First Refusal) • “Drag Along” Rights – sale of company /
control; typically coupled with a “Tag Along” right
© 2013 Armstrong Teasdale LLP
Transfer Provisions Automatic Repurchase Option Triggers
• The “Four D’s” – death, disability, discharge, divorce• “Non-sale” transfers – bankruptcy, insolvency,
creditor action, dissolution• “Non-permitted transfers” – attempted transfers in
violation of restrictions or other breaches of agreements or duties
Price is often variable based on the type of event• It is often discounted in the event of discharge “for
cause” or some other breach / wrongful act scenario
© 2013 Armstrong Teasdale LLP
Alternatives to Equity Goal - Provide Economic Rewards without Equity-
based Rights
• Incentive Bonus Plans based on Company and/or Individual Performance
• Phantom Stock Plans /Equity Incentive Units
• Stock Appreciation Rights Plans
© 2013 Armstrong Teasdale LLP
Remember: Important to review current structure before
granting equity interests to new holders; the current agreements may not be appropriate for a non-Family/founder equity holder
Consider the tax and accounting impacts to the Company and the recipient
© 2013 Armstrong Teasdale LLP
© 2013 Armstrong Teasdale LLP
Protecting Your Trade Secrets
Bill CorriganOctober 30, 2013
© 2013 Armstrong Teasdale LLP
Trade SecretsProtecting Your Trade Secrets What Are They?
1. Economic value2. Not generally known3. Reasonable measures taken to keep
confidential
© 2013 Armstrong Teasdale LLP
Trade SecretsCase Pending in Missouri Supreme Court Central Trust and Investment Co. v.
Signalpoint Asset Management, LLC, et al.
Oral Argument – 11/13/13
© 2013 Armstrong Teasdale LLP
Trade Secrets Practical Considerations to Protect Trade Secrets
1) Confidentiality agreement2) Confidentiality policy – employee handbook3) Employee exit interview checklist4) Follow-up letter to departing employee5) Non-compete agreements
© 2013 Armstrong Teasdale LLP
Trade SecretsNon-Compete Agreements and Unfair Competition
• When are they enforceable?
• Recent Missouri Supreme Court decision
• Defenses to the enforcement of a non-compete
© 2013 Armstrong Teasdale LLP
Trade SecretsMisappropriating Computer Data
• The Missouri Act
• The Federal Computer Tamper Act
© 2013 Armstrong Teasdale LLP
Questions?William Corrigan, Jr.314.342.4105 [email protected]
Jennifer Hoekel314.342.4162 [email protected]
Robert Kaiser314.342.4153 [email protected]
Steve Pozaric314.552.6643 [email protected]