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MEMBERSHIP
The
SCribe newsletter has been provided to you compliments of the
Software Council of Southern California. Join now to experience
all of the benefits of membership.
If
you are interested in more benefits of becoming a member, click
here or call the Software Council at (310) 325-4000.
VENTURENET
CALL FOR APPLICATIONS
The VentureNetSM conference is Southern
California's leading information technology fundraising platform
for growth companies with the potential to create superior shareholder
value. The past eight VentureNet conferences have cumulatively
helped companies raise over $75 million.
Why present at the conference? Because you get the unique opportunity
to reach an audience that at past
VentureNet conferences has included all venture capital firms
in Southern California, numerous venture capital firms from Northern
California and elsewhere in the country, angel groups, individual
angel investors, and investment bankers. The conference also attracts
the most influential opinion-leaders in Southern California's
technology industry, including accounting firms, law firms, banks
and executive recruiters.
All told, you get to talk directly to the who's who of Southern
California's information technology industry.
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ARE
YOU TAKING ADVANTAGE OF THESE SOFTWARE COUNCIL MEMBERSHIP BENEFITS?
Job
Bank/Employment Center
- This week we launched a new job bank that allows Software
Council member organizations to post management to CXO-level
job openings. Postings are provided at no charge to Software
Council member companies (a $250 value). Alert your Human Resources
staff of this new service. Submit listings online at http://www.scsc.org/resources/jobbank/postajob.html.
Resource Center - The Software Council Resource
Center is now accepting new submission applications. Our resource
collection includes white papers, articles, surveys, presentations,
Website links, and other materials of interest to members of the
software community and the media. If your organization has a white
paper, article, or other qualifying resource that should be getting
more exposure and attention, apply to have it listed in our Resource
Center. Please review our submission
guidelines for qualification requirements and acceptance criteria.
STOCK
PLANS: WHICH ONES WILL PASS THE INVESTOR TEST?
By
Tim Lovoy, Partner, Deloitte & Touche LLP
The
lavish use of stock-option grants that once made millionaires
out of ordinary tech workers is now producing legions of dissatisfied
shareholders. The reason is dilution. The number of options
granted and shares available for future grants - the overhang
- has risen, putting a bigger dent in per-share earnings and
slicing employees a bigger share of the company's future value.
At the same time, exchange-listing rules adopted earlier this
year give shareholders the power to block new plans or changes
in existing ones. We would expect that the bigger the overhang,
the greater the chance that a new stock-based compensation plan
will be voted down by shareholders.
What Companies Can Do
At first glance it appears that options, the preferred stock-plan
model up to now, are on the way out. They are, indeed, under
attack on multiple fronts. The Financial Accounting Standards
Board (FASB) is moving to require that they be expensed at fair
market value, thus taking away their current accounting edge
over other forms of compensation. Several high-profile companies
have recently dropped them in favor of restricted stock units.
Consider the overhang concerns and rising shareholder activism,
and one might wonder if options have any future at all.
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SARBANES-OXLEY
- WHAT PRE-IPO COMPANIES NEED TO KNOW*
By Marc Alcser and Brent Triff of Stradling Yocca Carlson &
Rauth
The Sarbanes-Oxley Act of 2002, signed into law by President
Bush on July 30, 2002, represents a groundbreaking set of rules
and regulations regarding corporate governance and financial
reporting. The Sarbanes-Oxley Act of 2002-or the "Act"
for short-was a response to recent corporate and accounting
scandals.
Since
the Act was signed into law, the Securities and Exchange Commission,
under the authority of the Act, has released an extensive array
of rules and regulations, the bulk of which are applicable,
primarily, to public companies. Additionally, the stock exchanges
have each changed their listing standards in response to the
Act's requirements.
Private companies, however, are not immune from the Act.
Some
parts of the Act apply to private companies right now. Other
parts, though not currently applicable, will start to apply
to private companies the moment they file for an initial public
offering, or an "IPO." This article summarizes certain
aspects of the Act currently applicable to private companies,
as well as some of the steps a company should take if it's contemplating
"going public" or being acquired in the future.
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HOT
EMPLOYMENT ISSUES FOR SOFTWARE COMPANIES
By Stacey McKee Knight & Jeremy Gray, Partners, Katten
Muchin Zavis & Rosenman
As a parting shot to California employers, Governor Davis signed
a series of laws expanding employees' rights and creating new
challenges for businesses operating in this State. In addition
to the well publicized legislation that requires California employers
to provide their employees with health care coverage, the outgoing
Governor also armed every employee with a private right of action
to enforce California's Labor Code. Labor Code section 2698 -
- the so-called "bounty hunter" statute - - empowers
employees to bring a civil action on behalf of themselves and
all other employees for any violation of California's wage and
hour laws. The best (and perhaps only) defense to this devastating
new weapon is full compliance with the Labor Code, i.e. even with
the comparatively inconsequential rules governing matters such
as posting and pay stub regulation. The Legislature also created
new protections for employees who report suspected illegal conduct
to law enforcement and mandated reciprocity in benefits to domestic
partners. While an exhaustive discussion of every new California
law is beyond the scope of this article, the following provides
a summary of the most dramatic changes.
It is recommended that your employee handbook be reviewed and
updated, as some of these changes currently impact existing policies.
Failure to update employee handbooks will cause the loss of opportunities
and potential liability for the employer.
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CREATING
YOUR COMPANY'S UNIQUE VALUE PROPOSITION
By
Rick Sharga, President & CEO, CJ Patrick Company
Executives
who believe that beautiful photos of rowing teams actually
inspire teamwork hate Despair.com. The Website, which features
a series of "de-motivational" products, includes
a particularly inspired poster, titled "Individuality."
The poster features a close-up shot of snowflakes, and a caption
that reads:
"Always
remember that you are unique. Just like everyone else."
It
seems that many technology companies operate on this principle.
How else to explain the mountain of jargon, acronyms, buzz
words and meaningless hyperbole that these companies use to
describe their products, services, and the companies themselves?
Take
a look at the press releases issued by most technology companies-especially
the paragraph that describes the company. In most cases, the
paragraph would work equally well for any number of the company's
competitors. Or worse, leave you with no idea what the company
does. One local technology company describes itself this way:
"Our
company provides solutions to manage and optimize business-critical
information technology infrastructures, systems and applications.
Working across multiple enterprise IT environments, our offerings
empower customers to track and maximize the business return
associated with IT investments."
If
you're fluent in technology-speak you'll know that "solution"
usually means "software," and "offerings"
means "products." So the company makes software
products. But what kind of software products? Vertical applications?
ERP? CRM? EAI? Middleware? Monitoring? Or might the company
be a Managed Service Provider, or an IT Outsourcing firm?
Clearly, this paragraph fails to deliver a clear, compelling
Value Proposition.
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ARE
YOU TRACKING YOUR #1 COST?
By
Rudolf Melik, CEO, Tenrox
For any business that is looking to automate and streamline its
business processes, time tracking software is one of the best
places to start. Payroll is the largest corporate expense. Tracking
and controlling time leads to immediate and tangible gains in
productivity and cost reductions. Time tracking increases operational
control, facilitates compliance with various employment and corporate
governance laws, reduces costs, and improves efficiency. Some
of the tangible benefits of time tracking are as follows:
- Reduces
timesheet review time by 80%. Average timesheet review takes
6 minutes; with an automated system, a review takes 1 minute
- American Payroll Association
- Helps
the company comply with various employment guidelines and
industry regulations such as state specific wage laws, FMLA,
FLSA and SOP 98 (US accounting guidelines for capitalizing
software development costs)
- Organizational
policies and business rules are integrated into the submission
and approval process; validation is done at point of entry
- Monitors
time by team and prevents budget overruns
- Reduces
time misappropriation (e.g. long lunches, early departures,
late arrivals) which accounts for up to 4.08 hours per week
- American Payroll Association
There
are hundreds of commercial time tracking applications to choose
from. Some companies consider building this type of software
in-house. So how do you decide what is best for your organization?
This article serves as an introduction to time tracking software,
the benefits and what to look for when considering a purchase.
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