this is for all those persons who interested in business line...

1. Best Practices For The
Growing Business
The material provided herein is for informational purposes
only and is not intended as legal advice or counsel.

2. Please help yourself to food
and drinks
Please let us know if the room
temperature is too hot or cold
Bathrooms are located past the
reception desk on the right
Please turn OFF your cell
phones
Please complete and return
surveys at the end of the
seminar 2

3. Corporate Maintenance, Tune Up
and Succession Planning
Stefanie McNamara

4. I. Observing Formalities
1. Governing Bodies
• Shareholders/Members
• Board of Directors/Managers
• Officers
2. Documenting Corporate Action
• Authorizing Resolutions
• Delegations of Authority for Officers/Key Employees
3. Meetings
• Annual/Periodic Meetings
4. Proper Record Keeping
• Minute Book/Stock Ledger
5. File Annual Report With Department of Treasury
Note:
∗ These Requirements Apply to All Entities Regardless of Size/Number
∗ Failure to Comply Creates Risk of Losing Corporate Shield From
Individual Liability
4

5. II. Contract Trouble Spots
• Indemnification
• Warranty
• Ownership of IP
• Assignment
• Term and Termination
• Restrictive Covenants
5

6. III. Corporate Succession Planning
Shareholder (Operating) Agreements
• Restrictions on transfer or issuance of stock/equity
• Buy/Sell Provisions
− Voluntary sales to third parties
− Upon death/retirement/termination/divorce
− Planning your exit strategy
− Planning for your partner’s exit
− Estate Planning
• Funding – Key Person Life Insurance; Disability
6

7. Insurance for the Growing
Business - and Beyond
Charles Miller

8. Risk Management Areas
1. Liability Loss Exposures
2. Income Loss Exposures
3. Property Loss Exposures
4. People Loss Exposures
8

9. Liability Loss Exposures
1. Commercial General Liability
Insurance
9

10. 1. Commercial General Liability
Insurance
• Cover bodily injury and property damage
claims
• Excludes coverage for employment practices
claims
• Exclude coverage for professional liability
claims
• Exclude coverage for pollution claims
• How much?
10

11. Liability Loss Exposures
1. Commercial General Liability
Insurance
2. Commercial Auto Insurance
11

12. 2. Commercial Auto Insurance
• Covers vehicles used by business
• Both property damage and liability
coverage
12

13. Liability Loss Exposures
1. Commercial General Liability
Insurance
2. Commercial Auto Insurance
3. Professional Liability/Errors and
Omissions Insurance
13

14. 3. Professional Liability/Errors
and Omissions Insurance
• Covers claims arising out providing
professional services
• Covers financial loss
• Excluded from coverage under CGL
policies
14

15. Liability Loss Exposures
1. Commercial General Liability
Insurance
2. Commercial Auto Insurance
3. Professional Liability/Errors and
Omissions Insurance
4. Employment Practices/Employers
Liability Insurance
15

16. 4. Employment
Practices/Employers Liability
Insurance
• Discrimination
• Wrongful termination
• Sexual harassment
16

17. Liability Loss Exposures
1. Commercial General Liability Insurance
2. Commercial Auto Insurance
3. Professional Liability/Errors and Omissions
Insurance
4. Employment Practices/Employers Liability
Insurance
5. Business/Profession Specific Liability
Insurance??
17

18. Income Loss Exposures
1. Business Interruption Insurance
18

19. 1. Business Interruption/Extra
Expense Insurance
• Covers lost cash flow and profits
• Often part of property insurance
coverage
19

20. Income Loss Exposures
1. Business Interruption Insurance
2. Workers Compensation Insurance
20

21. 2. Workers Compensation Insurance
• Covers job-related injuries
• Mandatory for most employers
21

22. Income Loss Exposures
1. Business Interruption Insurance
2. Workers Compensation Insurance
3. Disability/Life Insurance
22

23. 3. Disability/Life Insurance
• Disability Insurance
• Life Insurance
23

24. Property Loss Exposures
1. Business Property Insurance
24

25. 1. Business Property Insurance
• Covers business real and personal
property
• Business auto (property damage)
• Inland marine Insurance
25

26. People Loss Exposures
1. Workers Compensation Insurance
2. Medical Insurance
3. Business Continuity Insurance
26

27. 3. Business Continuity Insurance
1. Life/Disability Insurance
27

28. Life Insurance
1. Buy-sell
agreement - set up
by Owners.
2. Life insurance -
fund the buy-sell.
28

29. 3. Business Continuity Insurance
1. Life/Disability Insurance
2. Key Person Insurance
29

30. Key Person Insurance
Why?
To compensate the
business for its
losses and to
facilitate business
continuity when
that key person is
lost to the business.
30

31. Key Person Insurance
Who?
Death or disability would be a financial
detriment to the company
31

32. “Do I Have Enough Insurance?”
Let’s talk!
32

33. Questions & Answers Session
Part 1

34. Seminar Intermission

35. No Excuses! No Surprises!
Employee Handbooks and
Employment Policies
Pat Collins

36. Key Practical Issues
• Who is covered
– Location
– Status
– Union/Non-Union
– Salaried/Hourly
• What is covered
– Are these your policies in practice
36

37. Key Practical Issues
• Drafting
– Conversational – Non -Threatening
– Avoid Legalese
– Consistency
• Terminology
• Conflicting policies
• Distribution
– Format (hard copy – intranet)
– Time to Review
– Acknowledgement of Receipt
37

38. Key Legal Issues
• EEO – Discrimination Prohibited
• Anti-Harassment
• Employment At-Will
• Benefits/Payroll Administration
• Privacy Expectations
• Employee Contract
• General Work Rules
38

39. N.J. Law Against Discrimination (“LAD”)
N.J. Conscientious Employee Protection Act
(“CEPA”)
• Extremely liberal interpretation
– Easier administrative process. No caps on damages.
• Lower Thresholds than Federal Laws
• Allows Suits Against Individuals
• Broader Scope of Protected Classes under LAD
• CEPA “Reasonable Belief Standard”
39

40. LAD
• Applies to employers, individuals, and “any
person who aids, abets, or otherwise assists” in
prohibited conduct.
• Makes it unlawful to refuse to buy from, sell to,
license, contract with or provide goods or
services to anyone on the basis of a protected
class.
• Prohibits harassing conduct by third parties
(visitors, customers, vendors).
CEPA
• Applies not only to employees, but independent
contractors as well.
40

41. EEO – Non-Discrimination –
Anti-Harassment Policies
• Written Policy Mandatory in NJ
– Presumed negligent without one
• Training of Managers Mandatory in NJ
• Risk Losing “Employer Defense”
• Employee Liability
• Good Business Practice
41

42. Employment At-Will
No Contracts
• Policy emphasized repeatedly
• Introductory Disclaimer
• At-Will Statement
• Benefits Disclaimer
• Codes of Conduct
• Discipline & Termination
• Signed Acknowledgement
42

43. Benefits/Pay Practices
• Disclaimer – “The Company reserves the right to
amend or terminate any of these programs and to
require or increase premium contributions toward
any benefit programs in its discretion.”
• Benefit Explanations
• Leaves
• Pay Practices
– Safe Harbor Language
• Hours of Work
– Employee Classification
– Overtime Policy
43

44. Privacy Expectations
• Confidentiality Issues
• Conflicts of Interest
• Company Property/Trade Secrets
• Employee Reference Requests
• Medical Information
• Company Investigations
44

45. Privacy Expectations
• Drug and Alcohol Testing
• Searches
• Internet and Electronic Media
• Social Media and Networking
– Cell phones, Blackberrys, Smartphones
– Facebook, LinkedIn, Twitter
45

46. Employee Conduct
• Codes of Conduct
• Performance Reviews
– Counseling
• Discipline
– Avoid progressive
– Require documentation
• Termination
– Commissions/Bonuses
– Benefits paid
– Return of property
– Exit Interview
46

47. General Work Rules
•Moonlighting •Jury Duty •Emergency Procedures
•Personnel Files •Tuition Assistance •Office Supplies/Machines
•Office Hours •Dress Codes •Mail/Telephones
•Inclement Weather •No Smoking •Media Contacts
•Comp Time •Weapons •Inventions
•Direct Deposit •Violence •Gifts
•Performance Reviews •Solicitations •Customer Relations
•Vacations •Bulletin Boards •Arrests/Convictions
•Sick Days •Radios •Garnishments
•Holidays •Layoffs •Expenses
•Safety •Resignations •Language
•Workplace Injuries •Terminations •Nepotism
•Family Leave Issues •Exit Interviews •Grievance Procedure
•Military Leave •Office Searches •Open Door Policy
•Bereavement Leave •Visitors •Interns/Trainees
47

48. Keeping Key Employees
Agreements with Employees and Non-
compete Issues – Protection of Company
Assets and Retention of Talent
David Harmon

49. Retention, Protection and
Enforcement
EMPLOYEES
TRADE SECRETS,
CONFIDENTIAL/
COMPETITION PROPRIETARY
INFORMATION, FILES
AND RECORDS
COMPANY
CUSTOMERS COURTS
49

50. Take Your Employment
Temperature
Ask the following questions regarding your
employees and your business:
Who? What?
When?
Why? How?
50

51. Ask These Questions While
Considering The Importance Of:
• Protecting company assets and
customer relationships, retaining key
employees, and safely engaging
consultants.
51

52. Who? What? When?
• WHO does my company need? From whom does the company need protection and
ongoing loyalty?
Executives, consultants and rank and file employees privy to trade secrets and
confidential/proprietary information, including customer relationships. Protection from
competitors is critical.
• WHAT can we do to keep key people and protect the company from theft of data,
confidential and proprietary information and interference with employee, consulting
and customer relationships? What happens when the consultant leaves or completes
the engagement?
Create binding contracts that impose reasonable restrictions on activity both during and
after the employment and consulting relationships.
• WHEN should this be done?
Put agreements into effect at the commencement of employment and/or consulting
arrangements. Or, for employees make them concurrent with reviews and increases in
compensation/benefits. 52

53. WHY? – Just a Few Reasons:
• Costs/losses incurred by companies
• Increase of theft by employees during recession
• Security of company assets and retention of files
• Provide protection from competitors poaching
employees and theft of information and relationships
• Put your employees and the competition on notice
and create right to bring claims against departing
employees/consultants for breach of contract and
against your competition for tortious interference
with your contracts
53

54. How?
• Create agreements
• Provide adequate consideration to
make sure the agreements are
enforceable
• Create employment practices and
policies that dovetail with your
agreements
• Enforce those agreements
54

55. Agreements With Employees
and Consultants
• Employment Agreements/Consulting
Agreements (key executives, consultants)
• Confidentiality/Non-disclosure Agreements
• Non-Solicitation Agreements (non-poach/raiding)
• Non-Interference Agreements
• Non-Competition Agreements (reasonable in scope,
duration and geography)
• Non-Disparagement Agreements (including “no kiss
and tell” covenants; no ”bad-mouthing”)
• Return of Materials Agreements
• Invention Assignment Agreements (Work for Hire)
55

56. Retention, Protection and
Enforcement
EMPLOYEES
TRADE SECRETS,
CONFIDENTIAL/
COMPETITION PROPRIETARY
INFORMATION, FILES
AND RECORDS
COMPANY
CUSTOMERS COURTS
56

57. Intellectual Property Essentials
for the Small Business Owner
Kenneth Kaplan

58. Categories of Intellectual
Property
• Copyrights
• Trademarks and Service Marks
• Patents
• Trade Secrets
58

59. Copyright Law Basics
• Protects the creative expression of ideas
• Does not protect ideas
• Basic legal requirements:
– Originality
– Fixation
• Protection arises automatically upon fixation
• You get a basket of rights:
– Make copies
– Distribute work
– Prepare derivative works
– Perform the work
• Lasts for 70 years (for works created after 1977)
59

60. Registration of Copyrights
• Registration not necessary, but gives
you additional rights:
– Right to sue in federal court
– Ability to recover attorneys’ fees and
statutory damages
• Registration also puts potential
infringers on notice
60

61. Maintaining Copyrights
• Periodic checks of internet
• Use copyright notice to put potential
infringers on notice and prevent them
from claiming “innocent infringement”
• Proper notice:
– © or “copyright” or “copyr”
– Year of first publication
– Name of owner
– “all rights reserved”
61

62. Trademark Law Basics
• Trademarks distinguish your products
and services from those of your
competitors
• Protects your investment in brand
loyalty and good will
• Any word, symbol, slogan, logo or
design may qualify for trademark
protection
62

63. Acquiring Trademark Protection
• Starts with the choice of a name for your
business
• Continues with the way you brand your
products and services
• Must be used in commerce (“use it or lose
it”)
• Protection arises automatically from use in
commerce (first to use takes precedence)
63

64. Selecting and Vetting Your
Trademarks
• Using the Internet
• Using a public database like the USPTO
• Professional Search Companies
64

65. Not All Trademarks are Equal
• Choose a strong mark instead of a weak one
• Arbitrary marks are the strongest
• Suggestive marks are the most common
• Descriptive marks may put you in a grey
zone
• But, you can protect a descriptive mark by:
– Establishing “secondary meaning”
– Demonstrating exclusive and continuous use for 5 years
• Generic words cannot be protected
65

66. Benefits of Registration
• Federal and State Registration possible
• Right to use ® symbol
• More damages available
• Mark can become “incontestable” if
used in commerce for 5 years
• You can apply for federal registration
based on an “intent to use”
66

67. Maintaining Trademarks
• Marking your products and marketing
materials
• Use ® for federally registered marks
• Establish policies and guidelines for use
• Policing your Marks
67

68. Patent Law Basics
• A monopoly on technology
• Does not arise automatically – must be
filed
• Can take several years to obtain and can
cost several thousand dollars
• Essentially a contract between patent
holder and the government
68

69. What Can be Patented
• Often said that “Anything under the sun that
is made by man” can be patented
• A “new and useful process, machine,
manufacture, or composition of matter, or
any new and useful improvement thereof”
(Title 35, section 101 of U.S. patent laws)
• Patents in U.S. can be sought for almost any
kind of invention
69

70. What Cannot be Patented
• Laws of nature (E=mc²)
• Physical phenomena
• Abstract ideas
70

71. Types of Patents
Two Main Types:
1. Utility Patents:
– Most common
– Protects a new and useful process, machine, manufacture, or composition of matter, or any a
new and useful improvement thereof
– Protects what is useful about your invention
2. Design Patents:
– No requirement for utility
– Protects the appearance of a functional article
– Covers only the nonfunctional aspects of a product design (e.g. the design of a car)
– Patents protect the ornamental design of an article. Trademarks protect the public identity of
the product.
What about Business Method Patents?
– Historically, “methods of doing business” were not patentable because they did not fall into any
of the four categories of invention: process, machine, manufacture or composition of matter
– Up until about 2000 the USPTO took the position that "methods of doing business” are not
patentable
– Many business method patents granted in last 10 years
– BMPs have been under assault in recent years and recent decisions call into question the
enforceability of many if not most BMPs issued during last 10 years 71

72. Requirements for Patentability
Invention must be useful, new and non-obvious
• Utility/Usefulness:
– Usually the easiest of the 3 requirements to establish
• Novelty/Newness:
– Invention cannot be patented if (1) it was described in a publication more than
one year prior to the filing date; or (2) was used publicly, or offered for sale to the
public more than one year prior to the filing date.
– Inventor who does not file for patent protection on new invention within this one
year grace period will lose all right to obtain patent protection on the invention.
– Most other countries do not grant a grace period. Therefore, it is almost always
preferable to file a patent application before any public disclosure of the
invention.
• Non-obvious
– Invention must be a non-obvious improvement over prior art.
– Determination is made by deciding whether the invention sought to be patented
would have been obvious "to one of ordinary skill in the art. In other words, the
invention is compared to the prior art and a determination is made whether the
differences in the new invention would have been obvious to a person having
ordinary skill " in the type of technology used in the invention.
72

73. What Rights Does a Patent
Holder Have
• One word: “exclusivity”
• Only a right to exclude others from making, using
or selling your invention
• Unlike a copyright, which only protects actual
copying, patents can protect against commercial
use of an idea and its functional equivalent
• Right to preclude functionally equivalent works
• Doctrine of Equivalents is what makes patents the
most comprehensive form of IP protection
• Design patents = 14 years
• Utility patents = 20 years
73

74. Trade Secret Basics
• Business secrets, unlike published patents and
copyrights which are available for the world to see
• A trade secret is information that:
– Derives value from not being generally known
– Is the subject of efforts to maintain secrecy
• Examples:
– Formulas
– Marketing strategies
– Research pertaining to product formulations
– Specialized training materials
• Protection can last forever (unlike patents and
copyrights)
• Once disclosed, protection is lost forever
74

75. Trade Secret Protection
• Protected under federal and state laws
• Most states have a version of the
“Uniform Trade Secrets Act”
• Federal Law: the Economic Espionage
Act of 1996: makes it a federal crime to
steal a trade secret or to possess
information that is known to be stolen
75

76. Advantages over Patent
Protection
• Perpetual protection
• Broader protection that can extend to
business know-how
• Timely and automatic
• No proof of novelty required
76

77. Safeguarding Valuable Trade
Secrets
• Employee Confidentiality and non-
compete agreements
• Customer/Vendor Non-disclosure
Agreements
• Consultant work-for-hire agreements
(making sure you own what you pay
for)
77

78. Questions & Answers Session
Part 2
Thank you for coming!