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Cypen & Cypen
NEWSLETTER
for
JULY 2, 2004

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. VOLUNTEER FIRE DEPARTMENT SUBJECT TO FLORIDA SUNSHINE LAW:

The Florida Attorney General was recently asked whether Section 286.011, Florida Statutes, the Florida Government in the Sunshine Law, applies to individual boards of directors of volunteer fire departments that provide firefighting services to the county paid for by the county. Florida courts have stated that it was the Legislature’s intent to extend application of the Sunshine Law to every board or commission of the state or of any county or political subdivision over which it has dominion and control. The statute has been held applicable to private organizations when the private entity has been created by a public agency, when there has been a delegation of the public agency’s governmental functions or when the private organization plays an integral part in the decision-making process of the public agency. Receding from a 20-year-old prior opinion, the Attorney General held that the Sunshine Law applies to official corporate governance meetings of individual boards of directors of volunteer firefighters that provide firefighting services to and use facilities and equipment acquired with public funds from the county. However, answering a second part of the same question, the Attorney General found that meetings of a county volunteer firemen’s association established by the county’s volunteer fire departments to discuss firefighting issues of mutual concern, is not subject to the Sunshine Law. AGO 2004-32 (June 25, 2004)

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2. PENSION PLANS MAKE FINANCIAL COMEBACK:

Although they experienced increases in liabilities, the average funded status of Fortune 1000 Company Pension Plans (private-ERISA) increased from 82% to 88% between 2002 and 2003. Nevertheless, according to a Watson Wyatt Report, last year’s level is significantly below 1999's level of 131%. Actually, the 2003 funding picture is even brighter, because the figures include nonqualified pension plans, which are usually unfunded. Total liabilities for the subject plans were $1.288 Trillion against assets of $1.132 Trillion at the end of fiscal 2003. For fiscal 2002, the numbers were, respectively, $1.164 Trillion and $.959 Trillion. The one year increases were 11% for liabilities and 18% for assets. Investment return for fiscal 2003 was about 19% compared to -8.3% in 2002, -7.2% in 2001 and 4.9% in 2000. The weighted average annual return over the past four years was 1.5%.

3. HOW CORPORATE GOVERNANCE CAN AFFECT SHAREHOLDER VALUE:

A report from plansponsor.com deals with two new academic papers, one from a Harvard law school professor and the other from an associate professor of finance at Drexel University. The papers illustrate how shareholder value can be affected in director elections and other corporate governance reforms. The first study found that staggered board of director elections is one of approximately 25 shareholder-unfriendly provisions that correlated with lower shareholder value. The other found that as the number of independent, outside directors increased on a board or key committee, the likelihood of corporate wrongdoing decreased. So what else is new?

4. RUSSELL WILL ADJUST INDICES:

Later than the usual June 30, Russell Investment Corp. will announce the annual reconstitution of its 21 domestic stock indices on July 6, according to a plansponsor.com report. Look for big changes in the Russell 3000, Russell 2000 and Russell 1000 indices. Capitalization in the Russell 3000 will range from $318 Billion (General Electric) to $176 Million. The total market capitalization for the Russell 3000 will be $13.3 Trillion, a 32% increase. The Russell 2000's market capitalization will be $1.2 Trillion. Russell indices serve as benchmarks for many assets and are also extensively used as models for index funds. All changes will be posted on line at www.russell.com.

5. FLORIDA ENACTS “LAW ENFORCEMENT FAIR DEFENSE ACT”:

Section 111.065, Florida Statutes, the “Law Enforcement Fair Defense Act,” has been amended to provide a procedure for payment of attorney’s fees of an “officer” in certain circumstances. The term “officer” means any law enforcement officer, correctional officer or correctional probation officer. Prior to the amendment, the employing agency had the option to pay reasonable attorney’s fees for an officer in any civil or criminal action when the action arose out of the performance of his official duties and (1) plaintiff requests dismissal of the suit or (2) the officer is found not liable or not guilty. Now, the employing agency shall provide an attorney for an officer in a criminal action if the employing agency determines that the officer’s actions that gave rise to the charges occurred in response to what the officer reasonably believed was an emergency; occurred when the officer reasonably believed that his action was necessary to protect the officer or others from imminent death or bodily harm; or occurred in course of the officer’s fresh pursuit, apprehension or attempted apprehension of a suspect whom the officer reasonably believed had perpetrated or attempted to perpetrate certain forcible felonies; arose within the course and scope of the officer’s duties; and were not acts of omissions or commission that constituted a material departure from the employing agency’s written policies and procedures or generally recognized criminal justice standards if no written policies or procedures exist. If legal representation is requested and the employing agency determines that the above conditions have not been satisfied, or if the officer chooses not to use the employing agency’s designated attorney, the officer may select from a list of attorneys provided by the employing agency or choose his own attorney. In the latter case, there is a procedure for reimbursement that must be followed and the total attorney’s fees and costs awarded may not exceed $100,000.00. Chapter 2004-38.

Copyright, 1996-2004, all rights reserved.

Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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