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Name and title: Frank A. Sherer, general counsel, secretary and senior vice president of human resources age: 55 watch this: “It takes a licking and keeps on ticking.” Television pitchman John Cameron Swayze’s boast about Timex watches in the 1960s and ’70s could easily be applied to the watchmaker itself. Founded in 1854 as the Waterbury Watch Co., Timex became one of the world’s leading wristwatch makers after World War II, capitalizing on its mastery of the mass production of durable, all-weather, more or less accurate timepieces for the military. After Frank A. Sherer joined Timex Corp.’s 30-attorney in-house office in 1977, Timex used his expertise in mergers and acquisitions in several domestic and international deals. In the early 1980s, though, the company hit hard times. As part of a companywide retrenchment, Timex slashed its law office to two employees: Sherer and his secretary. Sherer was named general counsel in 1986, and has been at the legal helm as the company rebounded through acquisitions and internal growth in the 1990s. While Timex wound down its American manufacturing, Sherer played a key role in developing the firm’s foreign factories, especially in India. In the late 1980s, he helped put together a joint manufacturing venture with Titan Industries, then a subsidiary of India’s powerful Tata Group. The relationship soured, recalled Sherer, who thought Titan was constraining Timex’s growth in India. Ultimately, the company bought out its partner and established its own Indian corporation, Timex Watches Ltd., naming Sherer as its chairman. Sherer plays an active role in Timex Watches Ltd., flying to the subcontinent at least quarterly to chair board meetings and leading the firm’s move toward outsourcing its manufacturing, while concentrating on design. world’s watchmaker: The privately held Timex Corp., based in Middlebury, Conn., is the U.S. subsidiary of Timex Group, a Dutch holding company. The company’s $600 million in annual sales makes it the largest watch company in North America, and the second-largest worldwide (after Switzerland’s Rolex). The company also sells watches under the Ironman, Nautica, Guess? and Reef Gear logos. Timex has 5,500 employees worldwide, with about 500 in the United States, and it manufactures watches in China, France, India and the Philippines. In 2001, Timex closed its last U.S. factory, in Little Rock, Ark. sherer’s shop: Sherer supervises three other in-house lawyers, as well as the human resources, government affairs and tax offices. Given the importance of lawyers to tax planning, he believes that it is “completely illogical” for tax experts to report to the chief financial officer, rather than the GC. Sherer himself answers to Timex Corp. President and CEO Jose Santana-a reporting relationship that he believes is critical to his function as a legal and commercial “counselor.” Sherer tries to act as a business partner, rather than as a legal naysayer. “The general counsel should not shirk responsibility in business decisions,” he said. “You’re not serving your client well if you just point out rules and risks.” Timex’s lean law office has no room for overspecialized attorneys, said Sherer, who tries to train his lawyers in all substantive areas so that he has adequate “overlap and backup.” As a result of this well-rounded education in corporate law, several of his deputies have gone on to become general counsel themselves, including Paul Hally of SPX Corp., Amir Rosenthal of Katy Industries Inc. and Paul Halas of GridAmerica LLC. litigation: Timex avoids most litigation through aggressive intervention at the early stage of legal disputes, said Sherer. No fan of either litigation or arbitration, Sherer pushes for mediation clauses in major contracts. He prefers a requirement that the general counsel of both sides (and the CEOs, for more high- stakes cases) meet to discuss the dispute before either party may file a lawsuit. Several years ago, this provision facilitated a prelitigation settlement with a component manufacturer over a major product-defect dispute, he said. Not every dispute can be resolved before it lands in court, though. In 2001, 11 former employees from the shuttered Little Rock factory sued Timex in Pulaski County Circuit Court, claiming that the watchmaker reneged on promised $15,000 severance payments for employees who agreed to stay on the job until the plant’s closing. The complaint’s allegations were far afield of the facts, Sherer said, and the lawsuit was settled for a “nominal amount.” Sherer demurred on further details. The company may not get off so cheaply in another case in Montana. In May 2001, Timex was hit with a $2.1 million federal jury verdict in a copyright infringement case filed by two local filmmakers. The plaintiffs claimed that a Timex advertisement and a trade-show movie included pirated portions of the filmmakers’ 1995 film: a Timex-sponsored kayaking competition. Timex won a new trial on grounds of bad evidence and bad behavior by opposing counsel. However, the retrial last November had an even worse outcome for the defendant: a $2,415,000 jury verdict for the plaintiffs, including $315,000 in actual damages and $2.1 million for unlawful profits. “It’s clearly an incorrect decision,” said Sherer. Citing Timex’s pending 9th Circuit appeal, Sherer declined further comment. Also disappointing to Sherer were rulings in Timex’s suit over the “FosterGrant Expedition” sunglasses, which purportedly infringed on the Timex “Expedition” brand. In May 2001, the 2d Circuit upheld the denial of Timex’s motion for a preliminary injunction, agreeing with the district court that the plaintiff had not shown a likelihood of consumer confusion of the two brands. Timex and FosterGrant agreed to a confidential settlement after that ruling, he said. principal outside counsel: Timex turns to Washington’s Howrey Simon Arnold & White for trade regulation and antitrust, and to New York’s Chadbourne & Parke for major corporate matters. route to the top: A native of New York’s Brooklyn Heights neighborhood, Sherer graduated from Yale University in 1969. After his 1972 law degree from Boston University, Sherer signed on as a corporate associate at Chadbourne & Parke, then moved to Timex in 1977. personal: Sherer, who is separated, has four children: Frank Jr., a law student at Yale; Edward, a Swarthmore graduate now applying to medical school; daughter Bri, a Yale freshman; and 14-year-old Sean. last movie and book: The Matrix Reloaded and 1421: The Year the Chinese Discovered the World, by Gavin Menzies. -William C. Smith

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