TheCorporateCounsel.net

For each of the seven years I’ve been on this job, I’ve conducted an average of one survey on some aspect of insider trading policies (here is a list of them from our “Blackout Periods/Insider Trading” Practice Area). Recently, we wrapped up our latest one – this “Quick Survey” related to hedging and other trading prohibitions in insider trading policies. Below are the results:

1. Our company’s insider trading policy prohibits insiders from trading in any of the following:
– Exchange-traded options – 41.1%
– Hedging/monetization transactions (e.g., zero cost collars, forward sale contracts) – 36.7%
– Puts and calls – 45.6%
– Margin accounts – 25.6%
– Pledges – 23.3%
– None of the above – 10.0%
– We don’t have an insider trading policy – 1.1%

2. Our company discourages – but still permits – the following:
– Exchange-traded options – 18.2%
– Hedging/monetization transactions (e.g., zero cost collars, forward sale contracts) – 25.0%
– Puts and calls – 13.6%
– Margin accounts – 47.7%
– Pledges – 52.3%
– None of the above – 29.6%

Please take a moment to participate in our new “Quick Survey on D&O Questionnaires.”

Shelley Parratt: Longest-Serving Interim Corp Fin Director?

Although my memory is limited to the modern era, I believe Shelley Parratt is the longest-serving interim Corp Fin Director in SEC history with three months under her belt so far. Marty Dunn served as an interim for a few weeks before John White started – and Meredith Cross had a brief turn before Brian Lane moved over from Chairman Levitt’s office.

In fact, it’s not uncommon that there be no period of time between one Director leaving and another starting – particularly when the new Director is being promoted from within the building. For example, when John Huber left the SEC in ’86, Linda Quinn started that afternoon.

Not that any of this matters at all. Just some curious facts before I kick off my spring break vacation. I imagine we’ll see an announcement about a new permanent Corp Fin Director in the near future.

NYSE Clarifies Shareholder Approval Requirement for Convertible Debt Exchange Offers

Below is an excerpt from this recent Gibson Dunn memo (note this reflects an update from when blog was originally posted):

In the context of an exchange offer of new convertible debt for previously outstanding convertible debt, the NYSE staff has taken the position that the 20% Test only applies to any increase in the number of shares issuable under the new debt as compared to the old debt; the calculation is not made on the total number of shares issuable under the new debt. In other words, the NYSE only looks at the net increase in the number of shares potentially issuable upon conversion as a result of the exchange.

The NYSE staff had previously provided guidance that, when calculating whether an issuance of securities meets the 20% Test, the NYSE would take into account the number of shares issuable upon the original convertible debt, in addition to the actual amount outstanding, for purposes of calculating the number of shares outstanding on the date of measurement. The NYSE, however, has since corrected that guidance and has advised us that, pursuant to NYSE Rule 312.04, when calculating whether the 20% limit has been reached, the net increase in shares issuable upon conversion (the numerator in the calculation) will be compared only to the number of shares actually outstanding on the date of the listing application without giving effect to the number of shares then issuable upon conversion of the old convertible debt.

– Broc Romanek