Skip to main content
Date
Rule
801.1(f)
Staff
Michael Verne
Response/Comments
Agree.

Question

From:

(Redacted)

Sent:

Thursday, January 05, 2012 5:03 PM

To:

Verne, B. Michael

Subject:

Nonvoting Securities Question

Mike

Happynew year, I hope you are well. I have a quick question. I understand the PNO'sposition is that convertible nonvoting securities coupled with a contractualright to appoint 50% or more of a target company's board of directors may betreated as voting securities in determining whether a filing is required forthe sale of the Target. My client has the contractual right to appoint five ofseven board members of the Target company and owns nonvoting preferred stock ofthe Target which is not convertible into voting shares (the shares areguaranteed an annual dividend and are more like debt than equity). We believe thatthe preferred nonvoting, non-convertible shares should not be treated as votingsecurities even if the holder of those nonvoting shares has the right toappoint a majority of the board. Do you agree?

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

Learn more about Informal Interpretations.