RegAlert2004-03-18
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SEC Division of Corporation Finance no-action letter: Credit Suisse First Boston
The Division of Corporation Finance determines that executive officers subject to Section 16 of the Securities Exchange Act of 1934 are considered to own the shares of common stock underlying their vested and non-forfeitable compensatory employee options for purposes of Rule 16c-4. This determination applies to Credit Suisse First Boston's proposed collar transactions with executives of eligible U.S. companies, where the executives sell call options and purchase put options to limit exposure to stock price fluctuations. The Division concludes that because the executives receive no net economic benefit from a decline in the stock price after the transaction commencement date, the transactions do not violate the prohibition on short selling by insiders.
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Securities Exchange Act of 1934 - Section 16
March 18, 2004
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Credit Suisse First Boston ("CSFB") Incoming letter dated March 16, 2004
You have asked the Division's view concerning the application of Rule 16c-4 under Section 16 of the Securities Exchange Act of 1934 ("Exchange Act") to CSFB's proposed collar transactions ("Transactions") with executive officers subject to Section 16 ("Executives"). Specifically, you ask whether an Executive would be considered, for purposes of Rule 16c-4, to own shares of common stock underlying the Executive's vested and non-forfeitable compensatory employee stock options ("Employee Options").
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