U.S. Proxy Voting Manual
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Conversion of Securities

Votes on proposals regarding conversion of securities are determined on a CASE-BY-CASE basis. When evaluating these proposals the investor should review:

  • Dilution to existing shareholders' position

  • Conversion price relative to market value

  • Financial issues: company's financial situation and degree of need for capital; effect of the transaction on the company's cost of capital

  • Control issues: change in management; change in control; standstill provisions and voting agreements; guaranteed contractual board and committee seats for investor; veto power over certain corporate actions

  • Termination penalties

  • Conflict of interest: arm's length transactions, managerial incentives

Vote FOR the conversion if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved.

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