2503011 Informal Interpretation

Date

March 21, 2025

Rule

801.10

Staff

Nora Whitehead

Response/Comments

This share class qualifies as a voting security for HSR purposes.

UPDATE September 12, 2025: This no longer represents the position of the PNO. Shares that contemplate future, uncertain rights to vote for the board of directors of a corporation are voting securities, but absent 801.90 issues, may be exempt pursuant to 802.31. Contact the PNO if you have questions about the reportability of voting securities that have future, but no present, voting rights.

Original Image - 2503011 Informal Interpretation (544.73 KB)

Question

From: Whitehead, Nora
Sent: Friday, March 21, 2025 12:50:58 PM (UTC-05:00) Eastern Time (US & Canada)
To: [Redacted]
Cc: HSRHelp
Subject: RE: Voting Security for Transaction Value Purposes

This share class qualifies as a voting security for HSR purposes.

From: [Redacted]
Sent: Thursday, March 20, 2025 3:36:11 PM (UTC-05:00) Eastern Time (US & Canada)
To: HSRHelp
Subject: Voting Security for Transaction Value Purposes

PNO Team,

Can you confirm whether the following qualifies as a “voting security” such that its value must be factored into the transaction value (even if it does not contribute to the 801.12 voting percentage)?
• If a charter does not explicitly grant a share class (e.g., Series D) the specific right to elect a director, but also does not specify that it lacks the right to participate in the election of directors; and
• The charter states that “the holders of record of the shares of Common Stock and any other class or series of voting stock (including the Preferred Stock), exclusively and voting together as a single class, shall be entitled to elect the balance of the total number of directors of the Corporation,” but no such directorship currently exists. If it did exist, Series D could participate in electing the director.
In calculating the value of an investor’s holdings in a company, would Series D count as a voting security, and thus its value need to be included in the total transaction value, even though its voting percentage is 0%? Or would it be considered a “convertible voting security,” having no present right to participate in the election of directors until such time as a board seat is created that it would participate in electing, and therefore not be included in the transaction value?

Sheinberg, Samuel I.
From: 	HSRHelp
Sent: 	Friday, March 21, 2025 12:51 PM
To: 	HSR Auto Forward List
Subject: 	FW: Voting Security for Transaction Value Purposes
From: Whitehead, Nora
Sent: Friday, March 21, 2025 12:50:58 PM (UTC-05:00) Eastern Time (US & Canada)
To:
Cc: HSRHelp
Subject: RE: Voting Security for Transaction Value Purposes
T his share class qualifies as a voting security for HSR purposes.
From: HSRHelp
Sent: Thursday, March 20, 2025 3:36 PM
To: HSR Auto Forward List
Subject: FW: Voting Security for Transaction Value Purposes
From:
Sent: Thursday, March 20, 2025 3:36:11 PM (UTC-05:00) Eastern Time (US & Canada)
To: HSRHelp
Subject: Voting Security for Transaction Value Purposes
PNO Team,
Can you confirm whether the following qualifies as a “voting security” such that its value must be
factored into the transaction value (even if it does not contribute to the 801.12 voting percentage)?
 	If a charter does not explicitly grant a share class (e.g., Series D) the specific right to elect a
director, but also does not specify that it lacks the right to participate in the election of directors;
and
 	The charter states that “the holders of record of the shares of Common Stock and any other class
or series of voting stock (including the Preferred Stock), exclusively and voting together as a single
class, shall be entitled to elect the balance of the total number of directors of the Corporation,”
but no such directorship currently exists. If it did exist, Series D could participate in electing the
director.
In calculating the value of an investor’s holdings in a company, would Series D count as a voting security,
and thus its value need to be included in the total transaction value, even though its voting percentage is
0%? Or would it be considered a “convertible voting security,” having no present right to participate in
the election of directors until such time as a board seat is created that it would participate in electing,
and therefore not be included in the transaction value?
Thanks,
1

2503011 Informal Interpretation

Question

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