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.
