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CALIFORNIA CORPORATE & SECURITIES LAW

How To Confer A $6.9 Million Benefit For Less Than A Half Dollar

In March 2011, the three-member compensation committee of EchoStar Corporation awarded options to purchase 1.5 million shares of company stock to its Chairman, Charles W. Ergen.  According to EchoStar’s proxy statement for its 2012 annual meeting, the aggregate grant date fair value of the award was $21.6 million.  There was just one problem, the plan…

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Stock Option Exercise – Sale or No Sale?

The Corporate Securities Law prohibits the offer and sale of a security in an issuer transaction “in this state” unless the sale is (a) qualified; (b) the security is exempt from qualification; (c) the transaction is exempt from qualification; or (d) not subject to qualification.  The term “sale” is defined in Corporations Code Section 25017(a) to include every…

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