Public companies occasionally must deal with officer or director departures, and when that occurs, the company would be well-served by reminding the departing insider of his or her obligations under applicable securities laws. At a minimum, the reminder should cover insider trading and, if applicable, compliance with Section 16 of the Securities Exchange Act of 1934. It might also cover the application of Rule 144 to public share resales, as well as other items specific to the company (such as directives from the human resources department), depending on the desired scope of coverage and the company’s prior guidance to insiders.
The form of the reminder will depend on the company’s preference, but many companies typically deliver a simple exit memorandum to the departing insider.
In respect of insider trading, the deliverable should remind the departing insider that he orContinue Reading