Rule 16b-3 definition: Copy, customize, and use instantly
Introduction
The term "Rule 16b-3" refers to a regulation under the Securities Exchange Act of 1934, which provides an exemption for certain transactions by insiders of a company, such as officers, directors, or large shareholders, from the short-swing profit rules of Section 16(b). This rule allows these insiders to engage in certain transactions without being required to disgorge profits from short-swing trades, provided certain conditions are met, such as approval by the board of directors or a committee of independent directors.
Below are various examples of how "Rule 16b-3" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Rule 16b-3" as an exemption from short-swing profit rules for transactions approved by the board
This definition ties "Rule 16b-3" to board-approved transactions.
"Rule 16b-3" means the exemption from the short-swing profit rules under Section 16(b) of the Securities Exchange Act of 1934, allowing insiders to engage in transactions involving securities of their company, provided the transaction is approved by the board of directors or a committee of independent directors.
Definition of "Rule 16b-3" as a safe harbor for stock transactions by insiders
This definition connects "Rule 16b-3" to safe harbor provisions.
"Rule 16b-3" refers to a provision that provides a safe harbor for insiders, such as officers and directors, allowing them to engage in certain stock transactions without being subject to the short-swing profit recovery requirements of Section 16(b), provided specific conditions are met.
Definition of "Rule 16b-3" as a regulation allowing the grant of stock options to insiders without triggering short-swing profit rules
This definition links "Rule 16b-3" to stock option grants.
"Rule 16b-3" means the regulation under the Securities Exchange Act of 1934 that permits the grant of stock options, restricted stock, and other equity compensation to company insiders without triggering the short-swing profit rules, provided these transactions are approved by the company’s board or a designated committee.
Definition of "Rule 16b-3" as a rule allowing certain employee benefit plan transactions by insiders
This definition ties "Rule 16b-3" to employee benefit plans.
"Rule 16b-3" refers to a rule that permits certain transactions involving securities of a company by insiders under employee benefit plans, such as stock purchase plans, without violating the short-swing profit provisions of Section 16(b), provided these plans are administered according to specific criteria.
Definition of "Rule 16b-3" as an exemption for transactions made pursuant to a bona fide gift
This definition connects "Rule 16b-3" to gift transactions.
"Rule 16b-3" means the exemption from the short-swing profit rules under Section 16(b) for transactions involving securities made as a bona fide gift, provided the transaction is not part of a coordinated trading strategy.
Definition of "Rule 16b-3" as a provision for transactions by insiders with fiduciary duties
This definition links "Rule 16b-3" to fiduciary duties.
"Rule 16b-3" refers to the exemption from short-swing profit rules for transactions by insiders, such as officers or directors, who have fiduciary duties to the company, provided these transactions meet the required criteria for approval and compliance.
Definition of "Rule 16b-3" as a provision that facilitates employee stock ownership plans
This definition ties "Rule 16b-3" to employee stock ownership.
"Rule 16b-3" means a provision under the Securities Exchange Act of 1934 that facilitates the establishment and operation of employee stock ownership plans (ESOPs), allowing insiders to participate in these plans without triggering short-swing profit recovery, provided the plan complies with certain requirements.
Definition of "Rule 16b-3" as an exemption for transactions involving employee stock options and warrants
This definition connects "Rule 16b-3" to stock options and warrants.
"Rule 16b-3" refers to the exemption from the short-swing profit rules for transactions involving stock options or warrants granted to company insiders, provided these transactions are conducted in accordance with the applicable plan and board approvals.
Definition of "Rule 16b-3" as an exemption for transactions by insiders in connection with mergers or acquisitions
This definition links "Rule 16b-3" to mergers and acquisitions.
"Rule 16b-3" means the exemption from the short-swing profit rules for transactions by insiders involving securities in connection with mergers, acquisitions, or other corporate reorganizations, provided the transactions meet certain conditions and are approved by the board of directors.
Definition of "Rule 16b-3" as a rule governing the sale of securities by insiders
This definition ties "Rule 16b-3" to insider sales.
"Rule 16b-3" refers to the rule that allows insiders to sell securities without being subject to short-swing profit rules, provided the sale is conducted in compliance with specific guidelines, including board approval and adherence to the company’s policies.
Definition of "Rule 16b-3" as a provision to avoid liability for insider trading
This definition connects "Rule 16b-3" to liability avoidance.
"Rule 16b-3" means the provision that allows insiders to avoid liability for short-swing profits under Section 16(b) of the Securities Exchange Act of 1934 by ensuring that certain transactions are conducted with proper approval and disclosure.
Definition of "Rule 16b-3" as an exemption for transactions in securities under qualified plans
This definition links "Rule 16b-3" to qualified plans.
"Rule 16b-3" refers to an exemption for transactions involving securities under qualified retirement plans or employee benefit plans, where insiders can engage in transactions without triggering short-swing profit rules if the plan is properly designed and administered.
Definition of "Rule 16b-3" as an exemption for restricted stock transactions by insiders
This definition ties "Rule 16b-3" to restricted stock.
"Rule 16b-3" means the exemption from short-swing profit recovery for transactions involving restricted stock, where the stock is issued to insiders as part of an equity compensation plan and the transaction is approved by the board or a committee of independent directors.
Definition of "Rule 16b-3" as a provision for transactions involving stock appreciation rights
This definition connects "Rule 16b-3" to stock appreciation rights.
"Rule 16b-3" refers to the provision that permits transactions involving stock appreciation rights (SARs) to be exempt from the short-swing profit rules, provided they are structured according to the regulatory requirements and approved by the board.
Definition of "Rule 16b-3" as an exemption for transactions under a qualified employee stock purchase plan
This definition links "Rule 16b-3" to stock purchase plans.
"Rule 16b-3" means the exemption for transactions involving securities under a qualified employee stock purchase plan, allowing insiders to purchase or sell shares without violating short-swing profit rules, provided the plan is approved and meets regulatory standards.
Definition of "Rule 16b-3" as an exemption from Section 16(b) for stock transactions by insiders with specific restrictions
This definition ties "Rule 16b-3" to stock transactions with restrictions.
"Rule 16b-3" refers to the exemption from the short-swing profit rules of Section 16(b) for stock transactions by insiders, where specific restrictions or conditions apply to ensure the transaction complies with the requirements of the rule.
Definition of "Rule 16b-3" as a provision allowing stock buybacks from insiders
This definition connects "Rule 16b-3" to stock buybacks.
"Rule 16b-3" means the provision that allows a company to repurchase stock from insiders without triggering short-swing profit rules, provided the buyback is properly authorized and meets the conditions outlined in the regulation.
Definition of "Rule 16b-3" as a safe harbor for corporate insiders under certain transactions
This definition links "Rule 16b-3" to safe harbor provisions.
"Rule 16b-3" refers to a safe harbor provision under the Securities Exchange Act of 1934, allowing corporate insiders to engage in certain transactions without being subject to short-swing profit claims, provided the transactions meet specified conditions, including proper approval.
Definition of "Rule 16b-3" as a provision for transactions involving executive compensation
This definition ties "Rule 16b-3" to executive compensation.
"Rule 16b-3" means the provision that exempts certain transactions involving executive compensation, such as stock options or performance-based awards, from the short-swing profit rules, provided these transactions are approved by the company's board or a designated committee.
Definition of "Rule 16b-3" as an exemption for transactions related to director or officer stock transactions
This definition connects "Rule 16b-3" to director and officer stock transactions.
"Rule 16b-3" refers to the exemption from short-swing profit rules for transactions involving the purchase or sale of stock by directors or officers, provided these transactions are structured in accordance with the guidelines set forth by the rule.
Definition of "Rule 16b-3" as an exemption for stock exchanges between insiders
This definition links "Rule 16b-3" to stock exchanges between insiders.
"Rule 16b-3" means the exemption from short-swing profit recovery for transactions involving the exchange of stock between insiders, provided the transaction is approved by the board and meets the regulatory criteria.
Definition of "Rule 16b-3" as an exemption for certain transactions in connection with a public offering
This definition ties "Rule 16b-3" to public offerings.
"Rule 16b-3" refers to the exemption from the short-swing profit rules for transactions involving the purchase or sale of securities by insiders in connection with a public offering, provided the offering complies with the conditions specified under the rule.
Definition of "Rule 16b-3" as a regulation applicable to restricted stock units (RSUs)
This definition connects "Rule 16b-3" to restricted stock units.
"Rule 16b-3" means the regulation that provides an exemption for transactions involving restricted stock units (RSUs) granted to insiders, allowing them to participate in RSU programs without triggering short-swing profit rules, subject to board approval.
Definition of "Rule 16b-3" as an exemption for stock grants under employee incentive plans
This definition links "Rule 16b-3" to employee incentive plans.
"Rule 16b-3" refers to the exemption for transactions involving stock grants issued under employee incentive plans, such as stock bonuses, which are not subject to short-swing profit recovery if the plan complies with the required conditions.
Definition of "Rule 16b-3" as a rule for the transfer of stock options to family members
This definition ties "Rule 16b-3" to family stock option transfers.
"Rule 16b-3" means the rule that allows insiders to transfer stock options to family members without triggering the short-swing profit provisions of Section 16(b), provided the transfer is part of a valid gift or estate plan and meets the applicable conditions.
Definition of "Rule 16b-3" as a regulation governing the exercise of stock options by insiders
This definition connects "Rule 16b-3" to stock option exercises.
"Rule 16b-3" refers to the regulation that governs the exercise of stock options by insiders, allowing them to exercise options without being subject to the short-swing profit rule, provided the exercise is conducted in compliance with company policies and board approval.
Definition of "Rule 16b-3" as an exemption for transactions in connection with a spin-off or divestiture
This definition links "Rule 16b-3" to spin-offs and divestitures.
"Rule 16b-3" means the exemption from short-swing profit rules for transactions involving securities in connection with a corporate spin-off or divestiture, provided the transaction is structured to comply with the regulatory framework established by the rule.
Definition of "Rule 16b-3" as a safe harbor for transactions involving stock options for retiring executives
This definition ties "Rule 16b-3" to stock options for retiring executives.
"Rule 16b-3" refers to the safe harbor provision allowing transactions involving stock options granted to retiring executives, provided these transactions comply with board approval and other conditions set out by the rule.
Definition of "Rule 16b-3" as a provision allowing certain trades by insiders during open trading windows
This definition connects "Rule 16b-3" to open trading windows.
"Rule 16b-3" means the provision that allows insiders to engage in stock trades during an open trading window, without being subject to short-swing profit rules, provided these transactions meet the criteria for approval and reporting.
Definition of "Rule 16b-3" as an exemption for transactions involving the exercise of stock appreciation rights (SARs)
This definition links "Rule 16b-3" to stock appreciation rights (SARs).
"Rule 16b-3" refers to the exemption for transactions involving the exercise of stock appreciation rights (SARs) by insiders, provided the transaction is conducted in compliance with the company’s equity compensation plan and approved by the board.
Definition of "Rule 16b-3" as a rule applying to both non-qualified and incentive stock options
This definition ties "Rule 16b-3" to stock options types.
"Rule 16b-3" means the rule that applies to both non-qualified stock options (NSOs) and incentive stock options (ISOs), providing exemptions from the short-swing profit rules for transactions related to the exercise of these options by insiders, subject to compliance with board approval.
Definition of "Rule 16b-3" as an exemption for transactions involving securities in connection with a recapitalization
This definition connects "Rule 16b-3" to recapitalizations.
"Rule 16b-3" refers to the exemption from short-swing profit rules for transactions involving securities in connection with a recapitalization, restructuring, or reorganization of the company, provided the transaction meets the regulatory conditions outlined in the rule.
Definition of "Rule 16b-3" as a provision for transactions involving securities in a secondary offering
This definition links "Rule 16b-3" to secondary offerings.
"Rule 16b-3" means the provision that provides an exemption from short-swing profit rules for transactions involving securities in a secondary offering by insiders, provided the offering complies with applicable registration and approval requirements.
Definition of "Rule 16b-3" as an exemption for certain insider transactions conducted through trust accounts
This definition ties "Rule 16b-3" to trust accounts.
"Rule 16b-3" refers to the exemption for certain transactions conducted by insiders through trust accounts, such as irrevocable trusts, without triggering the short-swing profit provisions, provided the trust structure meets regulatory standards.
Definition of "Rule 16b-3" as an exemption for insider transactions involving the sale of company stock in response to financial hardship
This definition connects "Rule 16b-3" to financial hardship transactions.
"Rule 16b-3" means the exemption from the short-swing profit rule for insider transactions involving the sale of company stock in response to financial hardship, provided the transaction is conducted in accordance with specific guidelines and is properly documented.
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