Seven Network executives, David Leckie and Bruce McWilliam disclosed on Monday to the ASX that they had sold a large number of shares in their employer pursuant to a "cost collar financing arrangement". Leckie later told the Financial Review that "in these times, when it is impossible to roll over cost collars, it’s necessary and prudent to sell the shares." Leckie also claimed that the share sale did not affect his "view of Seven Network going forward [with] the company well placed with a strong balance sheet."
It is understood that the shares sold by Leckie were accumulated following the exercise of performance options (Leckie was issued with 3 million options upon his appointment in 2003 and a further 3 million in June 2005 when he renewed his employment contract). As a result of the 'collar and cap' arrangement, Leckie was able to receive an average selling price of $8.97 for the 2.99 million shares disposed. Courtesy of hedging his exposure to Seven, Leckie was able to reap proceeds of $26.8 million. Had Leckie's exposure not been hedged, his proceeds would have been only $18.05 million