Date: 9-16-2009
To: All Concerned
From: RCMP
Re: DO September $76.25 (adjusted strike price) Short Call Option (Original Strike =$80)
On the above date, the account sold 100 shares of Diamond Offshore at $76.25/share vs. the adjusted strike price of the expiring call (the call was exercised against the RCMP account).
The adjusted strike price of the call was a result of a “special” dividend. (July 23, 2009 Diamond Offshore Drilling, Inc. declared a special cash dividend of $1.875 per share of common stock and a regular quarterly cash dividend of $0.125 per share of common stock. Both dividends are payable on September 1, 2009 to shareholders of record on August 3, 2009.) This was the second adjustment to the strike price, as the company paid an identical “special dividend” of $1.875 per share of common stock and its regular quarterly cash dividend of $0.125 per share on April 29, 2009.
Houston-based Diamond Offshore Drilling, Inc. (DO) has meticulously remained committed to returning excess cash to shareholders through special dividends. Since the beginning of 2006, in addition to its regular dividend, the company has regularly been paying a special dividend. For the second quarter of 2009, Diamond declared a regular dividend of $0.125 and the 8th consecutive quarter of a special dividend of $1.875. The total dividend offered in the period was $2.00 per share.
(From: http://www.stockbloghub.com/2009/08/19/diamond-offshore-drilling-another-special-dividend/12673 )
The $80 strike price call was sold for a premium of $5.85 on 4-23-2009