E*Trade swaps 3.53 mln shares for $16 mln debt

NEW YORK May 22 (Reuters) - E*Trade Financial Corp (ETFC.O), the online broker, on Thursday disclosed that it swapped 3.53 mln shares earlier this month for $16 million of outstanding debt.

E*Trade in a Securities and Exchange Commission filing said that between May 1 and May 16 it exchanged the stock for $11 million of 7-3/8 percent notes maturing in 2013 and $5 million of 7-7/8 percent notes due 2015. Based on Wednesday's closing price, the shares swapped are worth about $13.9 million.

The broker also said it amended its bylaws so that directors running in uncontested elections must receive a majority of shares cast, not merely a plurality. Directors failing to win a majority of the votes are now required to resign. (Reporting by Joseph A. Giannone, editing by Gerald E. McCormick)