NYSE Amends Shareholder Approval Policy Regarding Stock Option PlansWashington, DC, October 8, 1998 - Recently, the New York Stock Exchange Board of Directors approved amendments to the Exchange's shareholder approval requirements concerning the definition of broadly based stock option plans. According to the Board's press release, the Board modified the Exchange's definition as follows: - At least a majority of the issuer's full-time, exempt U.S. employees are eligible to participate under the plan.
- At least a majority of the shares awarded under the plan (or shares of stock underlying options awarded under the plan) during the shorter of the three-year period commencing on the date the plan is adopted by the issuer, or the term of the plan itself, are made to employees who are not officers of directors of the issuer.
- The definition of officers conforms to SEC's Rule 16-1(f).
These amendments were approved by the Board based on recommendations made by a special Task Force, which was established by the Exchange to evaluate comments received on the policy amendment adopted last April. (Those amendments, among other things, defined broadly based plans as having at least 20% of the company's employees eligible to participate in the plan, of which no more than half of whom could be officers or directors. The Institute submitted a comment letter on the April amendments.) The press release notes that the policy amendment establishes the definition of a broadly based plan as an exclusive test, rather than the current safe harbor. The policy amendment will be submitted for SEC comment and approval.
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