Institute Comments on NASD Shareholder Approval Proposal

Washington, DC, February 5, 2001 - The Institute recently filed a comment letter with the Nasdaq Stock Market, Inc. in response to its Bulletin soliciting comments on proposals to require shareholder approval of stock option plans. Specifically, Nasdaq requested comment on recommendations by the New York Stock Exchange's Special Task Force on Stockholder Approval Policy that generally would require shareholder approval for all plans that included officers and directors, and would set an overall dilution standard for plans that did not include officers and directors.

The Institute's letter supports the NYSE Task Force recommendations and urges Nasdaq to propose and adopt similar (or alternative) rules in coordination with the NYSE. The letter notes that differing standards among various exchanges might create a "race to the bottom" if exchanges compete with each other to attract new listings.