Does NASDAQ require shareholder approval of equity compensation plans?
Yes. Listing Rule 5635(c) requires that a NASDAQ listed company seek shareholder approval when it establishes or materially amends a stock option or purchase plan or other arrangement pursuant to which stock may be acquired by officers, directors, employees or consultants. This includes any sale of securities at a discount to the market value to an officer, director, employee or consultant, even if part of a larger financing transaction. In addition, please see Interpretative Material 5635-1, which focuses on those corporate actions that would be considered material amendments to existing plans and/or arrangements, and thus, require shareholder approval. IM 5635-1 also discusses circumstances under which shareholder approval is not required pursuant to Listing Rule 5635(c).
Related Questions
- NASDAQ adopted its current rules regarding shareholder approval of equity compensation plans on June 30, 2003. Do plans adopted prior to that date require additional shareholder approval?
- Is NASDAQs requirement for shareholder approval of equity compensation plans or arrangements applicable to initial listings?
- Does NASDAQ require shareholder approval of equity compensation plans?
