Is shareholder approval required to add Restricted Stock Units (“RSUs”) to an equity compensation plan that allows for the issuance of restricted stock?
An award of a RSU typically results in the issuance of restricted stock on a deferred basis after vesting requirements are met. As such, this type of award is substantially equivalent to the award of restricted stock, and if the plan allows for the award of restricted stock, the addition of RSUs is not a material modification that requires shareholder approval under NASDAQ’s rules. Shareholder approval would be required, however, to add RSUs to a plan that does not provide for restricted stock awards because the revision would expand the types of awards available.
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 shareholder approval required to add Restricted Stock Units ("RSUs") to an equity compensation plan that allows for the issuance of restricted stock?
- Does NASDAQ require shareholder approval of equity compensation plans?
