What Should Canadian Public Companies Do?
Canadian companies should consider the following courses of action to ensure their option-granting practices are in compliance with Canadian securities laws and are consistent with their stock option plans: • Strike a special committee of disinterested directors to lead an independent review of the company’s stock option–granting practices to ensure that grants were issued on the date approved by the board and in compliance with the requirements of the stock option plan, the company’s other procedures and with applicable securities laws; • If an internal review discloses stock option–granting irregularities, the special committee should consider engaging independent legal counsel to review and report on the possible legal, accounting, tax and regulatory impact of non-compliant grants. Independent counsel should be instructed to provide recommendations to the company to bring it into compliance and the company should act upon those recommendations, including resetting stock option grant
