Maximizing Shareholder Approval
In June 2003, the SEC approved new rules adopted by the NYSE and NASDAQ exchanges requiring shareholder approval for the vast majority of underwater stock option exchange programs. This more onerous requirement has forced the evolution of more “shareholder friendly” programs designed to ensure approval in the proxy voting process. The following summarizes the most shareholder-friendly approaches to each major design consideration.
Design Consideration | Shareholder-Friendly Approach |
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Option Holder Eligibility |
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Grant Eligibility |
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Exchange Rate |
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New Award Vesting |
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Share Recaptures |
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