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Client has existing option plan (that does not include ISOs) and a plan that allows employees to purchase stock from the Company (not a 423 plan). Client wants to amend existing option plan to include ISOs and amend existing stock purchase plan so that it qualifies under 423, but does not want to go to shareholders for approval of either plan. The shareholders approved the existing plans two years ago.

Should the client have the shareholders approve the amended plans (the amended plans will be substantially different that the existing plans)? Do Code Sections 423 and 422 require shareholder approval for material amendments to plans?

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