Shareholder Approval Requirement for Amendment of Equity Compensation Plan

[Chaz]

Under the NYSE's listing standards (as approved by the SEC), issuers are required to obtain shareholder approval of material revisions to equity compensation plans. If a issuer wants to remove a minimum five year vesting schedule in a restricted stock plan to make no minimum vesting period required (so that "restricted" stock can be awarded that is immediately vested), is that a material revision requiring shareholder approval because the plan is now authorized to make a new form of award? Thanks.

[Chaz]

Bueller? Bueller? Does anyone have any insight on this?

[J Simmons]

What definition of "material revisions" does the SEC provide?

Apart from needing to know that, removing the vesting requirement will result in more of the 'restricted' stock being awarded than if the vesting requirement is kept. This has the affect of diluting the percentages of other, existing shareholders more than the equity comp plan would as approved before the change. Given that a prime reason for the shareholder approval requirement is to protect the existing investments, I would think that you would need shareholder approval to make this change to eliminate the vesting requirement.

Otherwise, it might be too easy to "Win Ben Stein's Money"