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Frequently Asked Questions
  Staff Interpretation Letter 2014-5
Identification Number 1132
This is in response to your correspondence asking if an amendment to a shareholder approved equity compensation plan to permit the accrual of cash dividend equivalents for restricted stock units (“RSUs”) would be considered a material amendment requiring shareholder approval under Listing Rule 5635(c) and IM-5635-1 (collectively, the “Rule”).
 
You stated that the Company currently has a shareholder-approved equity compensation plan (the “Plan”) that allows for grants of restricted stock, which may accrue dividends during vesting, and of RSUs, which do not accrue dividends. The Company proposes to amend the Plan to allow for the accrual of cash dividend equivalents with respect to the RSUs. The cash dividend equivalents would not vest until the underlying RSUs vest, and would be payable in cash. You stated that the holders of the RSUs would not be able to elect to receive common stock or stock units in lieu of the cash payment. You stated that there would be no other changes to the Plan and the proposed amendment would not either require or permit the issuance of additional shares under the Plan.
 
Following our review of the information provided, including that the proposed amendment you described would not necessitate the issuance of any shares under the Plan, we have determined that it would not be material for purposes of the Rule and, accordingly, would not require shareholder approval under the Rule.
 
Publication Date*: 11/12/2014 Mailto Link Identification Number: 1132
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