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Frequently Asked Questions
  Staff Interpretation Letter 2008-21
Identification Number 765
This is in response to your correspondence regarding whether the company’s proposed cancellation of previously granted stock options and the granting of new options (the “Cancellation and Issuance”) would require shareholder approval pursuant to Marketplace Listing Rule 4350(i)(1)(A) and IM-4350-5 (collectively, the “Rule”).  You stated that the company believes that the actions comprising the Cancellation and Issuance are authorized under the Plans’ current provisions.  Both Plans were approved by the company’s shareholders.
 
According to the information you provided, under the Cancellation and Issuance, the company would cancel certain options granted under the Plans and grant new options (the “Replacement Options”) to the optionees whose options were cancelled.  Prior to any cancellation becoming effective, the company would obtain the written consent from each optionee whose options would be cancelled.  All the Replacement Options would be granted under Plan 2 using currently available grants.  No changes would have to be made to Plan 2 for the Replacement Options to be granted.
 
Both Plans contain provisions authorizing the plan administrator: (i) to establish a program that would allow an optionee to exchange an award under the plan for one or more other types of awards on terms as determined by the administrator, and (ii) to offer to buy out for a payment in cash or shares or other consideration any grant previously made.
 
Following our review of the information you provided, we have determined that the Cancellation and Issuance would not be a material amendment to the Plans under the Rule because the specific actions that would be involved are specifically permitted by the provisions of the Plans.  As such, the Cancellation and Issuance would not require shareholder approval under the Rule
Publication Date*: 7/31/2012 Mailto Link Identification Number: 765
material_search_footer*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different Nasdaq web site.
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