This is in response to your correspondence regarding whether a proposed amendment (the “Amendment”) to the Plan would require shareholder approval pursuant to Marketplace Listing Rule 4350(i)(1)(A) and IM-4350-5 (collectively, the “Rule”). You stated
that the purpose of the Amendment would be to eliminate an inconsistency regarding the Plan’s eligibility requirements.
According to the information you provided, the Plan was originally adopted and approved by shareholders approximately six years ago. Certain amendments to the Plan were adopted and approved by shareholders approximately three years ago (the “Plan Amendments”).
The amendments did not relate to the eligibility requirements. The Plan, both as originally adopted and as amended, contains a provision relating to eligibility (the “Eligibility Provision”) which states that awards may be made to officers, employees, or
consultants of the company or a subsidiary or an affiliate. However, as a result of what you described as an apparent scrivener’s error, the Plan Amendments introduced a definition of a “Participant” in another section of the Plan as any employee of the company,
a subsidiary or an affiliate. This definition does not include “officers” or “consultants.”
You stated that it has always been the company’s intent and practice to allow awards to be made to not only employees, but also to officers and consultants, and that the change in the definition of “Participant” in the Plan as amended was apparently an
inadvertent error. Notwithstanding this definition, the Plan as amended contains the Eligibility Provision, which allows for awards to be made to officers and consultants as well as employees. Moreover, the proxy statements for the shareholders' meetings
at which the shareholders approved the Plan and the Plan Amendments each specifically stated that the company’s officers, employees and consultants would be eligible to participate in the Plan.
You stated that to eliminate the inconsistency, the company would adopt the Amendment to revise the definition of “Participant” to make it consistent with the Eligibility Provision and make other conforming changes.
Following our review of the information you provided, we have determined that the Amendment would not require shareholder approval under the Rule because it would not be a material amendment to the Plan. The Amendment would not expand the class of eligible
participants because officers and consultants are already eligible to participate in the Plan under the Eligibility Provision. Furthermore, the proxy statements for the meetings where the company’s shareholders approved the Plan and the Plan Amendments each
stated that such persons are eligible to participate. In addition, the Amendment would not result in: (i) any increase in the number of shares available under the Plan; or (ii) any material increase in benefits to participants; or (iii) any expansion in the
types of options or awards available.