Security-Based Compensation Arrangements: On the Agenda for Your Next Securityholder Meeting

A recent Toronto Stock Exchange staff notice is a reminder that TSX-listed companies should amend their option, share purchase or other security-based compensation arrangements¹ to add a detailed amendment provision. Effective June 30, 2007, companies will not be permitted to amend plans that do not contain such a provision—even to make housekeeping changes—without securityholder approval. The notice also provides a framework for companies to consider using if they wish to have the power to extend options whose expiry date falls within a blackout period.

The date referred to above, June 30, 2007, is the last day of temporary relief provided by the TSX under an old staff notice that heralded major changes to section 613 of the Toronto Stock Exchange Company Manual and that took effect on January 1, 2005. Before these changes, securityholder approval was required for amendments to security-based compensation arrangements that the TSX considered material.