June 23, 2003

Late Friday, the NYSE told

Late Friday, the NYSE told listed companies that its revised listing standard requiring shareholder approval of equity compensation plans – and prohibiting the use of broker nonvotes for those votes – will become effective as of June 30th (and will let its pilot program expire on that date). Now, the SEC must approve the NYSE’s final rule by June 30th – otherwise the following is subject to change.

The transition is as follows: plans adopted before June 30th are not subject to shareholder approval unless they are materially revised – with the exception of special transition rules that apply to “formula plans” and “discretionary plans” (at a minimum, all pre-existing plans may be used for a limited transition period ending on the first to occur of (1) the company’s next annual meeting at which directors are elected that occurs on or after December 27, 2003, (2) June 30, 2004, and (3) the expiration of the plan). For broker nonvotes, the final rules are effective for any shareholders meeting that occurs on or after September 28, 2003.

The final rules are slightly different than the proposed rules. For subscribers, we have posted the NYSE’s final rules at

We have also posted an interview with Marc Trevino of Sullivan & Cromwell on the Disney Opinion and Personal Liability for Directors at