This is in response to your correspondence regarding proposed amendments to the company’s stock purchase plans (the “Amendments”). You asked whether the Amendments would require shareholder approval under
Listing Rule 5635(c) and
IM-5635-1 (collectively, the “Rule”).
According to the information you provided, the company has two stock purchase plans: one for eligible employees in the United States (the “U.S. ESPP”), which is designed to qualify under Section 423 of the Internal Revenue Code, and one for eligible employees
who are neither U.S. citizens nor U.S. residents for tax purposes (the “Non-U.S. ESPP”). The company obtained shareholder approval of the U.S. ESPP, as required by Section 423 of the Internal Revenue Code. The Non-U.S. ESPP has not been approved by shareholders;
such approval was not required under the Listing Rules in effect at the time the Non-U.S. ESPP was adopted.
You stated that Section 423 generally does not permit qualified employee stock purchase plans to provide different terms or conditions for one or more subgroups of employees. For this reason, the company maintains the Non-U.S. ESPP, which operates in a
manner that complies with Section 423 except for variations due to differences in local law. For example, the securities or employment laws in some countries may require that separate bank accounts be created for each employee’s payroll deductions under a
stock purchase plan, while other countries may prohibit such segregation of funds. You stated that other than variations due to such local law differences, the material features of the Plans are the same, including those relating to the purchase price, the
length of the offering period, and the maximum amount that a participant can purchase during an offering period.
Pursuant to the Amendments, the company would add a specified number of shares of its common stock (the “Shares”) to the shares available under the Non-U.S. ESPP and would correspondingly reduce, on a one-for-one basis, the number of shares available under
the U.S. ESPP. You stated that the company is seeking to make the Amendments because it projects that the Non-U.S. ESPP does not have a sufficient number of shares available for future issuances.
Following our review of the information you provided, we have determined that the Amendments would not require shareholder approval under the Rule because the Shares would come from the available share reserve that shareholders approved for the U.S. ESPP
and the terms of the Non-U.S. ESPP are substantially the same as those of the U.S. ESPP. The Amendments would not result in an increase in the number of shares available for issuance, a material increase in the benefits to participants, a material expansion
of the class of eligible participants, or an expansion in the types of awards available.