A company’s proxy statement relating to its compensation plan is not materially misleading if it discloses the number of securities underlying the company’s obligation to deliver shares when an option-holder exercises options under the plan, a federal appeals court has ruled.
In suing The Boeing Co., a shareholder claimed that the company violated Item 10 of SEC Rule 14a-101 because a proxy statement about its compensation plan did not tell investors that the number of options that could be issued was not limited by the plan’s restriction on the number of shares of stock available for issuance under the plan.
