Companies Must Permit Vote on Resolutions Calling For Shareholder Approval of Stock Option Plans, SEC Says

TIAA-CREF Praises Decision

Jul 15, 2002, 01:00 ET from TIAA-CREF

    NEW YORK, July 15 /PRNewswire/ -- TIAA-CREF today praised a Securities and
 Exchange Commission staff decision that will require votes on certain equity
 compensation plans. Under the new policy released today, resolutions asking a
 company to obtain shareholder approval for all equity compensation plans that
 would potentially result in material dilution to existing shareholders must be
 included in corporate proxy materials, if other requirements are met.
     As a major pension provider and advocate for improved corporate
 governance, CREF, the equities arm of TIAA-CREF, had submitted proxy
 resolutions at several companies at the start of this year calling for
 shareholder voting on stock option plans. In February, the SEC staff held that
 the companies did not have to submit the CREF resolutions to their
 shareholders, because the resolutions involved "ordinary business" normally
 left to the discretion of management.
     The companies which the SEC had allowed to eliminate the CREF resolution
 were Adobe Systems, AutoDesk, Cadence Design Systems and Synopsys. However,
 the resolution did come to a vote at Mentor Graphics, where it won support
 from 57% of the shares voted at the company's May 7 annual meeting.
     "We are gratified that the SEC recognized the importance of the
 shareholder approval mechanism," said Peter Clapman, senior vice president and
 chief counsel for corporate governance at TIAA-CREF.  Clapman noted that the
 New York Stock Exchange in June proposed to require that all companies listed
 on that exchange submit all equity compensation plans to shareholders.  "It
 remains unclear whether Nasdaq also will move to require approval," said
 Clapman, "and so we are anxious to preserve our right, and the right of other
 shareholders, to raise this at particular companies." CREF had submitted the
 resolution to 13 companies this year.  Proposals were withdrawn at eight
 companies, including four where companies agreed to implement the requested
 policy, and discussions are continuing at four firms.
     TIAA-CREF, with approximately $275 billion in assets under management, is
 the premier pension system for people employed in education and research in
 the U.S., serving over two million participants at more than 11,000
 institutions. The organization is widely recognized as a major voice for
 shareholder rights and improved corporate governance. In addition to providing
 pensions, the TIAA-CREF group of companies offers after-tax annuities, mutual
 funds, life and long-term care insurance and trust services to the general
 public. TIAA-CREF Tuition Financing, Inc., a subsidiary of TIAA, manages 13
 state-sponsored college savings plans, more than any other company.
     The text of the SEC staff decision is available at:
     For further information, please contact Patrick Connor, TIAA-CREF Media
 Relations, Tel. (212) 916-5769; email:
                     MAKE YOUR OPINION COUNT -  Click Here