TAKING STOCK

Canadian companies may want to evaluate their stock option granting practices and consider the following steps:

• Adopt blackout periods to preclude option grants when executives have material information not yet released publicly.

• Adopt a fixed schedule of option grant dates, but refrain from making grants on those dates when executives have market-moving news.

• Keep detailed minutes of compensation committee and board meetings during which options are granted or discussed.

• Refrain from making option grants for a retroactive date.

• Assess the federal investigation risk by reviewing past grants to determine if the grant date matches the grant approval date and whether options were granted when stock prices were depressed.

• Prepare to meet new U.S. Securities and Exchange Commission disclosure requirements by gathering information on the timing and exercise price of 2006 executive option grants

Source: Osler, Hoskin & Harcourt L.L.P.