Summary
Cincinnati Financial Corporation (CINF) filed an 8-K on February 22, 2005, to report a notice from Nasdaq regarding a non-compliance issue with their 2003 Non-Employee Directors’ Stock Plan. The company inadvertently failed to obtain shareholder approval for this specific stock incentive plan, which is a requirement under Nasdaq Marketplace Rule 4350(i)(1)(A). This resulted in a notice from Nasdaq on February 22, 2005, requiring CINF to submit a plan and timetable for compliance. The company has since determined to seek shareholder approval for the 2003 Non-Employee Directors’ Stock Plan at its 2005 annual meeting. The shares issued under this plan to date represent a minimal amount (less than one-tenth of one percent of outstanding shares) and are all for non-employee directors. These directors have agreed not to transfer or vote their shares until shareholder approval is obtained. If the plan is not approved, the issued shares will be returned to treasury. All other CINF stock-based incentive plans have previously received shareholder approval.
Key Highlights
- 1Nasdaq notified Cincinnati Financial Corporation (CINF) of non-compliance with shareholder approval rules for its 2003 Non-Employee Directors’ Stock Plan.
- 2The non-compliance stems from failing to submit the 2003 plan for shareholder approval as required by Nasdaq Marketplace Rule 4350(i)(1)(A).
- 3CINF received the notice from Nasdaq on February 22, 2005, and must submit a compliance plan by March 9, 2005.
- 4The company plans to seek shareholder approval for the 2003 plan at the upcoming 2005 annual shareholders' meeting.
- 5A small number of shares (less than 0.1% of outstanding) have been issued under the non-compliant plan to non-employee directors.
- 6Directors who received shares under the plan have agreed to restrictions on transferring or voting these shares until approved by shareholders.
- 7All other CINF stock-based incentive plans are already shareholder-approved.