WASHINGTON, DC – Congressman Rob Andrews (D-NJ-01) today stated his intention to achieve a bipartisan compromise in regard to proposed changes to the Wealth Through the Workplace Act (H.R. 3462), a bill that would amend ERISA and the Internal Revenue Code to treat certain employer provided stock option programs as tax deferred employee benefit plans.   Andrews, the ranking Democrat on the Subcommittee on Employer-Employee Relations, offered substitute language to broaden and improve H.R. 3462's employee involvement and protections but later withdrew the amendment on the condition that he have the opportunity to work with Chairman Boehner to negotiate these changes prior to Committee markup later in June.

"I am very pleased that Chairman Boehner has agreed to work together to produce a bipartisan stock option bill.  These changes will benefit hard working American men and women by encouraging employees to hold stock and become employee-owners as well as adding to their retirement savings," said Congressman Andrews.  "The changes that I have proposed do not stray far from the original proposal and I feel that we can certainly reach an agreement that is amicable to both sides."

Under H.R. 3462, certain stock purchase arrangements would be tax-deferred provided:

- The options may only be granted to employees to purchase stock in the employer or any other corporation;
- The options may only be exercised by employees who remain employees at all times from the granting of the option until six months before the exercise of the option;
- The Board of Directors must in writing approve the arrangement either 12 months before or after the arrangement is adopted;
- The options may not be granted to employees possessing 5% or more of the total combined voting power or value of all classes of stock;
- At least 50% of all eligible employees must be covered by the arrangement (employees with less than 2 years of service, who work 20 hours or less, who work less than 5 months a year, and who are not US citizens may be excluded from eligibility);
- All employees shall have the same rights and privileges;
- The option price may not be less than 85% of the fair market value of the stock at the time the stock is granted or exercised;
- Applicability is limited to publicly traded stocks;
- The arrangement cannot be linked to any reduction in regular compensation; and
- Employees shall be provided all SEC disclosure statements.

Andrews’ amendment calls for an increase in the number of employees required to be offered options and it ensures that lower paid workers receive a proportionate share of options on the same terms as higher paid employees, as well as ensuring that employees receive adequate information and legal protection.

Specifically, the Andrews’ substitute:

- Requires that the plan must be offered to 90% of eligible employees (Boehner is 50%).
- Eliminates the bill's exclusion for non-U.S. citizens, and uses the current ERISA standard.
- Permits exclusion of workers with less than 1 year of service and less than 10 hours a week and requires pro rata credit for workers working 10 or more hours (Boehner permits exclusion for up to 2 years and under 20 hours). 
- Makes clear that the plan must be offered on the same terms to everyone.
- Excludes the 5 highest paid corporate officers or members of the board of directors.
- Requires allocation of options based on a formula which does not result in higher paid employees receiving options of greater value than their percentage receipt of employee wage compensation (but lower paid workers may receive a greater proportionate share). 
- Expands the information requirements to ensure that employees are provided information more comparable to current ERISA standards.
- Makes clear that stock option plans remain subject to federal securities law and state contract law.
- Changes the regulatory authority for the provision prohibiting reductions in compensation from the Department of Treasury to the Department of Labor.

Congressman Boehner has said that he expects to arrange a Committee markup sometime in June.  As part of the compromise, Congressman Boehner has agreed to discuss all amendments to H.R. 3462 prior to Committee mark-up.

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