California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 4 - Rights, Warrants and Options › Section 260.140.45 - Limitation on Number of Securities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The total number of securities issuable
					 upon exercise of all outstanding options [exclusive of rights described in
					 Section 260.140.40 and warrants described
					 in Sections
					 260.140.43 and
					 260.140.44 of these rules, and any
					 purchase plan or agreement as described in Section
					 260.140.42 of these rules
					 (provided that the purchase plan or agreement provides that all securities will
					 have a purchase price of 100% of the fair value (Section
					 260.140.50) of the security either
					 at the time the person is granted the right to purchase securities under the
					 plan or agreement or at the time the purchase is consummated)], and the total
					 number of securities called for under any bonus or similar plan or agreement
					 shall not exceed a number of securities which is equal to 30% of the then
					 outstanding securities of the issuer (convertible preferred or convertible
					 senior common shares of stock will be counted on an as if converted basis),
					 exclusive of securities subject to promotional waivers under Section
					 260.141, unless a percentage
					 higher than 30% is approved by at least two-thirds of the outstanding
					 securities entitled to vote.
(b)
					 The 30% limitation set forth in this Rule, or such other percentage limitation
					 as may be approved pursuant to this Rule, shall be deemed satisfied if the plan
					 or agreement provides that at no time shall the total number of securities
					 issuable upon exercise of all outstanding options and the total number of
					 shares provided for under any stock bonus or similar plan or agreement of the
					 issuer exceed the applicable percentage as calculated in accordance with the
					 conditions and exclusions of this Rule, based on the securities of the issuer
					 which are outstanding at the time the calculation is made.
(c) This section shall not apply to any plan
					 or agreement that complies with all conditions of Rule 701 of the Securities
					 Act of 1933, as amended (17
					 C.F.R. 230.701); provided that for purposes
					 of determining such compliance, any registered domestic partner shall be
					 considered a "family member" as that term is defined in Rule 701.
1.
						Renumbering and amendment of former section
						260.140.44 to section
						260.140.45 filed 5-3-83; effective
						thirtieth day thereafter (Register 83, No. 19).
2. Amendment filed
						12-5-91; operative 1-6-92 (Register 92, No. 9).
3. Amendment filed
						1-15-97; operative 1-15-97 pursuant to Government Code section
						11343.4(d)
						(Register 97, No. 3).
4. Amendment filed 12-28-2000 as an emergency;
						operative 1-1-2001 (Register 2000, No. 52). A Certificate of Compliance must be
						transmitted to OAL by 5-1-2001 or emergency language will be repealed by
						operation of law on the following day.
5. Amendment refiled 5-2-2001
						as an emergency; operative 5-2-2001 (Register 2001, No. 18). A Certificate of
						Compliance must be transmitted to OAL by 8-30-2001 or emergency language will
						be repealed by operation of law on the following day.
6. Amendment
						refiled 8-30-2001 as an emergency; operative 8-30-2001 (Register 2001, No. 35).
						A Certificate of Compliance must be transmitted to OAL by 12-28-2001 or
						emergency language will be repealed by operation of law on the following
						day.
7. Certificate of Compliance as to 8-30-2001 order, including
						further amendment of section heading and section, transmitted to OAL 12-27-2001
						and filed 2-7-2002 (Register 2002, No. 6).
8. New subsection (c) and
						amendment of NOTE filed 7-9-2007; operative 7-9-2007 pursuant to Government
						Code section
						11343.4
						(Register 2007, No. 28).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Sections
						  25102,
						  25110,
						  25140,
						  25610
						  and
						  25612.5,
						  Corporations Code.