Current through Register Vol. 35, No. 18, September 24, 2024
A. For purposes of the exemption provided in
Section
58-13C-202 U,
employee benefit plans that require advance cash contributions from employees
may be denied the benefit of this exemption where employee money is used to
purchase securities of the employer or its affiliates unless:
(1) the formula price at which employees may
purchase shares is calculated at least annually and is not less than 85 percent
of the fair market value of the stock at the beginning of the one-year purchase
period or the end of the purchase period, whichever is lower, and shares
purchased are fully paid for at the end of each period, stock certificates are
issued and no fractional shares are issued;
(2) the issuer delivers to all participating
employees copies of the issuer's annual financial statements;
(3) a participating employee has the right to
withdraw from the plan at any time without penalty;
(4) if there is no adequate public market for
the issuer's shares, the issuer offers to repurchase the shares at a price
determined by the same formula pursuant to which the shares were purchased by
the employee under the issuer's plan, upon the happening of either of the
following events:
(a) the employee ceases to
be employed by the issuer (or a subsidiary) and a written request for
repurchase is received by the issuer within 180 days after termination of
employment; or
(b) the employee
experiences severe financial hardship due to illness or death in the immediate
family, major uninsured casualty loss or other unforeseen events, and delivers
to the issuer a written irrevocable election to have the issuer repurchase the
shares, including a statement in reasonable detail as to the nature of the
employee's financial hardship, and within 20 days the issuer's board of
directors does not determine that no severe financial hardship
exists;
(5) all funds
contributed to the plan for the purchase of shares are protected from claims of
creditors of the issuer;
(6) any
withholding from an employee's compensation is limited to not more than ten
percent of the compensation each pay period;
(7) all shares issued under the plan have
voting, dividend and liquidation rights; and
(8) if the securities to be purchased under
the plan are not registered under the Securities Act of 1933, the issuer has a
satisfactory opinion of counsel as to its exempt status under that
act.
B. The following
transactions are exempted pursuant to Section
58-13C-203:
offers or sales of a security by an issuer pursuant to a written compensatory
benefit plan including, without limitation, a purchase, savings, option, bonus,
stock appreciation, profit-sharing, thrift, incentive, pension or similar plan,
and interests in any such plan, provided that the offers and sales qualify for
use of the registration exemption in Rule 230.701 under Section 28 of the
Securities Act of 1933.
