Current through Register Vol. 63, No. 9, September 1, 2024
(1) The
North American Securities Administrators Association, Inc., has adopted a
Statement of Policy regarding Options and Warrants. This rule is designed to
parallel, with modifications, the Statement of Policy regarding Options and
Warrants adopted by the North American Securities Administrators Association,
Inc. The provisions of this rule shall apply to offerings of securities
registered pursuant to ORS
59.065 and OAR 441, Division
065.
(2) Options granted by the
issuer to underwriters or other persons as compensation, in whole or in part,
for the sale of securities must be reasonable in amount and in terms and
conditions under the circumstances of the particular issue. Options which meet
all of the following requirements are presumptively reasonable:
(a) The number of shares or units called for
by such options does not exceed ten percent of the number of shares or units
underwritten for the issuer in the offering;
(b) The options do not exceed five years in
total duration;
(c) The options are
exercisable at an exercise price which is initially not less than the public
offering price of the securities underwritten and the options provide for an
increase of the exercise price by seven percent of the initial exercise price
for each full year such options are outstanding; or the options are exercisable
at a price which is not less than 120 percent of the public offering price of
the securities underwritten;
(d)
The options are not deliverable to the underwriters until the entire issue has
been sold, whether it is underwritten on a firm commitment or a best-efforts
basis;
(e) The options are
nontransferable other than by will or pursuant to the laws of descent and
distribution, except to a partner of the underwriter when the underwriter is a
partnership or to a stockholder, officer or director of the underwriter or
beneficiary of a trust which is a stockholder of such underwriter when the
underwriter is a corporation; however, after one year such a transfer may occur
providing the option is exercised immediately upon transfer. If not exercised
immediately upon transfer, the option shall lapse; and
(f) Either the exercise of the options, or
the resale, transfer and assignment of the shares underlying the options, is
prohibited for a period of at least one year from the date of the
offering.
Stat. Auth.: ORS
59.085 & ORS
59.285
Stats. Implemented: ORS
59.085
