1. (a) The total number of securities (which may be expressed as a specific number of securities or as a percentage of the total number of securities outstanding from time to time) which may be issued and the persons eligible to purchase securities under the plan or agreement.
2. (b) The nontransferablity of the rights of any eligible person to acquire securities under the plan or agreement, provided that the plan or agreement may permit transfer of the rights to purchase securities by will, by the laws of descent and distribution, to a revocable trust, or as permitted by Rule 701 of the Securities Act of 1933, as amended (17 C.F.R. 230.701).
3. (c) The proportionate adjustment of the number of securities allocated to any eligible person under the plan or agreement in the event of a stock split, reverse stock split, stock dividend, recapitalization, combination, reclassification or other distribution of the issuer's equity securities without the receipt of consideration by the issuer, of or on the issuer's class of securities subject to the purchase right.
4. (d) Securities must be issued within 10 years from the date the plan or agreement is adopted or the plan or agreement is approved by the issuer's security holders, whichever is earlier.
5. (e) The plan or agreement must be approved by a majority of the outstanding securities entitled to vote by the later of (1) within 12 months before or after the plan is adopted or the date the agreement is entered into or (2) prior to or within 12 months of the issuance of any security under the plan or agreement in this state. Any issuance of securities before security holder approval is obtained must be rescinded if security holder approval is not obtained in the manner described in the preceding sentence. Such securities shall not be counted in determining whether such approval is obtained. A foreign private issuer, as defined by Rule 3b-4 of the Securities Exchange Act of 1934, as amended (17 C.F.R. 240.3b-4), shall not be required to comply with this subsection provided that the aggregate number of persons in this state granted options under all option plans and agreements and issued securities under all purchases and bonus plans and agreements does not exceed 35.
6. (f) Compliance with Section 260.140.46 of these rules regarding the information required to be received by security holders.

Securities (other than options) distributed or sold to employees [including insurance agents who are employees for purposes of Rule 701(c) under the Securities Act of 1933, as amended (17 C.F.R. 230.701)], officers, directors, general partners, trustees (where the issuer is a business trust), managers, advisors or consultants of the issuer, its parents, its majority-owned subsidiaries or majority-owned subsidiaries of the issuer's parents as part of a compensatory benefit plan shall be pursuant to a plan or agreement that provides for all of the following:

Note: Authority cited: Sections 25102, 25140, 25610 and 25612.5, Corporations Code. Reference: Sections 25102, 25110, 25140, 25610 and 25612.5, Corporations Code.

History

1. Renumbering and amendment of former section 260.140.42 to section 260.140.43, and renumbering and amendment of former section 260.140.41.1 to Section 260.140.42 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 of first paragraph and subsections (c), (d) and (h), repealer of subsections (h)(1) and (h)(2), and new subsection (i) 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. Amendment of section heading, section and Note filed 7-9-2007; operative 7-9-2007 pursuant to Government Code section 11343.4 (Register 2007, No. 28).

9. Amendment of subsection (e) and Note filed 9-23-2009; operative 10-23-2009 (Register 2009, No. 39).