Haw. Code R. § 16-38-11.4 - Options and warrants
Options and warrants and other acquisitions or conversion rights granted to or reserved for officers, directors, promoters, or insiders shall be fully justified, reasonable in number and method of exercise, and meet the following requirements:
(1) A
complete explanation for the basis and reason for the issuance shall be
provided;
(2) The total number of
underlying shares subject to options does not exceed ten per cent of the shares
to be outstanding if all shares being offered are sold;
(3) The rights are not exercisable during the
effectiveness of the public offering nor for a period of eleven months from
date issued, and the exercise price thereafter of not less than the percentage
amounts provided in the following schedule:
Period at which exercise privilege may take place | Per cent of public offering price at which rights may be exercised |
After 1 year from issuance | 107% |
2 years from issuance | 114% |
3 years from issuance | 121% |
4 years from issuance | 128% |
(4)
The rights are not exercisable after the expiration of five years from the date
of issue; and
(5) Options or
warrants to dealers or underwriters do not exceed the limitations imposed by
section 16-38-11.2 relating to maximum commissions allowable as compensation in
whole or in part for the sale of securities and shall be nontransferable.
Options or warrants issued to all shareholders pro rata, or in connection with
qualified stock options to employees which meet the requirements of the United
States Internal Revenue Code, or other employees' options pursuant to a stock
purchase or profit-sharing plan, shall not be subject to the restrictions
provided in this section if they are justified and reasonable in number and
method of exercise.
Notes
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