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Can I offer stock options to employees without violating securities laws in Idaho? What are the requirements?

Requirements for Offering Stock Options to Employees in Idaho

To offer stock options to employees in Idaho, you must comply with the requirements set forth in IDST 26-214 and IDST 30-29-624. According to IDST 26-214, any bank may grant options to purchase, sell, or enter into agreements to sell shares of its stock to its employees, provided that the following conditions are met:

  • Application for approval shall be made to the director of the department of finance in the form of a letter accompanied by the necessary information.
  • The plan is administered by a committee, none of whose members may participate in the plan.
  • The number of shares allocable to any person under the plan is reasonable in relation to the purpose of the plan and the needs of the bank.
  • In the case of a stock option plan, the number of shares subject to the plan is not unreasonable in relation to the bank’s capital structure and anticipated growth.

Similarly, IDST 30-29-624 allows a corporation to issue rights, options, or warrants for the purchase of shares or other securities of the corporation, provided that the board of directors determines the terms and conditions upon which the rights, options, or warrants are issued, and the terms for which the shares or other securities are to be issued.

Exemptions and Waivers

IDST 30-14-203 states that a rule adopted or an order issued under this chapter may exempt a security, transaction, or offer. A rule adopted under this chapter may exempt a class of securities, transactions, or offers from any or all of the requirements of sections 30-14-301 through 30-14-306, Idaho Code, and section 30-14-504, Idaho Code. An order issued under this chapter may waive, in whole or in part, any or all of the conditions for an exemption or offer under sections 30-14-201 and 30-14-202, Idaho Code.

Conclusion

To offer stock options to employees in Idaho, you must comply with the requirements set forth in IDST 26-214 and IDST 30-29-624. These requirements include obtaining approval from the director of the department of finance, administering the plan through a committee, and ensuring that the number of shares allocated to any person under the plan is reasonable. However, exemptions and waivers may be available under IDST 30-14-203.

Jurisdiction

Idaho