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Subject:
Rule 701 of the Securities Act of 1933 -- does it hint anything?
Category: Business and Money Asked by: elebo-ga List Price: $5.00 |
Posted:
03 Feb 2006 21:53 PST
Expires: 05 Mar 2006 21:53 PST Question ID: 441229 |
Why would a private company issue information pursuant to the requirements of Rule 701 of the Securities Act of 1933 to its employees with unexercised stock options? Does it mean/hint something special will happen or is it just one of the normal procedure? |
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There is no answer at this time. |
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Subject:
Re: Rule 701 of the Securities Act of 1933 -- does it hint anything?
From: antontodorov-ga on 04 Feb 2006 09:10 PST |
Hi I think that it is a normal procedure and there is nothing special to happen. Rule 701 promulgated under the Securities Act provides an exemption from registration for certain issuers offering and selling stock options (or other securities) to employees and consultants under compensatory benefit plans. Rule 701 requires (among other things) that any company issuing more than $5 million in stock options over a 12-month period provide detailed financial statements and other disclosures to the option recipients. The Rule allows privately-held companies to compensate their employees with securities without incurring the obligations of public registration and reporting, while ensuring that essential information is provided to employees. Thus, to answer your question, the company does not want to violate the provisions of the Securities act as far as the amount of options (or smthg else) is too much to be considered exempt from the requirements. There is an interesting case with ... GOOGLE about it ...Have a look http://www.sec.gov/litigation/admin/33-8523.htm Rule 701 falls under section E - Exemption for Securities of Small Business Investment Companies For further info see the text of Rule 701 http://www.law.uc.edu/CCL/33ActRls/rule701.html |
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