Legal Question in Investment Law in California
Stock Options
If an employee of a company is given stock options and at a later date returns those to the company, what kind of forms, documents, or records would have to be provided to the SEC and/or stockholders? Would stockholders have to be notified? Where are such records held and how can a stock holder obtain those records?
Thank you,
1 Answer from Attorneys
Re: Stock Options
It depends in the first place upon whether the issuer is subject to SEC regulation and to what degree, and whether the options were registered or not.
The degree of disclosure required could run from "none at all" to "complete disclosure by individual notice" depending upon the nature of the issuer and the securities.
The corporate secretary would be the first place to begin inquiry. You should ask whether the options themselves or the securities which they represent an option to acquire are registered, and if so, under what rule or type of registration, and if unregistered, what exemption was relied upon in issuing them. Then ask your more specific questions about notice, etc.
Stockholders have some rights to inspect corporate records including stockholder rosters. This is governed mostly by state law and the limitations are too complex to describe here. See Corporations Code sections 1600-1605 at your local law library if interested. The law tries to balance individuals' rights to privacy with other shareholders' rights to know.
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