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

Yes, you can offer stock options to employees in Louisiana without violating securities laws, provided that you comply with the state’s regulations.

Requirements for offering stock options to employees in Louisiana

Louisiana Revised Statutes (LARS) § 12.1-624 allows corporations to issue rights, options, or warrants for the purchase of shares or other securities of the corporation. The board of directors determines the terms upon which the rights, options, or warrants are issued and the terms, including the consideration, for which the shares or other securities are to be issued. The authorization by the board of directors for the corporation to issue such rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options, or warrants are exercisable [2.1].

The terms and conditions of such rights, options, or warrants may include restrictions or conditions that preclude or limit the exercise, transfer, or receipt of such rights, options, or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation or by any transferee or transferees of any such person or persons. The board of directors may authorize one or more officers to designate the recipients of rights, options, warrants, or other equity compensation awards that involve the issuance of shares and to determine, within an amount and subject to any other limitations established by the board and, if applicable, the stockholders, the number of such rights, options, warrants, or other equity compensation awards and the terms thereof to be received by the recipients, provided that an officer may not use such authority to designate himself or herself or any other persons the board of directors may specify as a recipient of such rights, options, warrants, or other equity compensation awards [1.1].

Exemptions to securities laws in Louisiana

It is important to note that certain securities may be exempt from Louisiana’s securities laws. For example, LARS § 51.708 provides a list of securities that are exempt from the provisions of R.S. 51:705, which includes securities issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency, authority, public corporation, or other instrumentality of one or more of the foregoing, among others [3.1].

Conclusion

To offer stock options to employees in Louisiana, a corporation must comply with the terms and conditions set forth in LARS § 12.1-624. The board of directors must determine the terms upon which the options are issued, and the corporation must comply with any restrictions or conditions set forth in the statute. Additionally, an officer may be authorized to designate the recipients of the options, subject to any limitations established by the board and the stockholders. Certain securities may be exempt from Louisiana’s securities laws, so it is important to consult with a legal professional to ensure compliance [1.1][2.1][3.1].

Source(s):
Jurisdiction

Louisiana