N.M. Code R. § 12.11.12.15

Current through Register Vol. 35, No. 11, June 11, 2024

Section 12.11.12.15 - SECTION 58-13C-202U - EMPLOYEE BENEFIT PLANS

A. For purposes of the exemption provided in Section 58-13C-202 U, employee benefit plans that require advance cash contributions from employees may be denied the benefit of this exemption where employee money is used to purchase securities of the employer or its affiliates unless:

(1) the formula price at which employees may purchase shares is calculated at least annually and is not less than 85 percent of the fair market value of the stock at the beginning of the one-year purchase period or the end of the purchase period, whichever is lower, and shares purchased are fully paid for at the end of each period, stock certificates are issued and no fractional shares are issued;

(2) the issuer delivers to all participating employees copies of the issuer's annual financial statements;

(3) a participating employee has the right to withdraw from the plan at any time without penalty;

(4) if there is no adequate public market for the issuer's shares, the issuer offers to repurchase the shares at a price determined by the same formula pursuant to which the shares were purchased by the employee under the issuer's plan, upon the happening of either of the following events:

(a) the employee ceases to be employed by the issuer (or a subsidiary) and a written request for repurchase is received by the issuer within 180 days after termination of employment; or

(b) the employee experiences severe financial hardship due to illness or death in the immediate family, major uninsured casualty loss or other unforeseen events, and delivers to the issuer a written irrevocable election to have the issuer repurchase the shares, including a statement in reasonable detail as to the nature of the employee's financial hardship, and within 20 days the issuer's board of directors does not determine that no severe financial hardship exists;

(5) all funds contributed to the plan for the purchase of shares are protected from claims of creditors of the issuer;

(6) any withholding from an employee's compensation is limited to not more than ten percent of the compensation each pay period;

(7) all shares issued under the plan have voting, dividend and liquidation rights; and

(8) if the securities to be purchased under the plan are not registered under the Securities Act of 1933, the issuer has a satisfactory opinion of counsel as to its exempt status under that act.

B. The following transactions are exempted pursuant to Section 58-13C-203: offers or sales of a security by an issuer pursuant to a written compensatory benefit plan including, without limitation, a purchase, savings, option, bonus, stock appreciation, profit-sharing, thrift, incentive, pension or similar plan, and interests in any such plan, provided that the offers and sales qualify for use of the registration exemption in Rule 230.701 under Section 28 of the Securities Act of 1933.

N.M. Code R. § 12.11.12.15

12.11.12.15 NMAC - Rp, 12.11.11.9 NMAC, 1-1-2010