Kan. Admin. Regs. § 40-12-13 - Officers, directors, and employee stock purchase plans
Stock option plans in a domestic insurer shall conform to the following specifications:
(a) Stock
options shall be provided for by a fair and reasonable plan which has been
submitted to and approved by the board of directors and stockholders after the
company has been in operation for at least one full year.
(b) The granting of the stock option shall
bear a reasonable incentive relationship to the continual employment of the
optionee.
(c) The stock option
shall be for a stated number of shares, to be paid for in cash.
(d) If the stock is widely traded, the
options shall be for the full market value at the time the options are granted.
If the stock is not widely traded, the options shall be for a price fixed by
the company's board of directors and approved by the commissioner.
(e) The stock option shall fully set forth
employment qualifications, conditions for complete exercise of the options,
conditions under which cessation of employment shall terminate the option, and
the effect of death, resignation, or other similar events.
(f) The stock option shall contain an
anti-dilution or proration clause. The clause shall provide that the number of
shares allocated to the plan and the number of shares carried by each
individual option, and price per share, shall automatically be proportionately
adjusted for each increase or decrease in the number of issued and outstanding
shares of the corporation. This shall be accomplished without a corresponding
increase or decrease in the corporation's paid-in capital.
(g) Only the optionee, or a court appointed
guardian, shall exercise the option during the optionee's lifetime. For a
specified time after death, only the heirs, administrator or executor shall
exercise the option.
(h) The
period of time in which an option may be exercised after death shall be no
longer than five years.
(i) The
total number of shares set aside at any one time for this purpose shall not be
inequitably proportioned to the number of shares issued and outstanding.
Notes
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