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RULE §113.9Securities Underlying Transferable Warrants and Employee Stock Options

When equity securities underlying transferable warrants or employee stock options are registered under the Texas Securities Act, §7, those equity securities shall thereafter be deemed to be properly registered in Texas regardless of the time at which the warrants are exercised by warrant or option holders. Continuous registration (or annual renewal of registration) of the underlying equity securities during the life of the warrants or options shall not be required solely because of the existence of outstanding warrants or options. Once the distribution process is completed pursuant to the registration, the issuer or dealer who sold such registered securities is not required to remain continuously registered pursuant to the Texas Securities Act, §12 solely because of the existence of outstanding warrants or options. However, if the issuer or dealer solicits the holders to exercise their warrants or options, the issuer or dealer must be registered as a securities dealer if the transaction does not fall within an exemption other than this section. This section is adopted pursuant to the authority granted by the Texas Securities Act, §5.T.

Source Note: The provisions of this §113.9 adopted to be effective January 25, 1980, 5 TexReg 139; amended to be effective October 4, 1984, 9 TexReg 4974; amended to be effective December 6, 1998, 23 TexReg 12293.

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