California Commissioner of Corporations Amends Compensatory Benefit Plan Regulations

On July 9, 2007, the California Commissioner of Corporations amended the regulations under the California

Corporate Securities Law of 1968 (“California Securities Law”) to provide greater flexibility to companies that

provide stock options or other equity-based compensation in California. Private companies that issue compensatory securities in California generally either must seek qualification of the plan by the Commissioner of Corporations under Section 25110 et seq. of the California Corporations Code, or the grants must be exempt

under Section 25102(o). The new rules considerably simplify the requirements for qualification as well as those under Section 25102(o), although existing plans may need to be amended to permit their administration under the more relaxed new rules. Public companies generally do not need to concern themselves with the qualification requirements under the California Securities Law as a result of exemptions that are available to public, not private, companies.