This template notice may be used by underwriters in a securities offering to notify the issuer of their exercise of the over-allotment option. A typical underwriting agreement will give the underwriters an overallotment option, which allows them to purchase an additional amount of securities in an offering (up to 15% of the initial number of shares) to cover orders in excess of the initial number of shares being sold. This template includes practical guidance and drafting notes. The overallotment option allows underwriters to purchase additional shares from the company at the offering price less the underwriting discount. Through exercise of the overallotment option, the underwriters can meet the high demand for company’s shares, which helps to stabilize the price and market for the shares. The option may be exercised prior to the initial closing, in which case the closing for the sale of the over-allotment shares would be held in conjunction with the closing for the initial shares. If ...