California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 4 - Insurer Securities Permits
Article 7 - Promoters
Section 2607.04 - Restriction of Sale of Promoters' Shares

The persons investing pursuant to this article shall be required to execute an appropriate agreement with the company for the benefit of the company and all of its shareholders providing that the periods hereinafter specified from the date of completion of the original issue or granting of a Certificate of Authority, whichever is later, they and each of them will not sell, transfer, or encumber, except by operation of law, any shares acquired by them in satisfaction of the foregoing requirement or by exercise of promotional options without the written consent of the Commissioner. It will be permissible for each such person to dispose of the following amounts of the aggregate of such person's said shares after elapsation of the following indicated periods: 5% after one year; an additional 5% after two years; an additional 10% after three years; an additional 20% after four years and the remainder after five years. A restrictive legend prescribed by the permit shall be placed on each stock certificate representing such shares. A composite example of such a contract is found in Section 2613.08, infra.

1. Change without regulatory effect amending section filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.