Current through Register Vol. 63, No. 9, September 1, 2024
When a director or officer of an insurer issuing stock or a
stock option acquires shares of the insurer's stock pursuant to a stock bonus,
profit sharing, retirement, incentive, thrift, savings or similar plan, other
than stock acquired upon the exercise of an option, warrant or right, or
acquires a qualified or restricted stock option through an employee stock
purchase plan, the acquisition is exempt from ORS
732.435 if the plan meets the
following conditions:
(1) The plan has
been approved, directly or indirectly, by the affirmative votes of the holders
of a majority of the securities of the insurer present, or represented, and
entitled to vote at a meeting held according to Oregon law or by the written
consent of the holders of a majority of the securities of the insurer entitled
to vote. For the purpose of this section, "insurer" includes a predecessor
corporation if the plan or obligations to participate in the plan were assumed
by the insurer in connection with the succession. If, however, the vote or
written consent was not solicited substantially in accordance with OAR
836-024-0003 to
836-024-0055 at the time of the
vote or written consent, the following shall apply:
(a) The insurer shall furnish in writing to
the holders of record of the securities entitled to vote for the plan
substantially the same information concerning the plan that would be required
by OAR 836-024-0003 to
836-024-0055 at the time the
information is furnished, if proxies to be voted with respect to the approval
or disapproval of the plan were being solicited, on or prior to the date of the
first annual meeting of security holders held subsequent to the later of the
date on which ORS 732.420 to
732.455 first applies to the
insurer, or the date of the acquisition of an equity security for which an
exemption is claimed.
(b) The
written information required in subsection (a) of this section may be furnished
by mail to the last known address of the security holders of record within 30
days prior to the date of mailing. Four copies of the written information must
be filed with or mailed for filing to the Director of the Department of
Consumer and Business Services not later than the date on which it is first
sent or given to security holders of the insurer.
(2) If a person is authorized to exercise
discretion in the selection of any director or officer of the insurer to whom
stock may be allocated or to whom qualified, restricted or employee stock
purchase plan stock options may be granted pursuant to the plan, or in the
determination of the number or maximum number of shares of stock that may be
allocated to a director or officer or that may be covered by qualified,
restricted or employee stock purchase plan stock options granted to the
director or officer, the discretion may be exercised only as follows:
(a) With respect to the participation of
directors:
(A) By the board of directors of
the insurer, but a majority of the members of the board and a majority of the
directors acting in the matter must be disinterested persons;
(B) By, or only in accordance with the
recommendations of, a committee of three or more persons who have full
authority to act in the matter, but only if all of the members of the committee
are disinterested persons; or
(C)
Otherwise in accordance with the plan, if the plan:
(i) Specifies the number or maximum number of
shares of stock that directors may acquire or that may be subject to qualified,
restricted or employee stock purchase plan stock options granted to directors
and the terms upon which, and the times at which, or the periods within which
the stock may be acquired or the options may be acquired and exercised;
or
(ii) Sets forth, by formula or
otherwise, effective and determinable limitations with respect to acquisition
or purchase based upon earnings of the insurer, dividends paid, compensation
received by participants, option prices, market value of shares, outstanding
shares or percentages of shares outstanding from time to time, or similar
factors.
(b)
With respect to the participation of officers who are not directors:
(A) By the board of directors of the insurer
or a committee of three or more directors; or
(B) By, or only in accordance with the
recommendations of, a committee of three or more persons having full authority
to act in the matter, but only if all of the members of the committee are
disinterested persons.
(c) For the purpose of this section, a
director or committee member is a disinterested person only if the person, at
the time discretion is exercised, is not eligible and has not at any time
within one year prior to the exercise of discretion been eligible for selection
as a person:
(A) To whom stock may be
allocated; or
(B) To whom
qualified, restricted or employee stock purchase plan stock options may be
granted pursuant to the plan or any other plan of the insurer or any of its
affiliates entitling the participants to acquire stock or qualified, restricted
or employee stock purchase plan stock options of the insurer or any of its
affiliates.
(d) This
section does not apply with respect to any option granted, or other equity
security acquired, prior to the date that ORS
732.430,
732.435 and 732.440first become
applicable with respect to any class of equity securities of any
insurer.
(3) As to each
participant or as to all participants, the plan effectively limits the
aggregate dollar amount or the aggregate number of shares of stock that may be
allocated, or that may be subject to qualified, restricted or employee stock
purchase plan stock options granted pursuant to the plan. The limitations may
be established on an annual basis, or for the duration of the plan, whether or
not the plan has a fixed termination date, and may be determined either by
fixed or maximum dollar amounts or fixed or maximum numbers of shares or by
formulas based upon earning of the insurer, dividends paid, compensation
received by participants, option prices, market value of shares, outstanding
shares or percentages thereof outstanding from time to time, or similar factors
that will result in an effective and determinable limitation. The limitations
may be subject to any provision for adjustment of the plan or of stock
allocable or options outstanding thereunder to prevent dilution or enlargement
of rights.
(4) All terms used in
this rule have the same meaning as the terms have in ORS
732.420 to
732.455 and in OAR
836-024-0105. In addition, the
following definitions apply to this rule:
(a)
The term "plan" includes any plan, whether or not set forth in any formal
written document or documents and whether or not approved in its entirety at
one time.
(b) The definitions of
the terms "qualified stock option" and "employee stock purchase plan" that are
set forth in sections 422 and
423 of the Internal Revenue Code
of 1954, as amended, apply to those terms as they are used in this rule. For
the purpose of this rule, however, an option that meets all of the conditions
of sections 422 and
423 of the Internal Revenue Code
of 1954, as amended, other than the date of issuance, shall be considered to be
a "restricted stock option."
(c)
The term "exercise of an option, warrant or right" does not include:
(A) The making of any election to receive
under any plan an award of compensation in the forma of stock or credits for
stock, except that an election must be made prior to the making of the award
and the election must be irrevocable until at least six months after
termination of employment;
(B) The
subsequent crediting of the stock;
(C) The making of any election as to a time
for delivery of the stock after termination of employment, but only if the
election is made at least six months prior to delivery.
(D) The fulfillment of any condition to the
absolute right to receive stock; or
(E) The acceptance of certificates for shares
of stock.
Stat. Auth: ORS
731.244,
732.420,
732.430,
732.435,
732.445,
732.450,
732.455
Stats. Implemented: ORS
732.420 -
732.455
