The Oregon Administrative Rules contain OARs filed through November 15, 2015
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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
INSURANCE DIVISION
DIVISION 24
DOMESTIC INSURERS; ORGANIZATION; CORPORATE PROCEDURES
Shares, Shareholders, and Members
836-024-0003
Statutory Authority; Purpose
OAR 836-024-0003 to 836-024-0055 are authorized by ORS 732.415(4). These rules are adopted to carry out the purposes of ORS 732.415, to prevent fraud or deception in connection with the solicitation of proxies, consents, and other authorizations, and to protect the insurance-buying public in accordance with the purpose of the Insurance Code.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0004
Application of OAR 836-024-0003 to 836-024-0055
(1) A domestic stock insurer that has a class of equity securities held of record by 300 or more persons, or any director, officer or employee of that insurer, or any other person, may not solicit or permit the use of the name of a holder of any of the equity securities to solicit, by mail or otherwise, any proxy, consent or authorization in respect to any class of equity securities contrary to any provision of OAR 836-024-0003 to 836-024-0055 or Schedules A and B. OAR 836-024-0003 to 836-024-0055 do not apply, however, to:
(a) A domestic stock insurer if 95 percent or more of its equity securities is owned or controlled by a parent or an affiliated insurer and the remaining securities are held of record by fewer than 500 persons; or
(b) A domestic stock insurer, with respect to a class of securities, if the insurer files with the federal Securities and Exchange Commission forms of proxies, consents and authorizations complying with the requirements of the Securities and Exchange Act of 1934, as amended, and its applicable regulations, with respect to that class of securities.
(2) If proxies, consents or authorizations relating to a class of equity securities of a domestic stock insurer subject to section (1) of this rule are not solicited by or on behalf of the management of the insurer from the holders of record of the securities according to OAR 836-024-0003 to 836-024-0055 and its schedules, the insurer shall:
(a) File with the Director a written information statement containing the information specified in Schedule C; and
(b) Transmit the written information statement referred to in subsection (a) of this section to every security holder who is entitled to vote on a matter to be acted upon at any meeting of the security holders, and from whom a proxy is not solicited.
(3) Exhibits A, B and C are incorporated into this rule as Exhibits 1, 2 and 3.
[ED. NOTE: Exhibits referenced are available from the agency.]
Stat. Auth.: ORS 731.244, 732.415
Stats. Implemented: ORS 732.415(4)
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0006
Definitions
As used in OAR 836-024-0003 to 836-024-0055, unless the context otherwise requires:
(1) An "affiliate" of, or a person affiliated with, a specified person is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
(2) "Associate," when used to indicate a relationship with any person, means:
(a) A corporation or organization of which the person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities, but does not include the issuer or a majority-owned subsidiary of the issuer;
(b) A trust or other estate in which the person has a substantial beneficial interest or as to which the person served as trustee or in a similar fiduciary capacity; and
(c) A relative or spouse of that person, or any relative of the spouse, who has the same home as the person or who is a director or officer of the issuer or any of its parents or subsidiaries.
(3) "Beneficial owner" includes a person who, directly or indirectly, through a contract, arrangement, understanding, relationship or otherwise, has or shares:
(a) Voting power, including the power to vote, or the power to direct voting of, a security; or
(b) Investment power that includes the power to dispose of, or to direct the disposition of, the new security.
(4) "Control," and including the terms "controlling," "controlled by" and "under common control with," means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by ORS 732.568 that control does not exist in fact. The Director may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.
(5) "Issuer" means the issuer of the securities regarding which a proxy is solicited.
(6) "Last fiscal year" of the issuer means the last fiscal year of the issuer ending prior to the date of the meeting for which proxies are to be solicited.
(7) "Officer" means the president, secretary, treasurer, any vice president in charge of a principal business function, such as sales, administration or finance, and any other person who performs similar policy-making functions for the issuer.
(8) A "parent" of a specified person is an affiliate controlling the person directly or indirectly through one or more intermediaries.
(9) A "person" includes a government or a political subdivision thereof, and applies to a trust only when the interest or interests of the beneficiary or beneficiaries are evidenced by a security.
(10) "Proxy statement" means the statement required by OAR 836-024-0026, regardless of whether the statement is contained in a single document.
(11) "Schedule A" means the schedule incorporated in Exhibit 1, OAR 836-024-0004.
(12) "Schedule B" means the schedule incorporated in Exhibit 2, OAR 836-024-0004.
(13) "Schedule C" means the schedule incorporated in Exhibit 3, OAR 836-024-0004.
(14) "Solicit" and "Solicitation" include:
(a) A request for a proxy, whether or not accompanied by or included in a form of proxy;
(b) A request to execute or not to execute, or to revoke, a proxy; and
(c) The furnishing of a form of proxy or other communication to security holders under circumstances reasonably calculated to result in the procurement, withholding, or revocation of a proxy.
(15) "Solicit" and "Solicitation" do not apply to the security holder, the performance by the issuer of acts required by OAR 836-024-0038 or the performance by any person of ministerial acts on behalf of a person soliciting a proxy.
[ED. NOTE: Exhibits referenced are available from the agency.]
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0008
Solicitations to which OAR 836-024-0003 to 836-024-0055 Apply
OAR 836-024-0041 applies to every solicitation that is subject to 836-024-0004. 836-024-0006 to 836-024-0039 and 836-024-0046 apply to every solicitation that is subject to 836-024-0004 except the following:
(1) A solicitation not made on behalf of the issuer, when the total number of persons solicited is not more than ten.
(2) A solicitation by a person regarding securities carried in the name of the person or in the name of the person's nominee other than as voting trustee, or held in the person's custody, if the person does all of the following:
(a) Receives no commission or remuneration for the solicitation, directly or indirectly, other than reimbursement of reasonable expenses.
(b) Furnishes promptly to the solicited person a copy of all soliciting material relating to the same subject matter or meeting that is received from all persons. The persons who furnish the soliciting material shall furnish copies of that soliciting material for distribution to the solicited persons and shall, upon request, pay the reasonable expenses incurred in forwarding the material.
(c) Does no more than:
(A) Impartially instruct the solicited person to forward a proxy to the person, if any, to whom the solicited person desires to give a proxy; or
(B) Impartially request instructions from the solicited person regarding the authority to be conferred by the proxy and state that a proxy will be given if no instructions are received by a certain date.
(3) A solicitation by a person relating to securities of which the person is the beneficial owner.
(4) A solicitation through a newspaper advertisement that informs security holders of a source from which they may obtain copies of a proxy statement, form of proxy and any other soliciting material, and does no more than:
(a) Name the issuer;
(b) State the reason for the advertisement; and
(c) Identify the proposal or proposals to be acted upon by security holders.
(5) Any solicitation that the Director finds for good cause should be exempted from all or part of OAR 836-024-0003 to 836-024-0055.
Stat. Auth.: ORS 731.244, 732.415
Stats. Implemented: ORS 732.415(4)
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0026
Information to Be Furnished to Security Holders
(1) A solicitation subject to OAR 836-024-0003 to 836-024-0055 may not be made unless each person solicited is concurrently furnished or has previously been furnished with a written proxy statement containing the information specified in Schedule A.
(2) If the solicitation is made on behalf of the issuer and relates to an annual meeting of security holders at which directors are to be elected, each proxy statement furnished pursuant to section (1) of this rule shall be accompanied or preceded by an annual report to security holders that is subject to the following:
(a) The report must contain financial statements for the last two fiscal years, in comparative columnar form and prepared on a consistent basis, that in the opinion of the management will adequately reflect the financial position of the issuer at the end of each year and the results of its operations for each year. Consolidated financial statements of the issuer and its subsidiaries must be included in the report if they are necessary to reflect the financial position and results of operations of the issuer and its subsidiaries, but in that case the individual statements of the issuer may be omitted. The Director may permit the omission of financial statements for the earlier of the two fiscal years, upon the request of the issuer, upon a showing of good cause.
(b) The financial statements for the last two fiscal years required by subsection (a) of this section must be prepared in a manner acceptable to the Director.
(c) The report must include a summary of the issuer's operations, or the operations of the issuer and its subsidiaries consolidated, or both as appropriate, in comparative columnar form, for each of the last five fiscal years of the issuer (or the life of the issuer and its predecessors, if less than five years).
(d) The report must contain a brief description of the business or businesses done by the issuer and its subsidiaries during the most recent fiscal year that, in the opinion of management, will indicate the general nature and scope of the business of the issuer and its subsidiaries.
(e) The report must identify each of the issuer's directors and officers and must indicate the principal occupation or employment of each person and the name and principal business of any organization by which the person is so employed.
(f) The report must identify the principal market in which securities of any class entitled to vote at the meeting are traded, stating the range of bid and asked quotations for each quarterly period during the issuer's two most recent fiscal years, and must set forth each dividend paid during the two-year period.
(g) Subject to the requirements of this section:
(A) The report may be in any form that management considers to be suitable; and
(B) The information required by subsections (c) to (f) of this section may be presented in an appendix or other separate section of the report, but only if the attention of security holders is called to the presentation.
(h) Solicitations made on behalf of the management before the financial statements are available are not subject to this section if solicitation is being made at the time in opposition to the management and if the management's proxy statement includes an undertaking in bold face type to furnish the annual report, at least 20 days before the date of the meeting, to all persons being solicited.
(3) Two copies of each report sent to the security holders pursuant to this rule shall be mailed to the Director not later than the date on which the report is first sent or given to security holders, or the date on which preliminary copies of solicitation material are filed with the Director pursuant to OAR 836-024-0036(1), whichever date is later.
(4) If the issuer knows that consents or authorizations, or securities of any class entitled to vote at a meeting with respect to which the issuer intends to solicit proxies, are held of record by a broker, dealer, bank or voting trustee, or their nominees, the issuer shall inquire of the record holder at least ten days prior to the record date for the meeting of security holders whether other persons are the beneficial owners of the securities. If other persons are beneficial owners, the issuer shall also inquire of the record holder the number of copies of the proxy and other soliciting material and, in the case of an annual meeting at which directors are to be elected, the number of copies of the annual report to security holders, needed for supplying these materials to beneficial owners.
(5) The issuer shall supply the record holder in a timely manner with the additional copies of the annual report determined to be needed in section (4) of this rule, and assembled in a form and at a place reasonably requested by the record holder, in order to address and send one copy to each beneficial owner of the securities and shall pay the record holder's reasonable mailing expenses upon request.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0031
Requirements as to Proxy
(1) The form of proxy shall:
(a) Indicate in bold-face type whether the proxy is solicited on behalf of the issuer's board of directors, and if not, by whom it is solicited;
(b) Provide a specifically designed blank space for dating the proxy; and
(c) Identify clearly and impartially each matter or group of related matters intended to be acted upon, whether proposed by the issuer or by security holders.
(2) The form of proxy need not refer to proposals as to which discretionary authority is conferred pursuant to section (5) of this rule.
(3) A proxy must provide means for the person solicited to specify by ballot a choice between approval or disapproval of, or abstention with respect to, each matter or group of related matters referred to in the proxy, other than elections to office. A proxy may confer discretionary authority with respect to matters as to which a choice is not so specified if the form of proxy states in bold-face type how it is intended to vote the shares represented by the proxy in each case.
(4) A form of proxy that provides both for elections to office and for action on other specified matters must clearly provide means, by a box or otherwise, by which the security holder may withhold authority to vote for elections to office. A form of proxy that is executed by the security holder in a manner that does not withhold authority to vote for elections to office shall be considered a grant of such authority, if the form of proxy so states in boldface type.
(5) A proxy may confer discretionary authority to vote with respect to any of the following matters:
(a) Matters that, within a reasonable time before the solicitation, the persons making the solicitation do not know are to be presented at the meeting, if a specific statement to that effect is made in the proxy statement or form of proxy;
(b) Approval of the minutes of the prior meeting if the approval does not amount to ratification of the action taken at that meeting;
(c) The election of any person to any office for which a bona fide nominee is named in the proxy statement and the nominee is unable to serve or for good cause will not serve;
(d) Any proposal omitted from the proxy statement and the form of proxy pursuant to OAR 836-024-0039 and 836-024-0041; and
(e) Matters incident to the conduct of the meeting.
(6) A proxy may not confer authority to vote in either of the following instances:
(a) For the election of any person to any office for which a bona fide nominee is not named in the proxy statement. A person is not a bona fide nominee and may not be named as such unless the person has consented to being named in the proxy statement and to serve if elected.
(b) At any annual meeting other than the next annual meeting (or any adjournment thereof) to be held after the date on which the proxy statement and form of proxy are first sent or given to security holders.
(7) The proxy statement or form of proxy shall provide, subject to reasonable specified conditions:
(a) That the securities represented by the proxy will be voted; and
(b) That when the person solicited has specified a choice, by means of ballot provided pursuant to section (3) of this rule, with respect to any matter to be acted upon, the vote will be in accordance with specifications so made.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0033
Presentation of Information in Proxy Statement
(1) The information included in the proxy statement shall be clearly presented. The statements made must be divided into groups according to subject matter. The various groups of statements must be preceded by appropriate headings.
(2) All proxy statements shall disclose, under an appropriate caption, the date by which proposals of security holders intended to be presented at the next annual meeting must be received by the issuer for inclusion in the issuer's proxy statement and form of proxy relating to that meeting. The date must be calculated according to OAR 836-024-0039(2). If the date of the next annual meeting is subsequently advanced by more than 30 calendar days or delayed by more than 90 calendar days from the date of the annual meeting to which the proxy statement relates, the issuer in a timely manner shall inform security holders of the change and the date by which proposals of security holders must be received, by any means reasonably calculated to inform the security holders.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.:ID 16-2006, f. & cert. ef. 8-7-06
836-024-0036
Material Required to Be Filed
(1) Two preliminary copies of the proxy statement and form of proxy, and any other soliciting material to be furnished to security holders with the proxy, or the information pursuant to Schedule C, shall be filed with the Director at least ten days prior to the date final copies of the material are first sent or given to security holders, or a shorter period prior to that date that the Director authorizes upon a showing of good cause.
(2) Two preliminary copies of any additional soliciting material relating to the same meeting or subject matter to be furnished to security holders after the proxy statements shall be filed with the Director at least two days (exclusive of Saturdays, Sundays, or holidays) prior to the date copies of the material are first sent or given to security holders, or a shorter period prior to that date that the Director authorizes upon a showing of good cause.
(3) Two definitive copies of the proxy statement, form of proxy and all other soliciting material, or the information statement, in the form in which the material is furnished to security holders, shall be filed with, or mailed for filing to, the Director not later than the date the material is first sent or given to a security holder.
(4) Copies of replies to inquiries from security holders requesting further information and copies of communications that do no more than request that the proxy form previously solicited be signed and returned need not be filed pursuant to this rule.
(5) Notwithstanding the provisions of sections (1) and (2) of this rule and of OAR 836-024-0055(1), copies of soliciting material in the form of speeches, press releases and radio or television scripts may, but need not, be filed with the Director prior to use or publication. Definitive copies, however, shall be filed with or mailed for filing to the Director as required by section (3) of this rule not later than the date the material is used or published. Sections (1) and (2) of this rule and 836-024-0055(1) apply, however, to any reprints or reproductions of all or any part of such material.
(6) If a proxy statement, form of proxy or other material filed pursuant to this rule is amended or revised, one of the copies of the amendment or revision shall be marked to clearly show the changes.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0038
Mailing Communications for Security Holders
(1) If the management of the issuer has made or intends to make any solicitation subject to OAR 836-024-0003 to 836-024-0055, the issuer shall perform any act described in this rule that is requested in writing with respect to the same subject matter or meeting by any security holder who is, or by security holders who are, entitled to vote at least one percent of the votes entitled to be voted on the matter. The requesting security holder or security holders shall pay the reasonable expenses incurred by the issuer in performing the act or acts requested.
(2) The issuer shall mail or otherwise furnish to a security holder, as promptly as practicable after the receipt of the request:
(a) A statement of the approximate number of record owners and, to the extent known to the issuer, the approximate number of beneficial owners of any class of securities, any of whom have been or are to be solicited on behalf of the management, or any group of whom that is designated by the security holder; and
(b) An estimate of the cost of mailing a specified proxy statement, form of proxy or other communication to the owners.
(3) The issuer shall mail copies of any proxy statement, form of proxy or other communication furnished by the security holder to the security owners specified in section (2) of this rule and designated by the security holder. The issuer shall mail the material furnished by the security holder with reasonable promptness after receiving the material to be mailed, envelopes or other containers therefor, and postage or payment for postage. The issuer need not, however, mail any material before the first day that solicitation is made on behalf of the issuer. The issuer is not responsible for the proxy statement, form of proxy or other communication.
(4) Instead of performing the acts specified in section (3) of this rule, the issuer may furnish promptly to a security holder a reasonably current list of the names and addresses of the record owners and, to the extent known to the issuer, the beneficial owners designated by the security holder and a schedule of the handling and mailing costs if the schedule has been supplied to the issuer.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.:ID 16-2006, f. & cert. ef. 8-7-06
836-024-0039
Proposals of Security Holders
(1) As used in this rule, "proponent" means a holder or holders of an issuer's securities.
(2) An issuer shall set forth a proposal for action in its proxy statement if the proponent notifies the issuer as provided in this section and if the proponent is entitled at the time of the notice to vote at least one percent of the votes entitled to be voted on the proposal. The proponent must notify the issuer in writing not less than 90 days before the issuer's annual meeting of the proponent's intention to present a proposal for action at an upcoming meeting of the issuer's security holders. The issuer shall identify the proposal in the issuer's form of proxy and provide for specifying approval or disapproval of the proposal. The proxy statement shall also include the name and address of the proponent.
(3) If the issuer opposes a proposal received from a proponent, the issuer shall also include in its proxy statement, at the request of the proponent, a statement of the proponent not exceeding 200 words in support of the proposal.
(4) The issuer may omit a proposal and any supporting statement from its proxy statement and form of proxy under any of the following circumstances:
(a) The proponent has submitted more than one proposal in connection with a particular meeting.
(b) The proposal is more than 300 words in length.
(c) The proposal or the supporting statement is contrary to any provision of OAR 836-024-0003 to 836-024-0055.
(d) The proposal relates to the enforcement of a personal claim or the redress of a personal grievance against the issuer, its management or any other person.
(e) The proposal deals with a matter not significantly related to the issuer's business, a matter beyond the issuer's power to effectuate, a matter relating to the conduct of the ordinary business operations of the issuer or an election to office.
(f) The proposal is counter to a proposal to be submitted by the issuer at the meeting, the proposal has been rendered moot or the proposal relates to specific amounts of cash or stock dividends.
(g) The proposal is substantially duplicative of a proposal that was previously submitted to the issuer by another proponent and will be included in the management's proxy material for the meeting.
(h) Substantially the same proposal has previously been submitted to security holders in the issuer's proxy statement and form of proxy relating to any annual or special meeting of security holders held within the preceding five years and received less than five percent of the total number of votes cast at the time of the proposal's most recent submission.
(5) If the issuer intends to omit a proposal from its proxy statement or forms of proxy or both, the issuer shall notify the proponent in writing of its intention at least ten days before the issuer's preliminary proxy material is filed pursuant to OAR 836-024-0036.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.:ID 16-2006, f. & cert. ef. 8-7-06
836-024-0041
False or Misleading Statements
A proxy statement, form of proxy, notice of meeting, information statement, and any other communication, written or oral, that is subject to OAR 836-024-0003 to 836-024-0055 may not contain any statement that:
(1) At the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact; or
(2) Omits any material fact that is necessary in order to make the statements in the communication not false or misleading, or that is necessary to correct any statement in an earlier communication with respect to the same meeting or subject matter that has become false or misleading.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0046
Prohibition of Certain Solicitations
A person making a solicitation may not solicit any undated or postdated proxy, or any proxy that provides it will be considered to be dated as of any date subsequent to the date on which it is signed by the security holder.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0051
Special Provisions Applicable to Election Contests; Definition
OAR 836-024-0051 to 836-024-0055 apply to a solicitation by any person or group for the purpose of opposing a solicitation by another person or group regarding the election or removal of directors at an annual or special meeting of security holders. As used in 836-024-0051 to 836-024-0055, unless the context requires otherwise:
(1) "Participant" and "participant in a solicitation" include:
(a) The issuer;
(b) A director of the issuer, and a nominee for whose election as a director proxies are solicited; and
(c) Any other person, acting alone or with one or more other persons, committees or groups, in organizing, directing, or financing the solicitation.
(2) "Participant" and "participant in a solicitation" do not include:
(a) A bank, broker, or dealer who, in the ordinary course of business, lends money or executes orders for the purchase or sale of securities and who is not otherwise a participant;
(b) A person or organization retained or employed by a participant to solicit security holders, or a person who merely transmits proxy-soliciting material or performs ministerial or clerical duties;
(c) A person employed in the capacity of attorney or accountant, or advertising, public relations or financial adviser, and whose activities are limited to the performance of duties in the course of such employment;
(d) A person regularly employed as an officer or employee of the issuer or any of its subsidiaries or affiliates, who is not otherwise a participant; or
(e) An officer or director of, or a person regularly employed by, any other participant, if the officer, director, or employee is not otherwise a participant.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0053
Filings Required in an Election Contest
(1) A solicitation may not be made by a person other than the issuer unless a statement in duplicate containing the information specified by Schedule B and a copy of any material proposed to be distributed to security holders in furtherance of the solicitation is filed with the Director by or on behalf of each participant in the solicitation. The statement and material must be filed with the Director at least five business days prior to the solicitation or a shorter period authorized by the Director upon a showing of good cause.
(2) Within five business days after a solicitation subject to this rule is made by the issuer, or within a longer period that the Director authorizes on a showing of good cause, a statement in duplicate containing the information specified by Schedule B shall be filed with the Director by or on behalf of each participant in the solicitation, other than the issuer, and by or on behalf of each management nominee for director.
(3) If a solicitation on behalf of the issuer or another person has been made, or if proxy material is ready for distribution, prior to a solicitation subject to this rule in opposition, a statement in duplicate containing the information specified in Schedule B shall be filed with the Director, by or on behalf of each participant in the prior solicitation, other than the issuer, as soon as it is reasonably practicable after the commencement of the solicitation in opposition.
(4) If, subsequent to the filing of the statements required by sections (1) to (3) of this rule, additional persons become participants in a solicitation subject to this rule, a statement in duplicate containing the information specified by Schedule B shall be filed with the Director by or on behalf of each such person within three business days after the person becomes a participant, or within a longer period that the Director authorizes upon a showing of good cause.
(5) If any material change occurs in the facts reported in a statement filed by or on behalf of a participant, an appropriate amendment to the statement shall be filed promptly with the Director.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0054
Counter Solicitations Prior to Furnishing Required Written Proxy Statement
Notwithstanding the provisions of OAR 836-024-0026(1), a solicitation subject to 836-024-0051 to 836-024-0055 may be made prior to furnishing security holders with a written proxy statement containing the information specified in Schedule A with respect to the solicitation, if:
(1) The statements required by OAR 836-024-0053 are filed by or on behalf of each participant in the solicitation.
(2) A form of proxy is not furnished to security holders prior to the time the proxy statement required by OAR 836-024-0026(1) is furnished to such persons. This section does not apply, however, if a proxy statement meeting the requirements of Schedule A has been furnished to security holders.
(3) Statements containing at least the information specified by OAR 836-024-0053(2) and (3), or an appropriate summary of the information, are included in each communication sent or given to security holders in connection with the solicitation.
(4) A written proxy statement containing the information specified in Schedule A with respect to a solicitation is sent or given to security holders at the earliest practicable date.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0055
Filing Requirements for Preliminary Solicitation Material
(1) Two copies of any soliciting material proposed to be sent or given to security holders prior to the furnishing of the proxy statement required by OAR 836-024-0026(1) shall be filed with the Director in preliminary form at least five business days prior to the date definitive copies of the material are first sent or given to the persons unless on a showing of good cause the Director reduces the five-day period.
(2) Notwithstanding the provisions of OAR 836-024-0026(2) and (3), two copies of any portion of the annual report referred to in 836-024-0026(2) that comments upon or refers to a solicitation subject to 836-024-0051 to 836-024-0055, or to a participant in a solicitation, other than the solicitation by the management, shall be filed with the Director as proxy material subject to 836-024-0051 to 836-024-0055. The annual report portion to which this section applies must be filed with the Director, in preliminary form, at least five business days prior to the date copies of the report are first sent or given to security holders.
Stat. Auth.: ORS 731 & 732
Stats. Implemented: ORS 732.415(4)
Hist.: IC 68, f. & ef. 6-22-76; ID 16-2006, f. & cert. ef. 8-7-06
836-024-0100
Statutory authority; purpose
(1) OAR 836-024-0100 to 836-024-0220 are adopted under the authority of ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450 and 732.455, for the purpose of implementing 732.420 to 732.455.
(2) OAR 836-024-0100 to 836-024-0220 apply to domestic stock insurers.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0105
Definitions
As used in OAR 836-024-0100 to 836-024-0220:
(1) "Class" means all securities of an insurer that are of substantially similar character and in which the holders enjoy substantially similar rights and privileges.
(2) "Equity security" as defined in ORS 732.420 also includes any voting trust certificate or certificate of deposit for an equity security.
(3) "Officer" means a president, vice president, treasurer, actuary, secretary, controller and any other person who performs functions for the insurer corresponding to functions performed by those officers.
Stat. Auth.: ORS 731.244, 732.420, 732.455
Stats. Implemented: ORS 732.420, 732.425, 732.430, 732.435, 732.440
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0110
Securities "Held of Record" for Purpose of ORS 732.425
(1) To determine for the purpose of ORS 732.425 whether the equity securities of an insurer are held of record by 100 or more persons, securities are considered to be "held of record" by each person who is identified as the owner of the securities on records of security holders maintained by or on behalf of the insurer, subject to the following:
(a) If the records of security holders have not been maintained in accordance with accepted practice, any additional person who would be identified as an owner on the records if the records had been maintained in accordance with accepted practice shall be included as a holder of record.
(b) Securities identified as held of record by a corporation, a partnership, a trust (regardless of whether the trustees are named) or other organization shall be included as held of record by one person.
(c) Securities identified as held of record by one or more persons as trustees, executors, guardians, custodians or other fiduciary with respect to a single trust, estate or account shall be included as held of record by one person.
(d) Securities held by two or more persons as co-owners shall be included as held by one person.
(e) Each outstanding unrecorded or bearer certificate shall be included as held of record by a separate person, except to the extent that the insurer can establish that, if the securities were recorded, they would be held of record under this rule by a lesser number of persons.
(f) Securities recorded in substantially similar names may be included as held of record by one person when the insurer has reason to believe that, because of the address or other indication, the names represent the same person.
(2) Section (1) of this rule does not apply in either of the following circumstances. Instead:
(a) Securities that, to the knowledge of the insurer, are held subject to a voting trust, deposit agreement or similar arrangement shall be included as held of record by the record holders of the voting trust certificates, certificates of deposit, receipts or similar evidences of interest in the securities, except that the insurer may rely in good faith on information received in response to its request from a nonaffiliated issuer of the certificates or evidences of interest.
(b) If the insurer knows or has reason to know that the form of holding securities of record is used primarily to circumvent ORS 732.420 to 732.455, the insurer shall consider the beneficial owners of the securities to be the record owners.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0115
Filing of Statements
(1) A person who is required by ORS 732.430 to file a statement of beneficial ownership of equity securities shall file the initial statement on Form 3, which is prescribed in Exhibit 1 to this rule. A person who is required by ORS 732.430 to file a statement of change in beneficial ownership shall file the statement of change on Form 4, which is prescribed in Exhibit 2 to this rule.
(2) A director or officer who is required to file a statement of change on Form 4 shall include in the first statement of change the information required by Form 4 with respect to all changes in the beneficial ownership of equity securities of the insurer that occurred within six months prior to the date of the changes that required the filing of the statement, when a change occurs in the director's or officer's beneficial ownership of equity securities:
(a) Within six months after the director or officer became a director or officer of the insurer; or
(b) Within six months after a statement relating to the equity securities of the insurer has been filed with the Director, pursuant to ORS 732.430.
(3) A person who has ceased to be a director or officer of an insurer that has equity securities for which a statement is filed under ORS 732.430, or who is a director or officer of an insurer when the insurer ceased to have any equity securities for which a statement is filed under ORS 732.430, shall file a statement on Form 4 with respect to any change in the person's beneficial ownership of equity securities of the insurer if the change occurs:
(a) On or after the date on which the person ceased to be a director or officer or the date on which the insurer ceased to have any such equity securities, as the case may be; and
(b) Within six months after any change in the beneficial ownership of the securities prior to the date in subsection (a) of this section.
[ED. NOTE: Exhibits referenced are available from the agency.]
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0120
Ownership of more than 10 percent of an equity security
(1) When it is to be determined for the purpose of ORS 732.430 whether a person is the beneficial owner, directly or indirectly, of more than 10 percent of any class of any equity security, the class of the equity security consists of the total amount of the class outstanding, except for any securities of the class held by or for the account of the insurer or subsidiary of the insurer. To determine the percentage ownership of voting trust certificates or certificates of deposit for equity securities, however, the class of voting trust certificates or certificates of deposit consists of the amount of voting trust certificates or certificates of deposit issuable with respect to the total amount of outstanding equity securities of the class that may be deposited under the voting trust agreement or deposit agreement in question, regardless of whether all of the outstanding securities have been so deposited. For the purpose of this rule, a person acting in good faith may rely on the information contained in the latest Annual Statement filed with the Director of the Department of Consumer and Business Services with respect to the amount of securities of a class outstanding or in the case of voting trust certificates or certificates of deposit the amount issuable.
(2) When it is to be determined for the purpose of ORS 732.430 whether a person is the beneficial owner, directly or indirectly, of more than 10 percent of any class of equity securities, the person is considered to be the beneficial owner of securities of any class that the person has a right to acquire through the exercise of presently exercisable options, warrants or rights or through the conversion of presently convertible securities. A security that is subject to such an option, warrant, right or conversion privilege held by a person is considered to be outstanding for the purpose of computing, in accordance with section (1) of this rule, the percentage of outstanding securities of the class owned by the person. The security, however, is not considered to be outstanding for the purpose of computing the percentage of the class owned by another person.
(3) Section (2) of this rule does not relieve any person of a duty to comply with ORS 732.430 with respect to any equity securities consisting of options, warrants, rights or convertible securities that are otherwise subject as a class under 732.430.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0125
Disclaimer of Beneficial Ownership
A person who files a statement may declare expressly in the statement that the filing may not be construed as an admission that the person is the beneficial owner for the purpose of ORS 732.420 to 732.455 of any equity securities covered by the statement.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0130
Exemptions from ORS 732.430 and 732.435
(1) Securities held by the following persons are exempt from ORS 732.430 and 732.435 for 12 months following the date of the person's appointment and qualification:
(a) An executor or administrator of the estate of a decedent;
(b) A guardian or committee for an incompetent; and
(c) A receiver, trustee in bankruptcy, assignor for the benefit of creditors, conservator, liquidating agent or other similar person authorized by law to administer the estate or assets of other persons.
(2) After the 12-month period following the appointment of a person to whom section (1) of this rule applies:
(a) The person shall file a statement under ORS 732.430 with respect to the securities held by the estates that the person administers; and
(b) The person is liable for profits realized from trading in the securities pursuant to ORS 732.435 only when the estate being administered is a beneficial owner of more than ten percent of any class of equity security of an insurer subject to 732.430 and 732.435.
(3) Securities reacquired by or for the account of an insurer and held by it for its account are exempt from ORS 732.430 and 732.435 while they are held by the insurer.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0135
Exemptions from ORS 732.420 to 732.455 of Securities Purchased or Sold by Odd-lot Dealers
Securities purchased or sold by an odd-lot dealer are exempt from ORS 732.420 to 732.455 with respect to participation by the odd-lot dealer when the securities are purchased or sold:
(1) In odd lots that are reasonably necessary to carry on odd-lot transactions; or
(2) In round lots to offset odd-lot transactions previously or simultaneously executed or reasonably anticipated in the usual course of business.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0140
Certain Transactions Subject to ORS 732.430
Acquisition or disposition of the privilege of a transferable option, put, call, spread or straddle is a change in the beneficial ownership of the security to which the privilege relates. A person who acquires or disposes of such a privilege shall file a statement relating to the acquisition or disposition. This rule does not exempt a person, however, from filing the statements required when the option, put, call, spread or straddle is exercised.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0145
Ownership of Securities Held in Trust
(1) Beneficial ownership of a security for the purpose of ORS 732.430 includes any of the following:
(a) Ownership of securities as a trustee when either the trustee or members of the immediate family of the trustee have a vested interest in the income or corpus of the trust;
(b) Ownership of a vested beneficial interest in a trust; and
(c) Ownership of securities as a settlor of a trust in which the settlor has the power to revoke the trust without obtaining the consent of all the beneficiaries.
(2) Except as provided in section (4) of this rule, the following are exempt from the filing requirement in ORS 732.430:
(a) A person who has beneficial ownership of securities solely as a settlor or beneficiary of a trust, when less than 20 percent in market value of the securities having a readily ascertainable market value held by the trust, determined as of the end of the preceding fiscal year of the trust, consists of equity securities for which reports would otherwise be required.
(b) A person who has an obligation that would otherwise be imposed solely by reason of ownership as settlor or beneficiary of securities held in trust, when the ownership, acquisition or disposition of the securities by the trust is made without prior approval by the settlor or beneficiary.
(3) An exemption under section (2) of this rule is not acquired or lost solely because of changes in the value of the trust assets during a fiscal year or during any time that there is no transaction by the trust in the securities otherwise subject to the reporting requirements of ORS 732.430.
(4) If ten percent of a class of an equity security of an insurer is held in trust, the trust and its trustee are considered to be a person that must file reports required by ORS 732.430.
(5) A trust is not required to file more than one report of holdings or of a transaction in securities held by a trust, regardless of the number of officers, directors or 10 percent stockholders that are trustees, settlors or beneficiaries of a trust, if the filed report discloses the name of all trustees, settlers and beneficiaries who are officers, directors or ten percent stockholders. A person having an interest only as a beneficiary of a trust is not required to file a report as long as the person relies in good faith upon an understanding that the trustee of the trust will file whatever reports might otherwise be required of the beneficiary.
(6) As used in this rule, the "immediate family" of a trustee means:
(a) A son or daughter of the trustee, or a descendant of either;
(b) A stepson or stepdaughter of the trustee;
(c) The father or mother of the trustee, or an ancestor of either;
(d) A stepfather or stepmother of the trustee; or
(e) A spouse of the trustee.
(7) For the purpose of determining whether any of the relations described in section (6) of this rule exists, a legally adopted child of a person is considered to be a child of the person by blood.
(8) For the purpose of determining under ORS 732.430 whether a person is the beneficial owner, directly or indirectly, of more than 10 percent of any class of any equity security, the interest of that person in the remainder of a trust shall be excluded from the computation.
(9) A person is not required to file a report under ORS 732.430 with respect to the person's indirect interest in portfolio securities held by either of the following, regardless of whether the person is otherwise subject to the requirement of filing reports under ORS 732.430:
(a) A pension or retirement plan holding securities of an insurer whose employees generally are the beneficiaries of the plan.
(b) A business trust with more than 25 beneficiaries.
(10) This rule does not impose any duties or liabilities relating to the reporting of a transaction or holding prior to the effective date of the transaction or holding.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0150
Exemption for Small Transactions
(1) An acquisition of securities is exempt from ORS 732.430 when the person effecting the acquisition:
(a) Does not effect any disposition of securities of the same class, other than by gift, within six months of the acquisition; and
(b) Does not participate in acquisitions or in dispositions of securities of the same class having a total market value in excess of $3,000 for any six-month period during which the acquisition occurs.
(2) An acquisition or disposition of securities by way of gift, when the total amount of the gifts does not exceed $3,000 in market value for any six-month period, is exempt from ORS 732.430 and may be excluded from the computations under section (1)(b) of this rule.
(3) A person effecting a transaction exempted by section (1) or (2) of this rule shall include in the first report filed after the transaction a statement showing acquisitions and dispositions of the person for each six-month period or portion thereof that has elapsed since the last filing.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0155
Exemption from ORS 732.435 That Need not be Reported Under ORS 732.430
A transaction that has been or is exempted from the requirements of ORS 732.430 is also exempted from 732.435 to the extent that the transaction would otherwise be subject to 732.435.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0160
Exemption from ORS 732.435 of Certain Transactions Effected in Connection with a Distribution
(1) If the following conditions apply, a transaction of purchase and sale, or sale and purchase, of a security that is effected in connection with the distribution of a substantial block of securities is exempt from ORS 732.435 because the transaction is not included within the purpose of 732.435:
(a) The person effecting the transaction is engaged in the business of distributing securities and is participating in good faith, in the ordinary course of business, in distribution of the block of securities;
(b) The security involved in the transaction is:
(A) A part of a block of securities and is acquired by the person effecting the transaction, with a view to its distribution, from the insurer or other person on whose behalf the securities are distributed or from a person who participates in good faith in the distribution of the block of securities; or
(B) A security purchased in good faith by or for the account of the person effecting the transaction for the purpose of stabilizing the market price of securities of the class being distributed or to cover an over-allotment or other short position created in connection with the distribution; and
(c) Other persons who are not subject to ORS 732.435 participate in the distribution of the block of securities on terms at least as favorable as those on which the person is participating and to an extent at least equal to the aggregate participation of all persons exempted from ORS 732.435 by this rule. The performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing the functions, however, does not preclude an exemption that would otherwise apply under this rule.
(2) Exemption of a transaction under this rule with respect to participation in the transaction by one person does not render the transaction exempt with respect to participation by any other person unless the other person also meets the conditions of this rule.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0165
Exemption from ORS 732.435 of Acquisitions of Shares of Stock and Stock Options under Certain Stock Bonus, Stock Option or Similar plans
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 732.440 first 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
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0170
Exemption from ORS 732.435 of Certain Transactions in Which Securities are Received by Redeeming other Securities
An acquisition of an equity security, other than a convertible security or right to purchase a security, by a director or officer of the insurer issuing the security, is exempt from ORS 732.435 if all of the following conditions are met:
(1) The equity security is acquired by way of redemption of another security of an insurer, substantially all of whose assets other than cash or government bonds consist of securities of the insurer issuing the equity security, and the equity security:
(a) Represented substantially and in practical effect a stated or readily ascertainable amount of equity security;
(b) Had a value that was substantially determined by the value of the equity security; and
(c) Conferred upon the holder the right to receive the equity security without the payment of any consideration other than the security redeemed.
(2) The director or officer did not acquire any security of the same class as the security redeemed within six months prior to the redemption or does not acquire any such security within six months after the redemption.
(3) The insurer issuing the equity security acquired has recognized the applicability of section (1) of this rule by appropriate corporate action.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0175
Exemption of long Term Profits Incident to Sales Within Six Months of the Exercise of an Option
(1) As provided in section (2) of this rule, the Director exempts as not comprehended within the purposes of ORS 732.435 any transaction or transactions involving the purchase and sale, or sale and purchase, of any equity security in which the purchase is made pursuant to the exercise of an option or similar right that was:
(a) Acquired more than six months before its exercise; or
(b) Acquired pursuant to the terms of an employment contract entered into more than six months before its exercise.
(2) Regarding any transaction described in section (1) of this rule, the profits inuring to the insurer may not exceed the difference between the proceeds of sale and the lowest market price of any security of the same class within six months before or after the date of sale. Nothing in this rule may be considered to enlarge the amount of profit that would inure to the insurer in the absence of this rule.
(3) The Director exempts as not comprehended within the purposes of ORS 732.435 the disposition of a security purchased in a transaction specified in section (1) of this rule pursuant to a plan or agreement described in this section when the terms of the plan or agreement are binding upon all stockholders of the insurer, except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings. This section applies to a plan or agreement:
(a) For merger or consolidation or reclassification of the insurer's securities; or
(b) For the exchange of the insurer's securities for the securities of another person that has acquired its assets, or that is in control, as defined in section 368(c) of the Internal Revenue Code of 1954, of a person that has acquired its assets.
(4) The exemptions under this rule do not apply to any transaction made unlawful by ORS 732.440 or rules adopted under that statute.
(5) The person claiming an exemption under this section bears the burden of establishing market price of the security.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0180
Exemption from ORS 732.435 of Certain Acquisitions and Dispositions of Securities Pursuant to Merger or Consolidation
(1) The Director exempts as not comprehended within the purposes of ORS 732.435 the following transactions:
(a) The acquisition of a security of an insurer pursuant to a merger or consolidation in exchange for a security of a company that, prior to the merger or consolidation:
(A) Owned 85 percent or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company; or
(B) Held more than 85 percent of the combined assets of the companies undergoing merger or consolidation, computed according to their book values prior to the merger or consolidation as determined by reference to their most available financial statements for a 12-month period prior to the merger or consolidation.
(b) The disposition of a security of an insurer, pursuant to a merger or consolidation of an insurer that, prior to the merger or consolidation:
(A) Owned 85 percent or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company; or
(B) Held over 85 percent of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to merger or consolidation as determined by reference to their most recent available financial statements for a 12-month period prior to the merger or consolidation.
(2) A merger for the purpose of this rule includes the sale or purchase of substantially all the assets of one insurer by another in exchange for stock that is then distributed to the security holders of the insurer that sold its assets.
(3) Notwithstanding sections (1) and (2) of this rule, except for a purchase or sale exempted by this rule, the exemption under this rule is unavailable to a officer, director or stockholder to the extent of the purchase and sale if the officer, director or stockholder purchases a security in a company involved in the merger or consolidation or sells a security in another company involved in the merger or consolidation within a period of less than six months during which the merger or consolidation took place.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0185
Exemption from ORS 732.435 of Transactions Involving the Deposit or Withdrawal of Equity Securities Under a Voting Trust or Deposit Agreement
(1) If substantially all of the assets held under a voting trust or deposit agreement immediately after the deposit of a security under the voting trust or deposit agreement or immediately prior to the withdrawal of a security under the voting trust or deposit agreement consisted of equity securities of the same class as the security deposited or withdrawn, the following transactions are exempt from ORS 732.435:
(a) The acquisition or disposition of an equity security involved in the deposit of the security under the voting trust or deposit agreement, and the acquisition or disposition of the certificate representing the equity security; and
(b) The acquisition or disposition of an equity security involved in the withdrawal of an equity security from the voting trust or deposit agreement, and the acquisition or disposition of the certificate representing the equity security.
(2) Unless a purchase or sale of an equity security described in this section is included in a transaction involved in a deposit or withdrawal that is exempt either under section (1) of this rule or under another provision of OAR 836-024-0100 to 836-024-0220 that implements ORS 732.435, the exemption in section (1) of this rule does not apply to the extent that the purchase or sale has occurred within a period of less than six months before or after a transaction described in section (1) of this rule, including the date of the transaction itself. This section applies to the following:
(a) A purchase of an equity security of the class deposited and a sale of any certificate representing an equity security of such class; or
(b) A sale of an equity security of the class deposited and a purchase of any certificate representing an equity security of the class.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0190
Exemption from ORS 732.435 of Certain Transactions Involving the Conversion of Equity Securities
(1) An acquisition or disposition of an equity security involved in the conversion of an equity security is exempt from ORS 732.435 if the converted equity security, either immediately or after a stated period of time, is convertible by its terms or pursuant to the terms of the insurer's articles of incorporation or other governing instrument into another equity security of the same insurer.
(2) Unless an acquisition or disposition described in section (1) of this rule is included in a transaction involved in the conversion or in a transaction exempted by any other provision of OAR 836-024-0100 to 836-024-0220 that implements ORS 732.435, the exemption established in subsection (1) of this rule does not apply if either of the following has occurred within a period of less than six months before or after the conversion, including the date of the conversion. This section applies to the following:
(a) A purchase of any equity security of the class convertible, including any acquisition of or change in a conversion privilege and a sale of any equity security of the class issuable upon conversion; or
(b) A sale of any equity security of the class convertible and any purchase of any equity security issuable upon conversion.
(3) For the purpose of this rule:
(a) An equity security is not considered to be acquired or disposed of upon conversion of an equity security if the terms of the converted equity security require the payment or entail the receipt of cash or other property in connection with the conversion, other than equity securities involved in the conversion, equal in value at the time of conversion to more than 15 percent of the value of the equity security issued upon conversion.
(b) An equity security is considered to be convertible if it is convertible at the option of the holder or of some other person or by operation of the terms of the security or the governing instruments.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0200
Exemption from ORS 732.435 of Certain Transactions Involving the Sale of Subscription Rights
(1) Any sale of a subscription right to acquire any subject security of the same insurer is exempt from ORS 732.435, as provided in this rule, as not comprehended within the purpose of that statute, if:
(a) The subscription right is acquired, directly or indirectly, from the insurer without the payment of consideration;
(b) The subscription right by its terms expires within 45 days after issuance of the subscription;
(c) The subscription right by its terms is issued on a pro rata basis to all holders of the beneficiary security of the insurer; and
(d) A registration statement under the securities Act of 1933 is in effect as to each subject security, or the applicable terms of any exemption from registration have been met with respect to each subject security.
(2) As used in this rule:
(a) "Beneficiary security" means a security registered pursuant to section 12 of the federal Securities Exchange Act, to the holders of which a subscription right is granted.
(b) "Subject security" means a security that is the subject of a subscription right.
(c) "Subscription right" means any warrant or certificate evidencing a right to subscribe to or otherwise acquire an equity security.
(3) If a person purchases subscription rights for cash or other consideration, then a sale by the person of subscription rights otherwise exempted by this rule is not exempted to the extent of the purchases within the six-month period preceding or following the sale.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0205
Exemption of Certain Securities from ORS 732.440
A security is exempt from ORS 732.440 to the extent necessary to render lawful under that statute the broker's execution of an order for an account in which the broker has no direct or indirect interest.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0210
Exemption from ORS 732.440 of Certain Transactions Effected in Connection with a Distribution
A security is exempt from the operation of ORS 732.440 to the extent necessary to render lawful under that section any sale made by or on behalf of a dealer in connection with a distribution of a substantial block of securities, if the following conditions are met:
(1) The sale is represented by an over-allotment in which the dealer is participating as a member of an underwriting group, or the dealer or a person acting on the dealer's behalf intends in good faith to offset the sale with a security to be acquired by or on behalf of the dealer as a participant in an underwriting, selling or soliciting dealer group of which the dealer is a member at the time of the sale, whether or not the security to be so acquired is subject to a prior offering to existing security holders or some other class of persons; and
(2) Other persons to whom ORS 732.440 does not apply participate in the distribution of the block of securities on terms at least as favorable as those under which the dealer is participating and to an extent at least equal to the aggregate participation of persons exempted from 732.440 by this rule. The performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing the functions does not preclude an exemption that would otherwise be available under this rule.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0215
Exemption from ORS 732.440 of Sales of Securities to be Acquired
(1) When a person is entitled, as an incident to ownership of an issued security and without the payment of consideration, to receive another security "when issued" or "when distributed," the security to be acquired is exempt from ORS 732.440 if:
(a) The sale is made subject to the same conditions as those attaching to the right of acquisition;
(b) The person exercises reasonable diligence to deliver the security to the purchaser promptly after the person's right of acquisition matures; and
(c) The person reports the sale on the appropriate form for reporting transactions by persons subject to ORS 732.430.
(2) This rule does not exempt transactions involving both a sale of a security "when issued" or "when distributed" and a sale of the security by virtue of which the seller expects to receive the "when issued" or "when-distributed" security, if the two transactions combined result in a sale of more units than the aggregate of those owned by the seller plus those to be received by the seller pursuant to the right of acquisition.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
836-024-0220
Arbitrage Transactions under ORS 732.450
A director or officer of an insurer may not effect any foreign or domestic arbitrage transaction in any equity security of the insurer unless the director or officer includes the transaction in the statements required by ORS 732.430 and accounts to the insurer for the profits arising from the transaction as provided by ORS 732.435. ORS 732.440 does not apply to such an arbitrage transaction. ORS 732.420 to 743.455 do not apply to any bona fide foreign or domestic arbitrage transaction insofar as it is effected by any person other than a director or officer of the insurer.
Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455
Stats. Implemented: ORS 732.420 - 732.455
Hist.: ID 16-2006, f. & cert. ef. 8-7-06
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