806 KAR 26:010. Proxies, consents and authorizations

Link to law: http://www.lrc.ky.gov/kar/806/026/010.htm
Published: 2015

      806 KAR 26:010.

Proxies, consents and authorizations.

 

      RELATES TO: KRS

304.26-050

      STATUTORY AUTHORITY:

KRS 304.2-110, 304.26-050

      NECESSITY, FUNCTION,

AND CONFORMITY: KRS 304.2-110 provides that the Executive Director of Insurance

may make reasonable rules and administrative regulations necessary for or as an

aid to the effectuation of any provision of the Kentucky Insurance Code. KRS

304.26-050 gives the executive director the authority to regulate any form of

proxies, consents and authorizations. This administrative regulation sets out

the requirements for proxies and their solicitation, consents, and

authorizations.

 

      Section 1.

Definitions. (1) The definitions set out in Schedule SIS, as promulgated by the

National Association of Insurance Commissioners, shall be applicable for

purposes of this administrative regulation.

      (2) The terms

"solicit" and "solicitation" for purposes of this administrative

regulation shall include:

      (a) Any request for

proxy, whether or not accompanied by or included in a form of proxy; or

      (b) Any request to

execute or not to execute, or to revoke a proxy; or

      (c) The furnishing

of a proxy or other communications to security holders under circumstances

reasonably calculated to result in the procurement, withholding or revocation

of a proxy.

      (3) The terms

"solicit" and "solicitation" shall not include:

      (a) Any solicitation

by a person in respect to equity security of which he is the beneficial owner;

      (b) Action by a

broker or other person in respect to equity security carried in his name or in

the name of his nominee in forwarding to the beneficial owner of such equity

security soliciting material received from the company, or impartially

instructing the beneficial owner to forward a proxy to the person, if any, to

whom the beneficial owner with respect to the authority to be conferred by the

proxy and stating that a proxy will be given if the instructions are received

by a certain date;

      (c) The furnishing

of a form of proxy to a security holder upon the unsolicited request of such

security holder, or the performance by any person of ministerial acts on behalf

of a person soliciting a proxy.

 

      Section 2.

Application of Administrative Regulation. This administrative regulation shall

be applicable to each domestic stock insurer which has any class of equity

security held of record by 100 or more persons; provided, however, that this

administrative regulation shall not apply to any insurer if ninety-five (95)

percent or more of its equity securities are owned or controlled by a parent or

an affiliated insurer and the remaining securities are held of record by less

than 500 persons. A domestic stock insurer which files with the Securities and

Exchange Commission forms of proxies, consents and authorizations complying

with the requirements of the Securities Exchange Act of 1934, as amended, and

the applicable administrative regulations promulgated thereunder, shall be

exempt from the provisions of this administrative regulation with respect to

any class of securities subject to SEC jurisdiction.

 

      Section 3. Proxies,

Consents and Authorizations. A domestic stock insurer, or any director, officer

or employee of an insurer subject to Section 2 of this administrative

regulation, or any other person shall not solicit, or permit the use of his

name to solicit, by mail or otherwise, any proxy, consent or authorization in

respect of any class of equity security of an insurer held of record by 100 or

more persons in contravention of this administrative regulation and especially

Sections 14 and 15 of this administrative regulation.

 

      Section 4.

Disclosure of Equivalent Information. Unless proxies, consents or

authorizations in respect of any class of equity security of a domestic insurer

subject to Section 2 of this administrative regulation are solicited by or on

behalf of the management of such insurer from the holders of record of such

security in accordance with this administrative regulation prior to any annual

or other meeting of such security holders, such insurer shall, in accordance

with this administrative regulation file with the executive director and transmit

to all security holders of record information substantially equivalent to the

information which would be required to be transmitted if a solicitation were

made. The insurer shall transmit a written statement containing the information

specified in Section 6(4) of this administrative regulation to every security

holder who is entitled to vote in regard to any matter to be acted upon at the

meeting and from whom a proxy is not solicited on behalf of the management of

the insurer; provided, that in the case of a class of securities in unregistered

or bearer form such statement need be transmitted only to those security

holders whose names and addresses are known to the insurer.

 

      Section 5. (1) The

instructions set out in Schedule SIS, as promulgated by the National

Association of Insurance Commissioners, shall be applicable for purposes of

this administrative regulation.

      (2) Schedule SIS,

revised in 1992, is incorporated by reference. Copies may be obtained from or

inspected at the Office of Insurance, P.O. Box 517, 215

West Main Street, Frankfort, Kentucky 40602, Monday through Friday, 8 a.m. to

4:30 p.m.

 

      Section 6.

Information to be Furnished to Security Holders. (1) A solicitation subject to

this administrative regulation shall 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 Section 14 of this

administrative regulation.

      (2) If the

solicitation is made on behalf of the management of the insurer and relates to

an annual meeting of security holders at which directors are to be elected,

each proxy statement furnished pursuant to subsection (1) of this section shall

be accompanied or preceded by an annual report (in preliminary or final form)

to the security holders containing the financial statements for the last fiscal

year as are referred to in Schedule SIS under the heading "Financial

Reporting to Security Holders." Subject to the foregoing requirements with

respect to financial statement, the annual report to security holders may be in

any form deemed suitable by the management.

      (3) Two (2) copies

of each report sent to the security holders pursuant to this section shall be

mailed to the executive 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 executive director pursuant

to Section 8(1) of this administrative regulation, whichever date is later.

      (4) If no

solicitation is being made by management of the insurer with respect to any

annual or other meeting, such insurer shall mail to every security holder of

record at least twenty (20) days prior to the meeting date, an information

statement as required by Section 4 of this administrative regulation,

containing the information called for by Section 1 of this administrative

regulation, other than subsections (1), (3) and (4) of that Section, which

would be applicable to any matter to be acted upon at the meeting if proxies

were to be solicited in connection with the meeting. If the information

statement relates to an annual meeting at which directors are to be elected, it

shall be accompanied by an annual report to such security holders in the form

provided in subsection (2) of this section.

 

      Section 7.

Requirements as to Proxy. (1) The form of proxy:

      (a) Shall indicate

in boldface type whether or not the proxy is solicited on behalf of the

management;

      (b) Shall provide a

specifically designated blank space for dating the proxy; and

      (c) Shall identify

clearly and impartially each matter or group of related matters intended to be

acted upon, whether proposed by the management, or security holders. No

reference need be made to proposals as to which discretionary authority is

conferred pursuant to subsection (3) of this section.

      (2)(a) Means shall

be provided in the proxy for the person solicited to specify by ballot a choice

between approval or disapproval of each matter or group of related matters

referred to therein, 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 boldface type how it is intended to

vote the shares or authorization presented by the proxy in each case.

      (b) A form of proxy

which provides both for elections to office and for action on other specified

matters shall be prepared so as to clearly provide, by a box or otherwise,

means by which the security holder may withhold authority to vote for elections

to office. Any such form of proxy which is executed by the security holder in

this manner as not to withhold authority to vote for elections to office shall

be deemed to grant this authority, provided the form of proxy so states in

boldface type.

      (3) A proxy may

confer discretionary authority with respect to other matters which may come

before the meeting, provided the persons on whose behalf the solicitation is

made are not aware, a reasonable time prior to the time the solicitation is

made that any other matters are to be presented for action at the meeting and

provided further that a specific statement to that effect is made in the proxy

statement or in the form of proxy.

      (4) A proxy shall

not confer authority to vote:

      (a) For the election

of any person to any office for which a bona fide nominee is not named in the

proxy statement; or

      (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. The limitation in paragraph (a) of this

subsection shall not prevent the authority conferred from applying to a person

substituted for a nominee who, prior to the election, has clearly manifested

his unwillingness to serve or whose service would be a physical impossibility.

      (5) The proxy

statement or form of proxy shall provide, subject to reasonable specified

conditions, that the proxy will be voted and that where the person solicited

specifies by means of ballot provided pursuant to subsection (2) of this

section a choice with respect to any matter to be acted upon, the vote will be

in accordance with the specifications so made.

      (6) The information

included in the proxy statement or information statement shall be clearly

presented and the statements made shall be divided into groups according to

subject matter, with appropriate headings. All printed proxy statements or

information statements shall be clearly and legibly presented.

      (7) 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 insurer for inclusion in the insurer's proxy

statement and form of proxy relating to that meeting, the date to be calculated

in accordance with the provisions of Section 10(1) of this administrative

regulation. If the date of the next annual meeting is subsequently advanced by

more than thirty (30) calendar days or delayed by more than ninety (90)

calendar days from the date of the annual meeting to which the proxy statement

relates, the insurer shall, in a timely manner, inform security holders of such

change, and the date by which proposals of security holders must be received,

by any means reasonably calculated to so inform them.

 

      Section 8. Material

Required to be Filed. (1) Two (2) preliminary copies of the information

statement or the proxy statement and form of proxy and any other soliciting

material to be furnished to security holders concurrently therewith shall be

filed with the executive director at least thirty (30) days prior to the date

definitive copies of the material are first sent or given to security holders,

or such shorter period prior to that date as the executive director may

authorize upon a showing of good cause therefor.

      (2) Two (2)

preliminary copies of any additional soliciting material relating to the same

meeting or subject matter to be furnished to security holders subsequent to the

proxy statements shall be filed with the executive director at least ten (10)

days (exclusive of Saturdays, Sundays, or holidays) prior to the date copies of

this material are first sent or given to security holders or a shorter period

prior to the date as the executive director may authorize upon a showing of

good cause therefor.

      (3) Two (2)

definitive copies of the information statement or the proxy statement, form of

proxy and all other soliciting material, in the form in which this material is

furnished to security holders, shall be filed with, or mailed for filing to,

the executive director not later than the date the material is first sent or

given to the stockholders.

      (4) Where any information

statement or proxy statement, form of proxy or other material filed pursuant to

these rules is amended or revised, two (2) of the copies shall be marked to

clearly show such changes.

      (5) Copies or

replies to inquiries from security holders requesting further information and

copies of communications which do no more than request that forms of proxy

theretofore solicited be signed and returned need not be filed pursuant to this

section.

      (6) Notwithstanding

the provisions of subsections (1) and (2) of this section and of Section 13(5)

of this administrative regulation, copies of soliciting material in the form of

speeches, press releases and radio or television scripts may, but need not, be

filed with the executive director prior to use or publication. Definitive

copies, however, shall be filed with or mailed for filing to the executive director

as required by subsection (3) of this section not later than the date the

material is used or published. The provisions of subsections (1) and (2) of

this section and Section 13(5) of this administrative regulation shall apply,

however, to any reprints or reproductions of all or any part of such material.

 

      Section 9. Mailing

Communications for Security Holders. (1) If the management of the insurer has

made or intends to make any solicitation subject to this administrative

regulation, the insurer shall perform any of the following acts as may be duly

requested in writing with respect to the same subject matter or meeting by any

security holder who is, or security holders who are, entitled to vote at least

one (1) percent of the votes entitled to be voted on this matter and who shall

defray the reasonable expenses to be incurred by the insurer in the performance

of the act or acts requested:

      (a) The insurer

shall mail or otherwise furnish to the security holder, as promptly as

practicable after the receipt of the request:

      1. A statement of

the approximate number of record owners and, to the extent known to the

insurer, 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 the security holder shall designate; and

      2. An estimate of

the cost of mailing a specified proxy statement, form of proxy or other communication

to the owners.

      (b) Copies of any

proxy statement, form of proxy or other communication furnished by the security

holder shall be mailed by the insurer to the security owners specified in

paragraph (a)1 of this subsection as the security holder shall designate;

      (c) Material

furnished by the security holder shall be mailed with reasonable promptness

after receipt of the material to be mailed, envelopes or other containers

therefor, and postage or payment for postage. The insurer need not, however,

mail any such material prior to the first day on which solicitation is made on

behalf of the insurer;

      (d) The insurer

shall not be responsible for the proxy statement, form of proxy or other

communication.

      (2) In lieu of

performing the acts specified above, the insurer may, at its option, furnish

promptly to the security holder a reasonably current list of the names and

addresses of the record owners and, to the extent known to the insurer, the

beneficial owners as the security holder shall designate and a schedule of the

handling and mailing costs if the schedule has been supplied to the insurer.

 

      Section 10.

Proposals of Security Holders. (1) If any holder or holders of the securities

of an insurer (hereafter referred to as the "proponent") notifies the

insurer in writing not less than ninety (90) days before the insurer's annual

meeting of his intention to present a lawful proposal for action at a

forthcoming meeting of the insurer's security holders and at the time of the

notice the proponent is entitled to vote at least one (1) percent of the votes

entitled to be voted on the proposal, the insurer shall set forth the proposal

in its proxy statement and identify it in its form of proxy and provide for the

specification of approval or disapproval of such proposal. The proxy statement

shall also include the name and address of the proponent.

      (2) If the insurer

opposes any proposal received from a proponent, it shall also, at the request

of the proponent, include in its proxy statement a statement of the proponent

of not more than 200 words in support of the proposal.

      (3) The insurer may

omit a proposal and any statement in support thereof from its proxy statement

and form of proxy under any of the following circumstances:

      (a) The proponent

has submitted more than one (1) 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 section of this administrative

regulation, including Section 11 of this administrative regulation which

prohibits false or misleading statements in proxy soliciting materials;

      (d) The proposal

relates to the enforcement of a personal claim or the redress of a personal

grievance against the insurer, its management, or any other person;

      (e) The proposal

deals with a matter not significantly related to the insurer's business; a

matter beyond the insurer's power to effectuate; a matter relating to the

conduct of the ordinary business operations of the insurer; or an election to

office;

      (f) The proposal is

counter to a proposal to be submitted by the insurer 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 previously submitted to the insurer by

another proponent, which proposal will be included in the management's proxy

material for the meeting; or

      (h) The

substantially same proposal has previously been submitted to security holders

in the insurer's proxy statement and form of proxy relating to any annual or

special meeting of security holders held within the preceding five (5) calendar

years, and received less than five (5) percent of the total number of votes

cast in respect thereof at the time of its most recent submission.

      (4) If the insurer

intends to omit any proposal from its proxy statement or forms of proxy, it

shall notify the proponent in writing of its intention at least ten (10) days

before the insurer's preliminary proxy material is filed pursuant to Section 8

of this administrative regulation.

 

      Section 11. False or

Misleading Statements. A proxy statement, form of proxy, notice of meeting,

information statement, or other communication, written or oral, subject to this

administrative regulation, shall not contain any statement which 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 which omits to state any

material fact necessary in order to make the statements therein not false or

misleading or necessary to correct any statement in any earlier communication

with respect to the same meeting or subject matter which has become false or

misleading.

 

      Section 12.

Prohibition of Certain Solicitations. A person making a solicitation which is

subject to this administrative regulation shall not solicit any undated or

postdated proxy or any proxy which provides that it shall be deemed to be dated

as of any date subsequent to the date on which it is signed by the security

holder.

 

      Section 13. Special

Provisions Applicable to Election Contests. (1) Applicability. This section

shall apply to any solicitation subject to this administrative regulation by

any person or group for the purpose of opposing a solicitation subject to this

administrative regulation by any other person or group with respect to the

election or removal of directors at any annual or special meeting of

stockholders.

      (2) Participant or

participant in a solicitation. For purposes of this section the terms

"participant" and "participant in a solicitation" include:

      (a) The insurer;

      (b) Any person or

organization retained or employed by a participant to solicit security holders

or any person who merely transmits proxy soliciting material or performs

ministerial or clerical duties;

      (c) Any person

employed in the capacity of attorney, accountant, or advertising, public

relations or financial adviser, and whose activities are limited to the

performance of his duties in the course of this employment;

      (d) Any person

regularly employed as an officer or employee of the insurer or any of its

subsidiaries or affiliates who is not otherwise a participant; or

      (e) Any officer or

director of, or any person regularly employed by any other participant, if such

officer, director, or employee is not otherwise a participant.

      (3) Filing of

information required by Section 15 of this administrative regulation.

      (a) Solicitations

subject to this section shall not be made by any person other than the

management of an insurer unless at least five (5) business days prior thereto,

or a shorter period as the executive director may authorize upon a showing of

good cause therefor, there has been filed, with the executive director, by or

on behalf of each participant in this solicitation, a statement in duplicate

containing the information specified by Section 15 of this administrative

regulation and a copy of any material proposed to be distributed to security

holders in furtherance of this solicitation. Where preliminary copies of any

materials are filed, distribution to security holders should be deferred until

the executive director’s comments have been received and complied with.

      (b) Within five (5)

days after a solicitation subject to this section is made by the management of

an insurer, or a longer period as the executive director may authorize upon a

showing of good cause therefor, there shall be filed with the executive

director by or on behalf of each participant in the solicitation, other than

the insurer, and by or on behalf of each management nominee for director, a

statement in duplicate containing the information specified by Section 15 of

this administrative regulation.

      (c) If any

solicitation on behalf of management or any other person has been made, or if

proxy material is ready for distribution, prior to a solicitation subject to

this section in opposition thereto, a statement in duplicate containing the

information specified in Section 14 of this administrative regulation shall be

filed with the executive director, by or on behalf of each participant in the

prior solicitation, other than the insurer, as soon as reasonably practicable

after the commencement of the solicitation in opposition thereto.

      (d) If, subsequent

to the filing of the statement required by paragraphs (a), (b) and (c) of this

subsection, additional persons become participants in a solicitation subject to

this rule, there shall be filed with the executive director, by or on behalf of

a person, a statement in duplicate containing the information specified by

Section 15 of this administrative regulation within three (3) business days

after a person becomes a participant, or such longer period as the executive

director may authorize upon a showing of good cause therefor.

      (e) If any material

change occurs in the facts reported in any statement filed by or on behalf of

any participant, an appropriate amendment to the statement shall be filed

promptly with the executive director.

      (f) Each statement

and amendment thereto filed pursuant to this subsection shall be part of the

public files of the executive director.

      (4) Solicitations

prior to furnishing required written proxy statement. Notwithstanding the

provisions of Section 6(1) of this administrative regulation, a solicitation

subject to this section may be made prior to furnishing security holders a

written proxy statement containing the information specified in Section 14 of

this administrative regulation with respect to the solicitation, provided that:

      (a) The statements

required by subsection (3) of this section are filed by or on behalf of each

participant in the solicitation.

      (b) No form of proxy

is furnished to shareholders prior to the time the written proxy statement

required by Section 6(1) of this administrative regulation is furnished to

these persons: provided, however, that this paragraph shall not apply where a

proxy statement then meeting the requirements of Section 14 of this

administrative regulation has been furnished to security holders.

      (c) At least the

information specified in this paragraph and paragraph (b) of this subsection of

the statements required by subsection (3) of this section to be filed by each

participant, or an appropriate summary thereof, are included in each

communication sent or given to security holders in connection with the

solicitation.

      (d) A written proxy

statement containing the information specified in Section 14 of this

administrative regulation with respect to a solicitation is sent or given

security holders at the earliest practicable date.

      (5) Solicitations

prior to furnishing required written proxy statement; filing requirements. Two

(2) copies of any soliciting material proposed to be sent or given to security

holders prior to the furnishing of the written proxy statement required by

Section 6(1) of this administrative regulation shall be filed with the executive

director in preliminary form at least five (5) business days prior to the date

definitive copies of the material are first sent or given to such persons, or

shorter period as the executive director may authorize upon a showing of good

cause therefor.

      (6) Application of

this section to report. Notwithstanding the provisions of Section 6(2) and (3)

of this administrative regulation, two (2) copies of any portion of the report

referred to in Section 6(2) of this administrative regulation which comments

upon or refers to any solicitation subject to this section, or to any

participant in any such solicitation, other than the solicitation by the

management, shall be filed with the executive director as proxy material

subject to this administrative regulation. That portion of the report shall be

filed with the executive director in preliminary form at least five (5)

business days prior to the date copies of the report are first sent or given to

security holders.

 

      Section 14.

Information Required in Proxy Statement. (1) Revocability of proxy. Make a

positive statement similar to, "This proxy may be revoked at will, prior

to the voting for which it is given; upon notice to the Secretary of the Company."

KRS 271A.165 requires proxies be revocable at will.

      (2) Dissenters'

rights of appraisal. Outline briefly the rights of appraisal or similar rights

of dissenting security holders with respect to any matter to be acted upon and

indicate any statutory procedure required to be followed by such security

holders in order to perfect their rights. Where these rights may be exercised

only within a limited time after the date of the adoption of a proposal, the

filing of a charter amendment, or other similar act, state whether the person

solicited will be notified of the date.

      (3) Persons making

solicitations not subject to Section 13 of this administrative regulation:

      (a) If the

solicitation is made by the management of the insurer, so state. Give the name

of any director of the insurer who has informed the management in writing that

he intends to oppose any action intended to be taken by the management and

indicate the action which he intends to oppose.

      (b) If the

solicitation is made otherwise than by the management of the insurer, state the

names and addresses of the persons by whom the cost of solicitation has been or

will be borne, directly or indirectly.

      (4) Interest of

certain persons in matters to be acted upon. Describe briefly any substantial

interest, direct or indirect, by security holdings or otherwise, of any

director, nominee for election for director, officer and, if the solicitation

is made otherwise than on behalf of management, each person on whose behalf the

solicitation is made, in any matter to be acted upon other than elections to

office.

      (5) Voting

securities.

      (a) State, as to

each class of voting securities of the insurer entitled to be voted at the

meeting, the number of shares outstanding and the number of votes to which each

class is entitled.

      (b) Give the date as

of which the record list of security holders entitled to vote at the meeting

will be determined. If the right to vote is not limited to security holders of

record on that date, indicate the conditions under which other security holders

may be entitled to vote.

      (c) If action is to

be taken with respect to the election of directors, under KRS 271A.180 the

persons solicited shall have cumulative voting rights. Make a statement that

they have such rights and state briefly the technique of cumulative voting.

      (6) Nominees and

directors. If action is to be taken with respect to the election of directors

furnish the following information, in tabular form to the extent practicable,

with respect to each person nominated for election as a director and each other

person whose term of office as a director will continue after the meeting:

      (a) Name each such

person, state when his term of office or the term of office for which he is a

nominee will expire, and all other positions and offices with the insurer

presently held by him, and indicate which persons are nominees for election as

directors at the meeting.

      (b) State his

present principal occupation or employment and give the name and principal

business of any corporation or other organization in which the employment is

carried on. Furnish similar information as to all of his principal occupations

or employments during the last five (5) years, unless he is now a director and

was elected to his present term of office by a vote of security holders at a

meeting for which proxies were solicited under this administrative regulation.

      (c) If he is or has

previously been a director of the insurer, state the period or periods during

which he has served as such.

      (d) State, as of the

most recent practicable date, the approximate amount of each class of equity

security of the insurer or any of its parents, subsidiaries or affiliates other

than directors' qualifying shares, beneficially owned directly or indirectly by

him. If he is not the beneficial owner of any such equity securities make a

statement to that effect.

      (7) Remuneration and

other transactions with management and others:

      (a) This subsection

shall apply only to each director whose aggregate remuneration exceeds $40,000

and to each of the three (3) highest paid officers whose aggregate annual

remuneration exceeds $40,000.

      (b) Furnish the

information reported or required in Item 1 of Schedule SIS under the heading

"Information Regarding Management and Directors" if action is to be

taken with respect to:

      1. The election of

directors;

      2. Any remuneration

plan, contract or arrangement in which any director, nominee for election as a

director, or officer of the insurer will participate;

      3. Any pension or

retirement plan in which any such person will participate; or

      4. The granting or

extension to any such person of any options, warrants or rights to purchase any

equity securities other than warrants or rights issued to security holders, as

such, on a pro rata basis. If the solicitation is made on behalf of persons

other than management, information shall be furnished only as to Item 1-A of

the aforesaid heading of Schedule SIS.

      (8) Bonus, profit

sharing and other remuneration plans. If action is to be taken with respect to

any bonus, profit sharing, or other remuneration plan of the insurer, furnish

the following information:

      (a) A brief

description of the material features of the plan, each class of persons who

will participate therein, the approximate number of persons in each class, and

the basis of each participation.

      (b) The amounts

which would have been distributed under the plan during the last calendar year

to:

      1. Each person named

in subsection (7) of this section;

      2. Directors and

officers as a group; and

      3. All other employees

as a group, if the plan had been in effect.

      (c) If the plan to

be acted upon may be amended (other than by a vote of security holders) in a

manner which would materially increase the cost thereof to the insurer or to

materially alter the allocation of the benefits as between the groups specified

in paragraph (b) of this subsection, the nature of the amendments should be

specified.

      (9) Pension and

retirement plan. If action is to be taken with respect to any pension or

retirement plan of the insurer, furnish the following information:

      (a) A brief

description of the material features of the plan, each class of persons who

will participate therein, the approximate number of persons in each such class,

and the basis of the participation.

      (b) State:

      1. The approximate

total amount necessary to fund the plan with respect to past services, the

period over which the amount is to be paid, and the estimated annual payments

necessary to pay the total amount over that period;

      2. The estimated

annual payment to be made with respect to current services; and

      3. The amount of

such annual payments to be made for the benefit of:

      a. Each person named

in subsection (7) of this section;

      b. Directors and

officers as a group; and

      c. Employees as a

group.

      (c) If the plan to

be acted upon may be amended (other than by a vote of security holders) in a

manner which would materially increase the cost thereof to the insurer or to

materially alter the allocation of the benefits as between the groups specified

in paragraph (b)3 of this subsection, the nature of the amendments should be

specified.

      (10) Options,

warrants, or rights. If action is to be taken with respect to the granting or

extension of any options, warrants or rights (all referred to herein as

"warrants") to purchase equity securities of the insurer or any

subsidiary or affiliate, other than warrants issued to all security holders on

a pro rata basis, furnish the following information:

      (a) The title and

amount of equity security called for or to be called for, the prices,

expiration dates and other material conditions upon which the warrants may be

exercised, the consideration received or to be received by the insurer,

subsidiary or affiliate for the granting or extension of the warrants and the

market value of the equity security called for or to be called for by the

warrants, as of the latest practicable date.

      (b) If known, state

separately the amount of equity security called for or to be called for by

warrants received or to be received by the following persons, naming each such

person:

      1. Each person named

in subsection (7) of this section; and

      2. Each other person

who will be entitled to acquire five (5) percent or more of the equity security

called for or to be called for by such warrants.

      (c) If known, state

also the total amount of equity security called for or to be called for by such

warrants, received or to be received by all directors and officers of the

company as a group and all employees, without naming them.

      (11) Authorization

or issuance of equity securities.

      (a) If action is to

be taken with respect to the authorization or issuance of any equity security

of the insurer, furnish the title, amount and description of the equity

security to be authorized or issued.

      (b) If the equity

securities are other than additional shares of common stock of a class

outstanding, furnish a brief summary of the following, if applicable: dividend,

voting, liquidation, preemptive, and conversion rights, redemption and sinking

fund provisions, interest rate and date of maturity.

      (c) If the equity

securities to be authorized or issued are other than additional shares of

common stock of a class outstanding, the executive director may require

financial statements comparable to those contained in the annual report.

      (12) Mergers,

consolidations, acquisitions and similar matters.

      (a) If action is to

be taken with respect to a merger, consolidation, acquisition, or similar

matter, furnish in brief outline the following information:

      1. The rights of

appraisal or similar rights of dissenters with respect to any matters to be

acted upon. Indicate any procedure required to be followed by dissenting

security holders in order to perfect these rights.

      2. The material

features of the plan or agreement.

      3. The business done

by the company to be acquired or whose assets are being acquired.

      4. If available, the

high and low sales prices for each quarterly period within two (2) years.

      5. The percentage of

outstanding shares which must approve the transaction before it is consummated.

      (b) For each company

involved in a merger, consolidation or acquisition, the following financial

statements should be furnished:

      1. A comparative

balance sheet as of the close of the last two (2) fiscal years.

      2. A comparative

statement of operating income and expenses for each of the last two (2) fiscal

years and, as a continuation of each statement, a statement of earnings per

share after related taxes and cash dividends paid per share.

      3. A pro forma

combined balance sheet, and income and expenses statement for the last fiscal

year giving effect to the necessary adjustments with respect to the resulting

company.

      (13) Restatement of

accounts. If action is to be taken with respect to the restatement of any

assets, capital, or surplus of the insurer, furnish the following information:

      (a) State the nature

of the restatement and the date as of which it is to be effective.

      (b) Outline briefly

the reasons for the restatement and for the selection of the particular

effective date.

      (c) State the name and

amount of each account affected by the restatement and the effect of the

restatement thereon.

      (14) Matters not

required to be submitted. If action is to be taken with respect to any matter

which is not required to be submitted to a vote of security holders, state the

nature of the matter, the reason for submitting it to a vote of security

holders and what action is intended to be taken by the management in the event

of a negative vote on the matter by security holders.

      (15) Amendment of

charter, bylaws, or other documents. If action is to be taken with respect to

any amendment of the insurer's charter, bylaws or other documents as to which

information is not required above, state briefly the reasons for and general

effect of the amendment and the vote needed for its approval.

 

      Section 15.

Information to be included in statements filed by or on behalf of a participant

(other than the insurer) in a proxy solicitation in an election contest.

      (1) Insurer. State

the name and address of the insurer.

      (2) Identity and

background.

      (a) State the

following:

      1. Your name and

business address.

      2. Your present

principal occupation or employment and the name, principal business and address

of any corporation or other organization in which this employment is carried

on.

      (b) State the

following:

      1. Your resident

address.

      2. Information as to

all material occupations, positions, offices and employments during the last

ten (10) years, giving starting and ending dates of each and the name,

principal business and address of any business corporation or other business

organization in which each such occupation, position, office or employment was

carried on.

      (c) State whether or

not you are or have been a participant in any other proxy contest involving

this company or other companies within the past ten (10) years. If so, identify

the principals, the subject matter and your relationship to the parties and the

outcome.

      (d) State whether or

not, during the past ten (10) years, you have been convicted in a criminal

proceeding (excluding traffic violations or similar misdemeanors) and, if so,

give dates, nature of conviction, name and location of court, and penalty

imposed or other disposition of the case. A negative answer to this paragraph

need not be included in the proxy statement or other proxy soliciting material.

      (3) Interest in

equity securities of the insurer.

      (a) State the amount

of each class of equity security of the insurer which you own beneficially,

directly or indirectly.

      (b) State the amount

of each class of equity security of the insurer which you own of record but not

beneficially.

      (c) State with

respect to the equity security specified in paragraphs (a) and (b) of this

subsection the amounts acquired within the past two (2) years, the date of

acquisition and the amounts acquired on each date.

      (d) If any part of

the purchase price or market value of any of the equity security specified in

paragraph (c) of this subsection is represented by funds borrowed or otherwise

obtained for the purpose of acquiring or holding such equity security, so state

and indicate the amount of the indebtedness as of the latest practicable date.

If the funds were borrowed or obtained otherwise than pursuant to a margin

account or bank loan in the regular course of business of a bank, broker, or

dealer, briefly describe the transaction, and state the names of the parties.

      (e) State whether or

not you are a party to any contracts, arrangements or understandings with any

person with respect to any equity security of the insurer, including but not

limited to joint ventures, loan or option arrangements, puts or calls,

guarantees against loss or guarantees of profits, division of losses or

profits, or the giving or withholding of proxies. If so, name the persons with

whom such contracts, arrangements, or understandings exist and give the details

thereof.

      (f) State the amount

of equity security of the insurer owned beneficially, directly or indirectly,

by each of your associates and the name and address of each such associate.

      (g) State the amount

of each class of equity security of any parent, subsidiary or affiliate of the

insurer which you own beneficially, directly, or indirectly.

      (4) Further matters.

      (a) Describe the

time and circumstance under which you became a participant in the solicitation

and state the nature and extent of your activities or proposed activities as a

participant.

      (b) Describe

briefly, and where practicable state the approximate amount of any material

interest, direct or indirect, to yourself and of each of your associates in any

material transactions since the beginning of the company's last fiscal year, or

in any material proposed transactions, to which the company or any of its

subsidiaries or affiliates was or is to be a party.

      (c) State whether or

not you or any of your associates have any arrangement or understanding with

any person:

      1. With respect to

any future employment by the insurer or its subsidiaries or affiliates; or

      2. With respect to

any future transactions to which the insurer or any of its subsidiaries or

affiliates will or may be a party. If so, describe such arrangement or

understanding and state the names of the parties thereto.

      (5) Signature. The

statement shall be dated and signed in the following manner:

 

      I certify that the

statements made in this statement are true, complete, and correct, to the best

of my knowledge and belief.

Date:

Signature of participant

or authorized representative:

      (I-26.01; 1 Ky.R.

870; eff. 5-14-75; Am. 8 Ky.R. 926; eff. 4-7-82; 20 Ky.R. 2371; 2780; eff. 4-11-94;

TAm eff. 8-9-2007.)
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