Or. Admin. R. 836-024-0175

Current through Register Vol. 63, No. 8, August 1, 2024

Section 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.

Or. Admin. R. 836-024-0175

ID 16-2006, f. & cert. ef. 8-7-06

Stat. Auth: ORS 731.244, 732.420, 732.430, 732.435, 732.445, 732.450, 732.455

Stats. Implemented: ORS 732.420 - 732.455