Cal. Code Regs. Tit. 10, § 2682.15 - Exemption of Long Term Profits Incident to Sales Within Six Months of the Exercise of an Option
(a)
To the extent specified in paragraph (b) of this section, there is hereby
exempted, as not comprehended within the purposes of Section
1104.3 any transaction or
transactions involving the purchase and sale, or sale and purchase, of any
equity security where such purchase is pursuant to the exercise of an option or
similar right either
(1) acquired more than
six months before its exercise, or
(2) acquired pursuant to the terms of an
employment contract entered into more than six months before its
exercise.
(b) In respect
of transactions specified in paragraph (a) the profits inuring to the insurer
shall 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 the sale. Nothing in this section shall be deemed to enlarge
the amount of profit which would inure to such insurer in the absence of this
section.
(c) There is also
exempted, as not comprehended within the purposes of Section
1104.3, the disposition of a
security, purchased in a transaction specified in paragraph (a) of this
section, pursuant to a plan or agreement for merger or consolidation, or
reclassification of the insurer's securities, or for the exchange of its
securities for the securities of another person which has acquired its assets,
or which is in control, as defined in Section
368 (c) of the
Internal Revenue Code of 1954, of a person which has acquired its assets, where
the terms of such plan or agreement are binding upon all stockholders of the
insurer except to the extent that dissenting stockholders may be entitled,
under statutory provisions contained in the certificate of incorporation, to
receive the appraised or fair value of their holdings.
(d) The exemptions proved by this section
shall not apply to any transaction made unlawful by Section
1104.4 or by any rules and
regulations thereunder.
(e) The
burden of establishing market price of a security for the purpose of this
section shall rest upon the person claiming the exemption.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.