N.J. Admin. Code § 11:2-9.17 - Exemption from N.J.S.A 17:17B-2-certain securities received upon surrender of similar equity securities

(a) Where a person receives shares of stock of a class having general voting power from an insurer, upon the person's surrender of an equal number of shares of stock of the insurer of a class which does not have general voting power, pursuant to provisions of the insurer's certificate of incorporation, for the purpose of a sale of the shares (either accompanied simultaneously or followed immediately) so received, such transaction shall be exempt from the operation of 17:17B-2 as a transaction not comprehended within the purpose of that section, if the following conditions exist:
1. The person so receiving such shares is not an officer or director, or the beneficial owner, directly or indirectly, immediately prior to such receipt, of more than ten per cent of an equity security of the insurer;
2. The shares surrendered and the shares issued upon such surrender shall be of classes which are freely transferable and which entitle the holders thereof to participate equally per share in all distributions of earnings and assets;
3. The surrender and issuance are made pursuant to provisions of a certificate of incorporation which require that the shares issued upon such surrender shall be registered upon issuance in the name of a person or persons other than the holder of the shares surrendered, and may be required to be issued as of right only in connection with the public offering, sale and distribution of such shares and the immediate sale by such holder of such shares for that purpose, or in connection with a gift of such shares;
4. The shares surrendered are not or have not been purchased (otherwise than in a transaction exempted by this section) by the person surrendering such shares within six months before or after such surrender. "Shares surrendered" as used in this paragraph, refers to:
i. The shares actually surrendered;
ii. Shares of the same class as those surrendered;
iii. Shares of the same class as those issued upon surrender.


N.J. Admin. Code § 11:2-9.17
Amended by R.1996 d.3, effective 1/2/1996.
See: 27 New Jersey Register 3278(b), 28 New Jersey Register 152(b).

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