OAR 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.