OAR 836-024-0190: Exemption from ORS 732.435 of Certain Transactions Involving the Conversion of Equity Securities

(1) An acquisition or disposition of an equity security involved in the conversion of an equity security is exempt from ORS 732.435 if the converted equity security, either immediately or after a stated period of time, is convertible by its terms or pursuant to the terms of the insurer’s articles of incorporation or other governing instrument into another equity security of the same insurer. (2) Unless an acquisition or disposition described in section (1) of this rule is included in a transaction involved in the conversion or in a transaction exempted by any other provision of OAR 836-024-0100 to 836-024-0220 that implements ORS 732.435, the exemption established in subsection (1) of this rule does not apply if either of the following has occurred within a period of less than six months before or after the conversion, including the date of the conversion. This section applies to the following: (a) A purchase of any equity security of the class convertible, including any acquisition of or change in a conversion privilege and a sale of any equity security of the class issuable upon conversion; or (b) A sale of any equity security of the class convertible and any purchase of any equity security issuable upon conversion. (3) For the purpose of this rule: (a) An equity security is not considered to be acquired or disposed of upon conversion of an equity security if the terms of the converted equity security require the payment or entail the receipt of cash or other property in connection with the conversion, other than equity securities involved in the conversion, equal in value at the time of conversion to more than 15 percent of the value of the equity security issued upon conversion. (b) An equity security is considered to be convertible if it is convertible at the option of the holder or of some other person or by operation of the terms of the security or the governing instruments.