Section 26-A1414. EXEMPTION OF LONG TERM PROFITS INCIDENT TO SALES WITHIN SIX MONTHS OF THE EXERCISE OF AN OPTION

 

1414.1To the extent specified in §1414.2, the Mayor shall exempt, as not comprehended within the purposes of Section 3(b) of the Act, any transaction(s) involving the purchase and sale, or sale and purchase, of any equity security where the purchase is pursuant to the exercise of an option or similar right either acquired more than six (6) months before its exercise, or acquired pursuant to the terms of an employmentcontract entered into more than six (6) months before its exercise.

 

1414.2In respect to transactions specified in §1414.1, 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 (6) months before or after the date of sale.

 

1414.3Nothing in this section shall be considered to enlarge the amount of profit which shall inure to the insurer in the absence of this section.

 

1414.4The Mayor shall exempt, as not comprehended within the purposes of Section 3(b) of the Act the following:

 

(a)The disposition of a security, purchased in a transaction specified in §1414.1, pursuant to a plan or agreement for merger or consolidation;

 

(b)The classification of the insurer's securities; or

 

(c)The exchange of securities for the securities of another person which has acquired its assets, or which is in control, as defined in §368(c) of the Internal Revenue Code of 1954, of a person which has acquired its assets, where the terms of the plan or agreement are binding upon all stockholders of the insurer;

 

(d)Exception to this section shall be 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.

 

1414.6The exemptions proved by this section shall not apply to any transaction made unlawful by Section 3(c) of the Act or by any regulations of this chapter.

 

1414.7The burden of establishing market price of a security for the purpose of this section shall rest upon the person claiming the exemption.