Nothing in this article shall be deemed to prohibit the inclusion in the plan of conversion of provisions under which the insurer’s officers, directors, employees, agents, and employee benefit plans for their benefit may be entitled, in accordance with reasonable classifications of those individuals and employee benefit plans as may be included in the plan, to purchase for cash, at the same price as offered to the public in the initial public offering, voting stock not purchased by subscribers upon exercise of subscription rights. Nothing in this code shall be deemed to prohibit the establishment of stock option, incentive, and share ownership plans customary for publicly traded companies in the same and similar industries. The plan may not permit those persons to acquire any of the following:
(a) Greater than 25 percent of the voting stock issued pursuant to the plan for a domestic reciprocal insurer having assets in excess of two hundred million dollars ($200,000,000) or 35 percent for a domestic reciprocal insurer having assets of two hundred million dollars ($200,000,000) or less.
Terms Used In California Insurance Code 1560.07
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Domestic: means organized under the laws of this State, whether or not admitted. See California Education Code 32031
- plan: means a plan adopted by a domestic reciprocal insurer in compliance with this article. See California Insurance Code 1560.02
- subscription: includes mark when the signer or subscriber can not write, such signer's or subscriber's name being written near the mark by a witness who writes his own name near the signer's or subscriber's name. See California Education Code 25021
- Voting stock: means securities of any class or any ownership interest having voting power for the election of directors, trustees, or management of a person, other than securities having voting power only because of the occurrence of a contingency. See California Insurance Code 1560.02
(b) Greater than 25 percent of the stockholders’ equity for a medical malpractice reciprocal insurer having assets in excess of two hundred million dollars ($200,000,000) or 35 percent for a medical malpractice reciprocal insurer having assets of less than two hundred million dollars ($200,000,000).
(c) Unexercised options that exceed 20 percent of the number of issued and outstanding shares.
(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)