California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4 - Insurer Securities Permits › Article 13 - Forms and Addenda › Section 2613.08 - Agreement by Organizers, Promoters, Original Officers and Directors Restricting Transfer of Shares

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The following represents a composite, sample form of an
					 agreement the nature of which has been approved by the Commissioner:
AGREEMENT RESTRICTING TRANSFER OF
					 SHARES
This Agreement made and entered into this __________ day
					 of_______________, 199 __, by and between ABC LIFE INSURANCE COMPANY, a
					 California corporation (hereinafter called "Company") and ____________________
					 (hereinafter called "Shareholder"),
WITNESSETH:
WHEREAS, Company has obtained a permit from the Insurance
					 Commissioner of the state of California (hereinafter called "Commissioner"),
					 being No, __________ issued ____________________, authorizing the sale and
					 issuance of company's shares; and
WHEREAS, Condition ____________________ of said permit
					 required the promoters, organizers and all original officers and directors of
					 Company before any public offering and sale is made to purchase a certain
					 number of the shares sought to be authorized and requires certain restrictions
					 to be placed upon transfer of their said shares for varying periods of time;
					 and
WHEREAS, Shareholder has purchase, or has agreed to
					 purchase, from Company certain of its shares which will be subject to said
					 restrictions, and the number of shares to be purchased and restricted is
					 enumerated on an addendum attached hereto:
NOW, THEREFORE, the parties hereto agree as follows:
1. That, except as stated in Paragraph 2
				  hereof, Shareholder will not sell, transfer, or encumber any of the restricted
				  shares without prior written consent of the Commissioner.
2. The exceptions referred to in Paragraph 1
				  above are as follows:
a. The following
				  percentages to the nearest whole share of the restricted shares shall be
				  released automatically from the restrictions set forth in this Agreement
				  without further approval or consent by the Insurance Commissioner, or any other
				  party, at the following respective times: 5% at the end of the first year of
				  the 5-year restriction period; an additional 5% at the end of the second year;
				  an additional 10% at the end of the third year; an additional 20% at the end of
				  the fourth year; and the remainder at the end of the fifth year.
b. Any or all of the restricted shares may be
				  transferred by Shareholder at any time by gift to the following described
				  person or persons: Shareholder's spouse, child, or grandchildren; Shareholder
				  or spouse's parent, brother, sister, or child of brother or sister. (It is
				  understood that the singular includes the plural, and vice versa,in this
				  Agreement.)
c. Any or all of the
				  restricted shares may be transferred at any time by operation of law, pursuant
				  to last will and testament of Shareholder, or pursuant to the laws of descent
				  and distribution.
d. Any or all of
				  the restricted shares may be transferred at any time with the prior written
				  consent of the Commissioner, and Company hereby consents to such transfers. It
				  is understood that among the reasons which may, but not necessarily will, cause
				  the Commissioner to give such consent are the following:
(1) Significant change in the financial
				  position or affairs of Shareholder, not within the control of Shareholder, that
				  would otherwise result in hardship;
(2) Proposed pledging of any or all of the
				  restricted shares as collateral for a loan to be made to shareholder;
(3) A transfer of any or all of the
				  restricted shares by Shareholder to another Shareholder, some or all of whose
				  shares are subject to the restrictions of this Agreement, or similar
				  restrictions;
(4) The transfer of
				  any or all of the restricted shares by Shareholder to a transferee having a
				  sufficient financial sophistication and/or knowledge of the insurance industry
				  and such insurance securities to satisfy the Commissioner that such transfer
				  would be in the proper interest of Company, its policyholders and other
				  shareholders. Any such transfer which would destroy or impair desirable
				  leadership of the Company, or be conducive to internal dissension will be
				  disfavored.