31.04.10.05

.05 Exemption from Insurance Article, §3-119(e), Annotated Code of Maryland, of Certain Transactions in which Securities Are Received by Redeeming Other Securities.

Any acquisition of an equity security (other than a convertible security or right to purchase a security) by a director or officer of the issuer issuing the security shall be exempt from the operation of Insurance Article, §3-119(e), Annotated Code of Maryland, upon condition that:

A. The equity security is acquired by way of redemption of another security of an issuer substantially all of whose assets other than cash (or government bonds) consist of securities of the issuer of the equity security so acquired, and which:

(1) Represented substantially and in practical effect a stated or readily ascertainable amount of the equity security;

(2) Had a value which was substantially determined by the value of the equity security; and

(3) Conferred upon the holder the right to receive the equity security without the payment of any consideration other than the security redeemed;

B. No security of the same class as the security redeemed was acquired by the director or officer within 6 months before the redemption or is acquired within 6 months after the redemption;

C. The issuer of the equity security acquired has recognized the applicability of §A of this regulation by appropriate corporate action.