<html> <head> <title>Rule 20:06:04:28 Participation of officers who are not directors.</title> <META NAME="Keywords" Content="Administrative Rules 20:06:04:28"> <META NAME="Description" Content="Administrative Rules 20:06:04:28 Participation of officers who are not directors."> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Generator content="Microsoft Word 14 (filtered)"> <style> <!-- /* Font Definitions */ @font-face {font-family:Times; panose-1:2 2 6 3 5 4 5 2 3 4;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {margin:0in; margin-bottom:.0001pt; font-size:10.0pt; font-family:"Times","serif";} @page WordSection1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in;} div.WordSection1 {page:WordSection1;} --> </style> </head> <body lang=EN-US> <div class=WordSection1> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>20:06:04</b><b>:28.&nbsp;&nbsp;Participation of officers who are not directors.</b> Discretion shall be exercised with respect to the participation of officers who are not directors:</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;By the board of directors of the insurer or a committee of three or more directors; or</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;By, or only in accordance with the recommendations of, a committee of three or more persons having full authority to act in the matter, all of the members of which committee are disinterested persons.</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the purpose of this section, a director or committee member shall be deemed to be a disinterested person only if such person is not at the time such discretion is exercised eligible and has not at any time within one year prior thereto been eligible for selection as a person to whom stock may be allocated or to&nbsp; whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan or any other plan of the insurer or any of its affiliates entitling the participants therein to acquire stock or qualified, restricted or employee stock purchase plan stock options of the insurer or any of its affiliates.</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 4 SDR 6, effective August 9, 1977; 12 SDR 151, 12 SDR 155, effective July 1, 1986.</span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-5-73">58-5-73</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-5-77">58-5-77.</A></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-5-71">58-5-71</A> to <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-5-73">58-5-73.</A></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman","serif"'>&nbsp;</span></p> </div> </body> </html>