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8000 - Miscellaneous Statutes and Regulations
APPLICATION OF SAFE HARBOR FOR FORWARD-LOOKING
STATEMENTS.
SEC. 27A. (a) APPLICABILITY.--This
section shall apply only to a forward-looking statement made by--
(1) an issuer that, at the time that the statement is made, is
subject to the reporting requirements of
section 13(a) or
section 15(d) of the Securities
Exchange Act of 1934;
(2) a person acting on behalf of such issuer;
(3) an outside reviewer retained by such issuer making a
statement on behalf of such issuer; or
(4) an underwriter, with respect to information provided by such
issuer or information derived from information provided by the issuer.
(b) EXCLUSIONS.--Except to the extent otherwise
specifically provided by rule, regulation, or order of the Commission,
this section shall not apply to a forward-looking statement--
(1) that is made with respect to the business or operations of
the issuer, if the issuer--
(A) during the 3-year period preceding the date on which the
statement was first made--
(i) was convicted of any felony or misdemeanor described in
clauses (i) through (iv) of section 15(b)(4)(B) of the Securities
Exchange Act of 1934; or
(ii) has been made the subject of a judicial or administrative
decree or order arising out of a governmental action that--
(I) prohibits future violations of the antifraud provisions of
the securities laws;
(II) requires that the issuer cease and desist from violating the
antifraud provisions of the securities laws; or
(III) determines that the issuer violated the antifraud
provisions of the securities laws;
(B) makes the forward-looking statement in connection with an
offering of securities by a blank check company;
(C) issues penny stock;
(D) makes the forward-looking statement in connection with a
rollup transaction; or
{{8-29-97 p.8994.07}}
(E) makes the forward-looking statement in connection with a
going private transaction; or
(2) that is--
(A) included in a financial statement prepared in accordance with
generally accepted accounting principles;
(B) contained in a registration statement of, or otherwise issued
by, an investment company;
(C) made in connection with a tender offer;
(D) made in connection with an initial public offering;
(E) made in connection with an offering by, or relating to the
operations of, a partnership, limited liability company, or a direct
participation investment program; or
(F) made in a disclosure of beneficial ownership in a report
required to be filed with the Commission pursuant to section 13(d) of
the Securities Exchange Act of 1934.
(c) SAFE HARBOR.--
(1) IN GENERAL.--Except as provided in subsection (b),
in any private action arising under this title that is based on an
untrue statement of a material fact or omission of a material fact
necessary to make the statement not misleading, a person referred to in
subsection (a) shall not be liable with respect to any forward-looking
statement, whether written or oral, if and to the extent that--
(A) the forward-looking statement is--
(i) identified as a forward-looking statement, and is accompanied
by meaningful cautionary statements identifying important factors that
could cause actual results to differ materially from those in the
forward-looking statement; or
(ii) immaterial; or
(B) the plaintiff fails to prove that the forward-looking
statement--
(i) if made by a natural person, was made with actual knowledge
by that person that the statement was false or misleading; or
(ii) if made by a business entity; was--
(I) made by or with the approval of an executive officer of that
entity, and
(II) made or approved by such officer with actual knowledge by
that officer that the statement was false or misleading.
(2) ORAL FORWARD-LOOKING STATEMENTS.--In the case of an
oral forward-looking statement made by an issuer that is subject to the
reporting requirements of section
13(a) or section 15(d)
of the Securities Exchange Act of 1934, or by a person acting on behalf
of such issuer, the requirement set forth in paragraph (1)(A) shall be
deemed to be satisfied--
A) if the oral forward-looking statement is accompanied by a
cautionary statement--
(i) that the particular oral statement is a forward-looking
statement; and
(ii) that the actual results could differ materially from those
projected in the forward-looking statement; and
(B) if--
(i) the oral forward-looking statement is accompanied by an oral
statement that additional information concerning factors that could
cause actual results to differ materially from those in the
forward-looking statement is contained in a readily available written
document, or portion thereof;
(ii) the accompanying oral statement referred to in clause (i)
identifies the document, or portion thereof, that contains the
additional information about those factors relating to the
forward-looking statement; and
(iii) the information contained in that written document is a
cautionary statement that satisfies the standard established in
paragraph (1)(A).
(3) AVAILABILITY.--Any document filed with the
Commission or generally disseminated shall be deemed to be readily
available for purposes of paragraph (2).
(4) EFFECT ON OTHER SAFE HARBORS.--The exemption
provided for in paragraph (1) shall be in addition to any exemption
that the Commission may establish by rule or regulation under
subsection (g).
{{8-29-97 p.8994.08}}
(d) DUTY TO UPDATE.--Nothing in this section shall impose
upon any person a duty to update a forward-looking statement.
(e) DISPOSITIVE MOTION.--On any motion to dismiss based
upon subsection (c)(1), the court shall consider any statement cited in
the complaint and cautionary statement accompanying the forward-looking
statement, which are not subject to material dispute, cited by the
defendant.
(f) STAY PENDING DECISION ON MOTION.--In any private
action arising under this title, the court shall stay discovery (other
than discovery that is specifically directed to the applicability of
the exemption provided for in this section) during the pendency of any
motion by a defendant for summary judgment that is based on the grounds
that--
(1) the statement or omission upon which the complaint is based
is a forward-looking statement within the meaning of this section; and
(2) the exemption provided for in this section precludes a claim
for relief.
(g) EXEMPTION AUTHORITY.--In addition to the exemptions
provided for in this section, the Commission may, by rule or
regulation, provide exemptions from or under any provision of this
title, including with respect to liability that is based on a statement
or that is based on projections or other forward-looking information,
if and to the extent that any such exemption is consistent with the
public interest and the protection of investors, as determined by the
Commission.
(h) EFFECT ON OTHER AUTHORITY OF COMMISSION.--Nothing in
this section limits, either expressly or by implication, the authority
of the Commission to exercise similar authority or to adopt similar
rules and regulations with respect to forward-looking statements under
any other statute under which the Commission exercises rulemaking
authority.
(i) DEFINITIONS.--For purposes of this section, the
following definitions shall apply:
(1) FORWARD-LOOKING STATEMENT.--The term
"forward-looking statement" means--
(A) a statement containing a projection of revenues, income
(including income loss), earnings (including earnings loss) per share,
capital expenditures, dividends, capital structure, or other financial
items;
(B) a statement of the plans and objectives of management for
future operations, including plans or objectives relating to the
products or services of the issuer;
(C) a statement of future economic performance, including any
such statement contained in a discussion and analysis of financial
condition by the management or in the results of operations included
pursuant to the rules and regulations of the Commission;
(D) any statement of the assumptions underlying or relating to
any statement described in subparagraph (A), (B), or (C);
(E) any report issued by an outside reviewer retained by an
issuer, to the extent that the report assesses a forward-looking
statement made by the issuer; or
(F) a statement containing a projection or estimate of such other
items as may be specified by rule or regulation of the Commission.
(2) INVESTMENT COMPANY.--The term "investment
company" has the same meaning as in
section 3(a) of the Investment
Company Act of 1940.
(3) PENNY STOCK.--The term "penny stock" has the
same meaning as in section
3(a)(51) of the Securities Exchange Act of 1934, and the rules
and regulations, or orders issued pursuant to that section.
(4) GOING PRIVATE TRANSACTION.--The term "going
private transaction" has the meaning given that term under the rules
or regulations of the Commission issued pursuant to
section 13(e) of the Securities
Exchange Act of 1934.
(5) SECURITIES LAWS.--The term "securities laws"
has the same meaning as in section
3 of the Securities Exchange Act of 1934.
(6) PERSON ACTING ON BEHALF OF AN ISSUER.--The term
"person acting on behalf of an issuer" means an officer,
director, or employee of the issuer.
(7) OTHER TERMS.--The terms "blank check company",
"rollup transaction", "partnership", "limited liability
company", "executive officer of an entity" and
"direct
{{2-26-99 p.8994.09}}participation
investment program", have the meanings given those terms by rule or
regulation of the Commission.
[Codified to 15 U.S.C. 77z--2]
[Source: Section 102(a) of title I of the Act of December 22, 1995
(Pub. L. No. 104--67; 109 Stat. 749), effective December 22, 1995; as
amended by section 301(a)(5) of title III of the Act of November 3,
1998 (Pub. L. No. 105--353; 112 Stat. 3235), effective November 3,
1998]
SEC. 28. GENERAL EXEMPTIVE AUTHORITY.--The Commission, by
rule or regulation, may conditionally or unconditionally exempt any
person, security, or transaction, or any class or classes of persons,
securities, or transactions, from any provision or provisions of this
title or of any rule or regulation issued under this title, to the
extent that such exemption is necessary or appropriate in the public
interest, and is consistent with the protection of investors.
[Codified to 15 U.S.C. 77z--3]
[Source: Section 105(a) of title I of the Act of October 11, 1996
(Pub. L. No. 104--290; 110 Stat. 3424), effective October 11, 1996; as
amended by section 301(a)(5) of title III of the Act of November 3,
1998 (Pub. L. No. 105--353; 112 Stat. 3235), effective November 3,
1998]
SCHEDULE A
(1) The name under which the issuer is doing or intends to do
business;
(2) the name of the State or other sovereign power under which
the issuer is organized;
(3) the location of the issuer's principal business office, and
if the issuer is a foreign or territorial person, the name and address
of its agent in the United States authorized to receive notice;
(4) the names and addresses of the directors or persons
performing similar functions, and the chief executive, financial and
accounting officers, chosen or to be chosen if the issuer be a
corporation, association, trust, or other entity; of all partners, if
the issuer be a partnership; and of the issuer, if the issuer be an
individual; and of the promoters in the case of a business to be
formed, or formed within two years prior to the filing of the
registration statement;
(5) the names and addresses of the underwriters;
(6) the names and addresses of all persons, if any, owning of
record or beneficially, if known, more than 10 per centum of any class
of stock of the issuer, or more than 10 per centum in the aggregate of
the outstanding stock of the issuer as of a date within twenty days
prior to the filing of the registration statement;
(7) the amount of securities of the issuer held by any person
specified in paragraphs (4), (5), and (6) of this schedule, as of a
date within twenty days prior to the filing of the registration
statement, and, if possible, as of one year prior thereto, and the
amount of the securities, for which the registration statement is
filed, to which such persons have indicated their intention to
subscribe;
(8) the general character of the business actually transacted or
to be transacted by the issuer;
(9) a statement of the capitalization of the issuer, including
the authorized and outstanding amounts of its capital stock and the
proportion thereof paid up, the number and classes of shares in which
such capital stock is divided, par value thereof, or if it has no par
value, the stated or assigned value thereof, a description of the
respective voting rights, preferences, conversion and exchange rights,
rights to dividends, profits, or capital of each class, with respect to
each other class, including the retirement and liquidation rights or
values thereof;
{{2-26-99 p.8994.10}}
(10) a statement of the securities, if any, covered by options
outstanding or to be created in connection with the security to be
offered, together with the names and addresses of all persons, if any,
to be allotted more than 10 per centum in the aggregate of such
options;
(11) the amount of capital stock of each class issued or included
in the shares of stock to be offered;
(12) the amount of the funded debt outstanding and to be created
by the security to be offered, with a brief description of the date,
maturity, and character of such debt, rate of interest, character of
amortization provisions, and the security, if any, therefor. If
substitution of any security is permissible, a summarized
statement of the conditions un-
{{11-1-83 p.8995}}der which such substitution is
permitted. If substitution is permissible without notice, a specific
statement to that effect;
(13) the specific purposes in detail and the approximate amounts
to be devoted to such purposes, so far as determinable, for which the
security to be offered is to supply funds, and if the funds are to be
raised in part from other sources, the amounts thereof and the sources
thereof, shall be stated;
(14) the renumeration, paid or estimated to be paid, by the
issuer or its predecessor directly or indirectly, during the past year
and ensuing year to (a) the directors or persons performing similar
functions, and (b) its officers and other persons, naming them wherever
such remuneration exceeded $25,000 during any such year;
(15) the estimated net proceeds to be derived from the security
to be offered;
(16) the price at which it is proposed that the security shall be
offered to the public or the method by which such price is computed and
any variation therefrom at which any portion of such security is
proposed to be offered to any persons or classes of persons, other than
the underwriters, naming them or specifying the class. A variation in
price may be proposed prior to the date of the public offering of the
security, but the Commission shall immediately be notified of such
variation;
(17) all commissions or discounts paid or to be paid, directly or
indirectly, by the issuer to the underwriters in respect of the sale of
the security to be offered. Commissions shall include all cash,
securities, contracts, or anything else of value, paid, to be set
aside, disposed of, or understandings with or for the benefit of any
other persons in which any underwriter is interested, made, in
connection with the sale of such security. A commission paid or to be
paid in connection with the sale of such security by a person in which
the issuer has an interest or which is controlled or directed by, or
under common control with, the issuer shall be deemed to have been paid
by the issuer. Where any such commission is paid the amount of such
commission paid to each underwriter shall be stated;
(18) the amount or estimated amounts, itemized in reasonable
detail, of expenses, other than commissions specified in paragraph (17)
of this schedule, incurred or borne by or for the account of the issuer
in connection with the sale of the security to be offered or properly
chargeable thereto, including legal, engineering, certification,
authentication, and other charges;
(19) the net proceeds derived from any security sold by the
issuer during the two years preceding the filing of the registration
statement, the price at which such security was offered to the public,
and the names of the principal underwriters of such security;
(20) any amount paid within two years preceding the filing
of the registration statement or intended to be paid to any promoter
and the consideration for any such payment;
(21) the names and addresses of the vendors and the purchase
price of any property, or good will, acquired or to be acquired, not in
the ordinary course of business, which is to be defrayed in whole or in
part from the proceeds of the security to be offered, the amount of any
commission payable to any person in connection with such acquisition,
and the name or names of such person or persons, together with any
expense incurred or to be incurred in connection with such acquisition,
including the cost of borrowing money to finance such acquisition;
(22) full particulars of the nature and extent of the interest,
if any, of every director, principal executive officer, and of every
stockholder holding more than 10 per centum of any class of stock or
more than 10 per centum in the aggregate of the stock of the issuer, in
any property acquired, not in the ordinary course of business of the
issuer, within two years preceding the filing of the registration
statement or proposed to be acquired at such date;
(23) the names and addresses of counsel who have passed on the
legality of the issue;
(24) dates of and parties to, and the general effect
concisely stated of every material contract made, not in the ordinary
course of business, which contract is to be executed in whole or in
part at or after the filing of the registration statement or which
contract has been made not more than two years before such filing. Any
management contract or contract providing for special bonuses or
profit-sharing arrangements, and every material patent or
{{11-1-83 p.8996}}contract for a material patent
right, and every contract by or with a public utility company or an
affiliate thereof, providing for the giving or receiving of technical
or financial advice or service (if such contract may involve a charge
to any party thereto at a rate in excess of $2,500 per year in cash or
securities or anything else of value), shall be deemed a material
contract;
(25) a balance sheet as of a date not more than ninety days prior
to the date of the filing of the registration statement showing all of
the assets of the issuer, the nature and cost thereof, whenever
determinable, in such detail and in such form as the Commission shall
prescribe (with intangible items segregated), including any loan in
excess of $20,000 to any officer, director, stockholder or person
directly or indirectly controlling or controlled by the issuer, or
person under direct or indirect common control with the issuer. All the
liabilities of the issuer in such detail and such form as the
Commission shall prescribe, including surplus of the issuer showing how
and from what sources such surplus was created, all as of a date not
more than ninety days prior to the filing of the registration
statement. If such statement be not certified by an independent public
or certified accountant, in addition to the balance sheet required to
be submitted under this schedule, a similar detailed balance sheet of
the assets and liabilities of the issuer, certified by an independent
public or certified accountant, of a date not more than one year prior
to the filing of the registration statement, shall be submitted;
(26) a profit and loss statement of the issuer showing earnings
and income, the nature and source thereof, and the expenses and fixed
charges in such detail and such form as the Commission shall prescribe
for the latest fiscal year for which such statement is available and
for the two preceding fiscal years, year by year, or if such issuer has
been in actual business for less than three years, then for such time
as the issuer has been in actual business, year by year. If the date of
the filing of the registration statement is more than six months after
the close of the last fiscal year, a statement from such closing date
to the latest practicable date. Such statement shall show what the
practice of the issuer has been during the three years or lesser period
as to the character of the charges, dividends or other distributions
made against its various surplus accounts, and as to depreciation,
depletion, and maintenance charges, in such detail and form as the
Commission shall prescribe, and if stock dividends or avails from the
sale of rights have been credited to income they shall be shown
separately with a statement of the basis upon which the credit is
computed. Such statement shall also differentiate between any recurring
and nonrecurring income and between any investment and operating
income. Such statement shall be certified by an independent public or
certified accountant;
(27) if the proceeds, or any part of the proceeds, of the
security to be issued is to be applied directly or indirectly to the
purchase of any business, a profit and loss statement of such business
certified by an independent public or certified accountant, meeting the
requirements of paragraph (26) of this schedule, for the three
preceding fiscal years, together with a balance sheet, similarly
certified, of such business, meeting the requirements of paragraph (25)
of this schedule of a date not more than ninety days prior to the
filing of the registration statement or at the date such business was
acquired by the issuer if the business was aquired by the issuer more
than ninety days prior to the filing of the registration statement;
(28) a copy of any agreement or agreements (or, if identical
agreements are used, the forms thereof) made with any underwriter,
including all contracts and agreements referred to in paragraph (17) of
this schedule;
(29) a copy of the opinion or opinions of counsel in respect to
the legality of the issue, with a translation of such opinion, when
necessary, into the English language;
(30) a copy of all material contracts referred to in paragraph
(24) of this schedule, but no disclosure shall be required of any
portion of any such contract if the Commission determines that
disclosure of such portion would impair the value of the contract and
would not be necessary for the protection of the investors;
(31) unless previously filed and registered under the provisions
of this title, and brought up to date, (a) a copy of its articles of
incorporation, with all amendments
{{6-30-98 p.8997}}thereof and of its existing
bylaws or instruments corresponding thereto, whatever the name, if the
issuer be a corporation; (b) a copy of all instruments by which the
trust is created or declared, if the issuer is a trust; (c) a copy of
its articles of partnership or association and all other papers
pertaining to its organization, if the issuer is a partnership,
unincorporated association, joint-stock company, or any other form of
organization; and
(32) a copy of the underlying agreements or indentures affecting
any stock, bonds, or debentures offered or to be offered.
In case of certificates of deposit, voting trust certificates,
collateral trust certificates, certificates of interest or shares in
unincorporated investments trust, equipment trust certificates, interim
or other receipts for certificates, and like securities, the Commission
shall establish rules and regulations requiring the submission of
information of a like character applicable to such cases, together with
such other information as it may deem appropriate and necessary
regarding the character, financial or otherwise, of the actual issuer
of the securities and/or the person performing the acts and assuming
the duties of depositor or manager.
SCHEDULE B
(1) Name of borrowing government or subdivision thereof;
(2) specific purposes in detail and the approximate amounts to be
devoted to such purposes, so far as determinable, for which the
security to be offered is to supply funds, and if the funds are to be
raised in part from other sources, the amounts thereof and the sources
thereof, shall be stated;
(3) the amount of the funded debt and the estimated amount of the
floating debt outstanding and to be created by the security to be
offered, excluding intergovernmental debt, and a brief description of
the date, maturity, character of such debt, rate of interest, character
of amortization provisions, and the security, if any, therefor. If
substitution of any security is permissible, a statement of the
conditions under which such substitution is permitted. If substitution
is permissible without notice, a specific statement to that effect;
(4) whether or not the issuer or its predecessor has, within a
period of twenty years prior to the filing of the registration
statement, defaulted on the principal or interest of any external
security, excluding intergovernmental debt, and, if so, the date,
amount, and circumstances of such default, and the terms of the
succeeding arrangement, if any;
(5) the receipts, classified by source, and the expenditures,
classified by purpose, in such detail and form as the Commission shall
prescribe for the latest fiscal year for which such information is
available and the two preceding fiscal years, year by year;
(6) the names and addresses of the underwriters;
(7) the name and address of its authorized agent, if any, in the
United States;
(8) The estimated net proceeds to be derived from the sale in the
United States of the security to be offered;
(9) the price at which it is proposed that the security shall be
offered in the United States to the public or the method by which such
price is computed. A variation in price may be proposed prior to the
date of the public offering of the security, but the Commission shall
immediately be notified of such variation;
(10) all commissions paid or to be paid, directly or indirectly,
by issuer to the underwriters in respect of the sale of the security to
be offered. Commissions shall include all cash, securities, contracts,
or anything else of value, paid, to be set aside, disposed of, or
understandings with or for the benefit of any other person in which the
underwriter is interested, made, in connection with the sale of such
security. Where any such commission is paid, the amount of such
commission paid to each underwriter shall be stated;
(11) the amount or estimated amounts, itemized in reasonable
detail, of expenses, other than the commissions specified in paragraph
(10) of this schedule, incurred or borne by or for the account of the
issuer in connection with the sale of the security to be offered or
properly chargeable thereto, including legal, engineering,
certification, and other charges;
(12) the names and addresses of counsel who have passed upon the
legality of the issue;
{{6-30-98 p.8998}}
(13) a copy of any agreement or agreements made with any
underwriter governing the sale of the security within the United
States; and
(14) an agreement of the issuer to furnish a copy of the opinion
or opinions of counsel in respect to the legality of the issue, with a
translation, where necessary, into the English language. Such opinion
shall set out in full all laws, decrees, ordinances, or other acts of
Government under which the issue of such security has been authorized.
[Codified to 15 U.S.C. 77aa]
[Source: Schedules A and B of title I of the Act of May 27, 1933
(Pub. L. No. 22; 48 Stat. 88, 91), effective May 27, 1933]
[The page following this is 9169.]
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