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The Oregon Administrative Rules contain OARs filed through July 15, 2014
 
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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
DIVISION OF FINANCE AND CORPORATE SECURITIES

 

DIVISION 85

CONDITIONS OF REGISTRATION

441-085-0010

Selling Expenses

(1) The North American Securities Administrators Association, Inc., has adopted a Statement of Policy regarding Selling Expenses and Selling Security Holders. This rule is designed to parallel, with modifications, the Statement of Policy regarding Selling Expenses and Selling Securities Holders adopted by the North American Securities Administrators Association, Inc. Except as otherwise provided pursuant to sections (5) and (6) of this rule, the provisions of this rule will apply to offerings of securities registered pursuant to ORS 59.065.

(2) Except for offerings by issuers specified in section (5) of this rule, an Application to Register Securities filed pursuant to ORS 59.065 may be denied by the Director pursuant to ORS 59.105(1)(a) or (h) if the selling expenses of the offering exceed 15 percent of the aggregate offering price (before deducting discounts and commissions) as computed only on the portion of the aggregate offering price when and as paid to the issuer.

(3) Selling expenses shall mean:

(a) Total underwriting and brokerage discounts and commissions;

(b) Accountable and non-accountable fees or expenses to be paid to the underwriter or broker-dealer;

(c) Underwriters' attorney fees and expenses paid by the issuer;

(d) Fees payable pursuant to consulting or financial advisory agreements or similar arrangements;

(e) Printing and engraving expenses;

(f) Advertising and other promotional expenses;

(g) Charges of transfer agents, registrars, indenture trustees, escrow holders, depositories, engineers, appraisers and other experts; and

(h) Any other expenses incurred by the issuer directly related to the offering and sale of the securities, excluding:

(A) Accountants' fees and expenses;

(B) Issuer's attorney fees and expenses;

(C) Expenses of qualification, including issue taxes and registration fees, for the sale of securities under Federal and State laws; and

(D) Options, future registration rights and rights of first refusal granted to underwriters.

(4) In any event, the selling expenses and all other costs associated with an offering subject to this rule, including those tangible costs set forth in paragraphs (3)(h)(A) through (C) of this rule, must be reasonable. Selling expenses and all other costs associated with an offering subject to this rule which exceed 25 percent of the aggregate offering price (before deducting discounts and commissions) shall be presumed to be unreasonable.

(5) The following offerings by issuers shall not be governed by section (2) of this rule, but selling expenses and other costs in connection with such offerings must be reasonable:

(a) Partnerships, corporations or other similar organizations, formed and operated for the primary purpose of investment in or the operation of or gain from commodity pools;

(b) Partnerships or other similar organizations, other than corporations, formed and operated for the primary purpose of investment in or the operation of or gain from an interest in equipment, including equipment leases;

(c) Partnerships or other similar organizations, other than corporations, formed and operated for the primary purpose of investment in or the operation of or gain from the exploration for oil, gas or other hydrocarbon substances;

(d) Partnerships or other similar organizations, other than corporations, formed and operated for the primary purpose of investment in or the operation of or gain from an interest in real property, including such entities formed to make or invest in mortgage loans;

(e) Offerings by issuers pursuant to OAR 441-065-0030, which shall be subject to OAR 441-065-0030(1)(h);

(f) Offerings by issuers pursuant to OAR 441-065-0035;

(g) Offerings by issuers pursuant to OAR 441-065-0060 through 441-065-0240, which shall be subject to OAR 441-065-0140; and

(h) Offerings by issuers pursuant to OAR 441-065-0270.

(6) An Application to Register Securities that includes selling security holders and is filed pursuant to OAR 441-065-0020 or 441-065-0260 may be denied by the Director pursuant to ORS 59.105(1)(a) unless the following conditions are met:

(a) Selling security holders shall pay a pro rata share of all additional selling expenses that are the result of the inclusion of their securities in the offering; and

(b) The prospectus or offering document shall disclose the amount of selling expenses which the selling security holders shall pay.

(7) With the exception of underwriter's or broker-dealer's discounts or commissions, the provisions of subsections (6)(a) and (b) of this rule shall not apply if:

(a) The security holders have a written agreement with the issuer, that was entered into one year or more prior to the filing of the Application to Register Securities, whereby someone other than the selling security holders has agreed to pay all of the selling security holders' selling expenses;

(b) The agreement was arrived at through arm's-length negotiations; and

(c) The selling security holders have held their securities for at least one year prior to the filing of the Application to Register Securities.

(8) The Director may, by order, impose a condition requiring the Registrant to file with the Securities Section a written report setting forth the actual amounts of selling expenses and other costs incurred in connection with the offering.

Stat. Auth.: ORS 59.085 & ORS 59.285
Stats. Implemented: ORS 59.085
Hist.: FCS 1-1992, f. 1-31-92, cert. ef. 2-1-92

 

441-085-0020

Options to Underwriters

(1) The North American Securities Administrators Association, Inc., has adopted a Statement of Policy regarding Options and Warrants. This rule is designed to parallel, with modifications, the Statement of Policy regarding Options and Warrants adopted by the North American Securities Administrators Association, Inc. The provisions of this rule shall apply to offerings of securities registered pursuant to ORS 59.065 and OAR 441, Division 065.

(2) Options granted by the issuer to underwriters or other persons as compensation, in whole or in part, for the sale of securities must be reasonable in amount and in terms and conditions under the circumstances of the particular issue. Options which meet all of the following requirements are presumptively reasonable:

(a) The number of shares or units called for by such options does not exceed ten percent of the number of shares or units underwritten for the issuer in the offering;

(b) The options do not exceed five years in total duration;

(c) The options are exercisable at an exercise price which is initially not less than the public offering price of the securities underwritten and the options provide for an increase of the exercise price by seven percent of the initial exercise price for each full year such options are outstanding; or the options are exercisable at a price which is not less than 120 percent of the public offering price of the securities underwritten;

(d) The options are not deliverable to the underwriters until the entire issue has been sold, whether it is underwritten on a firm commitment or a best-efforts basis;

(e) The options are nontransferable other than by will or pursuant to the laws of descent and distribution, except to a partner of the underwriter when the underwriter is a partnership or to a stockholder, officer or director of the underwriter or beneficiary of a trust which is a stockholder of such underwriter when the underwriter is a corporation; however, after one year such a transfer may occur providing the option is exercised immediately upon transfer. If not exercised immediately upon transfer, the option shall lapse; and

(f) Either the exercise of the options, or the resale, transfer and assignment of the shares underlying the options, is prohibited for a period of at least one year from the date of the offering.

Stat. Auth.: ORS 59.085 & ORS 59.285
Stats. Implemented: ORS 59.085
Hist.: FCS 1-1992, f. 1-31-92, cert. ef. 2-1-92

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