| §5.I(b). An employee of the issuer or its participating
subsidiary who aids in offering or selling such securities in connection
with the plan is not required to be registered as an agent provided
the employee meets all of the following conditions:
(1) the employee was not hired for the purpose of offering
or selling such securities;
(2) the employee's activity involving the offer and
sale of such securities is strictly incidental to his or her bona
fide primary nonsecurities-related work duties; and
(3) the employee's compensation is based solely on
the performance of such other duties, i.e., the employee does not
receive any compensation for offering for sale, selling, or otherwise
aiding the sale of securities.
(h) Compensatory or benefit plans for counting purposes.
A noncontributory stock ownership plan or stock ownership trust that
holds securities of the issuer for the benefit of the participants
in that issuer's plan shall be counted as one security holder under §5.I(a).
Plan participants in such a stock ownership plan or trust will not
be deemed security holders of the issuer for purposes of counting
security holders under §5.I(a) solely because of their participation
in the plan or trust. However, participants receiving distributions
of securities from the plan or trust will be deemed security holders
of the issuer on receipt of securities of the issuer from the plan
or trust.
(i) Notices. There is no notice filing requirement
for sales made under the Act, §5.I(a), (b), or (c).
(j) Limitations on disposition. The issuer and any
person acting on its behalf shall exercise reasonable care to assure
that the purchasers are acquiring the securities as an investment.
Such reasonable care should include, but not be limited to, the following:
(1) making reasonable inquiry to determine if the purchaser
is acquiring the securities for his or her own account or on behalf
of other persons;
(2) placing a legend on the certificate or other document
evidencing the securities to the effect that the securities have not
been registered under any securities law and setting forth or referring
to the restrictions on transferability and sale of the securities;
(3) issuing stop transfer instructions to the issuer's
transfer agent, if any, with respect to the securities, or, if the
issuer transfers its own securities, making a notation in the appropriate
records of the issuer;
(4) obtaining from the purchaser a signed written agreement
to the effect that the securities will not be sold without registration
under applicable securities laws or exemptions therefrom; and
(5) prior to sale, written disclosure to each purchaser,
to the effect that a purchaser of the securities must bear the economic
risk of the investment for an indefinite period of time because the
securities have not been registered under applicable securities laws
and therefore cannot be sold unless they are subsequently registered
under such securities laws or an exemption from such registration
is available; and that the securities are subject to the limitations
set forth in paragraphs (2) - (4) of this subsection.
(k) Limited offering exemption coordinating with SEC
Regulation D, Rule 506. In addition to sales made under the Texas
Securities Act, §5.I, the State Securities Board, pursuant to
the Act, §5.T, exempts from the registration requirements of
the Act, §7, any offer or sale of securities offered or sold
in compliance with the Securities Act of 1933, Regulation D (17 C.F.R. §§230.500-230.508,
as amended), Rule 506, including any offer or sale made exempt by
application of Rule 508(a), and which satisfies the following further
conditions and limitations.
(1) In addition to the other requirements of this subsection,
to claim this exemption, the issuer must comply with notice filing
provisions set out in §114.4(b)(1) of this title (relating to
Filings and Fees).
(2) Transactions which are exempt under this subsection
may not be combined with offers and sales exempt under any other rule
or section of the Act; however, nothing in this limitation shall act
as an election. Should for any reason, the offer and sale fail to
comply with all of the conditions for this exemption, the issuer may
claim the availability of any other applicable exemption.
(3) In view of the objective of this subsection and
the purposes and policies underlying the Texas Securities Act, the
exemption is not available to any issuer with respect to any transaction
which, although in technical compliance with this subsection, is part
of a plan or scheme to evade registration or the conditions or limitations
explicitly stated in this subsection.
(4) Nothing in this subsection is intended to relieve
registered dealers, or agents from the due diligence, suitability,
or know your customer standards or any other requirements of law otherwise
applicable to such registered persons.
(5) The staff of the State Securities Board will review
all notice filings made under this subsection to determine if the
correct filing fee was submitted. If the staff determines that the
fee paid was deficient, the staff will notify the filer through the
EFD system or by email if the filing was not made through EFD. A filer
who receives such a notice may correct the deficiency within 30 days
of the date that the notice is sent by the staff. If a timely correction
is made, the filing shall be deemed to be complete and in compliance
with the filing requirements as of the date the original filing was
received.
(6) When an offering is made in compliance with Regulation
D of the SEC and the offering will be made by or through a registered
securities dealer, the issuer and its directors, officers, agents,
and employees may make themselves available to answer questions from
offerees, as required by Rule 502(b)(2)(v) of Regulation D, without
being required to register as securities dealers or agents under the
Act, §12.
(l) Intrastate limited offering exemption. In addition
to sales made under the Texas Securities Act, §5.I, the State
Securities Board, pursuant to the Act, §5.T, exempts from the
registration requirements of the Act, §7, any offer or sale of
any securities by the issuer itself, or by a registered dealer acting
as agent for the issuer provided all offers and sales are made pursuant
to an offering made and completed solely within this state and all
the conditions in paragraphs (1) - (11) of this subsection are satisfied.
(1) The sale is made, without the use of any public
solicitation or advertisements, as set forth in subsection (a) and
subsection (b) of this section to:
(A) not more than 35 new security holders of the issuer
who meet the criteria stated in subsection (a) of this section and
who became security holders during the period of 12 months ending
with the date of the sale in question (subject to paragraph (7) of
this subsection); and
(B) other well-informed investors who are "accredited
investors" as defined in §107.2 of this title (relating to Definitions).
(For purposes of this subsection, the term "well informed" shall have
the same meaning as set out in subsection (a)(1) of this section,
and the term "5.I" in such subsection shall include sales made pursuant
to this subsection.)
(2) Neither the issuer nor the registered dealer (as
such terms are defined in paragraph (4) of this subsection):
(A) is currently subject to any administrative order
issued by state or federal authorities within five years of the expected
offer and sale of securities in reliance upon this exemption, which
order:
(i) is based upon a finding that such person has engaged
in fraudulent conduct; or
(ii) has the effect of enjoining such person from activities
subject to federal or state statutes designed to protect investors
or consumers against unlawful or deceptive practices involving securities,
insurance, commodities or commodity futures, real estate, franchises,
business opportunities, consumer goods, or other goods and services;
(B) has been convicted within five years prior to commencement
of the offering of any felony or misdemeanor of which fraud is an
essential element, or which is a violation of the securities laws
or regulations of this state, or of any other state of the United
States, or of the United States, or any foreign jurisdiction; or which
is a crime involving moral turpitude; or which is a criminal violation
of statutes designed to protect consumers against unlawful practices
involving insurance, securities, commodities or commodity futures,
real estate, franchises, business opportunities, consumer goods, or
other goods and services;
Cont'd... |
