[Code of Federal Regulations]
[Title 17, Volume 2]
[Revised as of April 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR228.103]

[Page 312-313]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER II--SECURITIES AND EXCHANGE COMMISSION
 
PART 228--INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS--Table of Contents
 
                        Subpart A--Regulation S-B
 
Sec. 228.103  (Item 103) Legal Proceedings.

    (a) If a small business issuer is a party to any pending legal 
proceeding (or its property is the subject of a pending legal 
proceeding), give the following information (no information is necessary 
as to routine litigation that is incidental to the business):
    (1) Name of court or agency where proceeding is pending;
    (2) Date proceeding began;
    (3) Principal parties;
    (4) Description of facts underlying the proceedings; and
    (5) Relief sought.
    (b) Include the information called for by paragraphs (a) (1) through 
(5) of this Item for any proceeding that a governmental authority is 
contemplating (if the small business issuer is aware of the proceeding).

Instructions to Item 103: 1. A proceeding that primarily involves a 
claim for damages does not need to be described if the amount involved, 
exclusive of interest and costs, does not exceed 10% of the current 
assets of the small business issuer. If any proceeding presents the same 
legal and factual issues as other proceedings pending or known to be 
contemplated, the amount involved in such other proceedings shall be 
included in computing such percentage.
    2. The following types of proceedings with respect to the registrant 
are not ``routine litigation incidental to the business'' and, 
notwithstanding instruction 1 of this Item, must be described: 
bankruptcy, receivership, or similar proceeding.
    3. Any proceeding that involves federal, state or local 
environmental laws must be described if it is material; involves a 
damages claim for more than 10% of the current assets of the issuer; or 
potentially involves more than $100,000 in sanctions and a governmental 
authority is a party.
    4. Disclose any material proceeding to which any director, officer 
or affiliate of the issuer, any owner of record or beneficially of

[[Page 313]]

more than 5% of any class of voting securities of the small business 
issuer, or security holder is a party adverse to the small business 
issuer or has a material interest adverse to the small business issuer.