[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: 17CFR229.508]

[Page 410-413]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER II--SECURITIES AND EXCHANGE COMMISSION
 
 PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975--REGULATION S-K--Table of Contents
 
    Subpart 229.500--Registration Statement and Prospectus Provisions
 
Sec. 229.508  (Item 508) Plan of distribution.

    (a) Underwriters and underwriting obligation. If the securities are 
to be offered through underwriters, name the principal underwriters, and 
state the respective amounts underwritten. Identify each such 
underwriter having a material relationship with the registrant and state 
the nature of the relationship. State briefly the nature of the 
obligation of the underwriter(s) to take the securities.

Instruction to Paragraph 508(a): All that is required as to the nature 
of the underwriters' obligation is whether the underwriters are or will 
be committed to take and to pay for all of the securities if any are 
taken, or whether it is merely an agency or the type of best efforts 
arrangement under which the underwriters are required to take and to pay 
for only such securities as they may sell to the

[[Page 411]]

public. Conditions precedent to the underwriters' taking the securities, 
including market-outs, need not be described except in the case of an 
agency or best efforts arrangement.

    (b) New underwriters. Where securities being registered are those of 
a registrant that has not previously been required to file reports 
pursuant to section 13(a) or 15(d) of the Exchange Act, or where a 
prospectus is required to include reference on its cover page to 
material risks pursuant to Item 501 of Regulation S-K (Sec. 229.501), 
and any one or more of the managing underwriter(s) (or where there are 
no managing underwriters, a majority of the principal underwriters) has 
been organized, reactivated, or first registered as a broker-dealer 
within the past three years, these facts concerning such underwriter(s) 
shall be disclosed in the prospectus together with, where applicable, 
the disclosures that the principal business function of such 
underwriter(s) will be to sell the securities to be registered, or that 
the promoters of the registrant have a material relationship with such 
underwriter(s). Sufficient details shall be given to allow full 
appreciation of such underwriter(s) experience and its relationship with 
the registrant, promoters and their controlling persons.
    (c) Other distributions. Outline briefly the plan of distribution of 
any securities to be registered that are to be offered otherwise than 
through underwriters.
    (1) If any securities are to be offered pursuant to a dividend or 
interest reinvestment plan the terms of which provide for the purchase 
of some securities on the market, state whether the registrant or the 
participant pays fees, commissions, and expenses incurred in connection 
with the plan. If the participant will pay such fees, commissions and 
expenses, state the anticipated cost to participants by transaction or 
other convenient reference.
    (2) If the securities are to be offered through the selling efforts 
of brokers or dealers, describe the plan of distribution and the terms 
of any agreement, arrangement, or understanding entered into with 
broker(s) or dealer(s) prior to the effective date of the registration 
statement, including volume limitations on sales, parties to the 
agreement and the conditions under which the agreement may be 
terminated. If known, identify the broker(s) or dealer(s) which will 
participate in the offering and state the amount to be offered through 
each.
    (3) If any of the securities being registered are to be offered 
otherwise than for cash, state briefly the general purposes of the 
distribution, the basis upon which the securities are to be offered, the 
amount of compensation and other expenses of distribution, and by whom 
they are to be borne. If the distribution is to be made pursuant to a 
plan of acquisition, reorganization, readjustment or succession, 
describe briefly the general effect of the plan and state when it became 
or is to become operative. As to any material amount of assets to be 
acquired under the plan, furnish information corresponding to that 
required by Instruction 5 of Item 504 of Regulation S-K (Sec. 229.504).
    (d) Offerings on exchange. If the securities are to be offered on an 
exchange, indicate the exchange. If the registered securities are to be 
offered in connection with the writing of exchange-traded call options, 
describe briefly such transactions.
    (e) Underwriter's compensation. Provide a table that sets out the 
nature of the compensation and the amount of discounts and commissions 
to be paid to the underwriter for each security and in total. The table 
must show the separate amounts to be paid by the company and the selling 
shareholders. In addition, include in the table all other items 
considered by the National Association of Securities Dealers to be 
underwriting compensation for purposes of that Association's Rules of 
Fair Practice.

Instructions to paragraph 508(e): 1. The term ``commissions'' is defined 
in paragraph (17) of Schedule A of the Securities Act. Show separately 
in the table the cash commissions paid by the registrant and selling 
security holders. Also show in the table commissions paid by other 
persons. Disclose any finder's fee or similar payments in the table.
    2. Disclose the offering expenses specified in Item 511 of 
Regulation S-K (17 CFR 229.511).
    3. If the underwriter has any arrangement with the issuer, such as 
an over-allotment option, under which the underwriter may

[[Page 412]]

purchase additional shares in connection with the offering, indicate 
that this arrangement exists and state the amount of additional shares 
that the underwriter may purchase under the arrangement. Where the 
underwriter has such an arrangement, present maximum-minimum information 
in a separate column to the table, based on the purchase of all or none 
of the shares subject to the arrangement. Describe the key terms of the 
arrangement in the narrative.

    (f) Underwriter's representative on board of directors. Describe any 
arrangement whereby the underwriter has the right to designate or 
nominate a member or members of the board of directors of the 
registrant. The registrant shall disclose the identity of any director 
so designated or nominated, and indicate whether or not a person so 
designated or nominated, or allowed to be designated or nominated by the 
underwriter is or may be a director, officer, partner, employee or 
affiliate of the underwriter.
    (g) Indemnification of underwriters. If the underwriting agreement 
provides for indemnification by the registrant of the underwriters or 
their controlling persons against any liability arising under the 
Securities Act, furnish a brief description of such indemnification 
provisions.
    (h) Dealers' compensation. State briefly the discounts and 
commissions to be allowed or paid to dealers, including all cash, 
securities, contracts or other considerations to be received by any 
dealer in connection with the sale of the securities. If any dealers are 
to act in the capacity of sub-underwriters and are to be allowed or paid 
any additional discounts or commissions for acting in such capacity, a 
general statement to that effect will suffice without giving the 
additional amounts to be sold.
    (i) Finders. Identify any finder and, if applicable, describe the 
nature of any material relationship between such finder and the 
registrant, its officers, directors, principal stockholders, finders or 
promoters or the principal underwriter(s), or if there is a managing 
underwriter(s), the managing underwriter(s), (including, in each case, 
affiliates or associates thereof).
    (j) Discretionary accounts. If the registrant was not, immediately 
prior to the filing of the registration statement, subject to the 
requirements of section 13(a) or 15(d) of the Exchange Act, identify any 
principal underwriter that intends to sell to any accounts over which it 
exercises discretionary authority and include an estimate of the amount 
of securities so intended to be sold. The response to this paragraph 
shall be contained in a pre-effective amendment which shall be 
circulated if the information is not available when the registration 
statement is filed.
    (k) Passive market making. If the underwriters or any selling group 
members intend to engage in passive market making transactions as 
permitted by Rule 103 of Regulation M (Sec. 242.103 of this chapter), 
indicate such intention and briefly describe passive market making.
    (l) Stabilization and other transactions. (1) Briefly describe any 
transaction that the underwriter intends to conduct during the offering 
that stabilizes, maintains, or otherwise affects the market price of the 
offered securities. Include information on stabilizing transactions, 
syndicate short covering transactions, penalty bids, or any other 
transaction that affects the offered security's price. Describe the 
nature of the transactions clearly and explain how the transactions 
affect the offered security's price. Identify the exchange or other 
market on which these transactions may occur. If true, disclose that the 
underwriter may discontinue these transactions at any time;
    (2) If the stabilizing began before the effective date of the 
registration statement, disclose the amount of securities bought, the 
prices at which they were bought and the period within which they were 
bought. If you use Sec. 230.430A of this chapter, the prospectus you 
file under Sec. 230.424(b) of this chapter or include in a post-
effective amendment must contain information on the stabilizing 
transactions that took place before the determination of the public 
offering price; and
    (3) If you are making a warrants or rights offering of securities to 
existing security holders and any securities not purchased by existing 
security holders are to be reoffered to the public, disclose in a 
supplement to the prospectus

[[Page 413]]

or in the prospectus used in connection with the reoffering:
    (i) The amount of securities bought in stabilization activities 
during the offering period and the price or range of prices at which the 
securities were bought;
    (ii) The amount of the offered securities subscribed for during the 
offering period;
    (iii) The amount of the offered securities subscribed for by the 
underwriter during the offering period;
    (iv) The amount of the offered securities sold during the offering 
period by the underwriter and the price or price ranges at which the 
securities were sold; and
    (v) The amount of the offered securities that will be reoffered to 
the public and the public offering price.

[47 FR 11401, Mar. 16, 1982, as amended at 58 FR 19606, Apr. 15, 1993; 
62 FR 543, Jan. 3, 1997; 62 FR 11323, Mar. 12, 1997; 63 FR 6384, Feb. 6, 
1998]