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U.S. Code as of:
01/19/04
Section 78p. Directors, officers, and principal stockholders
(a) Disclosures required
(1) Directors, officers, and principal stockholders required to
file
Every person who is directly or indirectly the beneficial owner
of more than 10 percent of any class of any equity security
(other than an exempted security) which is registered pursuant to
section 78l of this title, or who is a director or an officer of
the issuer of such security, shall file the statements required
by this subsection with the Commission (and, if such security is
registered on a national securities exchange, also with the
exchange).
(2) Time of filing
The statements required by this subsection shall be filed -
(A) at the time of the registration of such security on a
national securities exchange or by the effective date of a
registration statement filed pursuant to section 78l(g) of this
title;
(B) within 10 days after he or she becomes such beneficial
owner, director, or officer;
(C) if there has been a change in such ownership, or if such
person shall have purchased or sold a security-based swap
agreement (as defined in section 206(b) (!1) of the
Gramm-Leach-Bliley Act (15 U.S.C. 78c note)) involving such
equity security, before the end of the second business day
following the day on which the subject transaction has been
executed, or at such other time as the Commission shall
establish, by rule, in any case in which the Commission
determines that such 2-day period is not feasible.
(3) Contents of statements
A statement filed -
(A) under subparagraph (A) or (B) of paragraph (2) shall
contain a statement of the amount of all equity securities of
such issuer of which the filing person is the beneficial owner;
and
(B) under subparagraph (C) of such paragraph shall indicate
ownership by the filing person at the date of filing, any such
changes in such ownership, and such purchases and sales of the
security-based swap agreements as have occurred since the most
recent such filing under such subparagraph.
(4) Electronic filing and availability
Beginning not later than 1 year after July 30, 2002 -
(A) a statement filed under subparagraph (C) of paragraph (2)
shall be filed electronically;
(B) the Commission shall provide each such statement on a
publicly accessible Internet site not later than the end of the
business day following that filing; and
(C) the issuer (if the issuer maintains a corporate website)
shall provide that statement on that corporate website, not
later than the end of the business day following that filing.
(b) Profits from purchase and sale of security within six months
For the purpose of preventing the unfair use of information which
may have been obtained by such beneficial owner, director, or
officer by reason of his relationship to the issuer, any profit
realized by him from any purchase and sale, or any sale and
purchase, of any equity security of such issuer (other than an
exempted security) or a security-based swap agreement (as defined
in section 206B of the Gramm-Leach-Bliley Act) involving any such
equity security within any period of less than six months, unless
such security or security-based swap agreement was acquired in good
faith in connection with a debt previously contracted, shall inure
to and be recoverable by the issuer, irrespective of any intention
on the part of such beneficial owner, director, or officer in
entering into such transaction of holding the security or
security-based swap agreement purchased or of not repurchasing the
security or security-based swap agreement sold for a period
exceeding six months. Suit to recover such profit may be instituted
at law or in equity in any court of competent jurisdiction by the
issuer, or by the owner of any security of the issuer in the name
and in behalf of the issuer if the issuer shall fail or refuse to
bring such suit within sixty days after request or shall fail
diligently to prosecute the same thereafter; but no such suit shall
be brought more than two years after the date such profit was
realized. This subsection shall not be construed to cover any
transaction where such beneficial owner was not such both at the
time of the purchase and sale, or the sale and purchase, of the
security or security-based swap agreement (as defined in section
206B of the Gramm-Leach-Bliley Act) involved, or any transaction or
transactions which the Commission by rules and regulations may
exempt as not comprehended within the purpose of this subsection.
(c) Conditions for sale of security by beneficial owner, director,
or officer
It shall be unlawful for any such beneficial owner, director, or
officer, directly or indirectly, to sell any equity security of
such issuer (other than an exempted security), if the person
selling the security or his principal (1) does not own the security
sold, or (2) if owning the security, does not deliver it against
such sale within twenty days thereafter, or does not within five
days after such sale deposit it in the mails or other usual
channels of transportation; but no person shall be deemed to have
violated this subsection if he proves that notwithstanding the
exercise of good faith he was unable to make such delivery or
deposit within such time, or that to do so would cause undue
inconvenience or expense.
(d) Securities held in investment account, transactions in ordinary
course of business, and establishment of primary or secondary
market
The provisions of subsection (b) of this section shall not apply
to any purchase and sale, or sale and purchase, and the provisions
of subsection (c) of this section shall not apply to any sale, of
an equity security not then or theretofore held by him in an
investment account, by a dealer in the ordinary course of his
business and incident to the establishment or maintenance by him of
a primary or secondary market (otherwise than on a national
securities exchange or an exchange exempted from registration under
section 78e of this title) for such security. The Commission may,
by such rules and regulations as it deems necessary or appropriate
in the public interest, define and prescribe terms and conditions
with respect to securities held in an investment account and
transactions made in the ordinary course of business and incident
to the establishment or maintenance of a primary or secondary
market.
(e) Application of section to foreign or domestic arbitrage
transactions
The provisions of this section shall not apply to foreign or
domestic arbitrage transactions unless made in contravention of
such rules and regulations as the Commission may adopt in order to
carry out the purposes of this section.
(f) Treatment of transactions in security futures products
The provisions of this section shall apply to ownership of and
transactions in security futures products.
(g) Limitation on Commission authority
The authority of the Commission under this section with respect
to security-based swap agreements (as defined in section 206B of
the Gramm-Leach-Bliley Act) shall be subject to the restrictions
and limitations of section 78c-1(b) of this title.
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