Current through Register Vol. 49, No. 2, February 2024
GENERAL
17.010
Definitions. As used in Rule 17:
1. "Acquire control" or "acquiring control"
means any act or conduct by a person whereby the person obtains control,
whether accomplished through the ownership of equity or voting securities,
ownership of rights to acquire equity or voting securities, by management or
consulting agreements or other contract, by proxy or power of attorney, by
statutory mergers, by consummation of a tender offer, by acquisition of assets,
or otherwise.
2. Unless otherwise
specified, "Commission" means the Arkansas Racing Commission or the
Commission's designee.
3.
"Control," when used as a noun, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
person, and when used as a verb, means to possess, directly or indirectly, such
power.
4. "Controlling person" with
respect to a publicly traded corporation means each person who controls the
publicly traded corporation.
5.
"Corporate acquisition opposed by management" means an attempt to acquire
control of a publicly traded corporation that is an affiliated company by means
of a tender offer that is opposed by the board of directors of the affiliated
company.
6. "Corporate licensee"
means a corporation that is licensed and registered with the
Commission.
7. "Current market
price" means the average of the daily closing prices for the 20 consecutive
trading days immediately preceding the date of a transaction or the closing
price on the day immediately preceding the date of such transaction, whichever
is higher. For the purpose of this definition, the closing price for each day
shall be the last reported sale price, regular way, or in case no such reported
sale takes place on such date, the average of the last reported bid and asked
prices, regular way, in either case on the principal national securities
exchange registered under the Securities Exchange Act of 1934 on which such
security is admitted to trading or listed, or if not listed or admitted to
trading on any national securities exchange, the closing price of such
security, or in case no reported sale takes place, the average of the closing
bid and asked prices, on NASDAQ or any comparable system, or if such security
is not listed or quoted on NASDAQ or any comparable system, the closing sale
price, or in case no reported sale takes place, the average of the closing bid
and asked prices, as furnished by any member of the National Association of
Securities Dealers, Inc., selected from time to time by the issuer for that
purpose.
8. "Debt restructuring"
means:
(a) A proceeding under the United
States Bankruptcy Code; or
(b) Any
out-of-court reorganization of a person that is insolvent or generally unable
to pay its debts as they become due.
9. "Exceptional repurchase of securities"
means the direct or indirect purchase by a corporation of securities
representing beneficial ownership of more than 1 percent of its voting
securities, whether in a single transaction or a series of related
transactions, at a price more than 10 percent above the current market price of
such securities on the date of the agreement to purchase such securities from
any person, other than a person who has been an executive officer or a member
of the board of directors for at least the past 2 years, who, on the date of
the agreement to purchase, is the beneficial owner of more than 3 percent of
the voting securities of such corporation and has been the beneficial owner of
more than 3 percent of such securities for less than 1 year, unless such
purchase has been approved by the affirmative vote of a majority of the holders
of voting securities voting on the transaction exclusive of the selling
security holder, or is pursuant to the same offer and terms as made to all
holders of voting securities of such class, other than holders, if any, who
have consented in writing to be excluded from the class of offerees, executive
officers, or members of the board of directors. For the purpose of this
definition, when determining whether a corporation has purchased more than 1
percent of its voting securities, the amount of voting securities of such
corporation shall be deemed to include voting securities issuable pursuant to
purchase rights where the price of the purchase rights is less than the current
market price of such securities on a given determination date provided,
however, that in any event, the amount of such voting securities beneficially
owned by a selling security holder pursuant to purchase rights shall be
included to determine the amount of the corporation's voting securities for
purposes of such computation if not otherwise included based on the foregoing
provision.
10. "Executive officer,"
with respect to a publicly traded corporation, means the president, secretary,
treasurer, any vice president in charge of a principal business function (such
as sales, administration or finance) and any other person who performs similar
policy-making functions for a publicly traded corporation.
11. "Federal Securities Act" means Title 15
United States Code sections 77a-77aa, as amended from time to time, and the
rules and regulations of the United States Securities and Exchange Commission
now or hereafter promulgated thereunder.
12. "Federal Securities Exchange Act" means
Title 15 United States Code sections 78a-78kk, as amended from time to time,
and the rules and regulations of the United States Securities and Exchange
Commission now or hereafter promulgated thereunder.
13. "Full disclosure" with respect to a
transaction or to a series of transactions means a descriptive statement
thereof that does not make an untrue statement of a material fact nor omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
14. "Institutional investor" means:
(a) A bank as defined in Section 3(a)(6) of
the Federal Securities Exchange Act;
(b) An insurance company as defined in
Section 2(a)(17) of the Investment Company Act of 1940, as amended;
(c) An investment company registered under
Section 8 of the Investment Company Act of 1940, as amended;
(d) An investment advisor registered under
Section 203 of the Investment Advisors Act of 1940, as amended;
(e) Collective trust funds as defined in
Section 3(c)(11) of the Investment Company Act of 1940, amended;
(f) An employee benefit plan or pension fund
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, excluding an employee benefit plan or pension fund sponsored by a
publicly traded corporation registered with the Commission;
(g) A state or federal government pension
plan;
(h) A group comprised
entirely of persons specified in (a) through (g); or
(i) Such other persons as the Commission may
determine for reasons consistent with the policies of these Rules.
To qualify as an institutional investor, a person other than a state or
federal pension plan must meet the requirements of a "qualified institutional
buyer" as defined in Rule 144A of the Federal Securities Act.
15. "Plan of recapitalization"
means a plan proposed by the Commission to the security holders of a publicly
traded corporation that is an affiliated company, which plan:
(a) Contains recommended action in response
to a corporate acquisition opposed by management, which acquisition cannot be
consummated until approval has been obtained pursuant to section 16.200, and
which acquisition has not been consummated, withdrawn or terminated;
(b) Involves either a cash dividend to voting
securities or an exchange of voting securities held by security holders in
return for a payment of cash or the issuance of securities of the issuer or a
combination of cash and securities of the issuer, with an aggregate value in
excess of 50 percent of the aggregate current market price of the voting
securities of the company on the day of the public announcement of the plan of
recapitalization; and
(c) Is
financed in substantial part by borrowings from financial institutions or the
issuance of debt securities.
16. "Public offering" means a sale of
securities that is subject to the registration requirements of section 5 of the
Federal Securities Act, or that is exempt from such requirements solely by
reason of an exemption contained in section 3(a)10, 3(a)11 or 3(c) of said Act
or Regulation A adopted pursuant to section 3(b) of said Act.
17. "Purchase rights" means a security or
contractual right in securities issued or issuable on the exercise of options,
warrants or other beneficial interest in securities obtained for value upon the
issuance of securities, or on conversion of other securities.
18. "Speculative securities" means:
(a) Securities, the value of which depends
substantially upon proposed or promised future promotion or development rather
than on material existing assets, conditions or operating results; or
(b) Securities, an investment in which
involves an extraordinary risk of loss to the investor.
19. "Tender offer" means a public offer by a
person other than the issuer to purchase voting securities of a publicly traded
corporation that is an affiliated company, made directly to security holders
for the purpose of acquiring control of the affiliated company.
20. "Voting security" means a security the
holder of which is entitled to vote for the election of a member or members of
the board of directors or board of trustees of a corporation or a comparable
person or persons in the case of a partnership, trust, or other form of
business organization other than a corporation.
17.020
Burden of proof. The
burden of proof for the granting of any approval required or permitted by these
Rules is at all times upon the applicant. Each applicant shall satisfy the
Commission or the Commission, as the case may be, that the granting of any
approval required or permitted by these Rules is consistent with the state
policies concerning gaming set forth in these Rules.
17.030
Powers of Commission.
1. The Commission may provide:
(a) That a time period be accelerated or
extended; or
(b) That as a
condition to the processing of an application or to the granting of an
approval:
(1) An application be supplemented
in any particular and to any extent either before or after the Commission has
acted thereon;
(2) An applicant or
other person urging the approval or denial of an application appear personally
before the Commission and submit to interrogation under oath or
otherwise;
(3) Funds, securities,
instruments or agreements be placed in escrow upon specified
conditions;
(4) A transaction be in
compliance with the applicable laws and regulations of any federal, state, or
local governmental entity or agency;
(5) A transaction be approved by an
applicant's board of directors;
(6)
An opinion of an applicant's legal counsel be furnished to the
Commission;
(7) An opinion of an
applicant's auditors be furnished to the Commission;
(8) All or any portion of an application be
examined or evaluated by a consultant to the Commission at the expense of the
applicant.
2.
The Commission has the power to delegate to its Director or staff, in its order
granting approval, the power to issue an interlocutory stop order. The
interlocutory stop order may be issued for any cause deemed reasonable by the
Commission.
17.040
Commission review of stop orders. If a stop order is issued by the
Commission pursuant to the provisions of these Rules, the Commission shall,
upon request of the person that is the subject of the order, conduct a hearing
on the merits of the matter no later than its next regular meeting for which
notice of the hearing is practicable.
17.050
Timing of investigations and
approvals.
1. The Commission is hereby
delegated the power to accelerate or extend the time period in which the
Commission may grant approval of any act for which approval by the Commission
is required or permitted by these Rules.
2. The Commission shall use its best efforts
to take final action upon an application by a person making a tender offer
within 60 days of the date upon which the application is filed and any fees are
paid consistent with the public policy of this state concerning gaming as
provided in these Rules. If the Commission cannot take final action upon the
application within 60 days of filing of such application, the Commission shall
transmit to the applicant written notice of a time certain for completion of
the investigation and the final action of the Commission. The notice required
by this subsection shall be transmitted at least 10 days prior to the sixtieth
day after the filing of the application.
17.060
Standards for Commission
action. The Commission will consider all relevant material facts in
determining whether to grant an approval required or permitted by these Rules.
With respect to any approvals requested pursuant to or in accordance with these
Rules, the Commission may further consider not only the effects of the action
or approval requested by the applicant, but whatever other facts are deemed
relevant, including but not limited to the following:
1. The business history of the applicant,
including its record of financial stability, integrity, and success of its
operations.
2. The current business
activities and interest of the applicant, as well as those of its executive
officers, promoters, lenders, and other sources of financing, or any other
individuals associated therewith.
3. The current financial structure of the
applicant, as well as changes which could reasonably be anticipated to occur to
such financial structure as a consequence of the proposed action of the
applicant.
4. The gaming-related
goals and objectives of the applicant, including a description of the plans and
strategy for achieving such goals and objectives.
5. The relationship between such goals and
objectives and the requested approval.
6. The adequacy of the proposed financing or
other action to achieve the announced goals and objectives.
7. The present and proposed compensation
arrangement between the applicant and its directors, executive officers,
principal employees, security holders, lenders, or other sources of
financing.
8. The equity
investment, commitment or contribution of present or prospective directors,
officers, principal employees, investors, lenders, or other sources of
financing.
9. The dealings and
arrangements, prospective or otherwise, between the applicant and any
investment bankers, promoters, finders or lenders, and other sources of
financing.
10. The effect of the
proposed action on existing and prospective security holders of the applicant,
both before and after the intended action.
11. Whether the applicant has made full and
complete disclosure of all material facts relative to the proposed action to
the Commission and made provision for such disclosure to all prospective
security holders.
12. Whether the
proposed action tends not to work a fraud upon the public.
13. Whether a proposed public offering
contains speculative securities.
14. Whether a proposed transaction will
create a significant risk that the publicly traded corporation and its
affiliated companies will not:
(a) Satisfy
their financial obligations as they become due; or
(b) Satisfy all financial and regulatory
requirements imposed by the Rules adopted by the Commission.
PUBLIC OFFERINGS
17.100
Corporate licensees. A
corporate licensee shall not guarantee a security issued by an affiliated
company pursuant to a public offering, nor hypothecate its assets to secure the
payment or performance of the obligations evidenced by a security issued by an
affiliated company pursuant to a public offering, without first obtaining the
prior approval of the Commission.
17.110
Public offerings of affiliated
companies. Prior approval of the Commission is required for any public
offering of any securities of an affiliated company:
1. Which is not a publicly traded corporation
if the securities will be offered by such an affiliated company or by a
controlling person thereof.
2.
Which is a publicly traded corporation if the securities will be offered by
such affiliated company and if such securities or the proceeds from the sale
thereof are intended to be used:
(a) To pay
for construction of gaming facilities in Arkansas to be owned or operated by
the affiliated company or a subsidiary of the affiliated company;
(b) To acquire any direct or indirect
interest in gaming facilities in Arkansas;
(c) To finance the operation by the
affiliated company or a subsidiary of such affiliated company of gaming
facilities in Arkansas; or
(d) To
retire or extend obligations incurred for one or more such purposes.
17.115
Continuous
or delayed public offerings.
1. An
affiliated company which is a publicly traded corporation may apply for
approval of a continuous or delayed public offering of its securities if such
an affiliated company:
(a) Has a class of
securities listed on either the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers Automatic Quotation
System, or has stockholders' equity in an amount of $10 million or more as
reported in its most recent report on Form 10-K or Form 10-Q filed with the
United States Securities and Exchange Commission immediately preceding the
application; and
(b) Has filed all
reports required to be filed by section 13 or section 15(d) of the Federal
Securities Exchange Act, or in the case of a foreign issuer or foreign private
issuer, pursuant to Regulations 13d-16 and 15a-16 of the Federal Securities
Exchange Act, during the preceding 12 months, or for such a shorter period that
such affiliated company has been required to file such reports.
2. The Commission may grant
approval of a continuous or delayed offering for a period of up to 3 years. An
approval granted pursuant to this Rule does not constitute an approval of other
related transactions for which separate Commission approval is otherwise
required by the Rules adopted by the Commission.
3. If an application is approved, the
affiliated company shall notify the Commission of its intent to make the public
offering and identify the type and amount of securities it proposes to sell and
the date on which it is anticipated the sale will occur. If such notification
is not written, it must be followed, as soon as practicable, with a written
confirmation which need not precede such sale.
17.118
Public offerings by entities not
presently licensees or affiliated companies.
1. Any entity that is not a licensee or an
affiliated company or otherwise subject to the provisions of the Act or the
Rules which plans to make a public offering of securities intending to use such
securities, or the proceeds from the sale thereof, to construct gaming
facilities in Arkansas to be operated by the entity, or a subsidiary of the
entity, or any other corporation or other form of business organization under
common control with the entity, to acquire any direct or indirect interest in
gaming facilities in Arkansas, to finance the operation by the entity, or a
subsidiary of the entity, or any other corporation or other form of business
organization under common control with the entity, of gaming facilities in
Arkansas, or to retire or extend obligations incurred for one or more such
purposes, may apply to the Commission for prior approval of such an
offering.
2. The Commission may act
on any such application.
3. Any
entity which submits an application pursuant to this Rule shall pay all costs
connected with the processing of the application including but not limited to
investigative costs.
4. An approval
sought under this Rule will not include a finding regarding the suitability of
the individuals involved.
5. The
Commission may find an entity unsuitable based solely on the fact that it did
not submit an application pursuant to subsection 1, unless the Commission has
ruled pursuant to subsection 6, that it is not necessary to submit an
application pursuant to subsection 1.
6. Upon receipt of a written request for a
ruling, the Commission may issue an administrative ruling that it is not
necessary for an entity to submit an application pursuant to subsection 1 upon
review of such factors as the Commission deems appropriate, including but not
limited to the following:
(a) The standards
enumerated in these Rules;
(b)
Whether the entity has any applications pending before the Commission and if
so, the nature of such applications;
(c) The operational and ownership structure
and history of the entity;
(d) A
description of the regulatory authorities that the entity is subject to the
jurisdiction of and the entity's regulatory history; and
(e) Such other facts as the Commission may
deem relevant and material.
7. Any entity for which the Commission has
approved an application submitted pursuant to subsection 1 shall cause the
following statement to be included in the prospectus, offering circular or
other offering document, or if such a document is not required by law the
offeror shall maintain adequate records that the statement was furnished to
potential investors, for the public offering which was approved by the
Commission: Because proceeds of this offering are to be used in connection with
gaming facilities in Arkansas, the entity making the offering voluntarily
sought and received approval of the Arkansas Racing Commission to make the
offering. That approval relates solely to the terms of the offering. It does
not constitute a finding that the entity has been or will be found qualified to
be involved with gaming activities in Arkansas for which a separate Arkansas
Racing Commission approval will be required. It also does not involve a finding
by the Arkansas Racing Commission as to the accuracy or adequacy of this
document.
17.120
Certain public offerings and stockholder approvals. The Commission
may find a publicly traded corporation unsuitable to be a holding company of a
corporate licensee if:
1. At a time when the
applicant was not subject to the jurisdiction of the Commission it made a
public offering of securities intending to use such securities, or the proceeds
from the sale thereof, to construct gaming facilities in Arkansas to be
operated by the applicant, or a subsidiary of the applicant, or any other
corporation or other form of business organization under common control with
the applicant, to acquire any direct or indirect interest in gaming facilities
in Arkansas, to finance the operation by the applicant, or a subsidiary of the
applicant, or any other corporation or other form of business organization
under common control with the applicant, of gaming facilities in Arkansas, or
to retire or extend obligation incurred for one or more such purposes;
or
2. At a time when the applicant
was not subject to the jurisdiction of the Commission it obtained the approval
or consent of its stockholders to have a material involvement with gaming in
the State of Arkansas, and in connection with such offering, approval or
consent, it did not make a full disclosure of all material facts to the
offerees or its stockholders relating to such material involvement including,
without limitation, a description of the nature and scope of the state and
applicable local laws of Arkansas regarding gaming control.
17.125
Approval of
securities issuable on exercise of options or warrants or conversion of other
securities.If the Commission approves a public offering of securities
which involves securities issuable on exercise of purchase rights, such
approval is deemed continuing for the entire period of exercisability or
convertibility and further approval is not required for the actual issuance of
such securities.
17.130
Application for approval of public offering. A person applying for
approval of a public offering pursuant to these Rules shall make a full
disclosure of all material facts relating thereto to the Commission. To the
extent applicable, the application must include the following information:
1. A description of the securities to be
offered.
2. The terms upon which
the securities are to be offered.
3. The gross and net proceeds of the
offering, including a detailed list of expenses.
4. The use of proceeds.
5. The name and address of the lead
underwriter and the participating underwriters, if any.
6. The forms of the underwriting agreement,
the agreement among underwriters, if any, and the selected dealer's agreements,
if any.
7. A statement of intended
compliance with all applicable federal, state, local and foreign securities
laws.
8. The names and addresses of
the applicant's general counsel, local counsel, special securities counsel,
independent auditors, and any special consultants on the offering.
9. If any securities to be issued are not to
be offered to the general public, the names and addresses of the other offerees
and the form of the offering thereto.
10. True copies or descriptions of all papers
filed with the United States Securities and Exchange Commission and all
material communications between the applicant and the United States Securities
and Exchange Commission or, if the offering is not subject to the registration
requirements of Section 5 of the Federal Securities Act other than by reason of
an exemption contained in Regulation A adopted pursuant to Section 3 of said
Act, copies or descriptions of all papers filed with, and all material
communications between the applicant and such other governmental entity charged
with securities regulation, if any. A copy of each registration statement and
each amendment thereto must be filed with the Commission by the end of the next
business day after their filing with the United States Securities and Exchange
Commission. All other papers required to be included pursuant to this
subsection must be filed with the Commission as soon as practicable.
17.140
Coordination.
The Commission will ordinarily permit an application for approval of a
public offering pursuant to this Rule to be completed over a period of time as
documents and information become available in accordance with the normal and
customary practice in the securities industry. An application may be filed
without all the information required by these Rules if all such information
required by the Commission is supplied prior to the sale of the
securities.
MERGERS, ACQUISITIONS AND CHANGES OF CONTROL
17.200
Approval of
acquisition of control. A publicly traded corporation shall not directly
or indirectly acquire control of a corporate licensee or affiliated company,
and a person shall not acquire control of a publicly traded corporation which
is an affiliated company, without the prior approval of the
Commission.
17.210
Application for approval of acquisitions of control. An application for
approval of a transaction subject to these Rules must contain full disclosure
of all material facts relating thereto, and include to the extent applicable:
1. The following information:
(a) A complete list of all stockholders when
it first registers, and annually thereafter, within 30 days after the annual
meeting of the stockholders of the corporation, showing the number of shares
held by each;
(b) The names of all
corporate officers within 30 days of their appointment;
(c) The names of all members of the Board of
Directors within 30 days of their election;
2. The terms and provisions of the
contemplated transaction;
3. A
statement of any contemplated management and operating changes to be effected
after completion of the contemplated transaction; and
4. Copies or descriptions of all material
documents and correspondence filed with the United States Securities and
Exchange Commission in connection with the contemplated transaction, if any,
or, if the transaction is not subject to the Federal Securities Act, copies or
descriptions of all material documents and correspondence filed with such other
governmental entity charged with securities regulation, if any.
17.250
Approval of plan of
recapitalization. Except as provided by these Rules, a publicly traded
corporation that is an affiliated company shall not consummate a plan of
recapitalization without the prior approval of the Commission.
17.260
Approval of exceptional
repurchases of securities. Except as provided in these Rules, a publicly
traded corporation that is an affiliated company shall not make an exceptional
repurchase of securities without the prior approval of the
Commission.
17.270
Exempt
transactions. Unless otherwise required by the Rules adopted by the
Commission, the approval of the Commission is not required before a publicly
traded corporation that is an affiliated company may repurchase securities
issued by such corporation if:
1. The
repurchase is made pursuant to contractual rights or arrangements, including
without limitation puts and price guarantees, given the issuee of such
securities or the issuee's designee at the time of the original issuance of the
security;
2. The repurchase is made
for purposes of compromising a bona fide dispute with a security holder arising
from the original issuance of such securities;
3. The repurchase is made pursuant to calls
or redemptions of any securities in accordance with the terms and conditions of
the governing instruments of such securities;
4. The repurchase involves securities
evidenced by a scrip certificate, order form, or similar document that
represents a fractional interest in a share of stock or similar
securities;
5. The repurchase is
made pursuant to a statutory procedure for the purchase of dissenting security
holders' securities;
6. The
repurchase is made in order to comply with any court or administrative
order;
7. The repurchase is made in
accordance with or to effectuate the provisions of any employee compensation
arrangement, employee stock plan, or employee benefit program including,
without limitation, an employee stock ownership plan or to eliminate or cancel
outstanding employee stock options or create a "disposition" for federal income
tax purposes as to securities acquired as a result of the exercise of an
employee incentive stock option as defined under the Internal Revenue
Code;
8. The repurchase involves a
transaction or series of related transactions occurring within a fiscal quarter
in which the aggregate price of the securities purchased is less than the
greater of $1 million or 5 percent of the consolidated net worth of the
corporation purchasing the securities determined using the most recent audited
financial statements of the corporation or the financial statements most
recently filed by the corporation with the Securities and Exchange Commission;
or
9. The repurchase is made
pursuant to a publicly announced open market securities repurchase program in
which the price and other terms of sale are not negotiated between the
purchaser and seller.
17.280
Application for approval of
recapitalization plan or exceptional securities repurchases. An
application for approval of a plan of recapitalization subject to these Rules
or an exceptional repurchase of securities subject to these Rules must contain
full disclosure of all material facts relating thereto, and include to the
extent applicable:
1. The terms and provisions
of the contemplated transaction.
2.
A statement of any contemplated management and operating changes to be effected
after completion of the contemplated transaction.
3. An analysis showing on a pro forma basis
the effect of the transaction on the financial statements of the publicly
traded corporation that is an affiliated company.
4. A general description of the source of
funds for the purchase and any financing arrangements.
5. Copies or descriptions of all material
documents and correspondence filed with the United States Securities and
Exchange Commission in connection with the contemplated transaction, if any,
or, if the transaction is not subject to the Federal Securities Act, copies or
descriptions of all material documents and correspondence filed with any other
governmental entity charged with securities regulation.
6. Any other documents, papers, reports, or
other information deemed relevant by the Commission.
MARKETS AND TRADING
17.300
Fraudulent and deceptive
practices prohibited. It is grounds for disciplinary action if any
person, in connection with the purchase or sale of any security issued by a
corporate licensee or an affiliated company or in connection with any document
required to be filed pursuant to these Rules or the Act:
1. Employs any device, scheme or artifice to
defraud;
2. Makes any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements made, in the light of the circumstances under
which they were made, not misleading;
3. Engages in any act, practice, or course of
business which operates or would operate as a fraud or deceit upon any person;
or
4. Causes any document,
correspondence, filing or statement containing materially untrue, incorrect or
misleading information to be made or filed with the Commission, regardless of
whether said information has been made or filed with another regulatory
agency.
17.310
Approval of proxy and information statements related to gaming.
1. Before any person sends to the holders of
a voting security of a publicly traded corporation a proxy statement subject to
Regulation 14A of the United States Securities and Exchange Commission, or an
information statement subject to Regulation 14C of the United States Securities
and Exchange Commission, and includes a discussion of the nature and scope of,
and procedures under, the Act and regulations, such proxy statement or
information statement must be approved by the Commission.
2. A proxy statement or information statement
is deemed to have been approved if it has been filed with the Commission for at
least 10 days and the Commission has not issued a stop order during such
period.
17.330
Reporting requirements.
1. Upon
the request of the Commission, whenever any material document, including any
document considered to be confidential or furnished to the holders of voting
securities of the publicly traded corporation, is filed by a publicly traded
corporation with the United States Securities and Exchange Commission or with
any national or regional securities exchange, such publicly traded corporation
shall within 5 business days file a true copy of such document with the
Commission.
2. Upon the request of
the Commission, whenever a publicly traded corporation receives any material
document filed with the United States Securities and Exchange Commission by any
other person relating to such publicly traded corporation, it shall, within 10
days following such receipt, file a true copy of such document with the
Commission.
3. Upon the request of
the Commission, each publicly traded corporation shall file with the Commission
annually a list of the holders of its voting securities or more frequently as
such lists are prepared.
4. Each
publicly traded corporation shall, within 60 days of election or appointment,
report to the Commission, on the form prescribed by the Commission, the
election or appointment of any director, any executive officer and any other
officer actively and directly engaged in the administration or supervision of
the gaming activities at a licensed gaming establishment of the corporate
licensee.
5. Whenever a publicly
traded corporation is informed that any person determined by the Commission to
be a controlling person in respect of such corporation has disposed of any of
such corporation's voting securities, such corporation shall thereupon promptly
report such information to the Commission.
6. Each publicly traded corporation shall
file promptly with the Commission such other documents within its control as
the Commission may lawfully request
INDIVIDUALS
17.400
Powers of Commission. The
Commission may determine, upon the recommendation of the Commission, at the
time of initial application by a publicly traded corporation for registration
as a holding company, or at any time thereafter, that the public interest and
the purposes of the Amendment require that any individual who has a material
relationship to, or material involvement with, a publicly traded corporation,
affiliated company or a licensee that is subject to the jurisdiction of the
Amendment should apply for a finding of suitability or licensing. A person may
be deemed to have a material relationship to, or material involvement with, a
corporation, affiliated company or a licensee if the person is a controlling
person or key employee of the corporation, affiliated company or a licensee, or
if the person, as an agent, consultant, advisor or otherwise, exercises a
significant influence upon the management or affairs of the corporation,
affiliated company or a licensee. The foregoing powers of the Commission are
not limited to individuals having a formal and direct involvement or
relationship with a publicly traded corporation, affiliated company or a
licensee, nor to individuals who are beneficial owners of any stated percentage
of the outstanding equity securities of a publicly traded corporation,
affiliated company or a licensee.
17.405
Beneficial owners of voting
securities.
1. The Commission shall
consider the following in making its determination as to which beneficial
owners of voting securities of publicly traded corporations must or may be
required to be found suitable or to be licensed:
(a) Each person who acquires, directly or
indirectly:
i. Beneficial ownership of any
voting security; or
ii. Beneficial
or record ownership of any nonvoting security, in a publicly traded corporation
which is registered with the Commission may be required to be found suitable if
the Commission has reason to believe that the person's acquisition of that
ownership would otherwise be inconsistent with the declared policy of this
state.
(b) Each person
who acquires, directly or indirectly, beneficial or record ownership of any
debt security in a publicly traded corporation which is registered with the
Commission may be required to be found suitable if the Commission has reason to
believe that the person's acquisition of the debt security would otherwise be
inconsistent with the declared policy of this state.
(c) Each person who, individually or in
association with others, acquires, directly or indirectly, beneficial ownership
of more than 5 percent of any class of voting securities of a publicly traded
corporation registered with the Arkansas Racing Commission, and who is required
to report, or voluntarily reports, the acquisition to the Securities and
Exchange Commission pursuant to section 13(d)(1), 13(g) or 16(a) of the
Securities Exchange Act of 1934, as amended,
15 U.S.C. §§
78m(d)(1),
78m(g)
and
78p(a),
respectively, shall, within 10 days after filing the report and any amendment
thereto with the Securities and Exchange Commission, notify the Arkansas Racing
Commission that the report has been filed with the Securities and Exchange
Commission.
(d) Each person who,
individually or in association with others, acquires, directly or indirectly,
the beneficial ownership of more than 10 percent of any class of voting
securities of a publicly traded corporation registered with the Commission, or
who is required to report, or voluntarily reports, such acquisition pursuant to
section 13(d)(1), 13(g) or 16(a) of the Securities Exchange Act of 1934, as
amended,
15 U.S.C. §§
78m(d)(1),
78m(g)
and
78p(a),
respectively, shall apply to the Commission for a finding of suitability within
30 days after the Commission mails the written notice. (e) A person who
acquires, directly or indirectly:
i.
Beneficial ownership of any voting security; or
ii. Beneficial or record ownership of any
nonvoting security or debt security, in a publicly traded corporation created
under the laws of a foreign country which is registered with the Commission
shall file such reports and is subject to such a finding of suitability as the
Commission may prescribe.
2. All rules and regulations of the
Securities and Exchange Commission applicable in determining whether a person
is the beneficial owner of a particular equity security for purposes of Section
13(d) of the Federal Securities Exchange Act may be considered by, but shall
not be binding upon, the Commission in making its determination whether, and
the extent to which, a person is the beneficial owner of a voting security for
the purposes of sections 17.010(8), 17.330, 17.405, and 17.430 of this
Rule.
3. This Rule applies to every
person who is, directly or indirectly, the beneficial owner of any voting
security in a publicly traded corporation which is registered with the
Commission, irrespective of the time of acquisition of such
ownership.
4. If any securities of
a publicly traded corporation are held in street name, by a nominee, an agent
or trust, the publicly traded corporation shall render maximum assistance to
the Commission, upon its request, to determine the beneficial ownership of such
securities.
17.410
Officers and employees.
1. The
Commission shall require application for finding of suitability and may require
licensing of any officer or employee of a publicly traded corporation whom the
Commission finds to be actively and directly engaged in the administration or
supervision of, or any other significant involvement with, the activities of a
corporate Casino licensee.
2. The
Commission may require application for licensing or finding of suitability by
any officer or employee of a publicly traded corporation whose application is
not otherwise required pursuant to paragraph 1 of this Rule, if the Commission
determines that the policies of the state regarding gaming would be served by
such action.
3. The following
officers or employees of the publicly traded corporation are deemed to be
actively and directly engaged in the administration or supervision of, and
significantly involved with, the activities of the corporate licensee and
therefore are normally required to be licensed or found suitable:
(a) Each employee who is involved in gaming
and who is also a director of the publicly traded corporation; and
(b) The president, any persons performing the
function of principal executive officer or principal operating officer, the
principal financial officer, and any persons performing the function of chief
technology officer or chief information officer.
17.415
Directors.
1. The Commission shall require application
for finding of suitability and may require licensing of any director whom the
Commission finds to be actively and directly engaged in the administration or
supervision of the gaming activities at a licensed gaming establishment of a
subsidiary corporate licensee.
2.
The Commission may require application for licensing or finding of suitability
by any director of a publicly traded corporation whose application is not
otherwise required by paragraph 1 of this Rule, if the Commission determines
that the policies of the state regarding gaming would be served by such
action.
3. The following directors
of the publicly traded corporation are deemed to be actively and directly
engaged in the administration or supervision of the gaming activities of the
subsidiary corporate licensee and therefore are normally required to be
licensed or found suitable:
(a) Each director
who serves as Director of the board of directors;
(b) Each director who serves as the Director
of the audit committee;
(c) Each
director who, individually or in association with others, is the beneficial
owner of greater than 5 percent of any class of voting securities of the
registered publicly traded corporation for which he or she serves as a
director; and
(d) Each person,
whether as director or otherwise, who serves on any committee to which is
delegated the authority of the Commission to act in any matter involving the
activities of a corporate Casino licensee and each director who serves in the
capacity of lead director.
17.420
Appointments and
elections. Except in a transaction subject to these Rules which involved
a change of control of a publicly traded corporation as a whole, an individual
may be appointed or elected to a position described in Rules 17.410 or 17.415
without the prior approval of the Commission, and may occupy the position and
exercise the authority and duties thereof until otherwise ordered by the
Commission. The Commission may impose stricter requirements, including a
requirement of prior approval, on any publicly traded corporation or with
respect to any individual at any time.
17.430
Institutional investor.
1. An institutional investor that becomes or
intends to become subject to these Rules as a result of its beneficial
ownership of voting securities of a publicly traded corporation registered with
the Commission may apply to the Commission for a waiver of the requirements
with respect to the beneficial ownership of the voting securities of such
publicly traded corporation if such institutional investor holds the securities
for investment purposes only; provided, however, that an institutional investor
shall not be eligible to receive or hold a waiver if the institutional investor
beneficially owns, directly or indirectly, except as otherwise provided in
subsection 2, more than 25 percent of the voting securities and if any of the
voting securities were acquired other than through a debt restructuring. Voting
securities acquired before a debt restructuring and retained after a debt
restructuring or as a result of an exchange, exercise or conversion, after a
debt restructuring, of any securities issued to the institutional investor
through a debt restructuring, shall be deemed to have been acquired through a
debt restructuring. A waiver granted under this section shall be effective only
as long as the institutional investor's direct or indirect beneficial ownership
interest in such voting securities meets the limitations set forth
above.
2. An institutional investor
that has been granted a waiver pursuant to subsection 1, may beneficially own
more than 25 percent, but not more than 29 percent, of the voting securities of
a publicly traded corporation registered with the Commission, only if such
additional ownership results from a stock repurchase program conducted by such
publicly traded corporation, and upon the condition that such institutional
investor does not purchase or otherwise acquire any additional voting
securities of the publicly traded corporation that would result in an increase
in the institutional investor's ownership percentage.
3. An institutional investor shall not be
deemed to hold voting securities for investment purposes only unless the voting
securities were acquired and are held in the ordinary course of business as an
institutional investor and not for the purpose of causing, directly or
indirectly, the election of a majority of the members of the board of
directors, any change in the corporate charter, bylaws, management, policies or
operations of the publicly traded corporation registered with the Commission or
any of its gaming affiliates, or any other action which the Commission finds to
be inconsistent with investment purposes only. The following activities shall
not be deemed to be inconsistent with holding voting securities for investment
purposes only:
(a) Voting, directly or
indirectly through the delivery of a proxy furnished by the board of directors,
on all matters voted on by the holders of such voting securities;
(b) Serving as a member of any committee of
creditors or security holders formed in connection with a debt
restructuring;
(c) Nominating any
candidate for election or appointment to the board of directors in connection
with a debt restructuring;
(d)
Accepting appointment or election as a member of the board of directors in
connection with a debt restructuring and serving in that capacity until the
conclusion of the member's term;
(e) Making financial and other inquiries of
management of the type normally made by securities analysts for informational
purposes and not to cause a change in its management, policies or operations;
and
(f) Such other activities as
the Commission may determine to be consistent with such investment
intent.
4. An
application for a waiver must include:
(a) A
description of the institutional investor's business and a statement as to why
the institutional investor is within the definition of "institutional investor"
set forth in these Rules.
(b) A
certification made under oath and the penalty of perjury, that the voting
securities were acquired and are held for investment purposes only as defined
in subsection 2 and a statement by the signatory explaining the basis of the
signatory's authority to sign the certification and to bind the institutional
investor to its terms. The certification shall also provide that the applicant
agrees to be bound by and comply with the Amendment and the Rules adopted
thereunder, to be subject to the jurisdiction of the courts of Arkansas, and to
consent to Arkansas as the choice of forum in the event any dispute, question,
or controversy arises regarding the application or any waiver granted under
this section.
(c) A description of
all actions, if any, taken or expected to be taken by the institutional
investor relating to the activities described in subsection 2.
(d) The name, address, telephone number and
social security number of the officers and directors, or their equivalent, of
the institutional investor as well as those persons that have direct control
over the institutional investor's holdings of voting securities of the publicly
traded corporation registered with the Commission.
(e) The name, address, telephone number and
social security or federal tax identification number of each person who has the
power to direct or control the institutional investor's exercise of its voting
rights as a holder of voting securities of the publicly traded corporation
registered with the Commission.
(f)
The name of each person that beneficially owns more than 5 percent of the
institutional investor's voting securities or other equivalent.
(g) A list of the institutional investor's
affiliates.
(h) A list of all
securities of the publicly traded corporation registered with the Commission
that are or were beneficially owned by the institutional investor or its
affiliates within the preceding year, setting forth a description of the
securities, their amount, and the date of acquisition or sale.
(i) A list of all regulatory agencies with
which the institutional investor or any affiliate that beneficially owns voting
securities of the publicly traded corporation registered with the Commission
files periodic reports, and the name, address, and telephone number of the
person, if known, to contact at each agency regarding the institutional
investor.
(j) A disclosure of all
criminal or regulatory sanctions imposed during the preceding 10 years and of
any administrative or court proceedings filed by any regulatory agency during
the preceding 5 years against the institutional investor, its affiliates, any
current officer or director, or any former officer or director whose tenure
ended within the preceding 12 months. As to a former officer or director, such
information need be provided only to the extent that it relates to actions
arising out of or during such person's tenure with the institutional investor
or its affiliates.
(k) A copy of
the institutional investor's most recent Schedule 13D or 13G and any amendments
thereto filed with the United States Securities and Exchange Commission
concerning any voting securities of the publicly traded corporation registered
with the Commission.
(l) A copy of
any filing made under
15 U.S.C.
18a with respect to the acquisition or
proposed acquisition of voting securities of the publicly traded corporation
registered with the Commission.
(m)
Any additional information the Commission may request.
5. The Commission shall consider all relevant
information in determining whether to grant a waiver requested pursuant to
subsection 1, including but not limited to:
(a) Whether the waiver is consistent with the
policy set forth in these Rules;
(b) The factors set forth within these Rules;
and
(c) Any views expressed to the
Commission by the publicly traded corporation or any licensed affiliate
thereof.
6. An
institutional investor that has been granted a waiver of a finding of
suitability and that subsequently intends not to hold its voting securities of
the publicly traded corporation for investment purposes only, or that intends
to take any action inconsistent with its prior intent shall, within 2 business
days after its decision, deliver notice to the Commission in writing of the
change in its investment intent. The Commission may then take such action under
the these Rules as the Commission deems appropriate.
7. A waiver of the requirements that has been
granted pursuant to this section shall not be construed as a waiver of or
exemption from the prior approval requirements of these Rules. An institutional
investor that intends to apply for a waiver of the requirements pursuant to
this section must also simultaneously apply to the Commission for an exemption
from the prior approval requirements of these Rules if:
(a) The proposed acquisition would give the
institutional investor, directly or indirectly, the power to direct or cause
the direction of the management and policies of the publicly traded
corporation; or
(b) The
institutional investor intends to increase its beneficial ownership to more
than 20% but not more than 25% of the voting securities of the registered
publicly traded corporation.
[] If at the time an institutional investor applies to the Commission
for a waiver of the requirements it does not intend to increase its beneficial
ownership to more than 20% of the voting securities of the registered publicly
traded corporation but subsequently intends to increase to more than 20% but
not more than 25%, it must apply to the Commission for an exemption from the
prior approval requirements of these Rules.
8. If the Commission finds that an
institutional investor has failed to comply with the provisions of this
section, or should be subject to a finding of suitability to protect the public
interest, the Commission may, in accordance with these Rules, require the
institutional investor to apply for a finding of suitability. The institutional
investor affected by the action taken by the Commission may request a hearing
on the merits of such action. The hearing shall be included on the agenda of
the next regularly scheduled Commission meeting occurring more than 10 working
days after the request for hearing. Upon good cause shown by the institutional
investor, the Commission may waive the 10-day requirement and place such
hearing on an earlier Commission agenda. The Commission, for any cause deemed
reasonable, may by a majority vote, sustain, modify or reverse the decision of
the Commission, or remand the matter to the Commission for such further
investigation and reconsideration as the Commission may order. While the
application for a finding of suitability review of the Commission's action
requiring the filing of such application is pending, the institutional investor
shall not, directly or indirectly, cause or attempt to cause any management,
policy, or operating changes in the publicly traded corporation or any gaming
affiliate.
9. Any publicly traded
corporation registered with the Commission or any registered or licensed
subsidiary thereof shall immediately notify the Commission of any information
about, fact concerning or actions of, an institutional investor holding any of
its voting securities, that may materially affect the institutional investor's
eligibility to hold a waiver under this section.
10. An institutional investor that is subject
to this Rule as a result of its beneficial ownership of voting securities of a
publicly traded corporation registered with the Commission and that has not
been granted a waiver pursuant to subsection 1, may beneficially own more than
10 percent, but not more than 11 percent, of the voting securities of such
publicly traded corporation, only if such additional ownership results from a
stock repurchase program conducted by the publicly traded corporation, upon the
same conditions as provided in subsection 2. Unless otherwise notified by the
Commission, such an institutional investor is not required to apply to the
Commission for a finding of suitability, but shall be subject to reporting
requirements as prescribed by the Commission.
17.440
Proscribed activities with
respect to "unsuitable" persons.
1. If
a person required by the Commission to apply for a finding of suitability
fails, refuses or neglects to apply for a finding of suitability or a license
within 30 days after the Commission orders that such application be made, the
Commission may find such person to be unsuitable.
2. The Commission may determine a publicly
traded corporation registered with the Commission to be unsuitable, or take
other disciplinary action, if the publicly traded corporation, after the
Commission serves notice to the publicly traded corporation that a person is
unsuitable to be a stockholder or to have any other relationship or involvement
with such publicly traded corporation or with a corporate licensee or any other
affiliated company:
(a) Pays to any person
found to be unsuitable any dividend or interest upon any voting securities or
any payment or distribution of any kind whatsoever except as permitted by
paragraph (d) of this Rule;
(b)
Recognizes the exercise by any such unsuitable person, directly or indirectly,
or through any proxy, trustee or nominee, of any voting right conferred by any
securities or interest in any securities;
(c) Pays to any such unsuitable person any
remuneration in any form for services rendered or otherwise except as permitted
pursuant to these Rules; or
(d)
Fails to pursue all lawful efforts to require such unsuitable person to
relinquish his or her voting securities including, if necessary, the immediate
purchase of said voting securities by the publicly traded corporation for cash
at fair market value.
17.450
Exemptions.
1. The Commission may, either generally or
specifically, exempt a person, a security, a transaction, or any portion
thereof, from the application of this Rule or any portion thereof if the
Commission determines that such exemption is consistent with the purpose of the
Act.
2. The Commission may by its
order, from time to time, delegate to the Commission the power to grant
exemptions from the application of this Rule, to the extent, and within the
scope, specified in such order.