nent record. Irrespective of the process used, all copies of any such material shall be clear, easily readable and suitable for repeated photocopying. Debits in credit categories and credits in debit categories shall be designated so as to be clearly distinguishable as such on photocopies.

(c) The registration statement proper shall be in the English language. If any exhibit or other paper or document filed with the registration statement is in a foreign language, it shall be accompanied by a translation into the English language.

Rule 404 Preparation of Registration Statement

(a) Notwithstanding any requirement of the appropriate form to the contrary, a copy of the proposed prospectus may be filed as a part of the registration statement proper in lieu of furnishing the information in item-and-answer form. Wherever this procedure is followed, either pursuant to this rule or otherwise, the text of the items of the form are to be omitted from the registration statement, as well as from the prospectus, except to the extent provided in paragraph (b) of this rule. All general instructions, instructions to items of the form and instructions as to financial statements, exhibits, or prospectuses are to be omitted from the registration statement in all

cases.

(b) Where any items of a form call for information not required to be included in the prospectus the text of such items together with the answers thereto shall be filed with the prospectus under cover of the facing sheet of the form as a part of the registration statement proper. If any such item is inapplicable, or the answer thereto is in the negative, a statement to that effect shall be made. Any financial statements not required to be included in the prospectus shall also be filed as a part of the registration statement proper, unless incorporated by reference pursuant to Rule 411. (c) Every registration statement shall include a cross reference sheet showing the location in the prospectus of the information required to be included in the prospectus in response to the items of the form. If any such item is inapplicable, or the answer thereto is in the negative and is omitted from the prospectus, a statement to that effect shall be made in the cross reference sheet.

(d) The facing page of every registration statement shall set forth the approximate date of proposed sale to the public.

(e) The prospectus included in the body of the registration statement proper prior to the effective date and the additional copies filed pursuant to Rule 424 (a), shall conform to the requirements of Rule 433 (b). Every such prospectus shall be deemed to have been filed as a part of the registration statement both for the purpose of section 7 of the Act and for the purpose of Rule 433.

Rule 405 Definitions of Terms

Unless the context otherwise requires, all terms used in this regulation or in the forms for registration have the same meanings as in the Act and in the General Rules and Regulations. In addition, the following definitions apply, unless the context otherwise requires:

Affiliate. An "affiliate" of, or a person "affiliated" with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

Amount. The term "amount," when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to shares, and the number of units if relating to any other kind of security.

Associate. The term "associate" used to indicate a relationship with any person, means (1) any corporation or organization (other than the registrant or a majority-owned subsidiary of the registrant) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of equity securities, (2) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity, and (3) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of the registrant or any of its parents or subsidiaries.

Certified. The term "certified," when used in regard to financial statements, means certified by an independent public or independent certified public accountant or accountants.

Charter.-The term "charter" includes articles of incorporation, declarations of trust, articles of association or partnership, or any similar instrument, as amended, effecting (either with or without filing with any governmental agency) the organization or creation of an incorporated or unincorporated person.

Commission.-The term "Commission" means the Securities and Exchange Commission.

Control. The term "control" (including the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

Director. The term "director" means any director of a corporation or any person performing similar functions with respect to any organization whether incorporated or unincorporated.

Employee. The term "employee" does not include a director, trustee, or officer.

Equity security. The term "equity security" means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right.

Fiscal year. The term "fiscal year" means the annual accounting period or, if no closing date has been adopted, the calendar year ending on December 31.

Majority-owned subsidiary. The term "majority-owned subsidiary" means a subsidiary more than 50 percent of whose outstanding securities representing the right, other than as affected by events of default, to vote for the election of directors, is owned by the subsidiary's parent and/or one or more of the parent's other majority-owned subsidiaries.

Material. The term "material," when used to qualify a requirement for the furnishing of information as to any subject, limits the information required to those matters as to which an average prudent investor ought reasonably to be informed before purchasing the security registered.

Officer. The term "officer" means a president, vice president, secretary, treasurer or principal fi

nancial officer, comptroller or principal accounting officer, and any other person performing similar functions with respect to any organization whether incorporated or unincorporated.

Parent. A "parent" of a specified person is an affiliate controlling such person directly, or indirectly through one or more intermediaries.

Predecessor. The term "predecessor" means a person the major portion of the business and assets of which another person acquired in a single succession, or in a series of related successions in each of which the acquiring person acquired the major portion of the business and assets of the acquired person.

Principal underwriter. The term "principal underwriter" means an underwriter in privity of contract with the issuer of the securities as to which he is underwriter, the term "issuer" having the meaning given in sections 2 (4) and 2 (11) of the Act.

Promoter. The term "promoter" includes(a) Any person who, acting alone or in conjunction with one or more other persons, directly or indirectly takes initiative in founding and organizing the business or enterprise of an issuer;

(b) Any person who, in connection with the founding and organizing of the business or enterprise of an issuer, directly or indirectly receives in consideration of services or property, or both services and property, 10 percent or more of any class of securities of the issue or 10 percent or more of the proceeds from the sale or any class of securities. However, a person who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this paragraph if such person does not otherwise take part in founding and organizing the enterprise.

Prospectus. Unless otherwise specified or the context otherwise requires, the term "prospectus" means a prospectus meeting the requirements of section 10 (a) of the Act.

Registrant. The term "registrant" means the issuer of the securities for which the registration statement is filed.

Share. The term "share" means a share of stock in a corporation or unit of interest in an unincorporated person.

Significant subsidiary. The term "significant

subsidiary" means a subsidiary meeting any one of the following conditions:

(a) The assets of the subsidiary, or the investments in and advances to the subsidiary by its parent and the parent's other subsidiaries, if any, exceed 15 percent of the assets of the parent and its subsidiaries on a consolidated basis.

(b) The sales and operating revenues of the subsidiary exceed 15 percent of the sales and operating revenues of its parent and the parent's subsidiaries on a consolidated basis.

(c) The subsidiary is the parent of one or more subsidiaries and, together with such subsidiaries would, if considered in the aggregate, constitute a significant subsidiary.

Subsidiary. A "subsidiary" of a specified person is an affiliate controlled by such person directly, or indirectly through one or more intermediaries. (See also "majority-owned subsidiary," "significant subsidiary," and "totally-held subsidiary.")

Succession. The term "succession" means the direct acquisition of the assets comprising a going business, whether by merger, consolidation, purchase, or other direct transfer. The term does not include the acquisition of control of a business unless followed by the direct acquisition of its assets. The terms "succeed" and "successor" have meanings correlative to the foregoing.

Totally-held subsidiary. The term "totallyheld subsidiary” means a subsidiary (a) substantially all of whose outstanding securities are owned by its parent and/or the parent's other totally-held subsidiaries, and (b) which is not indebted to any person other than its parent and/or the parent's other totally-held subsidiaries in an amount which is material in relation to the particular subsidiary, excepting indebtedness incurred in the ordinary course of business which is not overdue and which matures within one year from the date of its creation, whether evidenced by securities or not.

Voting securities.-The term "voting securities" means securities the holders of which are presently entitled to vote for the election of directors.

Rule 406 Title of Securities

Wherever the title of securities is required to be stated there shall be given such information as

will indicate the type and general character of the securities, including the following:

(a) In the case of shares, the par or stated value, if any; the rate of dividends, if fixed, and whether cumulative or noncumulative; a brief indication of the preference, if any; and if convertible, a statement to that effect.

(b) In the case of funded debt, the rate of interest; the date of maturity, or if the issue matures serially, a brief indication of the serial maturities, such as "maturing serially from 1950 to 1960"; if the payment of principal or interest is contingent, an appropriate indication of such contingency; a brief indication of the priority of the issue; and if convertible, a statement to that effect. (c) In the case of any other kind of security, appropriate information of comparable character.

Rule 407 Interpretation of Requirements

Unless the context clearly shows otherwise(a) The forms require information only as to the registrant.

(b) Whenever any fixed period of time in the past is indicated, such period shall be computed from the date of filing the registration statement, as determined by sections 6 (c) and 8 (a) of the Act and the rules and regulations thereunder. (c) Whenever words relate to the future, they have reference solely to present intention.

(d) Any words indicating the holder of a position or office include persons, by whatever titles designated, whose duties are those ordinarily performed by holders of such positions or offices.

Rule 408 Additional Information

In addition to the information expressly required to be included in a registration statement, there shall be added such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading.

Rule 409 Information Unknown or Not Reasonably Available

Information required need be given only insofar as it is known or reasonably available to the registrant. If any required information is unknown and not reasonably available to the regis

trant, either because the obtaining thereof would involve unreasonable effort or expense, or because it rests peculiarly within the knowledge of another person not affiliated with the registrant, the information may be omitted, subject to the following conditions:

(a) The registrant shall give such information on the subject as it possesses or can acquire without unreasonable effort or expense, together with the sources thereof.

(b) The registrant shall include a statement either showing that unreasonable effort or expense would be involved or indicating the absence of any affiliation with the person within whose knowledge the information rests and stating the result of a request made to such person for the information.

Rule 410 Disclaimer of Control

If the existence of control is open to reasonable doubt in any instance, the registrant may disclaim the existence of control and any admission thereof; in such case, however, the registrant shall state the material facts pertinent to the possible existence of control.

Rule 411 Incorporation of Certain Information by Reference

(a) Where an item calls for information not required to be included in the prospectus, matter contained in any part of the registration statement, other than exhibits, may be incorporated by reference in answer, or partial answer, to such item. Matter contained in an exhibit may be so incorporated to the extent specified in Rule 422.

(b) Any financial statement or part thereof filed with the Commission pursuant to any Act administered by the Commission may be incorporated by reference in any registration statement if it substantially conforms to the requirements of the appropriate form and is not required to be included in the prospectus. However, a financial schedule incorporated by reference to an annual report filed with the Commission pursuant to any Act administered by it need not be certified, if such schedule was not required to be certified in connection with the filing of the annual report, any requirement of any registration form to the contrary notwithstanding.

Rule 412 Form of and Limitation Upon Incorporation by Reference

Material incorporated by reference shall be clearly identified in the reference. An express statement that the specified matter is incorporated by reference shall be made at the particular place in the registration statement where the information is required. Matter shall not be incorporated by reference in any case where such incorporation would render the statement incomplete, unclear or confusing.

Rule 413 Registration of Additional Securities

Except as provided in section 24 (e) (1) of the Investment Company Act of 1940, the registration of additional securities of the same class as other securities for which a registration statement is already in effect shall be effected through a separate registration statement relating to the additional securities.

Rule 415 Competitive Bidding Registration Statements

(a) A registration statement covering securities to be offered at competitive bidding shall contain undertakings by the registrant (i) to file an amendment to the registration statement reflecting the results of the bidding, the terms of the reoffering and related matters to the extent required by the applicable form, not later than the first use, authorized by the registrant after the opening of the bids, of a prospectus relating to the securities offered at competitive bidding, unless no further public offering of such securities by the registrant and no reoffering thereof by the purchasers is proposed to be made, and (ii) to use its best efforts to distribute prior to the opening of bids, to prospective bidders, underwriters and dealers a reasonable number of copies of a prospectus which at that time meets the requirements of section 10 (a) of the Act, and relating to the securities offered at competitive bidding, as contained in the registration statement, together with any supplements thereto. Any order declaring the registration statement effective shall be deemed to declare an amendment thereto filed pursuant to the first such undertaking effective in accordance with paragraph (b) of this rule.

(b) An amendment to such a registration statement filed pursuant to the undertaking referred to in paragraph (a) (i) of this rule (which may make such other changes in the registration statement as the registrant deems appropriate) shall become effective at the time such amendment is filed with the Commission at its principal office or any regional or branch office, unless the Commission has notified the registrant that it has instituted proceedings under section 8 of the Act. The amendment shall be accompanied by the consent of a managing underwriter, acting on behalf of all principal underwriters of the securities offered at competitive bidding, to the filing thereof.

(c) A prospectus relating to the securities offered at competitive bidding, when used prior to the opening of bids, need not contain information dependent upon the determination of the offering price of such securities or the acceptance of the bid, in order to meet the requirements of section 10 (a) of the Act. A prospectus relating to such securities, when used after the opening of bids, shall not be deemed to meet the requirements of section 10 (a) of the Act unless (1) an amendment to the registration statement has been filed pursuant to the undertaking referred to in paragraph (a) (i) of this rule, if required, and (2) such prospectus reflects the information contained in the registration statement, as amended, to the extent required by the applicable form.

(d) A registrant may register securities to be offered at competitive bidding and securities not to be so offered pursuant to a single joint registration statement only if all information (including offering data, etc.) required by the applicable form

with respect to the securities not to be so offered is included in the registration statement prior to the initial effectiveness thereof. If such information is not so included, the Commission will not accelerate such effectiveness unless an amendment to the registration statement is first filed so as to make it cover only the securities to be offered at competitive bidding. The registrant may, however, either initially or after such amendment, register the securities not to be offered at competitive bidding pursuant to a separate registration statement. An appropriate composite form of prospectus may in any event be used for all securities registered.

Rule 416 Securities To Be Issued Under Antidilution Provisions

If a registration statement purports to register securities to be offered pursuant to terms which provide for a change in the amount of securities being offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions, such registration statement shall, unless otherwise expressly provided, be deemed to cover the additional securities to be offered or issued in connection with any such provision.

Rule 417 Date of Financial Statements

Whenever financial statements of any person are required to be furnished as of a date within a specified period prior to the date of filing the registration statement and the last day of such period falls on a Saturday, Sunday or holiday, such registration statement may be filed on the first business day following the last day of the specified period.

Rule 420 Legibility of Prospectuses

The body of all printed prospectuses shall be in roman type at least as large as 10-point modern type. However, to the extent necessary for convenient presentation, financial statements and other statistical or tabular data and the notes thereto may be in roman type at least as large as 8-point modern type. All type shall be leaded at least 2 points.

Rule 421 Presentation of Information in Prospectuses

(a) The information required in a prospectus need not follow the order of the items or other requirements in the form. Such information shall not, however, be set forth in such fashion as to obscure any of the required information or any information necessary to keep the required information from being incomplete or misleading.