S-469                 _______________________________________________

                                                   SENATE BILL NO. 5865

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Senators Moore, Bender, Metcalf and Pullen

Read first time 2/17/87 and referred to Committee on Financial Institutions.

AN ACT Relating to promotional shares; and adding a new section to chapter 21.20 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  A new section is added to chapter 21.20 RCW to read as follows:

          The director shall not establish regulations limiting promotional shares to less than fifty-five percent of the outstanding securities of the issuer after completion of the issue:  PROVIDED, That nothing in this section prevents the director from requiring escrow of promotional shares for a period not exceeding two years.  For the purposes of this section "promotional shares" means any securities that are:

          (1) Issued in consideration for services rendered in connection with the founding or organizing of a business enterprise; or

          (2) Issued to a promoter in consideration for any tangible or intangible property, such as patents, copyrights, or goodwill, to the extent that the value has not been satisfactorily established; or

          (3) Issued to a promoter in the recent past or proposed to be issued at a price substantially lower than the price at which other securities of the same class or substantially similar class have been or are to be sold without any change in the conditions of the market or in the circumstances of the issuer which would justify such different prices.