Oregon Chapter Newsletter In This Issue

OREGON CHAPTER NEWSLETTER Q2 NEWSLETTER – JUNE 2015

Oregon Chapter Newsletter

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Issue 8

2015 Wine Tasting Tour

Message from the President Sponsor Article Upcoming ACC Events Chapter Leadership Member Spotlight Welcome New Members! Thank You ORACC Sponsors

Page 1 Page 2 Page 2 Page 3 Page 3-4 Page 5 Page 6 Sponsored by Lexis-Nexis

motivating. I want to recognize Bonnie Page and Josh Simko for all their hard work in planning this special event.

It’s hard to believe that Summer has already arrived. It was an exciting and busy Spring for our chapter. Veta T. Richardson, President & CEO of ACC, attended our Professional Development Series Event “Level 5 Leadership” at the Nike World Headquarters on May 11th and presented our chapter with the ACC Chapter of the Year Award. It is a great honor for our chapter! As a chapter of the year winner, we received a free registration to the 2015 ACC Annual Meeting that will be held in Boston October 18-21st. The ORACC board decided that the registration should be given to one of our members. Each time a member attended an event this calendar year, they received an entry. I’m excited to announce that Su Kwak, Managing Counsel at Oracle America, Inc., was drawn as the winner. Congratulations Su! I look forward to seeing you in Boston. Speaking of the event on May 11th, I want to extend a special thank you to our panelists: Vince Chiappetta, Katherine Cowan, Grant Hanson, Jollee Patterson and Bill Pierznik. Their stories and experiences were captivating and

Last Friday, our chapter hosted a Wine Tasting Tour of four wineries in Yamhill County. We are grateful to our longtime special events sponsor Lexis-Nexis for hosting this social event. We enjoyed a beautiful day and I believe everyone had a great time. I hope we can make this an annual social event. Our chapter recently hosted two CLEs: Minding your M’s and A’s: Tips on Laying the Groundwork for Successful Mergers & Acquisitions (presented by Immix Law Group) and the Shifting Sands of Patent Protection for Software and Business Methods (presented by Alleman Hall McCoy Russell & Tuttle LLP and Bob Wasson V.P. and Assoc. General Counsel at Hewlett-Packard Company). Both CLE’s were excellent and the materials provided by the sponsors are available for download on our chapter website (http://www.acc.com/chapters/oreg/). On May 27th, our sponsor Tonkon Torp LLP hosted a chapter social at the Rooftop Deck of Revolution Hall. It was a beautiful evening with great views of downtown Portland. Our next summer event is our 7th annual golf event on Friday, August 14th with new twist this year. We will host at no charge a relaxing afternoon of “pitch and putt” golf at McMenamins Edgefield in Gresham. All you need is a

pitching wedge and putter (and if you don’t have golf clubs, we will rent them for you). Drinks and dinner will be hosted by our sponsor Lexis-Nexis. This is purely for fun – no scorekeeping will be allowed. If you want to join us for dinner only, you are welcome to do so. I am excited to announce that Jordana Shukla has been contracted as our chapter administrator. Jordana will help our chapter with event planning, event logistics, and member communications. If you have a question about an event, please contact Jordana at [email protected]. Jordana – thank you for putting this newsletter together. I also want to recognize Lisa Murphy for her outstanding contributions serving on our board and as our chapter Treasurer. Lisa is relocating to Seattle for a new role with her employer Cambia Health Solutions. Lisa, we will miss you and wish you the best. Our board has elected Bill Barber, V.P. and Senior Counsel at Umpqua Bank, as our new Treasurer. Thank you Bill for agreeing to take on this new role. Keep an eye on your e-mail for upcoming CLEs, programs and social events. We look forward to seeing you soon and we hope that you have a great summer!

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UPCOMING CHAPTER EVENTS All event details are available Online! August 14, 2015 Our traditional summer golf event is taking a new twist this year. We will host at no charge a relaxing afternoon of “pitch and putt” golf at McMenamins Edgefield in Gresham. All you need is a pitching wedge and putter (and if you don’t have golf clubs, we will rent them for you). Drinks and dinner will be hosted by our sponsor Lexis-Nexis. This is purely for fun – no scorekeeping will be allowed. If you want to join us for dinner only, you are welcome to do so.

3:00 PM - 8:00 PM McMenamins Edgefield 2126 SW Halsey Street Troutdale, Oregon

Wine Tasting Tour at Stoller Wineries

Crowdfunding for Small Oregon Businesses: New Rules By: Jeffrey S. Cronn and Claire E. Brown, Tonkon Torp LLP You Say "Crowdfunding," Securities Lawyers Say… Although the term "crowdfunding" is used to describe a range of fundraising strategies, it is primarily associated with raising relatively small amounts of money from a wide group of people, usually by way of the internet. Sites such as Kickstarter and indiegogo have made nonequity crowdfunding a popular way of raising money for a cause, including launching a for-profit company. Typically, companies using these sites allow "backers" to either pre-purchase products or make a donation in exchange for a token gift.

proposed and adopted "state-level" crowdfunding exemptions. There is an exemption from federal oversight for securities transactions if an issuer located in a state restricts all offers and sales of the securities issued in the offering to the residents of that state. Usually relying on this federal exemption, 38 states and the District of Columbia have now proposed or enacted rules allowing crowdfunding exclusively from residents. Not surprisingly, the characteristics of these state-level exemptions vary widely. However, most share certain common traits, including that: •

The issuer must usually be both organized and doing business in the state.

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The issuer must make basic disclosures.

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There is a cap on the amount raised in the offering (usually $1,000,000).

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There is cap on the amount raised from any individual.

Fundraising involving general solicitation for equity investments raised exclusively from accredited investors in what is otherwise a traditional private placement of securities is often referred to as "accredited crowdfunding." Many commentators and groups have agitated for a crowdfunding option that would merge these two, allowing for equity crowdfunding without regard to an individual's wealth or sophistication, tapping into the enthusiasm and energy of a crowd as well as its funds.

State-level crowdfunding is seen as a way to mobilize a neighborhood, a community group or others to support a local business. In states that have enacted state-level crowdfunding, smaller businesses such as breweries, restaurants and boutique craft shops have taken advantage of the opportunity. These types of businesses may not qualify for a bank loan and often struggle to attract equity investment from angels or other professional investors.

Federal Crowdfunding Fizzles

Oregon Enacts State Crowdfunding

The federal JOBS Act included a "main street" crowdfunding option, allowing companies to raise a limited amount of money from essentially anyone. The Securities and Exchange Commission ("SEC") responded to the Act by drafting hundreds of pages of proposed rules. The SEC rules purport to eventually allow most companies to raise up to $1,000,000 from the general public through an online funding portal. In order to access this type of fundraising, however, companies would be required to comply with substantial disclosure requirements, both initially and on an ongoing basis, necessitating expensive legal and accounting help. Although the SEC has not yet released final rules, many commentators believe that the rules are too expensive and restrictive to be of much use to most early-stage companies.

Not to be left behind, the Oregon Division of Finance and Corporate Securities finalized – without legislative action -Oregon Intrastate Offering ("OIO") rules on January 15, 2015 (OAR 441-035). The rules allow Oregon small businesses to crowdfund from Oregon residents.

State Crowdfunding Grows In recent years, and accelerating after the SEC disappointed many crowdfunding enthusiasts, individual states have

The rules reflect a number of the state-level crowdfunding trends described above, with Oregon-specific differences. Among other things, the OIO rules provide that: •

Only an Oregon small business, defined as a business with 50 or fewer employees, can rely on the rules to avoid registration of the securities issued in the offering and raise up to $250,000 in any 12-month period in reliance on the exemption.

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Every Oregon resident, regardless of income or net worth, can invest up to $2,500 in an OIO offering.

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No commissions or fees of any kind can be paid for selling securities or soliciting purchases in an OIO. The rules require companies to meet and discuss a business plan with a "business technical service provider" (defined as a Small Business Development Center as defined in OAR 123-022-0070, an Economic Development District as defined in 13 CFR 304.1, or a not-for-profit incubator, accelerator, or business resource provider approved by the Director of the Department of Consumer and Business Services) before offering or selling securities under the exemption.

3 filings, advertisements and shareholder disclosures. The new Oregon crowdfunding rules are intended to provide Oregon small businesses with an additional funding alternative. The rules may also allow local investors to make a meaningful contribution to sustainable and other community businesses. Put to best use, the rules promise the opportunity to grow and sustain local companies, and to contribute to building a community of committed stakeholders.

Member Spotlight

Seven days before beginning an offering, a company looking to fundraise must file certain information with the Division, including a copy of the offering documents to be provided to prospective investors. Oregon companies can engage in some advertising when conducting an OIO, but limited to a "tombstone" ad containing certain basic information about the issuer and the offering, to be filed with the Division before use. Companies that complete an OIO must provide a report to security holders at least twice per year containing a discussion of the business and disclosure of the compensation paid to directors and officers.

Potential for Building Local Community The OIO rules are designed to benefit small, local businesses that do not have the need for substantial funding. They are also designed to be kinder and gentler than the proposed federal crowdfunding rules. In theory, Oregon businesses can crowdfund under the rules without the assistance of professional advisors. However, all of the usual state and federal antifraud and liability rules applicable to an offering of securities generally also apply to an OIO offering. Based on this exposure, it may be risky for a company to "go it alone" in issuing securities in reliance on the OIO rules. Further, some professional advisors may be reluctant to assist with OIO offerings due to their exposure for participating in the securities transaction under applicable Oregon law. We would expect that professional consultants may fill any void by offering OIO services including compliant forms of business plans, state

CHAPTER LEADERSHIP

CHAPTER

President James Williams Xerox Corporation Senior Counsel [email protected] President Elect Bonnie Page Smarsh General Counsel [email protected] Treasurer Bill Barber Umpqua Bank VP/Senior Counsel [email protected] Secretary Marc Bocci Portland General Electric Company Associate General Counsel, Corporate Secretary [email protected]

For our 2nd Quarter Newsletter, ORACC interviewed Edward Impert, Associate General Counsel at Lithia Motors. Lithia Motors is a nationwide automotive dealership network headquartered in Medford, Oregon. It is the seventh largest automotive retailer in the United States, and ranked #14 in Fortune’s Most Admired Companies in 2013. How many people work in your legal department and in how many locations? Lithia Motors has two corporate locations: one in Medford Oregon and in New Jersey. Our franchise stores include 129 stores across 14 different states. Our legal team includes two attorneys and three paralegals. Our Franchise department, which reports to the General Counsel, includes another two employees. I handle legal and franchise work. Before Lithia Motors I was working with Harry & David. During the recession, I moved over to Lithia Motors; it was a great opportunity because they did not have an in-house attorney at that time. Other than your colleagues and clients what do you like most about your job? I love that we’re in a growth industry and that we provide one of the essential needs - transportation. I love the challenges and opportunities that I get to face in this job. With 129 locations, you never know what situation you may need to deal with on any particular day.

Vice Presidents Tamara Kessler Advantage Professional Management, LLC General Counsel [email protected] m Jay Nusbaum Vestas American Wind Technology, Inc. Vice President and General Counsel [email protected] J. Stuart Patterson Hewlett-Packard Company Vice President and Associate General Counsel [email protected] Joshua Simko NIKE, Inc. [email protected] Ben Buhayar NWEA Attorney [email protected] Katerina Kogan ESI, Inc. Attorney [email protected] Yumi O’Neil Moda Health

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What is one thing about your company you would like the world most to know? Other than that we’re awesome, the one thing that I do love that we do is Lithia for Kids which is our charity. We don’t concentrate on any one particular children’s charity, we help all charities that work with kids. It is something we’re pretty passionate about. Our dealership franchises often operate in small markets, and most of these charities are running on shoe-string budgets. Through Lithia for Kids we find we can have a huge impact in the communities we operate. What is the best job you had before this one, either in the legal profession or outside of it? Before Lithia Motors, probably camp counselor. I was a camp counselor at YMCA Camp ORKILA in the San Juan Islands in Washington. It was great – I got to be out in the sun all day during the summer with kids. Plus you feel that you’re making a real difference in people’s lives. Who are your primary outside counsel and what do you like best about them? We have primary SEC counsel. But, because we’re in 14 different states I tend avoid that question. We have counsel in each state we operate. The one we do the most work with in Oregon is Stoel Rives in Portland. One of the perks in operating in so many states is that we get to work with many outside counsel. Do you use social media in professional life? If so, which ones?

The ACC Annual Meeting is the world’s largest gathering of in-house counsel and offers the best value in corporate legal education. Take a leading role in your career development as you learn from experienced presenters who will discuss changes to the field and best practices on how to adapt. With over 100 CLE/CPD programs you can fulfill your annual CLE/CPD requirements, and meet with thousands of your peers and legal service providers during two and a half days of intensive programming on current legal issues. For more information visit the ACC Annual Meeting Website. (http://www.acc.com/education/am15/index.cfm)

your

I don’t use social media professionally, and I really should. I am not even on LinkedIn. I’ve been meaning to do it. I use Facebook socially. Maybe if you ask me in two years I will be on social media professionally. I anticipate that I will be forced along in the digital age. What is your favorite place in Oregon or southwest Washington and why? There are a couple of favorite places that I really like in Oregon and Washington. My absolute favorite place is Silver Falls State Park. The park has 20 waterfalls. You can go under and behind the waterfalls. It’s a really serene and beautiful place. In Southern Oregon, I love the table rock hiking trails and Crater Lake. What is the last book you read? The last book I read was “Einstein” by Walter Isaacson – biography of Albert Einstein. Really engaging and interesting book.

Su Kwak won the drawing for a free trip to the 2015 ACC annual meeting. Congratulations Su, see you in Boston!

OREGON CHAPTER NEWSLETTER | Issue 8

Welcome New Members! Kathleen Abbott, Counsel Puppet Labs, Inc Stan Austin, Associate General Counsel Moda Health Craig Capone, Senior Counsel Alacrity Services Rosemary Colliver, General Counsel & Head of Business Affairs LAIKA Jeff L. Dover, Compliance Manager - General Counsel Advantage Dental Laura Ledsworth-Wang, Regional Senior Counsel - Americas DataLogic Holdings, Inc. Jennifer Marsh, Manager, CFO’s Office Daimler Trucks North America LLC Vittal Patel, Legal & Compliance Manager National Pro Grid League Marcus H. Reed, General Counsel Craft Brew Alliance, Inc. Bob Rohlf, General Counsel Exterro, Inc. Katherine K. Rosenbaum, Associate Counsel NW Natural Elizabeth Schultz, Associate Corporate Counsel Vestas Americas Meghan Sercombe, Senior Corporate Counsel Mentor Graphics Corporation Peter Simons, Attorney DataLogic Holdings, Inc. Eric Wasik, Legal and Compliance Counsel Simple Finance Technology Corp. Robert T. Watt, Managing Counsel, Patent Strategy Intel

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OREGON CHAPTER NEWSLETTER Q2 NEWSLETTER – JUNE 2015

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Issue 8