==========================================START OF PAGE 1======


                            APPENDIX B
      ESSENTIAL ELEMENTS OF THE COMPANY REGISTRATION SYSTEM



     I.   Disclosure 

          A.   Disclosure and Prospectus Delivery Under the
               Company 
               Registration System 

               1.   Company Registration Statement 

               2.   File and Go 

               3.   Prospectus Delivery

          B.   Role of the Commission and Other Gatekeepers or
               Monitors

               1.   The Commission Review Process

               2.   The Underwriter

               3.   The Auditor

     II.  Company Eligibility

     III. Transactions Covered

          A.   Affiliate and Underwriter Resales

               1.   Sales of Restricted Securities

               2.   Sales by Affiliates

          B.   Exclusions

          C.   Offshore Offerings

          D.   Preservation of Transactional Exemptions

          E.   Limited Placements

     IV.  Disclosure Enhancements Under the Recommended Company
          Registration Model

          A.   Mandatory Disclosure Enhancements

               1.   Enhanced Involvement by Senior Management
==========================================START OF PAGE 2======

                    a.   Top Management Certifications

                    b.   Management Report to the Audit Committee

               2.   Improvements in the Content and Timeliness of
                    1934 Act
                    Reporting

                    a.   More Timely and Informative Reports 
                         on Form 8-K

                    b.   Form 10-K Risk Disclosure

          B.   Conclusion

     V.   Liability and Due Diligence Under Company Registration

          A.   Liability Under Company Registration

               1.   Other Liability Approaches Considered

               2.   Preservation and Expansion of Statutory
                    Liability

          B.   Due Diligence Under Company Registration

               1.   Underwriters

               2.   Outside Directors

          C.   Conclusion

     Addendum to Appendix B -- Comparison of Company Registration
and Shelf Offering Systems