File No. S7-02-03From: Elliot Miller [EMiller@kleban-samor.com]
Sent: Monday, January 27, 2003 1:24 PM
To: rule-comments@sec.gov
Subject: File No. S7-02-03

        I am submitting this comment in connection with Release 34-47137
containing proposed rules concerning audit committees of listed companies. 
This comment is directed particularly at the provisions which would define 
the status of audit committee members as independent. 

        In the discussion of independence of audit committee members it is 
stated that "…we believe that payments for services to law firms, accounting 
firms, consulting firms, consulting firms, investment banks or similar entities 
in which audit committee members are partners or hold similar positions are 
the kinds of compensatory payments that were intended to be precluded…"

        I believe that this statement and its reiteration shortly following it, 
are too broad and could inadvertantly encompass situations which are not 
inherently inconistent with the goals of the rule. For example, I am of counsel 
to a law firm. I am not a partner in the law firm and have no equity interest 
in it. I serve as a director and audit committee member of a listed company, 
to which the law firm of which I am of counsel acts as attorney. However, I 
personally do not function as an attorney in connection with the listed company; 
I act as a director and others at the law firm act as attorneys for the company. 
I do not bill my time as an attorney for the company and the company pays legal 
fees only for the time of others at the law firm. Moreover, I am  compensated 
directly by the company for acting as a director and committee member, and  my 
compensation from the law firm is not affected by fees the law firm receives 
from the company. Given the foregoing, it is not reasonable to conclude that 
I am not independent for purposes of the rule. Yet the broadness of the 
statements in the proposed rule referred to might be construed as precluding 
my continuing to serve as of counsel to the law firm and a member of the 
company's audit committee although the goals of the rule would not be advanced 
by such a result. I therefore suggest that the proper test of independence 
should be whether an audit committee member shares in legal fees paid by the 
company to the law firm.

        I hope that these comments are helpful. Should you wish to contact me
by telephone my direct dial number is 203-254-8912.

        Very truly yours, 
        Elliot Miller 
        




Elliot I. Miller 
Attorney 

Kleban & Samor, P.C. 
2425 Post Road 
Southport, CT. 06490 

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