Jonathan G. Katz
U.S. Securities and Exchange Commission
via e-mail: firstname.lastname@example.org
Re: File Number S7-2-98
Comments of the American Society of Corporate Secretaries on the Rule Proposal Regarding Registration of Securities on Form S-8 (Release No. 33-7647)
Dear Mr. Katz:
This comment letter on the rule proposal regarding the registration of securities on Form S-8 is submitted on behalf of the Securities Law Committee and the Corporate Practices Committee of the American Society of Corporate Secretaries. The Societyís 3,500 members represent over 2,000 public corporations.
We applaud the use of plain English in Release 33-7647.
We do not believe the issuance of S-8 securities to consultants (individually or in the aggregate) should be disclosed in Securities Exchange Act of 1934 ("1934 Act") filings. We do not believe that consulting contracts should be required to be filed as exhibits to Form S-8. Either requirement would cause competitive concerns to our members, particularly those in the technology companies. Instead, we believe it would be reasonable to require such data to be provided supplementally on a confidential basis at the request of the Assistant Director for the industry sector. We specifically wish to elevate the decision to that level in order to minimize the administrative burden of routinely providing the data in cases where there is no reason for concern.
We do not feel disclosing the number or percentage of S-8 securities awarded to consultants under S-8 will prevent further abuses. Our members who make awards to legitimate consultants having nothing to do with capital raising would find such disclosure burdensome. Having one more item to track may seem merely ministerial at first blush; however, in this era of downsizings and cost controls we feel it is not reasonable unless there were some clear benefit.
We donít have a strong reaction to the timeliness requirement and the waiting period after a shell merger. However, we strongly favor the exception for listed companies discussed in Release 33-7647.
We oppose requiring a post-effective amendment to file a certification regarding consultants. We feel this creates administrative cost and burden, again without commesurate tangible benefits in our view. However, we have no objection to requiring the issuer to obtain and retain a certificate from the consultants that they wonít use the S-8 securities for capital raising purposes seems reasonable.