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Ownership Reports and Trading by Officers, Directors and Principal Security Holders

August 23, 2002

MEMORANDUM

To:   Our Clients and Friends
From:   Olshan Grundman Frome Rosenzweig & Wolosky LLP
Date:   August 23, 2002
Re:   Ownership Reports and Trading by Officers, Directors and Principal Security Holders

Effective August 29, 2002, Section 16 reporting persons (directors, officers and 10% stockholders) will be required to file a Form 4 report within two days after a reportable transaction (rather than by the 10th day of the next succeeding month). We suggest that you adopt a Company policy to ensure compliance with this new regulation and to demonstrate to the SEC and the public that your Company is committed to full and honest disclosure. For your convenience, we have prepared and have attached a memorandum for you to disseminate to all of the Company's Section 16 reporting persons. Please note that this memorandum is a template. You must complete several blanks and identify by name or title the person who will pre-clear trades and other transactions. (See paragraph 2 below).

We suggest that the compliance program consist of the following:

  1. Dissemination of the attached memorandum to all Section 16 reporting persons and the requirement that each return a signed certification and power of attorney to the Company.
  2. A comprehensive pre-clearance procedure for all Section 16 persons, including outside directors, covering all transactions and transfers. The responsibility for pre-clearing transactions may be delegated to anyone. Generally, the responsibility is delegated to the General Counsel, the Chief Financial Officer, or to some other high-level officer who is familiar with legal restrictions on trading and is conversant with all material events and circumstances relating to the Company. Regardless of the identity of the person selected to serve as the pre-clearer, he or she must always be kept fully informed of material developments and be in direct communication with the person who will be preparing the Forms 4.
  3. A broker interface procedure, including a signed broker instruction/representation form.

You may also want to consider placing legends on all insiders' stock certificates, which will put any brokerage firm on notice that all transactions must first be pre-cleared with the Company.

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These are only brief descriptions of the SEC's new rules.  This memorandum provides general information only and does not constitute legal advice that may be applied to any particular situation.  Please contact the Partners in our Corporate Department for further advice and assistance.

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