SUMMARY

Securities Act Release No. 33-7646, dated February 26, 1999, Regarding
             Registration of Securities on Form S-8


Purpose:  To clarify that S-8 is not available to consultants and advisors
          who directly or indirectly promote or maintain a market in the
          issuer's securities, declaring that these persons take from an
          issuer with a view of distribution and are therefore "statutory
          underwriters" (who presumably would not have an exemption for the
          resale of securities issued in these types of transactions
          [Section 4(l) of the Securities Act of 1933, as amended (the
          "Act"), the exemption relied upon for secondary sales of
          securities, is not available to "issuers, underwriters or dealers"
          in securities]).

Background:

          Effective April 7, 1999, the availability of S-8's streamlined
          registration process will be restricted to deter the abuse of the
          Form to make sales to the general public through so-called
          "consultants" and "advisors," and to eliminate registration on the
          Form to "stock promoters."

          S-8 eliminated a need to file a prospectus that duplicated
          information usually available to plan participants who were being
          compensated by the issuance of securities rather than cash, and it
          reflected the Commission's distinction between offerings made to
          employees for compensatory reasons and offerings made for capital
          raising. The Commission reasoned that the relationship of the
          employee to the issuer provided the employee with a familiarity of
          the issuer's business sufficient to justify the abbreviated
          disclosure, which would not be adequate in a capital raising,
          transaction.

          The 1990 amendment included "consultants," whom the Commission
          found no reason to distinguish with regular employees, for bona
          fide non-capital raising services rendered.

Abuses:   Since 1990, the Form has been used to distribute securities to the
          public without the protections to investors of registration under
          Section 5 of the Act. Securities are often issued to so-called
          "consultants" for nominal services, with pre- arrangements for
          exercise and distribution to the public in underlying markets.
          Often the options granted are exercised to provide funds to the
          issuer or the proceeds of the sales are for the payment of debts
          of the issuer that are not related to any of the services provided
          by the consultants.

          The initial registration of the shares underlying these options
          did not register the public "capital raising" transaction which
          actually takes place in the secondary sales. In these instances,
          the employee or consultant acts as a conduit to the public, and
          the shares are not actually issued as compensation for services,
          for which the Form is solely intended.

          Securities have also been issued to consultants whose services are
          to promote the issuer's securities. This practice invites fraud by
          providing inexpensive compensation to persons who hype the
          securities of the issuer and expand the issuer's market through
          resales by these and other persons.

          Through its recent amendments to Form S-8, the Commission has
          sought to curb these practices, while maintaining, to the extent
          possible, the initial intent of the Form, i.e., the registration
          of compensatory transactions between the issuer and consultants
          and advisors who render bona fide services outside "capital
          raising," circumstances, as well as to traditional employees.

Amendments:

          The Form's availability is for employees or employees of
          subsidiaries, pursuant to any employee benefit plan. An "employee"
          is defined to include a consultant or advisor who provides bona
          fide services to the issuer other than in capital raising
          transactions. Like the traditional employee, the consultant or
          advisor must be a natural person, and there must be a contract
          between the issuer and the consultant or advisor. The Commission
          has determined that "capital raising" includes (i) compensation
          for any service that directly or indirectly promotes or maintains
          a market for the issuer's securities, or (ii) where the securities
          are issued to persons who act as conduits for a distribution to
          the general public.

          Securities issued to persons who promote the issuer's securities
          are outside of the Form. Securities cannot be issued to any one
          who directly or indirectly promotes or maintains a market in the
          issuer's securities.

          Issuers cannot use the Form for the issuance of securities to
          consultants and advisors whose services relate to potential
          capital restructuring because this service is a predicate to
          "capital raising" and market maintenance; however, services
          rendered in structuring the compensation scheme would be included
          under the Form.

          Public relations services are also prohibited as the Commission
          believes these services enhance and expand the market of the
          issuer and its securities.

Rule 701 Amendments:

           Effective April 7, 1999, the Commission amended Rule 701 to
           harmonize the definition of "consultants and advisors" permitted
           to use the Rule to the narrower definition of Form S-8.  As
           revised, securities promoters will clearly be excluded from the
           scope of persons eligible to use Rule 701.