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No Gobbledygook Award 7

The White House
Office of the Vice President

Vice President Gore Lauds U.S. Securities and Exchange Commission Rewrite of Financial Disclosure Forms

Washington, DC — Vice President Gore presented two Securities and Exchange Commission (SEC) employees a Plain Language Award today for their work with financial disclosure forms—a step that will help millions of Americans who depend on SEC regulated documents to determine where to invest their money.

The Vice President presented the awards to Nancy Smith of the SEC’s Office of Investor Education and Assistance, and Brian Lane, Director of the Division of Corporation Finance for their work on the SEC’s initiative to get companies to write financial disclosure documents in plain language.

“I want to congratulate Arthur Levitt, Chairman of the SEC, and the members of his staff who have been so helpful in promoting the use of plain language not only in the investment community, but throughout our government,” Vice President Gore said.

In October, the SEC rule took effect, requiring companies to write the cover page, summary, and risk factors sections of prospectuses in plain language to help customers understand the companies’ actions. And, to help the companies achieve that goal, the SEC has published a plain language guide which is available on the Internet at http://www.sec.gov/news/extra/handbook.htm.

Today’s Plain Language Award builds on President Clinton’s June 1st Executive Memorandum that directed all executive departments and agencies to make government documents clearer and more straightforward, with a goal of having all existing letters and notices written in plain language by 2002.

With regard to today’s announcement, the attached page illustrates a disclosure document before and after a plain language rewrite.

Financial Disclosure Form

  • Before

    Drakecorp has filed with the Internal Revenue Service a tax ruling request concerning, among other things, the tax consequences of the Distribution to the United States holders of the Drakecorp Stock. It is expected that the Distribution of Beco Common Stock to the shareholders of Drakecorp will be tax-free to such shareholders for federal income tax purposes, except to the extent that cash is received for fractional share interests.

  • After

    While we expect that this transaction will be tax free for U.S. shareholders at the federal level (except for any cash paid for fractional shares), we have asked the Internal Revenue Service to rule that it is.