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The Securities and Exchange Commission wasn’t able to prevent a mess of possibly not-quite-legal things from going on at Enron, but a publicly held corporation is supposed to file reports that, timely read and properly interpreted, might keep an investor from making the same mistakes about other investments. CCH’s SEC Compliance Desktop is a tool to help make SEC employee and insider stock ownership and transfer compliance easier. The program doesn’t currently deal with most things a corporation has to file but, with its five currently available modules, will make it easier to generate appropriate filings pursuant to SEC Rule 144 and § 16(a) of the Security and Exchange Act of 1934, as well as track various types of employee incentives. INSTALLATION, DOCUMENTATION AND SUPPORT The single computer installation version of the Desktop insisted that it had to install several different Windows system files that were either missing from the installation computer or files that were not the appropriate version. My installation required three reboots before it was complete. I didn’t receive any printed documentation, but the installation CD-ROM contains almost 30,000 kilobytes of PDF (Portable Document Format) files. Of course, you’ll need a copy of Adobe’s Acrobat Reader to view the files. A context-sensitive Windows Help system, which includes integrated tutorials that can be run from within the Help system, is a nice feature we haven’t seen before. Free and toll-free telephone support is available weekdays from 9 a.m. to 6 p.m., Eastern time. I had no problems once I was able to get through, but did spend many minutes on hold before speaking with a real person. WHAT IT DOES SEC Compliance Desktop has five modules, all working with a single, integrated Access 97 database with a Visual Basic front end. In most cases the likely user of most of the modules will not be outside counsel, at all, but may be the corporate law department, or the corporate law department supervising the Human Resources (HR) or Employee Benefits departments. Two of the modules do much of the work of generating SEC forms — one for Forms 3, 4 or 5 under § 16(a) and the other for Rule 144 filings. The other three modules currently available do accounting and tracking that may be appropriate to the corporate HR folks, for Employee Performance Plans, stock options, and Employee Stock Purchase Plans (ESPP), but can transfer information to the 144 or 16(a) modules, as may be appropriate. The modules are priced separately, and the user may purchase whatever combination seems to make sense for the organization’s SEC compliance needs. I assume that the Desktop may and probably will acquire additional available modules, as CCH continues its development. USING SEC COMPLIANCE DESKTOP The base of the program, of course, is the employee database, or at least the database of the employees who are involved with the various benefits that are trackable through the various modules. The user can enter all of the information by hand, but the program also has an import module that can feed a comma delimited plain ASCII text file into various fields in the data base. If the employee or other data is already available in database form, it should be possible to write it out of the old database into an appropriate transfer file and use the import feature to read it into SEC Compliance Desktop. I didn’t have an old database handy and didn’t attempt the import, but experience with similar facilities in other programs suggests that “should be possible” should not be taken to mean “automatic” or “will be easy.” It would be nice if more software manufacturers would create interfaces which would let programs communicate with each other at the click of a button. (This happens a lot, these days, between time and billing programs and accounting and case management programs.) Barring the automatic stuff, using comma delimited files should work. Similarly, the program has an “export” feature which should make it possible to export selected information already in the database to be imported into the database created and maintained by another program. Working with the program is easy: Select what you want to do from a list on the left side of the screen and an appropriate form pops up in the middle of the screen. The user can also deal with toolbar icons or pulldown menus to get to the same parts of the program. Once the information on employees and the stock and benefit positions they hold, acquire and dispose of is in the database, the user can run more than 130 separate reports, filtering information by a variety of different characteristics. Of course, the program will print Forms 3, 4 and 5 pursuant to § 16(a) and the Rule 144 forms, if you have the appropriate module. If you wish to file electronically, a built-in EDGAR module will “EDGARize” the report into a file that can be uploaded to EDGAR, the SEC’s Electronic Data Gathering, Analysis, and Retrieval system. The user will still need additional software and registration (easily available, of course) to do the actual electronic filing. The program also has a variety of SEC reports in template form that can be read into the included ScanSoft FormTyper module that I first came across as part of PaperPort. I am not sure why the feature is present as it does nothing connected to the database or other parts of the program, but it does work well. COST AND OTHER CONSIDERATIONS As sometimes happens with legal publishers, CCH is rather close-mouthed about how much it will actually charge for the program. The closest I could get is “from $1,495 to $17,995 for the first year” and annual fees of about one-third to one-half the initial cost thereafter. It all depends, it seems, on who you are (corporation, law firm, third party administrator) and how many modules you want and how many employees are in the database. And, we assume, how good a CCH customer you are, as your CCH sales rep may have the ability to shave the price, a bit, if you buy a lot of other things from CCH, or might be considering other purchase. At any rate, ask for a deal; it never hurts. I would think that most law firms would not be using this product themselves, unless they act as third party administrator’s of a client’s covered benefit plans. The firm might well, however, recommend software such software to a client’s law department. Again, the law department might handle the data input, but the corporation’s benefits or HR department might use it under the supervision of the law department. Other companies offer similar software or services — you might want to look at eTrade’s Equity Edge and OptionsLink ( www.etrade.com) if you have a need for this genre. As the SEC reconsiders a lot of things in light of the messes of the last few months, faster reporting requirements of employee stock trading are strong possibilities, if not probabilities. SEC Compliance Desktop should make it easy to comply. SUMMARY CCH’s SEC Compliance Desktop can help a small to medium sized publicly held corporation track employee stock benefits and comply with SEC reporting requirements relating thereto. DETAILS SEC Compliance Desktop Version 4.00.0013. Requires computer running Microsoft Windows 95 or later. Price: From $1,495 to $17,995 per module for stand-alone or network installation. CCH INCORPORATED, 4025 W. Peterson Ave., Chicago, IL 60646-6085. Phone: (800) 525-3335. Fax: (773) 866-3095. Web: www.cch.com. E-mail: [email protected]

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