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After a pilot program was created in 1997, and following a period of public comment, the regulations were made effective Oct. 1, 1998. Prospectuses must follow basic rules: "Use short sentences. Don't use legalese or industry jargon. Use bullet lists when information is embedded in a paragraph," Miller said. The regulations also call for documents to be "visually appealing, with shorter paragraphs and wider margins like magazines use," she added.

But the devil was in the details, according to IDT's Krock. Although the company received guidelines from the SEC, the first attempt at a plain English prospectus was sent back with demands for numerous changes, including minutia such as which words should be capitalized on the title page, he said.

"They had the document under review for four or five weeks out of the total four-month time," Krock said. IDT retained two outside law firms to help manage the process, and legal fees ended up being 50 to 100 percent higher than normal, he lamented. "The total cost is coming up on a couple million dollars, which is a heck of a burden for a $31 million deal."

The delay in completing the acquisition is causing other headaches, Krock said. "A lot of people are interested in this transaction, including employees and distributors. They don't appreciate a lot of uncertainty over its closure." Krock said the SEC-approved prospectus was filed on March 24, so the deal is now expected to close on April 30, about four to six weeks later than it normally would have.

IDT evidently is not the only company running into this problem. Cadence Design Systems is in the midst of a registration filing because of its planned takeover of Quickturn Design Systems, and "our experience has generally been that things are taking longer" than usual, a spokeswoman said. The plain English regulations "add to an already complicated process," she said. Cadence is looking toward merging Quickturn's products into Cadence's, "and anything that delays time-to- market in the technology sector is something we're concerned about."

But Miller of the SEC said "for as many comments about it taking a little longer, we've had as many about it making prospectuses better. There's always a learning curve. We see that once outside counsel have gone through this once or twice, subsequent filings will go much better and much more quickly."

The plain English regulations apply to stock prospectuses, but the SEC currently is examining whether to extend the requirement to periodic filings such as 10-K and 10-Q forms, Miller said. No timeframe has been set, she added.