Comment Letter to the U.S. Postal Service

Re: Eligibility Requirements for Standard Mail

June 9, 2004

Manager, Mailing Standards
U.S. Postal Service
1735 N. Lynn St., Room 3025
Arlington VA 22209-6038

Subject: Eligibility Requirements for Standard Mail

Dear Sir or Madam:

This letter is submitted on behalf of the American Society of Corporate Secretaries with regard to your proposals to amend the Domestic Mail Manual (DMM) standards concerning material eligible for mailing at Standard Mail postage rates. [Federal Register: April 19,2004 (Volume 69, Number 75)] [Proposed Rules] [Page 20841-20845].

The American Society of Corporate Secretaries, Inc. (ASCS) is a professional association founded in 1946, serving more than 4,000 corporate attorneys and other business executives who represent over 3,000 issuers. Job responsibilities of our members include working with corporate boards of directors and senior management regarding corporate governance; assuring issuer compliance with securities regulations and listing requirements; and coordinating activities with stockholders, including proxy voting for the annual meeting of stockholders and negotiation of stockholder proposals. The majority of ASCS members are attorneys. ASCS members are actively involved on behalf of their companies in the preparation and distribution of proxy material for their annual meetings of stockholders.

We appreciate the opportunity to comment on the proposals referred to above. Our interest in this proposal relates to the fact that public companies, in the aggregate, mail hundreds of millions of sets of proxy materials to their stockholders on an annual basis. These materials include an Annual Report to Stockholders, a Proxy Statement and a Proxy Card (used when the materials are sent through the transfer agent) or a Voting Instruction Form (used when the materials are sent through ADP Investor Communications Services on behalf of brokers and others who are record owners of shares beneficially owned by the broker, etc. customers). The materials include information to the stockholder on how to vote his or her shares through return mail, by telephone or on the Internet. These materials, and their content, constitute a centerpiece of the disclosures and corporate governance processes imposed upon publicly-traded issuers by the Securities Exchange Act of 1934 and administered by the Securities and Exchange Commission. The cost of mailing, most of which is sent Standard Mail, is a major, multi-million-dollar expense in the aggregate to the approximately 15,000 public companies in the United States.

In late 2003 the issuer community was informed by both ADP and several transfer agents that a number of offices of the USPS were considering a reclassification of proxy materials so as to require the use of First-Class mailing; this action by USPS was apparently based on an analysis of whether the routine proxy/stockholder information in the materials would constitute "personal information". Given the per-piece weight of proxy material mailings, a change to First-class rates would have cost issuers hundreds of millions of dollars in additional expense. Ultimately, we understand that ADP and the transfer agents were able to redesign proxy cards and the ADP Voting Instruction Form such that proxy material could continue to qualify for Standard Mail rates.

You allude to these events in your proposal when you state that "questions have been raised recently concerning printed material, including computer-generated personal information in mailpieces such as tax materials, warranties, proxy materials, financial services mailings such as credit card and equity loan advertisements, and others." However, there are no references in the proposed regulations themselves with regard to proxy material. The actual text neither provides guidance nor assurance to public companies with regard to the future status of their proxy material mailings. You do state the following in your general discussion, which we understand to be reflective of the revisions made in several proxy voting forms to avoid "personal information" status: "numbers that are not labeled or elsewhere defined in the mailpiece are not considered to be personal, even if information provided apart from the mailpiece reveals the numbers to he PINS or other personal information."

We recommend that the phrase quoted above be directly included in your regulations, so as to afford it a formal and binding status, In the alternative, we recommend that the regulations include an example relating to proxy materials which serves to illustrate how the proxy material data can avoid "personal information" status in accord with your position quoted above. We further recommend that dramatic and expensive changes in proxy material rate policy, as threatened in 2003 and quite contrary to past practice, be subject to a formal process of prior public notice and opportunity to comment.

Further, as a more general comment, the Society recommends that USPS should adopt the practices of federal agencies such as the Securities and Exchange Commission in 1) routinely publishing all USPS rule proposals on your website; 2) accept the submission of comments by email; and 3) publish all such email submissions on your website. These process improvements will make your rule-making process much more open, transparent and user-friendly to affected constituencies and the general public.

Please contact the undersigned if you would like any additional information with regard to these comments.

Very Truly Yours,

Cary Klafter
Chair, Public Company Affairs Committee
American Society of Corporate Secretaries

Society of Corporate Secretaries and Governance Professionals
521 Fifth Avenue New York NY 10175
212-681-2000 - Fax 212-681-2005

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