0705002 Informal Interpretation

From:(redacted)

Sent:Wednesday, May 02, 2007 6:32 AM

To:Verne, B. Michael

Subject:Restricted Stock valuation 801.10(c)

HiMike, hope all is well with you. In this transaction A is acquiring B bymerger. A is a publicly traded company. B shareholders will receive cash + Av/s. One shareholder (C") will receive restricted A v/s, C will have thepresent right to vote the A shares but not the present right to sell them, Cwill sign a stock restriction agreement that states the shares he receives willvest quarterly over 3 years, the first year, he will only vest in 1/3 of thetotal. He will be an officer of A.

Todetermine the value of the restricted A v/s to be received by C.

1.A v/s are publicly traded under 801.10(c)(1)the value would be the market price, the total market price here isapproximately $64 million.

2.However C is receiving restricted A v/s,therefore they are not publicly traded in that C may not sell them, so thevalue would be the acquisition price (which is undetermined) or the fair marketvalue as determined by C (Rule 801.10(c)(2) & (3)). C must make a goodfaith determination as to the present value of the restricted A v/s and if itreaches the threshold must file.

If Cdetermines the total value of the restricted A v/s does not presently reach thethreshold no filing is required at this time. If when the A v/s held by C dovest (are no longer restricted), prior to the vesting C must determine if thetotal value of the A v/s has reached the threshold (801.1(c)(1)), if so Cshould submit an HSR at that time (30-days prior to vesting) unless anexemption applies.