0610003 Informal Interpretation

From:(redacted)

Sent:Tuesday, October 03, 2006 3:17 PM

To:Verne, B. Michael

Subject:Tender Offer Valuation Question

Mike,

Aquestion about tender offer valuations and filing fees.

X plans to acquire voting securities of the Targetthrough a tender offer. After the tender offer, X plans to hold 50% of theTarget's voting securities but will accept all shares tendered up to 100% ofthe Target's voting securities. Informal Interpretation # 263 states that X'svaluation should be based on the greatest amount of voting securities that itis prepared to hold. Is #263 still the PNO's position? In that case, would Xhave to value the transaction based on acquiring 100% of the Target's votingsecurities even if reaching that level is not likely?

X will not exceed the $280,000 filing fee thresholdunless it holds greater than 80% of the Target's voting securities. If Xacquires only 50% of the Target's voting securities, as planned, X must onlypay $125,000. X would like to know if there is any way that it can pay the$125,000 fee and then, if necessary, pay an extra $155,000 (for a total of$280,000) in the unlikely event that it holds voting securities in excess of$567 million through the tender offer?

Thanksfor your assistance