Question
From: (redacted)
Sent: Thursday, December 13, 2007 9:30 PM
To: Verne, B. Michael
Subject: Authority to DetermineFair Market Value
Mike,
I amwriting to confirm that the following delegation of authority to determine fairmarket value is valid for purposes of Rule 801.10(c)(3).
The proposedacquisition has been approved by the Presidential Committee of the acquiringperson's ultimate parent entity (UPE). The Presidential Committee, whichconsists of officers and directors of the UPE, sits below the UPE's Board ofDirectors and has the authority to approve the proposed acquisition. Theofficer-director who is responsible for the relevant business division (the"Officer") is authorized (i) to execute any transaction documentsapproved by the Presidential Committee; and (ii) to delegate his signingauthority to any senior employee that he may deem fit (the "AuthorizedEmployees"). There is no specific delegation of authority with respect tothe valuation of the target's shares for purposes of the HSR Act either (a)from the Board of Directors of the UPE to the Presidential Committee (b) fromthe Presidential Committee to the Officer; or (c) from the Officer to theAuthorized Employees. Neither the Officer nor the Authorized Employees arefinancial officers but they perform valuations in the ordinary course of theirduties and are familiar with the type of business being valued.
Underthese facts, would a fair market value determination made by the Officer or byone of the Authorized Employees be valid forHSR purposes, provided that it is done in good faith and within the 60-day timeframe specified in Rule 801.10(c)(3)?