Question
From: (redacted)
Sent: Thursday, September 23, 2004 11:47 AM
To: Verne,B. Michael
Subject: Determination ofvalue of voting securities under 16 CFR 801.10
Dear Michael,
This message isto confirm our conversation yesterday regarding the calculation of the value ofvoting securities to be acquired.
As I describedto you, the proposed acquired person I am analyzing is of a Canadian publiccompany with voting securities traded on a Canadian stock exchange. Theagreement relating to the proposed acquisition states a fixed amount (inCanadian dollars) of consideration to be paid for each share of the acquiredperson.
Under 801.10(a)(1), the value of the voting securities is the market price of thesecurities or, if the acquisition price has been determined, the greater of themarket price and the acquisition price.
Under 801.10(c)(1)(ii), the market price of the voting securities is the lowest closingquotation within the 45 or fewer calendar days which are prior to theconsummation of the acquisition but not earlier than the execution of theacquisition agreement. I have previously been advised by one of your colleaguesthat, for purposes of making this calculation, each closing price should beconverted to U.S. dollars using the exchange rate for that date.
As we discussed,although the acquisition price is fixed in Canadian dollars, the U.S. dollarequivalent changes from day to day according to the exchange rate. You advisedme that in light of the continuing variation of the acquisition price(expressed in U.S. dollars), we may consider that the acquisition price has notbeen determined (within the meaning of 801.10(a)) and base the valuationof the securities to be acquired solely on the market price calculationdescribed above.
If I havemisstated your advice, please let me know.