Question
From: (redacted)
Sent: Tuesday, July 19, 2005 5:03 PM
To: Verne, B. Michael
Subject: Merger withVoting/Non-voting Stock
Hi Mike,
I am writing toyou with a question about a merger. The target has about 3,000 shares of Class AVoting Common Stock and 2,000,000 shares of Class B Nonvoting Common Stock. TheClass B Nonvoting Common Stock is not convertible into Class A Voting CommonStock (nor into voting stock of any kind), and does not currently entitle itsholders to vote for directors. There are also some Options to purchase sharesof the Class B Nonvoting Common Stock.
The aggregatepurchase price for the target is approximately $73 million. The purchase priceto be paid, at the effective time of the merger, for each share of Class AVoting Common Stock and Class B Nonvoting Common Stock will be the same. TheOptions to purchase shares of the Class B Nonvoting Common Stock will also becashed out at the time of the merger.
The aggregateconsideration to be paid to the holders of the Class A Voting Common Stock willbe slightly more than $100,000 but well below the size of transactionthreshold.
The attachedinformal interpretation seems to indicate that the parties should expresslyallocate the purchase price consideration in the agreement between the parties.I want to make sure that this interpretation is still the PremergerNotification Office's position, and that if the Agreement and Plan of Mergerwere to include a provision stating the value of the purchase price to be paidto the holders of shares of Class A Voting Common Stock that would besufficient to make the purchase price determined for the purpose of 16 C.F.R.801.10(a)(2)(i). We would accordingly conclude that no filing is required asthe size of transaction thresholds would not be met.