Dec 2, 1988

First Boston, Inc.

SEC-REPLY-1: SECURITY AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

RESPONSE OF THE OFFICE OF CHIEF COUNSEL

DIVISION OF CORPORATION FINANCE

RE: First Boston, Inc. ("Company")

Incoming letter dated October 25, November 23 and 30, 1988

While the question is not free from doubt, based on the facts presented, the Division will not recommend any enforcement action to the Commission if the Company, in reliance on your opinion that registration and qualification are not required, distributes the Deferred Cash Consideration Rights ("Rights") without compliance with the registration provisions of the Securities Act of 1933 or Securities Exchange Act of 1934 and the qualification requirements of the Trust Indenture Act of 1939. In reaching this position, we have particularly noted the following: (1) the Rights are an integral part of the consideration to be received in the proposed merger; (2) the holders of the Rights will have no rights common to stockholders such as voting and dividend rights, nor will the Rights bear a stated rate of interest; (3) the Rights will not be assignable or transferable except represented by any form of certificate or instrument.

Because thesepositions are based on the representations made in your letter, it should be noted that any different facts or conditions might require a different conclusion. Further, this letter only expresses the Division's position on enforcement action and does not purport to express any legal conclusions on the questions presented.

You have requested that your letter dated October 25, 1988 and our response thereto be afforded confidential treatment. In view of the provisions of the Freedom of Information Act, 5 U.S.C. 552 and 17 CFR 200.81, the staff has determined to grant your request and withhold the foregoing letters from public inspection and copying until the earlier of 30 days from the date of our letter or the mailing of the Company's definitive Proxy Statement. We understand that you will advise us of the mailing date of the definitive Proxy Statement.

Sincerely,

Abigail Arms

Deputy Chief Counsel

INQUIRY-1: SHEARMAN & STERLING

599 LEXINGTON AVENUE

AT FIFTY-THIRD STREET

NEW YORK, N.Y. 10022

212 848-4000

November 30, 1988

BY TELECOPIER

Office of Chief Counsel

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

First Boston, Inc.

Gentlemen:

Reference is made to our letter to you of October 25, 1988 requesting confidential treatment of certain documents, including the preliminary proxy statement of First Boston, Inc. ("First Boston") filed with the Securities and Exchange Commission (the "Commission") on October 17, 1988 (the "Preliminary Proxy Statement") and the Rule 13e-3 Transaction Statement as filed with the Commission on October 17, 1988 (the "Rule 13e-3 Transaction Statement"), submitted to you with our no-action request made on the same date.

Pursuant to my conversation with Robert Rosenblum today, on behalf of First Boston, we respectfully request that the Preliminary Proxy Statement be kept confidential pursuant to Rule 14a-6(f) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and that the Rule 13d-3 Transaction Statement be kept confidential in accordance with General Instruction G to Schedule 13E under the Exchange Act, and not pursuant to the provisions of 17 C.F.R. § 200.81(b) as previously requested.

Very truly yours,

Bonnie Greaves

INQUIRY-2: SHEARMAN & STERLING

599 LEXINGTON AVENUE

AT FIFTY-THIRD STREET

NEW YORK, N.Y. 10022

212 848-4000

(212)848-7670

November 23, 1988

BY HAND

Office of Chief Counsel

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street N.W.

Washington, D.C. 20549

First Boston, Inc.

Gentlemen:

Reference is made to my letter to you of October 25, 1988, a copy of which is enclosed. In a telephone conversation yesterday, we were advised by Robert H. Rosenblum of your request that we modify our previous request for confidential treatment of the Documents (as such term is defined in my letter of October 25). Accordingly, we hereby request, on behalf of First Boston, Inc. ("First Boston") that the Documents not be published or made available to any person until the earlier to occur of (a) the mailing of First Boston's definitive Proxy Statement to its stockholders in connection with the Special Meeting described therein or (b) 30 days after the Staff's response to the no-action request letter has been sent to First Boston. Also at your request, we agree to advise you when First Boston's definitive Proxy Statement is mailed to its stockholders.

Very truly yours,

Bonnie Greaves

INQUIRY-3: SHEARMAN & STERLING

599 LEXINGTON AVENUE

AT FIFTY-THIRD STREET

NEW YORK, N.Y.10022

212 848-4000

October 25, 1988

BY HAND

Office of Chief Counsel

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

First Boston, Inc.

Gentlemen:

On behalf of First Boston, Inc. ("First Boston"), we hereby respectfully request that the following documents (collectively, the "Documents") be treated as non-public and confidential matters pursuant to the provisions of 17 C.F.R. § 200.81(b):

(1) the enclosed no-action request letter dated October 25, 1988 and Schedule I thereto;

(2) First Boston's Preliminary Proxy Statement as filed with the Securities and Exchange Commission (the "Commission") on October 17, 1988 enclosed with the no-action request letter;

(3) the Rule 13e-3 Transaction Statement as filed with the Commission on October 17, 1988 enclosed with the no-action request letter;

(4) any written response to the no-action request letter by the Staff of the Division of Corporation Finance; and

(5) this letter.

We further request that the Documents, and any information contained therein, not be published or made available to any person until the earlier to occur of (a) the mailing of FirstBoston's definitive Proxy Statement to its stockholders in connection with the Special Meeting described therein or (b) 120 days after the Staff's response to the no-action request letter has been sent to First Boston.

We request that the Documents be treated as non-public and confidential matters for the requested period of time for the reason that First Boston's Preliminary Proxy Statement filed with the Commission for its review constitutes confidential and non-public information pursuant to Rule 14a-6(f) under the Securities Exchange Act of 1934, as amended.

Pursuant to 17 C.F.R. § 200.81(b) we request that the Staff advise us if it determines to deny this request for confidential treatment. We further request, on behalf of First Boston, the opportunity to submit additional material substantiating this claim should the Staff not comply with our request.

If you have any questions or wish to discuss the matter further, please call the undersigned collect at (212) 848-7670 or John J. Madden of this office at (212) 848-7055.

Very truly yours,

Bonnie Greaves

SHEARMAN & STERLING

599 LEXINGTON AVENUE

AT FIFTY-THIRD STREET

NEW YORK, N.Y. 10022

212 848-4000

October 25, 1988

BY HAND

Office of Chief Counsel

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

First Boston, Inc.

Gentlemen:

On behalf of First Boston, Inc. ("First Boston"), we respectfully request that the Staff of the Division of Corporation Finance advise us that it would not recommend any enforcement action to the Securities and Exchange Commission (the "Commission") if the Deferred Cash Consideration Rights described in this letter were included as part of the consideration to be paid to the public stockholders of First Boston upon consummation of the merger transaction also described in this letter (the "Merger") without registration of the Deferred Cash Consideration Rights under the Securities Act of 1933, as amended (the "Securities Act"), or qualification of an indenture relating thereto under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and if the surviving corporation of the Merger did not register the Deferred Cash Consideration Rights under, and comply with the periodic reporting requirements of, the Securities Exchange Act of 1934, as amended (the "Exchange Act"). On October 17, 1988, First Boston filed with the Commission a preliminary proxy statement relating to the Merger (the "Proxy Statement") pursuant to Rule 14a-6 promulgated under the Exchange Act, and a Rule 13e-3 Transaction Statement pursuant to Rule 13e-3 under the Exchange Act. Copies of the Proxy Statement and the Rule 13e-3 Transaction Statement are enclosed for your convenience.

Background

First Boston is an international investment bank which provides, through its subsidiaries, a full range of investment banking, sales and trading and related financial services to corporations, institutions, governments, individuals and international agencies. First Boston's common stock (the "First Boston Common Stock") is registered under Section 12(b) of the Exchange Act and is listed and principally traded on the New York Stock Exchange. First Boston has been subject to the reporting requirements of Section 13 of the Exchange Act since 1976. Approximately 40% of the First Boston Common Stock is currently held by Financiere Credit Suisse-First Boston, a Swiss corporation ("Financiere"), 60% of the common stock of which is, in turn, held by CS Holding, a Swiss corporation ("CS Holding"),and 40% of which is held by First Boston.

Proposed Transaction

First Boston has entered into an agreement and plan of merger and stock purchase agreement dated as of October 9, 1988 (the "Merger Agreement") with Financiere, CS Holding and FBC Acquisition Corp., a Delaware corporation the stockholders of which are certain members of the senior management of First Boston ("Acquisition"), pursuant to which, upon receipt of the approval of the stockholders of First Boston and the satisfaction of certain other conditions, Acquisition will be merged with and into First Boston, which will be the surviving corporation and renamed CS First Boston Inc. ("CS First Boston"). As a result of the Merger and certain related transactions (collectively, the "Transaction"), First Boston will become a private company, the common stockholders of which are expected to be CS Holding, which will hold 44.5% of the common stock of CS First Boston (the "CS First Boston Stock"), certain management employees of First Boston and Financiere (the "Management Investors"), who will hold an aggregate of 25% of the CS First Boston Stock, and SSO Limited, a British Virgin Islands company owned by Mr. Suliman S. Olayan (the "Temporary Investor"), which will hold 30.5% of the CS First Boston Stock. The acquisition of equity of CS First Boston by the Management Investors, and by the Permanent Investors as described below, will be made in transactions exempt from the registration requirements of the Securities Act. Following consummation of the Merger, an application will be filed pursuant to Rule 12d2-2 under the Exchange Act to delist the First Boston Common Stock from the New York Stock Exchange and to terminate its registration under the Exchange Act. Thereafter, it is intended that CS First Boston will not be subject to the reporting requirements of the Exchange Act.

The Temporary Investor is a participant in the Transaction in order to facilitate the consummation of the Merger by December 31, 1988. Because of significant potential adverse tax consequences which may result from consummation of the Transaction after December 31, 1988, the Merger Agreement provides that it may be terminated if the Merger is not consummated by that date. In light of this time constraint, the Temporary Investor has agreed to acquire and hold up to 30.5% of the CS First Boston Stock until such timeas it may be sold to permanent investors to be identified (each a "Permanent Investor" and, collectively, the "Permanent Investors"). If Permanent Investors are identified prior to the effective time of the Merger (the "Effective Time"), they may invest in Acquisition in lieu of, or in conjunction with, the Temporary Investor, in which event the Temporary Investor's ownership interest in CS First Boston will be correspondingly reduced. The Temporary Investor will receive a fee from CS First Boston for its services as such and will be indemnified by First Boston against certain liabilities incurred by it as a result of its participation in the Transaction.

Deferred Cash Consideration Rights

In the Merger, stockholders of First Boston will receive, in exchange for each share of First Boston Common Stock held, $ 52.50 in cash (the "Per Share Amount") and, subject to the receipt of the No-Action Letter described in more detail below, one non-transferable deferred cash consideration right (a "Deferred Cash Consideration Right"). Each Deferred Cash Consideration Right will represent the contingent right of the holder thereof to receive additional cash payments with respect tothe First Boston Common Stock of such holder disposed of in the Merger upon the occurrence of either of two events specified in the Merger Agreement.

The first of these two events is the purchase (a "Permanent Investor Purchase") by a Permanent Investor of common stock of Acquisition prior to the Effective Time or of CS First Boston Stock at or about the Effective Time. In that event, each holder of a Deferred Cash Consideration Right will be entitled to receive a pro rata interest in 50% of the amount by which the purchase price paid, or contribution made, by the Permanent Investor to Acquisition or CS First Boston, as the case may be, exceeds, in effect, the purchase price which would have been payable by the Temporary Investor for such shares after deduction of the expenses incurred by Acquisition or CS First Boston in connection with the Permanent Investor Purchase. Payment will be made as soon as practicable after the Merger.

The second event which will trigger a payment under the Deferred Cash Consideration Rights is the sale (a "Temporary Investor Sale") by the Temporary Investor of any of its CS First Boston Stock within one year after the date of the Merger Agreement and its receipt during such period of net proceeds in an amount in excess of the purchase price paid by the Temporary Investor for the CS First Boston Stock sold. In that event, each holder of a Deferred Cash Consideration Right will be entitled to receive a pro rata share of 50% of such excess net proceeds. The net proceeds of a Temporary Investor Sale will be calculated as set forth in the Merger Agreement by deducting from gross proceeds various amounts, including an amount equal to 2% of the gross proceeds, which will be payable to CS First Boston, the expenses incurred by the Temporary Investor in connection with such Temporary Investor Sale, including investment banking placement fees, and any increase in the proceeds received by the Temporary Investor which is attributable to actions taken by CS First Boston to increase the marketability of the CS First Boston Stock, such as an increase in normal dividends payable thereon. *

* If, in connection with or as part of any Temporary Investor Sale, CS First Boston issues additional securities to a Permanent Investor or one of its affiliates, each holder of a Deferred Cash Consideration Right would be entitled to receive a pro rata share of 50% of the sum of (1) the excess net proceeds received by the Temporary Investor and (2) the gross proceeds received by CS First Boston for such securities less (a) the amount which CS First Boston reasonably would have received if the securities had been issued to a third party in an arms-length transaction unrelated to the sale by the Temporary Investor and (b) its fees and expenses.

Any amounts to be paid with respect to the Deferred Cash Consideration Rights as a result of a Permanent Investor Purchase or a Temporary Investor Sale will be distributed by or on behalf of CS First Boston to the holders of Deferred Cash Consideration Rights. The Temporary Investor will be contractually obligated to pay to CS First Boston or another entity to be designated all excess net proceeds of Temporary Investor Sales, and CS First Boston will have no obligation to make payments under the Deferred Cash Consideration Rights with respect to such excess net proceeds unless payments are first received from the Temporary Investor. The relevant sections of the Merger Agreement providing for these payments and setting forth these calculations have been extracted and set forth on Schedule I hereto for the convenience of the Staff.

The Merger Agreement provides that the stockholders of First Boston will not be entitled to receive any predetermined amount in respect of the Deferred Cash Consideration Rights and may receive, for each share of First Boston Common Stock held, nothing more than the Per Share Amount. The Merger Agreement also provides that the Temporary Investor will not be obligated, and none of the parties to the Merger Agreement will be obligated to use any efforts to cause the Temporary Investor, to sell its CS First Boston Stock at any time or for any price, and neither the Temporary Investor nor any party to the Merger Agreement will be required to solicit any potential purchaser of the Temporary Investor's CS First Boston Stock or take any action to affect favorably the purchase price to be paid to the Temporary Investor for its CS First Boston Stock. In addition, the Merger Agreement states that CS First Boston will have no obligation to sell any CS First Boston securities as part of or in connection with a Temporary Investor Sale. It also provides that any offer by a potential Permanent Investor may be rejected for any reason, without regard to the price being offered.

The special committee (the "Special Committee") of the Board of Directors of First Boston negotiated the terms of the Deferred Cash Consideration Rights on behalf of First Boston's public stockholders in order to ensure that they would share in the net proceeds of sales of securities to any Permanent Investor within one year after the date of the Merger Agreement ata price in excess of the Per Share Amount. Their rationale in so doing was to afford First Boston stockholders price protection on the disposition of their stock in the Merger similar to the price protection often found in privately negotiated agreements between sophisticated parties. The Deferred Cash Consideration Rights represent nothing more than a contractual mechanism for adjusting the Per Share Amount on the basis of a contingent and exogenous event -- the sale within one year of CS First Boston securities.

CS Holding, Financiere and Acquisition believe that, after consummation of the Transaction, CS First Boston should not be subject to the reporting and other disclosure requirements under the Exchange Act, and the Merger Agreement recites the understanding and agreement of the parties that CS First Boston does not intend to become or remain a company subject to such requirements. As a result, the right of the First Boston stockholders to receive Deferred Cash Consideration Rights is conditioned upon the receipt by First Boston prior to the Effective Time of a favorable letter (a "No-Action Letter") from the Staff in form and substance satisfactory to CS Holding, Financiere and Acquisition indicating that the Staff will not recommend enforcement action if CS First Boston does not register the Deferred Cash Consideration Rights under the Exchange Act or continue to file periodic reports under the Exchange Act after the Merger. The Merger Agreement also provides that any No-Action Letter conditioned on CS First Boston becoming subject to such reporting and other disclosure requirements will not be satisfactory to CS Holding, Financiere or Acquisition. If the condition is not satisfied or waived, the Merger Agreement may be terminated by First Boston if its Board of Directors or the Special Committee determines that the consummation of the Merger without the issuance of the Deferred Cash Consideration Rights is not in the best interests of the public stockholders of First Boston.

The Deferred Cash Consideration Rights will not be evidenced by any form of certificate or other instrument and will not be assignable or otherwise transferable except by will or by operation of the laws of descent. They will not pay any dividends or bear any interest or other rate of return and will have no voting rights. The Deferred Cash Consideration Rights will representno right other than the contingent right to receive additional cash Merger consideration under certain specifically defined and limited circumstances.

It is our view that the registration requirements of the Securities Act and the Exchange Act, as well as the requirement to qualify an indenture with respect to the Deferred Cash Consideration Rights, are not applicable to the Deferred Cash Consideration Rights, and that CS First Boston should not be required as a result of the grant of the Deferred Cash Consideration Rights to comply with the reporting requirements of the Exchange Act.

Discussion

Securities Act of 1933

Although the term "security" is broadly defined in Section 2(1) of the Securities Act, we do not believe that the Deferred Cash Consideration Rights come within such definition and therefore are not required to be registered under the Securities Act in connection with the Merger or otherwise.

The Deferred Cash Consideration Rights are not readily identifiable as any of the securities specified in the Securities Act's definition. They also will not possess any of the characteristics of a security. The Deferred Cash Consideration Rights will not be evidenced by a certificate or other instrument. They will not be transferable except by will or by operation of the laws of descent and will be of only limited duration. The holders of Deferred Cash Consideration Rights will have no rights common to shareholders, such as the right to vote, and will receive no dividends or interest. The Deferred Cash Consideration Rights will not represent any equity or ownership interest in First Boston or CS First Boston.

A Deferred Cash Consideration Right is not, in our view, an investment contract. It is, instead, a vehicle whereby the public stockholders of First Boston will share in the benefit of acquisitions of CS First Boston securities by Permanent Investors at prices in excess of the Per Share Amount. The public stockholders of First Boston will not receive the Deferred Cash Consideration Rights in exchange for a cash investment, but rather as part of the consideration for their shares of First Boston Common Stock disposed of in the Merger, deferred on a non-interest bearing basis until the sale to a Permanent Investor is consummated. Rather than an investment contract, the Deferred Cash Consideration Rights should be viewed as a price protection mechanism for First Boston stockholders designed to provide them with the possibility of receiving additional deferred cash consideration for their First Boston Common Stock.

The Staff has on several occasions taken the view that contractual deferred payments having the same essential characteristics as the Deferred Cash Consideration Rights do not require registration under the Securities Act. See Essex Communications Corp. (available June 28, 1988); Slater Development Corp. (available May 9, 1988); Chicago Milwaukee Corporation (available March 20, 1987).

Slater Development Corp. involved a going-private transaction effected by means of a merger in which each share of the common stock of Slater was converted into the right to receive a stated amount of cash plus a non-transferable deferred cash consideration right representing a pro rata interest in the proceeds of Slater's pending patent litigation or the residual value of the patent rights after resolution of such litigation. One of the factors to be considered in determining the residual value of the patent rights was the revenues to be derived from their future licensing. In stating its conclusion not to recommend enforcementaction if the deferred cash consideration rights were not registered under the Securities Act, the Staff noted that (1) the rights were an integral part of the consideration for the proposed merger, (2) the rights would not be evidenced by a certificate or other instrument, (3) the rights would not be transferable and (4) any amount ultimately paid to Slater's shareholders pursuant to the rights would not depend on the operating results of Slater.

Similarly, in Chicago Milwaukee Corporation, the Staff took the view that deferred payment rights need not be registered under the Securities Act. In Chicago Milwaukee, in connection with the merger of CMC Real Estate Corporation into a wholly-owned subsidiary of Chicago Milwaukee Corporation, each share of CMC common stock was to be exchanged for cash and one non-transferable deferred cash consideration right. Each such right would represent the right to receive the sum of (a) either the proceeds actually received by CMC from the sale or other disposition of commuter rail lines then subject to pending eminent domain condemnation proceedings or the appraised fair market value of the properties and (b) the rental payments received by CMC during the interim between the execution of the merger agreement and the disposition or appraisal of the properties. In stating its conclusion not to recommend enforcement action if the rights were not registered under the Securities Act, the Staff noted that (1) the rights were part of the consideration for the merger, (2) the rights did not represent an ownership interest in CMC or Chicago Milwaukee, (3) the rights would not be transferable except by operation of law or by will and (4) the rights would not be represented by any form of certificate or instrument. In addition, notwithstanding that payments to be made pursuant to the rights would depend in part on rental payments received on the properties, the Staff also accepted as a fact the conclusion that any amount ultimately paid to Slater's shareholders pursuant to the rights would not depend upon the operating results of CMC or Chicago Milwaukee.

The Deferred Cash Consideration Rights possess all of the key features of the rights granted in Slater and Chicago Milwaukee and in other instances in which no-action letters have been issued by the Staff. See Essex Communications Corp. (available June 28, 1988); Star Supermarkets, Inc. (available December 22, 1982). They will not be transferable except by will or by operation of the laws of descent. They will not be evidenced by certificates or other instruments. They will not represent an ownership interest in either First Boston or CS First Boston. To the extent that the Deferred Cash Consideration Rights have any value, they, like the rights issued in Slater and Chicago Milwaukee, will constitute an integral, though deferred, component of the cash consideration to be paid in a merger transaction contingent upon the occurrence of a specific event. In considering the Merger Agreement, the stockholders of First Boston will not be making a decision whether to purchase Deferred Cash Consideration Rights. Rather, they will determine whether to dispose of their current investment in First Boston for a cash payment of $ 52.50 per share plus an additional contingent cash payment to be made if certain events occur.

We also do not believe that the Deferred Cash Consideration Right are notes, bonds, debentures or evidences of indebtedness within the meaning of Section 2(1) of the Securities Act. The Deferred Cash Consideration Rights represent only a contingentright to receive a pro rata portion of certain proceeds of the sale of CS First Boston securities. Since there can be no assurance or reasonable expectation that any particular amount will be received, the Deferred Cash Consideration Rights cannot represent any obligation to pay a predetermined specified amount. Moreover, the Deferred Cash Consideration Rights will not be evidenced by certificates or other instruments, will bear no interest or other rate of return and will not constitute notes, bonds, debentures or evidences of indebtedness as such terms are generally understood.

Based on all of the foregoing, we believe that the Deferred Cash Consideration Rights are not securities within the meaning of Section 2(1) of the Securities Act and, accordingly, should not be subject to the registration requirements of the Securities Act. Moreover, we believe that the registration of the Deferred Cash Consideration Rights would not further the disclosure purposes of the Securities Act. Those purposes will be served by furnishing First Boston stockholders with a definitive Proxy Statement containing the extensive disclosure required under Schedule 14A and Schedule 13E-3 promulgatedunder the Exchange Act.

Securities Exchange Act of 1934

Section 12(g) of the Exchange Act requires registration of "equity securities", as defined in Section 3(11) of the Exchange Act, of certain issuers. Section 3(11) defines the term "equity security" by reference to the term "security", the definition of which, set forth in Section 3(10) of the Exchange Act, is similar to that found in Section 2(1) of the Securities Act. Registration of an equity security under Section 12(g) results in the imposition of reporting requirements under Section 13 of the Exchange Act.

We do not believe that registration of the Deferred Cash Consideration Rights under Section 12(g) should be required since, applying the foregoing rationale, the Deferred Cash Consideration Rights are not "equity securities" for purposes of Section 12(g). Moreover, since the Deferred Cash Consideration Rights will not be assignable or otherwise transferable except by will or by operation of the laws of descent, no interest would be served by subjecting CS First Boston to the reporting requirements of Section 13 of the Exchange Act and making information about CS First Boston available to the general public. SeeEssex Communications Corp. (available June 28, 1988).

Trust Indenture Act of 1939

We believe that, since the Deferred Cash Consideration Rights are not securities, the requirement of the Trust Indenture Act to qualify an indenture with respect thereto is inapplicable. Even if the Deferred Cash Consideration Rights were securities, however, we believe that they would be exempted from the application of the Trust Indenture Act by Section 304(a)(1), which states that the provisions of the Trust Indenture Act do not apply to "any security other than (A) a note, bond, debenture, or evidence of indebtedness, whether or not secured, or (B) a certificate of interest or participation in any such note, bond, debenture, or evidence of indebtedness, or (C) a temporary certificate for, or guarantee of, any such note, bond, debenture, evidence of indebtedness, or certificate". As previously discussed, a Deferred Cash Consideration Right will not represent an obligation to pay a specified amount, will not be evidenced by a certificate or other instrument, will bear no interest or other rate of return and will not constitute a note, bond, debenture or evidence of indebtedness as such terms are currently understood.

Conclusion

On the basis of the foregoing, we believe that the Deferred Cash Consideration Rights are not securities for purposes of the Securities Act, the Exchange Act or the Trust Indenture Act,and that the purposes of these statutes will be served by providing the First Boston stockholders with a definitive Proxy Statement in connection with their consideration of the Merger Agreement, the only time at which they will make an investment decision with respect to the Transaction. Accordingly, we respectfully request that the Staff advise us that it would not recommend any enforcement action to the Commission if the Merger were consummated without registration of the Deferred Cash Consideration Right under the Securities Act or qualification of an indenture relating thereto under the Trust Indenture Act and if CS First Boston did not register the Deferred Cash Consideration Rights under, or comply with the periodic reporting requirements of, the Exchange Act.

First Boston proposes to mail the Proxy Statement to its stockholders on Wednesday, November 23, 1988, for a stockholders' meeting to be held on Thursday, December 22, 1988, and to indicatein the Proxy Statement when mailed whether or not the Deferred Cash Consideration Rights will be issued. Accordingly, your expedited attention to this letter would be greatly appreciated. If you have any questions or wish to discuss this further, please call Bonnie Greaves collect at (212) 848-7670 or John J. Madden collect at (212) 848-7055. In addition, if the Staff believes that it may not agree with the conclusions expressed in this letter, or if the Staff believes it beneficial for any other purpose, we request the opportunity to confer with the Staff prior to a written response to this letter.

Please acknowledge receipt of this letter by date stamping the enclosed copy and returning it to our office in the enclosed self-addressed stamped envelope.

Very truly yours,

SHEARMAN & STERLING