Company Name: Maverick Networks
Public Availability Date: January 26, 1999
Document Sections:LETTER OF INQUIRY
STAFF REPLY LETTER
[LETTER OF INQUIRY]
January 25, 1999 VIA TELECOPY Catherine T. Dixon, Esq.
Chief Counsel
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: Application of Section 3(a)(10) of the Securities Act of 1933
to Proposed Merger Dear Ms. Dixon: We represent Maverick Networks, a California corporation ("Maverick"). Maverick
is a private company and none of its outstanding securities are subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"1934 Act"). Maverick is in negotiations and is expected to enter into an
agreement and plan of merger (the "Merger Agreement") with Broadcom Corporation
(the "Buyer"). The Buyer has an outstanding a class of common stock (the "Class
A Common Stock") that is registered under the 1934 Act and traded on the Nasdaq
National Market. As contemplated by the negotiations which are ongoing, at the
effective time of the merger, each outstanding share of capital stock of
Maverick will be exchanged for shares of the Class B Common Stock of the Buyer
(other than fractional shares which will be converted into cash).1 The parties intend that the terms and conditions of the issuance of shares of
Class B Common Stock by the Buyer pursuant to the Merger Agreement will be
submitted for a determination of the fairness of such terms and conditions by
the California Department of Corporations, subject to notice and a hearing,
conducted in accordance with Section 25142 of the California Corporations Code
("Section 25142"). The approval of the California Department of Corporations as
to the fairness of the terms and conditions of the Merger Agreement under
Section 25142 will be obtained prior to the vote by the Maverick shareholders to
approve the Merger Agreement. Since the notice, hearing and fairness determination will be made in accordance
with Section 25142, the conditions for a Section 3(a)(10) exemption, as
described in Staff Legal Bulletin No. 3 (July 25, 1997), will be complied with.
We are of the opinion that the issuance of shares of Class B Common Stock
pursuant to the Merger Agreement in accordance with Section 25142 will be exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "1933 Act") pursuant to Section 3(a)(10) of the 1933 Act. Based on the foregoing, we are requesting that the staff of the Division of
Corporation Finance (the "Staff") of the Securities and Exchange Commission (the
"Commission") concur in our opinion that the validity of an exemption under
Section 3(a)(10) of the 1933 Act is not impaired by Section 18(b) of the 1933
Act with respect to securities that are listed or authorized for quotation on
the New York Stock Exchange, the Nasdaq National Market or the American Stock
Exchange. The Buyer is aware of and supports this request. Should you have any questions or comments regarding this matter, please contact
the undersigned at (202) 637-2242. We respectfully request confidential
treatment of this letter until January 26, 1999. Very truly yours, John J. Huber of LATHAM & WATKINS cc: Michael Hyatte, Esq. -----FOOTNOTES----- 1 The Class B Common Stock of Buyer is identical to its Class A Common Stock
except that the Class B Common Stock has ten votes per share and the Class A
Common Stock has one vote per share. Class B Common Stock is convertible by the
holder at any time into a like number of shares of Class A Common Stock and,
generally, will be mandatorily converted in connection with any transfer (except
for transfers to certain specified permitted transferees). The Class B Common
Stock is not registered under the 1934 Act. [STAFF REPLY LETTER]
January 25, 1999 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Maverick Networks Incoming letter dated January 25, 1999 Based on the facts presented, the Division shares your view that an exemptive
claim under section 3(a)(10) of the Securities Act for securities listed on the
New York Stock Exchange, the American Stock Exchange, or the National Market
System of the Nasdaq Stock Market in a transaction reviewed under section 25142
of the California Corporations Code would not be impaired by section 18(b) of
the Securities Act. Through a recent amendment to section 18(b)(4)(C) of the
Securities Act, securities that are otherwise covered securities, which are
generally exempt from regulatory requirements under state securities laws, are
removed from the definition of covered securities if they are offered and sold
in reliance on section 3(a)(10) of the Act. As a result, provisions under state
securities laws authorizing the approval of certain exchanges of securities may
again be used to perfect exemptive claims under section 3(a)(10) where the
securities would otherwise be covered securities. This position is based on the representations made to the Division in your
letter. Different facts or conditions might require different results. Pursuant
to rule 81(b), your request for confidential treatment has been granted. Sincerely, Michael Hyatte
Special Counsel
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