SEC Release 33-6100

Release No. 33-6100

Release 34-16075

IC-10805

Going Private Transactions by Public Companies or Their Affiliates

ACTION: Final rules.

SUMMARY: The Commission announces the adoption of a new rule and schedule relating to going private transactions by public companies or their affiliates. The rule and schedule prohibit fraudulent, deceptive and manipulative acts or practices in connection with going private transactions and prescribe new filing, disclosure and dissemination requirements as a means reasonably designed to prevent such acts and practices. This action is necessary and appropriate in the public interest and for the protection of investors because of the continued occurrence of going private transactions, the variety of methods employed in such transactions, and the possible deleterious effects to investors and their confidence in securities markets absent full and adequate disclosure.

EFFECTIVE DATE: September 7, 1979.

FOR FURTHER INFORMATION CONTACT: John Granda or John Huber (202-755-1750), Securities and Exchange Commission, 500 North Capitol Street, Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission today announced the adoption of a new Rule 13e-3 and related Schedule 13E-3 pursuant to Sections 17(a) and 19 of the Securities Act of 1933 (the "Securities Act") (15 U.S.C 77a et seq., as amended by Pub. L. No. 94-29 (June 4, 1975) and Sections 3(b), 10(b), 13(e), 14(a), 14(c), 14(e), and 23(a) of the Securities Exchange Act of 1934 (the "Exchange Act") (15 U.S.C 78a et seq., as amended by Pub. L. No. 94-29 (June 4, 1975)) with respect to going private transactions by public companies or their affiliates. The Rule and Schedule are intended to augment and implement the present statutory provisions by prohibiting fraudulent, deceptive and manipulative acts or practices in connection with going private transactions and by prescribing new filing, disclosure and dissemination requirements as a means reasonably designed to prevent such acts and practices.

The Commission is also concurrently publishing for comment a proposed amendment to Schedule 13E-3 which would require disclosure of projections of revenues, income (loss), or earnings (loss) per share under certain circumstances. In addition, the Commission is concurrently adopting Rule 13e-4 and related Schedule 13E-4 which provide substantive regulation and disclosure requirements with respect to tender offers by certain issuers for their own securities. Since these tender offers may involve going private transactions, attention is directed to the provisions of that rule and schedule.

Rule 13e-3 and Schedule 13E-3 are based primarily on the proposals published for comment by the Commission in November 1977 ¹ (the "1977 proposals" or the "former proposals"), the 49 letters of comment received in response thereto, ² and the Commissions experience. The release announcing the 1977 proposals (the "1977 release") included an extended discussion of the nature of going private transactions, the development of the 1977 proposals, and, most significantly, the need for Commission rules governing these transactions and its statutory authority to adopt such rules. In addition to questioning the need for the proposals, the commentators were especially critical of the breadth of their application as well as the requirement that a Rule 13e-3 transaction be fair to unaffiliated security holders. Although the proposals have been revised, as described below, to address those, as well as certain other concerns raised by the commentators, the Commission continues to believe that the views expressed in the 1977 release are sound and therefore specifically affirms those views. ³

Most of the commentators were opposed to the requirement in the 1977 proposals that a Rule 13e-3 transaction must be both substantively and procedurally fair to unaffiliated security holders. A number of these commentators expressed the view that the Commission does not have the authority to adopt such a requirement. They also maintained that, in the absence of an explicit legislative mandate to regulate the fairness of going private transactions, the Commission should, as a matter of policy, refrain from doing so because substantive regulation of corporate affairs is, in their view, a subject for state and not federal cognizance. It was noted in this regard that recent decisions by state courts indicate that state law provides protection to unaffiliated security holders if control persons act unfairly when taking a company private. ⁴ The imposition of a federal fairness requirement was also criticized because it would, in their view, result in the staff making decisions concerning the fairness of a proposed transaction in connection with its review of registration statements, preliminary proxy materials and tender offer documents relating to going private transactions. These commentators believe that the staff would not have the resources and expertise to handle such a role.

The Commission believes that the question of regulation of the fairness of going private transactions should be deferred until there is an opportunity to determine the efficacy of the provisions of Rule 13e-3. Further developments in the remedies provided by state law for unfairness in going private transactions will also be important in this regard. In the interim, the Commission believes that the protection of investors will be enhanced substantially by the more meaningful disclosure, particularly with respect to the fairness of going private transactions, and the other protections afforded by Rule 13e-3.

Several commentators criticized the application of the 1977 proposals to transactions which in their view do not involve the potential for abuse and overreaching associated with the normal going private transaction. Thus, they were of the view that the following types of transactions, among others, should not be covered: (i) merges following an any and all tender offer by a bidder who, as a result of the tender offer, becomes a affiliate if the same price were being paid in each transaction; (ii) exchange offers to holders of non-redeemable preferred stock or convertible debentures; (iii) transactions structured to create a holding company or reincorporate the entity in a new jurisdiction; and (iv) mergers with the exchange offers by affiliates in which unaffiliated security holders would receive common stock of the surviving entity. In response to these comments, exceptions for such transactions are now provided by paragraphs (g)(1) and (g)(2) of Rule 13e-3, assuming that the other conditions of those provisions are satisfied.

DISCUSSION

(a) Overview of Application of Rule 13e-3

Rule 13e-3 and Schedule 13E-3 operate in essentially the manner proposed. Thus, the application of the rule will depend on three factors: (1) whether the transaction involved is a Rule 13e-3 transaction; (2) if so, whether an exception from the application of Rule 13e-3 is available; and (3) if no exception is available, whether the equity securities which are the subject of the Rule 13e-3 transaction are of a class which is registered pursuant to Section 12 of the Exchange Act or of a class of an issuer which is required to file periodic reports pursuant to Section 15(d) of the Exchange Act.

A Rule 13e-3 transaction is defined to mean any transaction or series of transactions involving one or more of the transactions specified in paragraph (a)(4)(i) which has either a reasonable likelihood or purpose of producing, directly or indirectly, any of the effects specified in paragraph (a)(4)(ii). The specified transactions are: (a) a purchase of any equity security by the issuer of such security or by an affiliate of such issuer; (b) a tender offer or request or invitation for tenders of any equity security made by the issuer of such class of securities or by an affiliate of such issuer; or (c) a solicitation or distribution subject to Regulation 14A §§240.14a-1 to 240.14a-103 or Regulation 14C §§240.14c-1 to 14c-101 in connection with certain corporate events. The corporate events include a merger, consolidation, reclassification, recapitalization, reorganization or similar corporate transaction by an issuer or between an issuer (or its subsidiaries) and its affiliates; a sale by the issuer of substantially all of its assets to its affiliate; or a reverse stock split of any class of equity securities of the issuer involving the purchase of fractional interests.

As proposed, the effects selected to trigger the application of Rule 13e-3 were entirely in the disjunctive. As noted by the commentators, this produced the unintended result of applying Rule 13e-3 to specified transactions which had the reasonable likelihood or purpose of causing, for example, a class of equity securities of the issuer to be subject to delisting from an exchange, even though the securities would have continued to be authorized to be quoted on an inter-dealer quotation system of a registered national securities association. As revised, Rule 13r-3 is triggered by a specified transaction which has either the reasonable likelihood or purpose of causing either (i) the termination of reporting obligations under the Exchange Act, by virtue of the class of securities being held of record by less than 300 persons, or (ii) the securities to be neither listed on any exchange nor authorized to be quoted ⁵ on an inter-dealer quotation system of any registered national securities association. Accordingly, in the above illustration, delisting of a class of equity securities from an exchange would not trigger the application of Rule 13e-3 if the securities were nevertheless authorized to be quoted on an inter-dealer quotation system of a registered national securities association.

The tests of "a reasonable likelihood" or "a purpose" that the transaction or series of transactions will produce a specified effect operate as alternative standards. The tests are designed to operate independently; the presence of either will trigger the application of Rule 13e-3. In a given situation, however, both tests may be met. The tests would apply equally to issuers and affiliates of issuers. In resolving close questions as to the application of the tests, issuers and affiliates are encouraged to resolve such questions in favor of compliance with the more limited burdens imposed by the revised requirements of the rule.

Both tests were criticized by the commentators on the ground that they are overly subjective. However, a more objective standard would lend itself to circumvention through skillful planning. The Commission believes, moreover, that it is reasonable for the protection of investors to require the person who is engaging in a transaction which may have a specified effect to determine whether either or both of these tests are satisfied. In order to be effective, the disclosure required by Rule 13e-3 must be received by security holders before consummation of the transaction or the earliest transaction in a series of transactions having a specified effect. These tests ensure that this objective will be accomplished.

The special position occupied by the persons subject to Rule 13e-3 should enable them to make the necessary determination before the transaction without substantial difficulty. Thus, the issuer and affiliates, through their control of the issuer, have access to all of the information which is necessary to determine whether the reasonable likelihood test, which focuses on the circumstances of the issuer, is met. The "purpose test," on the other hand, focuses on the reasons for the transaction. The issuer or affiliate is obviously in a position to know whether a reason for the transaction is to produce a specified effect.

In addition, objectivity is provided by the effects selected for identifying a "going private transaction." These specific standards provide certainty and avoid, where practicable, having the application of the rule turn upon subjective evaluations of the purposes and intentions of persons proposing to enter into a transaction. Each of these effects has the result of depriving a security holder of the benefits of public ownership. The effects are selected because of this result and not because the Commissions regulatory jurisdiction with respect to such securities will be terminated.

Question have been raised as to whether multi-step sale of assets transactions of the type described in Securities Exchange Act Release No. 34-15572 (44 FR 11537) fall within the definition of a Rule 13e-3 transaction. Typically, transactions of this type involve a cash sale of substantially all of the assets of a public company ("seller") to another company ("purchaser"), often a private company not otherwise engaged in a trade or business, with the management of the business continuing to be conducted by the managers of the seller. In some cases, the sale of assets, if approved, may be followed closely by a tender offer by the seller to repurchase its shares for cash out of the proceeds received from the sale. Another variation of such transaction involves a second sale of the sellers assets (which, after the sale, consist solely of cash) to a tax exempt bond fund. The seller is then dissolved and its shareholders receive shares of the tax exempt fund.

A multi-step sale of asset transactions of the type described above which involves an issuer tender offer or purchases by the issuer would normally constitute a Rule 13e-3 transaction. A Rule 13e-3 transaction is defined to include a series of transactions involving one or more of the transactions described in paragraph (a)(4)(i) which has either a reasonable likelihood or purpose of producing, directly or indirectly, any of the effects described in paragraph (a)(4)(ii). While a sale of assets to a non-affiliate is not a transaction specified in paragraph (a)(4)(i), a tender offer or purchases by the issuer is such a transaction. Thus, the combination of these transactions constitutes a series of transactions involving a transaction specified in paragraph (a)(4)(i). A tender offer or purchases by the issuer in these circumstances will generally have a purpose or a reasonable likelihood of producing the effects described in paragraph (a)(4)(ii). Accordingly, the requisite elements of a Rule 13e-3 transaction are usually present.

Even though a multi-step sale of assets transaction of this type is structured without a tender offer or purchases by the issuer, it will nevertheless constitute a Rule 13e-3 transaction if the purchaser is an affiliate of the seller. An affiliate of the issuer is defined in Rule 13e-3(a)(1) to include a person that controls, is controlled by or is under common control with such issuer. Accordingly, if a person or group of persons owns a controlling equity interest in both the purchaser and the seller, the sale of assets would be made to an affiliate of the issuer and would be clearly covered by Rule 13e-3, assuming there is a solicitation or distribution subject to Regulation 14A §§240.14a-1 to 14a-103 or 14C §§240.14c-1 to 14c-101, respectively. The determination of whether a person is in control of an issuer, of course, depends on all the facts and circumstances and is not limited to control obtained through ownership of equity securities. Thus, affiliates of the seller often become affiliates ⁶ of the purchaser through means other than equity ownership as part of the overall sales transaction and thereby are in control of the sellers business both before and after the transaction. In such cases the sale, in substance and effect, is being made to an affiliate of the issuer and would constitute a Rule 13e-3 transaction if a solicitation subject to Regulation 14A §§240.14a-1 to 14a-103 or distribution subject to Regulation 14C §§240.14c-1 to 14c-101 is involved.

If the requirements of a Rule 13e-3 transaction are present, the application of the rule would be triggered unless an exception is available. Accordingly, the second factor to be considered is the availability of the exceptions set forth in paragraph (g). The exceptions included in the 1977 proposals, viz. transactions by a holding company registered under the Public Utility Holding Company Act of 1935, certain solicitations by an issuer with respect to a plan of reorganization under Chapter X of the Bankruptcy Act, and redemptions, calls or purchases pursuant to the instruments creating or governing the class of equity securities involved, have been adopted essentially as proposed. Two new exceptions have also been added.

First, Rule 13e-3(g)(1) excepts second-step, clean-up transactions which occur within one year of a tender offer by or on behalf of a bidder who, as a result of such tender offer, become an affiliate, provided that the equal consideration, disclosure and other requirements of the rule are met. The Commission believes that if a transaction is structured to meet the conditions of that rule it may safely be viewed as a unitary transaction which is not within the purview of the purposes of Rule 13e-3.

Second, Rule 13e-3(g)(2) provides an exception for transactions, including recapitalizations, in which, inter alia, security holders are offered only an equity security which is either common stock or has essentially the same attributes as the equity security which is the subject of the Rule 13e-3 transaction. The Commission believes that such transactions are also outside the purpose of Rule 13e-3 since all holders of that class of security are on an equal footing and are permitted to maintain an equivalent or enhanced equity interest.

The third factor to be considered in the application of Rule 13e-3 is the status under the Exchange Act of the issuer or the class of equity securities of the issuer. If the class of equity securities, which is subject to the Rule 13e-3 transaction, is registered pursuant to Section 12 of the Exchange Act (a "Section 12 issuer"), Rule 13e-3(b) 17 CFR 240.13e-3(b) would apply. Rule 13e-3(b) is divided into two subparagraphs, the first of which defines fraudulent, deceptive or manipulative acts or practices in connection with a Rule 13e-3 transaction and the second of which prescribes means reasonable designed to prevent such acts and practices. Thus, a Section 12 issuer or an affiliate of such issuer proposing to engage in a Rule 13e-3 transaction would be required to comply with the anti-fraud provisions of proposed Rule 13e-3(b). Compliance with these provisions would be in addition to compliance by a Section 12 issuer or affiliate of such issuer with the filing, disclosure and dissemination requirements of paragraphs (d), (e) and (f) of Rule 13e-3, respectively.

If the issuer of the class of securities which is subject to the Rule 13e-3 transaction is required to file periodic reports pursuant to Section 15(d) of the Exchange Act (a "Section 15(d) issuer"), Rule 13e-3(c) 17 CFR 240.13e-3(c) would apply. Under paragraph (c), a Section 15(d) issuer or an affiliate of such an issuer proposing to engage in a Rule 13e-3 transaction would be required to comply with the filing, disclosure and dissemination requirements of paragraphs (d), (e) and (f) of Rule 13e-3, respectively.

Since the provisions of Rule 13e-3 are not exclusive, the transaction would also be subject to other applicable provisions of the Federal securities laws. For example, if an affiliate of a Section 12 issuer made a tender offer for a class of equity securities of such an issuer which would be deemed to be a Rule 13e-3 transaction, the affiliate would also be subject to the other requirements of the Federal securities laws including, but not limited to, Sections 10(b), 14(d) and 14(e) of the Exchange Act and the rules promulgated thereunder. Similarly, if an affiliate of a Section 15(d) issuer made a tender offer for a class of equity securities of such an issuer which would be deemed to be a Rule 13e-3 transaction, the affiliate would also be subject to the other requirements of the Federal securities laws, including, but not limited to, Sections 10(b) and 14(e) of the Exchange Act, the rules promulgated thereunder, and Rule 13e-4.

(b) Filing Requirements

Under Rule 13e-3(d)(1) 17 CFR 240.13e-3(d)(1), the issuer or affiliate engaging in a Rule 13e-3 transaction would be required to file a Rule 13e-3 Transaction Statement on Schedule 13E-3 17 CFR 240.13e-100, including all exhibits thereto, with the Commission. The time for such an initial filing is set forth in General Instruction A to Schedule 13E-3. This instruction recognizes the variety of methods employed in such transactions. Consequently, the initial filing requirement for the proposed Schedule would depend on the type of Rule 13e-3 transaction involved. If the transaction involves the filing with the Commission of soliciting materials or an information statement pursuant to Regulations 14A 17 CFR 240.14a-1 to 240.14a-103 or 14C 17 CFR 240.14c-1 to 240.14c-101, respectively, the Schedule 13E-3 would be filed concurrently with the filing of "Preliminary Copies" of such soliciting materials or information statement. If the transaction involves the filing of a registration statement under the Securities Act, the Schedule would be filed concurrently therewith. If the transaction involves a tender offer, the Schedule would be filed as soon as practicable on the date the tender offer is first published, sent or given to security holders of the class of equity securities which is the subject of the Rule 13e-3 transaction. In cases where the transaction does not involve a solicitation, an information statement, the registration of securities or a tender offer, as described above, the Schedule would be required to be filed with the Commission at least 30 days prior to the date of any purchase by the issuer of affiliate of any securities of the class of securities subject to the Rule 13e-3 transaction. If the Rule 13E-3 transaction involves a series of transactions, the issuer or affiliate would file a Rule 13E-3 Transaction Statement on Schedule 13E-3 at the specified time for the first transaction in such series and would promptly amend the schedule with respect to each subsequent transaction.

Material changes in the information set forth in the initial filing of the Schedule would be required to be promptly filed with the Commission under Rule 13e-3(d)(2) 17 CFR 240.13e-3(d)(2). These filings would be denominated as amendments on Schedule 13E-3. ⁷

A final amendment on Schedule 13E-3 disclosing the results of the Rule 13e-3 transaction would be required to be filed under Rule 13e-3(d)(3) 17 CFR 240.13e-3(d)(3) promptly but not later than ten days after the termination of the transaction. If the Rule 13e-3 transaction is a tender offer governed by Rule 13e-4 17 CFR 240.13e-4, the final amendment would be filed no later than ten business days after the termination of such tender offer.

The need for a separate filing requirement was questioned in the letters of comment. The Commission believes, however, that a specific filing framework specifically tailored to Rule 13e-3 transactions is an administrative necessity if the Commission is to monitor these transactions effectively. Moreover, the resulting burden has been reduced to the extent feasible. Thus, if the Rule 13e-3 transaction reported on in the Schedule involves a transaction subject to Regulation 14A or 14C under the Exchange Act, the registration of securities under the Securities Act, or a tender offer subject to Regulation 14D or Rule 13e-4, General Instruction F to Schedule 13E-3 would require the Items of the Schedule to be answered by information incorporated by reference from the proxy or information statement, the registration statement, the Schedule 14D-1 or Schedule 13E-4. In such cases, the filing requirement under Rule 13e-3 will be satisfied by filing a Schedule 13E-3 containing a cover sheet, cross reference sheet, a copy of the proxy material, information statement, registration statement, schedule 14D-1 or Schedule 13E-4 and a signature page.

General Instruction F to the proposed Schedule would not be applicable in transactions where no other filings, as described above, would be required under the Federal securities laws. An example of such a transaction is a short form merger. ⁸ In such transactions, the Schedule 13E-3 would be the only filing with the Commission concerning the Rule 13e-3 transaction.

(c) Disclosure Requirements

Rule 13e-3(e) establishes the information required to be included in the disclosure document furnished to holders of the class of equity securities which is the subject of the transaction. This disclosure provision consists of two elements: (1) the information required by Items 1 through 6 and 10 through 16 of Schedule 13E-3 17 CFR 240.13e-100, or a fair and adequate summary thereof, and Items 7, 8 and 9 of the Schedule and (2) any other information required to be disclosed pursuant to any other applicable rule or regulation under the Federal securities laws.

Rule 13e-3(e)(3)(ii) requires the placement of a legend on the outside front cover page of the document which contains the information required by paragraph (e). The wording of the legend will depend on whether the Rule 13e-3 transaction involves a prospectus. If a prospectus is involved, the legend required by Rule 13e-3(e)(3)(ii)(B) shall be used in lieu of the legend set forth in Rule 425 17 CFR 230.425. Commentators objected to the legend requirement in the proposal on the grounds that it would not be helpful to investors and that Rule 13e-3 transactions should not be singled out for this purpose.

The Commission believes that the legend will be of assistance to investors by clarifying the Commissions role in reviewing Rule 13e-3 transactions, and by assuring, to the extent possible, that they do not place false reliance upon such review. The need for such a warning is evident from the letters which the Commission receives from investors complaining of the effects of going private transactions. Those letters reflect the misimpression that the Commission passes upon the substantive merits of transactions and guarantees the accuracy and adequacy of the disclosure. Without requiring a legend, the potential for such misimpressions is increased by the disclosure now required with respect to the fairness of the transaction to unaffiliated security holders.

The Commission believes that certain of the required disclosures are particularly important to investors in the context of a Rule 13e-3 transaction and is therefore requiring that they be adequately highlighted. Thus, Rule 13e-3(e) requires the information called for by Items 7, 8 and 9 of Schedule 13E-3, relating to the purpose for and fairness of the transaction and certain reports, opinions, appraisals and negotiations, to be prominently set forth in a special factors section to be included in the forepart of the disclosure document furnished to security holders.

(d) Dissemination Requirements

Rule 13e-3(f) prescribes the methods of dissemination of the information required to be disclosed to the security holders of the class of equity securities which is the subject of the Rule 13e-3 transaction. The method of dissemination applicable to a Rule 13e-3 transaction depends on the type of transaction involved.

If the Rule 13e-3 transaction is a purchase as described in Rule 13e-3(a)(4)(i)(A) 17 CFR 240.13e-3(a)(4)(i)(A) or a vote, consent or authorization or distribution of information statements, as described in proposed Rule 13e-3(a)(4)(i)(C) 17 CFR 240.13-3(a)(4)(i)(C), Rule 13e-3(f)(1) 17 CFR 240.13e(f)(1) would apply. While the disclosure would be disseminated in accordance with the provisions of applicable Federal or state law, in no event would such dissemination occur later than 20 days prior to: any such purchase; any such vote; consent or authorization; or with respect to the distribution of information statements, the meeting date, or if corporate action is to be taken by means of the written authorization or consent of security holders, the earliest date on which corporate action may be taken. Thus, Rule 13e-3(f)(1)(i)(A) would provide for a 20 day waiting period during which a Rule 13e-3 transaction could not be effected. ⁹ Moreover, Rule 13e-3(f)(1)(i)(B) requires that the disclosure be disseminated to persons who are record holders as of the date not more than 20 days prior to the date of dissemination. For example, if the vote on a Rule 13e-3 transaction will occur on August 30, the disclosure would be disseminated no later than August 10. If August 10 is the date of dissemination, the disclosure would be transmitted to persons who are listed as record holders as of date not earlier than July 21.

Certain commentators were of the view that the twenty day waiting period is arbitrary and has no justification and should be left entirely to the requirements of state law unless Congress expressly determines that it should be a matter of federal regulation.

The twenty day advance disclosure requirement is intended to provide reasonable assurance that the information required to be disclosed to security holders in a Rule 13e-3 transaction will be disseminated sufficiently far in advance of the specified transactions to permit security holders to make an unhurried and informed choice as to their alternatives. Unless security holders receive disclosure prior to consummation of the transaction, disclosure requirements are of limited utility since security holders are forced to select an alternative ¹⁰ without adequate information. The Commission therefore believes that dissemination is necessary to make disclosure effective.

The suggestion was made that the requirement in General Instruction A to Schedule 13E-3 that a Rule 13e-3 Transaction Statement be filed at least 30 days prior to a purchase which is not subject to the other provisions of that Instruction should be conformed to the twenty day period described above. The thirty day period has been retained in General Instruction A because it normally will afford the staff a ten day period, like that in the proxy rules, within which to examine the filing prior to the time the information set forth therein is disseminated to security holders.

If the Rule 13e-3 transaction is a tender offer for equity securities which is subject to Regulation 14D or Rule 13e-4, the tender offer containing the information required by paragraph (e) would be disseminated in accordance with Regulation 14D or Rule 13e-4, respectively. The tender offer would be required to be published, sent or given to security holders of the class of equity securities being sought.

(e) Schedule 13E-3

Schedule 13E-3 establishes specific disclosure requirements for Rule 13e-3 transactions. As noted in General Instruction E to the Schedule, these requirements are in addition to those of other applicable provisions of the Federal securities laws and supersede such requirements where there is a conflict. The Commission believes that the Schedule will provide more meaningful disclosures to investors in the context of a Rule 13e-3 transaction.

The comments on the items of the Schedule were generally technical in nature and were directed to clarifying the application of the items or reducing the compliance burden. The suggested revisions were adopted where it would not deprive security holders of information material to informed investment decision-making in the context of a Rule 13e-3 transaction.

The most significant change in the items of the Schedule is with respect to disclosure of the fairness of the transaction. Item 8 requires the issuer or affiliate to state whether it reasonably believes the Rule 13e-3 transaction is fair or unfair to unaffiliated security holders. The issuer or affiliate is also required to provide a detailed discussion of the material factors upon which that belief is based. This discussion is required to address the extent to which the following factors were taken into account: (1) whether the transaction is structured so that approval of at least a majority of unaffiliated security holders is required; (2) whether the consideration offered to unaffiliated security holders constitutes fair value; (3) whether the majority of non-employee directors has retained an unaffiliated representative to act solely on behalf of unaffiliated security holders for the purposes of negotiating the terms of the transaction and/or preparing a report concerning the fairness of the transaction; (4) whether the Rule 13e-3 transaction was approved by a majority of the directors of the issuer who are not employees of the issuer; and (5) whether a report, opinion or appraisal of the type described in Item 9 of the Schedule was obtained. In order to minimize, meaningless, boilerplate responses an instruction specifies that conclusory statements are not considered sufficient disclosure in responding to this requirement.

These factors are based to a large extent on the considerations set forth in the Note to proposed Rule 13e-3(b) which rule would have required that the transaction be fair to unaffiliated security holders. The commentators were concerned that the factors chosen would conflict with the standards under state law for determining fairness. Since a substantive fairness requirement is not being adopted at this time, this concern is now inapplicable. Moreover, Instruction 1 to Item 8(b) of Schedule 13E-3 indicates that the factors which are important in determining the fairness of a transaction to unaffiliated security holders, and the right which should be given to them in a particular context, will vary. The context in which this determination is made, of course, includes the applicable state law. Accordingly, accommodation with those requirements is assured.

In any event, the Commission believes that increased discussion of factors bearing upon fairness to unaffiliated security holders is necessary in view of the potential for abuse which exists in a Rule 13e-3 transaction. The absence of arms-length negotiations which is characteristic of going private transactions requires that unaffiliated security holders be furnished with detailed information so that they can determine whither their rights have been adequately protected. ¹¹

CERTAIN FINDINGS

In publishing the 1977 proposals, the Commission specifically invited comments with respect to: (1) whether the cost of the proposals to an issuer or affiliate engaging in a Rule 13e-3 transaction would outweigh their benefits to investors and the public interest; and (2) the adverse impact or burdens of the proposals on competition which are neither necessary nor appropriate in furthering the purposes of the Exchange Act.

The comment letters did not provide any significant basis for concluding that the implementation of the Commissions statutory mandate in the manner proposed would be outweighed by such possible additional costs. Accordingly, the Commission finds that the costs imposed on issuers and affiliates by the rule and schedule adopted herein are not unreasonable and are far outweighed by the benefits which will accrue to investors.

As required by Section 23(a)(2) of the Exchange Act, the Commission has specifically considered the impact which the rule and schedule adopted herein will have no competition. The Commission finds that compliance by issuers and affiliates with these actions will not impose any significant burden on competition. In any event, the Commission has determined that any possible competitive burden will be outweighted by, and is necessary and appropriate to achieve, the benefits of these actions to investors.

OPERATION OF RULES ADOPTED, EFFECTIVE DATE

Rule 13e-3 and Schedule 13E-3 will become effective 30 days after publication in the Federal Register.

Any person who so chooses may rely on Rule 13e-3 and Schedule 13e-3 immediately. No person is relieved from complying with such persons present obligations under other provisions of the federal securities laws pending the effective date of the rule and schedule.

TEXT OF ADOPTED RULE AND SCHEDULE

The following are the actions being taken:

17 CFR Part 240 is amended by adding §240.13e-3 and §240.13e-100 as follows:

§240.13e-3 Going private transactions by certain issuers or their affiliates.

(a) Definitions. Unless indicated otherwise or the context otherwise requires, all terms used in this section and in Schedule 13E-3 §240.13e-100 shall have the same meaning as in the Act or elsewhere in the General Rules and Regulations thereunder. In addition, the following definitions apply:

(1) An "affiliate" of an issuer is a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with such issuer. For the purposes of this section only, a person who is not an affiliate of an issuer at the commencement of such persons tender offer for a class of equity securities of such issuer will not be deemed an affiliate of such issuer prior to the stated termination of such tender offer and any extensions thereof;

(2) The term "executive officer" means the president, secretary, treasurer, and vice president in charge of a principal business function (such as sales, administration or finance) or any other person who performs similar policy making functions for the issuer;

(3) The term "purchase" means any acquisition for value including, but not limited to, (i) any acquisition pursuant to the dissolution of an issuer subsequent to the sale or other disposition of substantially all the assets of such issuer to its affiliate, (ii) any acquisition pursuant to a merger, (iii) any acquisition of fractional interests in connection with a reverse stock split, and (iv) any acquisition subject to the control of an issuer or an affiliate of such issuer;

(4) A "Rule 13e-3 transaction" is any transaction or series of transactions involving one or more of the transactions described in paragraph (a)(4)(i) of this section which has either a reasonable likelihood or a purpose of producing, either directly or indirectly, and of the effects described in paragraph (a)(4)(ii) of this section;

(i) The transactions referred to in paragraph (a)(4) of this section are:

(A) A purchase of any equity security by the issuer of such security or by an affiliate of such issuer;

(B) A tender offer for or request or invitation for tenders of any equity security made by the issuer of such class of securities or by an affiliate of such issuer; or

(C) A solicitation subject to Regulation 14A §§240.14a-1 to 240.14a-103 of any proxy, consent or authorization of, or a distribution subject to Regulation 14C §§ 240.14c-1 to 14c-101 of information statements to, any equity security holder by the issuer of the class of securities or by an affiliate of such issuer, in connection with: a merger, consolidation, reclassification, recapitalization, reorganization or similar corporate transaction of an issuer or between an issuer (or its subsidiaries) and its affiliate; a sale of substantially all the assets of an issuer to its affiliate or group of affiliates; or a reverse stock split of any class of equity securities of the issuer involving the purchase of fractional interests.

(ii) The effects referred to in paragraph (a)(4) of this section are:

(A) Causing any class of equity securities of the issuer which is subject to section 12(g) or section 15(d) or the Act to be held of record by less than 300 persons; or

(B) Causing any class of equity securities of the issuer which is either listed on a national securities exchange or authorized to be quoted in an inter-dealer quotation system of a registered national securities association to be neither listed on any national securities exchange nor authorized to be quoted on an inter-dealer quotation system of any registered national securities association.

(5) An "unaffiliated security holder" is any security holder of an equity security subject to a Rule 13e-3 transaction who is not an affiliate of the issuer of such security.

(b) Application of section to an issuer (or an affiliate of such issuer) subject to section 12 of the Act.

(1) It shall be a fraudulent, deceptive or manipulative act or practice, in connection with a Rule 13e-3 transaction, for an issuer which has a class of equity securities registered pursuant to Section 12 of the Act or which is a closed-end investment company registered under the Investment Company Act of 1940, or an affiliate of such issuer, directly of indirectly

(i) To employ any device, scheme or artifice to defraud any person;

(ii) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or

(iii) To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.

(2) As a means reasonably designed to prevent fraudulent, deceptive or manipulative acts or practices in connection with any Rule 13e-3 transaction, it shall be unlawful for an issuer which has a class of equity securities registered pursuant to Section 12 of the Act, or an affiliate of such issuer, to engage, directly or indirectly, in a Rule 13e-3 transaction unless:

(i) Such issuer or affiliate complies with the requirements of paragraphs (d), (e) and (f) of this Section; and

(ii) The Rule 13e-3 transaction is not in violation of paragraph (b)(1) of this section.

(1) It shall be unlawful as a fraudulent, deceptive or manipulative act or practice for an issuer which is required to file periodic reports pursuant to Section 15(d) of the Act, or an affiliate of such issuer, to engage, directly or indirectly, in a Rule 13e-3 transaction unless such issuer or affiliate complies with the requirements of paragraphs (d), (e) and (f) of this section.

(2) An issuer or affiliate which is subject to paragraph (c)(1) of this section and which is soliciting proxies or distributing information statements in connection with a transaction described in paragraph (a)(4)(i)(A) of this section may elect to use the timing procedures for conducting a solicitation subject to Regulation 14A §§ 240.14a-1 to 240.14a-103 or a distribution subject to Regulation 14C §§ 240.14c-1 to 14c-101 in complying with paragraphs (d), (e) and (f) of this section, provided that if an election is made, such solicitation or distribution is conducted in accordance with the requirements of the respective regulations, including the filing of preliminary copies of soliciting materials or an information statement at the time specified in Regulation 14A or 14C, respectively.

(d) Material required to be filed.

The issuer or affiliate engaging in Rule 13e-3 transaction shall, in accordance with the General Instructions to the Rule 13e-3 Transaction Statement on Schedule 13E-3 §240.13e-100:

(1) File with the Commission eight copies of such schedule, including all exhibits thereto;

(2) Report any material change in the information set forth in such schedule by promptly filing with the Commission eight copies of an amendment on such schedule; and

(3) Report the results of the Rule 13e-3 transaction by filing with the Commission promptly but no later than ten days (ten business days if Rule 13e-4 §240.13e-4 is applicable) after the termination of such transaction eight copies of a final amendment to such schedule.

(e) Disclosure of certain information.

(1) The issuer or affiliate engaging in the Rule 13e-3 transaction, in addition to any other information required to be disclosed pursuant to any other applicable rule or regulation under the federal securities laws, shall disclose to security holders of the class of equity securities which is the subject of the transaction, in the manner prescribed by paragraph (f) of this section, the information required by Items 1, 2, 3, 4, 5, 6, 10, 11, 12, 13, 14, 15 and 16 of Schedule 13e-3 §240.13e-100, or a fair and adequate summary thereof, and Items 7, 8, and 9 and include in the document which contains such information the exhibit required by Item 17(e) of such Schedule. If the Rule 13e-3 transaction involves (i) a transaction subject to Regulation 14A §§240.14a-1 to 240.14a-103 or 14C §§240.14c-1 to 240.14c-101 of the Act, (ii) the registration of securities pursuant to the Securities Act of 1933 and the General Rules and Regulations promulgated thereunder, or (iii) a tender offer subject to Regulation 14D §§240.14d-1 to 240.14d-101 or Rule 13e-4 §240.13e-4, such information shall be included in the proxy statement, the information statement, the registration statement or the tender offer for or request or invitation for tenders of securities published, sent or given to security holders, respectively.

(2) If any material change occurs in the information previously disclosed to security holders of the class of equity securities which is the subject of the transaction, the issuer or affiliate shall promptly disclose such change to such security holders in the manner prescribed by paragraph (f) (iii) of this section.

(3) Any document transmitted to such security holders which contains the information required by paragraph (e)(1) of this section shall:

(i) set forth prominently the information required by Items 7, 8 and 9 of the Rule 13e-3 Transaction Statement on Schedule 13E-3 §240.13e-100 in a Special Factors section to be included in the forepart of such document; and

(ii) set forth on the outside front cover page, in capital letters printed in bold face roman type at least as large as ten point modern type and at lease two points leaded, the statement in paragraph (e)(3)(ii)(A) of this section, if the Rule 13e-3 transaction does not involve a prospectus, or the statement in paragraph (e)(3)(ii)(B) of this section, if the Rule 13e-3 transaction involves a prospectus, and in the latter case such statement shall be used in lieu of that required by Rule 425 §230.425.

(A) THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

(B) NEITHER THIS TRANSACTION NOR THESE SECURITIES HAVE BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION. THE COMMISSION HAS NOT PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

Instructions. 1. Negative responses to any item of Schedule 13E-3 §240.13e-100 need not be included in the information disseminated to security holders unless otherwise indicated.

2. Although the financial information necessary to present a fair and adequate summary of Item 14 of Schedule 13E-3 §240.13e-100 may vary depending on the facts and circumstances involved, the following historical and pro forma summary financial information normally will be sufficient for purposes of paragraph (e) of this section:

(a) Summary financial information equivalent to that required by paragraph (e) of Guide 59 of the Guides for Preparation and filing of Registration Statements for (i) the two most recent fiscal years and (ii) the latest year-to-date interim period and corresponding interim period of the preceding year;

(b) Ratio of earnings to fixed changes for the same periods required by 2(a) above;

(c) Book value per share as of the most recent fiscal year end and as of the date of the latest interim balance sheet; and

(d) If material, pro forma data for the summarized financial information described in 2(a), (b), and (c) above, disclosing the effect of the transaction, should be provided for the most recent fiscal year and latest year-to-date interim period.

If the information required by Item 14 is summarized, appropriate instructions should be included stating how more complete financial information can be obtained.

(f) Dissemination of disclosure. (1) If the Rule 13e-3 transaction involves a purchase as described in paragraph (a)(4)(i)(A) of this section or a vote, consent, authorization, or distribution of information statements as described in paragraph (a)(4)(i)(C) of this section, the issuer or affiliate engaging in the Rule 13e-3 transaction shall:

(i) Provide the information required by paragraph (e) of this section: (A) in accordance with the provisions of any applicable federal or state law, but in no event later than 20 days prior to: any such purchase; any such vote, consent or authorization; or with respect to the distribution of information statements, the meeting date, or if corporate action is to be taken by means of the written authorization or consent of security holders, the earliest date on which corporate action may be taken, (B) to each person who is a record holder of a class of equity securities subject to the Rule 13e-3 transaction as of a date not more than 20 days prior to the date of dissemination of such information.

(ii) If the issuer or affiliate knows that securities of the class of securities subject to the Rule 13e-3 transaction are held of record by a broker, dealer, bank or voting trustee or their nominees, such issuer or affiliate shall (unless Rule 14a-3(d) §240.14a-3(d) or 14c-7 §240.14c-7 is applicable) furnish the number of copies of the information required by paragraph (e) of this section that are requested by such persons (pursuant to inquiries by or on behalf of the issuer or affiliate), instruct such persons to forward such information to the beneficial owners of such securities in a timely manner and undertake to pay the reasonable expenses incurred by such persons in forwarding such information; and

(iii) Promptly disseminate disclosure of material changes to the information required by paragraph (d) of this section in a manner reasonably calculated to inform security holders.

(2) If the Rule 13e-3 transaction is a tender offer or a request or invitation for tenders of equity securities which is subject to Regulation 14D §§240.14d-1 to 240.14d-101 or Rule 13e-4 §240.13e-4, the tender offer containing the information required by paragraph (e) of this section, and any material change with respect thereto, shall be published, sent or given in accordance with Regulation 14D or Rule 13e-4, respectively, to security holders of the class of securities being sought by the issuer or affiliate.

(g) Exceptions. This section shall not apply to:

(1) Any Rule 13e-3 transaction by or on behalf of a person which occurs within one year of the date of termination of a tender offer in which such person was the bidder and became an affiliate of the issuer as a result of such tender offer provided that the consideration offered to unaffiliated security holders in such Rule 13e-3 transaction is at least equal to the highest consideration offered during such tender offer and provided further that:

(i) If such tender offer was made for any or all securities of a class of the issuer;

(A) Such tender offer fully disclosed such persons intention to engage in a Rule 13e-3 transaction, the form and effect of such transaction and, to the extent known, the proposed terms thereof; and

(B) Such Rule 13e-3 transaction is substantially similar to that described in such tender offer; or

(ii) If such tender offer was made for less than all the securities of a class of the issuer:

(A) Such tender offer fully disclosed a plan of merger, a plan of liquidation or a similar binding agreement between such person and the issuer with respect to a Rule 13e-3 transaction; and

(B) Such Rule 13e-3 transaction occurs pursuant to the plan of merger, plan of liquidation or similar binding agreement disclosed in the bidders tender offer.

(2) Any Rule 13e-3 transaction in which the security holders are offered or receive only an equity security provided That:

(i) such equity security has substantially the same rights as the equity security which is the subject of the Rule 13e-3 transaction including, but not limited to, voting, dividends, redemption and liquidation rights except that this requirement shall be deemed to be satisfied if unaffiliated security holders are offered common stock;

(ii) such equity security is registered pursuant to section 12 of the Act or reports are required to be filed by the issuer thereof pursuant to section 15(d) of the Act; and

(iii) if the security which is the subject of the Rule 13e-3 transaction was either listed on a national securities exchange or authorized to be quoted in an interdealer quotation system of a registered national securities association, such equity security is either listed on a national securities exchange or authorized to be quoted in an inter-dealer quotation system of a registered national securities association.

(3) Transactions by a holding company registered under the Public Utility Holding Company Act of 1935 in compliance with the provisions of that Act;

(4) Redemptions, calls or similar purchases of an equity security by an issuer pursuant to specific provisions set forth in the instrument(s) creating or governing that class of equity securities; or

(5) Any solicitation by an issuer with respect to a plan of reorganization under Chapter X of the Bankruptcy Act, as amended, if made after the entry of an order approving such plan pursuant to section 174 of that Act and after, or concurrently with, the transmittal of information concerning such plan as required by section 175 of the Act.

§240.13e-100 Schedule 13E-3 §240.13e-3, Rule 13e-3 Transaction Statement Pursuant to Section 13(e) of the Securities Exchange Act of 1934 and Rule 13e-3 §240.13e-3 thereunder.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Rule 13e-3 Transaction Statement

(Pursuant to Section 13(e) of the Securities

Exchange Act of 1934)

Amendment No. __________________________________

________________________________________________________________________________________

(Name of the Issuer)

________________________________________________________________________________________

(Name of Person(s) Filing Statement)

________________________________________________________________________________________

(Title of Class of Securities)

________________________________________________________________________________________

(CUSIP Number of Class of Securities)

________________________________________________________________________________________

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications

on Behalf of Person(s) Filing Statement)

This statement is filed in connection with (check the appropriate box):

a. The filing of solicitation materials or an information statement subject to Regulation 14A 17 CFR 240.14a-1 to 240.14a-103, Regulation 14C 17 CFR 240.14c-1 to 240.14c-101 or Rule 13e-3(c) §240.13e-3(c) under the Securities Exchange Act of 1934.

b. The filing of a registration statement under the Securities Act of 1933.

c. A tender offer.

d. None of the above.

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies:

Instruction: Eight copies of this statement, including all exhibits, should be filed with the Commission.

GENERAL INSTRUCTIONS

A. Depending on the type of Rule 13e-3 transaction, this statement shall be filed with the Commission:

1. Concurrently with the filing of "Preliminary Copies" of soliciting materials or an information statement pursuant to Regulations 14A or 14C under the Act;

2. Concurrently with the filing of a registration statement under the Securities Act of 1933;

3. As soon as practicable on the date a tender offer is first published, sent or given to security holders; or

4. At least 30 days prior to any purchase of any securities of the class of securities subject to the Rule 13e-3 transaction, if the transaction does not involve a solicitation, an information statement, the registration of securities or a tender offer, as described in 1, 2 or 3 of this Instruction.

5. If the Rule 13e-3 transaction involves a series of transactions, the issuer or affiliate shall file this statement at the time indicated in 1-4 of this general instruction for the first transaction of such series and shall promptly amend this schedule with respect to each subsequent transaction in such series.

B. The item numbers and captions of the items shall be included but the text of the items is to be omitted. The answers to the items shall be so prepared as to indicate clearly the coverage of the items without referring to the text of the items. Answer every item. If an item is inapplicable or the answer is in the negative, so state.

C. If the statement is filed by a general or limited partnership, syndicate or other group the information called for by Items 2, 3, 5, 6, 10, and 11 shall be given with respect to: (i) each partner of such general partnership; (ii) each partner who is denominated as a general partner or who functions as a general partner of such limited partnership; (iii) each member of such syndicate or group; and (iv) each person controlling such partner or member. If the statement is filed by a corporation or if a person referred to in (i), (ii), (iii) or (iv) of this Instruction is a corporation, the information called for by the above mentioned items shall be given with respect to: (a) each executive officer and director of such corporation; (b) each person controlling such corporation; and (c) each executive officer and director of any corporation ultimately in control of such corporation.

D. Information contained in exhibits to the statement or in a filing by the issuer, other than filings the incorporation of which is governed by Instruction F, may be incorporated by reference in answer or partial answer to any item or sub-item of the statement, unless it would render such answer incomplete, unclear or confusing. Matter incorporated by reference pursuant to this Instruction shall be clearly identified in the reference by page, paragraph, caption or otherwise. An express statement that the specified matter is incorporated by reference pursuant to this Instruction shall be made at the particular place in the statement where the information is required. A copy of any information or a copy of the pertinent pages of a document containing such information which is incorporated by reference shall be submitted with this statement as an exhibit and shall be deemed to be filed with the Commission for all purposes of the Act.

E. The information required by the items of this statement is intended to be in addition to any disclosure requirements of any other form or schedule which may be filed with the Commission in connection with the Rule 13e-3 transaction. To the extent that the disclosure requirements of this statement are inconsistent with the disclosure requirements of any such forms or schedules, the requirements of this statement are controlling.

F. If the Rule 13e-3 transaction involves a transaction subject to Regulation 14A §§240.14a-1 to 240.14a-103 or 14C §§240.14c-1 to 240.14c-101 of the Act, the registration of securities pursuant to the Securities Act of 1933 and the General Rules and Regulations promulgated thereunder, or a tender offer subject to Regulation 14D §§240.14d-1 to 240.14d-101 or Rule 13e-4 §240.13e-4, the information contained in the proxy or information statement, the registration statement, the Schedule 14D-1 §240.14d-100, or the Schedule 13E-4, respectively, which is filed with the Commission shall be incorporated by reference in answer to the items of this statement or amendments thereto; this statement shall include an express statement to that effect and a cross reference sheet showing the location in the proxy or information statement, the registration statement, the schedule 14D-1 or the Schedule 13E-4 of the information required to be included in response to the items of this statement. If any such item is inapplicable or the answer thereto is in the negative and is omitted form the proxy or the information statement, the registration statement, the Schedule 14D-1, or the Schedule 13E-4, a statement to that effect shall be made in the cross reference sheet.

G. If the Rule 13e-3 transaction involves a proxy or an information statement subject to Regulation 14A §§240.14a-1 to 240.14a-103 or Regulation 14C §§240.14c-1 to 14c-101 and if preliminary copies of such materials have been incorporated by reference into this statement pursuant to Instruction F of this statement, this Schedule 13E-3, shall be deemed to constitute "Preliminary Copies" within the meaning of Rule 14a-6(e) §240.14a-6 and Rule 14c-5 §240.14c-5 and shall not be available for public inspection before an amendment to this statement containing definitive material has been filed with the Commission.

H. Amendments disclosing a material change in the information set forth in this statement may omit any information previously disclosed in this statement.

Item 1. Issuer and Class of Security Subject to the Transaction.

(a) State the name of the issuer of the class of equity security which is the subject of the Rule 13e-3 transaction and the address of its principal executive offices.

(b) State the exact title, the amount of securities outstanding of the class of security which is the subject of the Rule 13e-3 transaction as of the most recent practicable date and the approximate number of holders of record of such class as of the most recent practicable date.

(c) Identify the principal market in which such securities are being traded and, if the principal market is an exchange, state the high and low sales prices for such securities as reported in the consolidated transaction reporting system or, if not so reported, on such principal exchange for each quarterly period during the past two years. If the principal market is not an exchange, state the range of high and low bid quotations for each quarterly period during the past two years, the source of such quotations and, if there is currently no established trading market for such securities (excluding limited or sporadic quotations); furnish a statement to that effect.

(d) State the frequency and amount of any dividends paid during the past two years with respect to such class of securities and briefly describe any restriction on the issuers present or future ability to pay such dividends.

Instruction: If the person filing this statement is an affiliate of the issuer, the information required by Item 1(d) should be furnished to the extent known by such affiliate after making reasonable inquiry.

(e) If the issuer and/or affiliate filing this statement has made an underwritten public offering of such securities for cash during the past three years which was registered under the Securities Act of 1933 or exempt from registration thereunder pursuant to Regulation A, state the date of such offering, the amount of securities offered, the offering price per share (which should be appropriately adjusted for stock splits, stock dividends, etc.) and the aggregate proceeds received by such issuer and/or such affiliate.

(f) With respect to any purchases of such securities made by the issuer or affiliate since the commencement of the issuer second full fiscal year preceding the date of this schedule, state the amount of such securities purchased, the range of prices paid for such securities and the average purchase price for each quarterly period of the issuer during such period.

Instruction: The information required by Item 1(f) need not be given with respect to purchases of such securities by a person prior to the time such person became an affiliate.

Item 2. Identity and Background.

If the person filing this statement is the issuer of the class of equity securities which is the subject of the Rule 13e-3 transaction, make a statement to that effect. If this statement is being filed by an affiliate of the issuer which is other than a natural person or if any person enumerated in Instruction C to this statement is a corporation, general partnership, limited partnership, syndicate or other group of persons, state its name, the state or other place of its organization, its principal business, the address of its principal executive offices and provide the information required by (e) and (f) of this Item. If this statement is being filed by an affiliate of the issuer who is a natural person or if any person enumerated in Instruction C of this statement is a natural person, provide the information required by (a) through (g) of this Item with respect to such person(s).

(a) Name;

(b) Residence or business address;

(c) Present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment or occupation is conducted;

(d) Material occupations, positions, offices or employments during the last 5 years, giving the starting and ending dates of each and the name, principal business and address of any business corporation or other organization in which such occupation, position, office or employment was carried on;

(e) Whether or not, during the last 5 years, such person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so give the dates, nature of conviction, name and location of court, and penalty imposed or other disposition of the case;

(f) Whether or not, during the last 5 years, such person was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining further violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws; and, if so, identify and describe such proceeding and summarize the terms of such judgment, decree or final order;

Instruction: While negative answers to Items 2(e) and 2(f) are required in this schedule, they need not be furnished to security holders.

(g) Citizenship(s).

Item 3. Past Contacts, Transactions or Negotiations.

(a) If this schedule is filed by an affiliate of the issuer of the class of securities which is the subject of the Rule 13e-3 transaction:

(1) Briefly state the nature and approximate amount (in dollars) of any transaction, other than those described in Item 3(b) of this schedule, which has occurred since the commencement of the issuers second full fiscal year preceding the date of this schedule between such affiliate (including subsidiaries of the affiliate and those persons enumerated in Instruction C of this schedule) and the issuer. Provided however, That no disclosure need be made with respect to any transaction if the aggregate amount involved in such transaction was less than one percent of the issuers consolidated revenues (which may be based upon information contained in the most recently available filing with the Commission by the issuer unless such affiliate has reason to believe otherwise) (i) for the fiscal year in which such transaction occurred or (ii) for the portion of the current fiscal year which has occurred, if the transaction occurred in such year; and

(2) Describe any contacts, negotiations or transactions which have been entered into or which have occurred since the commencement of the issuers second full fiscal year preceding the date of this schedule between such affiliate (including subsidiaries of the affiliate and those persons enumerated in Instruction C of this schedule) and the issuer concerning: a merger, consolidation or acquisition; a tender offer for or other acquisition; of securities of any class of the issuer; an election of directors of the issuer; or a sale or other transfer of a material amount of assets of the issuer or any of its subsidiaries.

(b) Describe any contacts or negotiations concerning the matters referred to in Item 3(a)(2) which have been entered into or which have occurred since the commencement of the issuers second full fiscal year preceding the date of this schedule (i) between any affiliates of the issuer of the class of securities which is the subject of the Rule 13e-3 transaction; or (ii) between such issuer or any of its affiliates and any person who is not affiliated with the issuer and who would have a direct interest in such matters. Identify the person who initiated such contacts or negotiations.

Item 4. Terms of the Transaction.

(a) State the material terms of the Rule 13e-3 transaction.

(b) Describe any term or arrangement concerning the Rule 13e-3 Transaction relating to any security holder of the issuer which is not identical to that relating to other security holders of the same class of securities of the issuer.

Item 5. Plans or Proposals of the Issuer or Affiliate.

Describe any plan or proposal of the issuer or affiliate regarding activities or transactions which are to occur after the Rule 13e-3 transaction which relate to or would result in:

(a) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries;

(b) A sale or transfer of a material amount of assets of the issuer or any of its subsidiaries;

(c) Any change in the present board of directors or management of the issuer including, but not limited to, any plan or proposal to change the number or term of directors, to fill any existing vacancy on the board or to change any material term of the employment contract of any executive officer;

(d) Any material change in the present dividend rate or policy or indebtedness or capitalization of the issuer;

(e) Any other material change in the issuers corporate structure or business;

(f) A class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or

(g) The suspension of the issuers obligation to file reports pursuant to Section 15(d) of the Act.

Item 6. Source and Amounts of Funds or Other Consideration.

(a) State the source and total amount of funds or other consideration to be used in the Rule 13e-3 transaction.

(b) Furnish a reasonably itemized statement of all expenses incurred or estimated to be incurred in connection with the Rule 13e-3 transaction including, but not limited to, filing fees, legal, accounting and appraisal fees, solicitation expenses and printing costs and state whether or not the issuer has paid or will be responsible for paying any or all of such expenses.

(c) If all or any part of such funds or other consideration is, or is expected to be, directly or indirectly borrowed for the purpose of the Rule 13e-3 transaction,

(1) Provide a summary of each such loan agreement containing the identity of the parties, the term, the collateral, the stated and effective interest rates, and other material terms or conditions; and

(2) Briefly describe any plans or arrangements to finance or repay such borrowings, or, if no such plans or arrangements have been made, make a statement to that effect.

(d) If the source of all or any part of the funds to be used in the Rule 13e-3 transaction is a loan made in the ordinary course of business by a bank as defined by Section 3(a)(6) of the Act and Section 13(d) or 14(d) is applicable to such transaction, the name of such bank shall not be made available to the public if the person filing the statements so requests in writing and files such request, naming such bank, with the Secretary of the Commission.

Item 7. Purpose(s), Alternatives, Reasons and Effects.

(a) State the purpose(s) for the Rule 13e-3 transaction.

(b) If the issuer or affiliate considered alternative means to accomplish such purpose(s), briefly describe such alternative(s) and state the reason(s) for their rejection.

(d) Describe the effects of the Rule 13e-3 transaction on the issuer, its affiliates and unaffiliated security holders, including the federal tax consequences.

Instructions: (1) Conclusory statements will not be considered sufficient disclosure in response to Item 7.

(2) The description required by Item 7(d) should include a reasonably detailed discussion of the benefits and detriments of the Rule 13e-3 transaction to the issuer, its affiliates and unaffiliated security holders. The benefits and detriments of the Rule 13e-3 transaction should be quantified to the extent practicable.

(3) If this statement is filed by an affiliate of the issuer, the description required by Item 7(d) should include but not be limited to, the effect of the Rule 13e-3 transaction on the affiliates interest in the net book value and net earnings of the issuer in terms of both dollar amounts and percentages.

Item 8. Fairness of the Transaction.

(a) State whether the issuer or affiliate filing this schedule reasonably believes that the Rule 13e-3 transaction is fair or unfair to unaffiliated security holders. If any director dissented to or abstained from voting on the Rule 13e-3 transaction, identify each such director, and indicate, if known, after making reasonable inquiry, the reasons for each dissent or abstention.

Instruction. A statement that the issuer or affiliate has no reasonable belief as to the fairness of the Rule 13e-3 transaction to unaffiliated security holders will not be considered sufficient disclosure in response to Item 8(a).

(b) Discuss in reasonable detail the material factors upon which the belief stated in Item 8(a) is based and, to the extent practicable, the weight assigned to each such factor. Such discussion should include an analysis of the extent, if any, to which such belief is based on the factors set forth in instruction (1) to paragraph (b) of this Item, paragraphs (c), (d), and (e) of this Item, and Item 9.

Instructions. (1) The factors which are important in determining the fairness of a transaction to unaffiliated security holders and the weight, if any, which should be given to them in a particularly context will vary. Normally such factors will include, among others, those referred to in paragraphs (c), (d) and (e) of this Item and whether the consideration offered to unaffiliated security holders constitutes fair value in relation to:

(i) current market prices

(ii) historical market prices

(iii) net book value

(iv) going concern value

(v) liquidation value

(vi) the purchase price paid in previous purchases disclosed in Item 1(f) of Schedule 13e-3

(vii) any report, opinion, or appraisal described in Item 9 and

(vii) firm offers of which the issuer or affiliate is aware made by any unaffiliated person, other than the person filing this statement, during the preceding eighteen months for (A) the merger or consolidation of the issuer into or with such person or of such person into or with the issuer, (B) the sale or other transfer of all or any substantial part of the assets of the issuer or (C) securities of the issuer which would enable the holder thereof to exercise control of the issuer.

(2) Conclusory statements, such as "The Rule 13e-3 transaction is fair to unaffiliated security holders in relation to net book value, going concern value and future prospectus of the issuer" will not be considered sufficient disclosure in response to Item 8(b).

(c) State whether the transaction is structured so that approval of at least a majority of unaffiliated security holders is required.

(d) State whether a majority of directors who are not employees of the issuer has retained an unaffiliated representative to act solely on behalf of unaffiliated security holders for the purposes of negotiating the terms of the Rule 13e-3 transaction and/or preparing a report concerning the fairness of such transaction.

(e) state whether the Rule 13e-3 transaction was approved by a majority of the directors of the issuer who are not employees of the issuer.

(f) If any offer of the type described in instruction (vii) to Item 8(b) has been received, describe such offer and state the reason(s) for its rejection.

Item 9. Reports, Opinions, Appraisals and Certain Negotiations.

(a) State whether or not the issuer or affiliate has received any report, opinion (other than an opinion of counsel) or appraisal from an outside party which is materially related to the Rule 13e-3 transaction including, but not limited to, any such report, opinion or appraisal relating to the consideration or the fairness of the consideration to be offered to security holders of the class of securities which is the subject of the Rule 13e-3 transaction or the fairness of such transaction to the issuer or affiliate or to security holders who are not affiliates.

(b) With respect to any report, opinion or appraisal described in Item 9(a) or with respect to any negotiation or report described in Item 8(d) concerning the terms of the Rule 13e-3 transaction:

(1) Identify such outside party and/or unaffiliated representative;

(2) Briefly describe the qualifications of such outside party and/or unaffiliated representative;

(3) Describe the method of selection of such outside party and/or unaffiliated representative;

(4) Describe any material relationship between (i) the outside party, its affiliates, and/or unaffiliated representative, and (ii) the issuer or its affiliates, which existed during the past two years or is mutually understood to be contemplated and any compensation received or to be received as a result of such relationship;

(5) If such report, opinion or appraisal relates to the fairness of the consideration, state whether the issuer or affiliate determined the amount of consideration to be paid or whether the outside party recommended the amount of consideration to be paid.

(6) Furnish a summary concerning such negotiation report, opinion or appraisal which shall include, but not be limited to, the procedures followed; the findings and recommendations; the bases for and methods of arriving at such findings and recommendations; instructions received from the issuer or affiliate; and any limitation imposed by the issuer or affiliate; and any limitation imposed by the issuer or affiliate on the scope of the investigation.

Instruction: The information called for by subitem 9(b)(1),(2) and (3) should be given with respect to the firm which provides the report, opinion or appraisal rather than the employees of such firm who prepared it.

(c) Furnish a statement to the effect that such report, opinion or appraisal shall be made available for inspection and copying at the principal executive offices of the issuer or affiliate during its regular business hours by any interested equity security holder of the issuer or his representative who has been so designating in writing. This statement may also provide that a copy of such report, opinion or appraisal will be transmitted by the issuer or affiliate to any interested equity security holder of the issuer or his representative who has been so designated in writing upon written request and at the expense of the requesting security holder.

Item 10. Interest in Securities of the Issuer.

(a) With respect to the class of equity security to which the Rule 13e-3 transaction relates, state the aggregate amount and percentage of securities beneficially owned (identifying those securities for which there is a right to acquire) as of the most recent practicable date by the person filing this statement (unless such person is the issuer), by any pension, profit sharing or similar plan of the issuer or affiliate, by each person enumerated in Instruction C of this Schedule or by any associate or majority owned subsidiary of the issuer or affiliate giving the name and address of any such associate or subsidiary.

Instructions: 1. For the purpose of this Item, beneficial ownership shall be determined in accordance with Rule 13d-3 17 CFR 240.13d-3 under the Exchange Act.

2. The information required by this paragraph should be given with respect to officers, directors and associates of the issuer to the extent known after making reasonable inquiry.

(b) Describe any transaction in the class of equity securities of the issuer which is the subject of a Rule 13e-3 transaction that was effected during the past 60 days by the issuer of such class or by the persons named in response to paragraph (a) of this Item.

Instructions: 1. The description of a transaction required by Item 10(b) shall include, but not necessarily be limited to: (i) the identity of the person covered by Item 10(b) who effected the transaction; (ii) the date of the transaction; (iii) the amount of securities involved; (iv) the price per security; and (v) where and how the transaction was effected.

2. If the information required by Item 10(b) is available to the person filing this statement at the time this statement is initially filed with the Commission, the information shall be included in the initial filing. However, if the information is not available to such person at the time of such initial filing, it shall be filed with the Commission promptly but in no event later than seven days (or 2 business days with respect to a tender subject to Regulation 14D §§240.14d-1 to 240.14d-101 or 10 business days with respect to a tender offer subject to Rule 13e-4 §240.13e-4) after the date of such filing and, if material, disclosed to security holders of the issuer pursuant to Rule 13e-3(e) §240.13e-3(e), and disseminated to them in a manner reasonably calculated to inform security holders.

Item 11. Contracts, Arrangements or Understandings with Respect to the Issuers Securities.

Describe any contract, arrangement, understanding or relationship (whether or not legally enforceable) in connection with the Rule 13e-3 transaction between the person filing this statement (including any person enumerated in Instruction C of this schedule) and any person with respect to any securities of the issuer (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any of such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or witholding of proxies, consents or authorizations), naming the persons with whom such contracts, arrangements, understandings or relationships have been entered into and giving the material provisions thereof. Include such information for any of such securities that are pledged or otherwise subject to a contingency, the occurrence of which would give another person the power to direct the voting or disposition of such securities, except that disclosure of standard default and similar provisions contained in loan agreements need not be included.

Item 12. Present Intention and Recommendation of Certain Persons with Regard to the Transaction.

(a) To the extent known by the person filing this statement after making reasonable inquiry, furnish a statement of present intention with regard to the Rule 13e-3 transaction indicating whether or not any executive officer, director or affiliate of the issuer or any person enumerated in Instruction C of this statement will tender or sell securities of the issuer owned or held by such person and/or how such securities, and securities with respect to which such person holds proxies, will be voted and the reasons therefor.

Instructions: If the information required by Item 12(a) is available to the person filing this statement at the time this statement is initially filed with the Commission, the information shall be included in the initial filing. However, if the information is not available to such person at the time of such initial filing, it shall be filed with the Commission promptly but in no event later than seven days (or two business days with respect to a tender offer subject to Regulation 14D §240.14d-1 to 240.14d-101 or ten business days with respect to a tender offer subject to Rule 13e-4 §§240.13e-4) after the date of such filing and, if material, disclosed to security holders of the issuer pursuant to Rule 13e-3(e) §240.13e-3(e), and disseminated to them in a manner reasonably calculated to inform security holders.

(b) To the extent known by the person filing this statement after making reasonable inquiry, state whether any person named in paragraph (a) of this item has made a recommendation in support of or opposed to the Rule 13e-3 transaction and the reasons for such recommendation. If no recommendation has been made by such persons, furnish a statement to that effect.

Item 13. Other Provisions of the Transaction.

(a) State whether or not appraisal rights are provided under applicable state law or under the issuers articles of incorporation or will be voluntarily accorded by the issuer or affiliate to security holders in connection with the Rule 13e-3 transaction and, if so, summarize such appraisal rights. If appraisal rights will not be available under the applicable state law, to security holders who object to the transaction, briefly outline the rights which may be available to such security holders under such law.

(b) If any provision has been made by the issuer or affiliate in connection with the Rule 13e-3 transaction to allow unaffiliated security holders to obtain access to the corporate files of the issuer or affiliate or to obtain counsel or appraisal services at the expense of the issuer or affiliate, describe such provision.

(c) If the Rule 13e-3 transaction involves the exchange of debt securities of the issuer or affiliate for the equity securities held by security holders of the issuer who are not affiliates, describe whether or not the issuer or affiliate will take steps to provide or assure that such securities are or will be eligible for trading on any national securities exchange or an automated inter-dealer quotation system.

Item 14. Financial Information.

(a) Furnish the following financial data concerning the issuer:

(1) Audited financial statements for the two fiscal years required to be filed with the issuers most recent annual report under sections 13 and 15(d) of the Act;

(2) Unaudited balance sheets and comparative year-to-date income statements and statements of changes in financial position and related earnings per share amounts required to be include in the issuers most recent quarterly report filed pursuant to the Act;

(3) Ratio of earnings to fixed charges for the two most recent fiscal years and the interim periods provided under Item 14(a)(2); and

(4) Book value per share as of the most recent fiscal year end and as of the date of the latest interim balance sheet provided under Item 14(a)(2).

(b) If material, provide pro forma data disclosing the effect of the Rule 13e-3 transaction on:

(1) The issuers balance sheet as of the most recent fiscal year end and the latest interim balance sheet provided under Item 14(a)(2);

(2) The issuers statement of income, earnings per share amounts, and ration of earnings to fixed charges for the most recent fiscal year and the latest interim period provided under Item 14(a)(2); and

(3) The issuers book value per share as of the most recent fiscal year end and as of the latest interim balance sheet date provided under Item 14(a)(2).

Item 15. Persons and Assets Employed, Retained or Utilized.

(a) Identify and describe the purpose for which any officer, employee, class of employees or corporate asset of the issuer (excluding corporate assets which are proposed to be used as consideration for purchase of securities which are disclosed in Item 6 of this schedule) has been or is proposed to be employed, availed of or utilized by the issuer or affiliate in connection with the Rule 13e-3 transaction.

(b) Identify all persons and classes of persons (excluding officers, employees and class of employees who have been identified in Item 15(a) of this Schedule) employed, retained or to be compensated by the person filing this statement, or by any person on behalf of the person filing this statement, to make solicitations or recommendations in connection with the Rule 13e-3 transaction and provide a summary of the material terms of such employment, retainer or arrangement for compensation.

Item 16. Additional Information.

Furnish such additional material information, if any, as may be necessary to make the required statements in the light of the circumstances under which they are made, not materially misleading.

Item 17. Material to be Filed as Exhibits.

Furnish a copy of:

(a) Any loan agreement referred to in Item 6 of this Schedule;

Instruction: The identity of any bank which is a party to a loan agreement need not be disclosed if the person filing the statement has requested that the identity of such bank not be made available to the public pursuant to Item 6 of this schedule.

(b) Any report, opinion or appraisal referred to in Items 8(d) or 9 of this schedule;

(c) any document setting forth the terms of any contract, arrangements or understandings or relationships referred to in Item 11 of this schedule; and

(d) Any disclosure materials furnished to security holders in connection with the transaction pursuant to Rule 13e-3(d) §240.13e-3(d).

(e) A detailed statement describing the appraisal rights and the procedures for exercising such appraisal rights which are referred to in Item 13(a) of this schedule.

(f) If any oral solicitation of or recommendations to security holders referred to in Item 15(b) are to be made by or on behalf of the person filing this statement, any written instruction, form or other material which is furnished to the persons making the actual oral solicitation or recommendation for their use, directly or indirectly, in connection with the Rule 13e-3 transaction.

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

__________________________

(Date)

__________________________

(Signature)

____________________________

(Name and Title)

The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of the person filing this statement), evidence of the representatives authority to sign on behalf of such person shall be filed with the statement. The name and any title of each person who signs the statement shall be typed or printed beneath his signature.

AUTHORITY

The Commission hereby adopts Rule 13e-3 and Schedule 13E-3 pursuant to Sections 17(a) and 19 of the Securities Act and Sections 3(b), 10(b), 13(e), 14(a), 14(c), 14(e) and 23(a) of the Exchange Act. The Commission finds that any changes in the adopted rule and schedule from that published in the 1977 release have already been generally subject to comment and are either technical in nature or are less burdensome than the 1977 proposals so that further notice and rulemaking procedures pursuant to the Administrative Procedure Act (5 U.S.C. 553) are not necessary.

Sec. 17(a), 19(a), 48 Stat. 84, 85; secs. 3(b) 10(b), 13(e), 14(a), 14(d), 14(e), 23(a), 48 Stat. 882, 894, 895, 891, 901; sec. 209, 48 Stat. 908; sec. 203(a), 49 Stat. 704; sec. 8, 49 Stat. 1379; sec. 10, 68 Stat. 686; sec. 5, 78 Stat. 569, 570; secs. 2, 3, 82 Stat. 454, 455; secs. 1,2, 3-5, 84 Stat. 1497; secs. 3, 18, 89 Stat. 97, 155; 15 U.S.C. 77g(a), 77s(a), 78c(b), 78j(b), 78m(e), 78n(a), 78n(c), 78n(e), 78w(a).

By the Commission.

Shirley E. Hollis

Assistant Secretary

August 2, 1979

[FR Doc. 79-24453 Filed 8-7-79; 8:45 am]
BILLING CODE 8010-01-M

¹ Securities Exchange Act Release No. 34-14185 (November 17, 1977) (42 FR 60090).

² Copies of these comment letters are available for public inspection and copying at the Commissions Public Reference Room (File No. S7-729).

³ The 1977 release also included a discussion of the implication of a private right of action under Section 13(e) of the Exchange Act. Release No. 34-14185 (42 FR at 60099-60100). The Commission is aware of case law subsequent to the 1977 release, see, e.g., Cannon v. University of Chicago, 47 U.S.L.W. 4549 (U.S. May 14, 1979) and Touche Ross & Co. v. Redington, 47 U.S.L.W. 4732 (U.S. June 18, 1979), and continues to adhere to the position in the 1977 release.

⁴ The commentators cited the following decisions for this proposition, Berkowitz v. Power/Mate Corp., 135 N.J. Super. 36, 342 A.2d 566 (Super. Ct. Ch. Div. 1975); People v. Concord Fabrics, 371 N.Y.S.2d 550 (Sup. Ct. N.Y. City 1975) affd mem. 377 N.Y.S.2d 84 (A.D. 1st Dept. 1976); Singer v. Magnavox, 380 A. 2d 969 (Del. 1977); Tanzer v. International General Industries, Inc., 379 A.2d 1121 (Del. 1977).

⁵ The standards for securities which are authorized to be quoted in the nationwide automated system of the National Association of Securities Dealers ("NASD"), known as the NASDAQ System, are set forth in Schedule D to the by-laws of the NASD.

⁶ For the purpose of these transactions, the Commission would not view a person as an affiliate of the purchaser solely because such person enters into or agrees to enter into a reasonable and customary employment agreement or is elected or there is an agreement to elect such person as an executive officer or director of the purchaser.

⁷ General Instruction H of the Schedule would permit the person filing an amendment to the Schedule disclosing a material change in the information set forth therein to omit any information previously disclosed in the Schedule.

⁸ In a short form merger a corporation owning a large percentage of the outstanding shares of an other corporation may merge such other corporation into the parent corporation upon approval of the parent corporations board of directors and without the approval of the shareholders of either corporation. See e.g., Del. Gen. Corp. Law §253 (1967) (90% ownership required).

⁹ It should be noted that this period is addition to any waiting periods prescribed by other applicable provisions. For example, if a solicitation subject to Regulation 14A §§240.14a-1 to 240.14a-103 is involved, the proxy material to be furnished to security holders would have to be filed at least 10 days prior to the date definitive copies of such material are first disseminated in accordance with Rule 13e-3(f). Moreover, in view of the substantial disclosure issues which arise in the context of going private transactions, issuers are encouraged to file as early as possible.

¹⁰ Alternatives include participating in the transaction, election of appraisal rights, where available, and utilizing remedies available under state law to challenge the transaction.

¹¹ The materiality of information which would be useful to security holders in challenging the transaction under state law is well established. See e.g., Wright v. Heizer Corp., 560 F.2d 236, 250 (7th Cir. 1977), cert. denied, 434 U.S. 1066 (1978) and SEC v. Parklane Hosiery Co., 558 F.2d 1083, 1088-9 (2d Cir. 1977).

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Going Private Transactions by Public Companies or Their Affiliates

ACTION: Final rules.

DISCUSSION

(a) Overview of Application of Rule 13e-3

(b) Filing Requirements

(c) Disclosure Requirements

(d) Dissemination Requirements

(e) Schedule 13E-3

CERTAIN FINDINGS

OPERATION OF RULES ADOPTED, EFFECTIVE DATE

TEXT OF ADOPTED RULE AND SCHEDULE

AUTHORITY

Assistant Secretary