Mergers Reviewer for Q2 Doctrine 1 The purpose of the Williams Act is to insure that public shareholders who are

confronted by a cash tender offer for their stock will not be required to respond without adequate information regarding the qualifications and intentions of the offering party. Persons who allegedly sold their stock to petitioner at unfairly depressed predisclosure prices have adequate remedies by an action for damages, and those who would not have invested, had they thought a takeover bid was imminent, are not threatened with injury.

Doctrine 2 The Definition of Control - The term "control" (including the terms "controlling", "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. Disclosure of a control purpose may be required where the securities purchaser has a perceptible desire to influence substantially the issuer's operations. The purpose of Section 13(d) is to "alert the market place to every large, rapid aggregation or accumulation of securities, regardless of technique employed, which might represent a potential shift in corporate control. The disclosure provisions are intended to protect investors, and to enable them to receive the facts necessary for informed investment decisions. Thus, within the scope of its discretion, the district court might have required further disclosures of Sun. However, given the arguable danger of overstatement and the rule that parties are not required to disclose plans which are contingent or indefinite, the district court's order refusing further disclosures involved no abuse of discretion.

Doctrine 3 A conclusion that an offeror has failed to make full disclosure must, at bottom, rest upon a finding that the shareholders are being deprived of information necessary to evaluate and act upon the offer. The best remedy for such a problem is to get more information to the shareholders before they have to decide whether or not to tender their shares. Had management been serious in its desire to get all relevant information to its shareholders, it easily could have directed the district court's attention to the omitted contingent liability and sought

an order holding up the tender offer unless and until Icahn amended its 14D statements, and appealed the refusal of the district court to do so.

Doctrine 4 Whether or not the rule on mandatory tender offer applies to the indirect acquisition of shares in a listed company, in this case, the indirect acquisition by Cemco of 36% of UCC, a publicly-listed company, through its purchase of the shares in UCHC, a non-listed company. Tender offer is a publicly announced intention by a person acting alone or in concert with other persons to acquire equity securities of a public company. A public company is defined as a corporation which is listed on an exchange, or a corporation with assets exceeding P50,000,000.00 and with 200 or more stockholders, at least 200 of them holding not less than 100 shares of such company. Stated differently, a tender offer is an offer by the acquiring person to stockholders of a public company for them to tender their shares therein on the terms specified in the offer. Tender offer is in place to protect minority shareholders against any scheme that dilutes the share value of their investments. It gives the minority shareholders the chance to exit the company under reasonable terms, giving them the opportunity to sell their shares at the same price as those of the majority shareholders.

Doctrine 4 Generally, a shareholder who owns less than 50% of a corporation's outstanding stock does not, without more, become a controlling shareholder of that corporation, with a concomitant fiduciary status. For controlling stock ownership to exist in the absence of a numerical majority there must be domination by a minority shareholder through actual exercise of direction over corporate conduct. Corporate Liability: In general, when two corporations merge pursuant to statutory provisions, liabilities become the responsibility of the surviving company. Similarly, where a new corporation is created by consolidation, unless otherwise provided by statute, the new company assumes the debts and liabilities of the constituent companies and is entitled to avail itself of the same defenses as were available to the old companies. When no statutory merger or consolidation occurs, but one corporation buys all of the assets of another, the successor will not be saddled with the seller's liability except under certain conditions.

The record hereindicates that nothing other than statutory mergers or consolidations occurred; therefore, the sale of assets or the de facto merger doctrines do not appear pertinent.

TERMS 1. Golden Parachute: Agreement whereby corporate executives are shielded from changes in the corporations control. Misrepresentation: A statement or conduct by one party to another that constitutes a false representation of fact. Nondisclosure: The failure to communicate certain facts to another person. Squeeze-out Merger: Merger whereby the majority shareholder forces minority shareholders into the sale of their securities. Tender Offer: An offer made by one corporation to the shareholders of a target corporation to purchase their shares subject to number, time and price specifications.