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Today the United States equities markets and exchanges resumed trading for the first time since the devastating events in lower Manhattan early last week. Recognizing that issuer and affiliate purchases of an issuer’s common stock could represent an important source of liquidity should market volatility occur, the Securities and Exchange Commission on Sept. 14, 2001 summarily issued an order providing temporary, but significant, relief from various provisions that restrict the scope and manner of share purchases by issuers and affiliates. The temporary relief contemplated by the order is only effective with respect to the date the market reopens and the following four business days, e.g., Sept. 17 – 21. During the five business days covered by the order: � Rule 10b-18 “Time of Day” Restrictions Lifted: Registrants can obtain the safe harbor protections of Rule 10b-18 under the Exchange Act even if purchases do not comply with the “time of day” restrictions of the Rule. That is, a repurchase may constitute the opening transaction in the security and may occur in the final half hour of trading on the security’s primary market. � Rule 10b-18 Daily Volume Limit Raised to 100 percent: Registrants can comply with Rule 10b-18 by limiting purchases on each day so that they do not exceed 100 percent of the average daily trading volume for the security. Normally, the limit is 25 percent. The period for determining the average daily trading volume will be the four calendar weeks preceding the week starting September 10, 2001. � Repurchases Will Not Affect Poolings: Repurchases of the issuer’s equity securities will not affect the availability of pooling-of-interests accounting for prior transactions, nor will a registrant’s financial statements be deemed misleading or inaccurate solely because of the impact such repurchases may otherwise have had on the availability of pooling. Therefore, registrants who have completed pooling transactions within the last 6 months or who have pending pooling transactions initiated before the June 30 cutoff date will be able to repurchase common stock during this period without those repurchases putting the accounting treatment of the transactions at risk. � Purchases by Section 16 Persons Will Not be Matched with Prior Sales: Any purchase made during the period will be exempt from Section 16(b) of the Exchange Act with respect to, and will not be matched with, any sale by that person during the preceding six months. Such purchases must still be reported on Form 4, and purchases will still be matched against sales in the succeeding six months. All sales transactions during the period will remain subject to Section 16. The summary order also indicates that the fact that repurchases by a registrant during the five day period are outside of a registrant’s normal “window periods” will not be considered any indication that the registrant has violated antifraud rules. In addition, the order allows brokerage firms to calculate net capital without considering the days the market was closed. Companies and affiliates intending to effect purchases of the company’s common stock and equity securities must continue to be aware of and comply with other relevant rules and regulations, including the other applicable provisions of Rule 10b-18; rules restricting repurchases during tender offers, distributions of the security and periods in which the purchaser is in possession of material nonpublic information; compliance with state corporate laws and corporate formalities; and any applicable regulatory or covenant restrictions. Edward D. Herlihy, Craig M. Wasserman and David A. Katz are partners at the law firm Wachtell, Lipton, Rosen & Katz. Lawrence S. Makow is an associate at the firm.

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