Amendments to the Tender Offer Best-Price Rule

We are proposing amendments to the tender offer best-price rule to clarify that the rule applies only with respect to the consideration offered and paid for securities tendered in an issuer or third-party tender offer and should not apply to consideration offered and paid according to employment compensation, severance or other employee benefit arrangements entered into with employees or directors of the subject company. The proposed rule also would provide a safe harbor in the context of third-party tender offers that would allow the compensation committee or a committee performing similar functions of the subject company's or bidder's board of directors, depending on whether the subject company or the bidder is the party to the arrangement, to approve an employment compensation, severance or other employee benefit arrangement and thereby deem it to be such an arrangement within the meaning of the proposed exemption.