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Technology Stocks : BAY Ntwks (under House)
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To: Paul Lee who wrote (6947)8/18/1998 5:37:00 PM
From: Paul Fine  Read Replies (2) of 6980
 
Paul Lee-

I am so sorry. I re-read the proxy statement and realized that I has misread a section.

On p. 52, the proxy reads "Gain or loss realized by a U.S. Holder on the sale or other disposition of Nortel Common Stock will be subject to US federal income taxation as capital gain or loss in an amount equal to the difference between such US Holder's tax basis in the Nortel Common Stock and the amount realized on the disposition. Any such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the Nortel Common Stock was held for more than one year."

Since we don't get the Nortel stock until after the merger, I read this to mean we had to hold the Nortel stock for a year to get longterm capital gains. Unfortunately(and embarrassingly), I missed the sentence on p. 50 which states:

"The holding period for for shares of Nortel Common Stock received in exchange for shares of Bay Networks Common Stock pursuant to the Merger will include the holding period of the shares of Bay Networks Common Stock exchanged therefor, provided such shares of Bay Networks Common Stock were held as capital assets by the Bay Networks shareholder at the Effective Date."

I am truely sorry for any undue concern I caused anyone over my slip-up in reading this 85 page proxy statement. Wish I could blame it on Ken Starr, but it was my fault alone.

Paul
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