SecProbe.io

CORRESP
1
filename1.htm

[ADAMS AND REESE LLP LETTERHEAD]

June 9,
2009

Via Facsimile No. 202-772-9203

Mr. Perry
J. Hindin

Special
Counsel

U.S.
Securities and Exchange Commission

Division
of Corporation Finance

100
F Street, NE — Mail Stop 7010

Washington,
D.C. 20549-3628

Re:                             Evolution
Petroleum Corporation

Schedule
TO-I, as amended

Filed
May 21, 2009

File
No. 005-46383

Dear
Mr. Hindin:

On
behalf of Evolution Petroleum Corporation (“Evolution” or the “Company”), we
are responding to comments of the Securities and Exchange Commission (the “Staff”)
set forth in the letter from the Staff dated May 29, 2009, with respect to
the above-referenced issuer tender offer statement (the “Schedule TO-I”).  As you are aware the Schedule TO-I was filed
in connection with an exchange program (the “Exchange Program”), whereby
eligible participants were presented with the opportunity to exchange “underwater”
options for restricted stock (the “Offer to Exchange”).  For your convenience, we have repeated in
bold type the comments and requests for additional information as set forth in
your letter.  Evolution’s response
follows each applicable comment or request.
All capitalized terms used herein and not otherwise defined have the
respective meanings ascribed to them in the Offer to Exchange.

Schedule
TO-I

Offer
to Exchange

General

1.                                     Based
on disclosure on the first page of the Offer to Exchange as well as a
telephone conversation with Mr. Michael Larkin of Adams and Reese LLP,
counsel to the Company, it appears that the Company is attempting to use its
registration statement on Form S-8 filed on July 3, 2008 to register
the Offer to Exchange.  Please be advised
that Form S-8 may not be used to register this transaction.  In addition, based on your disclosure in
response to Question 16 on page 5 of the Offer to Exchange regarding the
requirement that option holders remit a cash payment, it does not appear that
the Company may currently rely on the exemption from

Mr. Perry J. Hindin

June 9, 2009

registration offered by Section 3(a)(9) of the Securities Act
of 1933.  Please advise us in the
response letter how the Offer to Exchange is permissible under Section 5
of the Securities Act.  Please also
indicate what consideration, if any, the Company has given to revising the
terms of the Offer to Exchange so that it may in the future rely on Section 3(a)(9).

Response:

The
Company respectfully advises the Staff that it believes the Exchange Program
described in the Schedule TO-I is permissible under the Securities Act of 1933
(the “Securities Act”) for the reasons set forth below.

The
Company believes that using an S-8 to register the securities offered in the
Exchange Program is permissible.  General
Instruction A.1.(a) of Form S-8 states that Form S-8 may be used
to register “securities of the registrant to be offered under any employee
benefit plan to its employees or employees of its subsidiaries or parents.”  Furthermore, the Staff has previously
recognized the valid use of an S-8 in similar exchange programs, stating that
in an option repricing program a registrant “may be able to rely on the S-8
where the repriced options come from the same plan.”(1)  Under the terms
of the Company’s Exchange Program, restricted stock derived from the Amended
and Restated 2004 Stock Plan, which has been registered through the Company’s
existing S-8, will be issued to employees and consultants of the Company in
exchange for outstanding options which were also granted and registered under
the same Plan and S-8.  However, as
described below, because the transaction is exempt from registration under Section 3(a)(9) of
the Securities Act (or, in the alternative, Section 4(2) of the
Securities Act), the Company has deleted all references in the Offer to
Exchange to registration of the Exchange Program under its previously filed Form S-8.

Notwithstanding
the Staff’s conclusion regarding the foregoing, the Exchange Program is not
required to be registered under the Securities Act, because the Company will
issue the restricted stock to its employees and consultants pursuant to the
exemption from registration afforded under Section 3(a)(9) of the
Securities Act.  Section 3(a)(9) states
that any security exchanged by the issuer with its existing security holders
exclusively where no commission or other remuneration is paid or given directly
or indirectly for soliciting such exchange is exempt from registration under Section 5
of the Securities Act.  In the Exchange
Program, only existing option holders (other than directors and executive
officers of the Company) will have the opportunity to exchange their options
for restricted stock.  Furthermore, no
commission or remuneration will be paid for soliciting such exchange.

(1) American
Bar Association Technical Session Between the SEC Staff and the Joint Committee
on Employee Benefits, Questions and Answers (May 9, 2000).

2

Mr. Perry J. Hindin

June 9, 2009

The
Company believes the initial requirement for Eligible Persons to pay the $0.001
par value of the restricted stock did not affect its ability to claim the 3(a)(9) exemption
because such payments are not given directly or indirectly for soliciting such
exchange.  In addition, in the instant
matter, the par value was truly for a nominal amount ($0.001 per share) and was
by no means part of a capital raising transaction.  As a result, we do not believe the existence
of a par value requirement was the type of compensation or remuneration which
would vitiate the Section 3(a)(9) exemption.  Nevertheless, we have omitted the requirement
that Eligible Persons pay par value to eliminate any uncertainty regarding the
availability of Section 3(a)(9).  We
have amended Schedule TO and the Exchange Program documents to remove any
references to payment of a par value.

In
the alternative, the Company believes the Exchange Program is exempt from
registration under Section 4(2) of the Securities Act.  Each of the Eligible Persons participating in
the Exchange Program has the ability to fend for himself.(2)  There are
only ten people eligible to participate in the Exchange Program and each of
these persons has access to all essential information regarding the Company and
the Exchange Program.

Conditions
of this Exchange Program, Page 17

2.                                     We note
the condition described in clause (c)(v) relating to “any significant increase or decrease in the market price of the
shares of our common stock” (emphasis added).
We do not object to the imposition of conditions in a tender offer
provided that they are not within the direct or indirect control of the bidder
and are specific and capable of objective verification when satisfied.  Please revise the disclosure in this clause
to allow for objective verification that the condition has been satisfied.

Response:

In
response to the Staff’s comment regarding further clarity and objectivity of
the condition described in clause (c)(v), the Company has deleted  clause (c)(v) in its entirety.

3.                                     We note
the representation that the Company may assert the conditions regardless of the
circumstances giving rise to such conditions.
Please revise to remove the implication that the offer conditions may be
triggered through action or inaction by the Company.

Response:

As
requested by the Staff, the Company has revised the language in Section 7
of the Offer to Exchange regarding the accrual and assertion of the express
conditions to the Exchange

(2) Securities &
Exchange Commission v. Ralston Purina Co, 346 U.S. 119, 125 (1953) (stating
that an offering to those who are shown to be able to fend for themselves is a
transaction not involving any public offering).

3

Mr. Perry J. Hindin

June 9, 2009

Program
in an effort to remove any implication that the offer conditions may be
triggered through the action or inaction of the Company.  The revised language is as follows:

We
may assert them in our sole discretion when events occur that give rise to such
conditions before the expiration date, so long as such condition was not
triggered as a result of any action or inaction by us.

4.                                     We note
in the fourth sentence of the last paragraph of this section the disclosure
relating to the Company’s failure to exercise any of the rights described in
this section.  This language suggests
that if a condition is triggered and the Company fails to assert the condition,
it will not lose the right to assert the condition at a later time.  Please note that when a condition is
triggered and the Company decides to proceed with the offer anyway, we believe
that this decision is tantamount to a waiver of the triggered
condition(s).  Depending on the
materiality of the waived condition and the number of days remaining in the
offer, the Company may be required to extend the offer and recirculate new
disclosure to security holders. Please confirm the Company’s understanding that
if an offer condition is triggered, it will notify shareholders whether or not
it has waived such condition.

Response:

In response to the Staff’s comment, the Company has
revised the fourth sentence of the last paragraph in Section 7 as follows:

If
a condition is triggered and we do not exercise any of our rights to terminate
or amend this Exchange Program or postpone our acceptance and cancellation of
any Eligible Option Grants tendered for exchange, such inaction shall be deemed
a waiver of the triggering condition, and we shall notify all Eligible Persons
of such waiver.  Depending on the
materiality of the waived condition and the number of days remaining in the
offer, we may extend the offer and circulate disclosures and other Exchange
Program documents to Eligible Persons as required by applicable securities laws.

5.                                     We note
disclosure in the same paragraph that any determination the Company makes
concerning the events described in this section shall be final and binding.  Revise to state that security holders may
challenge the Company’s determinations in a court of competent
jurisdiction.  Please make corresponding
revisions to Section 3, Determination of Validity and Section 4,
Withdrawal Rights.

4

Mr. Perry J. Hindin

June 9, 2009

Response:

In
response to the Staff’s comment, the Company has amended its Schedule TO to
revise the referenced language in Section 7 of the Offer to Exchange to
state that the Company’s determination concerning the waiver or assertion of
the conditions of the Exchange Program may be challenged by any Eligible Person
in a court of competent jurisdiction.
The Company has likewise included language in Sections 3 and 4 of the
Offer to Exchange providing that the Company’s final determination as to such
matters may be challenged in a court of competent jurisdiction.

Information
Concerning Evolution Petroleum Corporation, page 19

6.                                     It
appears that the company has elected to incorporate by reference the
information required by Item 1010(a) and (b) of Regulation M-A and
has disclosed summarized financial information required by Item 1010(c).  Please provide the information required by
Item 1010(c)(4) and (5) of Regulation M-A.

Response:

In
response to the Staff’s comment, the Company has revised its financial
disclosures to include the required disclosures regarding book value per share
as of the date of the most recent balance sheet and the required disclosures
regarding the ratio of earnings to fixed charges.

Extention of Exchange Program;
Termination; Amendment, page 22

7.                                     In the
second paragraph of this section, the Company reserves the right to terminate
or amend the offer upon the occurrence of any of the events listed as offer
conditions “by giving oral or written notice” of such termination to its
employees.  We do not believe that orally
informing the employees of such a development, without more, satisfies the
Company’s obligations under the tender offer rules.  Please confirm that the Company will provide
appropriate notice through the filing and dissemination of revised offer
materials.  See Rule 13e-4(c)(3) and
(e)(3).

Response:

In
response to the Staff’s comment, the Company has eliminated any reference in Section 14
regarding the Company’s right to provide oral notice to Eligible Persons of the
termination or amendment of the Exchange Program and has revised Section 14
to indicate that the Company will provide notice of termination or amendment of
the Exchange Program through the filing and dissemination of revised offer
materials.

5

Mr. Perry J. Hindin

June 9, 2009

Miscellaneous,
page 24

8.              We note
the disclosure in the third paragraph of this section.  If this language is intended to apply to
holders of Restricted Stock located outside the United States, please note that
the all-holders provision in Exchange Act Rule 13e-4(f)(8) applies
equally to U.S. as well as non-U.S. target holders.  Refer to the interpretive guidance in section
II.G.1. of SEC Release 33-8957.  Please:

·                  advise us as to how the Company is complying
with the all-holders provision in Rule 13e-4(f)(8);

·                  confirm that the offer is being made in
reliance upon the March 2001 Exemptive Order and provide a brief analysis
in support of the Company’s eligibility to rely on such order; or

·                  revise the disclosure here consistent with
that rule.

Response:

The Company respectfully advises the Staff that it believes
that the conditions set forth in the U.S. Securities and Exchange Commission’s March 21,
2001 exemptive order regarding Issuer Exchange Offers
Conducted for Compensatory Purposes have all been satisfied.  The exemptive order specifies that Rules 13e-4(f)(8)(i) and
(ii) will not apply to issuer tender offers, in which the subject security
is an option, that satisfy the following conditions (the conditions are set
forth in bold font and the Company’s compliance with such conditions is
described under each condition):

The
Exchange Program is conducted for compensatory purposes:

The purpose behind the Exchange Program is compensatory in
nature, as is stated in Answer 2 of the Summary Term Sheet and in Section 2
of the Offer to Exchange on pages 2 and 15, respectively of Exhibit (a)(1)(i),
by providing Eligible Persons the opportunity to exchange stock options that
may have become ineffective at providing their intended incentives and
retention value for restricted stock.

The
issuer is elegible to use Form S-8, the options subject to the Exchange
Program were issued under an employee benefit plan as defined in Rule 405
under the Securities Act, and the securities offered in the Exchange Program
will be issued under such an employee benefit plan.

The Company is eligible to use Form S-8.  All options subject to the Exchange Program
were validly issued under the Company’s Amended and Restated 2004 Stock Plan,
and

6

Mr. Perry J. Hindin

June 9, 2009

all options offered in the Exchange Program will be issued
pursuant to such plan.  This plan is an
employee benefit plan as defined in Rule 405 of the Securities Act.  The Company is eligible to register
securities with respect to this Exchange Program on Form S-8 because all
of the individuals holding options subject to the Exchange Program are
employees or consultants of the Company on the respective dates of grant.

In addition to the foregoing, the Company respectfully
advises the Staff that the Company has no employees or consultants outside of
the United States and, therefore, none of the persons eligible to participate
in the Exchange Program are located outside of the United States.

Pursuant
to the Staff’s request, the Company hereby acknowledges that it is the policy
of the Commission that:

·