0911003 Informal Interpretation

From:

(Redacted)

Sent:

Monday, November 02, 2009 5:40 PM

To:

Verne, B. Michael

Subject: HSRquestion

Mike,

This follows upmy voicemail. In our hypothetical, there are two directors of a publicly-heldcompany, each of whom has holdings of voting securities in excess of thestatutory threshold ($65.2 million). These holdings represent 15% and 10%,respectively, of the company's stock. Both directors have assets that meet thesize of person test, and the company (a manufacturer/retailer) has sales andassets that meet the test.

The directors'acquisitions of their holdings took place through an IPO that occurred lastyear. Because the IPO reduced the directors' percentage ownership interests inthe company, the acquisitions were exempt under 15 USC 18a(c)(10).

One director nowwishes to sell a portion of his holdings (worth about $3.0 million) to theother in a private transaction. Because the buying director's holdings alreadyexceed the statutory threshold, it appears his acquisition of the additionalshares will constitute a Rule 801.30 transaction that requires the buyer (asthe acquiring person) and the company (as the acquired issuer) to file HSRreports.

We aredetermining whether any exemptions may apply to the private sale. The issuerdoes not qualify for any of the industry or asset-specific exemptions (for example,relating to acquisitions of certain mineral interests or nonproductive realestate). This will be a sale, not a gift or a loan. And although the directorsare members of the same immediate family, they are not spouses, nor is one theminor child of the other. Both are adults who do not, individually or together,have contractual power presently to designate 50% or more of the company'sboard of directors.

If you are awareof any other exemptions that might apply, I would very much like to talk.