Question
From:(redacted)
Sent:Thursday, May 27, 2004 2:43
To:Verne, B. Michael
Subject: Another HSR Query
Mike, I guess the frequency of mye-mails to you suggests (in a small way) the recovery of the economy. Thanksfor the help yesterday. I have another question on a different transaction. Ihad already corresponded with you back in April about this transaction, and Iinclude your response below. Now, however, the transaction has changedsomewhat. Here is the situation:
Bank is the trustee of an ESOP inwhich 54% of the voting shares of a particular corporation (the"Company") are held in trust. The ESOP is an irrevocable trust and atax-qualified retirement plan under Code section 401 (a) which investsprimarily in employer stock in accordance with the statutory ESOP requirementsof Code section 4975(e)(7).As discussed below, the trustee technically has theright to vote those shares, but takes its instructions as to how to vote themfrom a committee comprised of individuals selected by the board of directors ofthe Company. As is typical, the trustee does not want to assume anyresponsibility for the management of the Company and therefore just does as itis told by the committee.
Under the original plan, theCompany was to be sold to a third party. Now, however, the proposal is for theESOP to acquire an additional 44% so that it will hold 98% of the outstandingvoting shares. The 98% would be held under the same terms as the current 54%.
Leaving the size of person andsize of transaction tests aside for the moment, my initial conclusion is thatthis is not a reportable transaction. Would you concur?