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Date
Rule
801.1(b)
Staff
Michael Verne
Response/Comments
This is the correct analysis. I'm sorry if my advice mislead you in the previous analysis. Having an irrevocable proxy to vote 50% or more of the voting securities of an issuer does confer control, but the person granted the proxy does not hold the voting securities. Maybe that's where we miscommunicated..

Question

------ Original Message-----

From: (redacted)

Sent: Wednesday, April 12, 2006 9:43 AM

To: Verne, B. Michael

Subject: Fw: Question

Mike,

I need clarification/confirmation on a UPEdetermination. I am fairly certain that I know the answer, but am skittish becauseof a determination that I got wrong in the context of a recent filing. You andI corresponded about the previous determination (see below) and I thought thatI understood that a person was not a UPE even if he was entitled to at least50% of the vote if he reached 50% by virtue of a combination of ownership andirrevocable proxies rather than by either independently. I understood from ourcorrespondence that such a person was not the UPE, but learned from Nancy Ovukathat I was wrong. My misunderstanding in that scenario leads me to ask forconfirmation now:

Person A holds an irrevocable proxy to vote at least50% of the voting securities of Corp. Company B owns at least 50% of the votingsecurities of Corp, but its shares are voted by Person A pursuant to theirrevocable proxy. I think that both Person A and Company B are UPEs of Corpsince Person A essentially has the contractual right to appoint the board andCompany B holds 50% or more of Corp's voting securities even though it hasgiven away its right to vote those shares. Is this correct?

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