Question
From: (redacted)
Sent: Wednesday, May 14, 2008 3:55 PM
To: Verne, B. Michael
Subject: HSR Reportability 802.30, 7A(c)(10)
Mike,
Company A iscomprised of two businesses, "X Business" and "Y Business."Company A plans a recapitalization of its "X Business" and aseparation from the X Business of the "Y Business" through severalsteps. Company A is a corporate entity and is its own UPE. Company A hasapproximately 300 shareholders, none of which hold greater than 10% ofoutstanding voting securities. Company A shareholders are the partners of the XBusiness and Y Business ("X Partners" and "Y Partners").The transaction will occur by way of a contribution, spin-off, and merger withCompany B. The spin-off will occur contemporaneous with, and as an integralpart of, the merger. The transaction will be structured as follows:
1. Company A will form two wholly owned subsidiaries,"Newco Inc" and "Newco LLC;"
2. Company A will contribute the assets of its YBusiness to Newco LLC (the "Contribution");
3. Company A will contribute Newco LLC to a wholly ownedsubsidiary of Newco Inc.;
4. Company A will distribute to its shareholders all ofthe shares of Newco Inc. voting stock on a pro-rata basis (the "Spin-Off'of Y Business);
5. Immediately following the Spin-Off, certain XPartners will exchange Newco Inc. voting shares for cash; 60 days followingclosing, Newco Inc. will repurchase all shares of Newco Inc. voting stock heldby X Partners in exchange for cash;
6. Immediately prior to the Merger, certain X Partnerswill exchange Company A voting shares and options for voting shares and optionsof the parent of Company B, and certain Y Partners will exchange Company Avoting shares and options for non-voting shares and options of the parent ofCompany B (the "Roll-Over");
7. A wholly owned subsidiary of Company B will mergewith and into Company A (which due to the Spin-Off consists of only X Business)with Company A surviving as a Wholly owned subsidiary of Company B (the"Merger");
8. Company A shareholders that did not participate inthe Roll-Over, if any, will receive cash in exchange for their shares of votingstock of Company A, except certain X Partners that did not participate in theRoll-Over, if any, will have some of their Company A voting shares and optionsconverted into the right to receive Company B voting shares and options.
Assuming that anHSR filing is submitted in connection with the Merger in step 7, can youconfirm that no other filings will be required, i.e., steps 1, 2, 3, and 5 areexempt pursuant to 802.30 (intraperson transactions) and step 4 is exemptpursuant to 7A(c)(1 0) (no increase in percentage voting securities).