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Date
Rule
801.2, 801.1(c)
Staff
Michael Verne
Response/Comments
It depends on how they were restricted. We have seen various plans, I think the position then and now is that if you have the right to vote the share, receive dividends, and by definition the risk of loss or benefit of gain in value there is an acquisition of voting securities at the time the stock is acquired. When the stock later vest there would be no acquisition unless the percentage of votes increased as a result of vesting. Other plans we have seen give the recipient only rick of loss and benefit of gain in value, and deferred receipt of dividends until it vests, The recipient cannot vote or dispose of the shares until vesting occurs. In the case we have said that the awarding of the stock is not an acquisition but an acquisition does occur at the time of stock vests.

Question

From:

Redacted

Sent:

Wednesday, July 14, 2010 3:17 PM

To:

Verne, B. Michael

Subject: RE: Salesinto the U.S.

Mike --Question rerestricted stock units that entitle the recipient to vote the shares andreceive dividends but not the right to dispose of the shares until the sharesvest.

Interpretation0611006 includes a notes that indicates that the receipt of such restrictedstock units is an acquisition of a different class of convertible votingsecurities when the units are awarded and that when the shares vest they areconverted into another class of shares that woul9 require filing if the votingrights increase as a result of the conversion.

My questionconcerns the PNO's position prior to November 2006. We are conducting aninternal investigation to determine whether an officer of a public company mayhave violated HSR when he was awarded restricted stock units in 1997. Was thePNO position at that time that the award of the restricted stock units constitutedan acquisition of voting securities for HSR purpose? Or was the PNO's positionat that time that the vesting of the restricted stock unit constituted anacquisition of voting securities? Or that the acquisition of restricted stockunits was not an acquisition of voting securities?

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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