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Date
Rule
802.35
Staff
Michael Verne
Response/Comments
I assume that Holdco has no other holdings other than Opco. If that is the case, the transaction would be exempt under 802.35

Question

From: (Redacted)
Sent: Wednesday, March 14, 2012 2:52 PM
To: Verne, B. Michael
Subject: Proposed ESOP Transaction

Mike,

The purpose of mytelephone call to you today was to confirm that the following proposedtransaction involving an ESOP would be exempt from reporting under 802.35 ofthe HSR Rules.

The proposed steps are asfollows:

A new corporation will beformed ("Holdco"), but initially will issue no securities.

1. Holdco acquires 100% of the votingsecurities of an existing operating corporation ("Opco").

2. An ESOP is formed meeting thequalifications of Section 401 of the Internal Revenue Code; Holdco's Board ofDirectors adopts the ESOP; Holdco has the authority to appoint the ESOP'strustee; and the employees of Opco become the beneficiaries of the ESOP.

3. The ESOP acquires 100% of thenewly-issued voting securities of Holdco.

I believe the acquisitionof Holdco securities by the ESOP is exempt from reporting pursuant to Section802.35, even though the beneficiaries of the ESOP are the employees of Opco,Holdco's wholly-owned subsidiary. I would appreciate it if you could advisewhether you agree with my conclusion.

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