1207005 Informal Interpretation

Date:
Rule:
802.9
Staff:
Michael Verne
Response/Comments:

  – Agree – as long as X does not engage in non-passive activities after leaving the company.  K Walsh concurs.

Question

From:

(Redacted)

Sent:

Tuesday, July 10, 2012 4:54 PM

To:

Verne, B. Michael

Cc:

(Redacted)

Subject:

guidance please Investment Only Exemption

HiMike -Hoping that you can confirm that the "investment onlyexemption" will apply to the following fact pattern:

Asan incentive to keep one of its officers, Company A makes a special arrangementwhereby Officer X gets 10,000 RSU credits per month for every month he agreesto stay with the company for up to one year. The RSUs vest on Officer X's lastday so effectively, he is an officer, one second later, the RSUs vest and onesecond later, he is no longer an employee of the company. Assume that Officer Xwill meet size of person and the size of transaction test is met at the momentthe RSUs vest. We believe that the investment only exemption will apply sinceOfficer X will no longer be an officer (involved in the management of thecompany) at the time that the size of transaction test is met.

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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