0401002 Informal Interpretation

From: (redacted)
Sent: Friday, January 09, 2004 9:10 AM
To: Ovuka Nancy
Cc: (redacted)

Subject: HSR Interpretation

Happy New Year Nancy. I am hoping foryour guidance on the following fact pattern:

Company X, is a cooperative ownedby 12 individuals in roughly equal shares. X is hoping to reorganize with allof its members contributing their voting membership interests to Company Y (whichis also a cooperative). The result will be that Company X will be wholly ownedby Company Y.

I wouldlike to argue that 16 CFR Section 802.30 exempts the transaction. My questions iswhether the PNOwould consider the voting membership interests to be voting securities".Y's bylaws will provide in relevant part that:

"a) each member of Y will have a single vote at anymeeting of its members and will be entitled to appoint two individuals to Y'sboard of directors. In connection With any matter pertaining to X as to which Yhas a vote, each member of Y will be entitled to require Y to exercise one ofits votes with respect to such matter in the manner that is directed by suchmember. Similarly, each member of Y will be entitled to direct Y as to the appointmentof two individuals to X's board of directors. (**does the right to appointmembers constitute the right to "elect" them)

b) On any liquidation or dissolution of Y, after all debtshave been paid and all patronage capital has been deemed on a pro rata basis tothe members and former members of Y, any remaining assets shall be distributedto Y's members and former members based on the historic partoage of each."