18040002 Informal Interpretation

us-ftc-hsr-informal-interpretations-31c91e78eb1f81f01c485773ce7e799018040002 Informal InterpretationGuidance

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Date

Tags:

Rule
801.12
Staff
Kristin Shaffer
Response/Comments

Assuming that all Series A Preferred Stock holders vote for two directors, we agree with your analysis. The fact that those directors need to receive 75% of the vote, rather than a simple majority, does not change the math.

Question

From: Shaffer, Kristin


Sent: Friday, April 13, 2018 11:00:43 AM (UTC-05:00) Eastern Time (US & Canada)


To: [Redacted]


Cc: [Redacted]


Subject: RE: 801.12 Question

[Redacted]

Assuming that all Series A Preferred Stock holders vote for two directors, we agree with your analysis. The fact that those directors need to receive 75% of the vote, rather than a simple majority, does not change the math.

Best regards,

Kristin

Kristin Shaffer

Attorney

Premerger Notification Office

Federal Trade Commission

202-326-3434 | kshaffer@ftc.gov

From: [Redacted]


Sent: Wednesday, April 11, 2018 10:58 AM


To: [Redacted]


Subject: 801.12 Question

All,

We are seeking guidance on how to apply the Section 801.12 formula to the following facts.

Company X has four authorized directors elected as follows.

  1. Two directors are elected by the holders of at least 75% of X’s Series A Preferred Stock voting as a class on as as-converted to Common Stock basis.
  2. Two directors are elected by the holders of a majority of X’s Common Stock voting as a class.

No stockholder holds at least 75% of X’s Series A Preferred Stock.

Assume Stockholder Y holds 30% of X’s Series A Preferred Stock and 10% of X’s Common Stock. How would we calculate what percentage of X’s voting shares Stockholder Y holds under Section 801.12? Would it still be [30% times 2/4] plus [10% times 2/4]?

1
Sheinberg, Samuel I.
From:
Sent: 	Friday, April 13, 2018 11:01 AM
To: 	Walsh, Kathryn E.; Berg, Karen E.; Carson, Timothy; Sheinberg, Samuel I.; Whitehead,
Nora; Davis, Alpa D.
Subject: 	FW: 801.12 Question
From: Shaffer, Kristin
Sent: Friday, April 13, 2018 11:00:43 AM (UTC-05:00) Eastern Time (US & Canada)
To:
Cc:
Subject: RE: 801.12 Question


AssumingthatallSeriesAPreferredStockholdersvotefortwodirectors,weagreewithyouranalysis.Thefactthat
thosedirectorsneedtoreceive75%ofthevote,ratherthanasimplemajority,doesnotchangethemath.

Bestregards,
Kristin

KristinShaffer
Attorney
PremergerNotificationOffice
FederalTradeCommission
202Ͳ326Ͳ3434|kshaffer@ftc.gov


From:
Sent: Wednesday, April 11, 2018 10:58 AM
To:
Subject: 801.12 Question


All,

WeareseekingguidanceonhowtoapplytheSection801.12formulatothefollowingfacts.

CompanyXhasfourauthorizeddirectorselectedasfollows.

a. 	Twodirectorsareelectedbytheholdersofatleast75%ofX’sSeriesAPreferredStockvotingasaclass
onasasͲconvertedtoCommonStockbasis.
b. 	TwodirectorsareelectedbytheholdersofamajorityofX’sCommonStockvotingasaclass.

Nostockholderholdsatleast75%ofX’sSeriesAPreferredStock.

2
AssumeStockholderYholds30%ofX’sSeriesAPreferredStockand10%ofX’sCommonStock.Howwouldwe
calculatewhatpercentageofX’svotingsharesStockholderYholdsunderSection801.12?Woulditstillbe[30%times
2/4]plus[10%times2/4]?

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