us-ftc-hsr-informal-interpretations-cd2ca50183dd3fc67b3efd4cb398b051•1203006 Informal Interpretation
1203006 Informal Interpretation
us-ftc-hsr-informal-interpretations-cd2ca50183dd3fc67b3efd4cb398b0511203006 Informal InterpretationGuidance
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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