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  Staff Interpretation Letter 2011-4  
Identification Number 694
This is in response to your correspondence regarding the applicability of the shareholder approval requirements of Listing Rule 5635(c) (the “Rule”) to awards under the Plan (the “Awards”).  Specifically, you asked whether the company could make Awards prior to obtaining shareholder approval.
The company conducts all of its operations through a limited liability company which holds substantially all of the company’s assets (the “LLC”).  The company owns substantially all of membership units of the LLC (the “LLC Units”).
The Awards would be made to members of the company’s senior management to provide them with the ability to receive cash or, following shareholder approval, equity based on the company’s level of return to shareholders over a specified period of time.  After the Awards vest, they could be redeemed for cash from the company at a price based on the price of the company’s common stock.  Following approval by the company’s shareholders, the Awards could become redeemable for LLC Units, instead of cash.  In addition, after the passage of a specified period of time, and only following approval by the company’s shareholders, the Awards, or the LLC Units into which they may be have been converted, would also be redeemable for shares of the company’s common stock on a one-for-one basis.
Following our review of the information you submitted, we have determined that the company may grant the Awards prior to seeking shareholder approval because no shares of the company’s common stock could be issued until after shareholder approval has been obtained.  This determination is based upon your representation that unless such approval has been obtained: (i) the Awards could not be convertible into LLC Units, and (ii) no shares of the company’s common stock could be issued under the Plan.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 694
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