SEC Company Response from LXU Healthcare, Inc. (CIK 0000793523) — Oct 19, 2005
LXU Healthcare, Inc. (CIK 0000793523)
Date: Oct. 19, 2005 · CIK: 0000793523 · Accession: 0001110550-05-000135
AI Filing Summary & Sentiment
Letter
VIA EDGAR --------- Michael Pressman, Special Counsel Office of Mergers & Acquisitions Securities and Exchange Commission Division of Corporation Finance Washington, D.C. 20549 PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A FILED AUGUST 31, 2005 FILE NO. 0-14961
RE: LXU HEALTHCARE, INC. SCHEDULE 13E-3 FILED AUGUST 31, 2005 FILE NO. 5-78542
Dear Mr. Pressman:
This letter is submitted on behalf of LXU Healthcare, Inc. (the "Company") in response to comments of the staff of the Division of Corporation Finance (the "Staff") of the Securities and Exchange Commission (the "Commission") with respect to the Company's Schedule 13E-3 filed with the Commission on August 31, 3005 and the Company's Preliminary Proxy Statement on Schedule 14A filed with the Commission on August 31, 2005 (the "Preliminary Proxy Statement"), as set forth in your letter, dated September 19, 2005 (the "Comment Letter"), to George Lloyd. The Company is filing Amendment No. 1 to the Preliminary Proxy Statement (the "Amendment"), which include changes principally to reflect responses to the Staff's comments. The responses in this letter are based on representations made by the Company to Goodwin Procter LLP for the purpose of preparing this letter. The Company will separately deliver copies of the Amendment, marked to show changes responsive to the Comment Letter, to the members of the Staff specified in the Comment Letter.
For reference purposes, the text of the Comment Letter has been reproduced herein with responses below each numbered comment. Unless otherwise indicated, page references in the descriptions of the Staff's comments refer to Schedule 13E-3 and the Preliminary Proxy Statement and page references in the responses refer to the Amendment, as applicable.
<PAGE>
General -------
1. COMMENT: ALL OF THE REPORTS, OPINIONS OR APPRAISALS MATERIALLY RELATED ------- TO THE GOING-PRIVATE TRANSACTION SHOULD BE DESCRIBED IN REASONABLE DETAIL IN THE PROXY MATERIALS AND ANY WRITTEN MATERIALS PRESENTED TO THE BOARD SHOULD BE FILED AS EXHIBITS TO SCHEDULE 13E-3, AS REQUIRED BY ITEM 1015 AND 1016 OF REGULATION M-A. EITHER PROVIDE THE DESCRIPTIONS OF ANY REPORTS, OPINIONS OR APPRAISALS AND FILE THE WRITTEN MATERIALS PREPARED BY SIMON FINANCIAL, JEFFRIES & COMPANY, SHATTUCK HAMMON, BURNHAM SECURITIES, AND WILLIAM BLAIR, OR EXPLAIN TO US WHY YOU BELIEVE THEY ARE NOT MATERIALLY RELATED TO THE GOING-PRIVATE TRANSACTION. REFER TO THE CHARLES L. EPHRAIM NO-ACTION LETTER DATED SEPT. 30, 1987) AND THE IN RE MEYERS PARKING SYSTEM RELEASE NO. 34-26069 (SEPT. 12, 1988).
RESPONSE: In response to the Staff's comment, the Company respectfully -------- submits that the business context and purposes for which the materials prepared by Jefferies & Company, Shattuck Hammond Partners, Burnham Securities, Inc. and William Blair & Company were prepared makes them unreliable indicators of the value of the Company. In addition, the Company respectfully submits that these materials are not reports, opinions or appraisals materially related to the Stock Splits.
These materials are "pitch materials" prepared by these investment banks to market their services to the Company. As is common, these pitch materials contained a highly preliminary view of the valuation of the Company based solely on publicly-available information about the Company. These investment banks were not engaged by the Company to prepare these materials or the preliminary valuations contained therein and received no compensation for preparing these materials.
Because the investment banks' primary motivation in preparing these reports was to secure business from the Company, these banks had an incentive to overstate the value of the Company. The very high and broad range of values ($37 million to $70 million) for the Company indicated by the investment banks are a consequence of the fact that these investment banks had limited knowledge of the Company and conducted no due diligence of the Company in connection with the preparation of these materials.
Based on all of these factors, the Company believes that these materials are an unreliable indicator of the Company's value and lack the credibility associated with independent appraisals, reports or opinions of the kind discussed in the Ephraim No-Action Letter and the In re Meyers Parking System Release. The absence of any significant research or due diligence investigation of the Company used to prepare these materials and the absence of compensation contrasts with the extensive, presumably paid, review conducted for the purpose of
<PAGE> preparing an independent appraisal of assets in connection with a post-closing adjustment in a merger context (as was the case in the Charles L. Ephraim No-Action letter) and for the purpose of preparing third party appraisals of properties in connection with the valuation of minority shares (which appraisals were used as a starting point for the preparation of the fairness opinion referenced in the In re Meyers Parking System Release). For this reason, as indicated in the Preliminary Proxy Statement, the Board did not give any significant weight to these indications of the investment banks' views regarding the value of the Company.
In addition, the Company does not believe that the investment banks' presentations are "materially related" to the deregistration transaction. Although the Company recognizes that the fact that a report, opinion or appraisal was not specifically prepared for purposes of the Rule 13e-3 transaction is not dispositive of its relevance or materiality to the transaction, the Company believes that it is relevant that, in this case, the investment banks' materials were not prepared in the context of the Stock Splits. It should be noted that although Simon Financial naturally reviewed these presentations as part of its due diligence in connection with the delivery of its fairness opinion, Simon Financial did not rely on these presentations in conducting its valuation analysis and preparing its fairness opinion.
In light of the fact that the materials prepared by the investment banks are "free" marketing materials and were not relied upon either by Simon Financial or the Board, the Company believes that the inclusion of a detailed description of these presentations in the Preliminary Proxy Statement and their attachment as exhibits would be inappropriate and misleading as it would suggest that these materials contain relevant information that the Board believes shareholders should rely on, and would frustrate the purposes of Rule 13e-3 by leading shareholders to unduly rely on information that does not rise to the level of a report, appraisal or opinion deemed relevant under Rule 13e-3 and is not materially related to the Company's proposed deregistration transaction.
Please note that the presentation of Simon Financial, Inc. to the Company's Board on August 25, 2005 is being filed as an exhibit to Schedule 13E-3 pursuant to Items 1015 and 1016 of Regulation M-A.
Schedule 13E-3 --------------
2. COMMENT: RULE 13E-3 REQUIRES THAT EACH AFFILIATE ENGAGED IN A GOING ------- PRIVATE TRANSACTION FILE A SCHEDULE 13E-3 AND FURNISH THE REQUIRED DISCLOSURES. PLEASE ADVISE US WHAT CONSIDERATION WAS GIVEN TO IDENTIFYING EACH "RELATED PERSON" AS AN AFFILIATE ENGAGED IN THE GOING PRIVATE TRANSACTION. IN PARTICULAR, WE NOTE THAT EACH "RELATED PERSON" WILL REMAIN WITH THE COMPANY FOLLOWING THE REVERSE STOCK SPLIT. REFER TO SECTION III OF RELEASE NO. 34-17719 AND SECTION II.D.3 OF OUR CURRENT ISSUES AND RULEMAKING PROJECTS OUTLINE DATED NOVEMBER 14, 2000 FOR ADDITIONAL GUIDANCE.
<PAGE> ALTERNATIVELY, REVISE TO INCLUDE EACH RELATED PERSON AS A FILING PERSON ON THE SCHEDULE 13E-3. PLEASE NOTE THAT EACH NEW FILING PERSON MUST INDIVIDUALLY COMPLY WITH THE FILING, DISSEMINATION AND DISCLOSURE REQUIREMENTS OF SCHEDULE 13E-3. THEREFORE, YOU WILL NEED TO REVISE THE DISCLOSURE TO INCLUDE ALL OF THE INFORMATION REQUIRED BY SCHEDULE 13E-3 AND ITS INSTRUCTIONS FOR ANY FILING PERSONS ADDED IN RESPONSE TO THIS COMMENT. FOR EXAMPLE, INCLUDE A STATEMENT AS TO WHETHER EACH PERSON BELIEVES THE RULE 13e-3 TRANSACTION TO BE FAIR TO UNAFFILIATED SECURITY HOLDERS AND AN ANALYSIS OF THE MATERIAL FACTORS UPON WHICH THEY RELIED IN REACHING SUCH A CONCLUSION. REFER TO ITEM 8 OF SCHEDULE 13E-3, ITEM 1014 OF REGULATION M-A AND QUESTION AND ANSWER NO. 5 OF EXCHANGE ACT RELEASE NO. 34-17719 (APRIL 13, 1981).
RESPONSE: In response to the Staff's comment, the Company respectfully -------- submits that it does not believe that any of its "Related Persons" (directors, executive officers, 10% shareholders and shareholders who have non-voting observer rights on the Board of Directors) is "engaged in a going private transaction" within the meaning of Rule 13e-3 and thus required to file a Schedule 13E-3.
The Company concedes that the Company is engaged in a going private transaction and that its directors, executive officers and 10% shareholders are affiliates of the Company. However, as noted in Section II, D.3 of the Commission's Current Issues and Rulemaking Projects Outline (November 14, 2000) (the "Outline") (discussing the issue as it relates to management of the issuer), whether affiliates of an issuer are engaged in a going private transaction depends on the facts and circumstances of the transaction. By implication, the Commission has acknowledged in the Outline that it is not always the case that affiliates of an issuer engaged in a going private transaction are themselves engaged in a going private transaction. The Company believes that the present fact pattern presents a compelling case that the Company's affiliates are not themselves engaged in a going private transaction.
The Company believes that the actions of the Company's directors should be distinguished from those of its affiliated shareholders. The deregistration transaction, including the Stock Splits, was first raised in meetings of the Company's Board of Directors, and is being directed and managed by the Company's Board, not by any of the Company's affiliated shareholders. In approving the transactions, the individual members of the Company's Board were acting in their capacity as board members and not in their capacity as representatives of the shareholders with whom they are affiliated (as applicable). Although the transaction has the support of the shareholders with whom directors or non-voting observers are affiliated, including GE Capital Equity Investments, Inc., the company's largest shareholder, the transaction is being directed and managed by the Board. The Company's affiliated shareholders, in their capacity as shareholders, are not leading the deregistration transaction. When consulted, the Company's affiliated shareholders, in their capacity as shareholders, have simply agreed to follow the Board's recommendation to pursue a deregistration transaction.
While it is correct that the Company's affiliates will remain shareholders of the Company following the Stock Splits, the Company does not believe this fact should be determinative of whether its affiliates should be included in the Schedule 13E-3 and whether separate affiliate disclosure is required. Instead, the Company
<PAGE> believes that the determining factor should be whether separate affiliate disclosure would be relevant to the Company's shareholders, including affiliated shareholders, unaffiliated shareholders and shareholders to be cashed-out in the Stock Splits. The Company believes that whether separate affiliate disclosure would be relevant to the Company's shareholders depends on the effect the transaction has on (a) the affiliates' control of, and financial interest in, the Company, (b) unaffiliated shareholders' control of, and financial interest in, the Company and (c) cashed-out holders.
In light of the fact that the Company's Related Persons already control the Company as a result of their owning voting majorities of the Company's outstanding common stock and Series G preferred stock, voting separately and together, the Stock Splits will have no impact on the Related Persons' control of the Company. The impact of the Stock Splits on the Related Persons' financial interest in the Company is DE MINIMUS given that the Stock Splits will result in the repurchase by the Company of .2% of the Company's fully diluted common stock, at a cost of approximately $24,149, resulting in an increase from 85.6% to 85.8% in the percentage ownership interest of the Related Persons in the Company's fully diluted common stock.
The Stock Splits will similarly have no impact on the unaffiliated shareholders' control of the Company since the Company's Related Persons control the Company. The impact of the Stock Splits on the financial interest in the Company of unaffiliated shareholders is similarly DE MINIMUS: the Stock Splits will result in a 1.5% reduction in the number of common stock equivalents owned by unaffiliated shareholders, in exchange for a payment to such unaffiliated shareholders of approximately $24,149. The vast majority of unaffiliated shareholders (measured based on shareholdings, not shareholders) will remain shareholders of the Company, with no reduction (and in fact a small increase) in their economic interest in the Company. (Reg
Show Raw Text
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<SEQUENCE>1
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<TEXT>
October 19, 2005
VIA EDGAR
---------
Michael Pressman, Special Counsel
Office of Mergers & Acquisitions
Securities and Exchange Commission
Division of Corporation Finance
Washington, D.C. 20549
RE: LXU HEALTHCARE, INC.
SCHEDULE 13E-3 FILED AUGUST 31, 2005
FILE NO. 5-78542
PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A
FILED AUGUST 31, 2005
FILE NO. 0-14961
Dear Mr. Pressman:
This letter is submitted on behalf of LXU Healthcare, Inc. (the "Company")
in response to comments of the staff of the Division of Corporation Finance (the
"Staff") of the Securities and Exchange Commission (the "Commission") with
respect to the Company's Schedule 13E-3 filed with the Commission on August 31,
3005 and the Company's Preliminary Proxy Statement on Schedule 14A filed with
the Commission on August 31, 2005 (the "Preliminary Proxy Statement"), as set
forth in your letter, dated September 19, 2005 (the "Comment Letter"), to George
Lloyd. The Company is filing Amendment No. 1 to the Preliminary Proxy Statement
(the "Amendment"), which include changes principally to reflect responses to the
Staff's comments. The responses in this letter are based on representations made
by the Company to Goodwin Procter LLP for the purpose of preparing this letter.
The Company will separately deliver copies of the Amendment, marked to show
changes responsive to the Comment Letter, to the members of the Staff specified
in the Comment Letter.
For reference purposes, the text of the Comment Letter has been reproduced
herein with responses below each numbered comment. Unless otherwise indicated,
page references in the descriptions of the Staff's comments refer to Schedule
13E-3 and the Preliminary Proxy Statement and page references in the responses
refer to the Amendment, as applicable.
<PAGE>
General
-------
1. COMMENT: ALL OF THE REPORTS, OPINIONS OR APPRAISALS MATERIALLY RELATED
-------
TO THE GOING-PRIVATE TRANSACTION SHOULD BE DESCRIBED IN REASONABLE
DETAIL IN THE PROXY MATERIALS AND ANY WRITTEN MATERIALS PRESENTED TO
THE BOARD SHOULD BE FILED AS EXHIBITS TO SCHEDULE 13E-3, AS REQUIRED
BY ITEM 1015 AND 1016 OF REGULATION M-A. EITHER PROVIDE THE
DESCRIPTIONS OF ANY REPORTS, OPINIONS OR APPRAISALS AND FILE THE
WRITTEN MATERIALS PREPARED BY SIMON FINANCIAL, JEFFRIES & COMPANY,
SHATTUCK HAMMON, BURNHAM SECURITIES, AND WILLIAM BLAIR, OR EXPLAIN TO
US WHY YOU BELIEVE THEY ARE NOT MATERIALLY RELATED TO THE
GOING-PRIVATE TRANSACTION. REFER TO THE CHARLES L. EPHRAIM NO-ACTION
LETTER DATED SEPT. 30, 1987) AND THE IN RE MEYERS PARKING SYSTEM
RELEASE NO. 34-26069 (SEPT. 12, 1988).
RESPONSE: In response to the Staff's comment, the Company respectfully
--------
submits that the business context and purposes for which the materials
prepared by Jefferies & Company, Shattuck Hammond Partners, Burnham
Securities, Inc. and William Blair & Company were prepared makes them
unreliable indicators of the value of the Company. In addition, the
Company respectfully submits that these materials are not reports,
opinions or appraisals materially related to the Stock Splits.
These materials are "pitch materials" prepared by these investment
banks to market their services to the Company. As is common, these
pitch materials contained a highly preliminary view of the valuation
of the Company based solely on publicly-available information about
the Company. These investment banks were not engaged by the Company to
prepare these materials or the preliminary valuations contained
therein and received no compensation for preparing these materials.
Because the investment banks' primary motivation in preparing these
reports was to secure business from the Company, these banks had an
incentive to overstate the value of the Company. The very high and
broad range of values ($37 million to $70 million) for the Company
indicated by the investment banks are a consequence of the fact that
these investment banks had limited knowledge of the Company and
conducted no due diligence of the Company in connection with the
preparation of these materials.
Based on all of these factors, the Company believes that these
materials are an unreliable indicator of the Company's value and lack
the credibility associated with independent appraisals, reports or
opinions of the kind discussed in the Ephraim No-Action Letter and the
In re Meyers Parking System Release. The absence of any significant
research or due diligence investigation of the Company used to prepare
these materials and the absence of compensation contrasts with the
extensive, presumably paid, review conducted for the purpose of
2
<PAGE>
preparing an independent appraisal of assets in connection with a
post-closing adjustment in a merger context (as was the case in the
Charles L. Ephraim No-Action letter) and for the purpose of preparing
third party appraisals of properties in connection with the valuation
of minority shares (which appraisals were used as a starting point for
the preparation of the fairness opinion referenced in the In re Meyers
Parking System Release). For this reason, as indicated in the
Preliminary Proxy Statement, the Board did not give any significant
weight to these indications of the investment banks' views regarding
the value of the Company.
In addition, the Company does not believe that the investment banks'
presentations are "materially related" to the deregistration
transaction. Although the Company recognizes that the fact that a
report, opinion or appraisal was not specifically prepared for
purposes of the Rule 13e-3 transaction is not dispositive of its
relevance or materiality to the transaction, the Company believes that
it is relevant that, in this case, the investment banks' materials
were not prepared in the context of the Stock Splits. It should be
noted that although Simon Financial naturally reviewed these
presentations as part of its due diligence in connection with the
delivery of its fairness opinion, Simon Financial did not rely on
these presentations in conducting its valuation analysis and preparing
its fairness opinion.
In light of the fact that the materials prepared by the investment
banks are "free" marketing materials and were not relied upon either
by Simon Financial or the Board, the Company believes that the
inclusion of a detailed description of these presentations in the
Preliminary Proxy Statement and their attachment as exhibits would be
inappropriate and misleading as it would suggest that these materials
contain relevant information that the Board believes shareholders
should rely on, and would frustrate the purposes of Rule 13e-3 by
leading shareholders to unduly rely on information that does not rise
to the level of a report, appraisal or opinion deemed relevant under
Rule 13e-3 and is not materially related to the Company's proposed
deregistration transaction.
Please note that the presentation of Simon Financial, Inc. to the
Company's Board on August 25, 2005 is being filed as an exhibit to
Schedule 13E-3 pursuant to Items 1015 and 1016 of Regulation M-A.
Schedule 13E-3
--------------
2. COMMENT: RULE 13E-3 REQUIRES THAT EACH AFFILIATE ENGAGED IN A GOING
-------
PRIVATE TRANSACTION FILE A SCHEDULE 13E-3 AND FURNISH THE REQUIRED
DISCLOSURES. PLEASE ADVISE US WHAT CONSIDERATION WAS GIVEN TO
IDENTIFYING EACH "RELATED PERSON" AS AN AFFILIATE ENGAGED IN THE GOING
PRIVATE TRANSACTION. IN PARTICULAR, WE NOTE THAT EACH "RELATED PERSON"
WILL REMAIN WITH THE COMPANY FOLLOWING THE REVERSE STOCK SPLIT. REFER
TO SECTION III OF RELEASE NO. 34-17719 AND SECTION II.D.3 OF OUR
CURRENT ISSUES AND RULEMAKING PROJECTS OUTLINE DATED NOVEMBER 14, 2000
FOR ADDITIONAL GUIDANCE.
3
<PAGE>
ALTERNATIVELY, REVISE TO INCLUDE EACH RELATED PERSON AS A FILING
PERSON ON THE SCHEDULE 13E-3. PLEASE NOTE THAT EACH NEW FILING PERSON
MUST INDIVIDUALLY COMPLY WITH THE FILING, DISSEMINATION AND DISCLOSURE
REQUIREMENTS OF SCHEDULE 13E-3. THEREFORE, YOU WILL NEED TO REVISE THE
DISCLOSURE TO INCLUDE ALL OF THE INFORMATION REQUIRED BY SCHEDULE
13E-3 AND ITS INSTRUCTIONS FOR ANY FILING PERSONS ADDED IN RESPONSE TO
THIS COMMENT. FOR EXAMPLE, INCLUDE A STATEMENT AS TO WHETHER EACH
PERSON BELIEVES THE RULE 13e-3 TRANSACTION TO BE FAIR TO UNAFFILIATED
SECURITY HOLDERS AND AN ANALYSIS OF THE MATERIAL FACTORS UPON WHICH
THEY RELIED IN REACHING SUCH A CONCLUSION. REFER TO ITEM 8 OF SCHEDULE
13E-3, ITEM 1014 OF REGULATION M-A AND QUESTION AND ANSWER NO. 5 OF
EXCHANGE ACT RELEASE NO. 34-17719 (APRIL 13, 1981).
RESPONSE: In response to the Staff's comment, the Company respectfully
--------
submits that it does not believe that any of its "Related Persons"
(directors, executive officers, 10% shareholders and shareholders who
have non-voting observer rights on the Board of Directors) is "engaged
in a going private transaction" within the meaning of Rule 13e-3 and
thus required to file a Schedule 13E-3.
The Company concedes that the Company is engaged in a going private
transaction and that its directors, executive officers and 10%
shareholders are affiliates of the Company. However, as noted in
Section II, D.3 of the Commission's Current Issues and Rulemaking
Projects Outline (November 14, 2000) (the "Outline") (discussing the
issue as it relates to management of the issuer), whether affiliates
of an issuer are engaged in a going private transaction depends on the
facts and circumstances of the transaction. By implication, the
Commission has acknowledged in the Outline that it is not always the
case that affiliates of an issuer engaged in a going private
transaction are themselves engaged in a going private transaction. The
Company believes that the present fact pattern presents a compelling
case that the Company's affiliates are not themselves engaged in a
going private transaction.
The Company believes that the actions of the Company's directors
should be distinguished from those of its affiliated shareholders. The
deregistration transaction, including the Stock Splits, was first
raised in meetings of the Company's Board of Directors, and is being
directed and managed by the Company's Board, not by any of the
Company's affiliated shareholders. In approving the transactions, the
individual members of the Company's Board were acting in their
capacity as board members and not in their capacity as representatives
of the shareholders with whom they are affiliated (as applicable).
Although the transaction has the support of the shareholders with whom
directors or non-voting observers are affiliated, including GE Capital
Equity Investments, Inc., the company's largest shareholder, the
transaction is being directed and managed by the Board. The Company's
affiliated shareholders, in their capacity as shareholders, are not
leading the deregistration transaction. When consulted, the Company's
affiliated shareholders, in their capacity as shareholders, have
simply agreed to follow the Board's recommendation to pursue a
deregistration transaction.
While it is correct that the Company's affiliates will remain
shareholders of the Company following the Stock Splits, the Company
does not believe this fact should be determinative of whether its
affiliates should be included in the Schedule 13E-3 and whether
separate affiliate disclosure is required. Instead, the Company
4
<PAGE>
believes that the determining factor should be whether separate
affiliate disclosure would be relevant to the Company's shareholders,
including affiliated shareholders, unaffiliated shareholders and
shareholders to be cashed-out in the Stock Splits. The Company
believes that whether separate affiliate disclosure would be relevant
to the Company's shareholders depends on the effect the transaction
has on (a) the affiliates' control of, and financial interest in, the
Company, (b) unaffiliated shareholders' control of, and financial
interest in, the Company and (c) cashed-out holders.
In light of the fact that the Company's Related Persons already
control the Company as a result of their owning voting majorities of
the Company's outstanding common stock and Series G preferred stock,
voting separately and together, the Stock Splits will have no impact
on the Related Persons' control of the Company. The impact of the
Stock Splits on the Related Persons' financial interest in the Company
is DE MINIMUS given that the Stock Splits will result in the
repurchase by the Company of .2% of the Company's fully diluted common
stock, at a cost of approximately $24,149, resulting in an increase
from 85.6% to 85.8% in the percentage ownership interest of the
Related Persons in the Company's fully diluted common stock.
The Stock Splits will similarly have no impact on the unaffiliated
shareholders' control of the Company since the Company's Related
Persons control the Company. The impact of the Stock Splits on the
financial interest in the Company of unaffiliated shareholders is
similarly DE MINIMUS: the Stock Splits will result in a 1.5% reduction
in the number of common stock equivalents owned by unaffiliated
shareholders, in exchange for a payment to such unaffiliated
shareholders of approximately $24,149. The vast majority of
unaffiliated shareholders (measured based on shareholdings, not
shareholders) will remain shareholders of the Company, with no
reduction (and in fact a small increase) in their economic interest in
the Company. (Reg