SEC Division of Investment Management staff letter: Tom DeWard Shareholder Proposal (LMP Real Estate Income Fund, Inc.)

Securities Exchange Act — Rule 14a-8(i)(7) Tom DeWard Shareholder Proposal (LMP Real Estate Income Fund, Inc.), (March 25, 2015)

March 25, 2015

Sarah E. Cogan Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017-3954

Re: LMP Real Estate Income Fund Inc. ("Fund") Shareholder Proposal of Thomas C. DeWard

In a letter dated January 9, 2015, on behalf of the Fund, you requested confirmation from the staff of the Securities and Exchange Commission (the "Commission") that we would not recommend enforcement action to the Commission if the Fund omits from the proxy materials for its April 2015 annual meeting a shareholder proposal (the "Proposal") submitted by Thomas C. DeWard (the "Proponent").

The Proposal states:

Stockholder Proposal To Instill Investor Confidence:

In order to instill investor confidence in the actions of the Board of Directors in choosing and retaining the current Fund Manager and sub advisors and to justify decisions to continue the Management Agreement, LMP Real Estate Income Fund Inc. shall provide the following information by year since retention of the current Fund Manager with continual updates on a quarterly basis:

For each investment at the date of the retention of the current Fund Manager, the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital. For each sale, identify the gain or loss at the date of disposition.

For each investment made by the current Fund Manager, the purchase price and the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital.

For each sale of an investment made by the current Fund Manager, the selling price and the gain or loss.

For each investment made by the current Fund Manager, the overall rate of return based on total returns, excluding return of capital, as a percentage of original cost.

The Management fee as a percentage of total investment returns to include Net Investment Income and Short and Long-Term Capital Gains but excluding return of capital.

There appears to be some basis for your view that the Proposal may be omitted from the Fund's proxy materials pursuant to Rule 14a-8(i)(7) under the Securities Exchange Act, as relating to the Fund's ordinary business.

Accordingly, the Division of Investment Management (the "Division") will not recommend enforcement action to the Commission if the Fund omits the Proposal from its proxy materials in reliance on Rule 14a-8(i)(7). In reaching this position, we have not found it necessary to address the alternative bases for omission set forth in your letter.

Attached is a description of the informal procedures the Division follows in responding to shareholder proposals. If you have any questions or comments concerning this matter, please call me at (202) 551-3393.

Sincerely,

Jay Williamson Attorney-Advisor

Attachment

cc: Thomas C. DeWard

DIVISION OF INVESTMENT MANAGEMENT INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS

The Division of Investment Management believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information furnished to it by an investment company in support of its intention to exclude the proposals from the investment company's proxy material, as well as any information furnished by the proponent's representative.

The staff will always consider information concerning alleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff's informal procedures and proxy review into a formal or adversary procedure.

The determination reached by the staff in connection with a shareholder proposal submitted to the Division under Rule 14a-8 does not and cannot purport to "adjudicate" the merits of an investment company's position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether an investment company is obligated to include shareholder proposals in its proxy material. Accordingly, a discretionary determination not to recommend or take Commission enforcement actions, does not preclude a proponent, or any shareholder of an investment company, from pursuing any rights he or she may have against the investment company in court, should the management omit the proposal from the investment company's proxy material.

Incoming Letter

The Incoming Letter is in Acrobat format.

http://www.sec.gov/divisions/investment/noaction/2015/lmp-real-estate-income-fund-032515-14a8.htm

---

SIMPSON THACHER & BARTLETT LLP

425 LExiNGTON AVENUE

NEW YoRK, N .Y. 10017-3954

(212) 42000
FACSlMILE: (212) 4-2~02
DmEcT DIAL NUMBER E-MAIL ADDRESS
(212) 455-3575 s~ogan (tils tbla . com
BY E-MA IL January 9, 2015
Re: Proposal ofThomas C. De Ward in connection with LMP Real Estate Income Fund lnc. 2015 Meeting of Stockholders U.S. Securities and Exchange Commission

Division ofCorporation Finance

Office ofChief Counsel

I 00 F. Street, N .E.

Washington, D .C . 20549

Ladies and Gentlemen:
On behalf of LMP Real Estate Income Fund Inc., a Maryland corporation ("RIT" or the "Company"), and in accordance with Rule 14a-8U) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we are filing this letter with respect to a stockholder proposal and supporting statement (together, the "Propo sal") submitted by Mr. Thomas C. De Ward (the "Proponent") for inclusion in the proxy materials to be distributed by RlT ("Proxy Materials") in connection with its annual meeting of stockholders anticipated to be held at the end of April 2015 (the "Annual Meeting"). A copy ofthe Proposal and related correspondence with the Proponent is attached as Exhibit A. For the reasons stated below, we respectfully request that the Staffofthe Division of Corporation Finance (the "Staff') ofthe Securities and Exchange Commission (the "Commission") not recommend any enforcement act ion against RJT if, in reliance on Rule 14a-8, RIT om its the Proposal in its entirety fl·om its Proxy Materials. RIT intends to file the definitive proxy statement for the 1\nnual Meeting more than 80 days after the date of this letter. In accordance with Staff Legal Bulletin No. 140 (November 7, 2008) ("SLB 14D"), th is letter is be ing submitted by email to shareholderproposals@sec .gov. In addition, pursuant to Rule 14a-8U) and as requested by the Proponent, a copy of this letter is also being sent simultaneously by email to the Proponent as notice of RJT's intention to omit the Proposal from its Proxy Materials. Rule 14a-8(k) and SLB 14D provide that a stockholder proponent is required to send the company a copy of any correspondence that the proponent elects to s ubmit to the Commission or the BEIJING HONG KONG HOUSTON LONDON Los ANGELES PALO ALTO SA.o PAULO SEOUL TOKYO WASHINGTON, D.C.

Securities and Exchange Commission -2- January 9, 2015 Staff. Accordingly, we hereby inform the Proponent that ifthe Proponent elects to submit additional correspondence to the Commission or the Staff relating to the Proposal, the Proponent must concurrently furn ish a copy of that correspondence to RIT. Similarly, we will promptly forward to the Proponent any response received from the Staff to this request that the Staff transmits only to RIT or to us. Submitted herewith is the legal opinion of Foley & Lardner LLP, special Maryland counsel to RIT, attached as Exhibit B, to the effect that the Proposal is not a proper subject for action by stockholders under the Maryland General Corporation Law (the "MGCL") because it inappropriately seeks to replace the broad and flexible fiduciary standard with specific requirements for the evaluation of its investment manager. The Board of Directors already has a fiduciary duty and the authority to evaluate the Company's investment manager. The Proposal would encumber the process of evaluation by supplanting the Board ' s discretion with specific rules that are both overinclusive and undcrinclusive for achieving the statutory objectives.
I. The Proposal
The Proposal states:
Stockholder Proposal To lnstilllnvestor Confidence :
In order to instill investor confidence in the actions of the Board of Directors in choosing and retaining the current Fund Manager and sub advisors and to justify decisions to continue the Management Agreement, LMP Real Estate fncome Fund Inc. shall provide the following information by year since retention of the current Fund Manager with continual updates on a quarterly basis:
For each investment at the date ofthe retention of the current Fund Manager, the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital. For each sale, identify the gain or loss at date of disposition. For each investment made by the current Fund Manager, the purchase price and the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital. For each sale of an investment made by the c urrent Fund Manager, the selling price and the gain or loss. For each investment made by the current Fund Manager, the overall rate of return based on total returns, excludi ng return of capital , as a percentage of original cost. The Management Fee as a percentage of total investment returns to include Net Investment Income and Short and Long-Term Capital Gains but excluding return of capital.

,., Securities and Exchange Commission - .)- January 9, 2015
II. Analysis
We believe the Proposal is properly excluded on the basis of any of Rule 14a-8(i)(l), (2), or (7), each ofwhich is an independent basis for exclusion. The Staff provided very strong precedent for this position in Tri-Continental Corp., 1996 SEC No-Act LEXIS 486, in which it gave no-action assurances, holding that a stockholder proposal requesting that the Board of Directors study the performance of its investment manager was properly excludable because it related to the company's conduct of ordinary business operations. For the sake of completeness, provided below is our legal analysis under each of the separate grounds for exclusion. A. The Proposal May be Excluded Under Rule 14a-8(i)(l) Because It Is Not a Proper Matter for Stockholder Action Under Maryland Law Rule 14a-8(i)(1) permits a company to exclude a stockholder proposal from its proxy materials if it "is not a proper subject for action by stockholders under the laws of the jurisdiction of the company's organization." The actions sought by the Proposal are within the Company's Board of Directors' powers under Maryland law. As in Anthracite Capital Inc. , 2002 SEC No-Act LEXlS 478 , "adoption ofthe Proposal would direct the process and fix the criteria by which the company's investment advisor is evaluated, with a view to retaining or replacing the advisor." for this reason, the Proposal improperly infringes upon the Board of Directors' discretion in the exercise of its fiduciary duties to act in the best interests of the Company and its stockholders. The Staff has long interpreted Rule 14a-8(i)( I) to grant the board of directors exclusive discretion in corporate matters where statutory language provides that the business and affairs of a company are to be managed by its board, unless there exists a specific contrary provision in the statute itself or in the company's governing documents. See Adoption ofAmendments Relating to Proposal by Security Holders, Exchange Act Release No. 34-12999 (Nov. 22, 1976). In that Release, the Commission stated that "proposals by security holders that mandate or direct the board to take certain action may constitute an unlawful intrusion on the board's discretionary authority under the typical statute." ld. Further, the Commission has clearly indicated that the purpose of Rule l4a-8(i)( I) is to allow the omission of proposals that inhibit the board of directors in the performance of duties properly delegated to the board under applicable state law, or which otherwise subvert the statutory role of directors by proposing the substitution of direct stockholder action for the board's discretion. See Proposals as Proper Subject for Action, Exchange Act Release No. 34-3638 (January 3, 1945). Accordingly, "a proposal does not address a "proper subject" wi thin the meaning of Rule 14a-8(i)( I) if it attempts to confer upon shareholders the power to make a decision that state law mandates be made by a company's board of directors." Anthracite Capital. The
Company is incorporated in the state of Maryland and subject to the MGCL. The Proposal constitutes an unlawful intrusion upon the authority of the Board of Directors under the MGCL because the Proposal would improperly substitute direct stockholder action

Securities and Exchange Commi ssion -4- January 9 , 2015 for the proper exercise of the Board's discretion regarding its evaluation of the investment manager. Accordingly, the Proposal is not a proper subject for stockholder action.
Section 2-40 1 of the MG CL provides that "the business and affairs ofthe corpo ration
shall be managed under the direction of the board of directors" and that "all powers of the corporation may be exercised by or under authority of the board of directors except as conferred on or reserved to the stockholders by law or by the charter or bylaws of the corporation." See also Hecht v. Resolut ion Trust Corp. , 333 Md. 324,33 1-32 ( 1994), hold ing that the board of directors of a Maryland corporation may exerci se all the powers of the corporation unless conferred o n or reserved to stockholders. To the same effect, see Werbowsky v. Collomb, 362 Md. 581,598-99 (200 1). As stated in the opinion offoley & Lardner LLP, neither the MGCL nor the Charter of the Company (the "Charter") contain any applicable provision that limits the authority of the Company's Board of Directors to manage and di rect the business of the Co mpany w ith respect to the subject matter ofthe Proposal. In addition to the provisions of the MGCL cited above, the Company's Chat1er ex press ly provides in Art icl e V, Section 4, Subsection vii, that the Company's Board o f Directors is "authorized to exercise all powers and do all acts that may be exercised or done by the Corporation pursuant to the provisions of the laws ofthe State of Maryland." Thus, the purpose and effect of the Proposal wo uld be to grant to the stockholders powers that are committed by Maryland law and by the Charter to the Company's Board of Directors. Responsibility to evaluate the investment manager lies exclusively with the Company's Board of Directors. The Proposal would encroach impermissibly upon the Board's authority and discretion as provided under Maryland law and the Company Charter. Contrary to Maryland law and the Charter, the Proposal improperl y seeks to remove such discretion from the Board of Directors and place it in the hands of the Company's stockholders. As a result, the Proposal is not a proper subj ect for actio n by the Compan y's stockhol ders and, therefore, it may properly be omitted from the Proxy Materials under Rule 14a-8(1)(1 ) . B. The Proposal May Be Excl uded Pursuant to Rul e 14a-8(i)(2) Because Implementation ofthe Proposal Wou ld V iolate Maryland Law Exchange Act Rule 14a-8(i)(2) allows the exclusion of a stockholder proposal where the proposal would "cause the company to violate any state, federa l, or fo reign law to wh ich it is subj ect." See, e.g., Central Fidelity Banks. Inc. (January 20, 1995). For the reasons set forth above and in the accompanying legal opinion of Foley & Lardner LLP, the Proposal would cause the Co mpany's Board of Directors to violate the MGCL by effecting an improper limitation on the authority and discretion of the Company's Board of Directors. Co nsequently, the Proposal may properly be omitted from the Proxy Materials under Rule 14a-8(i)(2).

Securities and Exchange Commission -5- January 9, 2015
C. The Proposal May Be Excluded Pursuant to Rule 14a-8(i)(7) Because lt Relates
to the Conduct of Ordinary Business Operat ions The Company also believes that Exchange J\ct Rule 14a-8(c)(7), which provides that a stockholder proposal may be omitted if the proposal deals with a matter relating to the conduct of the ordinary business operations of the registrant, may be relied upon for exclusion ofthe Proposal. Indeed, Rule 14a-8( c )(7) would justify exclusion of the Proposal even if the Proposal did not purport to be binding on the Company. The no-action letter issued to Tri-Continental Corp. is a solid precedent supporting the Company's position. As in Tri-Continental, the Company submits that "nothing could be more in the ordinary course of business for an investment company and its Board of Directors than the evaluation ... ofthe performance of its investment adviser. The fortunes of an investment company are directly linked to its investment performance, which is the responsibility of its investment adviser. An investment company's performance is always relevant to the Board's determination ofwhether to continue an advisory contract." Tri￾Continental. The Proposal calls for a study of the manager's performance along several dimensions, something that clearly relates to the Company's ordinary business. It has long been the case that proposals to require registrants to gather and submit reports on specific aspects of their business are excludable under Rule 14a-8(c)(7) if the subject matter of the investigation involves a matter of ordinary business. Release No. 34-20091 (Aug. 16, 1983). The Commission has stated that stockholder proposals "that have major implications are considered beyond the realm of an issuer's ordinary business operations." Release No. 34-12999 (Nov. 22, 1976). The Company acknowledges that its investment advisory arrangements are of great importance to its stockholders. This was recognized by Congress when it enacted Section 15 ofthe Investment Company Act; and it is recognized by the Board of Directors, which reviews large amounts of data, consults with outside counsel (who represent the independent Directors and not the investment manager), discusses its concerns and questions with management and generally devotes an enormous amount of attention to its evaluation of the nature and quality ofthe services provided to the Company by the investment manager and to consideration of whether the Company's investment advisory agreement should be continued. By requiring annual review ofmanagement contracts, Congress in effect made the review a part ofeach investment company's ordinary business operations. The mere fact that board acti on is required does not take the consideration out ofthe ambit of ordinary operations. Release No. 34-12999; The Germany Fund, Inc. (Apr. 25, 1991). The Proposal amounts to an attempt to micromanage the Board in the conduct of its responsibility to evaluate and review the performance of its investment manager in connection with the renewal of the management agreement. The data
required to be gathered by the Proposal (such as net investment income, capital gains and return of capital, among others) arc both overinclusive and underinclusivc relative to the data presented to and used by the Board to satisfy its statutory duties . The data are overinclusive because not all of the figures called for by the Proposal are required to be gathered and presented to satisfy

Securities and Exchange Commission -6- January 9, 2015
Section 15(c). The data are underinclusive because far mo re data than the figures required
by the Proposal are actually submitted to the Board and weighed by the Board as it makes its statutory determinations. Because of the Section 15 (c) regime, the Company already has a system and processes for gathering information required by the Board in the execution of its statutory duties and required by the Exchange Act for periodic reporting of material financial data to the SEC and stockholders. The Proposal would require the Company to change the existing processes, distracting management and adding cost to the system. Because an effective Section 15( c) protocol already exists and because the Proposal calls for the gathering of data that is both overinclusive and underinclusive, the Proposal amounts to a requirement of additional cost and work for no useful reason. As provided above, stockholder proposals that attempt to micromanage the Company are properly excludable under Rule 14a-8(i)(7). See Amendments to Rules on Shareholder Proposals, Rei. No. 34-40018 (May 21 , 1998) at n. 44 and accompanying text, citing Exchange Act Rei. No. 12999 (Nov. 22, 1976). Accord ingly, this Proposal may be omitted pursuant to such Rule.
Ill. Conclusion
For the reasons stated above, we respectfully request that the Staff concur that the Proposal may be properly omitted from the Proxy Materials on the basis of any of Rules 14a-8(i)(l ), 14a-8(i)(2) and 14a-8(i)(7) and not recommend any enforcement action to the Commission if RIT excludes the Proposal from the Proxy Materials. In the event that the Staff preliminaril y disagrees with RIT's conclusion that it is entitled to omit the Proposal, then we request the opportunity to confer with the Staff prior to the final determination of the Staffs position. If you have any questions with respect to this matter, please do not hesitate to contact me at the email address and telephone number appearing on the first page of this letter. Enclosures cc: Mr. Thomas C . DeWard

Exhibit A
Copy of the Proposal and
Related Correspondence with Mr. Thomas C. DeWard

Thomas C. DeWard

25806 Glover Court

Farmington Hills, Ml48335-1236

November 14, 2014

Legg Mason & Co.
Robert Frenkel
1 00 First Stamford Place, 6th Floor
Stamford, CT 06902
Following is a Stockholder Proposal to be included in the 2015 Proxy Statement of LMP Real Estate Income Fund Inc I have also included a copy of a letter dated November 12, 2014 from Fidelity Investments, verifying ownership as required by SEC rules. I plan to continue to own the stock through the date of the Annual Meeting of Stockholders. Any questions, please advise. My email address is tomdeward@sbcglobal.net I would appreciate receiving an email acknowledging receipt of this letter and the letter from Fidelity. Stockholder Proposal To Instill Investor Confidence:
In order to instill investor confidence in the actions of the Board of Directors in choosing and retaining the current Fund Manager and sub advisors and to justify decisions to continue the Management Agreement, LMP Real Estate Income Fund Inc. shall provide the following information by year since retention of the current Fund Manager with continual updates on a quarterly basis:
For each investment at the date of the retention of the current Fund Manager, the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital. For each sale, identify the gain or loss at date of disposition. For each investment made by the current Fund Manager, the purchase price and the total return broken down between Net Investment Income, Short and Long￾Term Capital Gains and Return of Capital. For each sale of an investment made by the current Fund Manager, the selling price and the gain or loss. For each investment made by the current Fund Manager, the overall rate of return based on total returns, excluding return of capital, as a percentage of original cost.

The Management fee as a percentage of total investment returns to include Net Investment Income and Short and Long-Term Capital Gains but excluding return of capital. End of Proposal Sin~~ a Thomas C. DeWard

Personal Investing P.O. Box 770001
Cincinnati, OH 45277-0045
November 12,2014
Thomas C. Deward
25806 Glover Court
Farmingtn His, MI 48335-1236
Dear Mr. Deward:
Thank you for contacting Fidelity Investments regarding your request for information regarding your position of LMP Real Estate Income Fund (RIT) within your Fidelity brokerage accounts ending in 5685 and 1607. I appreciate the opportunity to assist. This letter can confirm that you have held 2,200 shares ofRIT in your account ending in 1607 for a period in excess of one year. We can also confirm that you have held 17,693 shares ofRIT in your account ending in 5685 for a period in excess of one year. I hope you find this information helpful. If you have any questions regarding this issue or general inquiries regarding your account, please contact a Fidelity representative at 800-544 5704 for assistance. Sincerely, Blaine Heath High Net Worth Operations Our File: W092989-11NOV14 Fidelity Brokerage Services LLC, Members NYSE, SIPC.

Exhibit B

Copy of Opinion by Foley & Lardner LLP

ATTORNEYS AT LAW :FOLEY 90 PARK AVENUE
NEW YORK, NY 10016-1314
212.682.74 7 4 TEL FOLEY & LARDNER LLP 212.687.2329 FAX
WWW.FOLEY.COM
WRITER'S DIRECT LINE
212.338.3541 tbaclgalupo@foley.com EMAIL
CLIENT/MATTER NUMBER
101039-{)117
January 9, 2015
OFFICE OF THE CHIEF COUNSEL

DIVISION OF CORPORATION FINANCE

SECURITIES AND EXCHANGE COMMISSION

100 F Street, N.E.

Washington, D.C. 20549

Re: LMP Real Estate Income Fund Inc.
Ladies and Gentlemen:
We serve as special Maryland counsel to LMP Real Estate Income Fund Inc., a Maryland corporation (the "Company"), in connection with the Proposal (as defined below). Thomas C. De Ward, a stockholder ofthe Company, delivered a letter to the Company, dated as ofNovember 14, 2014, which included a proposal (the "Proposal") to be included in the Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Company's 2015 Annual Meeting of Stockholders anticipated to be held at the end of April 2015. The Proposal provides that:
In order to instill investor confidence in the actions of the Board of Directors in choosing and retaining the current Fund Manager and sub advisors and to justifY decisions to continue the Management Agreement, LMP Real Estate Income Fund Inc. shall provide the following information by year since retention of the current Fund Manager with continual updates on a quarterly basis:
For each investment at the date of the retention of the current Fund Manager, the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital. For each sale, identify the gain or loss at date of disposition. For each investment made by the current Fund Manager, the purchase price and the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital. For each sale of an investment made by the current Fund Manager, the selling price and the gain or loss. For each investment made by the current Fund Manager, the overall rate of return based on total returns, excluding return of capital, as a percentage of original cost. BOSTON JACKSONVILLE MILWAUKEE SAN DIEGO TALLAHASSEE BRUSSELS LOS ANGELES NEW YORK SAN FRANCISCO TAMPA CHICAGO MADISON ORLANDO SHANGHAI TOKYO DETROIT MIAMI SACRAMENTO SILICON VALLEY WASHINGTON, D.C. 4824-7291-3697.1

:FOLEY

FOLEY & LARDNER LLP
January 9, 2015
The Management Fee as a percentage oftotal investment returns to include Net Investment Income and Short and Long-Term Capital Gains but excluding return of capital. The Company has asked us to provide you with an opinion regarding whether the Proposal is a proper subject for stockholder action under the Maryland General Corporation Law (the "MGCL"). In connection with our representation ofthe Company, and as a basis for the opinion

hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our

satisfaction, ofthe following documents (collectively, the "Documents"):

1. The charter ofthe Company (the "Charter"), certified as of a recent date by the State
Department of Assessments and Taxation of Maryland;
2. The By-Laws ofthe Company (the "By-Laws"), certified as ofthe date hereof by the
Assistant Secretary ofthe Company; and
3. A certificate, executed by George P. Hoyt, Assistant Secretary ofthe Company, dated
the date hereof.
In expressing the opinion set forth below, we have assumed the following:
1. Each natural person executing any ofthe Documents, whether on behalf of such

individual or another person, is legally competent to do so.

2. Each individual executing any ofthe Documents on behalf of a party is duly

authorized to do so.

3. Each ofthe parties executing any ofthe Documents has duly and validly executed and
   delivered each of the Documents to which such party is a signatory, and the obligations of each of the parties executing any ofthe Documents set forth therein are legal, valid and binding.
4. All Documents submitted to us as originals are authentic. All Documents submitted
   to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All statements and information contained in the Documents are true and complete. There has been no oral or written modification or amendment to the Documents, or waiver of any provision ofthe Documents, by action or omission ofthe parties or otherwise.
   Section 2-401 ofthe MGCL provides that "the business and affairs ofthe corporation shall

be managed under the direction ofthe board of directors" and that "all powers ofthe corporation

may be exercised by or under authority ofthe board of directors except as conferred on or reserved

4824-7291-3697.1

:FOLEY

FOLEY & LARDNER LLP
January 9, 2015 to the stockholders by law or by the charter or bylaws ofthe corporation." See also Hecht v. Resolution Trust Corp., 333 Md. 324, 331-32 (1994), holding that the board of directors of a Maryland corporation may exercise all the powers of the corporation unless conferred on or reserved to stockholders. To the same effect, see Werbowsky v. Collomb, 362 Md. 581, 598-99 (2001). Neither the MGCL nor the Charter or the By-Laws contain any applicable provision that limits the authority ofthe Company's board of directors to manage and direct the business ofthe Company with respect to the subject matter of the Proposal. Based upon the foregoing, and subject to the assumptions, limitations and qualifications

stated herein, it is our opinion that the Proposal is not a proper subject for action by stockholders

under the MGCL because it would improperly infringe upon the power ofthe Company's board of

directors to manage the business and affairs of the Company.

The foregoing opinion is limited to the MGCL and we do not express any opinion herein concerning any other law, including, without limitation, any other Maryland law or any federal law. We assume no obligation to supplement this opinion if any applicable law changes after the

date hereof or if we become aware of any fact that might change the opinion expressed herein after

the date hereof.

This opinion is being delivered to you solely for your benefit. Accordingly, it may not be relied upon by, quoted in any manner to, or delivered to any other person or entity without, in each instance, our prior written consent. The opinion expressed above is limited to the matters set forth in this letter and no other opinion should be inferred. Very truly yours, 4824-7291-3697. 1