J. M. & M. S. BROWNING CO. OGDEN. UTAH August 14,1939, Mr. GordonM. Baxter, Scholefield, Wells & Baxter, First Security Bank Building, Cod Dear Coy. Gordon: Referring to our recent conversations, and in order that there can be no misunderstanding, we would like to have you proceed to work out a plan to consolidate and re-organize certain interests of this Company for the purpose of having them held by an operating company in place of the present personal holding company. In working out the plan, please feel free to get Mr. Thatcher's full cooperation in order that nothing will be overlooked from the legal standpoint. contracts be At present left in the it would seem best present company as that the royalty there does not seemto be any particular disadvantage to this. On the other hand, if they were held by an operating company the royalty income might be large enough to endanger the status of the operating company as such. For instance, the ranch might be sold or a war might put the Arms Company out of business, in which case the gross income might be diminished vitally. Stock of the operating company might be held by the parent company or it might be distributed to the stockholders of the parent company, therefore the stock issued should be the same as that of the parent, particularly as concerns the voting and non-voting feature, This is on the theory that the voting stock in the operating company could be distributed to the voting stockholders of the parent, and the non-voting stock couldbe distributed to the non-voting We should soon definitely stockholders of the parent. determine if this can be done in order to plan ahead. from time to Please let time order in Thanking us know that how we you progressing plan accordingly. very truly, we D you, Yours MAB: MS are can - ee 4