Exemption Orders (Discretionary)

INFONET SERVICES CORPORATION


2001 BCSECCOM 135


Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Relief granted from the registration and prospectus requirements for trades of shares acquired under employee stock purchase plans involving an agent. Relief also granted from the registration and, subject to certain conditions, the prospectus requirements for any resale of shares acquired under the plans.

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, ss. 34(1)(a), 48, 61 and 76



IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA AND QUÉBEC

AND

IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF INFONET SERVICES CORPORATION

MRRS DECISION DOCUMENT

[para 1]
WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Alberta and Québec (the “Jurisdictions”) has received an application from Infonet Services Corporation (“Infonet”) for a decision under the securities legislation of the Jurisdictions (the “Legislation”) that the requirements contained in the Legislation to be registered to trade in a security (the “Registration Requirement”) and to file and obtain a receipt for a preliminary prospectus and a prospectus in respect of such security (the “Prospectus Requirement”) shall not apply to intended trades in securities of Infonet pursuant to the Infonet Services Corporation 2000 International Employee Stock Purchase Plan, as amended from time to time (the “ESPP”), and the Infonet Services Corporation 2000 Omnibus Stock Plan, as amended from time to time (the “Omnibus Plan”) (collectively, the “Plans”);

[para 2]
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the “System”), the British Columbia Securities Commission is the principal regulator for this application;

[para 3]
AND WHEREAS Infonet has represented to the Decision Makers that:

1. Infonet is a corporation incorporated under the laws of the State of Delaware and is not, and has no present intention of becoming, a reporting issuer or the equivalent under the legislation of any of the Jurisdictions;

2. Infonet is a reporting company with the United States Securities and Exchange Commission, is subject to the requirements, including the reporting requirements, of the United States Securities Exchange Act of 1934, as amended, and is current with such requirements;

3. Infonet’s current authorized share capital consists of 400,000,000 shares of Class A common stock (the “Class A Shares”), 600,000,000 shares of Class B common stock (the “Class B Shares”) and 30,000,000 shares of Class C common stock, of which approximately 161,403,351 Class A Shares and 308,866,134 Class B Shares were issued and outstanding as of August 31, 2000;

4. the Class B Shares are listed and posted for trading on The New York Stock Exchange (the “NYSE”);

5. Infonet Services Canada Inc. and 3715108 Canada Inc. (the “Subsidiaries”) are both wholly-owned subsidiaries of Infonet incorporated under the federal laws of Canada and are not, and have no present intention of becoming, reporting issuers under the Legislation;

6. in Canada, pursuant to the ESPP, eligible employees of Infonet, the Subsidiaries and any subsidiaries Infonet may establish in the future (the “Participants”) are able to purchase Class B Shares at a discount from the fair market value;

7. under the Omnibus Plan, Participants are granted stock based awards (“Awards”) which may include non-transferable options and non-transferable rights to purchase Class B Shares and grants of Class B Shares;

8. as of September 27, 2000, there were approximately five Participants resident in the Jurisdictions eligible to participate in the Plans;

9. participation in the Plans is voluntary and Participants are not induced to participate in the Plans or to acquire Class B Shares under the Plans by expectation of employment or continued employment;

10. the Class B Shares distributed to Participants pursuant to the Plans may be authorized but unissued shares, treasury shares and/or shares purchased on the open market, and will be registered under the Securities Act of 1933, as amended;

11. Infonet will use the services of various agents (collectively, the “Agents”) to carry out certain administrative functions with respect to the Plans which may include setting up accounts for the Participants, assisting in the exercise of Awards, purchasing Class B Shares and allocating such shares to the Participants’ accounts, maintaining Participants’ accounts and providing record-keeping and account information services, all in accordance with and pursuant to the Plans; the Participants may also use the Agents to carry out first trades in Class B Shares acquired pursuant to the Plans; the Agents are not registered dealers or equivalent under the Legislation of any of the Jurisdictions; one of the Agents is a registered dealer or equivalent under the applicable securities legislation of the United States (a “U.S. Registrant”);

12. all sales of Class B Shares made on behalf of Participants under the Plans will be made through the facilities of, and in accordance with the rules of, the NYSE and through a U.S. Registrant;

13. Participants resident in the Jurisdictions will be provided with a copy of the Plans, the disclosure material relating to the Plans that is provided to all other Participants and a copy of this Decision Document and, upon becoming an Infonet stockholder, Participants resident in the Jurisdictions will be provided with the disclosure material relating to Infonet that is provided to all other holders of Class B Shares;

14. at the time of any issuance of Class B Shares under the Plans, holders of Class B Shares whose last address as shown on the books of Infonet is in Canada will not hold more than 10% of the total number of outstanding Class B Shares and will not represent in number more than 10% of the total number of holders of Class B Shares;

15. there is presently no market in Canada for any securities of Infonet, and no such market is expected to develop;

16. the Legislation of certain of the Jurisdictions does not contain exemptions from the Prospectus Requirement and/or Registration Requirement for the intended trades in Class B Shares under the Plans;

17. when U.S. Registrants sell Class B Shares on behalf of the Participants, the Participants and the U.S. Registrants are not able to rely on the exemption from the Registration Requirement contained in the legislation for trades made by a person solely through a registered dealer under the Legislation; and

18. the Legislation of certain of the Jurisdictions deems any trade in Class B Shares acquired under the Plans to be a distribution unless, among other things, Infonet is a reporting issuer and has been a reporting issuer for the 12 months immediately preceding the trade;

[para 4]
AND WHEREAS under the System this MRRS Decision Document evidences the decision of each of the Decision Makers (collectively, the “Decision”);

[para 5]
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

[para 6]
THE DECISION of the Decision Makers under the Legislation is that:

1. the Registration Requirement and Prospectus Requirement shall not apply to intended trades of Class B Shares under the Plans;

2. the Registration Requirement shall not apply to first trades in Class B Shares acquired by Participants under the Plans through U.S. Registrants; and

3. an intended trade in Class B Shares acquired by Participants under the Plans is deemed to be a distribution under the Legislation unless such trade is executed through the facilities of a stock exchange or market outside of Canada.

[para 7]
DATED January 29, 2001.




Brenda Leong
Director
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