Exemption Orders (Discretionary)
INGRAM MICRO INC.
2001 BCSECCOM 260
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – Relief granted from certain registration and prospectus requirements of the legislation in connection with certain intended trades of securities under an equity incentive plan available to employees and former employees of the Applicant, subject to certain conditions.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 48 and 76
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO, BRITISH COLUMBIA AND ALBERTA
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF INGRAM MICRO INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Ontario, British Columbia and Alberta (the “Jurisdictions”) has received an application from Ingram Micro Inc. ("Ingram Micro" or the “Company”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that (i) the requirements contained in the Legislation to be registered to trade in a security and to file and obtain a receipt for a preliminary prospectus and a prospectus (the “Registration and Prospectus Requirements”) shall not apply to certain trades in securities of Ingram Micro made in connection with the Ingram Micro 2000 Equity Incentive Plan (the “Plan”); and (ii) the Registration and Prospectus Requirements shall not apply to first trade of Shares (as defined below) acquired under the Plan executed on an exchange or market outside Canada;
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the principal regulator for this application;
AND WHEREAS Ingram Micro has represented to the Decision Makers as follows:
1. Ingram Micro is a corporation incorporated under the laws of the state of Delaware, is not a reporting issuer under the Legislation and has no present intention of becoming a reporting issuer under the Legislation.
2. Ingram Micro Canada Inc. ("Ingram Micro Canada") is a wholly-owned subsidiary of Ingram Micro and was incorporated pursuant to the laws of the province of Ontario. Ingram Micro Canada is not a reporting issuer in any of the Jurisdictions and has no present intention of becoming a reporting issuer under the legislation.
3. The authorized share capital of Ingram Micro consists of 265,000,000 Class A common shares, par value $0.01 (U.S.) ("Shares"), 135,000,000 Class B common shares, par value $0.01 (U.S.) ("Class B Shares") which are convertible into Class A Shares; and 1,000,000 preferred stock shares, par value $0.01 (U.S.) ("Preferred Shares"). As of November 30, 2000, there were 74,430,950 Shares, 71,579,935 Class B Shares and no Preferred Shares issued and outstanding.
4. Ingram Micro is subject to the requirements of the Securities Exchange Act of 1934, as amended, of the United States, including the reporting requirements. The Shares are listed for trading on the New York Stock Exchange ("NYSE").
5. The purpose of the Plan is to assist the Ingram Micro or its affiliates (the "Ingram Micro Companies") in attracting, retaining and motivating employees of Ingram Micro or its affiliates (the “Employees”) as well as enabling Employees to participate in the long-term growth and financial success of Ingram Micro.
6. Shares offered under the Plan are registered with the Securities and Exchange Commission (the "SEC") under the Securities Act of 1933.
7. Under the Plan, Ingram Micro may grant options (“Options”) on Shares of Ingram Micro, stock appreciation rights (“SARs”), shares of restricted stock and restricted stock units (collectively, "Restricted Stock Awards"), rights denominated in cash or Shares for the achievement of performance goals ("Performance Awards") and other stock-based awards ("Other Awards"; all of the above, collectively "Awards") to Employees.
8. The Ingram Micro Companies will identify Employees resident in Canada (the “Canadian Employees”) to be granted Awards under the Plan.
9. Ingram Micro proposes to use the services of an agent (the "Agent") in connection with the Plan. The current Agent under the Plan is Salomon Smith Barney, Inc. (“SSB”). The current Agent is, and any replacement Agent will be, a corporation registered under applicable U.S. securities or banking legislation and has been or will be authorized by Ingram Micro to provide services under the Plan. SSB is not a registrant in any of the Jurisdictions and, if replaced, the Agent is not expected to be a registrant in any of the Jurisdictions.
10. The Agent’s role in the Plan will involve various administrative functions and may include: (i) holding Shares underlying Restricted Stock Awards on behalf of participants; (ii) facilitating Option exercises (including cashless exercises) under the Plan; (iii) maintaining accounts on behalf of participants under the Plan; (iv) holding Shares on behalf of participants; and (v) facilitating the resale of Shares acquired under the Plan through the NYSE.
11. There are approximately 130,2 and 918 Canadian Employees resident in British Columbia, Alberta and Ontario, respectively, eligible to participate in the Plan.
12. Participation in the Plan by Canadian Employees is voluntary and such Canadian Employees are not induced to participate in the Plan or to exercise their Awards by expectation of employment or continued employment with the Ingram Micro or its affiliates. Awards are not transferable otherwise than by will or the laws of descent and distribution.
13. In certain circumstances persons who received Awards while they were Employees will continue to have certain rights in respect of Awards following their termination of employment (“Former Employees”). In the case of termination of employment as a result of death, disability or retirement, the Plan provides for the exercise of Options and SARS during certain specified time periods, unless such periods were modified by the Committee.
14. The committee appointed by the Board of Directors of Ingram Micro (the “Committee”) shall establish procedures governing the exercise of Options. Generally, in order to exercise an Option, the optionee, including Former Employees or the legal representative of a Canadian Employee or Former Employee must submit to Ingram Micro or to the Agent a notice of exercise, in the form approved by the Committee, identifying the Option and the number of Shares being exercised, together with full payment for the Shares underlying the Options. The Option exercise price may be paid in cash or where permitted by the Committee by way of a stock swap exercise or cashless exercise.
15. A copy of the U.S. Prospectus relating to the Plan will be delivered to each Canadian Employee who is granted an Award under the Plan. The annual reports, proxy materials and other materials Ingram Micro is required to file with the SEC, will be provided to persons who acquire Shares under the Plan at the same time and in the same manner as the documents are provided to U.S. shareholders.
16. Canadian Employees, Former Employees, or their legal representatives, who wish to sell Shares acquired under the Plan, may do so through the Agent.
17. At the time of any grant of Awards under the Plan, holders of Shares whose last address as shown on the books of Ingram Micro was in Canada will not hold more than 10% of the outstanding Shares and will not represent in number more than 10% of the total number of holders of Shares.
18. Because there is no market for the Shares in Canada and none is expected to develop, any resale of the Shares acquired under the Plan will be effected through the facilities of, and in accordance with the rules and laws applicable to, a stock exchange or organized market outside of Canada on which the Shares may be listed or quoted for trading.
19. The Legislation of certain of the Jurisdictions does not contain exemptions from the Registration and Prospectus Requirements for certain trades in Awards and Shares to, by, with and on behalf of Canadian Employees, Former Employees or their legal representatives, including trades carried out with or through the Agent.
20. When the Agent sells Shares on behalf of Canadian Employees, Former Employees or their legal representatives, such persons and the Agent, as applicable, are not able to rely on the exemption from the Registration Requirements contained in the Legislation for trades made by a person or company acting solely through a registered dealer under the Legislation.
AND WHEREAS pursuant to the System, this Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");
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;
THE DECISION of the Decision Makers pursuant to the Legislation is that:
a) the Registration and Prospectus Requirements shall not apply to any trade or distribution of Awards or Shares made in connection with the Plan, including trades and distributions involving the Agent, Former Employees or the legal representative of Canadian Employees or Former Employees, provided that the first trade in Shares acquired through the Plan pursuant to this Decision in a Jurisdiction shall be deemed a distribution under the Legislation of such Jurisdiction unless such first trade is executed on an exchange or market outside Canada; and
b) the first trade in Shares acquired through the Plan pursuant to this Decision, including a first trade in Shares effected through the Agent, shall not be subject to the Registration Requirements, provided such first trade is executed on an exchange or market outside Canada.
DATED this 7th day of February, 2001.
J.A. Geller Howard I. Wetston