Exemption Orders (Discretionary)
REAL RESOURCES INC.
2001 BCSECCOM 308
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - Relief granted to the directors and senior officers of the Issuer from the requirement to file insider reports for acquisitions under an automatic securities purchase plan, subject to certain conditions.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 87 and 91
IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA, BRITISH COLUMBIA, SASKATCHEWAN, ONTARIO, QUEBEC AND NOVA SCOTIA
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF REAL RESOURCES INC.
MRRS DECISION DOCUMENT
1. WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta, British Columbia, Nova Scotia, Ontario, Saskatchewan and Québec (the "Jurisdictions") has received an application from Real Resources Inc. ("Real" or the "Applicant") for a decision under the securities legislation of the Jurisdictions (the "Legislation") that the requirement contained in the Legislation for an insider of a reporting issuer, or the equivalent thereof, to file insider reports disclosing the insider’s direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer (the "Insider Reporting Requirements") shall not apply to certain employees of Real with respect to their acquisition of common shares of Real under its Employee Share Ownership and Group RRSP Savings Plan (the "Plan"), subject to certain conditions;
2. AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the “System”), the Alberta Securities Commission is the principal regulator for this application;
3. AND WHEREAS the Applicant represented to the Decision Makers that:
3.1 The Applicant is a corporation organized under the laws of the Province of Alberta, whose head office and majority of assets are located in the Province of Alberta;
3.2 The Applicant is a reporting issuer or the equivalent in each of the Jurisdictions and is not in default of any of the requirements of the Legislation;
3.3 The authorized share capital of the Applicant consists of an unlimited number of common shares without nominal or par value ("Common Shares"), and an unlimited number of four classes of preferred shares without nominal or par value to be designated as first preferred shares, second preferred shares, third preferred shares and fourth preferred shares (collectively, the "Preferred Shares") of which as at December 31, 2000 there were 18,474,245 Common Shares and no Preferred Shares outstanding;
3.4 The Common Shares of the Applicant are listed for trading on The Toronto Stock Exchange;
3.5 The Applicant has adopted the Plan which will provide employees of the Applicant or any subsidiary of the Applicant ("Participants") with an opportunity to purchase Common Shares (and other securities) and to receive Common Shares which are purchased on the Participants' behalf by the Applicant. Under the Plan:
3.5.1 Participants are active full-time employees of the Applicant who have completed a three-month waiting period from the commencement date of employment (unless the Applicant has waived such waiting period), contract and temporary employees are excluded from participating in the Plan, and participation in the Plan by Participants will be voluntary;
3.5.2 Participants may contribute up to 7% of their base salary earnings into the Plan (the "Employee Contribution"). The Employee Contribution will be matched by the Applicant (the "Employer Contribution"). The Employer Contribution will be used to purchase Common Shares of the Applicant. The Employee Contribution can be used to purchase Common Shares of the Applicant or a variety of other investments offered by Raymond James Ltd. (formerly Goepel McDermid Inc.), the administrator of the Plan (the “Administrator”);
3.5.3 at the end of every month, the Plan contributions are forwarded to the Administrator, who purchases Common Shares of Real at the current market price on The Toronto Stock Exchange using the Employer Contribution, and invests the Employee Contribution as directed by the Participant. Common Shares will not be issued from treasury for purchase under the Plan;
3.5.4 if Participants want to change the manner in which their own contributions are invested, they must provide notice at least 14 days prior to the end of the month in which such investment is to be made. Furthermore, Participants who are directors or senior officers of the Applicant can only change the investment of their own contributions between the Applicant’s common shares and other investment alternatives twice in any 12 month period; and
3.5.5 the Applicant will bear all of the expenses of administering the Plan, including, but not limited to, the Administrator’s fees and any transfer taxes and all fees and expenses associated with the purchase of Common Shares. Participants will bear expenses incurred by the Administrator in acquiring any investments under the Plan which are not Common Shares, and the expenses of selling any investment (including Common Shares) under the Plan;
3.6 Directors and senior officers of the Applicant (the "Participating Insiders") may be Participants in the Plan; and
3.7 The Plan is an "automatic securities purchase plan" within the meaning of Proposed National Instrument 55-101 "Exemption from certain Insider Reporting Requirements" (the "Proposed Instrument"), and if the Proposed Instrument were in place, the Applicant would be entitled to rely on it;
4. AND WHEREAS under the System this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");
5. AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Makers with the jurisdiction to make the Decision has been met;
6. IT IS THE DECISION of the Decision Makers under the Legislation that the Insider Reporting Requirements shall not apply to the acquisition of Common Shares of the Applicant by a Participating Insider under the Plan, provided that:
6.1 Each Participating Insider shall file in each of the Jurisdictions, in the form prescribed for the Insider Reporting Requirements, a report disclosing all acquisitions of Common Shares under the Plan that have not been previously reported by or on behalf of the Participating Insider:
6.1.1 for any Common Shares acquired under the Plan which are disposed of or transferred, within the time required by the Legislation for reporting the disposition or transfer; and
6.1.2 for any Common Shares acquired under the Plan during any calendar year which have not been disposed of or transferred during the calendar year, within 90 days of the end of the calendar year.
6.2 The exemptive relief granted by this Decision shall not apply to the acquisition of securities of Real pursuant to a lump-sum provision of the Plan.
6.3 In all Jurisdictions except Québec, such exemption is not available to an insider who beneficially owns, directly or indirectly, voting securities of the Applicant, or exercises control or direction over voting securities of the Applicant, or a combination of both, that carry more than 10% of the voting rights attaching to all of the Applicant's outstanding voting securities; and
6.4 In Québec, such exemption is not available to an insider who exercises control over more than 10% of a class of shares of the Applicant to which are attached voting rights or an unlimited right to a share of the profits of the Applicant and in its assets in case of winding up.
6.5 the Decision shall terminate on the effective date of the Proposed Instrument or any legislation or rule dealing with similar exemptions from insider reporting requirements.
DATED this 5th day of March, 2001.
Agnes Lau, C.A.
Deputy Director, Capital Markets