Exemption Orders (Discretionary)
MOSAIC GROUP INC.
2000 BCSECCOM 352
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - Directors and senior officers of subsidiaries of the issuer exempted from insider reporting requirements subject to certain conditions.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 87, 91
IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA, BRITISH COLUMBIA, NEWFOUNDLAND, ONTARIO AND QUEBEC
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF MOSAIC GROUP INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of Alberta, British Columbia, Newfoundland, Ontario and Quebec (the “Jurisdictions”) has received an application from Mosaic Group Inc. (“Mosaic”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that the requirement to file insider reports contained in the Legislation with respect to the ownership of or control or direction over securities of Mosaic, or any changes in such ownership, control or direction (the “Insider Reporting Requirements”) shall not apply to certain of its insiders;
AND WHEREAS pursuant to the Mutual Reliance System for Exemptive Relief Applications (the “System”), the Ontario Securities Commission is the principal regulator for this application;
AND WHEREAS Mosaic has represented to the Decision Makers that:
1. Mosaic is a corporation amalgamated under the laws of Ontario;
2. Mosaic is a reporting issuer or the equivalent thereof in all of the Jurisdictions and is not on the list of defaulting reporting issuers maintained pursuant to the Legislation;
3. Mosaic owns or controls 75 subsidiaries worldwide (individually a “Subsidiary”, collectively the “Subsidiaries”);
4. under the Legislation, every director and senior officer of a Subsidiary is required, unless exemptive relief is otherwise granted, to comply with the Insider Reporting Requirements contained within the Legislation;
5. Mosaic has previously applied for and obtained relief from the Insider Reporting Requirements in respect of directors and senior officers of certain of its Subsidiaries, which relief is evidenced by the Decision of the Decision Makers dated September 15, 1999 (reported at (1999), 22 O.S.C.B. 6258) (the “1999 Mosaic Decision”);
6. in the present application Mosaic has requested that the 1999 Mosaic Decision be revoked and replaced with a Decision in the form hereof due to certain changes in the management structure of Mosaic and its Subsidiaries (collectively, the “Mosaic Group”);
7. none of the Subsidiaries represents (on a consolidated basis together with its own subsidiaries) 10% or more of the consolidated assets of Mosaic, as shown on the most recent annual audited balance sheet of Mosaic that Mosaic has filed;
8. with the exception of two Subsidiaries, FMCG Limited (“FMCG”) and Mosaic Marketing Services Inc. (“MMSI”) (collectively the “Larger Subsidiaries”), none of the Subsidiaries represents (on a consolidated basis together with its own subsidiaries) 10% or more of the consolidated sales and operating revenues of Mosaic, as shown in the most recent annual audited statement of income and loss of Mosaic that Mosaic has filed;
9. FMCG represents (on a consolidated basis together with its own subsidiaries) approximately 17.1% of the consolidated sales and operating revenues of Mosaic, as shown in the most recent annual audited statement of income and loss of Mosaic that Mosaic has filed. MMSI represents (on a consolidated basis together with its own subsidiaries) approximately 11.7% of the consolidated sales and operating revenues of Mosaic, as shown in the most recent annual audited statement of income and loss of Mosaic that Mosaic has filed
10. with the exception of the Larger Subsidiaries, no Subsidiary of Mosaic represents a sufficiently large asset of Mosaic such that a material change in such Subsidiary in the ordinary course would represent a material change in Mosaic;
11. none of the directors or senior officers of any of the Subsidiaries of Mosaic, except those who are also directors or senior officers of Mosaic, in the ordinary course, receives notice of any material facts or material changes with respect to Mosaic prior to general disclosure of such facts or changes to the public;
12. Mosaic shall maintain a continuous review of the relevant facts contained in the representations upon which this Decision is made and shall advise the Commission promptly in writing of any changes in any such facts, including the name of every person who is exempted by this Decision or ceases to be exempted by this Decision;
13. Mosaic shall maintain a list of all persons exempted from the Insider Reporting Requirements by this Decision and shall, at the request of the Decision Makers, promptly furnish any information reasonably necessary for the Decision Makers to determine whether a senior officer or director of any Subsidiary should or should not be exempted pursuant to the Decision;
AND WHEREAS pursuant to the System this MRRS 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 Makers with the jurisdiction to make the decision has been met;
THE DECISION of the Decision Makers pursuant to the Legislation is as follows:
(1) subject to subparagraph (2) of this Decision, the Insider Reporting Requirements shall not apply to any director or senior officer of any Subsidiary in respect of securities of the Applicant;
(2) notwithstanding subparagraph (1) of this Decision, the Insider Reporting Requirements shall apply to any director or senior officer of any Subsidiary who
(a) is also a director or senior officer of any or all of the Applicant, FMCG and MMSI;
(b) receives, in the ordinary course, information as to material facts or material changes with respect to the Applicant prior to general disclosure of such facts or changes to the public,
(c) is or becomes a director or senior officer of any Subsidiary,
i) the value of the assets of which, on a consolidated basis with its subsidiaries, as reflected in the most recent annual audited balance sheet of the Applicant then filed by the Applicant, are 10 percent or more of the consolidated assets of the Applicant shown on that balance sheet, or
ii) the revenues of which, on a consolidated basis with its subsidiaries, as reflected in the most recent annual audited statement of income and loss of the Applicant then filed by the Applicant, are 10 percent or more of the consolidated revenues of the Applicant shown on that statement of income and loss;
(d) is or becomes an "insider" of the Applicant (as such term is defined in the Legislation) in a capacity other than as a director or senior officer of a Subsidiary; or
(e) who is denied the exemption contained in the Decision by another decision of the Decision Makers with regard to the Applicant or its insiders;
(3) The Decision of the Decision Makers in respect of Mosaic dated September 15, 1999 is hereby revoked.
DATED at Toronto, Ontario this 21st day of November, 2000.
Iva Vranic
Manager, Corporate Finance Branch