Exemption Orders (Discretionary)
INVITROGEN CORPORATION
2001 BCSECCOM 835
Headnote:
Mutual Reliance Review System for Exemptive Relief Applications – Relief granted from the registration requirements regarding first trades of securities by beneficiaries through a US broker, subject to certain conditions.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 34(1), 45(2)(10(iii), 48, 74(2)(11)(iii).
BCI 45-507 and BCI 72-501
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO, BRITISH COLUMBIA, ALBERTA AND QUEBEC
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF INVITROGEN CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Ontario, British Columbia, Alberta and Québec (the "Jurisdictions") has received an application from Invitrogen Corporation ("Invitrogen" or the "Company") for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that 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 shares of Invitrogen common stock ("Shares") made in connection with the Invitrogen Corporation 1997 Stock Option Plan (the "Plan");
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 Invitrogen has represented to the Decision Makers as follows:
1. Invitrogen 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. The authorized share capital of Invitrogen consists of 6,405,884 shares of preferred stock and 125,000,000 shares of common stock of Invitrogen ("Shares") of which, as of April 18, 2001, there were 52,192,108 Shares and no preferred shares issued and outstanding.
3. Invitrogen is subject to the requirements of the Securities Exchange Act of 1934, as amended, of the United States, including the reporting requirements thereof.
4. The purpose of the Plan is to advance the interests of Invitrogen, its affiliates and its shareholders by providing an incentive to attract, retain and reward persons performing services for the Invitrogen or its affiliates and by motivating such persons to contribute to the growth and profitability of Invitrogen and its affiliates (collectively, "Invitrogen Companies").
5. The Shares offered under the Plan are registered with the Securities and Exchange Commission (the "SEC") under the Securities Act of 1933.
6. The Shares are listed for trading on the Nasdaq National Market under the trading symbol "IVGN".
7. Under the Plan, options ("Options") exercisable for Shares may be granted to employees of the Invitrogen Companies ("Employees").
8. The Invitrogen Companies will identify Employees to be granted Options under the Plan.
9. Invitrogen intends to engage the services of agent(s) (an "Agent") in connection with the Plan. The current Agent under the Plan is E*Trade Securities, Inc. ("E*Trade"). E*Trade is, and any replacement Agent or additional Agent will be, either a corporation registered under applicable U.S. securities or banking legislation or a registrant in the Jurisdiction. However, E*Trade is not, and any additional Agent or replacement 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) facilitating the exercise of Options (including cashless exercises and stock swap exercises) under the Plan; (ii) maintaining accounts and holding Shares on behalf of participants under the Plan; and (iii) facilitating the resale of Shares acquired under the Plan through Nasdaq.
11. There are approximately 50 Employees resident in the Jurisdictions ("Canadian Employees") eligible to participate in the Plan, including approximately two in British Columbia, one in Alberta, 41 in Ontario and four in Quebec.
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 Options by expectation of employment or continued employment with the Invitrogen Companies.
13. Options are not transferable otherwise than by will or the laws of intestacy.
14. The committee appointed by the Board of Directors of Invitrogen (the "Committee") shall establish procedures governing the exercise of Options. Generally, in order to exercise an Option, the Option holder must submit to the Agent a written notice of exercise identifying the Option and the number of Shares being exercised, together with full payment for the Shares underlying the Option. The exercise price of an Option may be paid in cash or where permitted by the Committee by way of a cashless exercise, stock swap exercise, or such other method permitted by the Committee.
15. Following the termination of a Canadian Employee’s relationship with the Invitrogen Companies, a former Canadian Employee or the beneficiary of an Option or Shares by will or the laws of intestacy (collectively, "Former Employees") and their legal representatives may continue to have rights in respect of such Shares and Options ("Post-Termination Rights"). Post-Termination Rights may include, among other things, the right of a Former Employee and his or her legal representative to exercise an Option for a specified period and the right to sell Shares acquired under the Plan through the Agent.
16. Invitrogen will not acquire Shares delivered in connection with stock swap exercises under the Plan as such Shares will be sold on the open market by the Agent on behalf of the optionee.
17. A copy of a prospectus relating to the Plan will be delivered to each Canadian Employee who is granted an Option under the Plan. Such prospectus will be prepared in accordance with applicable U.S. securities legislation. The annual reports, proxy materials and other materials Invitrogen is required to file with the SEC, will be provided to persons who acquire Shares under the Plan and become shareholders at the same time and in the same manner as the documents are provided to U.S. shareholders.
18. Canadian Employees, Former Employees and their legal representatives, who wish to sell Shares acquired under the Plan may do so through the Agent.
19. At the time of any grant of Options under the Plan, holders of Shares whose last address as shown on the books of Invitrogen 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.
20. 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.
21. The Legislation of certain of the Jurisdictions does not contain exemptions from the Registration and Prospectus Requirements for the grant of Options and their subsequent exercise.
22. When the Agent sells Shares on behalf of Canadian Employees or Former Employees, none of the Agent, the Canadian Employees, the Former Employees and their legal representatives may be able to rely upon the exemption from the Registration Requirements contained in the Legislation of certain Jurisdictions.
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 the Registration and Prospectus Requirements shall not apply to any trade or distribution of Options or Shares made in accordance with the Plan with, to or on behalf of the Agent, the Canadian Employees, Former Employees or their legal representatives, provided that the first trade in Shares acquired through the Plan pursuant to this Decision shall be deemed a distribution under the Legislation, unless:
(i) at the time of the grant of the corresponding Option, Invitrogen was not a reporting issuer under the Legislation of any Jurisdiction;
(ii) at the time of the grant of the corresponding Option, holders of Shares who last address as shown on the books of Invitrogen was in the Jurisdictions did not own more than 10% of the outstanding Shares and did not represent in number more than 10% of the total number of holders of Shares; and
(iii) such first trade is executed through a stock exchange or market outside of Canada.
DATED this 13th day of August, 2001.
Paul Moore J. A. Geller