Exemption Orders (Discretionary)
POWER CORPORATION OF CANADA
2001 BCSECCOM 52
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – Relief from the insider reporting requirements for directors and senior officers of a reporting issuer and its subsidiaries, subject to certain conditions.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, s. 87, 91(1)(b)
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO, ALBERTA AND BRITISH COLUMBIA
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATION
AND
IN THE MATTER OF POWER CORPORATION OF CANADA
MRRS DECISION DOCUMENT
WHEREAS the Canadian securities regulatory authority or regulator (the “Decision Maker”) in each of Ontario, Alberta and British Columbia (the “Jurisdictions”) has received an application on behalf of Power Corporation of Canada (the “Applicant”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that the requirement contained in the Legislation for an insider of a reporting issuer to file insider reports (the “Insider Reporting Requirement”) shall not apply to certain insiders of the Applicant with respect to their acquisition of subordinate voting shares of the Applicant (the “Subordinate Voting Shares”) under the Applicant's Employee Share Purchase Program (the “Program”) subject to certain conditions;
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 the Applicant has represented to the Decision Makers that:
1. The Applicant is incorporated pursuant to the laws of Canada and is a diversified management and holding corporation.
2. The authorized capital of the Applicant consists of an unlimited number of Cumulative Redeemable First Preferred Shares, 1986 Series, 6,000,000 Series A First Preferred Shares, an unlimited number of Participating Preferred Shares and an unlimited number of Subordinate Voting Shares. At December 31, 1999 approximately 1,299,878 Cumulative Redeemable First Preferred Shares, 1986 Series, 6,000,000 Series A First Preferred Shares, 24,427,386 Participating Preferred Shares and 196,516,872 Subordinate Voting Shares were issued and outstanding.
3. The Applicant is a reporting issuer in each of the Jurisdictions and is not in default of any of the requirements of the Legislation. The Subordinate Voting Shares of the Applicant are listed and posted for trading on The Toronto Stock Exchange.
4. Subject to certain limitations, participants in the Program may contribute a percentage of their regular pay to the Program through automatic payroll deductions and through an annual lump sum payment. The Applicant (or a participating subsidiary) provides a matching contribution to the Program equal to either 50% or 100% of the participating employee’s contribution up to a specified maximum per calendar year. Under the terms of the Program, contributions are to be deposited with the trustee under the Program and used to acquire Subordinate Voting Shares.
5. The Program is an employee share purchase plan under which the timing of the share acquisitions, the number of shares purchased, and the price paid for the shares are established by procedures under the Program. The Program is an “automatic securities purchase plan” as such term is defined in proposed National Instrument 55-101 - Exemption From Certain Insider Reporting Requirements (2000), 23 OSCB 4221 (“NI 55-101") which has a “lump sum provision” as defined in that proposed instrument.
6. Acquisitions of Subordinate Voting Shares under the Program are made by an independent administrator in the open market.
7. Acquisitions of Subordinate Voting Shares under the Program are reported to participants in the Program quarterly, or on such other periodic basis as the Applicant may decide.
AND WHEREAS under 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 Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers under the Legislation is that the Insider Reporting Requirement shall not apply to an insider of the Applicant with respect to acquisitions of Subordinate Voting Shares of the Applicant pursuant to the Program provided that:
1. The Subordinate Voting Shares are not acquired with a payment made under the lump sum provision of the Program;
2. The insider files a report disclosing, in the form prescribed under the Insider Reporting Requirement, all acquisitions of Subordinate Voting Share under the Program that have not previously been reported by or on behalf of the insider:
a. if any shares acquired under the Program during a calendar year are disposed of or transferred during the calendar year, within the time required by the Legislation for reporting the disposition or transfer; and
b. if any shares acquired under the Program, either during a calendar year or following the last disposition or transfer in a calendar year, are not disposed of or transferred, within 90 days of the end of the calendar year;
3. The insider does not beneficially own, directly or indirectly, voting securities of the Applicant, or exercise control or direction over voting securities of the Applicant, or a combination of both, that carry more than 10 per cent of the voting rights attaching to all outstanding voting securities of the Applicant; and
4. The Subordinate Voting Shares are acquired prior to the date that NI 55-101 comes into effect.
DATED at Toronto this 21st day of December, 2000.
Margo Paul
Manager, Corporate Finance