Exemption Orders (Discretionary)
BANK OF AMERICA CORPORATION
2001 BCSECCOM 187
Headnote
Mutual Reliance System for Exemptive Relief Applications - Relief granted from the registration requirements in connection with trades in securities by a foreign registrant acquired on the exercise of options that were distributed under an employee stock incentive plan on the condition that the issuer is not a reporting issuer in the Jurisdiction, the connection to the Jurisdiction is de minimus, and the trades are executed on a stock exchange or market outside of Canada.
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 ALBERTA AND BRITISH COLUMBIA
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF BANK OF AMERICA CORPORATION
MRRS DECISION DOCUMENT
[para 1]
WHEREAS the local securities regulatory authority (the "Decision Maker") in each of the provinces of British Columbia and Alberta (the "Jurisdictions") has received an application from Bank of America Corporation (the "Corporation") for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the requirement contained in the Legislation to be registered to trade in a security (the "Registration Requirement") shall not apply to intended trades in shares of the common stock of the Corporation (the "Shares") made in connection with the Bank of America Corporation Key Employee Stock Plan (the "Plan");
[para 2]
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the British Columbia Securities Commission is the principal regulator for this Application;
[para 3]
AND WHEREAS the Corporation has represented to the Decision Makers that:
1. the Corporation is incorporated under the laws of Delaware and, together with its subsidiaries, provides a diversified range of banking and non-banking financial services and products in the U.S. and in selected international financial markets;
2. the Corporation is subject to the requirements of the Securities Exchange Act of 1934, as amended, of the United States of America (the "1934 Act"), and the Shares are listed for trading on the New York Stock Exchange ("NYSE"), the Pacific Stock Exchange, the London Stock Exchange, and certain Shares are listed on the Tokyo Stock Exchange;
3. the authorized share capital of the Corporation consists of 5,000,000 Shares and 100,000,000 shares of preferred stock of which as of June 30, 2000, there were 1,645,787,225 Shares and 1,742,349 shares of preferred stock issued and outstanding;
4. the purpose of the Plan is to promote the success and enhance the value of the Corporation by linking the personal interests of key employees of the Corporation or its affiliates ("Key Employees") with the interests of the Corporation's stockholders, and to provide Key Employees with an incentive for outstanding performance;
5. the Corporation is not a reporting issuer in either of the Jurisdictions and no securities of the Corporation are currently listed or quoted for trading on any Canadian stock exchange or market;
6. under the Plan, options on Shares (“Options”), stock appreciation rights (“SARs”), performance Shares and restricted stock (collectively, "Awards") may from time to time be granted to eligible Key Employees, including Key Employees resident in the Jurisdictions ("Canadian Employees"), as determined by the Committee appointed by the Board of Directors of the Corporation (the "Committee");
7. as of January 31, 2001, there were 3 Canadian Employees resident in the Jurisdictions eligible to receive Awards under the Plan;
8. participation in the Plan is entirely voluntary and Canadian Employees will not be induced to participate in the Plan by expectation of employment or continued employment with the Corporation or its affiliates;
9. the Corporation will distribute to all Canadian Employees the same or substantially similar disclosure material as is furnished to participants in the United States; a Canadian Employee who acquires Shares under the Plan will receive all materials that are distributed to the Corporation's shareholders at the same time and in the same manner as such materials are provided or made available upon request to holders of Shares resident in the United States;
10. the Corporation uses the services of agent(s) registered under applicable Legislation in the United States (the "Agent") to assist and facilitate the exercise of Awards granted under the Plan; the current Agent, Prudential Securities Inc. is, and if replaced the Agent will be, a broker registered under applicable legislation in the United States but is not, and if replaced is not expected to be registered under the Legislation;
11. Canadian Employees who wish to exercise Options or SARs granted to them under the Plan may do so by way of a cash exercise or a cashless exercise;
12. if an optionee requests a cashless exercise, the Corporation will deliver Shares to the Agent and will instruct the Agent to sell the Shares as soon as practicable; upon settlement of the trade, the Agent will transfer the proceeds of the sale to the Corporation; as soon as practicable thereafter, the proceeds from the sale of Shares (less the exercise price, applicable brokerage fees and withholding tax) will be delivered to the optionee;
13. as there is no market in Canada for the Shares and none is expected to develop, it is anticipated that any resale of Shares issued pursuant to the Plan (other than resales made in connection with a cashless exercise) will be effected through a broker of the Canadian Employee's own choosing through the facilities of and in accordance with the rules of the NYSE or such other exchange or market outside of Canada on which the Shares may be listed or quoted for trading;
14. the Corporation may rely on exemptions from registration and prospectus requirements in connection with the distribution of Shares and Awards under the Plan to Canadian Employees; and
15. there is no exemption from registration requirements available to Canadian Employees or to the Agent in connection with the resale of Shares by the Agent in connection with cashless exercises as the Agent is not, and is not expected to be, a registrant in the Jurisdictions;
[para 4]
AND WHEREAS pursuant to the System, the MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");
[para 5]
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;
[para 6]
The Decision of the Decision Makers pursuant to the Legislation is that the Registration Requirement shall not apply to first trades made through the Agent by or on behalf of Canadian Employees in Shares acquired pursuant to the Plan in connection with cashless exercises provided that:
(a) such first trades are effected through the facilities of the NYSE or such other exchange or market outside Canada on which the Shares may be listed or quoted for trading; and
(b) at the time of any such first trades, holders of Shares whose last address as shown on the books of the Corporation in the Jurisdictions do not hold, in the aggregate, more than 10% of the outstanding Shares and do not represent in number more than 10% of the total number of holders of Shares;
[para 7]
DATED February 12, 2001.
Ross P. McLennan
Director