Securities Law & Instruments


Headnote

Mutual Reliance Review System for Exemptive Relief Applications - the first trade byformer employees in shares acquired pursuant to the employee share purchase plan oremployee stock option plan of the issuer shall not be subject to section 25 of the Act,subject to certain conditions.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c.S.5., as am., ss. 25, 74(1)

Applicable Ontario Rules

Rule 45-503 - Trades to Employees, Executives and Consultants (1998) 21 OSCB 6559

Rule 72-501 - Prospectus Exemption for First Trade Over a Market Outside Ontario (1998) 21 OSCB 2318

IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA,BRITISH COLUMBIA, NEW BRUNSWICK, NOVA SCOTIA AND ONTARIO

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
AGILENT TECHNOLOGIES, INC.

MRRS DECISION DOCUMENT


WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker", and collectively, the "Decision Makers") in each of British Columbia, Alberta, NewBrunswick, Nova Scotia and Ontario (the "Jurisdictions") has received an application (the"Application") from Agilent Technologies, Inc. (the "Filer") for a decision under thesecurities legislation of the Jurisdictions (the "Legislation") that the requirements containedin the Legislation to be registered to trade in a security (the "Registration Requirements")and to file and obtain a receipt for a preliminary prospectus and a prospectus (the"Prospectus Requirements") (collectively, the "Registration and ProspectusRequirements") shall not apply to certain trades in common shares (the "Common Shares")in the capital of the Filer and in options (the "Options") for Common Shares made inconnection with the AT Employee Stock Purchase Plan and the AT 1999 Stock Plan;

AND WHEREAS under the Mutual Reliance Review System for Exemptive ReliefApplications (the "System"), Ontario is the principal jurisdiction for this application;

AND WHEREAS the Filer has represented to the Decision Makers that:

1. The Filer is a corporation incorporated under the laws of Delaware, is not areporting issuer or the equivalent under the Legislation of any of the Jurisdictionsand has no present intention of becoming a reporting issuer in any of theJurisdictions.

2. The authorized share capital of the Filer is 2,000,000,000 Common Shares. As atNovember 18, 1999, there were 452,000,000 Common Shares issued andoutstanding.

3. The Common Shares are listed and posted for trading on the New York StockExchange (the "NYSE").

4. Agilent Technologies Canada Inc. ("AT Canada') is a corporation incorporatedunder the federal laws of Canada.

5. Approximately 84% of the Common Shares are owned by Hewlett-PackardCompany ("Hewlett-Packard"). It is expected that during 2000 Hewlett-Packard willdistribute its Common Shares to the shareholders as a dividend in kind.

6. At Canada is not a reporting issuer or the equivalent under the Legislation of anyof the Jurisdictions and does not have the present intention of becoming areporting issuer or the equivalent in any of the Jurisdictions.

7. All of the persons who are eligible to purchase Common Shares under the ATEmployee Stock Purchase Plan ("Stock Eligible Employees") or to whom optionsmay be issued under the AT 1999 Stock Plan ("Option Eligible Employees"), in theJurisdictions, are employed by AT Canada, which is an indirect wholly-ownedsubsidiary, and therefore an affiliate, of the Filer.

8. AT has established the AT Employee Stock Purchase Plan, to be effective as ofFebruary 1, 2000 (the "Stock Purchase Plan") whereby it will allow Stock EligibleEmployees to acquire the Common Shares. All regular full-time and regularpart-time employees (those employees who work 20 hours or more per week on aregular schedule) of AT Canada are Stock Eligible Employees. Any Stock EligibleEmployee's participation in the Stock Purchase Plan shall be effective after he orshe has initiated his or her enrollment. The purpose of the Stock Purchase Plan isto foster continued cordial employee relations and to encourage maximumparticipation in AT stock ownership by its employees and employees of itssubsidiaries.

9. As at December 15, 1999, there were approximately 49 Stock Eligible Employeesresident in Alberta, 56 Stock Eligible Employees resident in British Columbia, 3Stock Eligible Employees resident in Manitoba, 1 Stock Eligible Employee residentin New Brunswick, 1 Stock Eligible Employee resident in Nova Scotia, 208 StockEligible Employees resident in Ontario and 91 Stock Eligible Employees residentin Quebec.

10. Participation in the Stock Purchase Plan by Stock Eligible Employees is voluntaryand the Stock Eligible Employees have not been and will not be induced toparticipate in the Stock Purchase Plan by expectation of employment or continuedemployment with the Filer, AT Canada or any other affiliated entity of the Filer.

11. Generally, each Stock Eligible Employee may elect to make contributions under theStock Purchase Plan by payroll deduction of any amount up to, but not exceeding,10% of his or her base earnings.

12. The purchase price of the Common Shares under the Stock Purchase Plan (the"Purchase Price") will be the lowest of the following:

(i) the average of the daily closing prices on the NYSE for the applicable fullquarter;

(ii) the average of the daily closing prices on the NYSE for the last five tradingdays of the applicable quarter; or

(iii) the closing price on the NYSE on the last trading day of the applicablequarter.

13. On the last day of each fiscal quarter (the "Purchase Date"), the balance in theStock Eligible Employee's account will be applied toward the purchase of thegreatest even number of whole Common Shares at the Purchase Price. For everytwo Common Shares purchased by and issued to the Stock Eligible Employee theFiler will issue to the Stock Eligible Employee one additional Common Share (the"AT Matching Shares"). If the employee sells his or her purchased Common Sharesprior to the expiration of the two-year period following the applicable PurchaseDate, the employee will forfeit such AT Matching Shares.

14. The Stock Eligible Employee's participation in the Stock Purchase Plan will beterminated when he or she voluntarily elects to withdraw from the Stock PurchasePlan or upon the Stock Eligible Employee's termination of employment. In the eventof the Stock Eligible Employee's termination as the result of, among other things,retirement due to age or disability, the two-year restriction period on his or her ATMatching Shares will lapse and such shares can be resold.

15. The Stock Eligible Employees who purchase Common Shares will be provided withall the disclosure documentation that holders of Common Shares resident in theUnited States and the Employees of the Filer who purchase Common Shares underthe Stock Purchase Plan are entitled to receive.

16. An exemption from the Registration and Prospectus Requirements is not availablein all of the Jurisdictions for the distribution of the Common Shares by the Filer toStock Eligible Employees through the Stock Purchase Plan.

17. An exemption from the Registration and Prospectus Requirements is not availablein all of the Jurisdictions for trades in Common Shares acquired under the StockPurchase Plan by Stock Eligible Employees, former Stock Eligible Employees or thelegal representatives of such present or former Stock Eligible Employees.

18. Because there is no market for the Common Shares in Canada and none isexpected to develop, any trades of the Common Shares by Stock EligibleEmployees will be effected through the facilities of and in accordance with the rulesof a stock exchange or recognized market outside of Canada on which the CommonShares are traded and in accordance with all laws applicable to such trading.

19. AT has established the AT 1999 Stock Plan (the "Stock Option Plan") whereby it willissue to Option Eligible Employees certain options to acquire the Common Shares(the "Options"). It is anticipated that Options will be awarded to various OptionEligible Employees on certain dates (the "Grant Date"). The Stock Option Planshall continue for a term of ten years unless terminated as permitted pursuant to itsterms. Each Option shall be designated in the agreement between the Filer and theOption Eligible Employee (the "Award Agreement") as a nonstatutory stock option.The Filer may grant additional options in the future to Option Eligible Employeespursuant to the Stock Option Plan. The purpose of the Stock Option Plan is toprovide an incentive to the Option Eligible Employees and to encourage or facilitatethe holding of Common Shares of the Filer by the Option Eligible Employees.

20. As at December 15, 1999, there were approximately 49 Option Eligible Employeesresident in Alberta, 56 Option Eligible Employees resident in British Columbia, 3Option Eligible Employees resident in Manitoba, 1 Option Eligible Employeeresident in New Brunswick, 1 Option Eligible Employee resident in Nova Scotia, 208Option Eligible Employees resident in Ontario and 91 Option Eligible Employeesresident in Quebec.

21. Participation in the Stock Option Plan is voluntary and the Option EligibleEmployees will not be induced to exercise Options by expectation of employmentor continued employment with the Filer, AT Canada or any other affiliated entity ofthe Filer.

22. All Options granted under the Stock Option Plan to the Option Eligible Employeesshall be determined by the relevant committee(s) of the Board of Directors of theFiler (the "Administrator") and stated in the Award Agreements. The Administratoradministers the Stock Option Plan.

23. At the time an Option is granted, the Administrator shall fix the period within whichthe Option may be exercised and shall determine the terms of the Option and anyconditions that must be satisfied before the Option may be exercised. One quarterof the Options granted to an Option Eligible Employee will vest each year after theGrant Date so that such Options will be fully vested four years after the Grant Date.Generally, the term of the Options shall not exceed 10 years from the Grant Date.

24. The Options are non-transferable during an Option Eligible Employee's life. Upondeath, an Option Eligible Employee's personal representative may exercise his orher Options in full within the earlier of 12 months thereafter or the expiration of theterm of such Option.

25. Except as described below or otherwise provided in the Award Agreement, anOption Eligible Employee's Options will terminate immediately upon the terminationof employment.

26. Generally, if an Option Eligible Employee's employment terminates because of hisor her permanent disability or retirement due to age, then he or she may exercisehis or her Options within the earlier of three years of the date of such disability orretirement or the expiration of the term of such Option.

27. If an Option Eligible Employee ceases to be an employee of AT Canada as a resultof participation in AT Canada's voluntary severance incentive program, all Optionsshall be exercisable within the earlier of 3 months following the Option EligibleEmployee's termination or the expiration of the term of such Option.

28. If an Option Eligible Employee ceases to be a participant because of a divestitureof AT Canada, the Administrator may make such employee's Options exercisablefor a period of time to be determined by the Administrator.

29. At any time, the Administrator may buy out for a payment in cash or CommonShares an Option previously granted based on such terms and conditions as theAdministrator shall establish.

30. Option Eligible Employees who are issued Options under the Stock Option Plan willbe provided with all the disclosure documentation that holders of Common Sharesresident in the United States and the Employees of the Filer who receive Optionsare entitled to receive.

31. An exemption from the Registration and Prospectus Requirements is not availablein all of the Jurisdictions for the distribution of Options by the Filer to Option EligibleEmployees through the Stock Option Plan.

32. An exemption from the Registration and Prospectus Requirements is not availablein all of the Jurisdictions for the exercise of Options acquired under the StockOption Plan by Option Eligible Employees, former Option Eligible Employees or thelegal representatives of such present or former Option Eligible Employees.

33. An exemption from the Registration and Prospectus Requirements is not availablein all of the Jurisdictions for trades in Common Shares acquired under the StockOption Plan by the Option Eligible Employees, former Option Eligible Employeesor the legal representatives of such present or former Option Eligible Employees.

34. Because there is no market for the Common Shares in Canada and none isexpected to develop, any trades of the Common Shares by Option EligibleEmployees will be effected through the facilities of and in accordance with the rulesof a stock exchange or recognized market outside of Canada on which the CommonShares are traded and in accordance with all laws applicable to such trading.

AND WHEREAS pursuant to the System this MRRS Decision Document evidencesthe decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation which provides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers under the Legislation is that:

(1) the Registration and Prospectus Requirements shall not apply to:

(a) distributions and/or trades of Common Shares to or on behalf of StockEligible Employees in connection with the Stock Purchase Plan and thedistribution of the Filer Matching Shares to Stock Eligible Employees;

(b) the distribution of Options by the Filer to Option Eligible Employees, theexercise of such Options and the distribution of Common Shares pursuantto such exercise;

provided that the first trade in the Common Shares acquired pursuant to paragraph(1) is a distribution subject to the Prospectus Requirements; and

(2) the first trade in any Common Shares acquired under the Stock Purchase Plan orthe Stock Option Plan is not subject to the Registration and ProspectusRequirements where the first trade is made by a Stock Eligible Employee, OptionEligible Employee, former Stock Eligible Employee or Option Eligible Employee orthe legal representatives of such present or former Stock Eligible Employee orOption Eligible Employee, provided that:

(a) at the time of the acquisition of the Common Shares or the Options, personsor companies whose last address as shown on the books of the Filer in anyone of the Jurisdictions did not hold, in the aggregate, more than 10% of theoutstanding Common Shares and did not represent in number more than10% of the total number of holders of Common Shares;

(b) at the time of the acquisition of the Common Shares or the Options, personsor companies who were resident in any one of the Jurisdictions and whobeneficially owned Common Shares did not beneficially own more than 10% of the outstanding Common Shares and did not represent in number morethan 10% of the total number of holders of Common Shares;

(c) at the time of the trade of any Common Shares, the Filer is not a reportingissuer under any of the Legislation; and

(d) such first trade is executed:

(i) through the facilities of a stock exchange outside of Canada;

(ii) on the NASDAQ Stock Market; or

(iii) on the Stock Exchange Automated Quotation System of the LondonStock Exchange Limited;

in accordance with the rules of such exchange or market and all applicablelaws.

January 28th, 2000.

"Howard I. Wetston"    "Robert W. Davis"