Subsection 74(1) - first trade relief previously available pursuant to Rule 72-501Distributions Outside the Jurisdiction no longer available due to exchange restructuring;relief from section 53 of the Act granted, subject to certain conditions.
Securities Act, R.S.O. 1990, c.S.5, as am., ss. 53, 74(1).
Rule 72-501 Distributions Outside the Jurisdiction (1998) 21 OSCB 3873.
R.S.O., 1990, CHAPTER S.5, AS AMENDED (the "Act")
IN THE MATTER OF
PREMIER TECH LTD.
(subsection 74(1) of the Act)
UPON the application (the "Application") of Premier Tech Ltd. ("Premier"), acorporation incorporated under the Canada Business Corporations Act, to the OntarioSecurities Commission (the "Commission") for a ruling pursuant to subsection 74(1) of theAct that the first trades in certain securities of Premier are not subject to section 53 of theAct;
AND UPON considering the Application and the recommendation of staff of theCommission;
AND UPON Premier having represented to the Commission that:
1. Premier was incorporated under the Canada Business Corporations Act onDecember 24, 1985.
2. Pursuant to the Restructuring (defined below), the authorized capital of Premier iscurrently comprised of an unlimited number of Class "A" subordinate voting shares,an unlimited number of Class "B" multiple voting shares, an unlimited number ofClass "A" preferred shares which are issuable in series and an unlimited numberof Class "B" preferred shares which are issuable in series. 15,046,733 Class "A"subordinate voting shares, and 859,750 Class B multiple voting shares were issuedand outstanding as at February 1, 2000.
3. In addition, options to purchase 489,500 Class "A" subordinate voting shares ofPremier were outstanding as at February 1, 2000.
4. The Class "A" common shares of Premier were listed only on the MontrealExchange until December 6, 1999, at which date the listing of the Class "A"common shares was transferred to The Toronto Stock Exchange (the "TSE")pursuant to the agreement between such exchanges (the "Listing Transfer Date").
5. Until the Listing Transfer Date, Premier was only a reporting issuer in Québec andhad never filed a prospectus or issued securities by way of private placement inOntario.
6. Since the Listing Transfer Date, Premier has been a reporting issuer in Ontario asdefined in subsection 1(1) of the Act.
7. Premier is still a reporting issuer in Québec and is not on the list of defaultingreporting issuers maintained under the Securities Act (Québec) (the "Québec Act").
8. At a meeting held on December 16th and December 22nd, 1999, Premier'sshareholders approved a proposal to amend the articles of Premier in order toeffect a restructuring of Premier's share capital (the "Restructuring").
9. As part of the Restructuring, the articles of Premier were amended, inter alia, tocreate an unlimited number of Class "A" subordinate voting shares, to modify thedesignation of the Class "B" common shares into Class "B" multiple voting shares,and to change each Class "A" common share outstanding into, at the election of theholder, either 1.1 Class "A" subordinate voting share or 1 Class "B" multiple votingshare of Premier.
10. The Restructuring received the approval of the Montreal Exchange on December3, 1999 and the Class "A" subordinate voting shares are listed on the TSE.
11. As of February 1, 2000, persons or companies whose last address as shown on thebooks of Premier was in Ontario and who held Class "A" subordinate voting sharesheld 8.1% of the total number of holders of Class "A" subordinate voting shares and7.64% of the total number of holders of Class "B" multiple voting shares.
12. Pursuant to subclause 72(1)(f)(ii) of the Act, the trade in the Class "A" subordinatevoting shares and the Class "B" multiple voting shares (collectively, the "Securities")issuable by Premier pursuant to the Restructuring to the holders of its Class "A"common shares is exempt from the provisions of section 53 of the Act.
13. Pursuant to section 50 of the Québec Act, the issuance of the Securities pursuantto the Restructuring is exempt from the prospectus requirements of the Québec Act,as confirmed by Order No. 1999-MC-3283 of the Commission des valeursmobilières du Québec (the "CVMQ").
14. Pursuant to subsection 72(5) of the Act, the first trade in the Securities previouslyacquired pursuant to subclause 72(1)(f)(ii) will, however, be a distribution sincePremier has not been a reporting issuer in Ontario for at least 12 months at the timeof the Restructuring (December 22, 1999).
15. Pursuant to section 60 of the Québec Act, the first trade in the Securities previouslyacquired pursuant to section 50 is exempt from the prospectus requirements underthe Québec Act since Premier has been a reporting issuer in Québec for at least12 months.
16. Were it not for the transfer, on the Listing Transfer Date, of all senior issuers listedon the Montreal Exchange to the TSE, the Ontario shareholders of Premier couldhave availed themselves of Rule 72-501 in connection with the first trade of theSecurities on the Montreal Exchange.
AND UPON the Commission being satisfied that to do so would not be prejudicialto the public interest;
IT IS RULED, pursuant to subsection 74(1) of the Act, that the first trade by Ontarioshareholders in the Securities of Premier previously acquired under the Restructuring shallnot be subject to section 53 of the Act, provided that the first trade in the Securities ismade in accordance with subsection 2.1(b) of Rule 72-501 Distributions Outside theJurisdiction.
February 22nd, 2000.
"J. A. Geller" Howard I. Wetston"