Mutual Reliance Review System for Exemptive Relief Applications - relief for officers anddirectors of certain subsidiaries of reporting issuer from the insider reporting requirements,subject to certain conditions - relief for officers and directors of reporting issuer and of anysubsidiary of reporting issuer from the insider reporting requirements with respect to theacquisition of securities under an automatic share purchase plan, subject to certainconditions, including annual reporting.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as amended, ss. 1(1), 107, 108, 121(2)(a)(ii).
Applicable Ontario Regulations
Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as amended, Part VIII.
Applicable Ontario Policy Statements
Ontario Securities Commission Policy Statement No. 10.1.
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker" or, collectively, the "Decision Makers") in each of British Columbia, Alberta,Manitoba, Ontario, Quebec, Newfoundland, Nova Scotia and Saskatchewan (the"Jurisdictions") has received an application from Celestica Inc. (the "Company") for adecision pursuant to the securities legislation of the Jurisdictions (the "Legislation") thatthe requirement in the Legislation to file insider reports shall not apply to: (i) directors andsenior officers of certain subsidiaries of the Company; and (ii) directors and senior officersof the Company or any of its subsidiaries with respect to their acquisition of subordinatevoting shares of the Company pursuant to the Company's Employee Share OwnershipPlan (the "Plan");
AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System") the Ontario Securities Commission (the "Commission")is the principal regulator for this application;
AND WHEREAS the Company has represented to the Decision Makers that:
1. The Company is a corporation incorporated under the Business Corporations Act(Ontario). The head office of the Company is located in Toronto, Ontario. TheCompany is a leading provider of electronics manufacturing services ("EMS") tooriginal equipment manufacturers worldwide.
2. The authorized capital of the Company consists of an unlimited number ofsubordinate voting shares and an unlimited number of multiple voting shares, ofwhich 163,826,962 subordinate voting shares and 39,065,950 multiple votingshares were outstanding as at July 6, 2000.
3. The subordinate voting shares of the Company are listed and posted for trading onThe Toronto Stock Exchange and the New York Stock Exchange.
4. The Company is a reporting issuer (or equivalent) in each of the Provinces andTerritories of Canada. The Company is not on the list of defaulting reportingissuers maintained pursuant to the Legislation.
5. The list of companies in the attached appendix ("Appendix A") includes allsubsidiaries ("Major Subsidiaries") of the Company that have, as reflected in themost recent annual audited financial statements of the Company filed with theDecision Makers in the Jurisdictions, either: (i) assets, on a consolidated basis withits subsidiaries, which represent 10 percent or more of the consolidated assets ofthe Company shown on the balance sheet, or (ii) revenues, on a consolidated basiswith its subsidiaries, which represent 10 percent or more of the consolidatedrevenues of the Company shown on the statement of income and loss.
6. All of the directors and senior officers of the Major Subsidiaries receive, in theordinary course, knowledge of material facts or material changes with respect to theCompany prior to general disclosure of such material facts or material changes.
7. With the exception of the directors and senior officers referred to in paragraph 6,none of the directors and senior officers of any of the subsidiaries of the Companyeither: (i) participate in the day to day management or operation of the Company,or (ii) receive or have access to, in the ordinary course, information respectingmaterial facts or material changes with respect to the Company prior to generaldisclosure of such material facts or material changes.
8. The Company undertakes: (i) to maintain a list of directors and senior officersexempted by this Decision (as hereafter defined) and the basis upon which eachof the directors and senior officers comes within the terms of the Decision; (ii) tomaintain a continuing review of the facts contained in the representations uponwhich this Decision is made; and (iii) upon the request of any of the DecisionMakers or their staff, to provide any information necessary to determine whether adirector or senior officer of any subsidiary of the Company is or is not exempted bythis Decision.
9. The Company undertakes to promptly advise the Commission des valeursmobilières du Québec (the "Québec Commission") of the name of every directorand senior officer who becomes, or ceases to be, exempted by this Decision, andto provide an updated list of directors and senior officers to the QuébecCommission annually.
10. The Plan was adopted effective as of July 1, 1998 to enable the Company'sdirectors and employees to acquire subordinate voting shares of the Company ina convenient systematic manner in order to encourage continued employeeparticipation in the Company's operation, growth and development.
11. The Plan is an automatic securities purchase plan designated by the Company tofacilitate the acquisition by directors and employees of the Company, and byemployees of subsidiaries of the Company and certain designated affiliates, ofpreviously issued subordinate voting shares whereby the number of the subordinatevoting shares acquired by each director and employee participating under the Plan(each, a "Plan Participant"), the timing of acquisitions of the subordinate votingshares and the price paid for such subordinate voting shares are established by aprocedure set out in the Plan, and acquisitions of the subordinate voting sharespursuant to the Plan are made by a trustee on the open market without anydirection from a Plan Participant.
12. The Plan permits all Plan Participants, including senior officers and the directorsof the Company, to contribute a whole percentage of their regular pay, up to amaximum of 10%, to the Plan. The Company provides a partial matchingcontribution equal to 25% of the participant's contribution, up to a maximum of 1%of regular pay.
13. The Plan also permits Plan Participants who are directors to designate all or aportion of any of their cash retainer fees, meeting fees, and committee or othersimilar fees as a participant contribution under the Plan (the "Lump Sum Option").
14. The Company has appointed Royal Trust Company (the "Administrator") as theadministrator under the Plan. The Administrator receives contributions, purchasessubordinate voting shares of the Company on the open market after the end of eachpayroll period and holds such shares as agent for and on behalf of PlanParticipants.
15. The time to process a change on behalf of a Plan Participant, which includescommencing, varying or ceasing participation in the Plan, is at least seven daysfrom the date a change is requested by the Plan Participant.
16. The number of subordinate voting shares that may be acquired under the Plan isand will be de minimis in relation to the number of subordinate voting shares thatare issued and outstanding at the time of acquisition under the Plan.
AND WHEREAS pursuant to the System, this Decision Document evidences thedecision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the Jurisdiction to make the Decisionhas been met;
THE DECISION of the Decision Makers pursuant to the Legislation is that:
A. any person who is subject to the insider reporting requirements of the Legislationdue to the fact that he or she is a director or senior officer of a subsidiary of theCompany, other than a Major Subsidiary listed in Appendix A, is exempt from theinsider reporting requirements with respect to his or her ownership of or control ordirection over securities of the Company, provided that the exemption contained inthis Decision Document shall not apply to a person who:
(a) in the ordinary course receives notice of or information as to material factsor material changes with respect to the Company prior to general disclosureto the public of such facts or changes;
(b) becomes a director or senior officer of the Company or a Major Subsidiaryas listed in Appendix A, or any company which, after the date hereof,becomes a Major Subsidiary;
(c) is also an insider of the Company in a capacity other than as a director orsenior officer of a subsidiary of the Company; or
(d) is denied the exemptions contained in this Decision Document by anotherdecision of the Decision Makers or any one of them; and
B. the requirement contained in the Legislation to file insider reports in connection withthe acquisition of subordinate voting shares of the Company pursuant to the Planshall not apply to any person who is subject to the insider reporting requirementsdue to the fact that he or she is a director or senior officer of the Company or of anysubsidiary of the Company, including a Major Subsidiary, provided that, in eachcase:
(a) each director or senior officer who participates in the Plan (a "ParticipatingInsider") files with the Decision Maker in each Jurisdiction, by the last dayof March of each year, a report (a "Yearly Report") in the form required to befiled by the Legislation disclosing any change or changes in his or her director indirect beneficial ownership of or control or direction over subordinatevoting shares of the Company resulting from his or her participation in thePlan during the 12-month period ending the preceding December 31 (the"Reporting Period") which were not previously reported in the holdings of theParticipating Insider;
(b) if in any month during a Reporting Period there are one or more changes(other than an acquisition of beneficial ownership that arises solely as aresult of the automatic operation of the Plan), including but not limited to theacquisition of subordinate voting shares of the Company pursuant to theLump Sum Option, in the Participating Insider's direct or indirect beneficialownership of or control or direction over subordinate voting shares of theCompany, the Participating Insider shall file a report in accordance with theinsider reporting requirements of the Legislation disclosing the acquisition,disposition or transfer of subordinate voting shares of the Company;
(c) if a Plan Participant becomes subject to the insider reporting requirementsdue to the fact that he or she becomes a director or senior officer of theCompany or of any subsidiary of the Company, including a Major Subsidiary,during a Reporting Period, then for the purposes of the first Yearly Reportcontemplated by paragraph (a) above, the "Reporting Period" for that PlanParticipant shall be calculated as the period of time commencing on the datethe Plan Participant became a Participating Insider of the Company throughto December 31 of that year;
(d) if, at any time during a Reporting Period other than at the commencement ofsuch period, a Participating Insider determines to adopt the use of a YearlyReport to report changes in direct or indirect beneficial ownership of orcontrol or direction over subordinate voting shares of the Company pursuantto the Plan, then for the purposes of the first Yearly Report contemplated byparagraph (a) above, the "Reporting Period" for that Participating Insidershall be calculated as the period of time commencing on the date on whichsuch determination is made through to December 31 of that year;
(e) in all Jurisdictions except Quebec, the Participating Insider does notbeneficially own, directly or indirectly, or exercise control or direction overvoting securities of the Company, or a combination of both, that carry morethan 10 percent of the voting rights attaching to all outstanding securities ofthe Company; and
(f) in Quebec, the Participating Insider does not exercise control over more than10 percent of a class of shares of the Company to which are attached votingrights or an unlimited right to a share of the profits of the Company and in itsassets in case of winding-up.
September 8th, 2000.
The Major Subsidiaries of CELESTICA INC., as at August 8. 2000 are:
(a) Celestica Asia Inc;
(b) Celestica Corporation;
(c) Celestica International Inc.; and
(d) Celestica Limited.