Mutual Reliance Review System for Exemptive Relief Applications - distribution ofshares of a foreign company which is not a reporting issuer as a dividend in kind is notsubject registration and prospectus requirement - de minimus Ontario holders - firsttrade is a distribution unless such trade is conducted through a stock exchange outsideof Canada.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as am., ss. 25, 35(1)13, 53, 72(1)(g), 74(1).
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
LUCENT TECHNOLOGIES INC. AND AVAYA INC.
MRRS DECISION DOCUMENT
WHEREAS the Canadian securities regulatory authority or regulator (the"Decision Maker") in each of British Columbia, Alberta, Saskatchewan, Manitoba,Ontario, Quebec, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland,the Northwest Territories, Nunavut and the Yukon Territory (the "Jurisdictions") havereceived an application from Lucent Technologies Inc. (the "Corporation") for adecision pursuant to the securities legislation of the Jurisdictions (the "Legislation")that, subject to certain conditions:
(i) the requirements contained in the Legislation to be registered to trade in asecurity (the "Registration Requirements") shall not apply to a distribution (the"Distribution") by the Corporation of shares of common stock of Avaya Inc.("Avaya") that it owns as a dividend in kind to the holders of shares of commonstock of the Corporation (the "Common Shares"); and
(ii) the requirements to file and obtain a receipt for a preliminary prospectus and aprospectus (the "Prospectus Requirements") shall not apply to the Distribution;
AND WHEREAS pursuant to the Mutual Reliance System for Exemptive ReliefApplications (the "System"), the Ontario Securities Commission is the principalregulator for this application;
AND WHEREAS the Corporation has represented to the Decision Makers that:
1. The Corporation is a corporation incorporated under the laws of the State ofDelaware and its principal executive offices are located in the State of NewJersey.
2. The Corporation designs, develops and manufactures communications systems,software and products.
3. The authorized share capital of the Corporation consists of (i) 10,000,000,000Common Shares; and (ii) 250,000,000 shares of preferred stock, $1.00 par valueper share (the "Preferred Shares").
4. At the close of business on June 30, 2000, approximately 3,300,000,000 of theCorporation's Common Shares were issued and outstanding and no PreferredShares were issued and outstanding.
5. The Common Shares are listed and posted for trading on the New York StockExchange.
6. The Corporation is not a reporting issuer or the equivalent in any Jurisdiction.
7. As of September 11, 2000, according to the books of the Corporation, 2,648persons or companies, whose last address as shown on the books of theCorporation was in Canada, held Common Shares and such persons orcompanies (i) represented approximately 0.16 percent of the total number ofholders of record of Common Shares worldwide and (ii) held approximately0.018 percent of the aggregate outstanding Common Shares.
8. Avaya was incorporated under the laws of the State of Delaware on February 16,2000, under the name "Lucent EN Corp.". As of June 27, 2000, Lucent ENCorp. changed its name to Avaya.
9. Avaya is not a reporting issuer or the equivalent in any Jurisdiction and has nointention of becoming a reporting issuer or the equivalent in any Jurisdiction.
10. As of September 12, 2000, Avaya was authorized to issue 1,700,000,000 sharesof capital stock consisting of (i) 1,500,000,000 shares of common stock (the"Avaya Shares"); and (ii) 200,000,000 shares of preferred stock, $1.00 parvalue.
11. As of September 12, 2000, 1,000 Avaya Shares were issued and outstandingand no shares of preferred stock of Avaya, $1.00 par value, were issued andoutstanding.
12. The Corporation currently owns all of the issued and outstanding Avaya Shares.
13. The Corporation intends to effect the Distribution on September 30, 2000.
14. The Avaya Shares are not currently available for trading on any stock exchange.Upon completion of the Distribution, the Avaya Shares will be listed and postedfor trading on the New York Stock Exchange.
15. In connection with the Distribution, approximately 278,292,661 Avaya Shares willbe distributed as a dividend in kind to the holders of Common Shares.
16. The Distribution will be effected in compliance with the laws of the State ofDelaware, the United States Securities Act of 1933, the United States SecuritiesExchange Act of 1934 and other applicable securities laws of the United States.
17. Upon completion of the Distribution, it is expected, on the basis of the holdingsof Common Shares as of September 11, 2000, that persons or companies whoseaddress as shown on the books of the Corporation is in Canada, will (i)represent approximately 0.16 percent of the total number of holders of record ofAvaya Shares worldwide, and (ii) will hold approximately 0.018 percent of theaggregate outstanding Avaya Shares.
18. In order to effect the Distribution, and in accordance with the requirements of theUnited States Securities Exchange Act of 1934, an information statement inForm 10 that contains prospectus-level disclosure with respect to Avaya hasbeen filed on behalf of Avaya with the United States Securities ExchangeCommission. The Corporation will mail such information statement to all holdersof Common Shares, including those who are resident in Canada.
19. Avaya will concurrently send to holders of Avaya Shares resident in theJurisdictions all disclosure materials it sends to holders of Avaya Sharesresident in the United States.
20. The Distribution would be exempt from the Registration Requirements and theProspectus Requirements of the Legislation in certain of the Jurisdictions but forthe fact that Avaya is not a reporting issuer or the equivalent in suchJurisdictions.
AND WHEREAS pursuant to the System, this MRRS Decision Documentevidences the decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test containedin the Legislation that provides the Decision Maker with the jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers under the Legislation is that theCorporation is exempt from the Registration Requirements and the ProspectusRequirements in connection with the Distribution of the Avaya Shares, provided that thefirst trade in any Avaya Shares acquired by a holder of Common Shares pursuant tothe Distribution in reliance on this decision shall be deemed a distribution, or a primarydistribution to the public, under the Legislation unless such trade is executed throughthe facilities of a stock exchange outside of Canada or on the Nasdaq Stock Market.
September 29th, 2000.
"J. A. Geller" "David Brown"