Subsection 74(1) - issuance of shares to an Ontario resident by non-reportingissuer pursuant to a directed share program in connection with its U.S. initial publicoffering exempt from section 53 of Act - first trade is a distribution unless made inaccordance with subsection 72(4) or made through the facilities of a stock exchangeor market outside of Ontario, subject to certain conditions.
Securities Act, R.S.O. 1990, c.S.5, as am., ss. 53, 72(4) and 74(1).
Rule 14-501 - Definitions (1997), 20 OSCB 4054, as amended, (199), 22 OSCB1173.
Rule 45-501 - Exempt Distributions (1998), 21 OSCB 6548.
Rule 72-501 - Prospectus Exemption for First Trade Over A Market Outside Ontario(1998), 21 OSCB 3873.
R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")
IN THE MATTER OF
UPON the application (the "Application") of Synplicity, Inc. ("Synplicity") to theOntario Securities Commission (the "Commission") for a ruling pursuant to subsection74(1) of the Act that certain trades in the Shares of Common Stock of Synplicity (the"Shares") to be made pursuant to a proposed Directed Share Program (the "Program")to a senior employee of a customer of Synplicity residing in the Province of Ontario,who elects to participate in the Program (the "Ontario Program Participant"), shall notbe subject to section 53 of the Act;
AND UPON considering the Application and recommendation of the staff of theCommission;
AND UPON Synplicity having represented to the Commission as follows:
1. Synplicity is a corporation incorporated under the laws of California and is nota reporting issuer under the Act and has no present intention of becoming areporting issuer under the Act.
2. Synplicity is currently in the process of completing an initial public offering (the"IPO") in the United States and in connection therewith has filed a registrationstatement on Form S-1, as amended.
3. Synplicity proposes to offer 4,300,000 Shares under the IPO.
4. Upon completion of the IPO, the Shares will be quoted on the Nasdaq NationalMarket ("NASDAQ").
5. The Program is being made available to directors, officers and employees ofSynplicity, as well as to some of its customers and suppliers and other personsassociated with Synplicity, including the Ontario Program Participant, inconnection with the IPO, all on the same terms and conditions.
6. Participation in the Program is voluntary and the preliminary and finalprospectus prepared in accordance with U.S. securities laws will be forwardedto the Ontario Program Participant.
7. The Shares will be offered to the Ontario Program Participant at a price equalto the price of the Shares offered under the IPO.
8. The Ontario Program Participant is a senior employee of a customer of theApplicant.
9. After giving effect to the IPO and the Program, the aggregate number of Sharesheld by the Ontario Program Participant will be less than 5% of the issued andoutstanding Shares, and persons or companies whose last address as shownon the books of Synplicity is in Ontario will not hold more than 10% of theoutstanding Shares and will not represent in number more than 10% of the totalnumber of holders of Shares.
10. There is not expected to be a market for the Shares in Ontario and it is intendedthat any resale of Shares acquired under the Program will be effected throughthe facilities of the NASDAQ in accordance with its rules and regulations.
11. As a result of the relationship between Synplicity and the Ontario ProgramParticipant, the Ontario Program Participant possesses knowledge of thebusiness and affairs of Synplicity.
12. The annual reports, proxy materials and other materials generally distributed toSynplicity shareholders resident in the United States will be provided to OntarioProgram Participant at the same time and in the same manner as the documentswould be provided to United States resident shareholders.
13. The Ontario Program Participant will be provided with a notice advising that theOntario Program Participant will not be entitled to remedial rights providedunder the Act in connection with the distribution of securities under a prospectusfiled under the Act, and as a result, must rely on other remedies which may beavailable, including common law rights of action for damages or rescission orrights of action under the civil liability provisions of U.S. federal securities laws.
14. The Shares will be traded to the Ontario Program Participant through RBCDominion Securities, Inc., which is registered as a dealer under the Act.
AND UPON the Commission being satisfied that to do so would not beprejudicial to the public interest.
IT IS RULED, pursuant to subsection 74(1) of the Act, that trades in Sharespursuant to the Program to the Ontario Program Participant are not subject to section53 of the Act, provided that the first trade in any of the Shares acquired by the OntarioProgram Participant pursuant to this ruling shall be a distribution unless:
A. such trade is executed in accordance with the provisions of subsection 72(4) ofthe Act as modified by section 3.10 of Rule 45-501 Prospectus ExemptDistributions, as if the Shares had been acquired pursuant to an exemptionreferred to in subsection 72(4) of the Act, except that, for these purposes, it shallnot be necessary to satisfy the requirements in clause 72(4)(a) that the issuernot be in default of any requirement of the Act or the regulations if the seller isnot in a special relationship with the issuer, or if the seller is in a specialrelationship with the issuer, the seller has reasonable grounds to believe thatthe issuer is not in default under the Act or the regulations, where, for thesepurposes, ``special relationship" shall have the same meaning as in Rule 14-501 Definitions; or
B. such trade is made in accordance with the provisions of subsection 2.1 of Rule72-501 Prospectus Exemption For First Trade Over a Market Outside Ontario.
October 20th, 2000.
"Robert W. Davis" "J.F. Howard"