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Louisiana-Pacific Corporation - MRRS Decision
Headnote
Mutual Reliance Review System for Exemptive Relief Applications trades made to former employees and beneficiariesin accordance with provisions of employee stock purchase plan exempt from registration and prospectus requirements first trade is shares acquired by former employees and beneficiaries of former employees deemed a distribution unlessissuer not a reporting issuer and trade is executed through facilities of an exchange outside of Canada issuer exemptfrom payment of certain fees, subject to conditions
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as am. ss. 25, 53.
Applicable Ontario Regulations
Regulation made under the Securities Act, R.R.O., 1990, Reg. 1015, as am., Schedule I ss. 28(2) and 59.
Applicable Ontario Rules
Rule 45-503 Trades to Employees, Executives and Consultants (1998) 22 O.S.C.B. 117
Rule 72-501 Prospectus Exemption for First Trade Over a Market Outside Ontario (1998) 21 O.S.C.B. 3873
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
MANITOBA, ONTARIO AND NOVA SCOTIA
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
LOUISIANA-PACIFIC CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of the provincesof Manitoba, Ontario, and Nova Scotia (the "Jurisdictions") has received an application from Louisiana-PacificCorporation ("LP") for a decision pursuant to the securities legislation (the "Legislation") of the Jurisdictions that certaintrades in securities of LP shall not be subject to the registration requirements (the "Registration Requirements") or theprospectus requirements (the "Prospectus Requirements") of the Legislation as such terms are defined in NationalInstrument 14-101;
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System") the Ontario Securities Commission is the principal regulator for this application;
AND WHEREAS LP has represented to the Decision Makers that:
1. LP is a corporation incorporated under the laws of the State of Delaware in the United States of America;
2. LP is subject to the requirements of the United States Securities Exchange Act of 1934, as amended (the "1934Act") and is not exempt from the reporting requirements of the 1934 Act;
3. LP is not, and has no present intention of becoming, a reporting issuer or the equivalent thereof under thesecurities legislation of any jurisdiction in Canada;
4. the $1.00 par value common shares of LP (the "Shares") are listed on the New York Stock Exchange and asat September 30, 2000 the authorized share capital of LP consisted of 200,000,000 Shares and 15,000,000$1.00 par value preferred shares (the "Preferred Shares"), of which 116,937,022 Shares (12,756,831 Sharesof which were held in treasury) and no Preferred Shares were issued and outstanding;
5. as at September 30, 2000, persons or companies whose last address as shown on the books of LP was inCanada and who held Shares held less than 10% of the outstanding Shares, and such persons or companiesrepresented in number less than 10% of the total number of holders of Shares;
6. the Plan was established for the benefit of employees (the "Employees") of LP and its subsidiaries (the "LPSubsidiaries"), including Employees resident in the Jurisdictions (the "Canadian Employees") and as atSeptember 30, 2000 there were approximately 825 Canadian Employees eligible to participate in the Plan;
7. under the Plan, eligible Employees, including the Canadian Employees, may subscribe for Shares by meansof payroll deductions;
8. participation in the Plan is voluntary and Canadian Employees will not be induced to participate in the Plan orto acquire Shares under the Plan by expectation of employment or continued employment;
9. on each Purchase Date (as defined in the Plan), LP issues and delivers to participants in the Plan a stockcertificate or certificates representing the number of Shares purchased by the participant during the PurchasePeriod (as defined in the Plan) or, alternatively, distributes Shares in book-entry form where the participant inthe Plan is provided with a statement that reflects the number of Shares registered electronically in theparticipant's name on LP's books;
10. although an Employee's participation in the Plan ends upon termination of employment for any reason, a formerEmployee (a "Former Employee") and, in the case of death, a beneficiary of a Former Employee (a"Beneficiary") has the right, for a period of time following the date of termination of the employment but priorto an applicable Purchase Date, to receive the Shares that can be purchased at the applicable Purchase Price(as defined in the Plan) with the amount withheld from the participant in accordance with the terms of the Plan;in addition, each Former Employee whose employment terminates by reason of injury, illness or retirement, andeach Beneficiary have the additional right to pay a lump sum for the entire unpaid balance of the PurchasePrice of the Shares covered by the participant's subscription agreement relating to the applicable PurchasePeriod and to receive the Shares;
11. the Canadian Employees who acquire Shares under the Plan will be provided with a copy of all continuousdisclosure material relating to LP which is provided to holders of Shares resident in the United States;
12. there are no exemptions from the Registration Requirements and Prospectus Requirements to permit certainissuances of securities of LP pursuant to the Plan to Former Employees resident in the Jurisdictions ("FormerCanadian Employees") and to Beneficiaries resident in the Jurisdictions ("Canadian Beneficiaries");
13. first trades in Shares acquired in connection with the Plan require relief from the Registration Requirements andProspectus Requirements, since exemptions for such requirements are not available under the Legislation inall Jurisdictions in respect of such first trade; and
14. the acts of the LP Subsidiaries in furtherance of trades in securities of LP pursuant to the Plan will require relieffrom the Registration Requirements in certain Jurisdictions since exemptions from such requirements are notavailable under the Legislation in all Jurisdictions in respect of such trades;
AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers pursuant to the Legislation is that:
(a) the Registration Requirements and Prospectus Requirements shall not apply to the distribution or initial tradeof securities of LP to Former Canadian Employees and Canadian Beneficiaries under the Plan provided thatthe first trade in securities of LP acquired pursuant to this Decision shall be deemed a distribution or a primarydistribution to the public under the Legislation of such Jurisdiction;
(b) the Registration Requirements and Prospectus Requirements shall not apply to a first trade in Shares acquiredunder the Plan and held by Canadian Employees, Former Canadian Employees and Canadian Beneficiariesprovided that:
(i) at the time of the trade in the Shares, LP is not a reporting issuer or its equivalent under theLegislation of the Jurisdiction of residence of such person; and
(ii) the trade is made through the facilities of an exchange outside of Canada in accordance with all therules and laws applicable to such exchange; and
(c) the Registration Requirements shall not apply to the acts of the LP Subsidiaries in furtherance of the trades insecurities of LP made to participants in the Plan resident in Canada;
AND IT IS THE FURTHER DECISION of the Ontario Securities Commission that LP be exempt from the feesapplicable to the trades in securities of LP to Former Canadian Employees and Canadian Beneficiaries under the OntarioLegislation provided that LP complies with section 11.1 of Ontario Securities Commission Rule 45-503 Trades toEmployees, Executives and Consultants and for that purpose, the reference to service providers shall be deemed toinclude the Former Canadian Employees and Canadian Beneficiaries.
March 21, 2001.
"J.A. Geller" "Robert W. Davis"