HeadnoteMutualReliance Review System for Exemptive Relief Applications - Canadiancorporation related to the issuer not technically an "affiliate"of Swiss issuer - Distribution of shares and options in connectionwith Swiss issuer's stock purchase and stock option plans to employeesof related Canadian corporation exempt from the prospectus andregistration requirement - First trade in shares and options acquiredby employees of related Canadian corporation deemed a distributionunless ss. 2.14(1) of MI 45-102 satisfied - Trade in shares ofSwiss issuer acquired in connection with stock purchase and stockoptions plans by employees of related Canadian corporation andaffiliates of Swiss issuer, and made through the agent, exemptfrom the registration requirement provided a de minimisCanadian market and trade executed outside of Canada.
ApplicableStatutory ProvisionsSecuritiesAct, R.S.O. 1990, c. S.5, as am., ss. 25, 53, 74(1).
ApplicableRulesOSCRule 45-503 - Trades to Employees, Executives and Consultants(1998) 22 OSCB 117.
INTHE MATTER OF
THESECURITIES LEGISLATION OF
ONTARIOAND NOVA SCOTIA
INTHE MATTER OF
THEMUTUAL RELIANCE REVIEW SYSTEM FOR
INTHE MATTER OF
WHEREAS the local securities regulatory authorityor regulator (the "Decision Maker") in each of British Columbia,Alberta, Ontario and Nova Scotia (the "Jurisdictions") has receivedan application from UBS for a decision pursuant to the securitieslegislation of the Jurisdictions (the "Legislation") that therequirement contained in the Legislation to be registered totrade in a security (the "Registration Requirement") and tofile and obtain a receipt for a preliminary prospectus and aprospectus in respect of such security (the "Prospectus Requirement")shall not apply to trades in certain securities of UBS underthe UBS Equity Plus Plan for Employees, as amended from timeto time (the "Plan") and the UBS Stock Option Plan, as amendedfrom time to time (the "SOP") to employees of UBS Bunting WarburgInc. ("Bunting Warburg");
AND WHEREAS under the Mutual Reliance ReviewSystem for Exemptive Relief Applications (the "System"), theOntario Securities Commission is the principal regulator forthis application;
AND WHEREAS UBS has represented to the DecisionMakers as follows:
1.UBS is incorporated under the laws of Switzerland and is aninvestment services firm. Its head office is located at Bahnhofstrasse45, Zurich, Switzerland.
2.The authorized capital of UBS consists of 1,281,052,743 UBSregistered shares with a par value of CHF 2.80 each (the "UBSShares") of which 1,256,024,442 UBS Shares were outstandingas at September 30, 2001.
3.As at September 30, 2001, the number of UBS Shares held by holdersof record with addresses in Canada represented less than 1%of the number of outstanding UBS Shares, and the number of holdersof record with addresses in Canada was less than 1% of the totalnumber of holders of record.
4.The UBS Shares are listed on the virt-x European Exchange ("virt-x"),the New York Stock Exchange ("NYSE") and the Tokyo Stock Exchange.
5.UBS is not, and has no present intention of becoming, a reportingissuer or the equivalent under the Legislation of any of theJurisdictions.
6.UBS has a representative office in certain of the Jurisdictionsand, in addition to Bunting Warburg, four wholly owned operatingsubsidiaries that carry on the business of UBS in the Jurisdictions.
7.Bunting Warburg is 100% beneficially owned by UBS Bunting WarburgLimited ("Bunting Warburg Holdco"), a holding company, whichin turn is 50% beneficially owned by a wholly-owned subsidiaryof UBS. The remaining indirect 50% interest in Bunting WarburgHoldco is owned by the employees of Bunting Warburg. UBS thereforehas an indirect 50% ownership interest in Bunting Warburg.
8.Bunting Warburg is not an "affiliate" of UBS within the meaningof the Legislation.
9.UBS has de facto control of Bunting Warburg pursuantto a shareholders agreement of Bunting Warburg Holdco whichprovides, among others, that a majority of the members of theboard of directors of Bunting Warburg Holdco are representativesof UBS.
10.Bunting Warburg is a corporation existing under the laws ofthe Province of Ontario and its head office is located in Toronto.It is not, and has no present intention of becoming, a reportingissuer or the equivalent under the Legislation of any of theJurisdictions.
11.The Plan will provide a convenient and economic way for employeesin the Jurisdictions and elsewhere in the world to invest inUBS either directly or through regular payroll deductions andan opportunity to participate in the value they help create.The Plan will also allow UBS and its subsidiaries to encouragetheir employees to invest in UBS Shares through matching stockoption incentives.
12.Any person who is an employee of UBS or any of its subsidiaries(including Bunting Warburg) may be invited by the managing boardof UBS (the "Committee") to participate in the Plan (an "EligibleEmployee").
13.The number of UBS Shares that will be purchased for an EligibleEmployee and the price at which such UBS Shares will be issuedby UBS and purchased for the Eligible Employee will be determinedby reference to the average of the high and low sale pricesof a UBS Share on the NYSE or the virt-x on the day of the purchase.
14.For each UBS Share purchased from UBS on behalf of an EligibleEmployee, UBS will grant such employee, as at the date of suchpurchase, options to purchase (the "UBS Options") two additionalUBS Shares. UBS Options will be granted under the SOP, a separateplan sponsored by UBS, and will have an exercise price equalto the purchase price of the corresponding UBS Shares purchasedon the date of grant.
15.UBS, UBS Warburg LLC, UBS PaineWebber Inc. or another UBS subsidiaryor related entity (hereinafter referred to as the "Agent") willopen an account for each Eligible Employee who purchases sharesunder the Plan. The Agent will be registered under applicablesecurities legislation in Europe or the United States, but willnot be registered under the Legislation.
16.Subject to certain vesting requirements, sales of UBS Shares,including UBS Shares issued upon exercise of UBS Options, madeby Eligible Employees will be made on behalf of the EligibleEmployees (including former employees) by or through the Agentpursuant to instructions given by the Eligible Employees throughthe facilities of, and in accordance with the rules of, thevirt-x or the NYSE.
17.Participation in the Plan is voluntary and Eligible Employeeswill not be induced to participate in the Plan by expectationof employment or continued employment.
18.As at September 30, 2001, there were approximately 318 EligibleEmployees resident in the Jurisdictions.
19.A copy of the Plan and of the SOP will be made available toeach Eligible Employee in electronic form, through their personalpage on the UBS Group Compensation internal website.
20.All information sent to security holders of UBS in general willbe sent to Eligible Employees resident in Canada who acquireUBS Shares under the Plan and the SOP.
21.There is no market for the UBS Shares in Canada and UBS doesnot intend to list the UBS Shares on any stock market in Canada.
22.The Legislation of the Jurisdictions does not contain exemptionsfrom the Registration Requirement and the Prospectus Requirementfor distributions, from time to time, of UBS Shares or UBS Optionsunder the Plan or the SOP to Eligible Employees of Bunting Warburg.
23.The Legislation of the Jurisdictions does not contain exemptionsfrom the Registration Requirement for first trades in UBS Sharesissued in connection with the Plan or the SOP, effected by orthrough the Agent on behalf of Eligible Employees (includingformer employees) of Bunting Warburg.
24.The Legislation of certain Jurisdictions does not contain anexemption from the Registration Requirement for first tradesin UBS Shares issued in connection with the Plan or the SOP,effected by or through the Agent on behalf of Eligible Employees(including former employees) of UBS and its affiliates residentin those Jurisdictions.
AND WHEREAS pursuant to the System this DecisionDocument evidences the decision of each Decision Maker (collectively,the "Decision");
AND WHEREAS each Decision Maker is satisfied that thetest contained in the Legislation that provides the DecisionMaker with the jurisdiction to make the Decision has been met.
THE DECISION of the Decision Makers pursuant to theLegislation is that:
(a) the Prospectus Requirement and the Registration Requirementshall not apply to the distribution, from time to time, of UBSShares and UBS Options in connection with the Plan or the SOPto Eligible Employees of Bunting Warburg provided that the firsttrade in UBS Shares or UBS Options acquired pursuant to thisDecision in a Jurisdiction shall be deemed to be a distributionto the public under the Legislation of such Jurisdiction unlessthe conditions in section 2.14(1) of Multilateral Instrument45-102 Resale of Securities are satisfied; and
(b) the Registration Requirement shall not apply to a tradeby an Eligible Employee (including a former employee) of BuntingWarburg, UBS or its affiliates (as applicable), in UBS Sharesacquired in connection with the Plan or the SOP by or throughthe Agent if:
(i) at the time of the trade, UBS is not a reporting issuerunder the Legislation in any of the Jurisdictions;
(ii) at the time of the distribution of the UBS Share to theEligible Employee (including a former employee), or in the caseof a UBS Share acquired on the exercise of a UBS Option, atthe time of the distribution of the UBS Option to the EligibleEmployee (including a former employee), after giving effectto the issue of such security, residents of Canada: (A) didnot own directly or indirectly more than 10 percent of the outstandingUBS Shares, and (B) did not represent in number more than 10percent of the total number of owners directly or indirectlyof UBS Shares; and
(iii) the trade is executed through an exchange, or a market,outside of Canada.
January4, 2002."PaulM. Moore" "Robert W. Korthals"