Securities Law & Instruments

Headnote

MutualReliance Review System for Exemptive Relief Applications - Issueris currently not a reporting issuer in any Canadian jurisdiction- upon completion of reorganization and merger, issuer will bea reporting issuer in Québec - de minimis numberof shareholders in Canada - relief from prospectus requirementsprovided for trade in shares of issuer provided that trade occursthrough an exchange or market outside of Canada, or to a personor company outside of Canada

 

ApplicableOntario Statutory Provisions

SecuritiesAct, R.S.O. 1990, c.S.5, as am ss. 74(1), 53(1)

MultilateralInstruments Cited

MultilateralInstruments 45-102 Resale of Securities (2001), 24 OSCB 5522,s.2.14

INTHE MATTER OF

THESECURITIES LEGISLATION

OFALBERTA, BRITISH COLUMBIA, NEWFOUNDLAND AND LABRADOR,

NOVASCOTIA, ONTARIO, AND SASKATCHEWAN

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM FOR

EXEMPTIVERELIEF APPLICATIONS

AND

INTHE MATTER OF

HEWLETT-PACKARDCOMPANY

MRRSDECISION DOCUMENT

WHEREASthe local securities regulatory authority or regulator (the"Decision Maker", and collectively, the "Decision Makers") ineach of Alberta, British Columbia, Newfoundland and Labrador,Nova Scotia, Ontario and Saskatchewan (the "Jurisdictions")has received an application (the "Application") from Hewlett-PackardCompany ("HP" or the "Filer") for a decision under the securitieslegislation of the Jurisdictions (the "Legislation") that therequirements contained in the Legislation to file and obtaina receipt for a preliminary prospectus and a prospectus (the"Prospectus Requirements") shall not apply to certain firsttrades in common shares in the capital of HP (the "HP CommonShares");

ANDWHEREAS under the Mutual Review Reliance System forExemptive Relief Applications (the "System"), the Ontario SecuritiesCommission is the principal Decision Maker for this application;

ANDWHEREAS the Filer has represented to the Decision Makersthat:

1.HP is a corporation incorporated under the laws of Delawareand is not currently a reporting issuer in any province or territoryof Canada. HP is subject to the reporting requirements of theU.S. Securities Exchange Act of 1933, as amended (the "1933Act"), and the U.S. Securities Exchange Act of 1934, as amended(the "1934 Act"). The Common Shares are listed and posted fortrading on the New York Stock Exchange (the "NYSE") and thePacific Exchange.

2.The authorized share capital of HP consists of 9,600,000,000HP Common Shares with a par value of US$0.01 each and 300,000,000shares of preferred stock with a par value of US$0.01 each.As at January 28, 2002, there were 1,941,391,000 HP Common Sharesand no preferred stock of HP issued and outstanding.

3.Compaq Computer Corporation ("Compaq") is a corporation incorporatedunder the laws of the state of Delaware and is subject to thereporting requirements of the 1933 Act and the 1934 Act. Itis not a reporting issuer or its equivalent in any provinceor territory of Canada except Québec.

4. In1998, Compaq merged with Digital Equipment Corporation, whichwas then a reporting issuer in Québec. As a consequenceof this merger, Compaq became a reporting issuer in Québecpursuant to subsection 68(4) of the Securities Act (Québec)("the "QSA"). On January 14, 2000 Compaq obtained from the Commissiondes valeurs mobiliérés du Québec (the "CVMQ")an exemption from continuous disclosure requirements in TitleIII of the QSA which governs reporting issuers in Québec(decision no. 2000-C-0029). As a condition of the CVMQ Exemption,Compaq provides disclosure to Compaq shareholders resident inQuébec in accordance with the reporting requirements ofthe 1933 Act and the 1934 Act.

5.The authorized share capital of Compaq consists of 3,000,000,000shares of common stock with a par value of US$0.01 per share ("CompaqCommon Shares") and 10,000,000 shares of preferred stock witha par value of US$0.01. As of January 28, 2002, there were 1,704,636,432Compaq Common Shares and no preferred stock of Compaq issued andoutstanding.

6.Indigo N.V. ("Indigo") is a corporation incorporated under thelaws of The Netherlands and is not a reporting issuer or its equivalentin any province or territory in Canada and has no present intentionof becoming a reporting issuer or its equivalent in any provinceor territory in Canada.

7.The authorized share capital of Indigo consists of 240,000,000common shares with a par value of NLG 0.04 per share ("IndigoCommon Shares"). As of September 5, 2001, there were 113,676,895issued and outstanding Indigo Common Shares. Indigo is subjectto the reporting requirements of the 1933 Act and the 1934 Act.

8.HP and Compaq have agreed that, subject to certain conditions,HP will acquire Compaq pursuant to an Agreement and Plan of Reorganization,dated as of September 4, 2001 (the "Merger").

9.Pursuant to the terms of the Merger and the applicable provisionsof Delaware corporations law, upon filing the Certificate of Mergerwith the Secretary of State of the State of Delaware, all issuedand outstanding Compaq Common Shares will be automatically convertedinto HP Common Shares. Holders of Compaq Common Shares will receive0.6325 of a HP Common Share in exchange for each Compaq CommonShare held.

10.Following the Merger, HP will become a reporting issuer in Québecpursuant to subsection 68(4) of the QSA. HP has no present intentionof becoming a reporting issuer in any other province or territoryof Canada. Immediately upon completion of the Merger, there willbe approximately 168 holders of HP securities resident in Québecholding less than 0.009% percent of then outstanding HP CommonShares.

11.HP and Indigo have agreed pursuant to an Offer Agreement datedas of September 6, 2001 that, subject to certain conditions, HPwill acquire Indigo by way of an exchange offer for the IndigoCommon Shares (the "Indigo Offer").

12.Pursuant to the terms of the Indigo Offer, all issued and outstandingIndigo Common Shares tendered to the offer will be exchanged forHP Common Shares or HP Common Shares and a non-transferable contingentvalue right that will entitle its holder to a contingent cashpayment in 2005 if certain conditions set out in the Indigo Offerare satisfied.

13.Pursuant to the applicable provisions of the Legislation, thedistribution of HP Common Shares to holders of Compaq Common Sharespursuant to the Merger, and the distribution of HP Common Sharesto holders of Indigo Common Shares pursuant to the Indigo Offer,will be exempt from the Prospectus Requirements.

14.The first trade of HP Common Shares so distributed, if made throughthe facilities of the New York Stock Exchange, would be exemptfrom the Prospectus Requirements pursuant to the exemption providedfor in section 2.14 of Multilateral Instrument 45-102 but forthe fact that HP will be deemed to be a reporting issuer in Québecupon completion of the Merger.

15.Holders of HP Common Shares resident in Canada will be concurrentlyprovided with the same continuous disclosure materials regardingHP as those holders of HP Common Shares who are resident in theUnited States.

ANDWHEREAS pursuant to the System, this MRRS Decision Documentevidences the decision of the Decision Makers (collectively, the"Decision");

ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the legislation that provides the DecisionMaker with the jurisdiction to make the Decision has been met;

THEDECISION of the Decision Makers pursuant to the Legislationis that the first trade in HP Common Shares issued to holdersof Compaq Common Shares pursuant to the Merger or to holders ofIndigo Common Shares pursuant to the Indigo Offer shall not besubject to the Prospectus Requirements provided that:

(i)after giving effect to the issuance of such HP Common Shares,and any other HP Common Shares that were issued at the same timeor as part of the same distribution, residents of Canada will:

(a)not own directly or indirectly more than ten percent (10%) ofthe outstanding HP Common Shares; and

(b)not represent in number more than ten percent (10%) of the totalnumber of owners directly or indirectly of outstanding HP CommonShares; and

(ii)such first trade is made through an exchange or a market outsideof Canada, or to a person or company outside of Canada.

April18, 2002.

"TheresaMcLeod"       "Lorne Morphy"