MRRS - Registration and prospectusrelief for issuance of securities by foreign issuer to Canadianemployees and related trades under stock ownership plans - Issuerbid relief for foreign issuer in connection with acquisitionof shares under stock ownership plans.
Applicable Ontario StatutoryProvisions
Applicable Ontario Rules
MRRS DECISION DOCUMENT
WHEREAS the Canadiansecurities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Manitoba,Ontario, Quebec and Nova Scotia (the "Jurisdictions")has received an application from Minnesota Mining and ManufacturingCompany ("3M") for a decision pursuant to the securitieslegislation of the Jurisdictions (the "Legislation")that certain trades in securities of 3M made in connection withthe operation of the 3M 2002 Management Stock Ownership Program,as such plan may be amended, supplemented, superseded or re-enactedfrom time to time (the "Plan"), including shares ofcommon stock of 3M (the "Shares") to be acquired uponthe optional reinvestment of dividends payable by 3M (the "DividendReinvestments"):
(i) shall not be subjectto the requirements contained in the Legislation to be registeredto trade in a security (the "Registration Requirements")and to file and obtain a receipt for a preliminary prospectusand a prospectus (the "Prospectus Requirements")(collectively, the "Registration and Prospectus Requirements");and
(ii) shall not be subjectto the requirements contained in the Legislation pertainingto bids to acquire or redeem securities of an issuer madeby an issuer (the "Issuer Bid Requirements");
AND WHEREAS pursuantto the Mutual Reliance System for Exemptive Relief Applications(the "System"), the Ontario Securities Commissionis the principal regulator for this application;
AND WHEREAS 3M has representedto the Decision Makers as follows:
1. 3M is a corporation incorporatedunder the laws of Delaware, is not a reporting issuer underthe Legislation and has no present intention of being a reportingissuer under the Legislation. 3M's executive offices are locatedin St. Paul, Minnesota. The majority of the directors andsenior officers of 3M are resident outside Canada.
2. The share capital of 3Mconsists of shares of common stock having $0.01 par valueper share of which 1.5 billion shares are authorized and 391,303,636are issued as of December 31, 2001, and shares of preferredstock without par value of which 10 million are authorizedbut none are issued.
3. 3M is subject to the requirementsof the Securities Exchange Act of 1934, as amended, of theUnited States, and the Shares are listed and posted for tradingon the New York Stock Exchange ("NYSE").
4. The purposes of the Planare to help 3M and its subsidiaries attract and retain outstandingemployees ("Employees") and to promote the growthand success of 3M's business by aligning the financial interestsof these Employees with the other stock holders of 3M.
5. Under the Plan, eligibleEmployees are granted stock options ("Options"),appreciation rights, restricted stock or other stock awards(collectively, "Awards") which are non-transferableother than to a permitted transferee (a "Permitted Transferee")by will (or other death beneficiary designation), the lawof descent and distribution or certain other exemptions.
6. The Plan is administeredby a committee (the "Committee") of three non-employeemembers of the board of directors of 3M.
7. 3M proposes to use theservices of an agent (the "Plan Broker") in connectionwith the Plan and the Dividend Reinvestments. Currently thePlan Brokers are Strong Investments Inc. and Salomon SmithBarney Inc., each of which is registered as a broker underapplicable legislation in the United States, but neither ofwhich are registered as securities dealers in any of the Jurisdictions.
8. The Plan Brokers will administerthe operation of the Plan, including the exercise of Awardsby Employees, former Employees and the legal representativesof Employees and former Employees (collectively, the "Participants")resident in the Jurisdictions, and the sale by the Participantsof any Shares acquired under the Plan or upon Dividend Reinvestment.
9. The Plan provides thatno more than 22,700,000 Shares may be issued as a result ofAwards and no Participant may be granted Awards with respectto more than 2,000,000 Shares.
10. Shares issued to Participantsupon the exercise of Options granted under the Plan will beauthorized and unissued Shares or issued Shares reacquiredby 3M.
11. The exercise price foreach Option will be determined by the Committee but in anyevent will not be less than 100% of the fair market valueof the Shares on the date the Option is granted which is definedin the Plan as the average of the high and low prices forthe Shares as reported by the New York Stock Exchange CompositeTransactions, rounded up to the nearest U.S. $0.05.
12. Payment ("Payment")by a Participant in connection with an Award is payable to3M in cash or by tendering previously acquired Shares valuedat the fair market value at the time of Payment.
13. As at December 31, 2001there were approximately 282 Canadians eligible to participatein the Plan, of which there were 16 Employees in British Columbia,7 Employees in Alberta, 2 Employees in Manitoba, 241 Employeesin Ontario, 15 Employees in Quebec and 1 Employee in NovaScotia.
14. As at December 4, 2001residents of Canada did not own, directly or indirectly, morethan ten percent of the outstanding Shares and did not representmore then ten percent of the number of owners, direct or indirect,of Shares. If at any time during the currency of the PlanCanadian shareholders of 3M hold, in aggregate, greater than10% of the total number of issued and outstanding Shares orif such shareholders constitute more than 10% of all shareholdersof 3M, 3M will apply to the Jurisdictions for an order withrespect to further trades to and by Participants in the Jurisdictionsin respect of Shares acquired under the Plan.
15. Employees will not beinduced to participate in the Plan by expectation of employmentor continued employment.
16. All disclosure materialrelating to 3M that 3M is required to file with the Securitiesand Exchange Commission in the United States will be providedor made available upon request to the Participants who acquireShares pursuant to Awards, at the same time, and in the samemanner, as such materials are provided or made available uponrequest to holders of Shares who are resident in the UnitedStates.
17. The purchase of Sharesfrom a Participant by 3M in connection with a Payment mayconstitute an "issuer bid" as defined under theLegislation of each of the Jurisdictions. Exemptions fromthe Issuer Bid Requirements may not be available for suchpurchases, since the formula under the Plan for establishingmarket value will not necessarily establish a price that isequal to or less than market value as prescribed under theLegislation. Furthermore, such exemptions are not availablefor purchases from legal representatives of Canadian Employees.
18. Since there is no marketfor the Shares in Canada and none is expected to develop,any resale of the Shares acquired under the Plan will be effectedthrough the facilities of, and in accordance with the rulesapplicable to, a stock exchange or market outside of Canadaon which the Shares may be listed or quoted for trading.
19. The Legislation of eachof the Jurisdictions does not contain exemptions from theRegistration and Prospectus Requirements for all of the potentialtrades in Awards under the Plan.
AND WHEREAS pursuantto the System, this MRRS Decision Document evidences the decisionof each Decision Maker (collectively, the "Decision");
AND WHEREAS each of theDecision Makers is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdictionto make the Decision has been met;
THE DECISION of the DecisionMakers pursuant to the Legislation is that:
1. the Registration and ProspectusRequirements will not apply to any trade or distribution ofAwards made in connection with the Plan, including tradesand distributions involving 3M and its Canadian affiliates,the Plan Brokers, the Participants and Permitted Transferees,provided that;
(a) except in Quebec, thefirst trade in Shares acquired through the Plan pursuantto this Decision will be deemed a distribution or primarydistribution to the public under the Legislation unlessthe conditions in subsection 2.14(1) of Multilateral Instrument45-102 Resale of Securities are satisfied; and
(b) in Quebec, the firsttrade in Shares acquired through the Plan pursuant to thisDecision will be deemed a distribution unless the alienation(resale) is made outside Quebec;
2. the first trade by Participantsor Permitted Transferees, in Shares acquired pursuant to thePlan including first trades effected through the Plan Brokers,will not be subject to the Registration Requirement, providedsuch first trade is executed through a stock exchange or marketoutside of Canada; and
3. the Issuer Bid Requirementsof the Legislation shall not apply to purchases of Sharesfrom Canadian Participants by 3M provided such purchases ofShares are made in accordance with the terms of the Plan.
June 11, 2002.
"Paul M. Moore" "HaroldP. Hands"