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Applied Micro Circuits Corporation
Headnote
Issuer has de minimisCanadian presence - relief from registration requirement forfirst trades by former director in common shares acquired understock option plan, provided that trades conducted outside Canada- relief from issuer bid requirements in connection with acquisitionby issuer of securities through exercise mechanisms under stockoption plan.
Statutes Cited
Securities Act, R.S.O. 1990,c.S.5, as am., ss. 25, 74(1), 95, 96, 97, 98, 100 and 104(2)(c).
Regulations Cited
Regulation made under the SecuritiesAct, R.R.O. 1990, Reg. 1015, as am, s. 203.1.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5,AS AMENDED
(the "Act")
AND
IN THE MATTER OF
GENERAL REGULATION
MADE UNDER THE ACT
R.R.O. 1990, Reg. 1015,
AS AMENDMED (the "Regulation")
AND
IN THE MATTER OF
APPLIED MICRO CIRCUITS CORPORATION
RULING AND ORDER
UPON the application(the "Application") of Applied Micro Circuits Corporation(the "Corporation") to the Ontario Securities Commission(the "OSC") for:
(a) a ruling pursuant to subsection74(1) of the Act that Section 25 of the Act (the "RegistrationRequirement") shall not apply to a first trade of commonshares (the "Shares") of the Corporation made byor on behalf of a former director of the Corporation who acquiredsuch Shares under the Corporation's 1997 Directors' StockOption Plan (the "Plan"); and
(b) an order pursuant to subsection104(2)(c) of the Act exempting the Corporation from Sections95, 96, 97, 98 and 100 of the Act and subsection 203.1(1)of the Regulation (the "Issuer Bid Requirements")with respect to acquisitions by the Corporation of Sharespursuant to the Plan.
AND UPON consideringthe Application and the recommendation of the staff of the OSC;
AND UPON the Corporationhaving represented to the OSC as follows:
1. The Corporation is a supplierof high-bandwidth silicon connectivity for the world's communicationsinfrastructure.
2. The Corporation is incorporatedunder the laws of the State of Delaware and is registeredwith the Securities Exchange Commission in the United Statesof America under the United States Securities ExchangeAct of 1934 (the "Exchange Act") and is notexempt from the reporting requirements of the Exchange Actpursuant to any exemption thereunder.
3. The authorized share capitalof the Corporation consists of 630,000,000 Shares. As at March31, 2002, there were 300,468,541 Shares issued and outstanding.There is no market in Ontario for the Shares and none is expectedto develop.
4. The Corporation is nota reporting issuer under the Act and has no present intentionof becoming a reporting issuer under the Act.
5. Shares, including thosewhich are issuable under the Plan, are listed and posted fortrading in the United States on the National Association ofSecurities Dealers Automated Quotation System (the "NASDAQ")under the symbol "AMCC".
6. The Plan was establishedto attract and retain the best available personnel for serviceas directors of the Corporation, and to provide additionalincentive to non-employee individuals to serve as directorsand to continue their continued service on the Corporation'sboard of directors.
7. Non-employee directorsof the Corporation, including any such director who is residentin the Province of Ontario, may participate in the Plan (the"Plan Participants").
8. Pursuant to the Plan, PlanParticipants are granted stock options ("Options")which are exercisable to purchase Shares. Options may notbe sold, pledged, assigned, hypothecated, transferred, ordisposed of in any manner other than by will or by the lawsof descent and distribution or pursuant to a qualified domesticrelations order (within the meaning of the United States InternalRevenue Code of 1986). The term of each Option shall notexceed 10 years from the date of the grant thereof.
9. As of April 22, 2002, onePlan Participant was resident in Ontario.
10. The Plan is administeredby the board of directors of the Corporation which has thepower to make determinations deemed necessary or advisablefor the administration of the Plan.
11. Salomon Smith Barney,Inc. (along with any replacement thereof, the "Administrator")has been retained by the Corporation to assist Plan Participantswith the exercise of Options and to provide day-to-day brokerageservices to Plan Participants. Salomon Smith Barney, Inc.is registered under applicable securities legislation in theUnited States but is not a registrant under the Act and itis expected that any replacement Administrator will not beregistered under the Act.
12. As at April 22, 2002,Shareholders whose last address as shown on the books of theCorporation as being in Ontario did not hold more than 10%of the issued and outstanding Shares of the Corporation anddid not constitute more than 10% of the shareholders of theCorporation.
13. Plan Participants residentin Ontario who acquire Options under the Plan will be providedwith all disclosure material relating to the Corporation whichis provided to holders of Options resident in the United States.
14. The per Share exerciseprice (the "Exercise Price") for the Shares to beissued pursuant to the exercise of an Option will be equalto 100% of the fair market value of the Shares on the dateof grant of the Option. For the purposes of the Plan, thefair market value of the Shares shall be determined by theCorporation's board of directors, provided that:
(i) where there is a publicmarket for the Shares, the fair market value per Share shallbe the mean of the bid and asked prices of the Shares inthe over-the-counter market on the date of the grant ofthe Option as reported in The Wall Street Journal (or, ifnot so reported, as otherwise reported by the NASDAQ); or
(ii) in the event the Sharesare traded on the NASDAQ or listed on a stock exchange,the fair market value per Share shall be the closing priceon such system or exchange on the date of grant of the Option(or, in the event that the Shares are not traded on suchdate, on the immediately preceding trading date), as reportedin The Wall Street Journal.
15. The Plan provides thatthe Exercise Price may, among other methods, be paid by aPlan Participant through the tender of Shares to the Corporationwhich have a fair market value equal to the Exercise Price.Payment of the Exercise Price through the surrender of Sharesmay be made by a Plan Participant provided that in the caseof Shares acquired from the Corporation, such Shares havebeen held by the Plan Participant for at least six months.
16. If a Plan Participantceases to be a director of the Corporation, to the extentthat Options then held by such Plan Participant were exercisable,such individual may still exercise such Options for a periodof up to the then remaining portion of the term of the Optionor, in the event that the individual ceases to be a directoras a result of total and permanent disability, for a periodof up to 12 months after ceasing to be a director.
17. The first trade of Sharesacquired under the Plan made by or on behalf of a former directormay not be made in reliance on exemptions from the RegistrationRequirement.
18. The acquisition of Sharesby the Corporation upon a Plan Participant paying the ExercisePrice by tendering Shares to the Corporation may be subjectto the Issuer Bid Requirements.
AND UPON the OSC beingsatisfied that to do so would not be prejudicial to the publicinterest;
IT IS RULED pursuantto subsection 74(1) of the Act that a first trade of Sharesacquired under the Plan made by a former director or by theAdministrator on such individual's behalf will not be subjectto the Registration Requirement provided that the conditionsin subsection 2.14(1) of Multilateral Instrument 45-102 aresatisfied; and
IT IS ORDERED pursuantto subsection 104(2)(c) of the Act that the acquisition of Sharesby the Corporation from Plan Participants is exempt from theIssuer Bid Requirements provided that it is done in accordancewith the Plan.
June 19, 2002.
"Theresa McLeod" "LorneMorphy"