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Shire Pharmaceuticals Group plc - MRRS Decision
Headnote
MRRS - Relief from registrationand prospectus requirements for trades involving employees,former employees and designated beneficiaries pursuant to equityinvestment plan - Relief from issuer bid requirements for acquisitionby issuer of securities in connection with exercise mechanismsunder equity investment plan - Issuer with de minimisCanadian presence.
Applicable Ontario StatutoryProvisions
Securities Act, R.S.O. 1990,c. S.5, as am. ss. 25, 53, 35(1)(12)(iii), 72(1)(f)(iii), 74(1)and 144.
Policies Cited
Rule 45-503 - Trades to Employees,Executives and Consultants.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
MANITOBA, ONTARIO AND NEWBRUNSWICK
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
SHIRE PHARMACEUTICALS GROUPPLC
MRRS DECISION DOCUMENT
WHEREAS the local securitiesregulatory authority or regulator (the Decision Makeror collectively the Decision Makers) in each of Manitoba,Ontario and New Brunswick (the Jurisdictions) has receivedan application from Shire Pharmaceuticals Group plc (the Company)to obtain relief from registration and prospectus requirementsfor employees of the Company or of its Canadian subsidiaries(including Shire BioChem Inc.) who have acquired shares of theCompany under the Shire Pharmaceuticals Employee Stock PurchasePlan (the Plan) and who wish to sell such shares;
AND WHEREAS pursuantto the Mutual Reliance Review System for Exemptive Relief Applications(the System), the Ontario Securities Commission (theCommission) is the principal regulator for this application;
AND WHEREAS the Companyhas represented to the Decision Makers that:
1. The Company is a UnitedKingdom corporation. The Company's principal corporate officesare located at East Anton, Andover, Hampshire, England, SP105RG. The Company conducts its business in Canada through itsCanadian subsidiary, Shire BioChem Inc.
2. Shire BioChem Inc. wasformerly known as BioChem Pharma Inc. On May 11, 2001, theCompany indirectly acquired all of the outstanding commonshares of BioChem Pharma Inc. by way of a plan of arrangementunder Section 192 of the Canada Business Corporations Act(the Plan of Arrangement).
3. BioChem Pharma Inc. hadbeen a reporting issuer in each Canadian jurisdiction thatprovides for a reporting issuer regime. As a result of theimplementation of the Plan of Arrangement, the Company hasbecome a reporting issuer in certain provinces.
4. On March 29, 2001, theCompany was exempted, under certain conditions, from the applicationof the continuous disclosure requirements and insider reportingrequirements of the jurisdictions pursuant to a MRRS decisionrendered by the Commission des valeurs mobilièresdu Québec.
5. As of March, 2002, theCompany had approximately 482,597,639 Ordinary Shares (theShares) issued and outstanding. The Shares are listedfor trading on the London Stock Exchange (LSE) underthe symbol "SHP.L"; the American depositary sharesof the Company (the ADSs) are quoted for trading onNASDAQ under the symbol "SHPGY".
6. The Company is subjectto the applicable informational requirements in the UnitedKingdom and in the United States. To this date, the Companyhas filed all necessary and required reports under the UnitedStates Securities Exchange Act of 1934, as amended. TheCompany has also filed all documents required to be filedpursuant to the MRRS decision rendered by the Commissiondes valeurs mobilières du Québec.
7. The number of holders ofShares whose last address (as shown on the books of the Company)is in each of the Jurisdictions is not in excess of 10% ofthe outstanding Shares and does not represent more than 10%of the total number of holders of Shares.
8. The Plan permits any individualwho is an employee of the Company or of a participating subsidiary(including Shire BioChem Inc.) and whose customary employmentis at least twenty (20) hours per week and more than five(5) months in any calendar year (the Eligible Employees)to purchase Shares at a discounted price from fair marketvalue through accumulated payroll deductions.
9. As of April 11, 2002, therewere approximately one (1) Eligible Employee in Nova Scotia,one (1) Eligible Employee in New Brunswick, 487 Eligible Employeesin Quebec, 21 Eligible Employees in Ontario, one (1) EligibleEmployee in Manitoba, two (2) Eligible Employees in Albertaand four (4) Eligible Employees in British Columbia.
10. The maximum number ofShares which will be made available for sale under the Planis 2,000,000 Shares. No options to purchase Shares will begranted under the Plan in any year which would cause the numberof Shares issued or to be issued in pursuance of options grantedunder the Plan or under any other employees share scheme inthat period of ten (10) calendar years ending with that yearto exceed 10% of the Share capital of the Company in issueat that time.
11. From time to time, theRemuneration Committee of the Board of Directors of the Company(the Committee) shall establish an "Offering Period".The duration of an Offering Period may not exceed 27 months,and the Offering Periods will begin within the period of six(6) weeks commencing with the trading day next following thedate on which the Company announces its results for any periodor at any other time when the circumstances are consideredby the Committee to be sufficiently exceptional to justifythe beginning of an Offering Period.
12. Participation in the Planis voluntary and Eligible Employees will not be induced toparticipate in the Plan or acquire Shares under the Plan byexpectation of employment or continued employment with theCompany, any of its subsidiaries or any other affiliated entityof the Company.
13. An Eligible Employee maybecome a participant in the Plan by completing a subscriptionagreement authorizing payroll deductions and filing it withthe Vice-President, Finance of the Company at least five (5)business days prior to the first day of the applicable OfferingPeriod.
14. No Eligible Employee shallbe granted an option under the Plan if, immediately afterthe grant, such Eligible Employee would own stock of the Companygranting him or her 5% or more of the total combined votingpower or value of all classes of stock of the Company or ofany affiliate.
15. An Eligible Employee maywithdraw all but not less than all the payroll deductionscredited to his or her account at any time prior to the lastbusiness day of an Offering Period by giving written noticeto the Company.
16. The purchase price fora Share will be at 85% of the fair market value of a Shareon the first day of the Offering Period or on the last dayof the Offering Period, whichever is lower. The number ofShares purchased by an Eligible Employee will be determinedby dividing such Eligible Employee's payroll deductions accumulatedand retained in the Eligible Employee's account by the applicablepurchase price, provided however that an Eligible Employeemust not purchase more than 7,000 Shares for each OfferingPeriod.
17. Eligible Employees whohave not withdrawn from the Plan will acquire Shares at theend of each Offering Period.
18. None of the rights underthe Plan may be assigned, transferred, pledged or otherwisedisposed of by the participant, except that the Shares maybe distributed to beneficiaries designated in writing by theEligible Employees (the Permitted Transferees) in theevent of such Eligible Employees' death subsequent or priorto the end of an Offering Period.
19. Upon a participant ceasingto be an Eligible Employee due to termination (a FormerEmployee), or for any other reason, he or she will bedeemed to have elected to withdraw from the Plan.
20. The distribution of Sharesto Eligible Employees under the Plan qualifies for registrationand prospectus exemptions in the Jurisdictions.
21. In order to enable EligibleEmployees, Former Employees and Permitted Transferees to sellthe Shares acquired under the Plan, however, relief from theregistration and prospectus requirements is required underthe legislation of the Jurisdictions.
22. The relief requested isconsistent with past MRRS decisions: Louisiana-PacificCorporation (2001), 24 OSCB 1780; Commerce One(2001), 23 OSCB 1373; Compaq Computer Corporation (2000)24 OSCB 34.
23. The Company is not a reportingissuer in the Jurisdictions. The Shares currently trade onthe LSE and the NASDAQ. There is no market for the Sharesin Canada and none is expected to develop; therefore, anyresale of the Shares acquired under the Plan will be effectedthrough the facilities of a stock exchange or organized marketoutside of Canada on which the Shares may be listed or quotedfor trading.
24. The Company is incorporatedin a jurisdiction other than Canada, will be subject to therequirements of the Securities Exchange Act of 1934and is not exempt from the reporting requirements of the SecuritiesExchange Act of 1934. All disclosure material relatingto the Company furnished to security holders in the UnitedStates will be made available to holders of the Shares residingin the Jurisdictions.
25. Failure to grant the reliefherein requested would require the Company to discontinuethe operation of the Plan with respect to Eligible Employeesin the Jurisdictions, thereby precluding such individualsfrom the opportunity of sharing in the financial success ofthe Company as contemplated by the terms of the Plan.
26. It would not be prejudicialto the public interest to permit Eligible Employees in theJurisdictions to participate in the Plan in the same manneras employees of the Company or its affiliates who are residentin other countries.
THE DECISION of the DecisionMakers pursuant to the Legislation is that Eligible Employees,Former Employees and Permitted Transferees who sell Shares acquiredunder the Plan are exempted from the registration and prospectusrequirements.
July 24, 2002.
"Paul M. Moore" "HaroldP. Hands"