Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications B relief from prospectus requirements grantedin respect of certain trades in units of an employee savingsfund made pursuant to a classic offering and a leveraged offeringby French issuer, provided that all sales of such units pursuantto the leveraged offering be made through a registrant B relieffrom registration and prospectus requirements upon the redemptionof such units for shares of the issuer B relief from the registrationand prospectus requirements granted in respect of first tradeof such shares where such trade is made through the facilitiesof a stock exchange outside of Canada B relief granted to themanager of the Fund from the adviser registration requirement.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25, 53 and 74(1).

Applicable Ontario Regulations

Regulation made under the Securities Act, R.R.O.1990, Reg. 1015 as am.

Applicable Rules

Multilateral Instrument 45-102 - Resale of Securities.

OSC Rule 45-503 - Trades to Employees, Executivesand Consultants.

OSC Policy 4.8 - Non Resident Advisers.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,MANITOBA, ONTARIO,

QUÉBEC, NEW BRUNSWICK,NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

AXA

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker")in each of British Columbia, Alberta, Manitoba, Ontario, Québec,New Brunswick and Newfoundland and Labrador (collectively, the"Jurisdictions") has received an applicationfrom AXA (the "Filer") for a decision underthe securities legislation (the "Legislation")of the Jurisdictions that:

(i) the requirements contained in the Legislationto file and obtain a receipt for a preliminary prospectusand a prospectus (the "Prospectus Requirements")shall not apply to certain trades in units ("Units")of the AXA Actionnariat II Fund (the "Classic Fund")and the AXA Plan 2002 Global Fund (the "LeveragedFund" and, together with the Classic Fund, the"Funds") made pursuant to the EmployeeShare Offering (as defined below) to or with QualifyingEmployees (as defined below) resident in the Jurisdictionswho elect to participate in the Employee Share Offering(the "Canadian Participants");

(ii) the requirements contained in the Legislationto be registered to trade in a security (the "RegistrationRequirements") shall not apply to trades in Unitsof the Classic Fund made pursuant to the Employee ShareOffering to or with Canadian Participants;

(iii) the Registration and Prospectus Requirementsshall not apply to the trades of ordinary shares of theFiler (the "Shares") by the Funds to CanadianParticipants upon the redemption of Units by Canadian Participants,nor to the issuance of Units of the Classic Fund to holdersof Leveraged Fund Units upon the transfer of the assetsof the Leveraged Fund to the Classic Fund at the end ofthe Lock-Up Period (as defined below);

(iv) the Registration and Prospectus Requirementsshall not apply to the first trade in any Shares acquiredby Canadian Participants under the Employee Share Offeringwhere such trade is made through the facilities of a stockexchange outside of Canada; and

(v) the manager of the Funds, AXA GestionIntéressement (the "Manager") isexempt from the requirements contained in the Legislationto be registered as an adviser (the "Adviser RegistrationRequirements") to the extent that its activitiesin relation to the Employee Share Offering require compliancewith the Adviser Registration Requirements.

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Commission des valeurs mobilières du Québecis the principal regulator for this application;

AND WHEREAS the Filer has representedto the Decision Makers that:

1. The Filer is a corporation formed underthe laws of France. It is not and has no intention of becominga reporting issuer (or equivalent) under the Legislation.The Shares are listed on the Paris Bourse and on the New YorkStock Exchange (in the form of American Depositary Shares).

2. The Filer carries on business in Canadathrough the following affiliated companies: AXA AssurancesInc., AXA Canada Inc., AXA Insurance (Canada), AXA PacificInsurance Company, Insurance Corporation of Newfoundland Limited,AXA Assistance Canada Inc., AXA Corporate Solutions, and AXACorporate Solutions Assurance (the "Canadian Affiliates",together with the Filer and other affiliates of the Filer,the "AXA Group"). Each of the Canadian Affiliatesis a direct or indirect controlled subsidiary of the Filerand is not, and has no intention of becoming, a reportingissuer (or equivalent) under the Legislation.

3. The Filer has established a worldwide stockpurchase plan for employees of the AXA Group (the "EmployeeShare Offering") which is comprised of two subscriptionoptions: (i) an offering of Shares to be subscribed throughthe Classic Fund (the "Classic Plan"); and(ii) an offering of Shares to be subscribed through the LeveragedFund (the "Leveraged Plan").

4. Only persons who are employees of a memberof the AXA Group at the time of the Employee Share Offering(the "Employees"), or persons who have retiredfrom an affiliate of the AXA Group and who continue to holdunits in French investment funds (fonds communs de placementd'entreprise or "FCPEs") in connection withprevious employee share offerings by the Filer (the "RetiredEmployees" and, together with the Employees, the"Qualifying Employees") will be invited toparticipate in the Employee Share Offering.

5. The Funds were established for the purposesof implementing the Employee Share Offering.

6. The Funds are not and have no intentionof becoming reporting issuers under the Legislation.

7. The Funds are collective shareholding vehiclesof a type commonly used in France for the conservation orcustodianship of shares held by employee investors. Only QualifyingEmployees will be allowed to hold Units of the Funds in anamount proportionate to their respective investments in theFunds.

8. Under French law, all Units of either Fundacquired in the Employee Share Offering will be subject toa hold period of approximately five years (the "Lock-UpPeriod"), subject to certain exceptions prescribedby French law (such as a release on death or termination ofemployment). At the end of the Lock-Up Period, a CanadianParticipant may:

(i) redeem Units: (a) in the Classic Fundin consideration for the underlying Shares or a cash paymentequal to the then market value of the Shares, or (b) inthe Leveraged Fund according to the Redemption Formula (describedbelow), to be settled by delivery of the number of Sharesequal to such amount or the cash equivalent, or

(ii) continue to hold Units in the ClassicFund and redeem those Units at a later date (as explainedbelow, at the end of the Lock-Up Period, holders of Unitsin the Leveraged Fund who do not redeem their Units willreceive Units in the Classic Fund).

9. In the event of an early unwind resultingfrom the Canadian Participant satisfying one of the exceptionsto the Lock-Up Period prescribed by French law, a CanadianParticipant may redeem Units: (a) from the Classic Fund inconsideration for the underlying Shares or a cash paymentequal to the then market value of the Shares, or (b) fromthe Leveraged Fund using the Redemption Formula (describedbelow), but using the market value of the Shares at the timeof unwind to measure the increase, if any, from the ReferencePrice (described below).

10. Under the Classic Plan, Canadian Participantswill purchase Units in the Classic Fund, which will subscribefor Shares on behalf of the Canadian Participants, at a purchaseprice that is equal to the average of the closing price ofthe Shares on the 20 trading days preceding AXA board approvalof the Employee Share Offering (the "Reference Price"),less a 20% discount. Dividends paid on the Shares held inthe Classic Fund will be capitalized and Canadian Participantswill be credited with additional Units.

11. Under the Leveraged Plan, Canadian Participantswill purchase Units in the Leveraged Fund, and the LeveragedFund will then subscribe for Shares using the Employee Contribution(as described below) and certain financing made availableby a major European bank, Deutsche Bank A.G. ("DeutscheBank").

12. As with the Classic Plan, Canadian Participantsin the Leveraged Plan enjoy the benefit of a 20% discountin the Reference Price. Under the Leveraged Plan, the CanadianParticipants effectively receive a share appreciation entitlementin the increase in value, if any, of the Shares financed bythe Deutsche Bank Contribution (as described below).

13. Participation in the Leveraged Plan representsan opportunity for Qualifying Employees potentially to obtainsignificantly higher gains than would be available throughparticipation in the Classic Plan, by virtue of the QualifyingEmployee's indirect participation in a financing arrangementinvolving a swap agreement (the "Swap Agreement")between the Leveraged Fund and Deutsche Bank. In economicterms, the Swap Agreement effectively involves the followingexchange of payments: for each Share which may be purchasedby the Qualifying Employee's contribution (the "EmployeeContribution") under the Leveraged Plan at the ReferencePrice less the 20% discount, Deutsche Bank will lend to theLeveraged Fund (on behalf of the Canadian Participant) anamount sufficient to enable the Leveraged Fund (on behalfof the Canadian Participant) to purchase an additional nineShares (the "Deutsche Bank Contribution")at the Reference Price less the 20% discount.

14. Under the terms of the Swap Agreement,at the end of the Lock-Up Period (the "SettlementDate"), the Leveraged Fund will owe to Deutsche Bankan amount equal to the market value of the Shares held inthat Fund, less

(i) 100% of the Employee Contributions;and

(ii) an amount equal to approximately 50%of the increase, if any, in the market price of the Sharesfrom the Reference Price (the "Appreciation Amount").

15. If, at the Settlement Date, the marketvalue of the Shares held in the Leveraged Fund is less than100% of the Employee Contributions, Deutsche Bank will, pursuantto a guarantee agreement, make a cash contribution to theLeveraged Fund to make up any shortfall.

16. At the end of the Lock-Up Period, theSwap Agreement will terminate after the making of final swappayments and a Canadian Participant may redeem his or herLeveraged Fund Units in consideration for a payment of anamount equal to the value of the Canadian Participant's EmployeeContribution and the Canadian Participant's portion of theAppreciation Amount, if any, to be settled by delivery ofsuch number of Shares equal to such amount or the cash equivalentof such amount (the "Redemption Formula").Following these redemptions, all assets (including Shares)remaining in the Leveraged Fund will be transferred to theClassic Fund. New Units of the Classic Fund will be issuedto the applicable Canadian Participants in recognition ofthe assets transferred to the Classic Fund. The Canadian Participantsmay redeem the new Units whenever they wish.

17. Under no circumstances will a CanadianParticipant in the Leveraged Fund be entitled to receive lessthan 100% of his or her Employee Contribution at the end ofthe Lock-Up Period, nor be liable for any other amounts.

18. Under French law, the Funds, as FCPEs,are limited liability entities. The risk statement providedto Canadian Participants will confirm that, under no circumstances,will a Canadian Participant in the Leveraged Plan be liableto any of the Leveraged Fund, Deutsche Bank or the Filer forany amounts in excess of his or her Employee Contributionunder the Leveraged Plan.

19. During the term of the Swap Agreement,dividends paid on the Shares held in the Leveraged Fund willbe remitted to the Leveraged Fund, and the Leveraged Fundwill remit an equivalent amount to Deutsche Bank as partialconsideration for the obligations assumed by Deutsche Bankunder the Swap Agreement.

20. For Canadian federal income tax purposes,the Canadian Participants in the Leveraged Fund will be deemedto receive all dividends paid on the Shares financed by eitherthe Employee Contribution or the Deutsche Bank Contribution,at the time such dividends are paid to the Leveraged Fund,notwithstanding the actual non-receipt of the dividends bythe Canadian Participants. Consequently, Canadian Participantswill be required to fund the tax liabilities associated withthe dividends without recourse to the actual dividends.

21. The declaration of dividends on the Sharesremains at the sole discretion of the board of directors ofthe Filer. The Filer has not made any commitment to DeutscheBank as to any minimum payment in respect of dividends.

22. To respond to the fact that, at the timeof the initial investment decision relating to participationin the Leveraged Plan, Canadian Participants will be unableto quantify their potential income tax liability resultingfrom such participation, the Filer will indemnify each CanadianParticipant in the Leveraged Plan for all tax costs to theCanadian Participants associated with the payment of dividendsin excess of a specified amount of euros per Share duringthe Lock-Up Period such that, in all cases, a Canadian Participantwill, at the time of the original investment decision, beable to quantify, with certainty, his or her maximum tax liabilityin connection with dividends received by the Leveraged Fundon his or her behalf under the Leveraged Plan.

23. At the time the Canadian Participant'sobligations under the Swap Agreement are settled, the CanadianParticipant will realize a capital gain (or capital loss)by virtue of having participated in the Swap Agreement tothe extent that amounts received by the Leveraged Fund, onbehalf of the Canadian Participant, from Deutsche Bank exceed(or are less than) amounts paid by the Leveraged Fund, onbehalf of the Canadian Participant to Deutsche Bank. To theextent that dividends on Shares that are deemed to have beenreceived by a Canadian Participant are paid by the Fund onbehalf of the Canadian Participant to Deutsche Bank, suchpayments will reduce the amount of any capital gain (or increasethe amount of any capital loss) to the Canadian Participantunder the Swap Agreement. Capital losses (gains) realizedby a Canadian Participant under the Swap Agreement may beoffset against (reduced by) any capital gains (losses) realizedby the Canadian Participant on a disposition of the Shares,in accordance with the rules and conditions under the IncomeTax Act (Canada) or comparable provincial legislation(as applicable).

24. The Manager, AXA Gestion Intéressement,is a portfolio management company governed by the laws ofFrance. The Manager is registered with the French Commissiondes Opérations de Bourse (the "COB")to manage French investment funds and complies with the rulesof the COB. The Manager is not and has no intention of becominga reporting issuer under the Legislation.

25. The Manager's portfolio management activitiesin connection with the Employee Share Offering and the Fundsare limited to purchasing Shares from the Filer, selling suchShares as necessary in order to fund redemption requests,and such activities as may be necessary to give effect tothe Swap Agreement.

26. The Manager is also responsible for preparingaccounting documents and publishing periodic informationaldocuments as provided by the rules of each Fund. The Manager'sactivities in no way affect the underlying value of the Shares.

27. Shares issued in the Employee Share Offeringwill be deposited in the relevant Fund through BNP ParibasSecurities Services (the "Depositary"), alarge French commercial bank subject to French banking legislation.

28. Under French law, the Depositary mustbe selected by the Manager from among a limited number ofcompanies identified on a list by the French Minister of theEconomy, and its appointment must be approved by the COB.The Depositary carries out orders to purchase, trade and sellsecurities in the portfolio and takes all necessary actionto allow each Fund to exercise the rights relating to thesecurities held in its portfolio.

29. Canadian Participants will not be inducedto participate in the Employee Share Offering by expectationof employment or continued employment.

30. The total amount invested by a CanadianParticipant in the Employee Share Offering cannot exceed 25%of his or her gross annual compensation for 2002, or for hisor her last year of employment, as the case may be, althougha lower limit may be established by the Canadian Affiliates.

31. None of the Filer, the Manager, the CanadianAffiliates or any of their employees, agents or representativeswill provide investment advice to the Qualifying Employeeswith respect to an investment in the Units.

32. The Filer has retained a registrant registeredas a broker/investment dealer under the Legislation (the "Registrant")to provide advisory services to Canadian Participants in connectionwith the Leveraged Plan and to make a determination, in accordancewith industry practices, as to whether an investment in theLeveraged Plan is suitable for each Canadian Participant whoexpresses interest in the Leveraged Plan, based on his orher particular financial circumstances. The Registrant willestablish accounts for, and will receive the initial accountstatements from the Leveraged Fund on behalf of, such CanadianParticipants.

33. The Units of the Leveraged Fund will beissued by the Leveraged Fund to Canadian Participants solelythrough the Registrant. The Units will be evidenced by accountstatements issued by the Leveraged Fund.

34. The Canadian Participants will receivean information package in the French or English language,as applicable, which will include a summary of the terms ofthe Employee Share Offering, a tax notice relating to therelevant Fund containing a description of Canadian incometax consequences of subscribing to and holding the Units inthe Funds and redeeming Units for cash or Shares at the endof the Lock-Up Period. The information package will also includea risk statement relating to the Leveraged Plan only, whichwill describe certain risks associated with an investmentin Units pursuant to the Leveraged Plan.

35. Upon request, employees may receive copiesof the Filer's annual report on Form 20-F filed with the UnitedStates Securities and Exchange Commission (the "SEC")and/or the French Document de Référencefiled with the COB in respect of the Shares and a copy ofthe relevant Fund's rules (which are analogous to companyby-laws).

36. The Canadian Participants who subscribefor Units in the Funds will also receive copies of the continuousdisclosure materials relating to the Filer furnished to AXAshareholders generally.

37. There are approximately 1,873 Employeesresident in Canada, in the provinces of Québec (1,198),Ontario (387), British Columbia (141), Alberta (91), Newfoundlandand Labrador (41), New Brunswick (10) and Manitoba (5), whorepresent in the aggregate approximately 1.3% of the numberof Employees worldwide.

38. There are approximately 21 eligible RetiredEmployees resident in Canada, in the provinces of Québec(10), Ontario (9), and British Columbia (2), for a total of1,894 Qualifying Employees resident in Canada.

39. As of the date hereof and after givingeffect to the Employee Share Offering, Canadian residentsdo not and will not beneficially own (which term, for thepurposes of this paragraph, is deemed to include all Sharesheld by the Funds on behalf of Canadian Participants) morethan 10% of the Shares and do not and will not represent innumber more than 10% of the total number of holders of theShares as shown on the books of the Filer.

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

(a) the Prospectus Requirements shall notapply to trades in Units of the Leveraged Fund to or withCanadian Participants pursuant to the Employee Share Offering,provided that all trades that are sales in a Jurisdictionare made through a dealer that is registered as a broker/investmentdealer in the Jurisdiction, and the first trade in suchUnits acquired by Canadian Participants pursuant to thisDecision, in a Jurisdiction, shall be deemed a distributionor a primary distribution to the public under the Legislationof such Jurisdiction;

(b) the Registration and Prospectus Requirementsshall not apply to trades in Units of the Classic Fund toor with the Canadian Participants pursuant to the EmployeeShare Offering, provided that the first trade in such Unitsacquired by Canadian Participants pursuant to this Decision,in a Jurisdiction, shall be deemed a distribution or a primarydistribution to the public under the Legislation of suchJurisdiction;

(c) the Registration and Prospectus Requirementsshall not apply to:

(i) trades of Shares by the Funds to theCanadian Participants upon the redemption of Units byCanadian Participants pursuant to the Employee Share Offering;and

(ii) the issuance of Units of the ClassicFund to holders of Leveraged Fund Units upon the transferof the assets of the Leveraged Fund to the Classic Fund;

provided that, the first trade in any suchShares or Units acquired by a Canadian Participant pursuantto this Decision, in a Jurisdiction, shall be deemed a distributionor a primary distribution to the public under the Legislationof such Jurisdiction;

(d) the Registration and Prospectus Requirementsshall not apply to the first trade in any Shares acquiredby a Canadian Participant under the Employee Share Offeringprovided that such trade is:

(i) made through a person or company who/whichis appropriately licensed to carry on business as a broker/dealer(or the equivalent) under the applicable securities legislationin the foreign jurisdiction where the trade is executed;and

(ii) executed through the facilities ofa stock exchange outside of Canada; and

(e) the Manager shall be exempt from theAdviser Registration Requirements, where applicable, inorder to carry out the activities described in paragraphs25 and 26 hereof.

September 24, 2002.

"Josée Deslauriers"