Securities Law & Instruments

Headnote

Application for relief from the requirement in the Securities Act (Ontario) and the Business Corporations Act (Ontario) to send an information circular to shareholders in connection with the solicitation of proxies from such shareholders. Exemption granted to allow solicitations without sending an information circular in circumstances currently allowed under the Canada Business Corporations Act where the solicitation consists of (i) a public announcement of how a shareholder intends to vote and the reasons for such decision, (ii) a communication to shareholders concerning the business and affaires of the company where no proxy is sent to such shareholders, or (iii) solicitations to no more than 15 shareholders. Exemption also granted to allow solicitation in a newspaper which is accompanied by all the information required to be sent to a shareholder when the shareholder's proxy is solicited.

Statutes Cited

Securities Act R.S.O. 1990, c. S.5, as amended, ss. 86(1)(b) and 88(2)(b).

Business Corporations Act R.S.O. 1990, c. B.16, as amended, ss. 112(1) and 113.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990,CHAPTER S.5, AS AMENDED (the "OSA")

AND

IN THE MATTER OF

THE BUSINESS CORPORATIONS ACT,

R.S.O. 1990, CHAPTER B.16, AS AMENDED (the "OBCA")

AND

IN THE MATTER OF

CARA OPERATIONS LIMITED

AND

IN THE MATTER OF

MR. PAUL D. PHELAN

 

ORDER

(Clause 88(2)(b) of the OSA and section 113 of the OBCA)

UPON the application of Mr. Paul D. Phelan ("Phelan"), on his own behalf and on behalf of companies controlled by him (collectively, the "Phelan Group"), to the Ontario Securities Commission (the "Commission") for an order (the "Order") pursuant to clause 88(2)(b) of the OSA and section 113 of the OBCA that the Phelan Group be exempted from the requirement in clause 86(1)(b) of the OSA and subsection 112(1) of the OBCA to send an information circular to shareholders ("Shareholders") of Cara Operations Limited ("Cara") in connection with the Phelan Group's potential solicitation of proxies for the special shareholders' meeting of Cara scheduled to be held on February 3, 2004 (the "Meeting"), subject to the conditions stated in this Order;

AND UPON considering the application and the recommendation of the staff of the Commission;

AND UPON the Commission being satisfied that Shareholders would not be prejudiced by the requested exemptions in view of the conditions contained therein;

AND UPON the Commission being satisfied in the circumstances that there is adequate justification for so doing;

IT IS ORDERED, pursuant to clause 88(2)(b) of the OSA and section 113 of the OBCA, that the Phelan Group is exempt from:

(a) clause 86(1)(b) of the OSA and subsection 112(1) of the OBCA in connection with any solicitation of proxies (as such terms are defined in Part XIX of the OSA and Part VIII of the OBCA) in respect of the Meeting which consists solely of:

(i) a public announcement of how the Phelan Group or any member thereof intends to vote in respect of any item of business to be considered at the Meeting and the reasons for that decision, where such public announcement is made by:

(A) a speech in a public forum; or

(B) a press release, an opinion, a statement or an advertisement provided through a broadcast medium or by a telephonic, electronic or other communication facility, or appearing in a newspaper, a magazine or other publication generally available to the public; and/or

(ii) a communication in circumstances in which the communication is made to Shareholders and concerns the business and affairs of Cara, including its management or proposals contained in the management proxy circular sent to Shareholders in respect of the Meeting, and no form of proxy is sent to or requested from those Shareholders by a member of the Phelan Group or any person acting on behalf of any such member;

(b) the requirement in clause 86(1)(b) of the OSA and subsection 112(1) of the OBCA to send an information circular to Shareholders in connection with any solicitation of their proxies in respect of the Meeting where such solicitation:

(i) consists of the publication of an advertisement in a daily newspaper distributed in Ontario; and

(ii) is not exempt from clause 86(1)(b) of the OSA and subsection 112(1) of the OBCA by reason of subparagraph (a)(i) above,

provided that such advertisement includes the required contents of an information circular as provided for in the regulation made under the OSA; and

(c) section 112 of the OBCA in connection with any solicitation of proxies to which subsection 86(1) of the OSA would not apply by reason of clause 86(2)(a) of the OSA.

January 26, 2004.

"Paul M. Moore"
"Theresa McLeod"