Editor's Note: A draft version of this decision was inadvertently published in (2010), 33 OSCB 6687. The final version of the decision is published here and replaces the draft version.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Section 104(2)(c) -- Issuer bid -- relief from issuer bid requirements in sections 93 to 99.1 of the Act -- issuer conducting a normal course issuer bid through the facilities of the TSX and NASDAQ -- relief granted, provided that the bid is subject to a maximum aggregate limit mirroring the TSX NCIB rules.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 93 to 99.1, 101.2, 104(2)(c).
July 13, 2010
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
RESEARCH IN MOTION LIMITED
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the requirements contained in the Legislation relating to issuer bids (the Issuer Bid Requirements) shall not apply to purchases of the common shares of the Filer (the Common Shares) made by the Filer through the facilities of the Nasdaq Stock Market (the Nasdaq) pursuant to the Share Repurchase Program (as defined below) (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application (the OSC), and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, Yukon, Northwest Territories and Nunavut (the Jurisdictions).
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
(a) The Filer is a corporation amalgamated under the Business Corporations Act (Ontario).
(b) The Filer's head office is in Waterloo, Ontario.
(c) The Filer is a reporting issuer in each of the provinces of Canada and the Filer is not in default of any requirement of the securities legislation in the jurisdictions in which it is a reporting issuer.
(d) The Filer is also a registrant with the Securities and Exchange Commission (the SEC) in the United States and is subject to the requirements of the United States Securities Exchange Act of 1934 (the 1934 Act).
(e) As at June 24, 2010, the Filer had approximately 552,511,264 Common Shares issued and outstanding.
(f) The Common Shares are listed for trading on the Toronto Stock Exchange (TSX) and the Nasdaq.
(g) Pursuant to a press release dated November 5, 2009, the Filer commenced a share repurchase program (the Previous Share Repurchase Program) under which it was authorized to purchase for cancellation through the facilities of the Nasdaq Common Shares having an aggregate purchase price of up to US$1.2 billion. The Previous Share Repurchase Program was authorized to commence on November 9, 2009.
(h) Between November 9, 2009 and April 13, 2010, the Filer purchased 16,235,800 Common Shares through the facilities of the Nasdaq.
(i) On April 13, 2010, the Filer obtained an issuer bid exemption order from the OSC to purchase for cancellation 2,000,000 Common Shares pursuant to private agreements between the Filer and a non-related third-party financial institution. The Common Shares repurchased through the private agreements, together with 16,235,800 Common Shares that the Filer had repurchased through the facilities of the Nasdaq since November 9, 2009, represented approximately 3.2% of the Filer's outstanding Common Shares and substantially completed the Previous Share Repurchase Program.
(j) On June 24, 2010, the Filer announced that its Board of Directors has authorized a normal course issuer bid to purchase for cancellation up to approximately 31 million Common Shares (the Share Repurchase Program).
(k) Under the Normal Course Issuer Bid Exemption (as defined below), the Filer is permitted to purchase up to an additional approximately 9.3 million Common Shares, or approximately 1.8% of its outstanding Common Shares, through the facilities of the Nasdaq. Any additional purchases of Common Shares must be made through the facilities of the TSX, with the approval of the TSX, or through the facilities of the Nasdaq, pursuant to an exemptive relief order from the principal regulator.
(l) Between July 8, 2010 and July 12, 2010, the Filer purchased 8,805,000 Common Shares through the facilities of the Nasdaq.
(m) On July 12, 2010, the Filer filed a Notice of Intention to Make a Normal Course Issuer Bid (the Notice of Intention) with the TSX in order to permit it to make normal course issuer bid purchases of its Common Shares through the facilities of the TSX.
(n) The Notice of Intention contemplates the purchase by the Filer of up to approximately 22.46 million Common Shares through the facilities of the TSX and Nasdaq during the 12 months ending July 14, 2011. The purchases of up to approximately 22.46 million Common Shares authorized pursuant to the Share Repurchase Program, together with the 18,235,800 Common Shares purchased under the Previous Share Repurchase Program and the 8,805,000 Common Shares purchased since June 24, 2010 under the Share Repurchase Program, represent approximately 10% of the Filer's outstanding public float (as defined in Section 628(a)(xi) of the TSX Company Manual) as at June 24, 2010. Additional purchases under the Share Repurchase Program exceeding approximately 584,763 Common Shares in the aggregate are limited to the facilities of the TSX and exempt from the Issuer Bid Requirements under the Designated Exchange Exemption (as defined below).
(o) The Filer wishes to be able to make normal course issuer bid purchases through the facilities of both the TSX and the Nasdaq.
(p) Issuer bid purchases made through the facilities of the TSX in compliance with the by-laws, regulations and policies of the TSX relating to normal course issuer bids (the TSX NCIB Rules) are exempt from the Issuer Bid Requirements pursuant to the designated exchange exemption contained in Section 101.2(1) of the Act, as amended or replaced from time to time (the Designated Exchange Exemption). The TSX NCIB Rules allow normal course issuer bid purchases of up to 10% of the public float to be made through the facilities of the TSX over the course of a 12-month period.
(q) Issuer bid purchases made through the facilities of the Nasdaq are normally made in reliance on the exemption contained in Section 101.2(2) of the Act, as amended or replaced from time to time (the Normal Course Issuer Bid Exemption). The Normal Course Issuer Bid Exemption limits the purchases that may be made by the Filer in a 12-month period to 5% of the securities of the particular class outstanding at the commencement of the period.
(r) Purchases made pursuant to the Notice of Intention through the facilities of the TSX are exempt from the Issuer Bid Requirements under the Designated Exchange Exemption while such purchases through the facilities of the Nasdaq are not exempt under the Designated Exchange Exemption, as the Act does not recognize the Nasdaq as a "designated exchange" for the purpose of the Designated Exchange Exemption.
(s) No other exemptions exist under the Act that would otherwise permit the Filer to make purchases through the Nasdaq on an exempt basis where the purchases exceed the 5% limitation under the Normal Course Issuer Bid Exemption.
(t) The Share Repurchase Program will be effected in accordance with the 1934 Act, and the rules of the SEC made pursuant thereto, including the safe harbour provided by Rule 10b-18 under the 1934 Act (collectively, Applicable U.S. Securities Laws), which contains, among other things, restrictions on the number of shares that may be purchased on a single day, subject to certain exceptions for block purchases, based on the average daily trading volumes of the Common Shares on Nasdaq.
(u) Purchases of Common Shares by the Filer of up to 10% of the public float through the facilities of the Nasdaq would be permitted under the rules of the Nasdaq and under Applicable U.S. Securities Laws.
(v) The Filer requires relief from the Issuer Bid Requirements in order to make purchases of its Shares through the facilities of the Nasdaq up to the number permitted to be purchased under the Notice of Intention as permitted by the TSX and under the Designated Exchange Exemption.
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that the purchases of Common Shares made through the facilities of Nasdaq are part of a normal course issuer bid that complies with the TSX NCIB Rules.