National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – application for a decision that the issuer is not a reporting issuer under applicable securities laws – issuer in default of certain filing obligations as a reporting issuer under applicable securities laws – outstanding securities are beneficially owned, directly or indirectly by fewer than 15 securityholders in each jurisdiction and fewer than 51 securityholders worldwide – requested relief granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
CSA Staff Notice 12-307 Applications for a Decision that an Issuer is not a Reporting Issuer.
December 16, 2014
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, ONTARIO
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
The securities regulatory authority or regulator in each of the Jurisdictions (“Decision Maker”) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the “Legislation”) that the Filer is not a reporting issuer in the Jurisdictions (the “Exemptive Relief Sought”).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.
Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation governed by the Canada Business Corporations Act (the “CBCA”) with its registered office located at 710 Dorval Drive, Suite 700, Oakville, Ontario L6K 3V7.
2. The authorized share capital of the Filer consists of an unlimited number of common shares (the “Common Shares”) and an unlimited number of preferred shares (the “Preferred Shares”, and, together with the Common Shares, the “Shares”). The Filer has no other securities outstanding, including debt securities and convertible securi-ties.
3. The Filer is a reporting issuer in each of the Jurisdictions and is thus subject to continuous disclosure requirements under the Legislation.
4. On August 29, 2014, the Filer entered into an arrangement agreement with Fairfax Financial Holdings Limited (“Fairfax”) and 8653291 Canada Inc. (the “Purchaser”) to complete a transaction by way of a statutory plan of arrangement under Section 192 of the CBCA (the “Arrangement”), pursuant to which the Purchaser will acquire all of the outstanding shares of the Filer.
5. The Arrangement was completed on November 14, 2014 (the “Effective Date”). Pursuant to the Arrangement, among other things:
(a) Fairfax acquired, directly or indirectly through a wholly-owned subsidiary, all of the issued and outstanding Common Shares and Preferred Shares of the Filer;
(b) each option to acquire a Common Share (an “Option”) of the Filer with an exercise price lower than the consideration paid per Common Share under the Arrange-ment was deemed transferred and assigned to the Filer and cancelled by the Filer and, in consideration for such Option, the Filer paid to the holder of such Option an amount equal to the consideration paid per Common Share under the Arrangement less the exercise price of such Option, and each Option of the Filer with an exercise price equal to or higher than the consideration paid per Common Share under the Arrangement was disposed of to the Filer and cancelled; and
(c) each deferred share unit (a “DSU”) was deemed transferred and assigned to the Filer and cancelled by the Filer in exchange for an amount equal to the consideration paid per Common Share under the Arrangement.
6. As a result of the Arrangement, the only securityholder of the Filer is Fairfax, directly or indirectly through a wholly-owned subsidiary.
7. The outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.
8. The Common Shares of the Filer were delisted from the Toronto Stock Exchange as at the close of business on November 18, 2014.
9. None of the Filer’s securities are traded on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
10. The Filer does not currently intend to seek public financing by an offering of its securities in Canada.
11. The Filer is applying for a decision that it is not a reporting issuer in all of the jurisdictions in Canada in which it is currently a reporting issuer.
12. Upon the grant of the Exemptive Relief Sought, the Filer will no longer be a reporting issuer in any jurisdiction in Canada.
13. The Filer did not voluntarily surrender its status as a reporting issuer in British Columbia pursuant to British Columbia Instrument 11-502 Voluntary Surrender of Reporting Issuer Status because it wanted to avoid the 10-day waiting period under that instrument.
14. The Filer is not eligible to use the simplified procedure under CSA Staff Notice 12-307 Applications for a Decision that an Issuer is not a Reporting Issuer because it is a reporting issuer in British Columbia and is in default of certain filing obligations under the Legislation as described in paragraph 15.
15. The Filer is not in default of any of its obligations as a reporting issuer under the Legislation other than its obligation to file its interim financial statements, related management’s discussion and analysis and certificates under National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim Filings for its third
quarter ended September 30, 2014. On November 14, 2014, the last date by which the Filer was required to make such filings, Fairfax owned 100% of the Shares of the Filer.
Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Makers under the Legislation is that the Exemptive Relief Sought is granted.
“Edward P. Kerwin”
Ontario Securities Commission
Ontario Securities Commission