National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Application for relief from dealer registration requirements in respect of first trade in shares made in connection with an employee stock purchase plan by a U.S. issuer – Relief from dealer registration requirements requested upon the first trade of shares through a plan administrator – The Filer cannot rely on the plan administrator exemption is subsection 8.16(3) of NI 31-103 Registration Requirements and Exemptions as the Filer is a reporting issuer in a Canadian jurisdiction – Canadian employees will receive disclosure documents from plan administrator – The plan administrator that executes first trade of shares is subject to the supervision of the U.S. Securities and Exchange Commission – Relief granted.
Applicable Legislative Provisions
Multilateral Instrument 11-102 Passport System, s. 4.7 (1).
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions, s. 3.6(6).
National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, s. 8.16.
National Instrument 45-102 Resale of Securities, ss. 2.6, 2.14.
March 28, 2017
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
QUÉBEC AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
HEWLETT PACKARD ENTERPRISE COMPANY
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) for an exemption (the Exemption Sought) from the dealer registration requirements contained in the Legislation so that such requirements do not apply to the Plan Administrators (as defined below) with respect to the first trade in shares of common stock of the Filer (Common Shares) issued upon the exercise or conversion of ESPP Awards and SIP Awards (as such terms are defined below) issued pursuant to the Hewlett Packard Enterprise Company 2015 Stock Incentive Plan (as may be amended from time to time) (the SIP) and the Hewlett Packard Enterprise Company 2015 Employee Stock Purchase Plan (as may be amended from time to time) (the ESPP), respectively.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the Autorité des marchés financiers is the principal regulator for this application (the Principal Regulator);
(b) the Filer has provided notice that section 4.7(1) of Regulation respecting Passport System (Regulation 11-102) is intended to be relied upon in each of the other jurisdictions of Canada, other than Ontario; and
(c) the decision is the decision of the Principal Regulator and evidences the decision of the securities regulatory authority in Ontario.
Terms defined in Regulation 14-101 respecting Definitions, Regulation 45-102 respecting Resale of Securities, Regulation 45-106 respecting Prospectus Exemptions and Regulation 11-102 respecting Passport System 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 incorporated under the laws of Delaware with principal executive offices in Palo Alto, California, U.S.A. The Filer is subject to the United States Securities Exchange Act of 1934 (the 1934 Act) and the rules, regulations and orders promulgated thereunder.
2. Prior to November 1, 2015, the Filer was a wholly owned subsidiary of HP Inc. (HP), a reporting issuer in Québec. On November 1, 2015, the Filer became a reporting issuer under the securities legislation of Québec by operation of law as a result of the distribution by HP of Filer Shares to HP’s stockholders (Spin-Off). The Filer does not presently intend to become a reporting issuer under the securities legislation of any other jurisdiction in Canada.
3. The authorized share capital of the Filer consists of 9,600,000,000 Common Shares with a par value of U.S.$0.01 each and 300,000,000 shares of preferred stock with a par value of U.S.$0.01 each. As at August 31, 2016, there were 1,665,537,308 Common Shares and no shares of preferred stock issued and outstanding.
4. The Filer’s Shares are listed on the New York Stock Exchange under the symbol “HPE”. The Common Shares are not listed on any Canadian stock exchange and the Filer does not presently intend to list its shares on any Canadian stock exchange.
5. As of September 7, 2016, residents of Canada did not own, directly or indirectly, more than 10% of the outstanding Common Shares and did not represent in number more than 10% of the total number of owners, directly or indirect, of the Common Shares.
6. ESIT Canada Enterprise Services Co., ESIT Advanced Solutions Inc., Hewlett Packard Enterprise Canada Co. and Hewlett Packard Financial Services Canada Co. (collectively, the “Canadian Affiliates”) are wholly-owned subsidiaries of the Filer. The Canadian Affiliates are not reporting issuers in Canada and do not presently intend to become reporting issuers under the securities legislation of any jurisdiction in Canada or to list their securities on any stock exchange in Canada. .
7. The Filer operates the SIP pursuant to which awards, including cash awards, stock awards, stock appreciation rights, options and converted awards (which were issued to satisfy automatic adjustment and conversion of certain awards over HP common stock issued prior to the Spin-Off) (SIP Awards) may be granted to eligible directors of the Filer and employees of the Filer or its affiliates, including the Canadian Affiliates (SIP Participants). Unless determined otherwise by the administrator of the SIP, SIP Awards granted under the SIP are non-transferable, other than by beneficiary designation, will or by the laws of descent or distribution.
8. The Filer operates the ESPP pursuant to which Common Shares may be purchased under the ESPP by various eligible employees of the Filer or its designated affiliates, including certain Canadian Affiliates (ESPP Participants). The ESPP is implemented by offering periods generally lasting for six months (each, an Offering Period). Each ESPP Participant who participates in the ESPP is automatically granted an option to purchase Common Shares (an ESPP Award). ESPP Awards are automatically exercised and Common Shares are purchased under the ESPP based on the ESPP Participant’s contributions at the end of each Offering Period, unless the participant withdraws or terminates employment earlier. Generally, each ESPP Participant may elect to make contributions under the ESPP by payroll deduction of any amount up to, but not exceeding, 10% of his or her base earnings.
9. As of September 7, 2016, there were 1,299 SIP Participants in Canada holding approximately 2.0483% of the outstanding SIP Awards.
10. As of September 7, 2016, there were 428 ESPP Participants in Canada holding approximately 9.58% of the outstanding ESPP Awards granted to foreign ESPP Participants.
11. Participation in each of the SIP and ESPP (collectively, the Plans) is voluntary, and SIP Participants and ESPP Participants will not be granted SIP Awards or ESPP Awards, as the case may be, or be induced to exercise same by expectation of employment or appointment or continued employment or appointment with the Filer or any other affiliated entity of the Filer.
12. SIP Participants in Canada who are granted SIP Awards and ESPP Participants in Canada who are granted ESPP Awards will be provided with all the disclosure documentation that the Filer’s employees resident in the United States who receive SIP Awards or ESPP Awards, respectively, are entitled to receive.
13. SIP Participants and ESPP Participants will also have access to the continuous disclosure materials relating to the Filer that are furnished to holders of the Common Shares, generally.
14. The Filer uses the services of a plan administrator (each a Plan Administrator) for each of the Plans. The Plan Administrator for the SIP is Merrill Lynch, Pierce, Fenner & Smith, Incorporated and for the ESPP is Fidelity Stock Plan Services, LLC. The Plan Administrator, among other things, assists in the recordkeeping of the Plans, facilitates the issuance of SIP Awards and ESPP Awards and their exercise or conversion. Trades in Common Shares acquired under the Plans will be effected through the respective Plan Administrator, each of which is registered under applicable U.S. securities legislation to trade in securities in the category of broker-dealer.
15. The Filer, its Canadian Affiliates and the Plan Administrators, including their employees, agents or representatives, do not provide investment advice. The Plan Administrators are responsible for inquiries from SIP Participants or EPSP Participants for the respective Plans, and their contact information will be included in the respective Plan documents.
16. There is no active trading market for the Common Shares in Canada and none is expected to develop, it is expected that any trades of the Common Shares by SIP Participants or ESPP Participants, their legal representatives or permitted transferees, or the Plan Administrators will be effected through the facilities of the NYSE or any market or exchange outside of Canada on which the Common Shares may be quoted or listed or to a person or company outside of Canada.
17. An exemption from the dealer registration requirement of the Legislation is not available in the Jurisdictions for the first trade of the Common Shares acquired pursuant to the SIP or the ESPP, including trades effected through the Plan Administrators. Such an exemption would be available in respect of trades made by a plan administrator pursuant to section 8.16(3) of Regulation 31-103 respecting Registration Requirements, Exemptions and Ongoing Registration Obligations but for the fact that the Filer is a reporting issuer in Québec.
18. Subject to the matter to which this decision relates, the Filer is not in default of any securities legislation in any jurisdiction of Canada.
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 Exemption Sought is granted provided that:
(a) at the time of the issuance of the Common Shares upon the exercise or conversion of ESPP Awards and SIP Awards (the Exercise Time), the Filer is not a reporting issuer in any jurisdiction of Canada except Québec;
(b) at the Exercise Time, after giving effect to the issuance of the Common Shares and any other Common Shares that were issued at the same time as or as part of the same distribution, residents of Canada:
(i) did not own directly or indirectly more than 10% of the outstanding Common Shares, and
(ii) did not represent in number more than 10% of the total number of owners directly or indirectly of Common Shares; and
(c) the trade is made:
(i) through an exchange, or a market, outside of Canada, or
(ii) to a person or company outside of Canada.
Superintendent, Client Services and Distribution Oversight