IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO,
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA, NEW BRUNSWICK AND NOVA SCOTIA
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF ORACLE CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory
authority
or regulator ("Decision Maker") in each of Ontario,
British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick and Nova Scotia
("Jurisdictions")
has received an application from Oracle Corporation ("Oracle" or
"Company") for a decision pursuant to the securities legislation
of the
Jurisdictions ("Legislation") that:
(i) the requirements contained in the Legislation to be registered to trade in
a security
(the "Registration Requirement") and to file and obtain
a receipt for a preliminary prospectus and a prospectus (collectively with the
Registration
Requirement, the "Registration and Prospectus Requirements")
shall not apply to certain trades in shares of Oracle common stock ("Shares")
and Awards, as defined below, made in connection with the Oracle 1991 Long-Term
Equity
Incentive Plan ("1991 LTIP"), the Oracle 2000 Long-Term
Equity
Incentive Plan ("2000 LTIP") and the Employee Stock
Purchase
Plan (1992) ("ESPP") (collectively, "Plans");
and
(ii) the requirements contained in the Legislation relating to the delivery of
an offer and issuer bid circular and any notices of change or variation thereto,
minimum deposit
periods and withdrawal rights, taking up and paying for securities tendered to
an issuer bid, disclosure, restrictions upon purchases of securities, bid financing,
identical
consideration and collateral benefits together with the requirement to file a
reporting
form within 10 days of an exempt issuer bid and pay a related fee ("Issuer
Bid Requirements") shall not apply to certain acquisitions by Oracle
of
Shares or Awards pursuant to the Plans in the Jurisdictions.
AND WHEREAS pursuant to the Mutual Reliance Review
System for Exemptive Relief Applications ("System"),
the Nova
Scotia Securities Commission is the principal regulator for this application;
AND WHEREAS Oracle has represented to the Decision
Makers as follows:
1. Oracle is presently a corporation incorporated under the laws of the State of Delaware.
The executive offices of Oracle are located in Redwood Shores, California.
2. The Company is registered with the Securities and Exchange Commission ("SEC")
in the U.S. under the U.S. Securities Exchange Act of 1934 ("Exchange Act")
and is not exempt from the reporting requirements of the Exchange Act pursuant
to Rule 12g
3-2 made thereunder.
3. Oracle is not, and has no present intention of becoming, a reporting issuer in any
jurisdiction in Canada. The majority of the directors and senior officers of Oracle reside
outside of Canada.
4. The authorized share capital of Oracle consists of 11,000,000,000 Shares and
1,000,000
shares of preferred stock ("Preferred Shares"). As
of December 31, 2001, there were 5,497,177,469 Shares and no Preferred Shares
issued and outstanding.
5. The Shares are quoted on the Nasdaq National Market ("Nasdaq").
6. Oracle intends to use the services of one or more agents or brokers ("Agents")
under the Plans. The current Agents for the Plans are E*TRADE Canada Securities,
Inc., AST Stock Plan, Inc. and Delphi Asset Management Corp. Not all of the current
Agents are
registered to conduct retail trades in the Jurisdictions and, if replaced, or
if additional Agents are appointed, are not all expected to be registered in
the
Jurisdictions. Agents that are not registered in the Jurisdictions are or will
be registered under applicable U.S. securities or banking legislation to trade
in securities,
if required under such legislation, and are or will be authorized by Oracle to
provide services under the Plans. An Agent that is not registered in the Jurisdictions
but is
registered to trade in securities in the U.S. is referred to as a "Foreign
Agent".
7. The Agents' role in the Plans may include: (a) assisting with the administration of the
Plans, including record-keeping functions; (b) facilitating the exercise of Options (as
defined below) granted under the Plans (including cashless and stock-swap exercises) to
the extent that they are exercisable for Shares; (c) facilitating the issuance of Shares
pursuant to the ESPP; (d) facilitating the cancellation and surrender of Awards (as
defined below) as permitted under the Plans; (e) holding Shares issued under the Plans on
behalf of Participants (as defined below), Former Participants (as defined below) and
Permitted Transferees (as defined below); (f) facilitating the resale of the Shares issued
in connection with the Plans; and (g) facilitating the mechanisms as set out in the Plans
for the payment of withholding taxes.
8. The Plans are administered by the board of directors of the Company ("Board")
and/or a committee appointed by the Board ("Committee").
9. All necessary securities filings have been made in the U.S. in order to offer the Plans
to Participants of Oracle and its affiliates ("Oracle Companies").
The Plans have been approved by the shareholders of Oracle.
10. A prospectus prepared according to U.S. securities laws describing the terms and
conditions of the Plans will be delivered to each Canadian Participant who is eligible to
participate in the ESPP or who receives an Award under the 2000 LTIP or the 1991 LTIP. The
annual reports, proxy materials and other materials Oracle is required to file with the
SEC will be provided or made available to Canadian Participants at the same time and in
the same manner as the documents are provided or made available to U.S. Participants.
11. The sale of Shares acquired under the Plans may be made by Participants, Former
Participants or Permitted Transferees through the Agents.
12. As there is no market for the Shares in Canada and none is expected to develop, it is
expected that the resale by Participants, Former Participants and Permitted Transferees of
the Shares acquired under the Plans will be effected through Nasdaq.
13. As of August 20, 2001, Canadian shareholders of Oracle did not own, directly or
indirectly, more than 10% of the issued and outstanding Shares and did not represent in
number more than 10% of the shareholders of the Company.
14. The purposes of the 1991 LTIP and the 2000 LTIP are to provide an incentive
to eligible employees, independent consultants, advisers, officers and directors
of the
Oracle Companies whose present and potential contributions are important to the
continued success of the Company; to afford such persons an opportunity to acquire
a proprietary
interest in the Company; and to enable the Company to continue to enlist and
retain in its employ the best available talent for the successful conduct of
its business. It is
Oracle's intention to only allow employees of the Oracle Companies ("Participants")
in Canada to participate in the 1991 LTIP and 2000 LTIP at this time.
15. The following awards are offered under the 1991 LTIP and 2000 LTIP: (a) stock
options
exercisable for Shares ("Options"); (b) stock purchase
rights; (c) stock appreciation rights; and (d) long-term performance awards (collectively,
the "Awards"). The Awards are non-transferable. It
is Oracle's intention to only offer Options to Participants in Canada at this
time.
16. The Shares issued under the 1991 LTIP and 2000 LTIP are previously authorized but
unissued Shares or reacquired Shares, whether purchased on the market or otherwise.
17. Participants who participate in the 1991 LTIP and 2000 LTIP will not be induced to
purchase Shares by expectation of employment or continued employment.
18. The maximum number of Shares that may be issued under the 1991 LTIP is 480,950,499 and
under the 2000 LTIP is 570,893,278 plus any unused Shares under the 1991 LTIP that may be
transferred to the 2000 LTIP. The foregoing maximum amount is subject to adjustment as
provided for in the Plans.
19. The Committee may, in its sole discretion, grant Options to eligible Participants.
Each Option granted under the 1991 LTIP and 2000 LTIP will be evidenced by an
Option
agreement ("Option Agreement").
20. As of December 31, 2001, there were 952 Participants in Canada eligible to
receive Options under the 2000 LTIP: 696 Participants in Ontario; 53 Participants
in British
Columbia; 43 Participants in Alberta; 4 Participants in Saskatchewan; 10 Participants
in
Manitoba; 140 Participants in Qu�bec; 4 Participants in New Brunswick; and 2
Participants
in Nova Scotia. No more Awards are being made under the 1991 LTIP.
21. Subject to the provisions of the 1991 LTIP and 2000 LTIP, the Committee has the sole
authority to determine the number of Shares covered by each Option and the conditions and
limitations applicable to the exercise of the Option.
22. Options shall be exercisable at such times and subject to such terms and conditions as
the Committee may specify, provided that no Option shall be exercisable after the
expiration of ten years from the date of grant.
23. The exercise price for Options ("Exercise Price")
will be specified in the Option Agreement and will be established at the discretion
of the
Committee. Generally, the Exercise Price per Share shall be the Fair Market Value
(as defined in the 1991 LTIP and 2000 LTIP) of a Share on the effective date
of grant of the
Option.
24. The Committee shall establish procedures governing the exercise of Options.
Generally, in order to exercise an Option, a Participant, Former Participant
or Permitted Transferee
must submit to Oracle or an Agent a notice of exercise in the form and manner
prescribed
by the Committee ("Notice of Exercise") identifying
the Option and number of Shares being purchased, together with full payment for
the Shares. The
Notice of Exercise shall specify which type of exercise will be used to pay the
Exercise
Price and other costs, if any.
25. Following the termination of a Participant's relationship with the Oracle
Companies
for reasons of disability, retirement or any other reason ("Former
Participant") or where the Option has been transferred on the death
of a Participant by will or pursuant to the laws of intestacy or where the Option
has been
transferred to family members and trusts and charitable institutions as the Committee
shall approve at the time of the grant of such Option ("Permitted Transferees"),
the Former Participants and Permitted Transferees will continue to have rights
in respect
of the Plans ("Post-Termination Rights"). Post-Termination
Rights may include, among other things, the right of a Former Participant or
Permitted Transferee to exercise an Option for a period determined in accordance
with the Plans and
the right to sell Shares acquired under the Plans through the Agents. Post-Termination
Rights are only available if the right was earned by the Participant while the
Participant
still had a relationship with the Oracle Companies.
26. The purpose of the ESPP is to provide Participants an opportunity to purchase Shares
through payroll deductions.
27. Subject to adjustments as provided for in the ESPP, an aggregate of 405,000,000 Shares
have been reserved for issuance under the ESPP.
28. As of December 31, 2001, there were 952 Participants in Canada eligible to purchase
Shares under the ESPP: 696 Participants in Ontario; 53 Participants in British Columbia;
43 Participants in Alberta; 4 Participants in Saskatchewan; 10 Participants in Manitoba;
140 Participants in Quebec; 4 Participants in New Brunswick; and 2 Participants in Nova
Scotia.
29. Participants may participate in an offering by delivering a subscription agreement to
the Company within the time specified in the ESPP, in the prescribed form, thereby
authorizing regular payroll deductions accumulated in a periodic deposit account
maintained on behalf of the Participant in the ESPP.
30. The purchase price of Shares acquired under the ESPP shall not be less than the lesser
of (i) an amount equal to 85% of the fair market value of a Share on the Offering Date, as
defined in the ESPP; or (ii) an amount equal to 85% of the fair market value of a Share on
the Exercise Date, as defined in the ESPP.
31. An ESPP Participant may authorize deductions not exceeding 10% of compensation, up to
a maximum of US$21,250 per year.
32. Immediately upon termination for any reason of a Participant's employment with the
Oracle Companies, the accumulated payroll deductions shall be distributed to the
terminated employee, without interest, unless termination occurs within 15 days of the end
of the Offering Period, as defined in the ESPP, in which case the purchase will occur at
the end of the Offering Period. A terminated Participant shall immediately cease to
participate in the ESPP.
33. Pursuant to the 1991 LTIP and the 2000 LTIP, the acquisition of Awards and
Shares by
the Company in certain circumstances may constitute an "issuer bid". The terms
of the Plans permit Option holders to surrender Shares to the Company on a stock-swap
exercise; for the Company to withhold Shares in order to satisfy tax-withholding
obligations (the Shares so withheld will have a Fair Market Value (as defined in the
Plans) equal to the amount required to be withheld); for the Company to buy out for a
payment in cash or Shares an Option; for the Company to substitute new Options for
previously issued Options. The exemptions in the Legislation from the Issuer Bid
Requirements may not be available for such acquisitions by the Company since such
acquisitions may occur at a price that is not calculated in accordance with the
"market price," as that term is defined in the Legislation and may
be made from
persons other than employees or former employees.
34. The Legislation of the Jurisdictions does not contain exemptions from the Registration
and Prospectus Requirements for all the trades in Awards and Shares under the Plans.
35. When a Foreign Agent sells Shares on behalf of Participants, Former Participants and
Permitted Transferees, the Foreign Agent, Participants, Former Participants and Permitted
Transferees may not be able to rely upon the exemptions from the Registration Requirement
contained in the Legislation.
AND WHEREAS pursuant to the System, this MRRS Decision
Document evidences the decision of each Decision Maker (collectively, "Decision");
AND WHEREAS each of the Decision Makers is satisfied
that the test contained in the Legislation that provides the Decision Maker with the
jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers pursuant to the Legislation is
that:
(i) the Registration and Prospectus Requirements shall not apply to any trade or
distribution of Awards or Shares made in connection with the Plans, including trades and
distributions involving the Oracle Companies, the Agents, Participants, Former
Participants, and Permitted Transferees, provided that the first trade of Shares acquired
through the Plans pursuant to this Decision shall be deemed a distribution or primary
distribution to the public under the Legislation unless the conditions in subsection
2.14(1) of Multilateral Instrument 45-102 Resale of Securities are satisfied;
(ii) the first trade of Shares acquired pursuant to the Plans by Participants, Former
Participants and Permitted Transferees effected through a Foreign Agent shall not be
subject to the Registration Requirement provided that the first trade is executed through
a stock exchange or market outside of Canada; and
(iii) the Issuer Bid Requirements shall not apply to the acquisition by Oracle of Shares
or Awards from Participants, Former Participants and Permitted Transferees provided the
acquisitions are made in accordance with the terms of the Plans.
DATED this 27th day of March, 2002.