Lucent Technologies Inc. and Agere Systems Inc. - MRRS Decision
Headnote
Mutual Reliance Review System for ExemptiveRelief Applications - distribution of shares of a foreign companywhich is not a reporting issuer as a dividend in kind is notsubject to registration and prospectus requirement - de minimusOntario holders - first trade is a distribution unless suchtrade is conducted through an exchange, or a market, outsideof Canada.
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25, 35(1)13, 53, 72(1)(g), 74(1).
Rules Cited
Multilateral Instrument 45-102 - Resale of Securities,s. 2.14(1).
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO,QUEBEC,
NEW BRUNSWICK, PRINCE EDWARD ISLAND,
NOVA SCOTIA, NEWFOUNDLAND AND LABRADOR,
THE NORTHWEST TERRITORIES, NUNAVUT AND
THE YUKON TERRITORY
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
LUCENT TECHNOLOGIES INC. AND
AGERE SYSTEMS INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Quebec, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundlandand Labrador, the Northwest Territories, Nunavut and the YukonTerritory (the "Jurisdictions") have received an application(the "Application") from Lucent Technologies Inc.("Lucent") for a decision pursuant to the securitieslegislation of the Jurisdictions (the "Legislation")that, subject to certain conditions:
(i) the requirements contained in the Legislationto be registered to trade in a security (the "RegistrationRequirements") shall not apply to a distribution by Lucentof Class A shares and Class B shares of Agere Systems Inc. ("Agere")that it owns to the holders of shares of common stock of Lucentas a dividend in kind; and
(ii) the requirements to file and obtain a receiptfor a preliminary prospectus and a prospectus (the "ProspectusRequirements") shall not apply to a distribution by Lucentof Class A shares and Class B shares of Agere that it owns tothe holders of shares of common stock of Lucent as a dividendin kind.
AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor the Application;
AND WHEREAS Lucent has represented tothe Decision Makers that:
1. Lucent is a corporation incorporated underthe laws of the State of Delaware and its principal executiveoffices are located in the State of New Jersey.
2. Lucent is a leading global supplier of communicationsnetworking equipment, holding strong leadership positions inInternet infrastructure for service providers, optical networking,wireless networks, communications networking support and services,and communications.
3. The authorized share capital of Lucent consistsof (i) 10,000,000,000 common shares ("Lucent Common Shares"),and (ii) 250,000,000 shares of preferred stock.
4. At the close of business on April 22, 2002,approximately 3,426,286,479 Lucent Common Shares were issuedand outstanding.
5. Lucent Common Shares are listed and postedfor trading on the New York Stock Exchange (the "NYSE").
6. Lucent is not a reporting issuer or the equivalentin any of the Jurisdictions.
7. As of April 22, 2002, according to the booksof Lucent, 2,730 persons or companies, whose last address asshown on the books of Lucent was in Canada, held Lucent CommonShares and such persons or companies (i) represented approximately0.179 percent of the total number of holders of record of LucentCommon Shares worldwide and (ii) held approximately 0.02 percentof the aggregate outstanding Lucent Common Shares. With respectto the province of Québec, as of May 3, 2002, accordingto the books of Lucent, 484 persons or companies, whose lastaddress as shown on the books of Lucent was in Québec,held Lucent Common Shares.
8. Agere is incorporated under the laws of theState of Delaware and is registered with the Securities ExchangeCommission in the United States of America under the UnitedStates Securities Exchange Act of 1934 (the "Exchange Act")and is not exempt from the reporting requirements of the ExchangeAct pursuant to Rule 12G 3?2 made thereunder.
9. Agere is not a reporting issuer or the equivalentin any of the Jurisdictions and has no intention of becominga reporting issuer or the equivalent in any of the Jurisdictions.
10. The authorized share capital of Agere consistsof 5,000,000,000 Class A shares ("Class A Shares"),5,000,000,000 Class B shares ("Class B Shares") and250,000,000 preferred shares. As at April 22, 2002, there were727,456,519 Class A Shares and 908,100,000 Class B Shares issuedand outstanding.
11. Agere completed an initial public offeringof its Class A Shares in April, 2001 (the "IPO").Prior to that time, Agere was a wholly-owned subsidiary of Lucent.
12. Upon completion of the IPO, Lucent retainedownership of the Class B Shares of Agere. Subsequent to theIPO on May 1, 2001, Lucent converted 37,000,000 Class B Sharesinto Class A Shares. Lucent currently owns all of the issuedand outstanding Class B Shares of Agere and 37,000,000 ClassA Shares.
13. Lucent intends to distribute all of itsClass A Shares and the Class B Shares of Agere (collectively,the "Lucent Agere Shares") to holders of Lucent CommonShares (the "Distribution"). Lucent proposes to effectthe Distribution on June 1, 2002, or as soon as practicable.
14. The Class A Shares are listed and postedfor trading in the United States on the NYSE. Upon completionof the Distribution, the Class B Shares will be listed and postedfor trading on the NYSE, subject to official notice of issuance,under the symbol "AGR".
15. In connection with the Distribution, approximately37,000,000 Class A Shares and 908,100,000 Class B Shares willbe distributed as a dividend in kind to the holders of LucentCommon Shares. The Distribution constitutes a distribution,within the meaning of the Legislation in each of the Jurisdictions,since it is a trade in previously issued securities of an issuerfrom the holdings of a control person pursuant to the meaningof distribution under the Legislation.
16. The Distribution will be effected in compliancewith the laws of the State of Delaware, the United States SecuritiesAct of 1933, the Exchange Act and other applicable securitieslaws of the United States.
17. Upon completion of the Distribution, itis expected, on the basis of the holdings of Lucent Common Sharesas of April 22, 2002, that persons or companies whose addressas shown on the books of Lucent is in Canada, will (i) representapproximately 0.179 percent of the total number of holders ofrecord of Class B Shares worldwide, and (ii) will hold approximately0.02 percent of the aggregate outstanding Class B Shares.
18. In order to effect the Distribution, andin accordance with the requirements of the United States Securitiesand Exchange Commission, an information statement in Form 8-Kthat contains required disclosure will be filed as an exhibitto a Lucent filing made under the requirements of the ExchangeAct. In addition, Lucent will mail such information statementto all holders of Lucent Common Shares, including those whoare resident in Canada, on or about May 13, 2002.
19. Residents in the Jurisdictions holding LucentCommon Shares will have the same rights at law, if any, in respectof Lucent Agere Shares. After the Distribution Agere will concurrentlysend to holders of Class A Shares and Class B Shares residentin the Jurisdictions all disclosure materials it sends to holdersof Class A Shares and Class B Shares resident in the UnitedStates.
20. The Distribution would be exempt from theRegistration Requirements and the Prospectus Requirements ofthe Legislation in certain of the Jurisdictions but for thefact that Agere is not a reporting issuer or the equivalentin such Jurisdictions.
AND WHEREAS pursuant to the System, thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");
AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers underthe Legislation is that Lucent is exempt from the RegistrationRequirements and the Prospectus Requirements in connection withthe Distribution, provided that the first trade in any LucentAgere Shares acquired by residents of Canada in connection withthe Distribution in reliance on this decision shall be deemeda distribution, or a primary distribution to the public, underthe Legislation unless:
(a) except in Québec, the conditionsin subsection 2.14(1) of Multilateral Instrument 45-102 Resaleof Securities are satisfied; or
(b) in Québec, the alienation is madethrough an exchange, or market, outside of Canada or to a personor company outside of Canada.
June 3, 2002.
"Paul M. Moore" "Harold P. Hands"