Celestica Inc. - MRRS Decision
Headnote
Mutual Reliance Review System for ExemptiveRelief Applications - relief granted to certain vice-presidentsof a reporting issuer from the insider reporting requirementssubject to certain conditions as outlined in CSA Staff Notice55-306 - Applications for Relief from the Insider ReportingRequirements by Certain Vice Presidents.
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 1(1), 107, 108, 121(2)(a)(ii).
Regulations Cited
Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am., Part VIII.
Rules Cited
National Instrument 55-101 - Exemption FromCertain Insider Reporting Requirements.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
ALBERTA, MANITOBA, NEWFOUNDLANDAND LABRADOR,
NOVA SCOTIA, ONTARIO, QUEBECAND SASKATCHEWAN
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
CELESTICA INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof Alberta, Manitoba, Newfoundland and Labrador, Nova Scotia,Ontario, Quebec and Saskatchewan (collectively, the "Jurisdictions")has received an application from Celestica Inc. ("Celestica")for a decision pursuant to the securities legislation of theJurisdictions (the "Legislation") that the requirementcontained in the Legislation to file insider reports shall notapply to certain individuals who are insiders of Celestica,on the grounds that they are "nominal vice-presidents",as that term is defined in CSA Staff Notice 55-306 (the "Notice");
AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;
AND WHEREAS Celestica has representedto the Decision Makers that:
1. Celestica is a corporation incorporatedunder the Business Corporations Act (Ontario). Celesticais a leading provider of electronics manufacturing servicesto original equipment manufacturers worldwide. Celestica hasfacilities in over 40 locations throughout the Americas, Europeand Asia. Celestica provides a broad range of services toits customers in the information technology and communicationsindustries;
2. The authorized capital of Celestica consistsof an unlimited number of subordinate voting shares and anunlimited number of multiple voting shares, of which 190,294,986subordinate voting shares and 39,065,950 multiple voting shareswere outstanding as at November 25, 2002;
3. The subordinate voting shares of Celesticaare listed and posted for trading on the Toronto Stock Exchangeand the New York Stock Exchange;
4. Celestica is a reporting issuer or theequivalent under the Legislation in each of the Jurisdictions.Celestica is not in default of any requirement under the Legislation;
5. Currently, 91 individuals are insidersof Celestica by reason of being an officer or director ofCelestica or its subsidiaries. Of those individuals, 28 arecurrently exempt from the insider reporting requirements ofthe Legislation by reason of the exemptions contained in NationalInstrument 55-101 ("NI 55-101"). Celestica has madethis application to seek the requested relief in respect of41 individuals;
6. Celestica maintains a trading policy (the"Policy") which it distributes to its insiders andpersons in a "special relationship" (as that termis defined in Section 76(5) of the Securities Act (Ontario))with Celestica. The Policy describes the trading restrictionsand reporting requirements to which such persons are subjectunder applicable law and sets out guidelines with which allsuch individuals must comply when trading or contemplatinga trade in securities of Celestica. These guidelines includea prohibition on trading in securities of Celestica duringcertain "blackout periods" prior to the releaseof Celestica's financial results and following the issuanceof a press release disclosing material information about Celestica;
7. The Policy requires that persons to whomit applies advise Celestica's Chief Financial Officer or ChiefExecutive Officer prior to undertaking any trades in securitiesof Celestica;
8. Celestica has compiled a list of individualswho it has determined meet the criteria for exemption setout in the Notice (the "Nominal VPs"), by consideringeach such person's activities and responsibilities withinCelestica and its major subsidiaries. Based on the natureof their job functions and after consulting with each NominalVP, Celestica has determined that none of the Nominal VPsas a matter of course receives or has access to material undisclosedinformation relating to Celestica;
9. Each of the Nominal VPs meets the definitionof "nominal vice-president", as defined in the Notice,for the following reasons:
(a) each of the individuals is a vice-president;
(b) none of the individuals is in chargeof a principal business unit, division or function of Celesticaor a "major subsidiary" of Celestica, as suchterm is defined in NI 55-101;
(c) none of the individuals in the ordinarycourse receives or has access to information as to materialfacts or material changes concerning Celestica before thematerial facts or material changes are generally disclosed;and
(d) none of the individuals is an insiderof Celestica in any other reporting capacity;
10. On an ongoing basis, Celestica intendsto monitor the eligibility for the exemption available underthe Notice of each of the Nominal VPs, and that of other employeesof Celestica and its major subsidiaries whose title is VicePresident and who may satisfy the criteria of "nominalvice-president" from time to time. This will be effectedby monitoring such persons' respective job functions and responsibilitiesand assessing the extent to which in the ordinary course theyreceive notice of material facts or material changes withrespect to Celestica prior to such facts or changes beinggenerally disclosed; and
11. In connection with this application, Celesticahas filed with the Decision Makers a copy of the Policy andthe list of Nominal VPs;
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 Makers with the jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers underthe Legislation is that the requirement contained in the Legislationto file insider reports shall not apply to the Nominal VPs orany other employee of Celestica or its major subsidiaries whohereafter is given the title Vice President, provided that:
(a) each such person satisfies the definitionof "nominal vice-president" contained in the Notice;
(b) Celestica prepares and maintains a listof all individuals who propose to rely on the exemptiongranted, submits the list on an annual basis to the boardof directors for approval and files the list with the DecisionMakers;
(c) Celestica files with the Decision Makersa copy of its internal policies and procedures relatingto monitoring and restricting the trading activities ofits insiders and other persons whose trading activitiesare restricted by Celestica; and
(d) the relief granted will cease to beeffective on the date when NI 55-101 is amended.
January 21, 2003.
"Robert W. Korthals" "H.Lorne Morphy"