REEL International

Headnote

Dual application under National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Application for relief from the prospectus and registration requirements for certain trades made in connection with an employee share offering by a French issuer -- The issuer cannot rely on the employee exemption in section 2.24 of National Instrument 45-106Prospectus Exemptions as the securities are not being offered to Canadian employees directly by the issuer but rather through a special purpose entity -- Canadian participants will receive disclosure documents -- The special purpose entity is subject to the supervision of the local securities regulator -- Canadian employees will not be induced to participate in the offering by expectation of employment or continued employment -- There is no market for the securities of the issuer in Canada -- The number of Canadian participants and their share ownership are de minimis -- Relief granted, subject to conditions.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25(1), 53(1) and 74(1).

May 27, 2022

[TRANSLATION]

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF REEL INTERNATIONAL (the Filer)

DECISION

Background

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:

1. an exemption from the prospectus requirement (the Prospectus Relief) so that such requirement does not apply to trades of:

(a) units (the Principal Classic Units) of a fonds commun de placement d'entreprise or "FCPE", a form of collective shareholding vehicle commonly used in France for the conservation and custodianship of shares held by employee-investors, named "My Share REEL" (the Principal Classic Fund), and

(b) units (the Temporary Classic Units, and together with the Principal Classic Units, the Units) of future temporary FCPEs (the Temporary Classic Funds and, together with the Principal Classic Fund, the Funds) organized in the same manner as the Principal Classic Fund (),

such trades made pursuant to Employee Share Offerings (as defined below) to or with Qualifying Employees (as defined below) resident in the Jurisdictions (collectively, the Canadian Employees, and Canadian Employees who subscribe for Units, the Canadian Participants); and

2. an exemption from the dealer registration requirement (the Registration Relief, and together with the Prospectus Relief, the Exemption Sought) so that such requirement does not apply to the Filer and its Local Affiliates (as defined below), the Funds and Equalis Capital France (the Management Company) in respect of trades in Units made pursuant to Employee Share Offerings to or with Canadian Employees.

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;

(b) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions, CQLR, c. V-1.1, r. 3, Regulation 11-102 respecting Passport System, CQLR, c. V-1.1, r. 1 and Regulation 45-106 respecting Prospectus Exemption, CQLR, c. V-1.1, r. 21 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation formed under the laws of France. It is not and has no current intention of becoming a reporting issuer under the securities legislation of any jurisdiction of Canada. The head office of the Filer is located in France. No shares of the Filer (the Shares) are listed on any stock exchange, and the Filer does not intend to list its securities on any stock exchange. No shareholders of the Filer are Canadian residents.

2. At the date hereof the Filer carries on business in Canada through three affiliates that employ Canadian Employees, REEL COH, REEL Aluminium and REEL ALESA (collectively, the Local Affiliates, and together with the Filer and other affiliates of the Filer, the REEL International Group).

3. Each Local Affiliate is an indirect controlled subsidiary of the Filer and is not, and has no current intention of becoming, a reporting issuer under the securities legislation of any jurisdiction of Canada.

4. The head office of the main Local Affiliate of the Filer, REEL COH., is located in Québec and the greatest number of employees in the REEL International Group in Canada reside in Québec.

5. At the date hereof and taking into account the Employee Share Offerings, Canadian Participants do not and will not beneficially own (which term, for the purposes of this paragraph, is deemed to include all Shares held by the Funds on behalf of Canadian Participants) more than 2,5% of the Shares as shown on the books of the Filer.

6. The Filer has established a global employee share offering (the Employee Share Offering 2022) and plans to put in place subsequent similar global employee share offerings during the four years (the Subsequent Employee Share Offerings, and with the Employee Share Offering 2022, the Employee Share Offerings) for Qualifying Employees (as defined below). The Employee Share Offerings involves an offering of Shares to be subscribed through the Funds.

7. Only persons who are employees of an entity forming part of the REEL International Group with at least three months' service on the last day of the subscription period and who are still employed on this last day of the subscription period for the Employee Share Offerings (the Qualifying Employees) will be allowed to participate in the Employee Share Offerings.

8. The Principal Classic Fund was established in 2022 for the purpose of implementing the Employee Share Offering 2022 and the Temporary Classic Funds will be established for the purpose of implementing the Subsequent Employee Share Offerings. There is no current intention for the Funds to become a reporting issuer under the securities legislation of any jurisdiction of Canada.

9. The Principal Classic Fund is registered with and has been approved by the French Autorité des marchés financiers (the French AMF). The Temporary Classic Funds established for Subsequent Employee Share Offerings will be registered with, and approved by, the French AMF.

10. Under the Employee Share Offerings, Canadian Participants will subscribe for Units and the Funds will then subscribe for Shares on behalf of Canadian Participants using the Canadian Participants' contributions.

a. The subscription period to the Principal Classic Fund for the Employee Share Offering 2022 will be limited to a period of three weeks, starting on or around June 1st, 2022. The subscription price per Principal Classic Unit will be the Canadian dollar equivalent of €10,00. This initial Principal Classic Unit valuation will be based on a 20% discount Share price of €77,27. The euro exchange rate used for the subscription will be fixed on May 31, 2022 and will correspond to the official spot rate as determined by the European Central Bank at this date. The Share price has been set by an independent appraiser, Oderis, (the Independent Appraiser) in accordance with regulations from the French AMF and as described in the terms and rules of the Principal Classic Fund (the Rules).

b. With respect to the Subsequent Employee Share Offerings:

i. The Canadian Participants will subscribe to Temporary Classic Units at a subscription price equal to the Share price certified by the Filer's auditor and following a valuation method determined by the Independent Appraiser in accordance with the regulations of the French AMF.

ii. Following the completion of a Subsequent Employee Share Offering, the relevant Temporary Classic Fund will be merged with the Principal Classic Fund (subject to the approval of the supervisory board of the FCPEs and the French AMF). The Temporary Classic Units held by the Canadian Participants will be replaced with Principal Classic Units on a pro rata basis and the Shares subscribed for will be held in the Principal Classic Fund (such transaction being referred to as the Merger).

11. A Canadian Participant's loss, if any, under the Employee Share Offerings will be limited to the Canadian Participant's contributions to the Employee Share Offerings and under no circumstances will a Canadian Participant be liable to the Filer or the Funds for any additional amounts.

12. The Units will be subject to a hold period of five years (the Lock-Up Period), subject to certain exceptions prescribed by French law and provided for in the Employee Share Offerings (such as long-term disability, death, or termination of employment).

13. At the end of the Lock-Up Period, a Canadian Participant may (a) request the redemption of Principal Classic Units in the Principal Classic Fund in consideration for a cash payment equal to the value of the Principal Classic Unit based on the current Share price as set by the Independent Appraiser or (b) continue to hold Units in the Principal Classic Fund and request the redemption of those Principal Classic Units at a later date in consideration for a cash payment equal to the value of the Unit based on the current Share price as set by the Independent Appraiser.

14. In the event of an early release resulting from a Canadian Participant exercising one of the exceptions to the Lock-Up Period and meeting the applicable criteria, the Canadian Participant may request the redemption of Principal Classic Units in the Principal Classic Fund in consideration for a cash payment equal to the value of the Principal Classic Unit based on the current Share price as set by the Independent Appraiser.

15. Any dividends paid on the Shares held by the Funds will be contributed to the relevant Funds and reinvested by the Funds in cash or cash equivalents on behalf of the Unit holder. To reflect this reinvestment, no new Units will be issued. Instead, the reinvestment will increase the asset base of the Unit of the relevant Funds as well as the value of the Units held by the Canadian Participants.

16. Under French law, an FCPE is a limited liability entity. The portfolio of the Funds will consist mostly of Shares and for the residual exposure of money market fund units, but may, from time to time, also include cash or cash equivalents in respect of dividends paid on the Shares (as described in paragraph 15). Initially, the portfolio of the Principal Classic Fund will consist of Shares for 95% and money market fund units for 5%.

17. The Management Company is a portfolio management company governed by the laws of France. The Management Company is registered with the French AMF as an investment manager and complies with the rules of the French AMF. The Management Company is not, and has no current intention of becoming, a reporting issuer under the securities legislation of any jurisdiction of Canada.

18. The Management Company's portfolio management activities in connection with the Employee Share Offerings and the Funds are limited to subscribing to Shares from the Filer, selling such Shares to the Filer at the Share price set by the Independent Appraiser as necessary in order to fund redemption requests and investing available cash in cash equivalents.

19. The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents about the Principal Classic Fund as provided by the Rules.

20. The Management Company is bound to act in the best interests of Canadian Participants and is liable to them, jointly with the Depositary (as defined below), for any violation of the rules and regulations governing FCPEs, for any self-dealing or for any negligence.

21. The entities forming part of the REEL International Group, the Funds and the Management Company, as well as any director, officer, employee, agent or representative thereof will not provide investment advice to the Canadians Employees with respect to an investment in the Shares or the Units nor to the Canadian Participants in respect of the holding or redemption of the Principal Classic Units.

22. Shares issued pursuant to the Employee Share Offerings will be deposited in the Funds through Banque Fédérative du Crédit Mutuel (the Depositary), a large French commercial bank subject to French banking legislation. The Depositary carries out orders to purchase, trade and sell securities in the portfolio and takes all necessary action to allow the Funds to exercise the rights relating to the securities held in their portfolio.

23. The accounts of the Funds are audited by chartered auditors, appointed for a period of six years with the agreement of the French AMF.

24. The value of the Principal Classic Units will be calculated and reported to the French AMF every six months, based on the net assets of the Principal Classic Fund divided by the number of Principal Classic Units outstanding, in accordance with the Rules. The value of the Units will be based on the value of the underlying Shares but the number of Units of the Funds will not correspond to the number of the underlying Shares. The underlying value of the Shares will be re-evaluated once a year based on the formula laid out by the Independent Appraiser in accordance with regulations from the French AMF and as described in the Rules.

25. All management charges relating to the Funds will be paid by the Filer, as provided in the Rules.

26. Participation in the Employee Share Offerings is voluntary, and the Canadian Employees will not be induced to participate in the Employee Share Offerings by expectation of employment or continued employment.

27. The total amount which may be invested by a Canadian Employee in each of the Employee Share Offerings cannot exceed 25 % of his or her estimated gross annual compensation for the calendar year in question.

28. The Filer adds for the Employee Share Offering 2022 to the subscriptions made by the Canadian Participants a financial contribution of 50 % of the subscriptions up to €610, then 20 % up to €14 335, unless expressly waived by said Canadian Employee. This financial contribution is applicable for the Employee Share Offering 2022 and may differ for the Subsequent Employee Share Offerings.

29. The Units are not transferable and will be not be listed on any exchange, and no market for the Units is expected to develop.

30. The Canadian Employees may request an information package in the French or English language, according to their preference, which will include a summary of the terms of the Employee Share Offerings and a tax notice, for information purposes only, containing a description of Canadian income tax consequences of subscribing to and holding Units of the Funds and requesting the redemption of Principal Classic Units for cash at the end of the Lock-Up Period.

31. Canadian Employees can have access, through their management or their human resource services, to a copy of a presentation of the Filer, its annual consolidated and audited financial statements, as well as a copy of the information documents of the Filer deposited with the French AMF relating to the Shares and the Rules. The new value of the Shares and general information on the business of the Filer will also be communicated annually to the Canadian Employees.

32. Canadian Participants will receive an initial statement of their holdings under the Employee Share Offerings, together with an updated statement at least once per year.

33. There are approximately 308 Qualifying Employees resident in Canada (with the greatest number, approximately 254, resident in Québec), who represent, in the aggregate, approximately 12 % of the number of employees in the REEL International Group worldwide as of April 2022.

34. Neither the Principal Classic Fund nor an entity forming part of the REEL International Group is in default of securities legislation of any jurisdiction of Canada. The Management Company is not in default of securities legislation of any jurisdiction of Canada.

Decision

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 with respect to any Subsequent Employee Share Offering under this decision completed within five years from the date of this decision, provided that the representations other than those in paragraphs 2, 28 and 33 remain true and correct with necessary adjustments in respect of the relevant Subsequent Employee Share Offering and Temporary Classic Fund.