Manulife Financial Corporation et al. - MRRS Decision

Headnote

Exemptions from most continuousdisclosure requirements granted to a trust on specified conditions,including the conditions that both the parent company and itspublicly traded holding company remain a reporting issuer andsecurity holders of the trust receive the continuous disclosuredocuments of the holding company. Because of the terms of thetrust a security holder's return depends upon the financialcondition of the parent company and the holding company andnot that of the trust. Trust offered trust units to the publicin order to provide the parent company with a cost effectivemeans of raising capital for Canadian insurance company regulatorypurposes. No distributions are payable on the trust units ifthe parent company fails to pay dividends on its preferred sharesand if distributions are not paid the parent company is preventedfrom paying dividends on its preferred shares. Trust units arenot redeemable but are exchangeable at the option of the holderafter a fixed term for shares of the parent company. Trust unitsare non-voting. Holders of trust securities have no claim orentitlement to the income of the Trust or the assets held bythe Trust.

Applicable Ontario StatutoryProvisions

Applicable Ontario RulesCited

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MRRS DECISION DOCUMENT

WHEREAS the local securitiesregulatory authority or regulator (the Decision Maker and collectivelythe Decision Makers) in each of the Provinces of British Columbia,Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia,and Newfoundland and Labrador (the Jurisdictions) has receivedan application (the Application) from Manulife Financial Corporation( MFC ), The Manufacturers Life Insurance Company ( MLI ) andManulife Financial Capital Trust (the Trust) for a decisionpursuant to the securities legislation of the Jurisdictions(the Legislation), that the requirements contained in the Legislationto:

(a) file interim financialstatements and audited annual financial statements (collectively,Financial Statements) with the Decision Makers and deliversuch statements to the security holders of the Trust;

(b) make an annual filing( Annual Filing ) with the Decision Makers in lieu of filingan information circular, where applicable;

(c) file an annual report( Annual Report ) and an information circular with the DecisionMaker in Quebec and deliver such report or information circularto the security holders of the Trust resident in Quebec;

(d) prepare and file underOSC Rule 51-501 AIF and MD&A, section 159 of the Regulationto the Securities Act (Quebec) and the SaskatchewanInstrument 51-501, an annual information form ( AIF ), includingmanagement's discussion and analysis ( MD&A ) of thefinancial condition and results of operation of the Trustand send such MD&A to security holders of the Trust(collectively the AIF and MD&A Requirements );

shall not apply to the Trust,subject to certain terms and conditions;

AND WHEREAS pursuantto the Mutual Reliance Review System for Exemptive Relief Applications(the System), the Ontario Securities Commission is the PrincipalRegulator for this application;

AND WHEREAS MFC, MLIand the Trust have represented to the Decision Makers that:

The Manufacturers Life InsuranceCompany

1. MLI was incorporated onJune 23, 1887, by a Special Act of Parliament of the Dominionof Canada. Pursuant to the provisions of the then Canadianand British Insurance Companies Act (Canada), the predecessorlegislation to the Insurance Companies Act (Canada)( ICA ), MLI undertook a plan of mutualization and becamea mutual life insurance company on December 19, 1968. On September23, 1999 MLI demutualized (the Demutualization) pursuant toletters patent of conversion issued by the Minister of Finance.

2. MLI's head office is locatedin Ontario. MLI is regulated by the Superintendent of FinancialInstitutions (Canada) and it is licensed under the insurancelegislation of each province and territory of Canada. MLIis a reporting issuer (or equivalent) in each of the provincesand territories of Canada and has held that status since filinga non-offering prospectus on May 19, 1994. To the best ofits knowledge, information and belief, MLI is currently notin default of its reporting requirements under the Act orthe Regulations made thereunder.

3. MLI has authorized sharecapital consisting of an unlimited number of Common Shares,an unlimited number of Class A Shares, issuable in series,an unlimited number of Class B Shares, issuable in series,an unlimited number of Class C Shares, issuable in series,and an unlimited number of Class D Shares, issuable in series.As of December 31, 2001, only Common Shares and 40,000 ClassA Shares Series 1 of MLI (the MLI Class A Shares Series 1)are issued and outstanding. Pursuant to the Demutualization,MFC became the holder of all of the issued and outstandingCommon Shares of MLI. MFC subscribed for the Class A SharesSeries 1 of MLI in connection with the Offering (as definedbelow).

4. MLI obtained a decisiondocument dated May 19, 2000 (the 2000 MRRS Decision), pursuantto which the requirements contained in the Legislation todisclose material changes, to file Financial Statements andto file an Annual Report shall not apply to MLI subject tocertain specified conditions, including that MFC comply withsuch requirements, and the requirement that MLI file an AIFshall be satisfied by the filing of an AIF by MFC.

Manulife Financial Corporation

5. MFC was incorporated underthe ICA on April 26, 1999. On September 23, 1999, in connectionwith the Demutualization, MFC became the sole shareholderof MLI and certain holders of participating life insurancepolicies of MLI (the Eligible Policyholders) became shareholdersof MFC. On September 24, 1999 MFC filed a final prospectusin connection with an initial treasury and secondary offeringconducted in Canada and the United States. MFC is a publiclytraded company on The Toronto Stock Exchange, the New YorkStock Exchange, the Stock Exchange of Hong Kong Limited andthe Philippine Stock Exchange. The authorized share capitalof MFC consists of Class A Shares, issuable in series, ClassB Shares, issuable in series, and Common Shares of which approximately482 million Common Shares were issued and outstanding as ofDecember 31, 2001.

6. MFC is a reporting issuerin each of the provinces and territories of Canada. To thebest of its knowledge, information and belief, MFC is currentlynot in default of its reporting requirements under the Actor the Regulations made thereunder.

7. MFC has no material assetsor material liabilities other than the shares that it holdsin MLI. MFC conducts its operations through MLI and MLI'sbranches and subsidiaries.

Manulife Financial CapitalTrust

8. The Trust is an open-endtrust established under the laws of the Province of Ontarioby The Canada Trust Company ( Trustee), as trustee, pursuantto a declaration of trust made as of October 30, 2001, asamended and restated on December 5, 2001 (the Declarationof Trust).

9. The outstanding securitiesof the Trust consist of two classes of units: (i) SpecialTrust Securities ( Special Trust Securities ) and (ii) ManulifeFinancial Capital Securities ( MaCS ), issuable in series(such Special Trust Securities and MaCS are collectively referredto as the Trust Securities ).

10. The Trust was establishedsolely for the purpose of effecting the Offering and possiblefuture offerings of securities in order to provide MLI (andindirectly, MFC) with a cost effective means of raising capitalfor Canadian insurance company regulatory purposes by meansof (i) creating and selling the Trust Securities, and (ii)acquiring and holding Trust Assets, which consist primarilyof debentures issued by MLI (the MLI Debentures ). The MLIDebentures generate income for distribution to holders ofthe Trust Securities. The Trust does not and will not carryon any operating activity other than in connection with theOffering and any future offerings.

11. The Trust is a reportingissuer, or the equivalent, in each of the Jurisdictions asa result of the filing of the final prospectus in connectionwith the Offering dated December 5, 2001 (the Prospectus )and the issuance of the final MRRS Decision Document in relationto the Prospectus.

MaCS

12. The Trust distributedMaCS - Series A (MaCS - Series A) and MaCS - Series B (MaCS- Series B) in the Jurisdictions under the Prospectus (theOffering). The MaCS - Series A are listed on The Toronto StockExchange. The MaCS - Series B will not be listed on any publicsecurities exchange. The Trust also issued and sold 2,000Special Trust Securities to MLI in connection with the Offering.

13. The Prospectus also qualifiedcertain other related securities for distribution in the Jurisdictions,including the Conversion Right which will allow the Trustto satisfy the Holder Exchange Right and the Automatic ExchangeRight (each as defined below).

14. The Trust used the proceedsof the offering of MaCS - Series A to purchase a debentureissued by MLI (the MLI A Debenture) and the proceeds of theoffering of MaCS - Series B to purchase a second debentureissued by MLI (the MLI B Debenture). MLI is considering subsequentofferings of MaCS (to be designated as Series C, D, etc.)by the Trust. The proceeds from the issue of each additionalseries of MaCS would be used by the Trust to purchase a separatedebenture from MLI.

15. For simplicity, the balanceof this decision generally only refers to the MaCS - SeriesA, Class A Shares Series 2 of MLI (the MLI Class A SharesSeries 2), Class A Shares Series 3 of MLI (the MLI Class AShares Series 3) and the MLI A Debenture because the featuresof each series of MaCS and each related debenture issued byMLI are, in the case of the MaCS - Series B and the MLI BDebenture, and would be, in the case of subsequent offeringsof MaCS, the same as the MaCS - Series A and the MLI A Debenturedescribed in this Application except for the following:

(a) the indicated yield(constituted by the distribution payable on each seriesof MaCS) may be different;

(b) the interest rate oneach debenture may be different but will correspond to theindicated yield of the particular corresponding series ofMaCS;

(c) the redemption dateof each debenture will be different; and

(d) each series of MaCSand the corresponding debenture will be exchangeable orconvertible into separate series of shares of MLI with attributessimilar to the MLI Class A Shares Series 2 and Series 3,except that the dates upon which various rights arise maybe different from the MaCS - Series A and the MLI ClassA Series 2 and Series 3. All of these terms for the MaCS-SeriesA and the MaCS-Series B were fully set forth in the Prospectusand the terms of subsequent offerings of MaCS would be setforth in the prospectus prepared in connection with suchofferings.

16. Subject to paragraphs17 and 18, each MaCS - Series A entitles the holder (MaCSHolders) to receive a fixed cash distribution (a Distribution)payable by the Trust on the last day of June and Decemberof each year (each such day, a Distribution Date and eachperiod from the Distribution Date to but excluding the nextDistribution Date, a Distribution Period).

17. MaCS Holders are not entitledto receive Distributions in respect of a particular DistributionDate if (i) MLI fails to declare dividends on its MLI ClassA Shares Series 1 or (ii) MLI has not declared regular cashdividends on its public preferred shares, in either case,in the three month period immediately prior to the commencementof the Distribution Period ending on the day preceding thatDistribution Date.

18. Pursuant to the shareexchange agreement entered into by MFC, MLI, the Trust andthe Exchange Trustee on December 10, 2001, MFC and MLI haveagreed, for the benefit of the holders of MaCS - Series A,that, in the event the Trust fails, on any Distribution Date,to pay in full Distributions on the MaCS - Series A to whichthe MaCS Holders are entitled, (i) MLI will not pay dividendsof any kind on its preferred shares, and (ii) if MLI doesnot have any preferred shares outstanding, MFC will not paydividends of any kind on its preferred shares or the MFC CommonShares, in each case, until a specific period of time haselapsed, unless the Trust first pays such Distribution (orthe unpaid portion thereof) to MaCS Holders.

19. Upon the occurrence ofcertain adverse tax events or events relating to the treatmentof MaCS - Series A for capital purposes, subject to regulatoryapproval and on not less than 30 nor more than 90 days' priorwritten notice, MaCS - Series A will be redeemable, at theoption of the Trust and with the approval of the Superintendentof Financial Institutions (Canada) (the Superintendent), inwhole (but not in part) for a cash amount.

20. On December 31, 2006 andon any subsequent Distribution Date thereafter, subject toregulatory approval and on not less than 30 nor more than60 days' prior written notice, the MaCS - Series A will beredeemable in whole or in part for a cash amount, at the optionof the Trust and subject to the approval of the Superintendent.

21. Holders of MaCS - SeriesA will have the right (the Holder Exchange Right), at anytime, to surrender all or part of their MaCS - Series A tothe Trust at a price for each MaCS - Series A equal to 40MLI Class A Shares Series 2.

22. Each MaCS - Series A willbe exchanged automatically (the Automatic Exchange) withoutthe consent of the holder, for 40 MLI Class A Shares Series3 if: (i) an application for a winding-up order in respectof MLI pursuant to the Winding-up and Restructuring Act (Canada)(the Winding-up Act) is filed by the Attorney General of Canadaor a winding-up order in respect of MLI pursuant to the Winding-upAct is granted by a court; (ii) the Superintendent advisesMLI in writing that the Superintendent has taken control ofMLI or its assets pursuant to the ICA: (iii) the Superintendentadvises MLI in writing that MLI has a net Tier 1 capital ratioof less than 75% or an MCCSR ratio of less than 120%; (iv)the board of directors of MLI advises the Superintendent inwriting that MLI has a net Tier 1 capital ratio of less than75% or an MCCSR ratio of less than 120%; or (v) the Superintendentdirects MLI pursuant to the ICA to increase its capital orto provide additional liquidity and MLI elects to cause theexchange as a consequence of the issuance of such directionor MLI does not comply with such direction to the satisfactionof the Superintendent within the time specified.

23. The Holder Exchange Rightand the Automatic Exchange will be effected through the rightto convert the whole or a part of the MLI A Debenture intoMLI Class A Shares Series 2 and MLI Class A Shares Series3, respectively (the Conversion Right). Upon the exerciseof the Holder Exchange Right or the Automatic Exchange, theTrust will convert the corresponding principal amount of theMLI A Debenture into MLI Class A Shares Series 2 or MLI ClassA Shares Series 3, as the case may be.

24. The MLI Class A SharesSeries 2 and the MLI Class A Shares Series 3 will be redeemableafter specified dates, at the option of MLI and subject toregulatory approvals, by the payment of a cash amount or bythe delivery of MFC Common Shares.

25. On and after June 30,2051, the MLI Class A Shares Series 2 and MLI Class A SharesSeries 3 will be exchangeable, at the option of the holder,into MFC Common Shares, except under certain circumstances.

26. As set forth in the Declarationof Trust, MaCS - Series A are non-voting except in certainlimited circumstances and Special Trust Securities entitlethe holders to vote.

27. Except to the extent thatthe Distributions are payable to MaCS Holders and, other thanin the event of termination of the Trust (as set forth inthe Declaration of Trust), MaCS Holders have no claim or entitlementto the income of the Trust or the assets held by the Trust.

28. In certain circumstances(as described in paragraph 22 above), including at a timewhen MLI's financial condition is deteriorating or proceedingsfor the winding-up of MLI have been commenced, the MaCS -Series A will be automatically exchanged for MLI Class A SharesSeries 3 without the consent of MaCS Holders. As a result,MaCS Holders will have no claim or entitlement to the assetsheld by the Trust, other than indirectly in their capacityas preferred shareholders of MLI.

29. MaCS Holders may not takeany action to terminate the Trust.

30. The Trust has not requestedrelief for the purposes of filing a short form prospectuspursuant to National Instrument 44-101 Short Form ProspectusDistributions (NI 44-101) (including, without limitation,any relief which would allow the Trust to use MFC's AIF asa current AIF of the Trust) and no such relief is providedby this Decision Document from any of the requirements ofNI 44-101.

31. The terms of the MaCS,the Share Exchange Agreement and the various covenants ofMFC and MLI given in connection with an offering of the MaCSas well as the extensive role of MLI and its affiliates inthe day-to-day management of the business and affairs of theTrust, lead to the conclusion that it is information withrespect to the affairs and financial performance of MFC andMLI, as opposed to that of the Trust itself, that is meaningfulto holders of MaCS. Pursuant to the 2000 MRRS Decision, itwas decided that it was not necessary for MLI to disclosematerial changes, file Financial Statements or file an AnnualReport, so long as MFC did so on its own behalf, because adequatedisclosure would be provided to the holders of securitiesissued by MLI pursuant to MFC's filings. MFC's filings andthe delivery by MFC to holders of MaCS of the same materialdelivered to shareholders of MFC will provide holders of MaCSand the general investing public with all information requiredin order to make an informed decision relating to an investmentin MaCS. Information regarding MFC is relevant both to aninvestor's expectation of being paid the indicated yield onthe MaCS as well as the return of the investor's principal.

AND WHEREAS pursuantto the System this MRRS Document evidences the decision of eachDecision Maker (collectively, the Decision);

AND WHEREAS each of theDecision Makers is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdictionto make the Decision has been meet;

THE DECISION of the DecisionMakers under the Legislation is that the requirement containedin the Legislation:

(a) to file Financial Statementswith the Decision Makers and deliver such statements toholders of Trust Securities;

(b) to make an Annual Filing,where applicable, with the Decision Makers in lieu of filingan information circular; and

(c) to file an Annual Reportand an information circular with the Decision Maker in Quebecand deliver such report or information circular to holdersof Trust Securities resident in Quebec;

shall not apply to the Trustfor so long as:

(i) MFC remains a reportingissuer under the Legislation;

(ii) MLI remains a reportingissuer under the Legislation;

(iii) MFC files with theDecision Makers, in electronic format under the Trust'sSEDAR profile, the documents listed in clauses (a) to (c)above of this Decision, at the same time as they are requiredunder the Legislation to be filed by MFC;

(iv) the Trust pays allfiling fees that would otherwise be payable by the Trustin connection with the filing of the documents referredto in clauses (a) to (c) above of this Decision;

(v) MFC sends its FinancialStatements and Annual Filing, where applicable, to holdersof Trust Securities and its Annual Report to holders ofTrust Securities resident in the Province of Quebec at thesame time and in the same manner as if the holders of TrustSecurities were holders of MFC Common Shares;

(vi) all outstanding securitiesof the Trust are either MaCS or Special Trust Securities;

(vii) the rights and obligations(other than the economic terms thereof) of holders of additionalseries of MaCS are the same in all material respects asthe rights and obligations of the holders of MaCS - SeriesA and MaCS - Series B at the date hereof; and

(viii) all of the outstandingSpecial Trust Securities are beneficially owned by MLI orany of its affiliates and all of the issued and outstandingvoting shares of MLI or of its affiliate which owns theSpecial Trust Securities are beneficially owned by MFC;

and provided that this Decisionshall expire 30 days after:

(A) the date that MLI canno longer rely on the 2000 MRRS Decision; or

(B) the date a materialadverse change occurs in the affairs of the Trust.

March 21, 2002.

"Paul M. Moore"                    "RobertW. Korthals"

AND THE FURTHER DECISIONof the Decision Makers in Ontario, Quebec & Saskatchewanis that the AIF and MD&A Requirements shall not apply tothe Trust for so long as:

(i) the conditions set outin clauses (i), (ii), (vi), (vii) and (viii) of the Decisionabove are complied with;

(ii) MFC files the AIF andthe annual and interim MD&A with the Decision Makers,in electronic format under the Trust's SEDAR profile atthe same time as they are required under the Legislationto be filed by MFC;

(iii) the Trust pays allfiling fees that would otherwise be payable by the Trustin connection with the filing of the documents referredto in clauses (a) to (c) above of this Decision;

(iv) MFC sends its annualand interim MD&A to holders of Trust Securities at thesame time and in the same manner as if the holders of TrustSecurities were holders of MFC Common Shares;

and provided that this Decisionshall expire 30 days after:

(A) the date that MLI canno longer rely on the 2000 MRRS Decision; or

(B) the date a materialadverse change occurs in the affairs of the Trust.

March 21, 2002.

"John Hughes"