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Accenture Ltd. - MRRS Decision
Headnote
MRRS - trades in securitiesof foreign issuer in connection with share incentive plan toemployees, executives and consultants ('participants'), includingtrades through agent and to former participants, exempt fromregistration requirements, provided conditions in s. 2.14(1)of MI 45-102 are satisfied - first trades exempt from registrationrequirements provided the first trade is executed on a foreignexchange or market - activities of SSB in connection with theplan exempt from registration requirements.
Applicable Ontario StatutoryProvisions
Securities Act, R.S.O. 1990,c. S.5, as am., ss. 25(1), 35(1)(12)(iii), 53(1), 72(1)(f)(iii),74(1).
Applicable Ontario Rule
OSC Rule 45-503 Trades to Employees,Executives and Consultants - ss. 2.2, 2.4, 3.3, 3.5.
Applicable Instrument
Multilateral Instrument 45-501Resale of Securities - s. 2.14(1).
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
ONTARIO AND QUÉBEC
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN MATTER OF
ACCENTURE LTD.
MRRS DECISION DOCUMENT
WHEREAS the local securitiesregulatory authority or regulator (the "Decision Maker")in each of Ontario and Québec (the "Jurisdictions")has received an application from Accenture Ltd. ("Accenture")for a decision pursuant to the securities legislation of theJurisdictions (the "Legislation") that (i) the requirementscontained in the Legislation to be registered to trade in asecurity (the "Registration Requirements") shall notapply to certain trades in securities of Accenture made in connectionwith the Accenture Ltd 2001 Share Incentive Plan (the "Plan");and (ii) the Registration Requirements shall not apply to firsttrades of Shares (as defined below) acquired under the Plan;
AND WHEREAS pursuantto the Mutual Reliance Review System for Exemptive Relief Applications(the "System"), the Ontario Securities Commissionis the principal regulator for this application;
AND WHEREAS Accenturehas represented to the Decision Makers as follows:
1. Accenture is an exemptedcompany registered in Bermuda, is not a reporting issuer underthe Legislation and has no present intention of becoming areporting issuer under the Legislation.
2. Accenture Inc. ("AccentureCanada") is an indirect, wholly-owned subsidiary of Accentureand was incorporated pursuant to the laws of the Provinceof Ontario. Accenture Canada is not a reporting issuer inany of the Jurisdictions and has no present intention of becominga reporting issuer under the legislation.
3. The authorized share capitalof Accenture is 20,000,000,000 Class A common shares ("Shares"),par value US$0.0000225 per share; 1,000,000,000 Class X commonshares, par value US$0.0000225 per share; and 2,000,000,000preferred shares, par value US$0.0000225 per share. As ofAugust 14, 2001, there were 343,307,238 Shares issued andoutstanding and as of July 18, 2001, there were 591,161,472Class X common shares issued and outstanding.
4. The Shares are listed andposted for trading on the New York Stock Exchange ("NYSE")and are registered with the United States Securities ExchangeCommission under the Securities Exchange Act of 1934, as amended.
5. The purpose of the Planis to aid Accenture and its affiliates (each an "AccentureCompany" and collectively, the "Accenture Companies")in rewarding employees, officers and directors ("CurrentEmployees") and consultants ("Consultants")and to motivate such individuals to exert their best effortson behalf of the Accenture Companies by providing incentivesthrough the granting of Awards (as defined below).
6. The Plan is administeredby a committee (the "Committee") of the board ofdirectors of Accenture (the "Board") or, at itselection, the Board, and may be terminated or amended by theCommittee at any time. The Committee may also grant Awardsto such additional individuals as it may determine.
7. Under the Plan, the Committeemay grant, inter alia, options to purchase Shares ("Options")and Restricted Share Units ("RSUs") as well as othershare-based awards (collectively, "Awards") (eachsuch individual granted an Award, a "Participant").
8. Accenture has appointedSalomon Smith Barney Inc. ("SSB") to act as itsagent in connection with the administration and operationof the Plan.
9. The role of SSB may include:(a) facilitating the exercise of Options by Participants;(b) maintaining accounts on behalf of Participants; (c) holdingShares on behalf of Participants; and (d) facilitating resalesof Shares acquired under the Plan through the facilities ofthe NYSE.
10. SSB is a corporation registeredunder applicable securities legislation in the United Statesand is registered as an international dealer, investment counseland portfolio manager in Ontario. SSB is not a registrantin Quebec.
11. There are approximately999 and 167 Current Employees, respectively, resident in Ontarioand Québec.
12. Participation in the Planby Participants is voluntary and Participants are not inducedto participate in the Plan or to exercise their Awards byexpectation of employment or continued employment with theAccenture Companies. Awards generally are not transferableotherwise than by will or the laws of decent and distribution.
13. In certain circumstances,Participants who were granted Awards during the term of theiremployment with or the term of their provision of servicesto the Accenture Companies will continue to have certain rightsin respect of such Awards following termination of their employmentor the completion of the provision of their services to theAccenture Companies ("Former Participants"). Inthe case of termination of employment or the termination ofthe provision of services as a result of death, disabilityor retirement, the Plan provides for the exercise of Optionsduring certain specified time periods, unless such periodsare modified by the Committee.
14. The Committee has establishedprocedures governing the exercise of Options. Generally, inorder to exercise an Option, the Participant must submit toAccenture a notice of exercise identifying the Option andthe number of Shares for which the Option is being exercised,together with full payment for the Shares underlying the Options.The Option exercise price may be paid in cash or, where permittedby the Committee, Shares or by way of a cashless exercise.
15. A copy of the U.S. Prospectusrelating to the Plan will be delivered to each Participantwho is granted an Award under the Plan. The annual reports,proxy materials and other materials Accenture is requiredto file with the SEC will be provided to Participants whoacquire Shares under the Plan at the same time and in thesame manner as such documents are provided to U.S. shareholders.
16. Participants or theirlegal representatives who wish to sell Shares acquired underthe Plan may do so through SSB.
17. At the time of any grantof Awards under the Plan, holders of Shares whose last addressas shown on the books of Accenture were in Canada, and inany of the Jurisdictions, will not hold more than 10% of theoutstanding Shares and will not represent in number more than10% of the total number of holders of Shares.
18. Because there is no marketfor the Shares in Canada and none is expected to develop,any resale of the Shares acquired under the Plan will be effectedthrough the facilities of, and in accordance with the rulesand laws applicable to, a stock exchange or organized marketoutside of Canada on which the Shares may be listed or quotedfor trading.
19. The Legislation of Ontariodoes not contain exemptions from the Registration Requirementsfor certain trades in Awards and Shares to, by, with and onbehalf of Participants, Former Participants or their legalrepresentatives, including trades carried out with or throughSSB.
20. When SSB sells Shareson behalf of Participants, Former Participants or their legalrepresentatives, such persons and SSB, as applicable, arenot able to rely on the exemption from the Registration Requirementcontained in the Legislation of certain of the Jurisdictionsfor trades made by a person or company acting solely througha registered dealer under the Legislation.
AND WHEREAS pursuantto the System this Decision Document evidences the decisionof each Decision 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 met;
THE DECISION of the DecisionMakers pursuant to the Legislation is that:
(a) the Registration Requirementsshall not apply in Ontario to any trade or distributionof Awards made in connection with the exercise of Optionsunder the Plan, including trades and distributions involvingSSB, Participants, Former Participants or the legal representativeof Participants or Former Participants, provided that thefirst trade in Shares acquired pursuant to this Decisionin Ontario shall be deemed a distribution under the Legislationof such Jurisdiction unless the conditions in section 2.14(1)of Multilateral Instrument 45-102 are satisfied;
(b) the first trade in Sharesacquired through the Plan, including a first trade in Shareseffected through SSB, shall not be subject to the RegistrationRequirements in Ontario, provided that such first tradeis made to a person or company outside of Canada or, inthe case of a Former Participant or the legal representativeof a Former Participant, such first trade is made throughan exchange or market outside of Canada; and
(c) the Registration Requirementsshall not apply to SSB for the activities it performs inconnection with the Plan.
June 27, 2002.
"Robert W. Korthals" "HaroldP. Hands"