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Bank of America Corporation - MRRS Decision
Headnote
MRRS for Exemptive Relief Applications - reliefgranted from the registration requirements for trades by formerparticipants and permitted transferees of securities acquiredunder an employee stock plan - relief granted from the issuerbid requirements for acquisitions of shares under the plan -revocation of a previous order relating to the plan
Applicable Ontario Statutes
Securities Act R.S.O. 1990, c. S.5, as am.,ss. 25, 74(1), 95, 96, 97, 98, 100, 104(2)(c).
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
BRITISH COLUMBIA, ALBERTAAND
ONTARIO
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
BANK OF AMERICA CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta and Ontario (the "Jurisdictions")has received an application from Bank of America Corporation(the "Filer") for a decision under the securitieslegislation of the Jurisdictions (the "Legislation")that:
(a) the registration requirement will notapply to certain trades in shares of the common stock ofthe Filer (the "Shares") under the Bank of AmericaCorporation Key Employee Stock Plan (the "Plan"),and
(b) the requirements relating to the deliveryof an offer and issuer bid circular and any notices of changeor variation thereto, minimum deposit periods and withdrawalrights, take-up and payment for securities tendered to anissuer bid, disclosure, restrictions upon purchases of securities,financing, identical consideration, collateral benefitsand form filing (the "Issuer Bid Requirements")will not apply to certain acquisitions of Shares by theFiler under the Plan;
AND WHEREAS the Filer was previouslygranted a decision by the Decision Makers in British Columbiaand Alberta dated February 12, 2001 (the "Previous Decision")under the Mutual Reliance Review System for Exemptive ReliefApplications (the "System") that provided relief fromthe Registration Requirement for trades in securities underthe Plan;
AND WHEREAS the Filer has also appliedto the Decision Makers in British Columbia and Alberta for adecision under the Legislation revoking the Previous Decision;
AND WHEREAS under the System, the BritishColumbia Securities Commission is the principal regulator forthis application;
AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice14-101;
AND WHEREAS the Filer has representedto the Decision Makers as follows:
1. the Filer is incorporated under the lawsof Delaware;
2. the Filer, together with its affiliates(collectively, the "Bank of America Companies"),provide a diversified range of banking and non-banking financialservices and products in the U.S. and in selected internationalfinancial markets;
3. the Filer is registered with the SecuritiesExchange Commission (the "SEC") in the U.S. underthe U.S. Securities Exchange Act of 1934 (the "ExchangeAct") and is not exempt from the reporting requirementsof the Exchange Act;
4. the Filer is not a reporting issuer inany of the Jurisdictions and has no present intention of becominga reporting issuer in any of the Jurisdictions;
5. the Filer's authorized share capital consistsof 5,000,000,000 Shares and 100,000,000 shares of preferredstock ("Preferred Shares") of which, as of March1, 2002, there were 1,536,219,076 Shares and 1,483,324 PreferredShares outstanding;
6. the Shares are listed for trading on theNew York Stock Exchange ("NYSE"), the Pacific StockExchange, the London Stock Exchange, and certain Shares arelisted on the Tokyo Stock Exchange;
7. the Filer intends to use the services ofone or more agents/brokers in connection with the Plan (eachan "Agent"); Salomon Smith Barney Inc. ("SSB")has initially been appointed by the Filer to act as an Agentfor the Plan;
8. SSB is not registered to trade in any ofthe Jurisdictions, but is registered under applicable U.S.securities or banking legislation to conduct retail tradesand has been authorized by the Filer to provide services underthe Plan;
9. if SSB is replaced, or if additional Agentsare appointed, the replacement or additional Agents will alsonot be registered to trade in any of the Jurisdictions, butwill be registered under applicable U.S. securities or bankinglegislation to conduct retail trades and will be authorizedby the Filer to provide services under the Plan;
10. the purpose of the Plan is to promotethe success and enhance the value of the Filer by linkingthe personal interests of the Participants (as defined below)to those of the Filer's shareholders, and to provide Participantswith an incentive for outstanding performance;
11. subject to adjustment as described inthe Plan, the maximum number of Shares that may be issuedunder the Plan is 0.75% of the outstanding Shares as of thefirst business day of each calendar year from 1995 through1998, and 1.50% of the outstanding Shares as of the last dayof the immediately preceding calendar year of each calendaryear from 1999 through 2004, plus an additional 38,724,102Shares that became available for issuance on the occurrenceof other corporate events between 1995 and 1998;
12. under the Plan, options on Shares ("Options"),stock appreciation rights ("SARs"), performanceShares ("Performance Shares") and restricted stock("Restricted Shares") (Options, SARs, PerformanceShares, Restricted Shares and Shares are collectively "Awards")may be granted to eligible employees of the Bank of AmericaCompanies ("Participants");
13. there are 61 Participants in Canada eligibleto receive Awards under, or participate in, the Plan;
14. participation in the Plan is entirelyvoluntary and employees will not be induced to participatein the Plan by expectation of employment or continued employmentwith the Bank of America Companies;
15. all necessary securities filings havebeen made in the U.S. in order to offer the Plan to Participantsresident in the U.S.;
16. a prospectus prepared according to U.S.securities laws describing the terms and conditions of thePlan will be delivered to each Participant who receives anAward under the Plan; the annual reports, proxy materialsand other materials the Filer provides to its U.S. shareholderswill be provided or made available upon request to Participantsresident in the Jurisdictions who acquire and retain Sharesunder the Plan at substantially the same time and in substantiallythe same manner as such documents would be provided to U.S.shareholders;
17. the Plan is administered by the boardof directors (the "Board") of the Filer or a committeeappointed by the Board (the "Committee");
18. generally, in order to exercise an Optiongranted under the Plan, an optionee must submit a writtennotice of exercise to the Filer or to the Agent identifyingthe Option, the number of Shares being purchased and the methodof payment;
19. the Plan provides that, on exercise ofOptions, the exercise price to acquire the Shares may be paid(a) in cash, (b) by the surrender of Shares owned by the Optionholder to the Filer for cancellation ("Stock-Swap Exercises")or to the Agent for resale, (c) by the retention of a numberof Shares by the Filer from the total number of Shares intowhich the Option is exercised, (d) by a combination of theforegoing, or (e) by such other consideration and method ofpayment permitted by the Committee at an exercise price determinedin accordance with the terms of the Plan;
20. Options will vest and will be exercisableas specified in the Option agreement as determined by theCommittee; the exercise price for each Option will be establishedin the discretion of the Board, provided that the exerciseprice per Share cannot be less than the Fair Market Value(as defined in the Plan) of a Share on the effective dateof grant of the Option;
21. the term of each Option will be fixedby the Committee, provided, however, that terms will be nomore than ten (10) years from the date of grant; the dateof exercise will be chosen by the Option holder;
22. the Committee may grant SARs unrelatedor related to Options or any combination of both; generally,a SAR will entitle a Participant to receive a payment in cash,Shares of equivalent value, or a combination thereof in anamount determined in accordance with the terms of the Plan;SARs will be exercisable at such time and subject to suchterms and conditions as determined by the Committee in itssole discretion;
23. Restricted Shares will be subject to suchrestrictions as the Committee may impose; unless otherwisedetermined by the Committee, upon termination of employmentfor any reason all Restricted Shares still subject to restrictionwill be forfeited and reacquired by the Filer;
24. Performance Shares may be granted to Participantsin such amount and upon such terms, at any time and from timeto time, as determined by the Committee; the number and/orvesting of Performance Shares granted will be contingent onthe attainment of certain performance goals or other conditionsover a period of time, all as determined by the Committeeand evidenced by an Award agreement;
25. the Filer has the right to deduct applicabletaxes from any payment under the Plan by withholding, at thetime of delivery or vesting of cash or Shares under the Plan,an appropriate amount of cash or Shares ("Share WithholdingExercises") or a combination thereof, or to take suchother action as may be necessary in the opinion of the Fileror the Committee to satisfy all obligations for the withholdingof such taxes;
26. Awards and rights under the Plan are nottransferable by a Participant other than by will or beneficiarydesignation or by the laws of intestacy, unless otherwiseprovided for by the Committee;
27. following the termination of a Participant'srelationship with the Bank of America Companies for reasonsof disability, retirement, termination, change of controlor any other reason (such Participants are "Former Participants"),and where Awards have been transferred by will or pursuantto a beneficiary designation or the laws of intestacy or otherwiseon the death of a Participant (beneficiaries of such Awardsare "Permitted Transferees"), the Former Participantsand Permitted Transferees will continue to have rights inrespect of the Plan ("Post-Termination Rights");
28. Post-Termination Rights may include, amongother things, (a) the right to exercise Awards for a perioddetermined in accordance with the Plan; and (b) the rightto sell Shares acquired under the Plan through the Agent;
29. Post-Termination Rights will only be effectivewhere such rights accrued under the Plan while the Participanthad a relationship with the Bank of America Companies;
30. the Agent may (a) disseminate informationand materials to Participants in connection with the Plan(b) assist with the administration of and general record keepingfor the Plan; (c) hold Shares on behalf of Participants, FormerParticipants and Permitted Transferees in limited purposebrokerage accounts; (d) facilitate Option exercises (includingcashless exercises and Stock Swap Exercises) under the Plan;(e) facilitate the payment of withholding taxes, if any, bycash or the tendering or withholding of Shares; (f) facilitatethe reacquisition of Awards under the terms of the Plan; and(g) facilitate the resale of Shares issued in connection withthe Plan;
31. as there is no market for the Shares inCanada and none is expected to develop, it is expected thatthe resale by Participants, Former Participants and PermittedTransferees of the Shares acquired under the Plan will beeffected through the NYSE;
32. as of February 1, 2002, Canadian shareholdersdid not own, directly or indirectly, more than 10% of theissued and outstanding Shares and did not represent in numbermore than 10% of the Filer's shareholders;
33. under the Plan, the acquisition of Sharesby the Filer under a Stock Swap Exercise or Share WithholdingExercise may constitute an issuer bid;
34. the issuer bid exemptions in the Legislationmay not be available for such acquisitions by the Filer sincethe acquisitions may occur at a price that is not calculatedin accordance with the "market price", as definedin the Legislation, and may be made from Permitted Transferees;and
35. the Legislation of all of the Jurisdictionsdoes not contain exemptions from the Registration Requirementfor all the intended trades in Awards under the Plan;
AND WHEREAS under the System, this DecisionDocument evidences the decision of each Decision Maker (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:
(a) the registration requirement will notapply to the first trade by Former Participants and PermittedTransferees in Shares acquired under the Plan provided thatthe conditions in subsection 2.14(1) of Multilateral Instrument45-102 Resale of Securities are satisfied; and
(b) the Issuer Bid Requirements will notapply to the acquisition by the Filer of Shares from Participants,Former Participants or Permitted Transferees provided suchacquisitions are made in accordance with the terms of thePlan.
THE FURTHER DECISION of the DecisionMakers in British Columbia and Alberta under the Legislationis that the Previous Decision is revoked.
October 25, 2002.
"Brenda Leong"