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.
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 1(1), 107, 108, 121(2)(a)(ii).
Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am., Part VIII.
National Instrument 55-101 - Exemption FromCertain Insider Reporting Requirements.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
ALBERTA, SASKATCHEWAN, MANITOBA,
ONTARIO, QUÉBEC, NOVASCOTIA, AND
NEWFOUNDLAND AND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
BALLARD POWER SYSTEMS INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof Alberta, Saskatchewan, Manitoba, Ontario, Québec,Nova Scotia, and Newfoundland and Labrador (the "Jurisdictions")has received an application from Ballard Power Systems Inc.("Ballard") for a decision pursuant to the securitieslegislation of the Jurisdictions (the "Legislation")that the requirement of the Legislation for an insider of areporting issuer to file reports disclosing the insider's director indirect beneficial ownership of, or control or directionover, securities of the reporting issuer shall not apply tocertain of the officers of Ballard;
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, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice 14-101;
AND WHEREAS Ballard has represented tothe Decision Maker that:
1. Ballard was amalgamated under the CanadaBusiness Corporations Act on May 30, 1989.
2. Ballard develops, manufactures and marketsproton exchange membrane fuel cell products and other productsfor use in transportation, power generation and portable powermarkets.
3. Ballard is a reporting issuer in each provinceand territory of Canada and its common shares are listed andposted for trading on the Toronto Stock Exchange and the NationalAssociation of Securities Dealers Automated Quotation.
4. Ballard is not in default of any requirementsof the Legislation.
5. Each of Ballard Power Systems Corporation("BPSC") and Ballard Power Systems AG ("BPSAG") is a "major subsidiary" of Ballard (asthat term is defined in National Instrument 55-101) ("NI55-101").
6. Currently, Ballard has approximately 33persons who are "insiders" of Ballard under theLegislation by reason of being a director or officer of Ballardor a major subsidiary of Ballard (the "Insiders").
7. None of the Insiders is exempt from theinsider reporting requirements contained in the Legislationby reason of an existing exemption such as NI 55-101 or aprevious decision or order.
8. Ballard has developed a stock trading policy(the "Policy") that applies to all the Insidersand other employees who have knowledge of material undisclosedinformation.
9. The Policy was developed to ensure thatits directors, officers and employees who are "insiders"under the Legislation are aware of their responsibilitiesunder the Legislation and to assist them in complying withthe Legislation.
10. Under the Policy, the Insiders and otheremployees with knowledge of material undisclosed informationmay not trade in securities of Ballard. In addition, the Insidersmay not trade in securities of Ballard during "black-out"periods as determined by Ballard.
11. Ballard considered the job requirementsand principal functions of the Insiders to determine whichof them met the definition of "nominal vice president"(or who hold an equivalent title and perform such equivalentfunctions and duties) contained in Canadian Securities AdministratorsStaff Notice 55-306 (the "Staff Notice") and hascompiled a list of those Insiders who, in the opinion of Ballard,meet the criteria set out in the Staff Notice (the "ExemptedOfficers").
12. Each of the Exempted Officers satisfiesthe following criteria (the "Exempt Officer Criteria"):
(a) the individual is a vice president of,or holds an equivalent title and performs such equivalentfunctions and duties at, Ballard, BPSC or BPS AG;
(b) the individual is not a member of Ballard'sexecutive team and is not appointed by the board of directors;
(c) the individual is not in charge of aprincipal business unit, division or function of Ballardor a major subsidiary of Ballard;
(d) the individual does not, in the ordinarycourse, receive or have access to information regardingmaterial facts or changes concerning Ballard or its majorsubsidiaries before the material facts or material changesare generally disclosed; and
(e) the individual is not an insider ofBallard or its major subsidiaries in any capacity otherthan vice president or such equivalent title.
13. Ballard will assess any future employeeof Ballard who has the title of vice president or such equivalenttitle on the same basis as set out above, and will re-assessall Exempted Officers who experience a change in job requirementsor functions, to determine if such individuals meet, or continueto meet, the Exempt Officer Criteria.
14. If an individual who is designated asan Exempted Officer no longer satisfies the Exempt OfficerCriteria, as a result of which the individual is subject toa renewed obligation to file insider reports, Ballard willimmediately inform such individual of such renewed obligation.
15. Ballard has filed with the Decision Makersin connection with this application a copy of the Policy andthe list of Exempted Officers.
AND WHEREAS under the System, this MRRSDecision Document 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 the requirement contained in the Legislationto file insider reports shall not apply to insiders of Ballardwho satisfy the Exempt Officer Criteria for so long as suchinsiders satisfy the Exempt Officer Criteria, provided that:
(a) Ballard prepares and maintains a listof all individuals who propose to rely on the exemption grantedby this Decision, submits the list on an annual basis to theboard of directors for approval, and files the list with theDecision Makers;
(b) Ballard files with the Decision Makersa copy of its internal policies and procedures relating tomonitoring and restricting the trading activities of its insidersand other persons whose trading activities are restrictedby Ballard; and
(c) the relief granted will cease to be effectiveon the date NI 55-101 is amended.
May 16, 2003.
"Robert L. Shirriff"
"Harold P. Hands"