Progress Energy Resources Corp.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- temporary exemption granted from the additional independence requirements -- filer granted relief to hire an individual for a summer intern position who is a child of an audit committee member and shares a home with this audit committee member.

Applicable Legislative Provisions

National Instrument 52-110 Audit Committees, s. 1.5

Citation: Progress Energy Resources Corp., Re, 2011 ABASC 135

March 16, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

PROGRESS ENERGY RESOURCES CORP.

(the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting the Filer from the additional independence requirements of section 1.5 of National Instrument 52-110 Audit Committees (NI 52-110) so that an adult child (the Intern) of one of the directors of the Filer, who is also a member of the Filer's audit committee (the Member), can work in a clerk position in the Filer's finance department on a temporary basis (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for this application;

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; and

(c) this 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 National Instrument 14-101 Definitions or MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

Representations

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

1. The Filer, a corporation incorporated under the Business Corporations Act (Alberta) with its head office in Alberta, is a reporting issuer in each of the provinces of Canada and has its securities listed on the Toronto Stock Exchange.

2. To its knowledge, the Filer is not in default of applicable securities legislation in each of the provinces of Canada.

3. The Filer would like to offer the Intern a clerk position in the Filer's finance department on a temporary basis for a 20-week term of employment.

4. The Intern will not be involved in the preparation of financial information regarding the Filer, the Intern will not be authorized to make decisions on behalf of the Filer and, in carrying out his employment, the Intern will report directly to the manager of the finance department.

5. The remuneration that will be paid by the Filer to the Intern for his employment as a clerk with the Filer is consistent with the remuneration that the Filer is paying its other employees who have comparable positions.

6. The Intern lives part-time in the same home as the Member.

7. The payment to the Intern of the salary for the 20-week term of employment is deemed to be an indirect acceptance of compensation by the Member and creates a "material relationship", for the purposes of NI 52-110, between the Member and the Filer.

8. Consequently, the Member is no longer considered "independent" for the purposes of NI 52-110 and the Filer can no longer satisfy the audit committee composition requirements of subsection 3.1(3) NI 52-110, which requires every member of the audit committee to be "independent".

9. The Filer believes that the remuneration being paid by the Filer to the Intern for his employment as a clerk with the Filer is not a significant amount and therefore would not be expected to interfere with the exercise of the Member's independent judgment.

10. The board of directors of the Filer have considered the relationship between the Member and the Filer created by the temporary employment of the Member's adult child and have determined that such relationship is not reasonably expected to interfere with the exercise of the Member's independent judgment.

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.

For the Commission: