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Solium Capital Inc. et al.
Headnote
Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- reporting insiders parties to automatic securities disposition plans -- relief granted from section 3.3 of National Instrument 55-104 Insider Reporting Requirements and Exemptions, provided that reporting insiders file reports with respect to dispositions under the plans during the year by March 31 of the next calendar year.
Applicable Legislative Provisions
National Instrument 55-104 Insider Reporting Requirements and Exemptions, ss. 3.3, 10.1.
Citation: Solium Capital Inc., Re, 2013 ABASC 482
October 25, 2013
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
SOLIUM CAPITAL INC. (Solium), MARCOS A. LOPEZ
(Lopez) and BRIAN N. CRAIG (Craig)
(collectively, the Filers)
DECISION
ALBERTA AND ONTARIO
(the Jurisdictions)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
SOLIUM CAPITAL INC. (Solium), MARCOS A. LOPEZ
(Lopez) and BRIAN N. CRAIG (Craig)
(collectively, the Filers)
DECISION
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
SOLIUM CAPITAL INC. (Solium), MARCOS A. LOPEZ
(Lopez) and BRIAN N. CRAIG (Craig)
(collectively, the Filers)
DECISION
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
SOLIUM CAPITAL INC. (Solium), MARCOS A. LOPEZ
(Lopez) and BRIAN N. CRAIG (Craig)
(collectively, the Filers)
DECISION
AND
IN THE MATTER OF
SOLIUM CAPITAL INC. (Solium), MARCOS A. LOPEZ
(Lopez) and BRIAN N. CRAIG (Craig)
(collectively, the Filers)
DECISION
SOLIUM CAPITAL INC. (Solium), MARCOS A. LOPEZ
(Lopez) and BRIAN N. CRAIG (Craig)
(collectively, the Filers)
DECISION
(collectively, the Filers)
DECISION
Background
The securities regulatory authority or regulator (theDecision Maker) in each of the Jurisdictions has received an application from the Filers for a decision (the Exemption Sought) under the securities legislation (the Legislation) of the Jurisdictions exempting Lopez and Craig from the requirement in Section 3.3 of National Instrument 55-104 Insider Reporting Requirements and Exemptions (NI 55-104) to file insider reports within five days following the disposition of securities under their respective automatic securities disposition plans.
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 Filers have 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; 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, MI 11-102 or NI 55-104 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 Filers:
Solium
1. Solium is a corporation existing under the laws of the Province of Alberta and is a reporting issuer under the securities legislation of Alberta, British Columbia and Ontario. Solium is not in default of securities legislation in any jurisdiction.
2. The head office of Solium is Suite 1500, 800 -- 6th Avenue S.W., Calgary, Alberta T2P 3G3 and the registered office of Solium is Suite 3700, 400 -- 3rd Avenue S.W., Calgary, Alberta T2P 4H2.
3. The authorized share capital of Solium consists of an unlimited number of common shares (Common Shares) and an unlimited number of preferred shares, issuable in series. As at September 30, 2013, Solium had 43,042,574 Common Shares and no preferred shares issued and outstanding.
4. The Common Shares are listed and posted for trading on the Toronto Stock Exchange under the symbol "SUM".
Lopez
5. Lopez is a Managing Director of Solium and is a reporting insider. Lopez is not in default of securities legislation in any jurisdiction.
6. Lopez is currently the beneficial owner of 2,050,063 Common Shares (representing approximately 4.8% of the outstanding Common Shares).
7. Lopez wishes to sell 300,000 Common Shares pursuant to the LASDP (as defined below) to further diversify his portfolio. The 300,000 Common Shares represent approximately 15% of Lopez's total current shareholdings in Solium.
Lopez's Automatic Securities Disposition Plan
8. FirstEnergy Capital Corp. (theLASDP Administrator), Solium and Lopez entered into an automatic securities disposition plan (the LASDP) dated effective September 3, 2013 to facilitate the automatic sale of up to 300,000 Common Shares beneficially owned by Lopez and which have been deposited into an account managed by the LASDP Administrator, managed in accordance with the trading parameters and other instructions set out in the LASDP.
9. Lopez can only make changes to the trading parameters and other instructions set out in the LASDP if all of the following conditions are met:
(a) Lopez has obtained the prior written consent of the LASDP Administrator and Solium;
(b) Lopez has provided notice to the public of the proposed change by describing it in a filing on the System for Electronic Disclosure by Insiders (SEDI) or in a news release;
(c) Lopez has represented to the LASDP Administrator that a blackout period is not currently in effect and that he is not aware of any material non-public information about Solium or the securities of Solium and has no knowledge of a material fact or material change with respect to Solium or any securities of Solium (including the Common Shares) that has not been generally disclosed;
(d) such amendment or modification is made in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Securities Act (Alberta) (the Alberta Act) or Section 76 of the Securities Act (Ontario) (the Ontario Act).
10. The LASDP Administrator is a securities broker which is at arm's length to Solium and Lopez.
11. The LASDP Administrator has been appointed as an independent broker to effect the sales of the Common Shares pursuant to the terms and conditions of the LASDP. The dispositions under the LASDP will be effected by the LASDP Administrator in accordance with the pre-determined instructions as to the number and dollar value of the Common Shares to be sold, and other relevant information.
12. Subject to the restrictions set forth in the LASDP, the LASDP Administrator shall execute the trades in such a way as to attempt to minimize the negative price impact on the market and to attempt to maximize the price obtained for the Common Shares sold.
13. Except to set trading parameters in the manner described in the representations in this decision, Lopez does not have the authority to make investment decisions or influence or control any disposition effected by the LASDP Administrator pursuant to the LASDP and the LASDP Administrator and Lopez will not consult regarding any disposition.
14. Lopez will not disclose to the LASDP Administrator any information concerning Solium that might influence the execution of any disposition under the LASDP.
15. The LASDP includes a waiting period of 30 days between the date of adoption of the LASDP and the date that the first disposition can be made under the LASDP.
16. The LASDP has been structured to comply with applicable securities legislation and guidance, including Paragraph 147(5)(c) of the Alberta Act, Paragraph 175(2)(b) of the General Regulation under the Ontario Act and Ontario Securities Commission Staff Notice 55-701 Automatic Securities Disposition Plans and Automatic Securities Purchase Plans.
17. At the time of execution of, and entering into the LASDP, Lopez represented that he was not in possession of material undisclosed information about Solium and that he was entering into the LASDP in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or any other applicable securities laws.
18. The Common Shares are not subject to any liens, security interests or other impediments to transfer (except for limitations imposed by any applicable laws).
19. The LASDP will automatically terminate on the earliest to occur of:
(a) September 3, 2015;
(b) the date on which 300,000 Common Shares have been disposed of pursuant to the LASDP;
(c) the date on which more than $1,250,000 in gross proceeds has been realised from the sale of Common Shares pursuant to the LASDP;
(d) the date Solium terminates the LASDP, which shall be the date three business days' after Solium has done both of the following:
(i) given written notice of termination to the LASDP Administrator of the termination of the LASDP;
(ii) publicly disclosed the termination by news release;
(e) the date Lopez terminates the LASDP, which shall be the date three business days after Lopez has done all of the following:
(i) given written notice to the LASDP Administrator of the termination of the LASDP;
(ii) represented in writing to the LASDP Administrator that he is not aware of any material fact or material change with respect to Solium or any securities of Solium that has not been generally disclosed;
(iii) publicly disclosed the termination by doing either of the following:
A. filing a report on SEDI disclosing the effective date of the termination of the LASDP;
B. issuing a news release disclosing the termination of the LASDP;
(f) the date on which the LASDP Administrator receives notice of or otherwise becomes aware of any one of the following:
(i) Solium having entered into a definitive agreement pursuant to which either of the following applies:
A. Solium will be subject to a take-over bid, tender or exchange offer with respect to the Common Shares;
B. Solium will be subject to an arrangement, merger, acquisition, reorganization, recapitalization or comparable transaction affecting the securities of Solium as a result of which the Common Shares are to be exchanged or converted into shares of another company;
(ii) the death or mental incapacity of Lopez;
(iii) the commencement or impending commencement of any proceedings in respect of or triggered by Lopez's bankruptcy or insolvency;
(g) the date the LASDP Administrator terminates the LASDP after having received notice (an LASDP Restriction Notice) of any legal, contractual or regulatory restriction applicable to Lopez, including without limitation, any restriction related to a take-over bid, tender or exchange offer, an arrangement, merger or acquisition, reorganization or a stock offering requiring lock-up, that would prohibit dispositions pursuant to the LASDP.
20. Any LASDP Restriction Notice given by Lopez or Solium will be given in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act or Section 76 of the Ontario Act.
21. Lopez will not terminate the LASDP with knowledge of a material fact or material change that has not been generally disclosed.
Craig
22. Craig is the Executive Chairman and Managing Director of Solium and is a reporting insider. Craig is not in default of securities legislation in any jurisdiction.
23. Craig is currently the beneficial owner of 3,662,772 Common Shares (representing approximately 8.6% of the outstanding Common Shares).
24. Craig wishes to sell 600,000 Common Shares pursuant to the CASDP (as defined below) to diversify his portfolio. The 600,000 Common Shares represent approximately 16% of Craig's total current shareholdings in Solium.
Craig's Automatic Securities Disposition Plan
25. Scotia Capital Inc. (the CASDP Administrator), Solium and Craig entered into an automatic securities disposition plan (the CASDP) dated effective September 3, 2013 to facilitate the automatic sale of up to 600,000 Common Shares beneficially owned by Craig which have been deposited into an account managed by the CASDP Administrator, managed in accordance with the trading parameters and other instructions set out in the CASDP.
26. Craig can only make changes to the trading parameters and other instructions set out in the CASDP if all of the following conditions are met:
(a) Craig has obtained the prior written consent of the CASDP Administrator and Solium;
(b) Craig has provided notice to the public of the proposed change by describing it in a filing on SEDI or in a news release;
(c) Craig has represented to the CASDP Administrator that a blackout period is not currently in effect and that he is not aware of any material non-public information about Solium or the securities of Solium and has no knowledge of a material fact or material change with respect to Solium or any securities of Solium (including the Common Shares) that has not been generally disclosed;
(d) such amendment or modification is made in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act or Section 76 of the Ontario Act.
27. The CASDP Administrator is a securities broker which is at arm's length to Solium and Craig.
28. The CASDP Administrator has been appointed as an independent broker to effect the sales of the Common Shares pursuant to the terms and conditions of the CASDP. The dispositions under the CASDP will be effected by the CASDP Administrator in accordance with the pre-determined instructions as to the number and dollar value of the Common Shares to be sold, and other relevant information.
29. Subject to the restrictions set forth in the CASDP, the CASDP Administrator shall execute the trades in such a way as to attempt to minimize the negative price impact on the market and to attempt to maximize the prices obtained for the Common Shares sold.
30. Except to set trading parameters in the manner described in the representations in this decision, Craig does not have the authority to make investment decisions or influence or control any disposition effected by the CASDP Administrator pursuant to the CASDP and the CASDP Administrator and Craig will not consult regarding any disposition.
31. Craig will not disclose to the CASDP Administrator any information concerning Solium that might influence the execution of any disposition under the CASDP.
32. The CASDP includes a waiting period of 30 days between the date of adoption of the CASDP and the date that the first disposition can be made under the CASDP.
33. The CASDP has been structured to comply with applicable securities legislation and guidance, including Paragraph 147(5)(c) of the Alberta Act, Paragraph 175(2)(b) of the General Regulation under the Ontario Act and Ontario Securities Commission Staff Notice 55-701 Automatic Securities Disposition Plans and Automatic Securities Purchase Plans.
34. At the time of execution of, and entering into the CASDP, Craig represented that he was not in possession of material undisclosed information about Solium and that he was entering into the CASDP in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or any other applicable securities laws.
35. The Common Shares are not subject to any liens, security interests or other impediments to transfer (except for limitations imposed by any applicable laws).
36. The CASDP will automatically terminate on the earliest to occur of:
(a) September 3, 2015;
(b) the date on which 600,000 Common Shares have been disposed of pursuant to the CASDP;
(c) the date Solium terminates the CASDP which shall be the date three business days' after Solium has done both of the following:
(i) given written notice to the CASDP Administrator of the termination of the LASDP; and
(ii) publicly disclosed the termination by news release;
(d) the date Craig terminates the CASDP, which shall be the date three business days after Craig has done all of the following:
(i) given written notice to the CASDP Administrator of the termination of the CASDP;
(ii) represented in writing to the CASDP Administrator that he is not aware of any material fact or material change with respect to Solium or any securities of Solium that has not been generally disclosed;
(iii) publicly disclosed the termination by doing either of the following:
A. filing a report on SEDI disclosing the effective date of the termination of the CASDP;
B. issuing a news release disclosing the termination of the CASDP;
(e) the date on which the CASDP Administrator receives notice of or otherwise becomes aware of any one of the following:
(i) Solium having entered into a definitive agreement pursuant to which either of the following applies:
A. Solium will be subject to a take-over bid, tender or exchange offer with respect to the Common Shares;
B. Solium will be subject to an arrangement, merger, acquisition, reorganization, recapitalization or comparable transaction affecting the securities of Solium as a result of which the Common Shares are to be exchanged or converted into shares of another company;
(ii) the death or mental incapacity of Craig;
(iii) the commencement or impending commencement of any proceedings in respect of or triggered by Craig's bankruptcy or insolvency;
(f) the date the CASDP Administrator terminates the CASDP after having received notice (a CASDP Restriction Notice) of any legal, contractual or regulatory restriction applicable to Craig, including without limitation, any restriction related to a take-over bid, tender or exchange offer, an arrangement, merger or acquisition, reorganization or a stock offering requiring lock-up, that would prohibit dispositions pursuant to the CASDP.
37. Any CASDP Restriction Notice given by Craig or Solium will be given in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act or Section 76 of the Ontario Act.
38. Craig will not terminate the CASDP with knowledge of a material fact or material change that has not been generally disclosed.
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:
(a) the Exemption Sought is granted with respect to Lopez, provided that Lopez shall file a report through SEDI, by March 31 of each calendar year, of all dispositions under the LASDP during the prior calendar year not previously disclosed in a SEDI filing, disclosing either:
(i) each disposition on a transaction-by-transaction basis;
(ii) all dispositions as a single transaction using the average unit price of the securities;
(b) the Exemption Sought is granted with respect to Craig, provided that Craig shall file a report through SEDI by March 31 of each calendar year, of all dispositions under the CASDP during the prior calendar year not previously disclosed in a SEDI filing, disclosing either:
(i) each disposition on a transaction-by-transaction basis;
(ii) all dispositions as a single transaction using the average unit price of the securities.
"Tom Graham, CA"
Director, Corporate Finance