National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions – Application for a 5 year relief from the prospectus and dealer registration requirement in respect of certain trades of securities in connection with employee share offerings by a French issuer – The offerings will involve the use of collective employee shareholding vehicles, each a fonds communs de placement d’entreprise (FCPE) – The filer cannot rely on the employee prospectus exemption in section 2.24 of National Instrument 45-106 Prospectus Exemptions or the plan administrator exemption in section 8.16 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations as the shares are not being offered to Canadian employees directly by the issuer but through the FCPEs – Canadian employees will receive disclosure documents – The FCPEs are subject to the supervision of the French Autorité des marchés financiers – Relief granted, subject to conditions.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25, 53, 74(1).
National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
National Instrument 45-102 Resale of Securities.
National Instrument 45-106 Prospectus Exemptions.
May 2, 2017
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
QUÉBEC AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
The securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for:
1. an exemption from the prospectus requirement (the Prospectus Relief) so that such requirement does not apply to:
(a) trades of:
(i) units (the 2017 Units) of a temporary fonds commun de placement d’entreprise or “FCPE”, a form of collective shareholding vehicle commonly used in France for the conservation and custodianship of shares held by employee-investors named Castor International Relais 2017 (the 2017 Fund); and
(ii) units (together with the 2017 Units, the Temporary Classic Units, and together with the 2017 Units and the Principal Classic Units (as defined below), the Units) of future temporary FCPEs organized in the same manner as the 2017 Fund (together with the 2017 Fund, the Temporary Classic Funds),
made under an International Group Share Ownership Plan (the Plan) to or with Qualifying Employees (as defined below) resident in the Jurisdictions, British Columbia, Alberta and Saskatchewan (collectively, the Canadian Employees, and the Canadian Employees who subscribe for Temporary Classic Units, the Canadian Participants);
(b) trades of ordinary shares of the Filer (the Shares) by the Classic Fund to or with Canadian Participants upon the redemption of Units as requested by Canadian Participants (the term “Classic Fund” used herein means, prior to the Merger (as defined below), a Temporary Classic Fund and, following the Merger, an FCPE named Castor International (the Principal Classic Fund)); and
2. an exemption from the dealer registration requirement (the Registration Relief, and together with the Prospectus Relief, the Offering Relief) so that such requirement does not apply to the Filer and its Local Related Entities (as defined below), the Classic Fund and Amundi Asset Management (the Management Company) in respect of:
(a) trades in Units made pursuant to an Employee Offering (as defined below) to or with Canadian Employees; and
(b) trades in Shares by the Classic Fund to or with Canadian Participants upon the redemption of Units as requested by Canadian Participants;
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the Autorité des marchés financiers is the principal regulator for this application;
(b) the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System (Regulation 11-102) is intended to be relied upon in British Columbia, Alberta and Saskatchewan; and
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority in Ontario.
Terms defined in Regulation 14-101 respecting Definitions, Regulation 11-102 and Regulation 45-106 respecting Prospectus Exemption have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation formed under the laws of France. It is not and has no current intention of becoming a reporting issuer under the securities legislation of any jurisdiction of Canada. The head office of the Filer is located in France and the Shares are listed on Euronext.
2. The Filer carries on business in Canada through certain related entities that employ Canadian Employees (Local Related Entities, and together with the Filer and other related entities of the Filer, the Vinci Group). Currently, the greatest number of employees of the Vinci Group in Canada reside in Québec.
3. The Filer has established a global employee share offering under the Plan (the 2017 Employee Offering) and expects to establish subsequent global employee share offerings following 2017 for the next four years that are substantially similar (Subsequent Employee Offerings, and together with the 2017 Employee Offering, Employee Offerings) for Qualifying Employees and participating related entities of the Filer, including the Local Related Entities. Each Local Related Entity is a direct or indirect controlled subsidiary of the Filer and no Local Related Entity has any current intention of becoming a reporting issuer under the securities legislation of any jurisdiction of Canada.
4. As of the date hereof, “Local Related Entities” include B.A. Blacktop Ltd, Carmacks Enterprises Ltd, Construction DJL Inc, Agra Foundations Limited, Bermingham Construction Ltd, Freyssinet Canada Ltee, Geopac Inc, Reinforced Earth Company Ltd, Janin Atlas Inc, Asphalte Trudeau Ltee, Pavage Rolland Fortier Inc, Location Rolland Fortier Inc, Groupe Lechasseur, Eurovia Québec Grands projets, Eurovia Québec CSP, Eurovia Québec Construction, Freycan Major Projects Ltd, Eurovia Canada Inc, Coquitlam Ridge Constructors, Two Crossings Maintenance Services Ltd, Carmacks Industrial Ltd, Carmacks Maintenance Services Ltd, Pico Envirotec Inc, Vinci Infrastructure Canada Ltd, Rail Cantech Inc, Eurovin British Columbia Inc, Nuvia Canada Inc and Mobility Way Inc.
5. As of the date hereof and after giving effect to any Employee Offering, Canadian residents do not and will not beneficially own more than 10% of the Shares (which term, for the purposes of this paragraph, is deemed to include all Shares held by the Classic Fund on behalf of Canadian Participants) issued and outstanding, and do not and will not represent in number more than 10% of the total number of holders of Shares as shown on the books of the Filer.
6. Each Employee Offering involves an offering of Shares to be acquired through a Temporary Classic Fund, which will be merged with the Principal Classic Fund following completion of the Employee Offering (the Classic Plan).
7. Only persons who are employees of the Vinci Group during the subscription period for an Employee Offering and who meet other employment criteria (the Qualifying Employees) will be allowed to participate in the relevant Employee Offering.
8. The 2017 Fund was established for the purpose of implementing the 2017 Employee Offering. The Principal Classic Fund was established for the purpose of implementing the Employee Offerings generally. There is no current intention for any Temporary Classic Fund or the Principal Classic Fund to become a reporting issuer under the securities legislation of any jurisdiction of Canada.
9. The 2017 Fund and the Principal Classic Fund are FCPEs and are registered with the Autorité des marchés financiers in France (the French AMF). It is expected that each Temporary Classic Fund established for Subsequent Employee Offerings will be a French FCPE and registered with, and approved by, the French AMF.
10. Under the Classic Plan, each Employee Offering will be made as follows:
(a) Canadian Participants will subscribe for Units of the relevant Temporary Classic Fund. The Temporary Classic Fund will then subscribe for Shares on behalf of the Canadian Participants using the Canadian Participants’ contributions. The subscription price will be the Canadian dollar equivalent of the average of the volume-weighted average Share price (expressed in Euros) on Euronext for the 20 trading days preceding the start of the subscription period.
(b) Initially, the Shares will be held in the relevant Temporary Classic Fund and the Canadian Participants will receive Units of the relevant Temporary Classic Fund.
(c) Following the completion of an Employee Offering, the relevant Temporary Classic Fund will be merged with the Principal Classic Fund (subject to the approval of the supervisory board of the FCPEs and the French AMF). The Temporary Classic Units held by the Canadian Participants will be replaced with units of the Principal Classic Fund (the Principal Classic Units) on a pro rata basis and the Shares subscribed for will be held in the Principal Classic Fund (such transaction being referred to as the Merger). The Filer will rely on the exemption from the prospectus requirement pursuant to section 2.11 of Regulation 45-106 in respect of the issuance of Units of the Principal Classic Fund to Canadian Participants in connection with the Merger.
(d) The Units will be subject to a hold period of approximately three years (the Lock-Up Period), subject to certain exceptions provided for in the Plan and adopted for an Employee Offering in Canada (such as a release on death, disability or termination of employment).
(e) Any dividends paid on the Shares held in the Classic Fund will be contributed to the Classic Fund and used to purchase additional Shares. To reflect this reinvestment, new Units (or fractions thereof) will be issued to the Canadian Participants.
(f) At the end of the relevant Lock-Up Period, a Canadian Participant may (i) request the redemption of his or her Units in the Classic Fund in consideration for the underlying Shares or a cash payment equal to the then market value of the Shares, or (ii) continue to hold his or her Units in the Classic Fund and request the redemption of those Units at a later date in consideration for the underlying Shares or a cash payment equal to the then market value of the Shares.
(g) In the event of an early exit resulting from a Canadian Participant exercising one of the exceptions to the Lock-Up Period and meeting the applicable criteria, the Canadian Participant may request the redemption of his or her Units in the Classic Fund in consideration for a cash payment equal to the then market value of the underlying Shares.
(h) Subject to certain conditions being satisfied (as provided for in the Plan), the Local Related Entity employing a Canadian Participant will also contribute on behalf of such Canadian Participant additional Shares (the Bonus Shares) into the Classic Plan based on predetermined matching contribution rules. Bonus Shares, if not forfeited, will be delivered at the end of the Lock-Up Period. In certain events (i.e. good leavers), forfeiture of rights to receive Bonus Shares will be compensated by a cash payment.
11. For the 2017 Employee Offering, the number of Bonus Shares which a Canadian Participant is eligible to receive will be determined according to the following matching schedule:
Canadian Participant’s Subscription
2 Bonus Shares for each Share subscribed
Next 30 Shares (i.e., the 11th to 40th Share subscribed for)
1 Bonus Share for each Share subscribed
Next 60 Shares (i.e., the 41st to 100th Share subscribed for)
1 Bonus Share for each 2 Shares subscribed
Any further Shares starting from the 101st Share subscribed for
No additional Bonus Shares
12. Under French law, an FCPE is a limited liability entity. The portfolio of the Classic Fund will consist almost entirely of Shares and may, from time to time, include cash in respect of dividends paid on the Shares which will be reinvested in Shares and cash or cash equivalents pending investments in the Shares and for the purposes of Unit redemptions.
13. The Management Company is a portfolio management company governed by the laws of France. The Management Company is registered with the French AMF to manage investments and complies with the rules of the French AMF. The Management Company is not, and has no current intention of becoming, a reporting issuer under the securities legislation of any jurisdiction of Canada.
14. The Unit value of the Classic Fund will be calculated and reported to the French AMF on a regular basis, based on the net assets of the Classic Fund divided by the number of Units outstanding. The value of the Units will be based on the value of the underlying Shares.
15. Only Qualifying Employees will be allowed to subscribe for Units of the Classic Fund.
16. The Management Company’s portfolio management activities in connection with an Employee Offering and the Classic Fund are limited to subscribing for Shares from the Filer, selling such Shares as necessary in order to fund redemption requests and investing available cash in cash equivalents.
17. The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents of the Classic Fund. The Management Company’s activities do not affect the underlying value of the Shares. All management charges relating to the Classic Fund will be paid from the assets of the Classic Fund or by the Filer, as provided in the regulations of the Classic Fund.
18. None of the entities forming part of the Vinci Group, the Classic Fund or the Management Company or any of their respective employees, directors, officers, agents or representatives will provide investment advice to the Canadian Employees with respect to investments in the Shares or the Units.
19. Shares issued pursuant to an Employee Offering will be deposited in the Classic Fund through CACEIS Bank France (the Depositary), a large French commercial bank subject to French banking legislation.
20. Under French law, the Depositary must be selected by the Management Company from a limited number of companies identified on a list maintained by the French Minister of the Economy and Finance and its appointment must be approved by the French AMF. The Depositary carries out orders to purchase, trade and sell assets in the portfolio and takes all necessary action to allow the Classic Fund to exercise the rights relating to the securities held in its portfolio.
21. Participation in an Employee Offering is voluntary, and the Canadian Employees will not be induced to participate in an Employee Offering by expectation of employment or continued employment.
22. The total amount invested by a Canadian Employee pursuant to an Employee Offering cannot exceed 25% of his or her estimated gross annual compensation (excluding Bonus Shares).
23. The Shares and Units are not currently listed for trading on any stock exchange in Canada and there is no intention to have the Shares or the Units so listed.
24. None of the entities forming part of the Vinci Group, the Classic Fund or the Management Company is in default of securities legislation of any jurisdiction of Canada.
25. The Canadian Employees will receive an information package in the French or English language, according to their preference, which will include a summary of the terms of the relevant Employee Offering and a description of the relevant Canadian income tax consequences. Canadian Participants will have access to the Filer’s French Document de Référence filed with the French AMF in respect of the Shares and a copy of the regulations of the relevant Temporary Classic Fund and the Principal Classic Fund. The Canadian Employees will also have access to copies of the continuous disclosure materials relating to the Filer through the Filer’s public internet site. Canadian Participants will receive an initial statement of their holdings under the Classic Plan, together with an updated statement at least once per year.
26. For the 2017 Employee Offering, there are approximately 2,500 Qualifying Employees resident in Canada, with the largest number residing in Québec, and less than 2% of Qualifying Employees reside in Canada.
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 Offering Relief is granted on the following conditions:
1. with respect to the 2017 Employee Offering, the prospectus requirement will apply to the first trade in any Units or Shares acquired by Canadian Participants pursuant to this decision, unless the following conditions are met:
a) the issuer of the security
i) was not a reporting issuer in any jurisdiction of Canada at the distribution date, or
ii) is not a reporting issuer in any jurisdiction of Canada at the date of the trade;
b) at the distribution date, after giving effect to the issue of the security and any other securities of the same class or series that were issued at the same time as or as part of the same distribution as the security, residents of Canada
i) did not own, directly or indirectly, more than 10% of the outstanding securities of the class or series, and
ii) did not represent in number more than 10% of the total number of owners, directly or indirectly, of securities of the class or series; and
c) the first trade is made
i) through an exchange, or a market, outside of Canada, or
ii) to a person or company outside of Canada; and
2. with respect to any Subsequent Employee Offering under this decision completed within five years from the date of this decision, provided that the following conditions are met:
a) the representations other than those in paragraphs 4, 11 and 26 remain true and correct with necessary adjustments in respect of the relevant Subsequent Employee Offering and Temporary Classic Fund, and
b) the conditions set out in paragraph 1. above apply to any Subsequent Employee Offering .
|“Anne Marie Ryan”
Ontario Securities Commission
|“Robert P. Hutchinson”
Ontario Securities Commission