IN THE MATTER OF THE SECURITIES
LEGISLATION OF BRITISH COLUMBIA,
ALBERTA, MANITOBA, ONTARIO, Québec, NEW BRUNSWICK, NEWFOUNDLAND AND LABRADOR
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF AXA
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of British Columbia, Alberta, Manitoba, Ontario, Québec, New Brunswick and Newfoundland and Labrador (collectively, the "Jurisdictions") has received an application from AXA (the "Filer") for a decision under the securities legislation (the "Legislation") of the Jurisdictions that:
(i) the requirements contained in the Legislation to file and obtain a receipt for a preliminary prospectus and a prospectus (the "Prospectus Requirements") shall not apply to certain trades in units ("Units") of the AXA Actionnariat II Fund (the "Classic Fund") and the AXA Plan 2002 Global Fund (the "Leveraged Fund" and, together with the Classic Fund, the "Funds") made pursuant to the Employee Share Offering (as defined below) to or with Qualifying Employees (as defined below) resident in the Jurisdictions who elect to participate in the Employee Share Offering (the "Canadian Participants");
(ii) the requirements contained in the Legislation to be registered to trade in a security (the "Registration Requirements") shall not apply to trades in Units of the Classic Fund made pursuant to the Employee Share Offering to or with Canadian Participants;
(iii) the Registration and Prospectus Requirements shall not apply to the trades of ordinary shares of the Filer (the "Shares") by the Funds to Canadian Participants upon the redemption of Units by Canadian Participants, nor to the issuance of Units of the Classic Fund to holders of Leveraged Fund Units upon the transfer of the assets of the Leveraged Fund to the Classic Fund at the end of the Lock-Up Period (as defined below);
(iv) the Registration and Prospectus Requirements shall not apply to the first trade in any Shares acquired by Canadian Participants under the Employee Share Offering where such trade is made through the facilities of a stock exchange outside of Canada; and
(v) the manager of the Funds, AXA Gestion Intéressement (the "Manager") is exempt from the requirements contained in the Legislation to be registered as an adviser (the "Adviser Registration Requirements") to the extent that its activities in relation to the Employee Share Offering require compliance with the Adviser Registration Requirements.
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Commission des valeurs mobilières du Québec is the principal regulator for this application;
AND WHEREAS the Filer has represented to the
Decision Makers that:
1. The Filer is a corporation formed under the laws of France. It is not and has no
intention of becoming a reporting issuer (or equivalent) under the Legislation. The Shares
are listed on the Paris Bourse and on the New York Stock Exchange (in the form of American
Depositary Shares).
2. The Filer carries on business in Canada through the following affiliated companies:
AXA Assurances Inc., AXA Canada Inc., AXA Insurance (Canada), AXA Pacific Insurance
Company,
Insurance Corporation of Newfoundland Limited, AXA Assistance Canada Inc., AXA
Corporate
Solutions, and AXA Corporate Solutions Assurance (the "Canadian Affiliates",
together with the Filer and other affiliates of the Filer, the "AXA Group").
Each of the Canadian Affiliates is a direct or indirect controlled subsidiary
of the Filer and is not, and has no intention of becoming, a reporting issuer
(or equivalent) under the
Legislation.
3. The Filer has established a worldwide stock purchase plan for employees of
the AXA
Group (the "Employee Share Offering") which is comprised of two subscription
options: (i) an offering of Shares to be subscribed through the Classic Fund (the
"Classic Plan"); and (ii) an offering of Shares to be subscribed through the
Leveraged Fund (the "Leveraged Plan").
4. Only persons who are employees of a member of the AXA Group at the time of
the Employee
Share Offering (the "Employees"), or persons who have retired from an affiliate
of the AXA Group and who continue to hold units in French investment funds (fonds communs
de placement d'entreprise or "FCPEs") in connection with previous employee share
offerings by the Filer (the "Retired Employees" and, together with the
Employees, the "Qualifying Employees") will be invited to participate
in the
Employee Share Offering.
5. The Funds were established for the purposes of implementing the Employee Share
Offering.
6. The Funds are not and have no intention of becoming reporting issuers under the
Legislation.
7. The Funds are collective shareholding vehicles of a type commonly used in France for
the conservation or custodianship of shares held by employee investors. Only Qualifying
Employees will be allowed to hold Units of the Funds in an amount proportionate to their
respective investments in the Funds.
8. Under French law, all Units of either Fund acquired in the Employee Share
Offering will
be subject to a hold period of approximately five years (the "Lock-Up Period"),
subject to certain exceptions prescribed by French law (such as a release on
death or termination of employment). At the end of the Lock-Up Period, a Canadian
Participant may:
(i) redeem Units: (a) in the Classic Fund in consideration for the underlying Shares or a cash payment equal to the then market value of the Shares, or (b) in the Leveraged Fund according to the Redemption Formula (described below), to be settled by delivery of the number of Shares equal to such amount or the cash equivalent, or
(ii) continue to hold Units in the Classic Fund and redeem those Units at a later date (as explained below, at the end of the Lock-Up Period, holders of Units in the Leveraged Fund who do not redeem their Units will receive Units in the Classic Fund).
9. In the event of an early unwind resulting from the Canadian Participant satisfying
one of the exceptions to the Lock-Up Period prescribed by French law, a Canadian
Participant may redeem Units: (a) from the Classic Fund in consideration for the
underlying Shares or a cash payment equal to the then market value of the Shares, or (b)
from the Leveraged Fund using the Redemption Formula (described below), but using the
market value of the Shares at the time of unwind to measure the increase, if any, from the
Reference Price (described below).
10. Under the Classic Plan, Canadian Participants will purchase Units in the
Classic Fund, which will subscribe for Shares on behalf of the Canadian Participants,
at a purchase
price that is equal to the average of the closing price of the Shares on the
20 trading
days preceding AXA board approval of the Employee Share Offering (the "Reference
Price"), less a 20% discount. Dividends paid on the Shares held in the Classic
Fund will be capitalized and Canadian Participants will be credited with additional
Units.
11. Under the Leveraged Plan, Canadian Participants will purchase Units in the
Leveraged Fund, and the Leveraged Fund will then subscribe for Shares using the
Employee
Contribution (as described below) and certain financing made available by a major
European
bank, Deutsche Bank A.G. ("Deutsche Bank").
12. As with the Classic Plan, Canadian Participants in the Leveraged Plan enjoy the
benefit of a 20% discount in the Reference Price. Under the Leveraged Plan, the Canadian
Participants effectively receive a share appreciation entitlement in the increase in
value, if any, of the Shares financed by the Deutsche Bank Contribution (as described
below).
13. Participation in the Leveraged Plan represents an opportunity for Qualifying
Employees potentially to obtain significantly higher gains than would be available
through
participation in the Classic Plan, by virtue of the Qualifying Employee's indirect
participation in a financing arrangement involving a swap agreement (the "Swap
Agreement") between the Leveraged Fund and Deutsche Bank. In economic terms, the Swap
Agreement effectively involves the following exchange of payments: for each Share which
may be purchased by the Qualifying Employee's contribution (the "Employee
Contribution") under the Leveraged Plan at the Reference Price less the 20% discount,
Deutsche Bank will lend to the Leveraged Fund (on behalf of the Canadian Participant) an
amount sufficient to enable the Leveraged Fund (on behalf of the Canadian Participant) to
purchase an additional nine Shares (the "Deutsche Bank Contribution")
at the
Reference Price less the 20% discount.
14. Under the terms of the Swap Agreement, at the end of the Lock-Up Period (the "Settlement Date"),
the Leveraged Fund will owe to Deutsche Bank an amount equal to the market value
of the Shares held in that Fund, less
(i) 100% of the Employee Contributions; and
(ii) an amount equal to approximately 50% of the increase, if any, in the market price of the Shares from the Reference Price (the "Appreciation Amount").
15. If, at the Settlement Date, the market value of the Shares held in the Leveraged
Fund is less than 100% of the Employee Contributions, Deutsche Bank will, pursuant to a
guarantee agreement, make a cash contribution to the Leveraged Fund to make up any
shortfall.
16. At the end of the Lock-Up Period, the Swap Agreement will terminate after
the making of final swap payments and a Canadian Participant may redeem his or
her Leveraged Fund
Units in consideration for a payment of an amount equal to the value of the Canadian
Participant's Employee Contribution and the Canadian Participant's portion of
the Appreciation Amount, if any, to be settled by delivery of such number of
Shares equal to
such amount or the cash equivalent of such amount (the "Redemption Formula").
Following these redemptions, all assets (including Shares) remaining in the Leveraged
Fund will be transferred to the Classic Fund. New Units of the Classic Fund will
be issued to
the applicable Canadian Participants in recognition of the assets transferred
to the Classic Fund. The Canadian Participants may redeem the new Units whenever
they wish.
17. Under no circumstances will a Canadian Participant in the Leveraged Fund be entitled
to receive less than 100% of his or her Employee Contribution at the end of the Lock-Up
Period, nor be liable for any other amounts.
18. Under French law, the Funds, as FCPEs, are limited liability entities. The risk
statement provided to Canadian Participants will confirm that, under no circumstances,
will a Canadian Participant in the Leveraged Plan be liable to any of the Leveraged Fund,
Deutsche Bank or the Filer for any amounts in excess of his or her Employee Contribution
under the Leveraged Plan.
19. During the term of the Swap Agreement, dividends paid on the Shares held in the
Leveraged Fund will be remitted to the Leveraged Fund, and the Leveraged Fund will remit
an equivalent amount to Deutsche Bank as partial consideration for the obligations assumed
by Deutsche Bank under the Swap Agreement.
20. For Canadian federal income tax purposes, the Canadian Participants in the Leveraged
Fund will be deemed to receive all dividends paid on the Shares financed by either the
Employee Contribution or the Deutsche Bank Contribution, at the time such dividends are
paid to the Leveraged Fund, notwithstanding the actual non-receipt of the dividends by the
Canadian Participants. Consequently, Canadian Participants will be required to fund the
tax liabilities associated with the dividends without recourse to the actual dividends.
21. The declaration of dividends on the Shares remains at the sole discretion of the board
of directors of the Filer. The Filer has not made any commitment to Deutsche Bank as to
any minimum payment in respect of dividends.
22. To respond to the fact that, at the time of the initial investment decision relating
to participation in the Leveraged Plan, Canadian Participants will be unable to quantify
their potential income tax liability resulting from such participation, the Filer will
indemnify each Canadian Participant in the Leveraged Plan for all tax costs to the
Canadian Participants associated with the payment of dividends in excess of a specified
amount of euros per Share during the Lock-Up Period such that, in all cases, a Canadian
Participant will, at the time of the original investment decision, be able to quantify,
with certainty, his or her maximum tax liability in connection with dividends received by
the Leveraged Fund on his or her behalf under the Leveraged Plan.
23. At the time the Canadian Participant's obligations under the Swap Agreement are
settled, the Canadian Participant will realize a capital gain (or capital loss) by virtue
of having participated in the Swap Agreement to the extent that amounts received by the
Leveraged Fund, on behalf of the Canadian Participant, from Deutsche Bank exceed (or are
less than) amounts paid by the Leveraged Fund, on behalf of the Canadian Participant to
Deutsche Bank. To the extent that dividends on Shares that are deemed to have been
received by a Canadian Participant are paid by the Fund on behalf of the Canadian
Participant to Deutsche Bank, such payments will reduce the amount of any capital gain (or
increase the amount of any capital loss) to the Canadian Participant under the Swap
Agreement. Capital losses (gains) realized by a Canadian Participant under the Swap
Agreement may be offset against (reduced by) any capital gains (losses) realized by the
Canadian Participant on a disposition of the Shares, in accordance with the rules and
conditions under the Income Tax Act (Canada) or comparable provincial legislation
(as applicable).
24. The Manager, AXA Gestion Intéressement, is a portfolio management company governed by the laws of France. The Manager is registered with the French Commission des Opérations de Bourse (the "COB") to manage French investment funds and complies with the rules of the COB. The Manager is not and has no intention of becoming a reporting issuer under the Legislation.
25. The Manager's portfolio management activities in connection with the Employee Share
Offering and the Funds are limited to purchasing Shares from the Filer, selling such
Shares as necessary in order to fund redemption requests, and such activities as may be
necessary to give effect to the Swap Agreement.
26. The Manager is also responsible for preparing accounting documents and publishing
periodic informational documents as provided by the rules of each Fund. The Manager's
activities in no way affect the underlying value of the Shares.
27. Shares issued in the Employee Share Offering will be deposited in the relevant
Fund
through BNP Paribas Securities Services (the "Depositary"), a large
French
commercial bank subject to French banking legislation.
28. Under French law, the Depositary must be selected by the Manager from among a limited
number of companies identified on a list by the French Minister of the Economy, and its
appointment must be approved by the COB. The Depositary carries out orders to purchase,
trade and sell securities in the portfolio and takes all necessary action to allow each
Fund to exercise the rights relating to the securities held in its portfolio.
29. Canadian Participants will not be induced to participate in the Employee Share
Offering by expectation of employment or continued employment.
30. The total amount invested by a Canadian Participant in the Employee Share Offering
cannot exceed 25% of his or her gross annual compensation for 2002, or for his or her last
year of employment, as the case may be, although a lower limit may be established by the
Canadian Affiliates.
31. None of the Filer, the Manager, the Canadian Affiliates or any of their employees,
agents or representatives will provide investment advice to the Qualifying Employees with
respect to an investment in the Units.
32. The Filer has retained a registrant registered as a broker/investment dealer
under the
Legislation (the "Registrant") to provide advisory services to Canadian
Participants in connection with the Leveraged Plan and to make a determination,
in accordance with industry practices, as to whether an investment in the Leveraged
Plan is
suitable for each Canadian Participant who expresses interest in the Leveraged
Plan, based on his or her particular financial circumstances. The Registrant
will establish accounts
for, and will receive the initial account statements from the Leveraged Fund
on behalf of,
such Canadian Participants.
33. The Units of the Leveraged Fund will be issued by the Leveraged Fund to Canadian
Participants solely through the Registrant. The Units will be evidenced by account
statements issued by the Leveraged Fund.
34. The Canadian Participants will receive an information package in the French or English
language, as applicable, which will include a summary of the terms of the Employee Share
Offering, a tax notice relating to the relevant Fund containing a description of Canadian
income tax consequences of subscribing to and holding the Units in the Funds and redeeming
Units for cash or Shares at the end of the Lock-Up Period. The information package will
also include a risk statement relating to the Leveraged Plan only, which will describe
certain risks associated with an investment in Units pursuant to the Leveraged Plan.
35. Upon request, employees may receive copies of the Filer's annual report on Form 20-F filed with the United States Securities and Exchange Commission (the "SEC") and/or the French Document de Référence filed with the COB in respect of the Shares and a copy of the relevant Fund's rules (which are analogous to company by-laws).
36. The Canadian Participants who subscribe for Units in the Funds will also receive
copies of the continuous disclosure materials relating to the Filer furnished to AXA
shareholders generally.
37. There are approximately 1,873 Employees resident in Canada, in the provinces
of
Québec (1,198), Ontario (387), British Columbia (141), Alberta (91), Newfoundland
and Labrador (41), New Brunswick (10) and Manitoba (5), who represent in the
aggregate
approximately 1.3% of the number of Employees worldwide.
38. There are approximately 21 eligible Retired Employees resident in Canada,
in the
provinces of Québec (10), Ontario (9), and British Columbia (2), for a total
of 1,894
Qualifying Employees resident in Canada.
39. As of the date hereof and after giving effect to the Employee Share Offering, Canadian
residents do not and will not beneficially own (which term, for the purposes of this
paragraph, is deemed to include all Shares held by the Funds on behalf of Canadian
Participants) more than 10% of the Shares and do not and will not represent in number more
than 10% of the total number of holders of the Shares as shown on the books of the Filer.
AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;
(a) the Prospectus Requirements shall not apply to trades in Units of the Leveraged Fund to or with Canadian Participants pursuant to the Employee Share Offering, provided that all trades that are sales in a Jurisdiction are made through a dealer that is registered as a broker/investment dealer in the Jurisdiction, and the first trade in such Units acquired by Canadian Participants pursuant to this Decision, in a Jurisdiction, shall be deemed a distribution or a primary distribution to the public under the Legislation of such Jurisdiction;
(b) the Registration and Prospectus Requirements shall not apply to trades in Units of the Classic Fund to or with the Canadian Participants pursuant to the Employee Share Offering, provided that the first trade in such Units acquired by Canadian Participants pursuant to this Decision, in a Jurisdiction, shall be deemed a distribution or a primary distribution to the public under the Legislation of such Jurisdiction;
(c) the Registration and Prospectus Requirements shall not apply to:(i) trades of Shares by the Funds to the Canadian Participants upon the redemption of Units by Canadian Participants pursuant to the Employee Share Offering; and
(ii) the issuance of Units of the Classic Fund to holders of Leveraged Fund Units upon the transfer of the assets of the Leveraged Fund to the Classic Fund;
provided that, the first trade in any such Shares or Units acquired by a Canadian Participant pursuant to this Decision, in a Jurisdiction, shall be deemed a distribution or a primary distribution to the public under the Legislation of such Jurisdiction;(d) the Registration and Prospectus Requirements shall not apply to the first trade in any Shares acquired by a Canadian Participant under the Employee Share Offering provided that such trade is:
(i) made through a person or company who/which is appropriately licensed to carry on business as a broker/dealer (or the equivalent) under the applicable securities legislation in the foreign jurisdiction where the trade is executed; and
(ii) executed through the facilities of a stock exchange outside of Canada; and(e) the Manager shall be exempt from the Adviser Registration Requirements, where applicable, in order to carry out the activities described in paragraphs 25 and 26 hereof.
DATED September 24, 2002.
Josée Deslauriers
Le chef du service du financement des sociétés