AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF INVESTORS GROUP INC., 4221079 CANADA INC. AND IPC FINANCIAL NETWORK INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision
Maker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,
Qu�bec, Nova Scotia and Newfoundland and Labrador (the "Jurisdictions") has
received an application (the "Application") from Investors Group Inc.
("Investors Group") for a decision pursuant to the securities legislation of the
Jurisdictions (the "Legislation") that Investors Group, 4221079 Canada Inc., a
wholly-owned subsidiary of Investors Group ("IPC Holdco") and their affiliates
from time to time, with respect to certain transfers of shares of IPC Holdco, be
exempt from the requirements in the Legislation respecting issuer bids and
take-over bids (collectively, the "Issuer Bid and Take-over Bid Requirements");
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief
Applications (the "System"), the Ontario Securities Commission is the
Principal
Regulator for the Application;
AND WHEREAS unless otherwise defined, the terms herein have the meaning set out
in National Instrument 14-101 Definitions or in Qu�bec Commission Notice 14-101;
AND WHEREAS Investors Group and IPC Holdco have represented to the Decision
Makers as follows:
1. Investors Group was incorporated under the Canada Business Corporations
Act on August 3, 1978. Its registered and principal office is located in
Winnipeg, Manitoba.
2. Investors Group is a reporting issuer, or its equivalent, in all provinces
and territories of Canada.
3. Investors Group is not in default of any requirement of the Legislation and
is not on the list of defaulting reporting issuers in any Jurisdiction in which
such a list is maintained.
4. IPC Financial Network Inc. ("IPC") was incorporated under the Canada
Business Corporations Act on May 14, 1998. IPC's registered and principal
office is located in Mississauga, Ontario.
5. IPC is a reporting issuer, or its equivalent, in British Columbia, Alberta,
Saskatchewan, Ontario, Qu�bec and Nova Scotia.
6. IPC is not on the list of defaulting reporting issuers in any Jurisdiction in
which such a list is maintained.
7. IPC and its subsidiaries presently conduct (and will continue to conduct)
business across Canada through a network of financial advisors (the "Advisors").
8. According to an information memorandum provided to Investors Group by IPC,
there are currently 92 Advisors in British Columbia, 26 Advisors in Alberta,
4
Advisors in Saskatchewan, 9 Advisors in Manitoba, 454 Advisors in Ontario, 3
Advisors in Qu�bec, 4 Advisors in New Brunswick, 41 Advisors in Nova Scotia, 9
Advisors in Newfoundland and Labrador and 1 Advisor in Prince Edward Island. IPC
has advised Investors Group that approximately 175 Advisors currently hold
common shares of IPC ("IPC Shares").
9. Although some of the Advisors are not employees of IPC, all Advisors have a
written contract with IPC pursuant to which they devote a substantial amount of
their time and attention to IPC's business.
10. IPC Holdco was incorporated under the Canada Business Corporations
Act on February 10, 2004. Its registered and principal office is in Toronto,
Ontario.
11. Investors Group and IPC entered into an acquisition agreement made as of
February 24, 2004 pursuant to which Investors Group and IPC Holdco will, subject
to certain conditions being met, acquire all of the shares of IPC by way of a
proposed plan of arrangement (the "Plan") among Investors Group, IPC and IPC
Holdco. The Plan provides that IPC Holdco will acquire all of the issued and
outstanding IPC Shares for, at the election of the IPC shareholder: (i) cash
and/or common shares of Investors Group ("Investors Shares"), or (ii) cash,
Investors Shares and/or common shares of IPC Holdco ("IPC Holdco Shares"), in
the case of certain shareholders of IPC who are Advisors and members of IPC
management (the "Officers").
12. Upon the effective date of the Plan, the Advisors and the Officers
(collectively, the "IPC Holdco Shareholders") will not own, as a group,
more than 30% of the outstanding IPC Holdco Shares, and Investors Group will
own the
balance of the outstanding IPC Holdco Shares. Pursuant to the Plan (i) certain
of the Officers will receive IPC Holdco Shares and Investors Shares; and (ii)
the other Officers and certain Advisors may elect to receive IPC Holdco Shares,
cash, or a combination of cash and Investors Shares, for each IPC Share held.
IPC Holdco Shares are being used as consideration under the Plan in order to
maintain the ownership interest of the Officers and certain Advisors in the IPC
business (indirectly through IPC Holdco).
13. Other than Investors Group and its affiliates, all of the IPC Holdco
Shareholders are, and will continue to be, "employees", "senior officers",
"directors", "consultants" or "permitted assigns" for
the purpose of
Multilateral Instrument 45-105 - Trades to Employees, Senior Officers,
Directors and Consultants.
14. As a condition to receiving IPC Holdco Shares under the Plan or, in the case
of individuals who become IPC Holdco Shareholders in the future, subsequent to
the implementation of the Plan, all potential IPC Holdco Shareholders will be
required to enter into one or, in the case of certain IPC Holdco Shareholders,
two shareholders' agreements (collectively, the "Shareholders' Agreements")
with
IPC Holdco and Investors Group.
15. The proposed terms of the Shareholders' Agreements include: (i) the right
of each IPC Holdco Shareholder to cause IPC Holdco, Investors Group or an affiliate
of Investors Group to purchase his or her IPC Holdco Shares from time to time;
(ii) the right of one or possibly more of IPC Holdco, Investors Group or any
affiliate of Investors Group to purchase IPC Holdco Shares from each IPC Holdco
Shareholder from time to time; (iii) an obligation of each IPC Holdco
Shareholder to sell his or her IPC Holdco Shares to IPC Holdco, Investors Group
or an affiliate of Investors Group in certain circumstances; and (iv) the right
of IPC Holdco, Investors Group or an affiliate of Investors Group to purchase
IPC Holdco Shares from a IPC Holdco Shareholder upon the occurrence of certain
triggering events, such as bankruptcy or insolvency and certain events of
default of a IPC Holdco Shareholder (collectively, the "Transfers").
16. The IPC Holdco Shareholders will, among other things, have access to a copy
of the Shareholders' Agreements prior to the IPC shareholder's meeting called
for the purpose of approving the Plan and, in the case of future IPC Holdco
Shareholders, prior to receiving IPC Holdco Shares.
17. The letter of transmittal to be signed by each IPC Holdco Shareholder for
the purpose of depositing his or her IPC Shares and receiving IPC Holdco Shares
will contain an acknowledgment from the IPC Holdco Shareholder that he or she is
aware that IPC Holdco will not become a reporting issuer, and that IPC Holdco
will not be subject to the continuous disclosure requirements under the
Legislation.
18. Pursuant to the terms of the Shareholders' Agreements, each IPC Holdco
Shareholder will receive copies of IPC Holdco's quarterly and annual financial
statements.
19. Unless relief is granted, the Transfers will be subject to the Issuer Bid
and Takeover Bid Requirements because IPC Holdco's purchase of IPC Holdco Shares
from the IPC Holdco Shareholders will be issuer bids and purchase by Investors
Group, or an affiliate of Investors Group, of IPC Holdco Shares from the other
IPC Holdco Shareholders will be takeover bids and any such Transfers will not be
exempt under the Legislation as there may be more than 50 IPC Holdco
Shareholders, exclusive of employees.
20. If the Legislation treated the Advisers and the permitted assigns of IPC
Holdco Shareholders in the same manner as employees, the Transfers would be
exempt from the Issuer Bid and Takeover Bid Requirements.
AND WHEREAS pursuant to 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;
THE DECISION, of the Decision Makers in the Jurisdictions pursuant to the
Legislation is that the Issuer Bid and Takeover Bid Requirements shall not apply
to Transfers pursuant to the Shareholders' Agreements.
Dated this 3rd day of May, 2004.
Paul M. Moore | Robert W. Davis |