Ontario Commission des 22nd Floor 22e étage
Securities valeurs mobilières 20 Queen Street West 20, rue queen ouest
Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8
August 27, 2021
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF PEOPLE CORPORATION (the Filer) ORDER
Background
The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission (the Principal Regulator) is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11- 102 Passport System (MI 11-102) is intended to be relied upon in British Columbia and Alberta.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
Representations
This order is based on the following facts represented by the Filer:
The Filer is a corporation incorporated under the laws of the Province of Ontario.
The Filer’s head office is located at 1403 Kenaston Blvd, Winnipeg, Manitoba, R3P 2T5.
People Corporation (a corporation amalgamated on January 1, 2015 under the Business Corporations Act (Ontario)) (the First Predco) entered into an arrangement agreement (the Arrangement Agreement) dated December 13, 2020 with 2799825 Ontario Inc. (the Purchaser), a corporation incorporated under the laws of the Province of Ontario.
Immediately prior to the effective time (Effective Time) of the Plan of Arrangement (as defined below), being 12:01 a.m. (Toronto time) on February 18, 2021, the First Predco had the following issued and outstanding securities: (i) common shares (the First Predco Shares); (ii) options to purchase First Predco Shares (the Options); and (iii) rights to receive First Predco Shares pursuant to (A) restricted share units granted under the Security Based Compensation Plan of the First Predco (the SBCP) with an effective grant date of September 1, 2020, subject to performance conditions (the Conditional RSUs); (B) restricted share units granted under the SBCP (other than the Conditional RSUs) (the Unconditional RSUs); and (C) deferred share units (the DSUs). The First Predco Shares were listed on the TSX Venture Exchange (the TSXV) under the symbol “PEO”. No other securities of the First Predco were listed on any exchange.
In connection with the Plan of Arrangement (as defined below), the First Predco distributed the meeting materials (which included, among other things, the information circular, notice of meeting, notice of application, and the interim order) on January 14, 2021 to the holders of the First Predco Shares, Options, Unconditional RSUs and DSUs in connection with the special meeting of holders of First Predco Shares that took place on February 11, 2021 to consider the Arrangement in accordance with the order of the Ontario Superior Court of Justice.
On February 11, 2021, the holders of First Predco Shares approved a statutory plan of arrangement under Section 182 of the OBCA (the Plan of Arrangement) pursuant to the Arrangement Agreement.
On February 18, 2021, and pursuant to the Plan of Arrangement:
(a) the Purchaser acquired all of the issued and outstanding First Predco Shares for $15.22 in cash per First Predco Share, other than certain First Predco Shares held by certain senior management shareholders and their affiliates and associates who received, in respect of such First Predco Shares, consideration consisting of cash and shares of the direct parent of the Purchaser;
(b) each Option outstanding immediately prior to the Effective Time was surrendered by the holder thereof to the First Predco in exchange for a cash payment from the First Predco and thereby cancelled;
(c) each Unconditional RSU and each DSU outstanding immediately prior to the Effective Time was cancelled in exchange for a cash payment from the First Predco; and
(d) the First Predco and the Purchaser were amalgamated to form People Corporation (the Second Predco), having an authorized capital consisting of an unlimited number of common shares (the Second Predco Shares); as a result of such amalgamation, 2799821 Ontario Inc. became the sole shareholder of the Second Predco.
The Second Predco Shares were de-listed from the TSXV at the close of trading on February 18, 2021.
On February 24, 2021, the Second Predco amalgamated with Lane Quinn Benefit Consultants Ltd., Watermark Benefit Consulting Inc., People First HR Services Ltd., Apri Insurance Services Inc., Bencom Financial Services Group Inc., ACL Student Benefits Ltd., Skipwith & Associates Insurance Agency Inc., Mark T. Hogan Holdings Inc. and Lowdenclear Inc. to form the Filer, having an authorized capital consisting of an unlimited number of common shares (the Filer Shares). As a result of such amalgamation, 2799821 Ontario Inc. became the sole shareholder of the Filer.
As of July 27, 2021, 130,659 Conditional RSUs remain outstanding as obligations of the Filer. The number of holders of Conditional RSUs is under 15 in each applicable jurisdiction in Canada. The number of holders of Conditional RSUs in each applicable jurisdiction in Canada, and the aggregate number of Conditional RSUs held by holders in each such jurisdiction, is as follows:
Jurisdiction
Number of Holders
Number of Conditional RSUs
Manitoba
14
98,247
Ontario
13
28,275
Alberta
1
3,284
Quebec
1
853
In connection with the transactions contemplated by the Arrangement Agreement, the terms of such Conditional RSUs were amended in accordance with the terms of the SBCP such that the holders thereof became entitled to receive a fixed cash payment of $15.22 per restricted share unit (being the per share consideration paid under the Arrangement) provided that such holders remained employed or engaged by the Filer by a specified date. Accordingly, the Filer is of the view that the Conditional RSUs are no longer “securities” for purposes of applicable securities laws. No additional Filer Shares are issuable in respect of the Conditional RSUs.
The Filer is not required to remain a reporting issuer pursuant to the terms of the Conditional RSUs.
The Filer is a reporting issuer in each of the provinces of British Columbia, Alberta and Ontario and it is applying for the Order Sought in each of the provinces of British Columbia, Alberta and Ontario. The Filer is not a reporting issuer in any jurisdiction of Canada other than the jurisdictions identified in this order.
Since close of trading on February 18, 2021, no securities of the Filer, including debt securities, have traded in Canada or another country on a marketplace as defined in National Instrument 21-101 - Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.
The outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.
The Filer is not in default of securities legislation in any jurisdiction, other than that the Filer has not filed the disclosure required by Section 9.3.1(1) of National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102) by the time required by 9.3.1(2.2) of NI 51-102, and as a result has also not filed the disclosure required by Section 4.9 of NI 51-102 by the time required by that section in respect of its amalgamation effective February 24, 2021 (the Filings).
The Filer is not eligible to use the simplified procedure under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications as it is in default for failure to file the Filings.
The Filer has no intention to seek public financing by way of an offering of securities.
Upon the granting of the Order Sought, the Filer will not be a reporting issuer or the equivalent in any jurisdiction of Canada.
Order
The Principal Regulator is satisfied that the order meets the test set out in the Legislation for the Principal Regulator to make the order.
The decision of the Principal Regulator under the Legislation is that the Order Sought is granted.
DATED at Toronto on this 27 day of August, 2021.
“Mary Anne De Monte-Whelan” “Cathy Singer”
Mary Anne De Monte-Whelan Cathy Singer
Commissioner Commissioner
Ontario Securities Commission Ontario Securities Commission