3 Issuer Information

3.4 Issuer Grant Report

What is an issuer grant report? An issuer grant report is a report filed by an issuer on SEDI that publicly discloses the details of compensation arrangements under which grants of stock options or similar instruments are made to reporting insiders. While there is no obligation for an issuer to file an issuer grant report, it may choose to do so to assist its reporting insiders with their reporting obligations, provide them with the benefits of an exemption and communicate material information about its compensation practices to the market in a timely manner.

The issuer grant report exemption reduces the regulatory burden on reporting insiders that is associated with insider reporting of stock options and similar instruments since it allows an issuer to make a single filing on SEDI. This filing provides the market with timely information about the existence and material terms of the grant, and makes it unnecessary for each of the affected reporting insiders to file an insider report about the grant within the ordinary reporting time periods.

It contains the information listed in question 3.4.4.

A SEDI issuer that chooses to report details of a grant or an issue of interests in its securities and related financial instruments to insiders pursuant to a compensation arrangement.

The deadline for an issuer to file an issuer grant report is effectively within five days [FN 7] of a grant or award. This is because the exemption in Part 6 of NI 55-104 for reporting insiders is available only when an issuer grant report is filed within the time prescribed for filing insider reports.

Reporting insiders will be in breach of their individual insider reporting obligations if the issuer has not filed the report within five days of the grant, and the reporting insiders have not filed their insider reports. We therefore recommend that the issuer file the issuer grant report as soon as reasonably practicable following the grant, award or issue of securities or related financial instruments to reporting insiders.

FN 7 Prior to November 1, 2010, within 10 calendar days.

The issuer grant report discloses the details of a compensation arrangement and must include

• the date the option or other security or related financial instrument was issued or granted;
• the number of options or other securities or related financial instruments issued or granted to each director or officer;
• the price at which the option or other security or related financial instrument was issued or granted and the exercise price;
• the number and type of securities or related financial instruments issuable on the exercise of the option or other security or instrument; and
• any other material terms that have not been previously disclosed or filed in a public filing on SEDAR.

Issuer grant reports are filed on SEDI.

If an issuer files an issuer grant report within five days [FN 8] of a grant, award or issue of securities or related financial instruments, the reporting insiders named in the issuer grant report can report the grant on a deferred basis. Instead of reporting the grant within the usual five day reporting timeframe, the reporting insiders have until March 31 of the next calendar year to report the grant or award.

If, subsequent to the grant and prior to March 31 of the next calendar year, the reporting insider disposes of or transfers the securities or related financial instruments identified in the issuer grant report (other than as part of a specified disposition), the reporting insider must file an insider report within five days of the disposition or transfer.

FN 8 Prior to November 1, 2010, within 10 calendar days.

There is no requirement to file issuer grant reports. If an issuer chooses not to file an issuer grant report, the issuer should notify reporting insiders of a grant, award or issue of securities and related financial instruments in a timely manner so that those insiders can meet their individual reporting obligations within the period prescribed for filing insider reports.