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Summary of

Securities Act (M&C Saatchi plc) Exemption Notice 2004

2004/205

Gazetted on 1 July 2004
Expires on 31 December 2004

Effects of the exemption
M & C Saatchi plc is able to offer its shares to M & C Saatchi Limited's directors and employees within New Zealand using offer documents that comply with the laws of its home jurisdiction.

The company does not have to:

• prepare a prospectus or investment statement;
• comply with restrictions on statements in advertisements by experts;
• comply with the register, accounting records, audit and certificate requirements of the Securities Act 1978;
• disclose certain information to security holders on request, or send this information to them periodically.

Background
M & C Saatchi plc is a newly established company, which applied for all of its ordinary shares to be admitted to trading on the Alternative Investment Market of the London Stock Exchange.

A reorganisation of the M&C Saatchi Group resulted in M & C Saatchi plc acquiring the entire issued share capital of M&C Saatchi Worldwide, (then the parent company of the M & C Saatchi Group and the holding company of M & C Saatchi Limited).

The exemption
M & C Saatchi plc is exempted from sections 37, 37A, 38A, and 51 to 54B of the Securities Act 1978 and the Securities Regulations 1983 (except regulation 8).

Conditions
The exemption is subject to the following conditions:

• the shares are only allotted to employees (defined as directors and employees of M & C Saatchi plc or any member of the M & C Saatchi Group);
• before subscribing for the shares, employees receive the following information:
• a copy of the pathfinder admission document and the terms of the offer in New Zealand; or
• written advice that the above information is available on M & C Saatchi plc's Internet or intranet site and that a copy is available on request;
• before the shares are allotted, employees receive a copy of the admission document filed with the London Stock Exchange;
• before the shares are allotted, the Registrar of Companies receives a copy of the pathfinder admission document and the terms of the offer in New Zealand;
• the offer complies with United Kingdom legislation, the requirements of the London Stock Exchange, and any other relevant codes, rules or other requirements.

Reasons
The present situation is similar to that covered by the Securities Act (Overseas Employee Share Purchase Schemes) Exemption Notice 2002 (the OESPS Exemption Notice). That exemption recognises that issuers incorporated under the laws of certain jurisdictions, and whose shares are listed on an exchange in certain jurisdictions, are already subject to an appropriate level of regulation in respect of offers of shares to employees. In addition, the cost of producing a prospectus and an investment statement to comply with New Zealand law may preclude offers being made to New Zealand employees by overseas issuers.

M & C Saatchi plc is unable to comply with the OESPS Exemption Notice as the offer does not involve a scheme with prescribed rules, as required by that notice, and because it is a new company and, as such, does not have past annual reports or financial information. However, the Commission is satisfied that the policy of the OESPS Exemption Notice should apply in this case.

The conditions of the exemption are consistent with those in the OESPS Exemption Notice. The conditions require that the employees to whom the offer of the specified equity securities is made receive, before subscribing, certain relevant information about M & C Saatchi plc as the issuer, the M&C Saatchi Group, and the terms of the offer.