Exemption Orders (Discretionary)
ARAMARK CORPORATION
2001 BCSECCOM 672
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - Relief from the registration and prospectus requirements for trades of securities issued under an employee incentive plan to certain permitted transferees.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 34(1)(a), 48, 61 and 76
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, NOVA SCOTIA, NEW BRUNSWICK, PRINCE EDWARD ISLAND, NEWFOUNDLAND, NORTHWEST TERRITORIES AND THE YUKON
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF ARAMARK CORPORATION
MRRS DECISION DOCUMENT
1. WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Alberta, Saskatchewan, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland, Northwest Territories and the Yukon (the “Jurisdictions”) has received an application from ARAMARK Corporation (“ARAMARK”) for a decision under the securities legislation of the Jurisdictions (the “Legislation”) that the requirements under the Legislation to be registered to trade in a security (the “Registration Requirement”) and to file and obtain a receipt for a preliminary prospectus and a prospectus (the “Prospectus Requirement”) shall not apply to certain trades in common stock of ARAMARK;
2. AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the “System”) the Alberta Securities Commission is the principal regulator for this application;
3. AND WHEREAS ARAMARK has represented to the Decision Makers that:
3.1 ARAMARK is a corporation incorporated under the laws of the State of Delaware;
3.2 the head office of ARAMARK is in Philadelphia, Pennsylvania;
3.3 the authorized capital of ARAMARK includes 25,000,000 shares of class A common stock (“Class A Shares”) and 150,000,000 shares of class B common stock (“Class B Shares”);
3.4 there are currently 2,385,438 Class A Shares and 60,576,313 Class B Shares outstanding;
3.5 Class B Shares may be converted into Class A Shares on a ten for one basis with the approval of the board of directors of ARAMARK;
3.6 each of the Class A Shares and Class B Shares carry the right to one vote at general meetings of the shareholders of ARAMARK;
3.7 only employees of ARAMARK and certain permitted transferees may hold Class B Shares;
3.8 the securities of ARAMARK are not listed on any stock exchange or traded on any market;
3.9 ARAMARK is subject to the reporting requirements under the Securities Exchange Act of 1934 in the United States of America;
3.10 ARAMARK is not a reporting issuer or the equivalent in any of the Jurisdictions;
3.11 ARAMARK intends to implement the ARAMARK Ownership Program (the “Program”) in the Jurisdictions;
3.12 employees, senior officers and directors of ARAMARK and its affiliates (“Participants”) are eligible to participate in the Program;
3.13 under the Program, the board of directors of ARAMARK may grant certain options or rights to acquire Class B Shares (“Rights”) to Participants;
3.14 Rights and Class B Shares issued under the Program are distributed under a registration statement filed under the Securities Act of 1933 in the United States of America;
3.15 all stockholders of ARAMARK must enter into a stockholder’s agreement (the “Stockholder’s Agreement”) with ARAMARK;
3.16 the Stockholder’s Agreement restricts the transfer of Class A Shares and Class B Shares to certain permitted transferees;
3.17 in the case of trades of Class B Shares acquired by Participants upon the exercise of Rights granted under the Program or trades of Class A Shares acquired upon the conversion of such Class B Shares, the permitted transferees under the Stockholder’s Agreement include the following (the “Transferees”):
3.17.1 the spouse, child, grandchild or parent of the Participant;
3.17.2 a child of the spouse of the Participant;
3.17.3 the Registered Retirement Savings Plan of the Participant;
3.17.4 a company whose securities are wholly owned by the Participant, their spouse, spouse’s child, child, grandchild or parent or a combination thereof;
3.17.5 a representative, custodian or nominee acting on behalf of the Participant, their Registered Retirement Savings Plan, their spouse, spouse’s child, child, grandchild or parent or a combination thereof; and
3.17.6 a trust where one of the trustees is the Participant and the beneficiaries are their spouse, spouse’s child, child, grandchild or parent or a combination thereof;
3.18 any transfer of Class A Shares or Class B Shares must be approved by the board of directors of ARAMARK;
3.19 participation in the Program is voluntary and Participants will not be induced to participate in the Program or acquire Rights, Class B Shares or Class A Shares upon the conversion of Class B Shares by expectation of continued engagement with ARAMARK or its affiliates;
3.20 any information sent to security holders of ARAMARK in general will be sent to Participants or Transferees resident in the Jurisdictions who acquire Rights, Class B Shares or Class A Shares upon the conversion of Class B Shares;
3.21 the number of Class B Shares that may be acquired by Participants upon the exercise of Rights granted under the Program will not exceed 1% of the outstanding number of Class B Shares;
3.22 there are no exemptions from the Registration Requirement and Prospectus Requirement available under the Legislation in New Brunswick to permit ARAMARK to issue Rights under the Program to Participants who are employees of an affiliate of ARAMARK;
3.23 there are no exemptions from the Registration Requirement and Prospectus Requirement available under the Legislation to permit a Participant who acquires Class B Shares upon the exercise of Rights issued under the Program to trade them to a Transferee or to permit a Transferee who acquires Class B Shares from a Participant to trade them to another Transferee or the Participant;
3.24 there are no exemptions from the Registration Requirement and Prospectus Requirement available under the Legislation to permit a Participant who acquires Class A Shares upon the conversion of Class B Shares to trade them to a Transferee or to permit a Transferee who acquires Class A Shares from a Participant to trade them to another Transferee or the Participant;
4. AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);
5. 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;
6. THE DECISION of the Decision Makers under the Legislation is that:
6.1 in New Brunswick, the Registration Requirement and Prospectus Requirement shall not apply to the issuance by ARAMARK of Rights under the Program to Participants who are employees of an affiliate of ARAMARK;
6.2 the Registration Requirement and Prospectus Requirement shall not apply to trades by a Participant of Class B Shares acquired upon the exercise of Rights issued under the Program to a Transferee and to trades by a Transferee of Class B Shares acquired from a Participant to another Transferee or the Participant, provided that any other trade of Class B Shares shall be deemed to be a distribution under the Legislation of the Jurisdiction or Jurisdictions where the trade occurs; and
6.3 the Registration Requirement and Prospectus Requirement shall not apply to trades by a Participant of Class A Shares acquired upon the conversion of Class B Shares to a Transferee and to trades by a Transferee of Class A Shares acquired from a Participant to another Transferee or the Participant, provided that any other trade of Class A Shares shall be deemed to be a distribution under the Legislation of the Jurisdiction or Jurisdictions where the trade occurs.
DATED this 12th day of June, 2001.
Eric T. Spink, Vice-Chair John W. Cranston, Member