Exemption Orders (Discretionary)
CITI CONSTRUCTION INFORMATION TECHNOLOGY INC.
2001 BCSECCOM 182
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF CITI CONSTRUCTION INFORMATION TECHNOLOGY INC.
Exemption Order Under Sections 48 and 76
[para 1]
WHEREAS CITI Construction Information Technology Inc. (“CITI”) has applied to the Executive Director for an order under sections 48 and 76 of the Securities Act, R.S.B.C. 1996, c. 418 that certain intended trades in options of CITI under its Key Employees and Contractors Stock Option Plan dated June 1, 1999 (the “Plan”) to employees and officers of the British Columbia Construction Association (the “BCCA”) and the Vancouver Island Construction Association, the Vancouver Construction Association, the Northern British Columbia Construction Association and the Southern Interior Construction Association (the “Regional Associations”) are exempt from the requirements of sections 34(1)(a) and 61 of the Act;
[para 2]
AND WHEREAS CITI has represented to the Executive Director that:
1. CITI was incorporated under the Company Act (B.C.), is not a reporting issuer under the Act, has ceased to be a private issuer and is not in default of any requirements under the Act or the Securities Rules, B.C. Reg. 194/97;
2. the BCCA is a non-profit society registered pursuant to the Society Act (B.C.) whose four members are the Regional Associations, all of which are non-profit societies;
3. CITI was established to create an arm’s length for-profit entity to commercialize certain computer software developed by BCCA and to operate a service bureau providing an internet-accessible electronic document construction planroom, construction project management system and related services for use by BCCA and Regional Association members and others in association with construction projects;
4. the BCCA and the Regional Associations have a long term commercial relationship with CITI which operates its service bureau with the assistance and participation, on a daily basis, of employees and officers of the BCCA and the Regional Associations (the “Employee Stakeholder Group”);
5. CITI wishes to grant options to acquire common shares of CITI (“Shares”) to the Employee Stakeholder Group under the Plan in consideration of their contribution to and support of the development of the CITI service bureau business and to encourage the on-going and future commitment of the Employee Stakeholder Group in supporting the CITI business operations;
6. the options will be non-transferable except by will or laws of descent;
7. participation in the Plan is voluntary, and members of the Employee Stakeholder Group who participate in the Plan (“Participants”) will not be induced to acquire Shares under the Plan by expectation of employment or continued employment with BCCA or the Regional Associations;
8. CITI is not able to rely on the exemptions from the registration and prospectus requirements of the Act contained in sections 45(2)(10) and 74(2)(9) of the Act for the trades in the options, as the BCCA and the Regional Associations are not affiliates of CITI; and
9. CITI will provide Participants with a copy of the Plan and all disclosure material relating to CITI which is provided to the shareholders of CITI;
[para 3]
AND WHEREAS the Executive Director considers that it would not be prejudicial to the public interest to do so;
[para 4]
IT IS ORDERED:
1. under sections 48 and 76 of the Act that the intended trades in options by CITI to the Employee Stakeholder Group are exempt from the requirements of sections 34(1)(a) and 61 of the Act provided that:
(a) CITI files a Form 20 on or before the 10th day after each distribution of options in reliance on this Order; and
(b) CITI provides each Participant with a copy of this order; and
2. under section 76 of the Act that any trade in the Shares acquired by a Participant on exercise of options issued under this order, other than a trade to another member of the Employee Stakeholder Group, is deemed to be a distribution unless:
(a) CITI is a reporting issuer under the Act and has been a reporting issuer for the 12 months immediately preceding the trade;
(b) if the seller is an insider of CITI, other than a director or a senior officer, the seller has filed all records required to be filed under sections 87 and 90 of the Act;
(c) if the seller is a director or senior officer of CITI, the seller has filed all records required to be filed under sections 87 and 90 of the Act and CITI has filed all records required to be filed under Part 12 of the Act and of the Rules;
(d) the trade is not a distribution from the holdings of a control person;
(e) no unusual effort is made to prepare the market or create a demand for the security; and
(f) no extraordinary commission or other consideration is paid in respect of the trade.
[para 5]
DATED February 8, 2001.
Brenda Leong
Director