Exemption Orders (Discretionary)

VENTRA GROUP INC.


COR#96/243

IN THE MATTER OF THE SECURITIES ACT
S.B.C. 1985, c. 83

AND

IN THE MATTER OF VENTRA GROUP INC.

AND

IN THE MATTER OF THE TARXIEN CORPORATION


Decision Under Section 96(2)(a) of the Act


WHEREAS Ventra Group Inc., (together with a wholly-owned subsidiary), has applied to the British Columbia Securities Commission for a decision under section 96(2)(a) of the Securities Act, S.B.C. 1985, c. 83for the purposes of section 89(2) of the Act that the employment agreement with Ventra and Ralph J. Zarboni is made for reasons other than to increase the value of the consideration paid to Zarboni for the securities of Tarxien Corporation of Zarboni and that the employment agreement may be entered into notwithstanding section 89(2) of the Act;
    AND WHEREAS Ventra has represented to the Commission that:

    1. Ventra was incorporated under the laws of Ontario, is a reporting issuer under the Act and is not in default of any requirement of the Act or the Securities Rules, B.C. Reg. 479/95;

    2. the common shares and non-cumulative convertible first preference shares of Ventra are listed on The Toronto Stock Exchange;

    3. Acquisition Co., a wholly owned subsidiary of Ventra, is incorporated under the laws of Ontario;

    4. Tarxien Corporation was incorporated under the laws of Ontario, is a reporting issuer under the Act and has an authorized capital consisting of unlimited common shares, an unlimited number of voting special shares convertible equally into common shares and 1,857,000 preferred shares, of which 2,955,575 common shares and no voting special shares or preferred shares are issued and outstanding;

    5. the common shares of Tarxien are listed on the TSE;

    6. Zarboni is the President and Chief Executive Officer of Tarxien;

    7. Ventra together with Acquisition Co. intend to make an offer for all of the issued and outstanding common shares of Tarxien on the basis of $8.00 cash (less the amount of any special dividend which may be declared by the Tarxien board payable to holders of Tarxien shares prior to any take-up of such shares under the offer), plus two Ventra shares for each Tarxien share;

    8. shareholders of Tarxien who tender to the bid will receive the cash portion of the consideration from Acquisition Co. and the share portion from Ventra;

    9. the principal shareholders of Tarxien are Zarboni and Rossiter Ventures Corporation a corporation controlled by Zarboni, and collectively they own 918,213 Tarxien shares and options to acquire an additional 146,000 Tarxien Shares;

    10. on September 8, 1993, Tarxien loaned the principal shareholders $660,000;

    11. on September 28, 1996, the principal shareholders and Ventra entered into a lock-up agreement which provides that Ventra and Acquisition Co. will make the offer if certain pre-bid conditions are satisfied;

    12. the lock-up agreement contemplates that prior to making the offer, Ventra will deliver to Zarboni an irrevocable offer of employment conditional only on the taking-up of the principal shareholder’s shares under the offer, the offer of employment will become effective following the take-up and payment of the principal shareholder’s shares, and under the employment agreement, Zarboni will be required to resign as a director and officer of Tarxien without additional compensation, or severance, from Tarxien;

    13. the essential terms of the employment agreement are:
        (a) Zarboni will be employed as Vice President of Ventra, and will receive an annual base salary of $200,000 (which is the same base as his current salary with Tarxien and is commensurate with other senior officers of Ventra and other senior officers in similar companies) and will be entitled to a cash bonus comparable to other Ventra corporate head office executives (which currently is up to 50% of annual salary based on performance), and Zarboni's maximum bonus entitlement would therefore be $100,000 under Ventra's current policies;

        (b) if Zarboni accepts a full-time employee position with Ventra, at the option of the Chief Executive Officer of Ventra, and subject to shareholder elections and board approvals, he will be nominated to a position on the board of directors of Ventra, and if Zarboni is employed on a less than a full-time basis with Ventra, and if he still holds a significant number of Ventra shares, at the option of Zarboni, and subject to shareholder elections and board approvals, Zarboni will be nominated to a position on the Ventra board;

        (c) Ventra will continue payments for Zarboni's defined benefit plan and pay such contributions and administrative costs until age 65, whether or not he remains an employee of Ventra or, at Ventra's option in its sole discretion, Ventra will buy out Zarborni's defined benefit pension plan by purchasing on his behalf an annuity with a value such that Zarboni would receive a benefit of approximately $70,000 per year commencing at age 65, Zarboni will not be entitled to receive Ventra pension benefits in addition to those continued under the Tarxien pension arrangements;

        (d) if Zarboni is terminated without cause, Zarboni will be entitled to a severance payment of $30,000 per month for a period of twenty months, an amount equal to $600,000, and if Zarboni resigns or is terminated for cause, Zarboni will be entitled to a severance payment of $15,000 per month for a period of twenty months, an amount equal to $300,000;

        (e) Zarboni will be granted options under the Ventra employee stock option plan to purchase 50,000 Ventra shares following the closing of the offer and it has been Ventra's past practice to grant to senior officers upon joining the management of Ventra stock options to purchase Ventra shares;

        (f) at the option of Zarboni, Zarboni will either cancel the Policy or change the designation of the beneficiary from Tarxien to a beneficiary designated by Zarboni and Zarboni will assume responsibility for payment of premiums if the Policy is transferred to him; and

        (g) the employment agreement will be for an indefinite term;
    14. the employment agreement is conditional on the loan being repaid by the principal shareholders as soon as practicable before the expiry date of the offer; and

    15. the employment agreement is being negotiated on an arm’s length basis, and Ventra’s president, on behalf of the board of directors, has reviewed the employment agreement and is satisfied that the remuneration and other benefits to be paid to Zarboni under the agreement are reasonable and consistent with industry practice;

    AND WHEREAS the Commission has decided, for the purposes of section 89(2) of the Act, that the employment agreement with Ventra and Zarboni is made for reasons other than to increase the value of the consideration paid to Zarboni for the Tarxien shares of Zarboni;

    IT IS ORDERED effective October 11, 1996, under section 96(2)(a) of the Act that the employment agreement may be entered into notwithstanding section 89(2) of the Act.
      DATED at Vancouver, British Columbia, on November 8, 1996.





      Joyce C. Maykut, Q.C.
      Vice Chair
      ©2025 British Columbia Securities Commission