Exemption Orders (Discretionary)
SITA GROUP EMPLOYEE TRUST
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – relief granted from the registration and prospectus requirements for trades in certificates and shares acquired on exercise of the certificates, under a group deferred share award plan – relief also granted from the prospectus requirements for resale, subject to certain conditions
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 45(2)(10), 45(2)(12)(iii), 48, 74(2)(9), 74(2)(11)(iii), 76
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ONTARIO AND QUÉBEC
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF SITA GROUP EMPLOYEE TRUST
NATIONAL DECISION DOCUMENT
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF SITA GROUP EMPLOYEE TRUST
NATIONAL DECISION DOCUMENT
WHEREAS the Canadian securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Ontario and Québec (the “Jurisdictions”) has received an application from the SITA Group Employee Trust (the “Trust”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that the requirements contained in the Legislation to be registered to trade in a security and to file a preliminary prospectus and a prospectus and receive receipts therefor (the “Registration and Prospectus Requirements”) shall not apply to the distribution of depositary certificates (the “Certificates”) issued by The SITA Foundation (the “Foundation”) and the eventual distribution of Class A shares of EQUANT NV upon conversion of the Certificates, pursuant to the SITA Group Deferred Share Award Plan (the "Plan");
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the “System”), the Commission des valeurs mobilières du Québec is the Principal Regulator for this application;
AND WHEREAS the Trust has represented to the Decision Makers that:
1. SITA SC is a non-profit cooperative governed by the laws of Belgium which was constituted in 1949 by the main air transportation companies in the world to provide data transmission and communication services to the airlines industry.
2. In March 1995, SITA SC constituted SITA Telecommunications Holdings NV, now known as EQUANT NV (“EQUANT”), a corporation governed by the laws of the Netherlands.
3. In 1995 and within the framework of a reorganization of SITA SC and EQUANT, SITA SC transferred to the Foundation the Class A shares (the “EQUANT Shares”) which it held in the share capital of EQUANT, 85.83% of such shares to be held by the Foundation for the account of air transporta-tion companies and 14.16% of such shares to be held by the Trust for the account of participants in the Plan.
4. The Foundation issued Certificates which SITA transferred to the air transporta-tion companies and the Trust. The Certificates confer to their holders the economic rights to the EQUANT Shares but not the voting rights which remain with, and are exercised by, the Foundation.
5. The Trust is governed by English law.
6. The EQUANT Shares have been listed on the New York Stock Exchange and the Bourse de Paris since July 21, 1998.
7. None of SITA SC, EQUANT, the Foundation or the Trust is a reporting issuer in Québec, British Columbia or Ontario.
8. The Plan provides for the granting of ordinary awards to which all participants are eligible and discretionary awards at the sole discretion of the trustees of the Trust. No consideration is paid for the awards.
9. An award is a conditional allocation of Certificates, which are distributed to the participants upon vesting of the awards. Such vesting may not occur later than the latest of:
- 9.1 the receipt of all regulatory approval for the distribution of the Certificates;
9.2 the third anniversary of the eligibility date for the granting of the awards; and
9.3 the date on which the Certificates become transferable or are, at the sole discretion of the Foundation, converted into EQUANT Shares.
10. The Certificates represent the economic rights to the EQUANT Shares, on the basis of one Certificate for each EQUANT Share. No consideration is paid either for the Certificates or the EQUANT Shares. Prior to the vesting of the awards, all dividends declared on the EQUANT Shares which are the object of such Certificates are held by the Trustees and are paid to the participants upon vesting. The Certificates do not carry the right to vote.
11. The Canadian participants in the Plan are employees of SITA SC, Canadian branch (“SITA”) or, as the case may be, EQUANT Integration Services Inc., Canadian branch (“EIS”). EIS is a wholly owned US subsidiary of EQUANT and SITA is the former parent corporation (100%) of EQUANT.
12. In Québec, an aggregate of 201,063 Certificates have been conditionally allocated pursuant to awards made to approximately 160 participants. In British Columbia, an aggregate of 3,731 Certificates have been conditionally allocated pursuant to awards made to a total of eight participants. In Ontario, an aggregate of 10,244 Certificates have been conditionally allocated pursuant to awards made to a total of 11 participants.
13. The distribution of securities by an issuer to its employees is generally exempt from the prospectus and registration requirements under application securities legislation of all provinces of Canada.
14. Participants receive a summary of the Plan, in both the French and English languages, by way of a guide outlining the principal terms and conditions of the Plan.
15. The participants do not make any cash investment nor do they make any investment decision since no consideration is payable for the issuance of the Certificates or the EQUANT Shares. Therefore, no risk factors pertain to the acquisition of such securities which would require the level of disclosure provided for in a prospectus.
16. The participants will not be induced to participate in a trade of a Certificate or an EQUANT Share by expectation of their employment or continued employment by SITA SC, EQUANT or an affiliated entity of either SITA SC or EQUANT.
AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of each Decision Maker (collectively the “Decision”);
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Makers with the jurisdiction to make the decision has been met;
THE DECISION of the Decision Makers pursuant to the Legislation is that the Registration and Prospectus Requirements shall not apply to the distribution of Certificates by the Trust and eventual distribution of EQUANT Shares upon conversion of the Certificates to participants in the Plan, provided that the first trade in the Certificates and the EQUANT Shares by the individual participants or by the Trust or the Foundation on behalf of the participants shall be subject to the Prospectus Requirement unless such first trade is effected through the facilities of a stock exchange outside Canada and such first trade is made in accordance with the rules of the stock exchange upon which the trade is made and such first trade is not knowingly made, in whole or in part, to any person or company who is, or who is acting on behalf of, a resident of Canada.
DATED at Montréal, Québec, this 10 day of January, 2000.
- Johanne Duchesne