Securities Law & Instruments

Headnote

Section 74(1) - Trade by applicant control bloc shareholder of shares acquired by it asproceeds of redemption of certain shares of a related control bloc shareholder. Thetrade by the applicant of the shares acquired as proceeds of redemption is exempt fromthe resale restrictions in subsection 3.11(1) of Rule 45-501 provided, inter alia, that anequivalent number of otherwise freely tradable shares in the hands of the applicant'ssubsidiary or affiliate thereof become subject to such resale restrictions, and thenumber of shares which may be distributed pursuant to the Ruling is limited to 1% ofthe outstanding shares per year.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 1(1), 53, 72(7)(b), 72(7)(c) and 74(1).

Income Tax Act, R.S.C. 1985, c. I.2, as am., s. 85(1).

Regulations Cited

Rule 45-501, ss. 3.11(1), 3.11(2), 3.11(3), 3.11 (5).

Rules Cited


IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF
PJT FAMILY CORP.

RULING
(Subsection 74(1))


UPON the application (the "Application") of PJT Family Corp. (the "Applicant") tothe Ontario Securities Commission (the "Commission") for a ruling pursuant to subsection74(1) of the Act, that certain trades in common shares (the "Common Shares") of TheThomson Corporation ("TTC") not be subject to section 53 of the Act;

AND UPON reading the Application and the recommendation of the staff of theCommission;

AND UPON the Applicant having represented to the Commission that:

1. TTC is a corporation incorporated under the laws of the Province of Ontario, is areporting issuer under the Act and is not in default of any requirement of the Act orthe rules or regulations made thereunder.

2. Kenneth R. Thomson ("KRT") is, with respect to TTC, a person referred to in clause(c) of the definition of "distribution" in subsection 1(1) of the Act.

3. The Applicant and 1435839 Ontario Limited ("1435839") are corporationsincorporated under the laws of the Province of Ontario and 1435839 is a wholly-owned subsidiary of the Applicant.

4. TTCI Holdings Inc. ("TTCIHI") distributes to holders of its Class Y preferenceshares (the "Class Y Shares"), including the Applicant, Common Shares asredemption proceeds on the redemption of its Class Y Shares each quarter.

5. Each of the Applicant, TTCIHI and 1435839 are indirectly controlled by KRT. Eachof the Applicant, TTCIHI and 1435839 are, with respect to TTC, persons referredto in clause (c) of the definition of "distribution" in subsection 1(1) of the Act.

6. The Applicant has transferred Common Shares to 1435839 in consideration forcommon shares of 1435839 on a rollover basis as provided for by subsection 85(1)of the Income Tax Act (Canada).

7. The Applicant wishes to sell the Common Shares acquired by it each quarter fromTTCIHI as proceeds on the redemption of the Class Y Shares of TTCIHI held by theApplicant to third parties forthwith after the Applicant receives such CommonShares, such sales to be made pursuant to clauses 72(7)(b) and (c) of the Act.

8. Subsection 3.11(1) of Rule 45-501 provides that the prospectus exemptioncontained in clauses 72(7)(b) and (c) of the Act does not apply to a trade insecurities unless the seller has held the securities for at least six months.

9. For the purposes of calculating the period during which the seller has held suchsecurities, subsection 3.11(5) of Rule 45-501 permits the seller to include the periodduring which the securities were held by an affiliated entity if the securities wereacquired by the seller from an affiliated entity.

10. 1435839, or an affiliated entity from which it acquired Common Shares, has helda sufficient number of Common Shares for the requisite 6 month period in order topermit 1435839 to immediately sell a number of them pursuant the prospectusexemptions in clauses 72(7)(b) and (c) of the Act at least equal to the number ofCommon Shares to be distributed by the Applicant.

11. 1435839, or an affiliated entity, will hold a number of Common Shares at least equalto the number of Common Shares to be distributed by the Applicant for anadditional 6 month period commencing on the date of receipt by the Applicant of theCommon Shares distributed by TTCIHI as redemption proceeds.

12. The Applicant will undertake, and will cause 1435839, or the affiliated entity, as thecase may be, to undertake to the Commission, that it will ensure that, in each casewhere there is a permitted distribution of Common Shares by the Applicant pursuantto this Ruling, an equivalent number of otherwise freely tradable Common Sharesin the hands of 1435839, or the affiliate, as the case may be, will become subjectto a new six month hold period pursuant to the conditions set forth in the Ruling.

AND UPON the Commission being satisfied that to do so would not be prejudicialto the public interest;

IT IS RULED pursuant to subsection 74(1) of the Act, that any distribution by theApplicant of Common Shares received as redemption proceeds from TTCIHI on the ClassY Shares held by the Applicant is not subject to section 53 of the Act provided that:

1. such trades are made in accordance with the provisions of clauses 72(7)(b) and (c)of the Act, without regard to subsection 3.11(1) of Rule 45-501;

2. at the time of the distribution of Common Shares by the Applicant, 1435839beneficially owns a number of Common Shares which have been held for therequisite six-month period in accordance with subsections 3.11(1) and (5) of Rule45-501 at least equal to the number of Common Shares to be distributed by theApplicant;

3. 1435839, or an affiliated entity, holds a number of Common Shares at least equalto the number of Common Shares to be distributed by the Applicant for anadditional six-month period commencing on the date of receipt by the Applicant ofthe Common Shares distributed by TTCIHI as proceeds on the redemption of theClass Y Shares of TTCIHI held by the Applicant;

4. the Common Shares to be held by 1435839, or an affiliated entity, for an additionalsix-month period as required by the terms of the immediately preceding paragraphare Common Shares which, but for the application of this Ruling, would not havebeen subject to any hold period and could have been sold forthwith to the publicpursuant to clauses 72(7)(b) and (c) of the Act; and

5. the aggregate number of Common Shares distributed by the Applicant pursuant tothis ruling in any financial year of TTC does not exceed one percent (1%) of theCommon Shares outstanding at the commencement of such financial year.

September 22nd, 2000.

"J. A. Geller"       "Robert W. Davis"