Securities Law & Instruments

Headnote

First trade by employees and former employeesin common shares acquired pursuant to employee share purchaseplan or employee stock option plans of the issuer shall notbe subject to sections 25 and 53 of the Act, subject to certainconditions.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c.S.5., as am.,ss. 25, 53, 74(1).

Applicable Ontario Rules

Rule 45-503 - Trades to Employees, Executivesand Consultants (1998) 21 OSCB 6559.
Rule 45-102 - Resale of Securities (2001) 24 OSCB 5522.

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

AND

IN THE MATTER OF
ENTRUST, INC.

RULING
(Subsection 74(1))

WHEREAS Entrust, Inc. ("Entrust")has applied to the Ontario Securities Commission (the "Commission")for a ruling pursuant to subsection 74(1) of the SecuritiesAct (Ontario), providing that the first trade made by any OntarioEmployee (as defined below) of Entrust Technologies Limited(the "Subsidiary"), any former Ontario Employee orany executor, administrator or guardian of any Ontario Employeeor former Ontario Employee who is resident in the Province ofOntario in common shares of Entrust (the "Common Shares")acquired upon (i) the exercise of options (the "Options")granted pursuant to Entrust's employee stock option plans (the"Option Plans") and (ii) upon the purchase of CommonShares pursuant to Entrust's employee stock purchase plan (the"Purchase Plan"), shall not be subject to sections25 and 53 of the Act, subject to certain conditions;

AND UPON considering the applicationand the recommendation of the staff of the Commission;

AND UPON Entrust having represented tothe Commission that:

1. Entrust is a corporation existing under thelaws of the State of Maryland.

2. Entrust is registered with the Securitiesand Exchange Commission (the "SEC") under the SecuritiesExchange Act of 1934 (as amended) (the "1934 Act"),is subject to the reporting requirements of the 1934 Act andis not in default of those requirements.

3. Entrust is not a reporting issuer under theAct and has no present intention of becoming a reporting issuerunder the Act.

4. The Common Shares are quoted on the NasdaqNational Market ("Nasdaq") under the symbol ENTU.The number of Common Shares issued and outstanding as of December31, 2001 was 64,426,512.

5. As of December 31, 2001, Nortel NetworksCorporation ("Nortel Networks"), a corporation residentin Ontario, through its subsidiary Nortel Networks Inc., wasthe beneficial owner of 13,249,159 Common Shares or approximately20.4% of the Common Shares. Entrust was incorporated on December16, 1996 in connection with a transaction whereby Entrust acquiredassets from Nortel Networks in exchange for issuing Common Sharesto Nortel Networks.

6. As of March 1, 2002, 53,650 Common Sharesor approximately 0.001% of the Common Shares were held by registeredshareholders who are residents of Canada, other than NortelNetworks and its subsidiaries.

7. The Subsidiary is a corporation existingunder the laws of the Province of Ontario and is a wholly-ownedsubsidiary of Entrust.

8. The Subsidiary is not a reporting issuerunder the Act and has no present intention of becoming a reportingissuer under the Act.

9. As of December 31, 2001, there were 483 employeesof the Subsidiary resident in the Province of Ontario eligibleto participate in the Option Plans and the Purchase Plan (the"Ontario Employees").

10. Entrust has two Option Plans in which theOntario Employees participate: the Amended and Restated 1996Stock Incentive Plan (the "1996 Plan") and the 1999Non-Officer Employee Stock Incentive Plan (the "1999 Plan").As at December 31, 2001:

(a) pursuant to the 1996 Plan, Options had beengranted and were outstanding to purchase 7,549,778 Common Sharesand Options to purchase an additional 9,587,323 Common Shareswere available to be granted; and

(b) pursuant to the 1999 Plan, Options had beengranted and were outstanding to purchase 2,012,580 Common Sharesand Options to purchase an additional 7,587,420 Common Shareswere available to be granted.

Accordingly, Options had been granted and wereoutstanding to purchase a total of 9,562,358 Common Shares pursuantto the Option Plans and Options to purchase an additional 17,174,743Common Shares were available to be granted. Under the OptionPlans, each Option entitles the holder to purchase one CommonShare at an exercise price and upon other terms determined atthe time the Option is granted.

11. As at March 31, 2002, 564,121 Common Shareshad been issued pursuant to the Purchase Plan and an additional435,879 Common Shares were available to be issued. Under thePurchase Plan, participating employees are entitled to acquireCommon Shares during specified offering periods at a discountto the fair market value of each Common Share.

12. Subject to certain restrictions, employees,officers and directors of Entrust and its subsidiaries, includingthe Subsidiary, are eligible to participate in the Option Plansand the Purchase Plan, each of which provide participants withan opportunity to acquire Common Shares.

13. The board of directors of Entrust is responsiblefor the administration of the Option Plans and the PurchasePlan.

14. A registration statement on Form S-8 andany other disclosure documents prepared in accordance with UnitedStates securities legislation outlining the terms and conditionsof the Option Plans and the Purchase Plan has been deliveredor will be delivered to each Ontario Employee who participatesin one or more of the Option Plans or the Purchase Plan.

15. Entrust may rely on section 2.2 of Rule45-503 established by the Commission which provides an exemptionfrom sections 25 and 53 of the Act in respect of the issuanceof Options pursuant to the Option Plans and the issuance ofCommon Shares pursuant to the Option Plans and the PurchasePlan.

16. There is no market for Common Shares inthe Province of Ontario or any other province in Canada. Thefirst trade made by Ontario Employees or former Ontario Employeesor any executor, administrator or guardian of an Ontario Employeeor a former Ontario Employee in Common Shares that are or wereacquired pursuant to the Option Plans or the Purchase Plan willbe effected through Nasdaq in accordance with all laws applicableto trades made on such market.

17. Ontario Employees will not be induced toparticipate in the Option Plans or the Purchase Plan by expectationof employment or continued employment.

18. The extension of the availability of theOption Plans and the Purchase Plan to the Ontario Employeesallows the Subsidiary to attract, obtain and motivate employeeswho are able to make an important contribution to the Subsidiary'sprofitability and long term success.

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS RULED, pursuant to subsection 74(1)of the Act that the first trade made by an Ontario Employee,a former Ontario Employee or an executor, administrator or guardianof an Ontario Employee or a former Ontario Employee in CommonShares acquired upon (i) the exercise of Options granted pursuantto the Option Plans and (ii) upon the purchase of Common Sharespursuant to the Purchase Plan, shall not be subject to the requirementsof sections 25 and 53 of the Act, provided that:

(a) at the time of the trade, Entrust is nota reporting issuer in any Canadian jurisdiction;

(b) at the time of the trade, after giving effectto the issue of such Common Shares and any other Common Sharesthat were issued at the same time or as part of the same distributionas such Common Shares, residents of Canada, other than NortelNetworks and its subsidiaries;

(i) do not own directly or indirectly morethan 10% of the outstanding Common Shares; and

(ii) do not represent in number more than 10%of the outstanding Common Shares; and

(c) such first trade is made;

(i) through an exchange, or a market, outsideof Canada, or

(ii) to a person or company outside of Canada.

April 26, 2002.

"Paul Moore"      "Theresa McLeod"