Securities Law & Instruments

Headnote

Clause 104(2)(c) - direct and indirect issuerbids resulting from a reorganization involving issuer and asignificant shareholder prior to a proposed offering by issuerand shareholder - each shareholder company to transfer commonshares to newly-incorporated company with no material assetsor liabilities - issuer's wholly-owned subsidiary company amalgamateswith newco - amalco is liquidated and common shares are to bedistributed to issuer and cancelled - purpose of reorganizationis to allow shareholder to achieve certain tax-planning objectivesprior to the secondary offering - shareholder to indemnify andreimburse issuer for costs and liabilities associated with reorganization- no adverse economic impact on or prejudice to issuer or publicshareholders - issuer exempt from requirements of sections 95,96, 97, 98 and 100 of the Act.

Subsection 59(1) of Schedule 1 - issuer exemptfrom fee otherwise payable pursuant to clause 32(1)(b) of Schedule1 to the Regulation in respect of certain transactions exemptedfrom the issuer bid requirements and take-over bids, where thetransactions did not result in any change to the share ownershipstructure of the issuer, subject to the requirement that theminimum fee of $800 be paid.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 92, 95, 96, 97, 98, 100, 104(2)(c).

Regulations Cited

Regulation made under the Securities Act, R.R.O.1990, Regulation 1015, as am., ss. 32(1)(b) and 59(1) of Schedule1.

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

AND

IN THE MATTER OF
THE REGULATION UNDER THE SECURITIES ACT,
R.S.O. 1990, REGULATION 1015, AS AMENDED
(the "Regulation")

AND

IN THE MATTER OF
THE THOMSON CORPORATION AND
THE WOODBRIDGE COMPANY LIMITED

ORDER

UPON the application (the "Application")of The Thomson Corporation ("Thomson") and The WoodbridgeCompany Limited ("Woodbridge") to the Ontario SecuritiesCommission (the "Commission") for an order:

(i) pursuant to clause 104(2)(c) of the Actthat certain acquisitions by Thomson of its common shares ("CommonShares"), pursuant to a proposed reorganization (the "Reorganization")described in paragraph 8 below, are exempt from the requirementsof sections 95, 96, 97, 98 and 100 of the Act (the "IssuerBid Requirements"); and

(ii) pursuant to subsection 59(1) of ScheduleI (the "Schedule") to the Regulation that Thomsonand Woodbridge be exempt from paying, in part, the fees payablepursuant to clause 32(1)(b) of the Schedule;

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

AND UPON Thomson and Woodbridge havingrepresented to the Commission as follows:

1. Thomson is a corporation incorporated underthe Business Corporations Act (Ontario) (the "OBCA")and is a reporting issuer under the Act not in default of anyrequirements of the Act or the Regulation.

2. The authorized capital of Thomson consistsof an unlimited number of Common Shares and an unlimited numberof preference shares without par value, issuable in series ofwhich 6,000,000 shares consist of a series designated as CumulativeRedeemable Floating Rate Preference Shares, Series II (the "SeriesII Preference Shares") and 18,000,000 shares consist ofa series designated as Cumulative Redeemable Preference Shares,Series V (the "Series V Preference Shares"). As ofApril 15, 2002, 632,112,974 Common Shares, 6,000,000 SeriesII Preference Shares and 18,000,000 Series V Preference Shareswere issued and outstanding.

3. The Common Shares, Series II Preference Sharesand Series V Preference Shares are listed on The Toronto StockExchange (the "TSX").

4. Woodbridge is a corporation incorporatedunder the OBCA and is not a reporting issuer under the Act.

5. As of April 15, 2002, Woodbridge directlyand indirectly owned 432,115,788 Common Shares, representingapproximately 68.4% of Thomson's issued and outstanding CommonShares.

6. Mr. Kenneth R. Thomson ("KRT")controls Woodbridge. He also controls other companies that directlyand indirectly own 28,222,338 Common Shares. Accordingly, throughWoodbridge and these other companies, KRT controls 460,338,126Common Shares, representing approximately 72.8% of Thomson'sissued and outstanding Common Shares.

7. Thomson has filed a preliminary prospectusdated May 2, 2002 in respect of an offering of its Common Sharesin Canada and the United States (the "Offering").Woodbridge will offer some of its Common Shares for sale underthe Offering to increase liquidity in the market for the CommonShares following the completion of the Offering. The Reorganizationwill facilitate Woodbridge's participation in the Offering byenabling it to achieve certain tax planning objectives relatingto its ownership of Common Shares.

8. The Reorganization, which will be completedprior to the completion of the Offering, involves the followingprincipal steps:

(a) each of Woodbridge, along with eight othercompanies controlled by KRT and one other company controlledby Mr. John A. Tory, a director of Thomson and Woodbridge (eacha "Shareholder Company", collectively the "ShareholderCompanies"), will reorganize its respective holdings ofCommon Shares resulting in such Common Shares being owned byan indirect wholly-owned subsidiary (each a "Newco",collectively the "Newcos"). This will involve a numberof transfers of the Common Shares owned by each of the ShareholderCompanies (the "Transfers"). Prior to the Transfers,the Newcos will have no material assets and the Newcos willhave no liabilities at any time. The authorized capital of eachNewco will consist of an unlimited number of common shares andan unlimited number of preference shares;

(b) following the completion of the reorganizationby each of the Shareholder Companies of the Common Shares ownedby it:

(i) each of the Newcos will own all of the CommonShares formerly owned by its respective Shareholder Company;

(ii) all of the issued and outstanding preferenceshares of each Newco will be owned by its respective ShareholderCompany; and
(iii) all of the issued and outstanding common shares of eachNewco will be owned by a wholly-owned subsidiary of each ShareholderCompany (these wholly-owned subsidiaries together with theirrespective Shareholder Companies are hereinafter collectivelyreferred to as the "Shareholder Group of each Newco");

(c) Thomson will then incorporate a wholly-ownedsubsidiary ("Subco"). Subco will have no materialassets and no liabilities. The authorized capital of Subco willconsist of an unlimited number of common shares;

(d) the Newcos will then amalgamate with Subcoto form Amalco by way of an amalgamation under the OBCA (the"Amalgamation");

(e) under the Amalgamation:

(i) Thomson will issue that number of CommonShares to the Shareholder Group of each Newco which will equal,in the aggregate, the number of Common Shares owned by eachNewco prior to the Amalgamation; and

(ii) Amalco will acquire the Common Shares formerlyowned by the Newcos;

(f) immediately following the Amalgamation,Amalco will be liquidated by way of a liquidation under theOBCA (the "Wind-up") into Thomson and the Common Sharesheld by Amalco (the "Amalco Common Shares") will becancelled; and

(g) immediately following the Amalgamation,Woodbridge will transfer its Common Shares to two wholly-ownedsubsidiaries (referred to herein as part of the "Transfers").

9. The Reorganization will not change the numberof Common Shares issued and outstanding as Thomson will havethe same aggregate number of Common Shares outstanding followingthe Reorganization as it did immediately prior to the Reorganization.

10. Following the Reorganization, each of KRT,Mr. John A. Tory and the public shareholders of Thomson (the"Public Shareholders") will beneficially own the sameaggregate number and same relative percentages of Common Sharesthat they owned immediately prior to the Reorganization andwill have the same rights and benefits in respect of such sharesthat they currently have.

11. All costs and expenses incurred by Thomsonin connection with the Reorganization will be paid for by Woodbridgeand the Shareholder Group of each Newco.

12. Woodbridge and the Shareholder Group ofeach Newco will indemnify Thomson and its subsidiaries, includingSubco, the Public Shareholders, Amalco, and the present andfuture directors and officers of each of Thomson and its subsidiaries,including Subco and Amalco, from any losses or liabilities whichmay be incurred by them as a result of the Reorganization.

13. The Reorganization will have no adverseeconomic effect on, or adverse tax consequences to, or in anyway prejudice Thomson or the Public Shareholders.

14. The Reorganization has been unanimouslyapproved by the board of directors of Thomson, excluding thosedirectors who are also directors or significant shareholdersof Woodbridge and the Shareholder Group of each Newco.

15. The Reorganization has been conditionallyapproved by the TSX.

16. Upon the Amalgamation, the offer by Subco(the "Subco Offer") to acquire all of the shares ofthe Newcos to form Amalco will constitute an indirect issuerbid under subsection 89(1) and section 92 of the Act in thatit will constitute an indirect offer by Thomson for the CommonShares owned by the Newcos at the time of the Amalgamation.Further, the offer by Thomson (the "Thomson Offer")to acquire the Amalco Common Shares on the Wind-up will constitutea direct issuer bid under subsection 89(1) of the Act (the SubcoOffer and the Thomson Offer are collectively referred to asthe "Offers"). The Offers will not be exempt issuerbids under the Act.

17. The Offers will be subject to the reportingand fee requirements in section 203.1(1)(b)(ii) of the Regulationand clause 32(1) of the Schedule (the "Issuer Bid Fee Requirements").

18. In addition, the Transfers will involvethe acquisition of Common Shares by companies controlled byKRT. Since each company controlled by KRT will be deemed tobeneficially own all of the Common Shares beneficially ownedby all other companies controlled by KRT, the acquisition ofCommon Shares by each of such companies will result in eachcompany owning in excess of 20% of Thomson's outstanding CommonShares. Accordingly, the acquisition of Common Shares by eachof such companies will constitute a take-over bid under theAct (each an "Exempt Take-Over Bid"). The take-overbid exemption in Section 93(1)(c) of the Act will be reliedupon in connection with each Exempt Take-Over Bid.

19. Each Exempt Take-Over Bid will be subjectto the reporting and fee requirements in section 203.1(1)(b)(i)of the Regulation and clause 32(1) of the Schedule (the "Take-OverBid Fee Requirements").

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

IT IS ORDERED pursuant to clause 104(2)(c)of the Act that the Offers to be made by Thomson as part ofthe Reorganization be exempt from the Issuer Bid Requirements;

IT IS FURTHER ORDERED THAT Thomson isexempt from the Issuer Bid Fee Requirements, provided that aminimum fee of $800 is paid; and

IT IS FURTHER ORDERED THAT Thomson isexempt from the Take-Over Bid Fee Requirements, provided thata minimum fee of $800 is paid.

May 24, 2002.

"Harold P. Hands"      "Robert W. Korthals"