Securities Law & Instruments

Headnote

The subsidiary of issuer exempt from requirement to pay participation fee, subject to conditions.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.

Rules Cited

OSC Rule 13-502 Fees (2003), 26 O.S.C.B. 890.

IN THE MATTER OF

THE SECURITIES ACT R.S.O. 1990, C. S.5, AS AMENDED

AND

ONTARIO SECURITIES COMMISSION RULE 13-502 FEES (the "Fee Rule")

AND

IN THE MATTER OF

LAFARGE NORTH AMERICA INC. AND LAFARGE CANADA INC.

 

EXEMPTION

(Section 6.1 of the Fee Rule)

UPON the Director having received an application (the Application) from Lafarge North America Inc. (the Applicant or Lafarge North America), on its own behalf and on behalf of Lafarge Canada Inc. (Lafarge Canada), seeking a decision pursuant to section 6.1 of the Fee Rule exempting Lafarge Canada from the requirement in section 2.2 of the Fee Rule to pay a participation fee;

AND UPON considering the Application and the recommendation of the staff of the Ontario Securities Commission;

AND UPON the Applicant having represented to the Director as follows:

1. Lafarge North America was incorporated under the laws of the State of Maryland in 1977. Its principal executive offices are located at 12950 Worldgate Drive, suite 500, Herndon, Virginia.

2. The authorized capital of Lafarge North America consists of (i) up to 150,000,000 shares of common stock, par value $1.00 per share (the Common Stock), and (ii) 30,000,000 shares of voting stock, par value $0.0001 per share (the Voting Stock). As of February 20, 2004, Lafarge North America had 69,708,627 shares of Common Stock, and 4,572,080 shares of Voting Stock outstanding.

3. Lafarge North America is subject to the United States Securities Exchange Act of 1934, as amended. Lafarge North America is a reporting issuer (or equivalent) in British Columbia, Alberta, Saskatchewan, Manitoba Ontario, Québec, Nova Scotia, and Newfoundland and is not on the list of reporting issuers in default in any of those jurisdictions.

4. The Lafarge North America shares of Common Stock are listed and posted for trading on the New York Stock Exchange and the Toronto Stock Exchange.

5. Lafarge Canada is a corporation governed by the Canada Business Corporations Act. It head office is located at 606 Cathcart Street, Suite 900, Montréal, Québec H3B 1L7.

6. The authorized capital of Lafarge Canada consists of (i) an unlimited number of common shares and (ii) 15,698,252 Exchangeable Preference Shares (Exchangeable Shares). As of February 29, 2004, 16,384,202 common shares and 4,572,080 Exchangeable Shares were outstanding. All of Lafarge Canada Inc.'s common shares are held by Lafarge North America.

7. Lafarge Canada is a reporting issuer (or equivalent) in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec and Nova Scotia and is not on the list of reporting issuers in default in any of those jurisdictions.

8. The Exchangeable Shares are listed and posted for trading on the Toronto Stock Exchange.

9. Each Exchangeable Share provides the holder thereof with the economic and voting equivalent, to the extent practicable, of one Lafarge North America share of Common Stock and the holders of Exchangeable Shares receive the same continuous disclosure and other information that Lafarge North America provides to holders of Lafarge North America shares of Common Stock.

10. On May 30, 2000, Lafarge Canada obtained an order (the Prior Order) under the mutual reliance review system exempting Lafarge Canada from, among other things, the requirement to issue a press release and file a report upon the occurrence of a material change, to file and deliver interim and annual financial statements and to file and deliver an information circular or analogous report (the Lafarge Canada Continuous Disclosure Requirements), subject to certain conditions.

11. Lafarge Canada has no intention of accessing the capital markets in the future by issuing to the public any further securities of Lafarge Canada other than possibly Exchangeable Shares.

12. After March 30, 2004, Lafarge Canada intends to rely on the exemption at Section 13.3 of National Instrument 51-102 for exchangeable securities in order to continue to be exempted from Lafarge Canada Continuous Disclosure Requirements.

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS THE DECISION of the Director, pursuant to section 6.1 of the Fee Rule, that Lafarge Canada is exempt from the requirement in section 2.2 of the Fee Rule to pay a participation fee for each of its financial years, for so long as:

a) Lafarge Canada continues to be exempt from the Lafarge Canada Continuous Disclosure Requirements,

b) all of the equity securities of Lafarge Canada (other than the Exchangeable Shares) continue to be held beneficially, directly or indirectly by, or remain under the control of, Lafarge North America,

c) Lafarge North America is a reporting issuer in Ontario,

d) Lafarge North America has paid its participation fee pursuant to section 2.2 of the Fee Rule, and in calculating such fee, has included the market value of the Exchangeable Shares of Lafarge Canada outstanding at the relevant time, and

e) Lafarge Canada does not issue to the public any securities of Lafarge Canada other than the Exchangeable Shares.

provided further that upon any issuance of securities other than the Exchangeable Shares of Lafarge Canada to the public, a participation fee shall be immediately paid by Lafarge Canada in respect of the financial year during which such securities are issued (such fee to be pro rated to reflect the number of entire months remaining in such financial year) and in respect of subsequent financial years during which such securities remain outstanding.

April 12, 2004.

"Charlie MacCready"