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THE THOMSON CORPORATION 2APR200415090752 …
Tags: acquisition, annual information form, audit committee, capital structure, corporate structure, december 31, dividends, reuters, structure 3, structure 6, table of contents, thomson corporation, year ended december,Pages: 24
Language: english
Created: Mon Mar 10 16:21:53 2008
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THE THOMSON CORPORATION
2APR200415090752
Annual Information Form
For the Year Ended December 31, 2007
March 10, 2008
TABLE OF CONTENTS
Page
1. PROPOSED ACQUISITION OF REUTERS 2
2. FORWARD-LOOKING STATEMENTS 2
3. CORPORATE STRUCTURE 3
4. GENERAL DEVELOPMENT OF THE BUSINESS 4
5. DESCRIPTION OF THE BUSINESS 5
6. DIVIDENDS 5
7. DESCRIPTION OF CAPITAL STRUCTURE 6
8. MARKET FOR SECURITIES 8
9. DIRECTORS AND OFFICERS 9
10. TRANSFER AGENT AND REGISTRARS 15
11. INTERESTS OF EXPERTS 15
12. ADDITIONAL INFORMATION 16
SCHEDULE A AUDIT COMMITTEE CHARTER A-1
In this annual information form, ``Thomson,'' ``we,'' ``us'' and ``our'' each refers to The Thomson Corporation and its
consolidated subsidiaries unless the context requires otherwise.
In this annual information form, ``Thomson Reuters'' refers collectively to Thomson Reuters Corporation, Thomson Reuters PLC
and their respective consolidated subsidiaries operating as a unified group under the dual listed company structure following
completion of our proposed acquisition of Reuters Group PLC (Reuters), unless the context requires otherwise.
In this annual information form, ``Woodbridge'' refers to The Woodbridge Company Limited and other companies affiliated with
it unless the context requires otherwise.
Unless the context requires otherwise, references in this annual information form to ``$,'' ``US$'' or ``dollars'' are to United States
(U.S.) dollars. References in this annual information to ``C$'' are to Canadian dollars. In 2007, the average daily exchange rate
was US$1.00 = C$1.07.
Information contained on our website or any other websites identified in this annual information form is not part of this annual
information form. All website addresses listed in this annual information form are intended to be inactive, textual references
only. The Thomson logo and other trademarks, trade names and service names of our company and our subsidiaries mentioned
in this annual information form are the property of our company and our subsidiaries.
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1. PROPOSED ACQUISITION OF REUTERS
In May 2007, we agreed to acquire Reuters by implementing a dual listed company (DLC) structure. The proposed acquisition
has been cleared by antitrust regulators in Europe, the United States and Canada and the only significant conditions to closing
that remain are shareholder and court approvals. Our shareholders and Reuters shareholders will be asked to approve the
proposed acquisition at meetings to be held on March 26, 2008. If our shareholders and Reuters shareholders approve the
proposed acquisition and the requisite court approvals are obtained, we expect that closing will occur on April 17, 2008.
Under the DLC structure, Thomson Reuters will have two parent companies, both of which will be publicly listed The Thomson
Corporation, renamed as Thomson Reuters Corporation, and Thomson Reuters PLC, a new UK company in which existing
Reuters shareholders will receive shares as part of their consideration in the transaction. Those companies will operate as a
unified group pursuant to contractual arrangements as well as provisions in their organizational documents. Under the DLC
structure, shareholders of Thomson Reuters Corporation and Thomson Reuters PLC will both have a stake in Thomson Reuters,
with cash dividend, capital distribution and voting rights that are comparable to the rights they would have if they were holding
shares in one company carrying on the Thomson Reuters business.
Information about our proposed acquisition of Reuters, including a description of the DLC structure, is contained in our
management information circular dated February 29, 2008 relating to our special meeting of shareholders to be held on
March 26, 2008, which we refer to in this annual information form as the Special Meeting Circular. The Special Meeting Circular
was filed with the securities regulatory authorities in Canada and furnished to the SEC on Form 6-K on February 29, 2008 and it
is specifically incorporated by reference in this annual information form.
A copy of the Special Meeting Circular is available at the Canadian securities regulatory authorities' website at www.sedar.com,
at the SEC's website at www.sec.gov and at our website at www.thomson.com.
2. FORWARD-LOOKING STATEMENTS
Certain statements contained in this annual information form constitute ``forward-looking statements''. When used in this
annual information form, the words ``anticipate'', ``believe'', ``plan'', ``estimate'', ``expect'', ``intend'', ``will'', ``may'', ``should'' and
similar expressions, as they relate to us and our management, are intended to identify forward-looking statements. These
forward-looking statements are not historical facts but reflect expectations, estimates and projections. These forward-looking
statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from
current expectations. These risks include, but are not limited to:
· changes in the general economy;
· actions of our competitors;
· changes to legislation and regulations;
· increased accessibility by our customers to free or relatively inexpensive information sources;
· failure to derive fully anticipated benefits from future or existing acquisitions, joint ventures, investments or dispositions;
· failure to develop new products, services, applications and functionalities to meet our customers' needs, attract new
customers or expand into new geographic markets;
· failure of electronic delivery systems, network systems or the Internet;
· detrimental reliance on third parties for information;
· failure to meet the challenges involved in the expansion of international operations;
· failure to realize the anticipated cost savings and operating efficiencies from the THOMSONplus initiative and other
cost-saving initiatives;
· failure to protect our reputation;
· impairment of our goodwill and identifiable intangible assets;
· failure of significant investments in technology to increase revenues or decrease operating costs;
· increased self-sufficiency of our customers;
· inadequate protection of intellectual property rights;
· downgrading of our credit ratings;
· threat of legal actions and claims;
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· changes in foreign currency exchange and interest rates;
· failure to recruit and retain high quality management and key employees;
· funding obligations in respect of pension and post-retirement benefit arrangements; and
· actions or potential actions that could be taken by our principal shareholder, Woodbridge.
These factors and other risk factors incorporated by reference in this annual information form represent risks that our
management believes are material. Other factors not presently known to us or that we presently believe are not material could
also cause actual results to differ materially from those expressed in the forward-looking statements contained and incorporated
by reference in this annual information form. Accordingly, undue reliance should not be placed on these forward-looking
statements. We disclaim any intention or obligation to update publicly or to revise any of the forward-looking statements
contained or incorporated by reference in this annual information form, whether as a result of new information, future events or
otherwise, except as required by law, rule or regulation.
3. CORPORATE STRUCTURE
The Thomson Corporation was incorporated under the Business Corporations Act of Ontario, Canada by articles of
incorporation dated December 28, 1977. We restated our articles on February 28, 2005. Our registered office is Suite 2706,
Toronto Dominion Bank Tower, P.O. Box 24, Toronto-Dominion Centre, Toronto, Ontario M5K 1A1, Canada. Our principal
executive office is at Metro Center, One Station Place, Stamford, Connecticut 06902, United States.
The following provides information about our principal subsidiaries as of December 31, 2007. As of that date, we beneficially
owned, directly or indirectly, 100% of the voting securities and non-voting securities of each of these subsidiaries. Certain
subsidiaries, each of which represents not more than 10% of the consolidated assets and not more than 10% of the
consolidated revenues of our company, and all of which, in the aggregate, represent not more than 20% of the total
consolidated assets and the total consolidated revenues of our company as of December 31, 2007, have been omitted.
Indentation indicates the voting securities are directly or indirectly owned by the subsidiary listed above. Our legal structure is
not indicative of our operational structure.
Jurisdiction of
Subsidiary Incorporation/Formation
Thomson Canada Limited Ontario, Canada
Thomson Holdings S.A. Luxembourg
Thomson Finance S.A. Luxembourg
LiveNote Technologies Ltd. England and Wales
LiveNote Inc. Delaware, U.S.A.
Engate LLC Delaware, U.S.A.
Emica Corporation Delaware, U.S.A.
Thomson U.S. Holdings Inc. Delaware, U.S.A.
THI (U.S.) Inc. Delaware, U.S.A.
Thomson U.S. Inc. Delaware, U.S.A.
The Thomson Corporation Delaware Inc. Delaware, U.S.A.
Thomson Holdings Inc. Delaware, U.S.A.
Thomson Finance Company Delaware, U.S.A.
Thomson TradeWeb LLC Delaware, U.S.A.
Thomson Healthcare Inc. Delaware, U.S.A.
Physicians' Desk Reference Inc. Florida, U.S.A.
Thomson Financial Holdings Inc. Delaware, U.S.A.
Thomcorp Holdings Inc. New York, U.S.A.
Thomson Scientific Inc. Pennsylvania, U.S.A.
Thomson Professional & Regulatory Inc. Texas, U.S.A.
Quantitative Analytics, Inc. Illinois, U.S.A.
Thomson Financial LLC Delaware, U.S.A.
Thomson Legal & Regulatory Inc. Minnesota, U.S.A.
West Publishing Corporation Minnesota, U.S.A.
West Services Inc. Delaware, U.S.A.
Thomson International SA Luxembourg
The Thomson Corporation PLC England and Wales
The Thomson Organisation Limited England and Wales
TTC (1994) Limited England and Wales
Thomson Information & Publishing Holdings Limited England and Wales
Thomson Information & Solutions Limited England and Wales
Thomson Legal & Regulatory Limited England and Wales
Thomson Financial Limited England and Wales
For a description of the anticipated structure of Thomson Reuters following completion of our proposed acquisition of Reuters,
please see the section entitled ``The Dual Listed Company Structure'' on pages 39 to 47 of our Special Meeting Circular, which
pages are incorporated by reference in this annual information form.
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4. GENERAL DEVELOPMENT OF THE BUSINESS
Overview
We are one of the world's leading information services providers. We are focused on providing products and services that:
· serve business and professional customers;
· target customer segments and sub-segments that we believe provide the best opportunities for growth and profitability;
· integrate critical, must-have data with software, tools and services;
· generate subscription-based or recurring revenues;
· reach customers directly through a technology platform;
· integrate into customers' workflows; and
· are scalable and leverageable.
Through ongoing portfolio optimization and a disciplined capital allocation, we continue to shift our product and services
portfolio to a higher percentage of electronic workflow solutions.
2007 Operational Priorities
In 2007, we made progress on our three key operational priorities:
2007 Objective 2007 Progress
Successfully complete the sale of Thomson Learning and Completed the sale of Thomson Learning for approximately
deploy the proceeds in a manner that will result in long-term $8 billion and plan to use the proceeds as part of the
value creation for shareholders. consideration required to acquire Reuters.
Continue to increase revenue growth from existing businesses Revenues increased 11%, to $7.3 billion, driven by strong
through the build-out of new and existing solutions. growth across all business segments. Organic revenue growth
was 6%.
Continue to aggressively implement THOMSONplus initiatives Our accelerated efforts to increase operational efficiency
to drive operational efficiency and effectiveness across the through THOMSONplus continued in 2007. As a result, at the
organization. end of 2007, we achieved annualized run-rate savings of
$120 million, investing $153 million in 2007. The aggregate
amount expected to be spent on THOMSONplus remains
unchanged at $250 million. However, we expect to achieve
annualized run-rate savings of $160 million by the middle of
2008, six months ahead of schedule, and in excess of our
original target of $150 million.
2008 Operational Priorities
For 2008, our two key operational priorities currently are:
· Successfully complete the acquisition of Reuters and begin to execute on the integration and creation of the new
Thomson Reuters organization; and
· Drive organic growth in core businesses by building on our momentum in electronic products, software and services.
Acquisitions and Dispositions
During the last three years, we made a number of tactical acquisitions that complemented our existing information businesses.
For many of our acquisitions, we purchased information or a product or service that we integrated into our operations to
broaden the range of our offerings. As alternatives to the development of new products and services, these acquisitions often
have the advantages of faster integration into our product and service offerings and cost efficiencies. These acquisitions have
further strengthened our leadership position, expanded our product offerings and enabled us to enter adjacent markets and tap
new revenue streams. In addition, as part of our continuing strategy to optimize our portfolio of businesses, to sharpen our
strategic focus on providing electronic workflow solutions to business and professional markets and to ensure that we are
investing in parts of our business that offer the greatest opportunities to achieve growth and returns, we also actively pursued
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the sale of a number of businesses during the last three years. For more information on acquisitions and dispositions that we
made in 2005, 2006 and 2007, please see our Management's Discussion and Analysis for the year ended December 31, 2007.
5. DESCRIPTION OF THE BUSINESS
Overview
For a description of our business, including information on our company's material contracts and legal proceedings involving our
company, please see the section entitled ``Information Concerning Thomson'' on pages 143 to 165 of our Special Meeting
Circular, which pages are incorporated by reference in this annual information form. For information on the business of Reuters
and management's plans for the business of Thomson Reuters following completion of our proposed acquisition of Reuters,
please see the section entitled ``Information Concerning Reuters'' on pages 203 to 212, and the section entitled ``Business of
Thomson Reuters'' on pages 53 to 56, of our Special Meeting Circular, which pages are incorporated by reference in this annual
information form.
Risk Factors
For information on the risks relating to our proposed acquisition of Reuters and the risks relating to the business and operations
of our company and Thomson Reuters following completion of the acquisition, please see the section entitled ``Risk Factors'' on
pages 106 to 113 of our Special Meeting Circular, which pages are incorporated by reference in this annual information form.
6. DIVIDENDS
Policy
We presently pay dividends on our common shares and intend to continue to do so. Our policy is to pay common share
dividends at a rate that takes into account all factors that our Board of Directors considers relevant, including our available cash
flow, financial condition and capital requirements. The declaration of common share dividends by our Board of Directors and the
amount of those dividends may be adjusted or eliminated at the discretion of our Board of Directors. As discussed below, we
also pay dividends on our outstanding preference shares.
For information on the anticipated dividend policy of Thomson Reuters and the dividends expected to be paid to our
shareholders in 2008, please see the section entitled ``Dividend Policy of Thomson Reuters'' on pages 69 to 73 of our Special
Meeting Circular, which pages are incorporated by reference in this annual information form.
Common Share Dividends
The table below sets forth the dividends declared on our common shares in 2007, 2006 and 2005. We pay dividends on our
common shares in U.S. dollars, but our common shareholders have the option to receive dividends in equivalent Canadian
dollars or British pounds sterling.
Dividend Amount
Per Thomson
Period Common Share
2007
Fourth Quarter $0.245
Third Quarter $0.245
Second Quarter $0.245
First Quarter $0.245
2006
Fourth Quarter $0.220
Third Quarter $0.220
Second Quarter $0.220
First Quarter $0.220
2005
Fourth Quarter $0.200
Third Quarter $0.200
Second Quarter $0.200
First Quarter $0.190
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Preference Share Dividends
We pay dividends on our Series II preference shares quarterly at an annual rate of 70% of the Canadian bank prime rate applied
to the stated capital of such shares. The table below sets forth the dividends declared on our Series II preference shares in 2007,
2006 and 2005.
Dividend Amount
Per Thomson
Series II
Period Preference Share
2007
Fourth Quarter C$0.273921
Third Quarter C$0.274362
Second Quarter C$0.261781
First Quarter C$0.258904
2006
Fourth Quarter C$0.264658
Third Quarter C$0.264658
Second Quarter C$0.250437
First Quarter C$0.224384
2005
Fourth Quarter C$0.208197
Third Quarter C$0.188789
Second Quarter C$0.185428
First Quarter C$0.183390
7. DESCRIPTION OF CAPITAL STRUCTURE
Capital Structure
Our authorized share capital consists of an unlimited number of common shares and an unlimited number of preference shares,
issuable in series, of which 6,000,000 shares consist of Series II preference shares. As of December 31, 2007, there were
638,682,953 common shares and 6,000,000 Series II preference shares outstanding.
For information on the amendments to be made to our capital structure upon completion of our proposed acquisition of
Reuters, please see the section entitled ``The Dual Listed Company Structure'' on pages 39 to 47, and the section entitled
``Reuters Trust Principles and Reuters Founders Share Company'' on pages 48 to 52 of our Special Meeting Circular, which pages
are incorporated by reference in this annual information form.
Common Shares
Each common share entitles its holder to one vote at meetings of our shareholders and to receive dividends when declared by
our Board of Directors. All dividends declared by our Board of Directors are paid equally on all common shares, subject to the
rights of holders of the preference shares. Holders of common shares will participate equally in any distribution of our assets
upon liquidation, dissolution or winding-up, subject to the rights of the holders of the preference shares. There are no
preemptive, redemption, purchase or conversion rights attaching to our common shares.
Preference Shares
Our preference shares may be issued in one or more series as determined by our Board of Directors. Our Board of Directors is
authorized to fix the number, the consideration per share and the rights and restrictions of the preference shares of each series.
The preference shares of each series are to rank on a parity with the preference shares of each other series with respect to the
payments of dividends and the return of capital on our liquidation, dissolution or winding-up. The preference shares are entitled
to preference over the common shares and any other shares ranking junior to the preference shares with respect to the payment
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of dividends and the return of capital. The special rights and restrictions attaching to the preference shares as a class may not be
amended without approval of at least two-thirds of the votes cast at a meeting of the holders of preference shares. The holders
of preference shares are not entitled to any voting rights except as provided by our Board of Directors when authorizing a series
or as provided by law.
The Series II preference shares are non-voting and are redeemable at the option of our company for C$25.00 per share, together
with accrued dividends. Dividends are payable quarterly at an annual rate of 70% of the Canadian bank prime rate applied to
the stated capital of such shares.
Ownership Restrictions
There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the
remittance of dividends, interest or other payments to non-resident holders of common shares, other than withholding tax
requirements.
There is no limitation imposed by Canadian law or by our articles of incorporation or other charter documents on the right of a
non-resident to hold or vote our common shares, other than as provided by the Investment Canada Act, which requires
notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a
non-Canadian of control of a Canadian business.
Credit Ratings
Our long-term unsecured debt securities are rated Baa1 (stable) by Moody's, A (negative) by S&P and A (low) (stable) by DBRS.
Credit ratings are intended to provide investors with an independent measure of the credit quality of an issue of securities and
are indicators of the likelihood of payment and of the capacity and willingness of a company to meet its financial commitment
on an obligation in accordance with the terms of the obligation. A description of the rating categories of each of the rating
agencies is set out below.
Moody's Investor Services (Moody's)
Moody's long-term credit ratings are on a rating scale that ranges from Aaa to C, which represents the range from highest to
lowest quality of such securities rated. Moody's ``Baa'' rating assigned to our long-term debt instruments is the fourth highest
rating of nine rating categories. Obligations rated ``Baa'' are subject to moderate credit risk. They are considered medium-grade
and as such may possess certain speculative characteristics. Moody's appends numerical modifiers from 1 to 3 to its long-term
debt ratings, which indicate where the obligation ranks in its ranking category, with 1 being the highest. In September 2007,
Moody's downgraded its ratings assigned to our long-term debt to ``Baa1'' from ``A3'', citing significant increases in leverage
that will result from our proposed acquisition of Reuters. Moody's outlook is stable. Outlooks represent Moody's assessment
regarding the likely direction of the rating over the medium-term.
Standard & Poor's (S&P)
S&P's long-term credit ratings are on a rating scale that ranges from AAA to D, which represents the range from highest to
lowest quality of such securities rated. S&P's ``A'' rating assigned to our long-term debt instruments is the third highest rating of
10 major rating categories. An ``A'' rating indicates that the obligor's capacity to meet its financial commitment is strong, but
that the obligation is somewhat more susceptible to adverse effects of changes in circumstances and economic conditions than
obligations in higher rated categories. S&P uses ``+'' or `` ``designations to indicate the relative standing of securities within a
particular rating category. In September 2007, S&P affirmed its ``A '' rating of our long-term debt and changed its outlook to
negative. Outlooks represent S&P's assessment regarding the potential direction of the rating over the immediate to long-term.
A developing outlook is assigned when a rating may be raised or lowered.
DBRS Limited (DBRS)
DBRS' credit ratings are on a long-term debt rating scale that ranges from AAA to D, which represents the range from highest to
lowest quality of such securities rated. DBRS' ``A'' rating assigned to our long-term debt is the third highest of the 10 rating
categories for long-term debt. Debt securities rated ``A'' are of satisfactory credit quality and protection of interest and principal
is considered substantial. A reference to ``high'' or ``low'' reflects the relative strength within the rating category. In the fourth
quarter of 2007, DBRS confirmed our long-term rating and raised its outlook to stable. Outlooks represent DBRS' opinion
regarding the outlook for the ratings.
The credit ratings by Moody's, S&P and DBRS are not recommendations to purchase, hold or sell securities and do not address
the market price or suitability of a specific security for a particular investor. Credit ratings may not reflect the potential impact of
all risks on the value of securities. In addition, real or anticipated changes in the rating assigned to a security will generally affect
the market value of that security. Shareholders cannot be assured that a rating will remain in effect for any given period of time
or that a rating will not be revised or withdrawn entirely by a rating agency in the future.
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8. MARKET FOR SECURITIES
Our common shares are listed and traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol
``TOC.'' Of the two marketplaces, the greatest volume of trading in 2007 occurred on the Toronto Stock Exchange. Our Series II
preference shares are also listed on the Toronto Stock Exchange under the symbol ``TOC.PR.B.''
The following table sets forth the reported trading prices in Canadian dollars and trading volumes for our common shares on the
Toronto Stock Exchange during each month in 2007.
Month High Low Close Trading Volume
January 49.95 47.05 49.50 9,022,529
February 51.95 46.82 47.15 12,415,702
March 49.56 46.30 47.81 12,408,158
April 50.00 47.13 48.69 10,541,248
May 49.74 43.80 45.28 52,975,816
June 46.15 43.17 43.50 22,038,245
July 46.19 42.90 44.32 24,205,453
August 44.70 41.00 44.70 24,108,780
September 44.63 41.66 41.66 14,116,588
October 44.69 41.63 44.62 22,421,200
November 44.16 36.44 38.70 34,651,511
December 40.83 37.49 40.29 27,864,159
The following table sets forth the reported trading prices in U.S. dollars and trading volumes for our common shares on the
New York Stock Exchange during each month in 2007.
Month High Low Close Trading Volume
January 42.27 40.08 42.07 831,200
February 44.19 40.07 40.37 1,571,661
March 42.83 39.46 41.56 899,100
April 44.64 40.77 44.05 1,460,800
May 44.93 39.75 42.37 2,969,180
June 43.62 40.27 41.03 2,137,800
July 44.36 40.44 41.61 3,221,000
August 42.41 38.27 42.32 2,835,500
September 42.99 40.66 41.93 1,857,800
October 47.26 42.11 47.26 2,416,200
November 47.00 36.93 38.91 3,578,604
December 41.25 37.01 40.75 3,640,544
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The following table sets forth the reported trading prices in Canadian dollars and trading volumes for our Series II preference
shares on the Toronto Stock Exchange during each month in 2007.
Month High Low Close Trading Volume
January 28.80 25.51 26.60 19,739
February 26.60 25.81 26.06 21,317
March 26.25 25.27 25.74 191,761
April 26.04 25.22 25.73 13,555
May 25.98 25.25 25.50 414,046
June 25.75 25.00 25.25 215,336
July 25.75 24.90 25.26 42,467
August 25.45 25.00 25.40 117,227
September 25.35 24.77 25.24 74,830
October 25.23 24.80 24.80 25,339
November 25.20 24.70 25.00 17,831
December 25.00 23.25 24.00 33,648
In 2007, we sold US$800 million of 5.70% notes due 2014. These notes are not listed or quoted on a marketplace.
9. DIRECTORS AND OFFICERS
For information on the individuals who will serve as the initial directors and executive officers of Thomson Reuters following
completion of our proposed acquisition of Reuters and other corporate governance matters relating to Thomson Reuters, please
see the section entitled ``Management and Governance of Thomson Reuters'' on pages 74 to 89 of our Special Meeting Circular,
which pages are incorporated by reference in this annual information form.
Directors
The names, municipalities and countries of residence, offices and principal occupations of our directors as of the date of this
annual information form are shown below. Each director has been a director since the year indicated below. All of our directors
have been engaged for more than five years in their present principal occupations or in other capacities within Thomson, except
where noted below.
Our Board of Directors currently has a Corporate Governance Committee, a Human Resources Committee and an Audit
Committee and the members of each committee are shown below.
Director
Name and Municipality of Residence Office and Principal Occupation Since
David Thomson Chairman of Thomson and Chairman of The Woodbridge 1988
Toronto, Ontario, Canada Company Limited (holding company)
W. Geoffrey Beattie(1)(2) Deputy Chairman of Thomson and President of The 1998
Toronto, Ontario, Canada Woodbridge Company Limited (holding company)
Richard J. Harrington President and Chief Executive Officer of Thomson 1993
Westport, Connecticut, U.S.A.
Ron D. Barbaro(1)(3)(4) Chairman of The Brick Group Income Fund (retail company) 1993
Toronto, Ontario, Canada
Mary Cirillo(1)(5) Corporate director 2005
New York, New York, U.S.A.
Robert D. Daleo Executive Vice President and Chief Financial Officer of 2001
Alpine, New Jersey, U.S.A. Thomson
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Director
Name and Municipality of Residence Office and Principal Occupation Since
Steven A. Denning(2)(6) Chairman of General Atlantic LLC (private equity firm) 2000
Greenwich, Connecticut, U.S.A.
V. Maureen Kempston Darkes, O.C.(1)(2) Group Vice President, General Motors Corporation and 1996
Miami, Florida, U.S.A. President of GM Latin America, Africa and Middle East
(automobile manufacturer)
Roger L. Martin(3) Dean of the Joseph L. Rotman School of Management at the 1999
Toronto, Ontario, Canada University of Toronto (post secondary education)
Vance K. Opperman(3) President and Chief Executive Officer of Key Investment Inc. 1996
Minneapolis, Minnesota, U.S.A. (holding company)
Michael J. Sabia(2)(7) President and Chief Executive Officer of BCE Inc. and Chief 2006
´
Montreal, Quebec, Canada Executive Officer of Bell Canada (communications companies)
John M. Thompson(1)(3)(8) Chairman of the Board of The Toronto-Dominion Bank 2003
Toronto, Ontario, Canada (financial institution)
Peter J. Thomson Chairman of The Woodbridge Company Limited (holding 1995
Toronto, Ontario, Canada company)
Richard M. Thomson, O.C.(2)(3) Corporate director 1984
Toronto, Ontario, Canada
John A. Tory(2) Director, The Woodbridge Company Limited (holding 1978
Toronto, Ontario, Canada company)
(1) Member of the Corporate Governance Committee.
(2) Member of the Human Resources Committee.
(3) Member of the Audit Committee.
(4) Prior to 2004, Mr. Barbaro was Chairman and Chief Executive Officer of the Ontario Lottery and Gaming Corporation.
(5) Since September 2003, Ms. Cirillo has served as an advisor to Hudson Ventures, a venture capital fund. Ms. Cirillo served as
Chairman and Chief Executive Officer of OpCenter, LLC from March 2000 to September 2003.
(6) Prior to 2005, Mr. Denning was the Managing Partner of General Atlantic Partners, LLC.
(7) Mr. Sabia has been President and Chief Executive Officer of BCE Inc. since April 2002 and Chief Executive Officer of Bell
Canada since May 2002. Mr. Sabia was President and Chief Operating Officer of BCE Inc. from March 2002 to April 2002
and Chief Operating Officer of Bell Canada from March 2002 to May 2002. He was President of BCE Inc. from
December 2000 to March 2002 and Vice Chair of Bell Canada from July 2000 to March 2002. Mr. Sabia was a director and
officer of Teleglobe Communications Corporation and Teleglobe Inc. from February 2002 to April 2002. In May 2002, both
of these companies filed for protection under the Companies' Creditors Arrangement Act (Canada) and Chapter 11 of the
U.S. Bankruptcy Code.
(8) Mr. Thompson was Vice Chairman of the board of directors of IBM Corporation from 2000 to 2002.
Audit Committee
The members of our Audit Committee are Vance K. Opperman (Chair), Ron D. Barbaro, Roger L. Martin, John M. Thompson and
Richard M. Thomson. Our Board of Directors has determined that all of the members of the Audit Committee are independent
(within the meaning of the NYSE listing standards and Canadian Securities Administrators' Multilateral Instrument 52-110
(Audit Committees)) as well as financially literate (within the meaning of the NYSE listing standards and Multilateral
Instrument 52-110).
· Mr. Opperman is currently President and Chief Executive Officer of Key Investment Inc., and was formerly the President of
West Publishing Company. He also serves on the boards of DeCare Dental LLC, Blue Cross/Blue Shield of Minnesota and
Avenet LLC. Mr. Opperman received a J.D. from the University of Minnesota Law School.
· Mr. Barbaro is Chairman of The Brick Group Income Fund, a Toronto Stock Exchange listed income fund, and was
formerly the Chairman and CEO of the Ontario Lottery and Gaming Corporation. He was also formerly the President of
Worldwide Operations for the Prudential Insurance Company of America. Mr. Barbaro also serves as Chairman of Trans
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Global Life Insurance Company and is a director of Northbridge Financial Corporation, a Toronto Stock Exchange
listed company.
· Mr. Martin is currently the Dean of the Joseph L. Rotman School of Management at the University of Toronto. He also
serves as a director of Research in Motion Limited, a Toronto Stock Exchange and Nasdaq listed company. Mr. Martin
received an MBA from Harvard Business School.
· Mr. Thompson is currently the non-executive independent Chairman of the Board of The Toronto-Dominion Bank, a
Toronto Stock Exchange and New York Stock Exchange listed company, and was formerly the Vice Chairman of the
Board of IBM Corp., a New York Stock Exchange listed company. Prior to that, he held various senior executive positions
with IBM. He also serves as the member of the supervisory board of Royal Philips Electronics, a New York Stock Exchange
listed company. Mr. Thompson received his undergraduate degree from the University of Western Ontario and
completed the executive management programs at the Richard Ivey School at the University of Western Ontario and the
Kellogg Graduate School of Business at Northwestern University.
· Mr. Thomson is a corporate director and was formerly the Chairman and Chief Executive Officer of The Toronto-
Dominion Bank, a Toronto Stock Exchange and New York Stock Exchange listed company. He also serves as a director and
member of the audit committee of Nexen Inc., a Toronto Stock Exchange and New York Stock Exchange listed company.
He is also Vice Chairman and a member of the audit committee of S.C. Johnson & Son, Inc. Mr. Thomson received an
MBA from Harvard Business School. Mr. Thomson is not related to David Thomson and Peter J. Thomson.
Our Board of Directors has also determined that Richard Thomson is qualified as an ``audit committee financial expert'' (within
the meaning of applicable SEC rules) and that he has ``accounting or related financial management expertise'' (within the
meaning of the NYSE listing standards).
A copy of the charter of our Audit Committee is attached to this annual information form as Schedule A and is also available on
our website, www.thomson.com.
Executive Officers
The names, municipalities and countries of residence, offices and principal occupations of our executive officers as of the date of
this annual information form are shown below. All of our executive officers have been engaged for more than five years in their
present principal occupations or in other capacities within Thomson, except where noted below. Messrs. Harrington, Daleo,
Smith and Wilens are members of our company's Executive Committee.
Name and Municipality of Residence Office and Principal Occupation
Richard J. Harrington President and Chief Executive Officer
Westport, Connecticut, U.S.A.
Robert D. Daleo Executive Vice President and Chief Financial Officer
Alpine, New Jersey, U.S.A.
James C. Smith(1) Executive Vice President and Chief Operating Officer
Stamford, Connecticut, U.S.A.
Michael E. Wilens(2) Executive Vice President and Chief Technology Officer
Westport, Connecticut, U.S.A.
Robert B. Bogart(3) Executive Vice President, Human Resources
New York, New York, U.S.A.
Deirdre Stanley(4) Senior Vice President and General Counsel
New York, New York, U.S.A.
Gustav Carlson(5) Senior Vice President and Chief Marketing and Communications Officer
Bedford, New York, U.S.A.
Richard Benson-Armer(6) Senior Vice President and Chief Strategy Officer
Brookfield, Connecticut, U.S.A.
Mike Boswood(7) President and Chief Executive Officer, Thomson Healthcare
Wilton, Connecticut, U.S.A.
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Name and Municipality of Residence Office and Principal Occupation
Vin Caraher(8) President and Chief Executive Officer, Thomson Scientific
Wayne, Pennsylvania, U.S.A.
Roy M. Martin, Jr.(9) President and Chief Executive Officer, Thomson Tax & Accounting
St. Paul, Minnesota
Sharon Rowlands(10) President and Chief Executive Officer, Thomson Financial
New York, New York, U.S.A.
Peter Warwick(11) President and Chief Executive Officer, Thomson North American Legal
Minneapolis, Minnesota, U.S.A.
Helen Owers(12) President and Chief Operating Officer, Thomson International Legal &
London, United Kingdom Regulatory
(1) Mr. Smith became Executive Vice President and Chief Operating Officer of Thomson in 2007. In 2005 and 2006, he was
President and Chief Executive Officer of Thomson Learning's Academic & Reference Group. Prior to that, Mr. Smith was
Executive Vice President, Human Resources and Administration of Thomson.
(2) Mr. Wilens became Executive Vice President, Chief Technology Officer of Thomson in 2006. Prior to this appointment, he
was President and Chief Executive Officer of Thomson Legal & Regulatory's North American Legal division from 2000
to 2006. Prior to that, he was Chief Technology Officer of Thomson as well as Thomson West.
(3) Mr. Bogart became Executive Vice President, Human Resources of Thomson in 2005. From 2003 to 2005, he was Senior
Vice President of Human Resources for Thomson Financial. Prior to joining Thomson Financial, he was the senior human
resources executive and a member of the operating committee at Primerica Corporation.
(4) Ms. Stanley became Senior Vice President and General Counsel of Thomson in 2002. Prior to joining Thomson, Ms. Stanley
served in various senior executive positions, including Deputy General Counsel at USA Networks, Inc. and its successor
companies.
(5) Mr. Carlson became Senior Vice President and Chief Marketing and Communications Officer of Thomson in 2007. He
joined Thomson in 2006 as Senior Vice President, Corporate Communications. Prior to joining Thomson, Mr. Carlson was
Vice President, Communications for Standard & Poor's and Associate Partner, Corporate Communications at Accenture.
(6) In 2006, Mr. Benson-Armer was appointed Senior Vice President, Chief Strategy Officer of Thomson. Prior to this
appointment, he was Senior Vice President, Strategic Planning and Business Development at Thomson Learning. Prior to
joining Thomson in 2004, Mr. Benson-Armer was a partner at McKinsey & Company.
(7) In 2008, Mr. Boswood was appointed President and Chief Executive Officer of Thomson Healthcare. Prior to this
appointment, he was President and Chief Executive Officer of Thomson International Legal & Regulatory from
2003 to 2008. He was previously Managing Director of Thomson Legal & Regulatory Europe.
(8) Mr. Caraher became President and Chief Executive Officer of Thomson Scientific in 2004. Prior to this appointment, he held
various senior management positions at Thomson Scientific, including Executive Vice President, Pharma Markets, Executive
Vice President, Academic and Government Markets and Senior Vice President, Worldwide Sales and Marketing.
(9) Mr. Martin became President and Chief Executive Officer of Thomson Tax & Accounting in 2005. From 2001 to 2005, he
was President and Chief Executive Officer of Thomson Dialog.
(10) Ms. Rowlands has been President of Thomson Financial since 2000. She became Thomson Financial's Chief Executive
Officer in 2005. Prior to being named President and Chief Executive Officer of Thomson Financial, she was President and
Chief Operating Officer of Thomson Financial.
(11) Mr. Warwick has been President and Chief Executive Officer of Thomson North American Legal since 2006. He is also the
President and Chief Executive Officer of Thomson West, a role he took on in 2005. Prior to these appointments, he was
President and Chief Executive Officer of Thomson Tax & Accounting from 2001 to 2004. He was also previously Chief
Executive Officer of Thomson Legal & Regulatory Asia Pacific.
(12) Ms. Owers has been the President and Chief Operating Officer of Thomson International Legal & Regulatory since 2008.
She became Chief Operating Officer in 2003 and was also Head of Business Development from 2004 to 2008 for Thomson
International Legal & Regulatory. She was previously Director of European Operations of Thomson Legal & Regulatory
Europe.
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Ownership of Securities
At March 6, 2008, our directors and executive officers as a group beneficially owned, directly or indirectly, or exercised control or
direction over less than 1% of our outstanding common shares. David Thomson and Peter J. Thomson are the Chairmen, and
Mr. Beattie is the President, of Woodbridge, our controlling shareholder. Mr. Tory is a director of Woodbridge. As of March 6,
2008, Woodbridge beneficially owned approximately 70% of our outstanding common shares.
Principal Accountant Fees and Services
PricewaterhouseCoopers LLP have been the auditors of our company since our incorporation in 1977.
Fees payable to PricewaterhouseCoopers LLP for the years ended December 31, 2007 and 2006 were as follows:
(in millions of U.S. dollars) 2007 2006
Audit fees $13.7 $21.1
Audit-related fees 19.0 11.5
Tax fees 10.9 7.4
All other fees 0.2 0.1
Total $43.8 $40.1
Audit Fees
These audit fees were for professional services rendered for the audits of consolidated financial statements, reviews of interim
financial statements included in periodic reports, audits related to internal control over financial reporting, and services that
generally only the independent auditors can reasonably provide, such as comfort letters, statutory audits, consents, and
assistance and review of documents filed with securities regulatory authorities.
Audit-related Fees
These audit-related fees were for assurance and related services that are reasonably related to the performance of the audit or
review of the financial statements and are not reported under the ``audit fees'' category above. These services included advisory
services related to internal control over financial reporting, audits of various employee benefit plans, transaction due diligence,
subsidiary audits and other services related to acquisitions and dispositions.
Tax Fees
Tax fees were for tax compliance, tax advice and tax planning. These services included the preparation and review of corporate
and expatriate tax returns, assistance with tax audits and transfer pricing matters, advisory services relating to federal, state,
provincial and international tax compliance, customs and duties, and restructurings, mergers and acquisitions.
All Other Fees
Fees disclosed in the tables above under the item ``all other fees'' were for services other than the audit fees, audit-related fees
and tax fees described above. These services included:
· authoring content for inclusion in certain of our products and services; and
· French translations of our financial statements, MD&A and financial information included in our prospectuses and other
offering documents.
Pre-approval Policies and Procedures
For the year ended December 31, 2007, our Audit Committee was responsible for overseeing the work of the independent
auditors and considered whether the provision of services other than audit services was compatible with maintaining the
auditors' independence. The Audit Committee has adopted a policy regarding its pre-approval of all audit and permissible
non-audit services provided by the independent auditors. The policy gave detailed guidance to management as to the specific
types of services that have been pre-approved by the Audit Committee. The policy required the Audit Committee's specific
pre-approval of all other permitted types of services that have not already been pre-approved. Senior management periodically
provided the Audit Committee with a summary of services provided by the independent auditors in accordance with the
pre-approval policy. The Audit Committee's charter delegated to its Chair the authority to evaluate and approve engagements in
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the event that the need arose for approval between Audit Committee meetings. If the Chair approved any such engagements,
he reported his approval decisions to the full Audit Committee at its next meeting.
For the year ended December 31, 2007, none of our audit-related, tax or all other fees described above made use of the de
minimis exception to pre-approval provisions contained in Rule 2-01(c)(7)(i)(C) of U.S. Securities and Exchange Commission
Regulation S-X or Section 2.4 of the Canadian Securities Administrators' Multilateral Instrument 52-110 (Audit Committees).
Controlled Company
The NYSE listing standards require a listed company to have, among other things, a majority of independent directors on its
board of directors and solely independent directors on its compensation committee and corporate governance committee. The
rules permit a ``controlled company'' to be exempt from these requirements. A ``controlled company'' is a company of which
more than 50% of the voting power is held by an individual, group or another company. Controlled companies are not,
however, exempt from the requirement that the Audit Committee must be comprised solely of independent directors.
Our company is controlled by Woodbridge, which beneficially owned approximately 70% of our outstanding common shares as
of March 6, 2008. The Board has determined that it is appropriate for directors affiliated with the controlling shareholder to
serve on the Board committees apart from the Audit Committee. Accordingly, the Board has approved the company's reliance
on the controlled company exemption. Nine of our current 15 directors are independent of both management and the
controlling shareholder.
Independent Directors
In February 2008, our Board conducted its annual assessment of the independence of each of its members. In determining
independence, the Board examined and relied on the definition of ``independent'' in the NYSE listing standards and as
referenced in National Instrument 58-101. The Board also reviewed the results of annual questionnaires completed by each
director. After considering a wide variety of factors and information disclosed by each director, our Board determined that of our
15 current directors, nine are independent.
· Two of our directors (Messrs. Harrington and Daleo) are not independent because they are members of senior
management of Thomson.
· Four of our directors (David Thomson, W. Geoffrey Beattie, Peter J. Thomson and John A. Tory) are not independent
because they are directors and current or former executive officers of Woodbridge. None of these individuals is a member
of The Thomson Corporation's management team. While the Board considers these directors' interests to be fully aligned
with the interests of minority shareholders, and although they do not act as part of our executive management, the NYSE
listing standards and National Instrument 58-101 suggest that they be considered not independent.
· The independent directors are Mary Cirillo, V. Maureen Kempston Darkes and Messrs. Barbaro, Denning, Martin,
Opperman, Sabia, Thompson and Richard M. Thomson. Richard M. Thomson is not related to David Thomson and Peter
J. Thomson. In determining that all of these directors are independent, the Board considered all relevant facts and
circumstances, including that in the normal course of business, The Thomson Corporation provides services to, and
receives services from, companies that some of our directors are affiliated with. For example, various in-house legal
departments of a number of these companies subscribe to Thomson Legal's Westlaw service. The Board determined that
these types of relationships were immaterial. In particular, the Board acknowledged that Messrs. Denning and Thompson
were also directors of companies that our company has a relationship with, but determined that these relationships also
were not material and did not preclude a finding of independence.
Mr. Denning, one of our independent directors, is also a director of Hewitt Associates Inc. In February 2005, we
entered into a contract with Hewitt Associates Inc. to outsource certain human resources administrative functions in
order to improve operating and cost efficiencies. When we initially signed the contract, we expected to pay Hewitt an
aggregate of $115 million over a five year period. This contract was subsequently renegotiated and extended in
September 2006. Under the new terms, we expect to pay Hewitt an aggregate of $165 million over a 10-year period.
In 2007 and 2006, we paid Hewitt $11 million and $16 million, respectively, for its services. Mr. Denning has not
participated in negotiations related to the contract and has refrained from deliberating and voting on the matter by
the Human Resources Committee and the Board of Directors.
Mr. Thompson, another of our independent directors, is the non-executive independent Chairman of the Board of The
Toronto-Dominion Bank. In the normal course of business, our company has a banking relationship with The Toronto-
Dominion Bank and one of the bank's affiliates has served as a dealer for our company's recent offerings of debt
securities in Canada.