Franklin Resources Inc., FTI Acquisition Inc. and Bissett & Associates Investment Management Ltd.

Headnote

Rule 61-501 - Going private transactions - Offeror proposes to effect a subsequentacquisition transaction after completing a formal bid - Offeror entering into employmentagreements and a consulting agreement with certain securityholders of offeree and,accordingly, such securityholders may be receiving consideration of greater value thanthat received by other offerees - Exemption granted to permit securities tendered to theformal bid by such securityholders and companies they control to be included in thedetermination of whether the requisite minority approval has been obtained in respect ofthe subsequent acquisition transaction

Ontario Rules Cited

Rule 61-501 - Insider Bids, Issuer Bids, Going Private Transactions and Related PartyTransactions, ss. 4.7, 8.1 and 9.1

UPON the application (the "Application") of Franklin Resources, Inc. ("Franklin") andBissett & Associates Investment Management Ltd. ("Bissett" and, collectively with Franklin,the "Applicants") to the Director for a decision pursuant to section 9.1 of Rule 61-501 that,notwithstanding subsection 8.2(a) of Rule 61-501, in connection with the offer by FTIAcquisition Inc. ("FTI") to acquire all of the outstanding common shares (the "CommonShares") of Bissett (the "Offer") and proposed subsequent acquisition transactioninvolving Bissett, FTI and Franklin (the "Second Step Transaction"), Common Sharestendered to the Offer by David A. Bissett, Kevin W. Wolfe ("Wolfe"), Frederick E. Pynn("Pynn"), Michael A. Quinn ("Quinn"), Nancy G. Lazar ("Lazar" and collectively with DavidBissett, Wolfe, Lazar, Pynn and Quinn, the "Individuals"), Belmont Capital ManagementLtd. ("Belmont"), 604478 Alberta Ltd. ("604478"), 571770 Alberta Ltd. ("571770" and,collectively with Belmont and 604478, the "Companies") may be included as votes infavour of the Second Step Transaction in determining whether the requisite minorityapproval has been obtained pursuant to section 8.1 of Rule 61-501 in respect of theSecond Step Transaction;

AND UPON considering the Application and the recommendation of staff of theOntario Securities Commission (the "Commission");

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

1. Franklin is a corporation organized under the laws of the State of Delaware.

2. FTI is an indirect wholly-owned subsidiary of Franklin incorporated under the lawsof Ontario for the purpose of making the Offer.

3. Bissett is an investment management company continued under the BusinessCorporations Act (Alberta).

4. Bissett's authorized capital consists of an unlimited number of Common Shares, anunlimited number of First Preferred Shares and an unlimited number of SecondPreferred Shares, of which there were 6,948,750 Common Shares outstanding asat July 26, 2000. The Common Shares are listed and posted for trading on TheToronto Stock Exchange.

5, David Bissett is Chairman of Bissett's board of directors. He beneficially owns,directly or indirectly, or exercises control or direction over 1,945,100 CommonShares representing approximately 28% of the class.

6. Wolfe is Bissett's President and Chief Executive Officer. Wolfe beneficially owns,directly or indirectly, or exercises control or direction over 502,794 Common Sharesrepresenting approximately 7.2% of the class.

7. Pynn is a Vice President and Senior Portfolio Manager of Bissett. Pynn beneficiallyowns, directly or indirectly, or exercises control or direction over 502,030 CommonShares representing approximately 7.2% of the class.

8. Quinn is a Vice President and Senior Portfolio Manager of Bissett. Quinnbeneficially owns, directly or indirectly, or exercises control or direction over555,000 Common Shares representing approximately 8% of the class.

9. Lazar is a Vice President and Senior Portfolio Manager of Bissett. Lazarbeneficially owns, directly or indirectly, or exercises control or direction over531,160 Common Shares representing approximately 7.6% of the class.

10. Pursuant to an acquisition agreement dated July 26, 2000 among Franklin, FTI andBissett (the "Acquisition Agreement"), Franklin agreed to make an offer to acquirethe Common Shares on the basis of $20.50 cash plus a special dividend of $0.48cash per Common Share.

11. On July 26, 2000, Templeton Management Limited ("Templeton"), an affiliate ofFranklin, entered into employment agreements (the "New EmploymentAgreements") with each of Wolfe, Pynn, Quinn and Lazar (collectively, the"Employees") and a consulting agreement (the "Consulting Agreement" and,collectively with the New Employment Agreements, the "Agreements") with DavidBissett.

12. Pursuant to lock-up agreements dated July 26, 2000 (the "Lock-up Agreements")between Franklin and, among others, each of the Individuals, the Individuals agreedto deposit under the Offer and, except in certain circumstances, not withdraw,Common Shares beneficially owned or controlled by them.

13. Pursuant to an escrow agreement dated August 4, 2000 (the "Escrow Agreement")among Franklin, Montreal Trust Company of Canada (the "Escrow Agent"),Belmont, a company controlled by David Bissett, 571770, a company controlled byPynn, Quinn and Lazar, and 604478, a company controlled by Wolfe, each of theCompanies agreed to deliver to the Escrow Agent 30% of the aggregate purchaseprice (the "Escrowed Amount") to be received for their Common Shares, to be heldand applied in accordance with the Escrow Agreement's terms. The EscrowedAmount will be released in specified amounts on each of the 18 month, second,third, fourth and fifth anniversaries of the Escrow Agreement.

14. The Offer was made on August 11, 2000 and is scheduled to expire, unlessextended, on October 2, 2000. The Offer is conditional on, among other things,there being validly deposited under the Offer and not withdrawn at the expiry timeat least 67.43% of the Shares (calculated on a fully diluted basis).

15. The principal terms of the existing employment arrangements between Bissett andeach of the Employees are as follows:

(a) For each of the fiscal years ended December 31, 1998 and 1999, Wolfe wasentitled to a base salary of $180,000 and a bonus of $300,000.

(b) For each of the fiscal years ended December 31, 1998 and 1999, Pynn wasentitled to a base salary of $180,000 and a bonus of $300,000.

(c) For each of the fiscal years ended December 31, 1998 and 1999, Quinn wasentitled to a base salary of $180,000 and a bonus of $300,000.

(d) For the fiscal year ended December 31, 1999, Lazar was entitled to a basesalary of $135,000 ($180,000 in 1998) and a bonus of $180,000 ($180,000in 1998).

(e) There are no provisions relating to termination or change of controlpayments.

(f) None of the Employees is a party to a non-competition or non-solicitationcovenant granted in favour of Bissett.

16. The New Employment Agreements take effect only if Bissett is acquired by FTI andhave the following material features:

(a) The New Employment Agreements with Pynn, Quinn and Wolfe are for aninitial term of four years unless terminated by Templeton on the expirationof the third anniversary of the New Employment Agreement. Pynn, Quinnand Wolfe are entitled to the same level of base salary and bonus that eachreceived from Bissett for the fiscal years ended December 31, 1998 and1999.

(b) The New Employment Agreement with Lazar is for an initial term expiring onJune 30, 2001 and provides Bissett with the option of retaining her serviceson an independent consulting basis for an additional one year term. For thefiscal year ended December 31, 2000, Lazar will be entitled to receive abase salary of $144,000 and a bonus of $240,000.

(c) The New Employment Agreements provide that each of the Employees otherthan Lazar will be granted options to purchase 40,000 common shares ofFranklin (the "Options"), which Options shall vest as to one quarter per yearfor a four year period commencing on or about September 30, 2001 at anexercise price determined in accordance with Franklin's stock option plan(the "SOP"). Pursuant to the SOP, the exercise price for an Option shall bebased on the market price of common shares of Franklin one year prior tothe vesting date.

(d) The New Employment Agreements include confidentiality provisions andnon-solicitation and non-competition covenants whereby during the term ofthe Employee's employment and for a period of two years thereafter theEmployee cannot compete with Bissett or solicit any of Bissett's clients.

17. The Consulting Agreement takes effect only if Bissett is acquired by FTI and hasthe following material terms:

(a) The Consulting Agreement has a five-year term and provides that DavidBissett shall provide client and dealer relations, communications and otherservices (the "Services") as Bissett may direct from time to time.

(b) During the term of the Consulting Agreement and for a period of five yearsthereafter, David Bissett may not compete with, or solicit any business orclients of, Bissett or any of its affiliates (the "Covenants").

(c) During the term of the Consulting Agreement, David Bissett may performother services for third parties, provided that such activities do not interferewith the timely and efficient performance of the Services for Bissett and suchactivities are not otherwise in violation of the Consulting Agreement.

(d) In consideration for agreeing to make his services available to Bissett uponrequest and in consideration for entering into the Covenants, David Bissettshall be entitled to receive a monthly fee of $5,000, regardless of whetherhe provides any services to Bissett.

18. If FTI takes up and pays for Common Shares deposited under the Offer, it intendsto propose a Second Step Transaction for the purpose of acquiring CommonShares not tendered to the Offer. Unless FTI is in a position to effect a SecondStep Transaction pursuant to a statutory right of compulsory acquisition, suchSecond Step Transaction would be a going private transaction within the meaningof subsection 1.1 of Rule 61-501 and would be subject to the minority approvalrequirement in subsection 4.7 of Rule 61-501 (the "Minority ApprovalRequirement"). Unless a discretionary exemption is granted by the Director, theCommon Shares tendered to the Offer by the Individuals and the Companies maynot be included in the determination of whether the requisite minority approval hasbeen obtained in respect of the Second Step Transaction pursuant to section 8.1of Rule 61-501 because, as a consequence of entering into the Agreements withTempleton, the Individuals and the Companies may be receiving consideration ofgreater value than that paid to other beneficial owners of Common Shares.

19. Franklin believes that its ability to retain the Individuals was critical to its decisionto make the Offer, since the Individuals have played an integral role in successfullydeveloping Bissett's business and have substantial and valuable experience andexpertise in the investment management industry. The purpose of the Agreementsis to ensure the Individuals' continued participation in the successful managementand development of Bissett's business and its integration with Franklin's operationsfollowing completion of the Offer.

20. The Agreements have been negotiated with the Individuals at arm's length andhave been made on commercially reasonable terms and conditions that areconsistent with the Individuals' prior employment or service. The granting of theOptions pursuant to the amended and restated employment agreements isconsistent with Franklin's intention to grant Options to a broader group of keyBissett employees and is consistent with Franklin's historical and current practicesin this regard.

21. The New Employment Agreements and the Consulting Agreement have beenentered into for valid business reasons unrelated to the Individuals' beneficialownership of Shares and not for the purpose of conferring an economic or collateralbenefit on the Individuals that other shareholders do not enjoy, and are being madefor reasons other than to increase the value of the consideration to be paid to theIndividuals pursuant to the Offer for their Shares. Franklin and FTI have no reasonto believe that the Agreements had the effect of reducing the price that otherwisewould have been considered acceptable to the Individuals or the Companies fortheir Common Shares.

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

IT IS DECIDED pursuant to section 9.1 of Rule 61-501 that, despite subsection8.2(a) of Rule 61-501, in connection with the Offer and possible Second Step Transaction,the Common Shares tendered to the Offer by the Individuals and the Companies may beincluded in the determination of whether the requisite minority approval has been obtainedin respect of the Second Step Transaction, provided that Franklin and FTI comply with theother applicable provisions of Rule 61-501.

September 29^th, 2000.

"Margo Paul"