Overview
This Premium DistributionTM and Distribution Reinvestment Plan (the "Plan") provides Eligible Unitholders of Fort Chicago Energy Partners L.P. ("Fort Chicago") with the opportunity to reinvest their Eligible Distributions (net of any applicable withholding taxes) in new Units at a 5% discount to the Average Market Price on the applicable payment date, which new Units will, at the Participant's election, either be credited to its account under the Distribution Reinvestment Component of the Plan or exchanged under the Premium DistributionTM Component of the Plan for a cash payment equal to 102% of the Eligible Distributions that are reinvested. Each component of the Plan, which is explained in greater detail below, is subject to eligibility restrictions, applicable withholding taxes, prorating as provided herein, and other limitations on the availability of new Units in certain events.
Eligible Unitholders are not required to participate in the Plan, which is not automatic but rather must be initiated by an Eligible Unitholder as described herein. An Eligible Unitholder who does not elect to participate in the Plan will continue to receive their Distributions in the normal manner.
In order to participate in either the Distribution Reinvestment Component or the Premium DistributionTM Component, an Eligible Unitholder must enroll in the Plan directly or through the broker, investment dealer, financial institution or other nominee who holds Units on the Eligible Unitholder's behalf. See "Enrollment" below.
This Plan further amends and restates in its entirety the Premium DistributionTM, Distribution Reinvestment and Optional Unit Purchase Plan of Fort Chicago dated June 17, 2002, as amended and restated on January 14, 2004. The option to purchase additional Units otherwise than on the reinvestment of Eligible Distributions through optional cash payments at 100% of the Average Market Price, as previously provided in the Plan, is no longer permitted under the Plan.
Definitions
In this Plan:
"Average Market Price", in respect of a particular Distribution payment date, refers to the arithmetic average (calculated by Fort Chicago to four decimal places) of the daily volume weighted average trading prices of Units on the TSX for the trading days on which at least one board lot of Units is traded on the TSX during the corresponding Pricing Period, subject to such adjustments as Fort Chicago may, in its sole discretion, determine to be appropriate to account for (i) certain trading reversals, adjustments, corrections and similar changes with respect to trades of Units during the corresponding Pricing Period, (ii) a change in the aggregate number of Units outstanding into a greater or lesser number of Units, (iii) a reclassification of the Units, or (iv) a merger, reorganization or other transaction affecting the Units.
"Business Day" refers to any day other than a Saturday, Sunday or statutory holiday in the Province of Ontario.
"CDS" refers to CDS Clearing and Depository Services Inc., which acts as a nominee for certain Canadian brokers, investment dealers, financial institutions and other nominees, or its nominee, as applicable.
"CDS Institutions" refers to brokers, investment dealers, financial institutions or other nominees in their capacity as participants in the CDS depository service, who hold Units registered in the name of CDS on behalf of beneficial owners of Units and who are acting on behalf of such beneficial owners in respect of the Plan.
"Distribution" refers to a cash distribution declared payable by Fort Chicago on the outstanding Units.
"Distribution Reinvestment Component" refers to that component of the Plan, as more particularly described below under the heading "Plan Components TM Distribution Reinvestment", pursuant to which Units are acquired on the reinvestment of Eligible Distributions under the Plan but are not exchanged for the Premium DistributionTM.
"Eligible Distribution" refers to that portion of a Distribution determined by Fort Chicago to be eligible for purposes of the Plan.
"Eligible Unitholders" refers to Unitholders who are permitted to participate in the Plan as described herein under the heading "Eligibility Requirements".
"Enrollment Form" refers to the Reinvestment Enrollment-Participant Declaration Form established by Fort Chicago from time to time for the purpose of enrolling eligible registered holders of Units (other than CDS) in the Plan.
"Participants" refers to registered holders of Units who, on the applicable record date for a Distribution, are Eligible Unitholders and are duly enrolled in the Plan; provided, however, that CDS and brokers, investment dealers, financial institutions or other nominees, as the case may be, shall be Participants only to the extent that CDS or such nominees, respectively, have enrolled in the Plan on behalf of Unitholders who are Eligible Unitholders.
"Plan Agent" refers to Computershare Trust Company of Canada, or such other party as is appointed by Fort Chicago from time to time to act as "Plan Agent" under the Plan.
"Plan Broker" refers to Canaccord Capital Corporation, or such other qualified investment dealer as is designated from time to time to act as broker under the Plan.
"Premium DistributionTM" refers to a cash amount equal to 102% of an Eligible Distribution or, as the context may require, 102% of the aggregate Eligible Distributions payable by Fort Chicago on a particular Distribution payment date to Participants enrolled in the Premium DistributionTM Component, subject to proration in certain events as described herein.
"Premium Distribution ComponentTM" refers to that component of the Plan, as more particularly described below under the heading "Plan Components TM Premium Distribution", pursuant to which Units are acquired on the reinvestment of Eligible Distributions under the Plan and exchanged for the Premium DistributionTM.
"Pricing Period", in respect of a particular Distribution, refers to the period beginning on the later of the 21st Business Day preceding the Distribution payment date and the second Business Day following the record date applicable to that Distribution payment date, and ending on the second Business Day preceding the Distribution payment date.
"TSX" refers to the Toronto Stock Exchange.
"Units" refers to Class A limited partnership units of Fort Chicago.
"Unitholders" refers to holders of Units.
Plan Components
Distribution Reinvestment
Under the Distribution Reinvestment Component, the Plan Agent will, on each Distribution payment date, on behalf of Participants in the Distribution Reinvestment Component, apply the aggregate Eligible Distributions payable on the Units of such Participants that are enrolled in the Distribution Reinvestment Component towards the purchase from treasury of Fort Chicago of such number of new Units (calculated to six decimal places) as is equal to the aggregate amount of such Eligible Distributions divided by 95% of the corresponding Average Market Price.
The new Units so purchased will be held under the Plan by the Plan Agent for the account of the applicable Participants or, in the case of Eligible Unitholders that are enrolled in the Plan indirectly through CDS, credited through CDS to the accounts of appropriate CDS Institutions on behalf of such Eligible Unitholders.
Any subsequent Eligible Distributions made in respect of Units acquired under the Distribution Reinvestment Component will be subject to reinvestment under the Plan (i) in the case of Units held under the Plan for the account of a Participant other than CDS, pursuant to the current election of the Participant as between the Distribution Reinvestment Component and the Premium DistributionTM Component; or (ii) in the case of Units enrolled in the Plan indirectly through CDS, pursuant to instructions provided to the Plan Agent by CDS in the manner described below under the heading "Enrollment".
Premium Distribution
Under the Premium DistributionTM Component, the Plan Agent will, on each Distribution payment date, on behalf of Participants in the Premium DistributionTM Component, apply the aggregate Eligible Distributions payable on the Units of such Participants that are enrolled in the Premium DistributionTM Component, towards the purchase from treasury of Fort Chicago of such number of new Units (calculated to six decimal places) as is equal to the aggregate amount of such Distributions divided by 95% of the corresponding Average Market Price.
The Plan Agent is authorized, on behalf of Participants in the Premium DistributionTM Component, to pre-sell through the Plan Broker, in one or more transactions on the TSX, that number of Units to be purchased on the applicable Distribution payment date with the Eligible Distributions of such Participants that are reinvested. Such Units, when acquired, will not be held under the Plan by the Plan Agent or credited through CDS to the accounts of appropriate CDS Institutions on behalf of Eligible Unitholders, but will instead be credited through CDS or otherwise delivered to the Plan Broker in exchange for the Premium DistributionTM in an amount equal to 102% of the reinvested amount. The Plan Agent will in turn remit payment of the Premium DistributionTM to Participants in the Premium DistributionTM Component in the same manner that Distributions are paid on behalf of Fort Chicago.
At the time Units are delivered to the Plan Broker, each Unitholder for whom Eligible Distributions are reinvested under the Premium DistributionTM Component shall be deemed to represent and warrant to Fort Chicago, the Plan Agent and the Plan Broker that: (i) it holds good and marketable title to such Units, free and clear of all liens, restrictions, charges, encumbrances, claims and rights of others; (ii) such Units are not subject to resale restrictions; and (iii) it is an Eligible Unitholder.
Fort Chicago and the Plan Agent have a commitment from the Plan Broker to pay the Premium DistributionTM to the Plan Agent against delivery of the corresponding Units on the applicable Distribution payment date. Although Fort Chicago and the Plan Agent will, if necessary, make claims on this commitment, neither Fort Chicago nor the Plan Agent has any liability to Participants in the Premium DistributionTM Component (or any Unitholder for whom the Participant may be acting) for any failure of the Plan Broker to fulfil its obligation to pay the Premium DistributionTM when required. If the Plan Agent does not receive from the Plan Broker funds sufficient to pay the Premium DistributionTM on all Units of Participants in the Premium DistributionTM Component, such Participants will be entitled to receive from Fort Chicago the regular, declared Eligible Distribution for each such Unit in respect of which the Premium DistributionTM is not paid by the Plan Broker.
Eligibility Requirements
The partnership agreement which governs Fort Chicago provides that no Units may be owned by or transferred to, among other things, a person who, for purposes of the Income Tax Act (Canada), is a "non-resident" of Canada, a person in which an interest would be a "tax shelter investment" or a partnership that is not a "Canadian partnership". Accordingly, no such person may be a Unitholder or therefore participate in either the Distribution Reinvestment Component or the Premium DistributionTM Component.
Fort Chicago and the Plan Agent also reserve the right to deny participation in the Plan to, or cancel the participation of, any person or agent of any person who appears to be, or who Fort Chicago or the Plan Agent has reason to believe is, subject to the laws of any jurisdiction which do not permit participation in the Plan in the manner sought by such person or which will subject the Plan or Fort Chicago to requirements of the jurisdiction not otherwise applicable to the Plan or Fort Chicago, or whose participation in the Plan is suspected to be part of a scheme to avoid applicable legal requirements or otherwise engage in unlawful behaviour.
Fort Chicago further reserves the right to determine, from time to time, a minimum number of Units that a Unitholder must hold in order to be eligible for, or continue to be enrolled in, the Plan, subject to any applicable legal or regulatory requirements.
Withholding Taxes
This Plan is subject to any obligations of Fort Chicago with respect to withholding taxes, and any amounts to be reinvested hereunder shall be net of any amounts required to be so withheld. Without limiting the generality of the foregoing, as a portion of Fort Chicago's income may from time to time be subject to United States taxation Fort Chicago may determine, in its sole discretion, that some amount of a Distribution must or should be paid in cash in order to meet United States withholding tax obligations. Only the portion of the Distribution net of that amount will be eligible for reinvestment under the Plan, whether pursuant to the Distribution Reinvestment Component or the Premium DistributionTM Component.
Enrollment
Direct Enrollment
An Eligible Unitholder whose Units are registered in its own name may directly enroll in either the Distribution Reinvestment Component or the Premium DistributionTM Component by delivering to the Plan Agent a duly completed Enrollment Form. A copy of the Enrollment Form is available from the Plan Agent's website at www.computershare.com or by calling the Plan Agent at 1-800-564-6253, or from Fort Chicago's website at www.fortchicago.com.
A Participant who delivers an Enrollment Form will be deemed to thereby direct Fort Chicago to credit the Plan Agent with all Eligible Distributions (less any applicable withholding taxes) payable in respect of all Units registered in the name of the Participant or held under the Plan by the Plan Agent for the Participant's account as of the Distribution record date, and the Plan Agent to reinvest such Eligible Distributions (less any applicable withholding taxes) in new Units in accordance with the Distribution Reinvestment Component or the Premium DistributionTM Component, as applicable, all in accordance with the Plan. A Participant who elects in its Enrollment Form to participate in the Premium DistributionTM Component will be further deemed to thereby direct the Plan Agent to deliver all such new Units to the Plan Broker in exchange for payment of the Premium DistributionTM as provided herein.
Indirect Enrollment
An Eligible Unitholder whose Units are not registered in its own name cannot enroll in the Plan directly but may instead do so indirectly through the broker, investment dealer, financial institution or other nominee who holds their Units by providing appropriate enrollment instructions to such nominee. Where such nominee holds Units in its own name (and not through CDS) on behalf of an Eligible Unitholder, the nominee may enroll in the Plan on behalf of the Eligible Unitholder by delivering to the Plan Agent a duly completed Enrollment Form. Where the Units are held indirectly through CDS, enrollment instructions must be communicated to CDS by the applicable CDS Institution in accordance with the procedures of the CDS depository system and CDS will in turn provide instructions to the Plan Agent regarding the extent of its participation, on behalf of Eligible Unitholders, in the Distribution Reinvestment Component and the Premium DistributionTM Component, respectively. The CDS instructions will advise the Plan Agent of (i) the aggregate number of Units held through CDS in respect of which Eligible Distributions are to be reinvested under the Distribution Reinvestment Component, and (ii) the aggregate number of Units held through CDS in respect of which Eligible Distributions are to be reinvested under the Premium DistributionTM Component.
Continued Participation
Once a Participant (other than CDS) has enrolled in either the Premium DistributionTM Component or the Distribution Reinvestment Component by delivering to the Plan Agent a duly completed Enrollment Form, participation in the manner elected by the Participant continues automatically with respect to all Units registered in the name of the Participant or held under the Plan by the Plan Agent for the Participant's account until the Plan or the Participant's participation therein is terminated or until the Participant changes its election.
Eligible Unitholders who participate in the Plan indirectly through CDS or otherwise through their broker, investment dealer, financial institution or other nominee should consult such nominee to confirm the nominee's policies concerning continued participation following initial enrollment.
See "Termination of Participation" and "Change of Election" below.
Enrollment Deadlines
In order for a particular Eligible Distribution on Units of an Eligible Unitholder to be reinvested on the Distribution payment date, the Plan Agent must receive (i) a duly completed Enrollment Form that covers such Units not later than 5:00 p.m. (Toronto time) on the fifth (5th) business day preceding the record date for the Distribution, or (ii) in the case of Units enrolled indirectly through CDS, appropriate instructions from CDS regarding the extent of its participation not later than such time preceding the record date as may be agreed from time to time between CDS and the Plan Agent in accordance with custom and practice relating to the CDS depository system. In order for CDS to enroll Units in the Plan with respect to a particular Eligible Distribution, CDS must itself receive appropriate instructions from the nominee holders that are CDS Institutions by such deadline as may be established by CDS from time to time. Enrollment Forms or CDS instructions, as applicable, received by the Plan Agent after the stipulated pre-record date deadline will not be effective in respect of the corresponding Distribution unless otherwise determined by Fort Chicago and the Plan Agent in their sole discretion.
A CDS Institution or other broker, investment dealer, financial institution or other nominee may require certain information or documentation from an Eligible Unitholder before it will act upon enrollment instructions relating to the Plan. Eligible Unitholders who wish to participate in the Plan should contact the broker, investment dealer, financial institution or other nominee who holds their Units to provide instructions regarding their decision to enroll and their election as between the Distribution Reinvestment Component and the Premium DistributionTM Component, to confirm any information or documentation required to give effect to their instructions, and to inquire about any applicable deadlines that the nominee may impose or be subject to under the policies of the CDS depository system.
Administration
Computershare Trust Company of Canada has been appointed to act as Plan Agent for and on behalf of Participants. If Computershare Trust Company of Canada ceases to act as Plan Agent for any reason, another qualified party will be designated by Fort Chicago to act as Plan Agent and Participants will be notified of the change.
All funds credited to the Plan Agent under the Plan will be applied to the purchase of new Units directly from Fort Chicago on behalf of Participants. In no event will interest be paid to Participants on any funds held for reinvestment under the Plan.
In carrying out its obligations under the Plan on behalf of Participants, the Plan Agent shall only be required to act in accordance with the instructions duly received within the appropriate time periods.
Proration in Certain Events
Fort Chicago reserves the right to determine, on or before each Distribution record date, the amount of new equity, if any, to be made available under the Plan on the Distribution payment date to which such record date relates. No assurances can be made that new Units will be made available under the Plan on a regular basis, or at all.
If, in respect of any Distribution payment date, fulfilling the elections of all Participants under the Plan would result in the issuance of more than the maximum amount of new equity set by Fort Chicago, then elections for the purchase of new Units on that Distribution payment date will be accepted (i) first, from Participants electing to reinvest Eligible Distributions under the Distribution Reinvestment Component, and (ii) second, to the extent that new equity remains available under the Plan, from Participants electing to receive the Premium DistributionTM under the Premium DistributionTM Component. If Fort Chicago is not able to accept all elections for a particular component of the Plan, then purchases of Units under that component on the applicable Distribution payment date will be prorated among all Participants in that component according to the number of Units enrolled therein.
If trading of Units on the TSX, or the trading thereof by the Plan Broker, is for any reason prohibited for an entire day, or if the Premium DistributionTM Component is terminated or suspended for any reason, in any such case during a Pricing Period, then the new Units to be exchanged for the Premium DistributionTM pursuant to the Premium DistributionTM Component will be prorated among all Participants who have elected to receive the Premium DistributionTM according to the number of Units enrolled in the Premium DistributionTM Component.
If on any Distribution payment date Fort Chicago determines not to issue any equity through the Plan or the availability of new Units is prorated in accordance with the terms of the Plan, or for any other reason an Eligible Distribution cannot be reinvested under the Plan, in whole or in part, then Participants will receive from Fort Chicago the regular, declared Eligible Distribution on each Unit for which the Eligible Distribution is payable but cannot be reinvested under the Plan in accordance with the applicable election.
Price of New UnitsTM
The subscription price of new Units purchased on a Distribution payment date under both the Distribution Reinvestment Component and the Premium DistributionTM Component will be 95% of the Average Market Price for that Distribution payment date.
Full reinvestment is possible as fractions of Units (to six decimal places) may be credited to Participants' accounts maintained under the Plan.
Costs
No commissions, service charges or brokerage fees are payable by Participants in connection with the purchase of new Units from treasury under either the Distribution Reinvestment Component or the Premium DistributionTM Component. All administrative costs of the Plan, including the fees and expenses of the Plan Agent, will be paid by Fort Chicago.
Eligible Unitholders who wish to participate in the Plan indirectly through the broker, investment dealer, financial institution or other nominee who holds their Units should consult such nominee to confirm whether the nominee charges any fees to enroll in the Plan on their behalf.
Reports to Participants
The Plan Agent will maintain an account for each Participant respect to purchases of Units made under the Plan for that Participant's account and will issue an unaudited statement regarding purchases made under the Distribution Reinvestment Component on a quarterly basis. These statements are a Participant's continuing record of purchases of Units made for such Participant's account under the Plan and should be retained for income tax purposes. No statements will be provided to Participants in respect of purchases made under the Premium DistributionTM Component.
Eligible Unitholders who participate in the Plan indirectly through their broker, investment dealer, financial institution or other nominee should consult such nominee to confirm what statements or reports, if any, they should expect to receive concerning transactions made on their behalf under the Plan, whether for tax reporting purposes or otherwise.
Whether or not it receives detailed statements or reports concerning transactions made on its behalf under the Plan, each Unitholder is responsible for calculating and monitoring its own adjusted cost base in Units for Canadian federal income tax purposes, as certain averaging and other rules may apply and such calculations may depend on the cost of other Units held by the Unitholder and other factors.
Certificates for Units
Units purchased under the Distribution Reinvestment Component and held under the Plan by the Plan Agent will be registered in the name of the Plan Agent or its nominee, or in accounts designated by it, for the account of Participants other than CDS. Certificates for such Units will only be issued to the Participant if the Plan or the Participant's participation therein is terminated or if the Participant withdraws Units from its account.
A Participant may, without terminating participation in the Plan, withdraw from its account under the Plan, and have a Unit certificate issued and registered in the Participant's name for, any number of whole Units held for its account under the Plan by delivering to the Plan Agent a duly completed withdrawal portion of the voucher located on the reverse of the statement of account issued by the Plan Agent. A withdrawal request form may also be obtained from the Plan Agent at the address below. The withdrawal of Units and certificate issuance will be completed within the Plan Agent's ordinary service standards. Any remaining Units (including any residual fraction of a Unit) will continue to be held by the Plan Agent for the Participant's account under the Plan.
Units held under the Plan by the Plan Agent for the account of a Participant may not be sold, pledged or otherwise disposed of by the Participant while so held.
For Eligible Unitholders enrolled in the Distribution Reinvestment Component indirectly through CDS, any new Units issued will not be held under the Plan but instead credited through the CDS depository system to the account of the appropriate CDS Institution on behalf of the Eligible Unitholder.
Termination of Participation
An Eligible Unitholder who is enrolled in the Plan directly as a Participant and wishes to terminate their participation in the Plan may do so voluntarily by delivering to the Plan Agent a duly completed termination portion of the voucher located on the reverse of the statement of account issued by the Plan Agent. A termination request form may also be obtained from the Plan Agent at the address below. In addition, participation will be terminated automatically following receipt by the Plan Agent of written notice of an individual Participant's death.
If a duly completed termination request (or notice of an individual Participant's death) is not received by the Plan Agent before 5:00 p.m. (Toronto time) on the fifth (5th) Business Day preceding a Distribution record date, then the Participant's account will not be closed, and participation in the Plan by such Participant will not be terminated, until after the Distribution payment date to which that record date relates.
An Eligible Unitholder who is enrolled in the Plan indirectly through CDS or otherwise through its broker, investment dealer, financial institution or other nominee and wishes to terminate its participation in the Plan must contact the nominee who holds its Units and provide appropriate instructions to do so. The nominee should be consulted to confirm what information or documentation may be required to give effect to the termination instructions, and to inquire about any applicable deadlines that the nominee may impose or be subject to under the policies of that nominee or the CDS depository system.
In the event of termination of participation, a Participant (other than CDS) or a deceased Participant's estate or legal representative, as applicable, will be issued a certificate for the number of whole Units held under the Plan by the Plan Agent in the Participant's account and payment for any residual fraction of a Unit so held based on the last price per Unit at which Eligible Distributions were reinvested under the Plan.
Change of Election
An Eligible Unitholder who is enrolled in the Plan directly as a Participant and wishes to change its election as between the Distribution Reinvestment Component and the Premium DistributionTM Component may do so by delivering to the Plan Agent a new, duly completed Enrollment Form reflecting the new election.
If a new Enrollment Form is not received by the Plan Agent before 5:00 p.m. (Toronto time) on the fifth (5th) Business Day preceding a Distribution record date, then the previous election will apply to the Eligible Distribution to which that record date relates and the new election will only become effective for purposes of subsequent Eligible Distributions.
An Eligible Unitholder who is enrolled in the Plan indirectly through CDS or otherwise through its broker, investment dealer, financial institution or other nominee and wishes to change its election as between the Distribution Reinvestment Component and the Premium DistributionTM Component must contact such nominee who holds its Units and provide appropriate instructions to do so. The nominee should be consulted to confirm what information or documentation may be required to give effect to the change of election instructions, and to inquire about any applicable deadlines that the nominee may impose or be subject to under the policies of that nominee or the CDS depository system.
Subdivisions
If Units are distributed pursuant to a subdivision of Units, the additional Units received by the Plan Agent in respect of Units held under the Plan by the Plan Agent for the account of Participants will be credited proportionately to the accounts of such Participants.
Unitholder Voting
Whole Units held under the Plan by the Plan Agent for a Participant's account on the record date for a vote of Unitholders will be voted in accordance with the instructions of the Participant given on a form to be furnished to the Participant for this purpose. Units for which instructions are not received will not be voted. No voting rights will attach to any fraction of a Unit held for a Participant's account under the Plan.
Deemed Representations, Authorizations, etc.
Distribution Reinvestment Component
By enrolling in the Distribution Reinvestment Component, whether directly as a Participant or indirectly through CDS or otherwise through a broker, investment dealer, financial institution or other nominee, a Unitholder shall be deemed to have: (i) represented and warranted to Fort Chicago and the Plan Agent that it is an Eligible Unitholder with respect to participation in the Distribution Reinvestment Component; (ii) appointed the Plan Agent to receive from Fort Chicago, and directed Fort Chicago to credit the Plan Agent with, all Eligible Distributions (less any applicable withholding taxes) payable in respect of all Units registered in the name of the Unitholder or held under the Plan for the its account or, in the case of a Unitholder enrolled indirectly through CDS or otherwise through a broker, investment dealer, financial institution or other nominee, that are enrolled (through CDS or otherwise) on its behalf in the Distribution Reinvestment Component; and (iii) authorized and directed the Plan Agent to reinvest such Eligible Distributions (less any applicable withholding taxes) in new Units, all in accordance with the provisions of the Distribution Reinvestment Component as set forth herein.
Premium DistributionTM Component
By enrolling in the Premium DistributionTM Component, whether directly as a Participant or indirectly through CDS or otherwise through a broker, investment dealer, financial institution or other nominee, a Unitholder shall be deemed to have: (i) represented and warranted to Fort Chicago, the Plan Agent and the Plan Broker that it is an Eligible Unitholder with respect to participation in the Premium DistributionTM Component; (ii) appointed the Plan Agent to receive from Fort Chicago, and directed Fort Chicago to credit the Plan Agent with, all Eligible Distributions (less any applicable withholding taxes) payable in respect of all Units registered in the name of the Unitholder or held under the Plan for the its account or, in the case of a Unitholder enrolled indirectly through CDS or otherwise through a broker, investment dealer, financial institution or other nominee, that are enrolled (through CDS or otherwise) on its behalf in the Premium DistributionTM Component; (iii) authorized and directed the Plan Agent to reinvest such Eligible Distributions (less any applicable withholding taxes) in new Units, all in accordance with the provisions of the Premium DistributionTM Component as set forth herein; and (iv) authorized and directed the Plan Agent to deliver such new Units to the Plan Broker in exchange for payment of the Premium DistributionTM, upon and subject to the terms and conditions described herein.
Responsibilities of Fort Chicago and the Plan Agent
None of Fort Chicago, the Plan Agent or the Plan Broker will be liable to any Unitholder, CDS, any CDS Institution or any other nominee acting on behalf of a Unitholder in respect of the Plan for any act or for any omission to act in connection with the operation of the Plan including, without limitation, any claims or liability with respect to or arising out of:
(a) any failure by CDS, a CDS Institution or any other nominee to enroll or not enroll in the Plan any Unitholder (or, as applicable, any Units held on the Unitholder's behalf) in accordance with the Unitholder's instructions;
(b) the continued enrollment in the Plan of any Unitholder (or, as applicable, any Units held on the Unitholder's behalf) until receipt of all necessary documentation as provided herein required to terminate participation in the Plan;
(c) the prices and times at which Units are purchased under the Plan for the account of, or on behalf of, any Participant;
(d) any decision by Fort Chicago to issue or not issue new equity through the Plan on any given Distribution payment date, or the amount of equity issued (if any);
(e) any determination made by Fort Chicago regarding the portion of a Distribution that is an Eligible Distribution;
(f) any decision to amend or terminate the Plan in accordance with the terms hereof;
(g) any default by the Plan Broker in delivering the Premium DistributionTM to the Plan Agent on any Distribution payment date;
(h) a prorating, for any reason, of the amount of equity available under the Plan in the circumstances described herein or otherwise;
(i) any determination made by Fort Chicago or the Plan Agent regarding a Unitholder's eligibility to participate in the Plan or any component thereof, including the cancellation of a Unitholder's participation for failure to satisfy eligibility requirements; or
(j) any income taxes or other liabilities payable by a Unitholder in connection with their direct or indirect participation in the Plan.
None of Fort Chicago, the Plan Agent or the Plan Broker can assure a Participant (or any beneficial owner of Units for which the Participant may be acting) a profit, or protect a Participant (or such beneficial owner, as applicable) against loss, on Units purchased under the Plan.
The Plan Agent retains the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Plan Agent, in its sole judgment, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist law, regulation or policy or any other law, regulation or policy to which the Plan Agent is now or hereafter becomes subject.
Canadian Federal Income Tax Considerations
The following is a summary only of certain Canadian federal income tax considerations relevant to participation in the Plan for purposes of the Income Tax Act (Canada) (the "Tax Act"). The information provided is current as of March 19, 2009 and is based on the current provisions of the Tax Act and the regulations thereunder, all specific proposals to amend the Tax Act and the regulations which have been publicly announced prior to March 19, 2009 and Fort Chicago's understanding of the current administrative and assessing practices of the Canada Revenue Agency (the "CRA"). This summary does not otherwise take into account or anticipate changes in the income tax legislation or in the administrative and assessing practices of the CRA, and it is not exhaustive of all possible Canadian federal income tax considerations nor does it take into account or anticipate any provincial, territorial or foreign tax considerations which may be applicable to any particular Participant.
This summary is provided by and on behalf of Fort Chicago and not the Plan Agent or the Plan Broker. The summary is for general information only and is not intended to be legal or tax advice to any particular Unitholder. Unitholders are urged to consult their own tax advisors as to their particular circumstances and tax position.
Since all Unitholders are required to be residents of Canada for the purposes of the Tax Act, this summary does not discuss any Canadian tax information that would be applicable to Participants who are not residents of Canada for the purposes of the Tax Act.
Fort Chicago is a partnership, with the result that Unitholders are required to include in their income the amount of any income or loss allocated to them by Fort Chicago at the end of each fiscal year irrespective of the amount of the cash distributions paid out by Fort Chicago. Accordingly, Participants can continue to expect to have income or loss allocated to them for each fiscal year by Fort Chicago computed independently from their participation in the Plan. Furthermore, Participants who hold their Units as capital property for the purposes of the Tax Act can expect to have the amount of the Eligible Distributions which the Participants receive under the Plan applied as a reduction in the adjusted cost base of the Units held by the Participants at the time of such distributions.
The CRA may take the position that Units acquired and sold under the Premium DistributionTM Component are inventory and not capital property for the purposes of the Tax Act. Where a Participant acquires and holds the Units acquired under the Premium DistributionTM Component as inventory, the Participant will generally be required to include in income the profit or net gain arising from the acquisition and disposition of such Units, such that the Participant will be required to include in income the amount of the Premium DistributionTM and will have the adjusted cost base of the other Units held by the Participant as capital property reduced by the amount of the Eligible Distribution which the Participant receives under the Plan.
Conversely, where a Participant acquires and holds the Units acquired under the Plan as capital property for the purposes of the Tax Act, the amount paid by the Participant's on the purchase of such Units will become the Participant's cost of such Units for purposes of determining the adjusted cost base and subsequent capital gain or loss on the disposition of such Units. Pursuant to the averaging provisions of the Tax Act, the cost of such Units must be averaged with the cost of all other Units held by the Participant at that time as capital property for the purpose of determining the adjusted cost base of all Units held by the Participant. The result is that for Participants who hold their Units as capital property and hold any new Units acquired under the Plan as capital property, upon the receipt of the Eligible Distribution from Fort Chicago under the Plan, the adjusted cost base of the Participant's Units held at the time of the receipt of the Eligible Distribution will be reduced by a corresponding amount. Upon the purchase of new Units under the Plan which are considered to be capital property to the Participant for the purposes of the Tax Act (including those Units acquired for resale under the Premium DistributionTM Component and those Units acquired to be held for the account of the Participant under the Plan with reinvested Eligible Distributions), the amount paid by the Plan Agent to Fort Chicago on the purchase of such Units will become the cost of such new Units acquired under the Plan. The cost of all Units then held by the Participant as capital property will be required to be averaged to determine the adjusted cost base of each such Unit. Such Participants who participate in the Premium DistributionTM Component will then sell their Units and will recognize a capital gain (or a capital loss) to the extent that the Premium DistributionTM received on the disposition, net of any reasonable costs associated with the disposition, exceed (or are less than) such averaged adjusted cost base of the Units held by the Participant immediately before the disposition. One-half of any capital gain (a "taxable capital gain") must be included in the income of the Participant for the year in which the disposition occurs and one-half of any capital loss (an "allowable capital loss") may generally be deducted by the Participant against taxable capital gains realized in the year of disposition, in any of the three preceding years, or in any subsequent year, subject to the detailed provisions of the Tax Act in this regard.
Amendment or Termination of the Plan
Fort Chicago reserves the right to amend or terminate the Plan at any time, provided that no such action shall have retroactive effect prejudicial to Participants.
Fort Chicago will publicly announce any material amendments to, or termination of, the Plan. Generally, no notice will be given to Participants regarding any amendments to the Plan intended to cure, correct or rectify any ambiguities, defective or inconsistent provisions, errors, mistakes or omissions. Where required, amendments to the Plan will be subject to the prior approval of the TSX.
In the event of termination of the Plan, Participants will be issued a certificate for the number of whole Units held under the Plan by the Plan Agent in the Participant's account and payment for any remaining fraction of a Unit so held based on the last price per Unit at which Eligible Distributions were reinvested under the Plan.
Interpretation
Any issues of interpretation arising in connection with the Plan or its application shall be conclusively determined by Fort Chicago.
Governing Law
The Plan shall be governed by, and administered and construed in accordance with, the laws of the Province of Alberta and the federal laws of Canada applicable therein.
Notices
Any notices, documents (including Unit certificates) or payments required under the Plan to be given or delivered to Participants by Fort Chicago or the Plan Agent shall be validly given or delivered if mailed to Participants at their respective addresses as recorded in the register of Unitholders maintained by or on behalf of Fort Chicago or, in the case of CDS, in accordance with custom and practice relating to the CDS depository system.
Communications to the Plan Agent may be directed to:
Computershare Trust Company of Canada
Attention: Reinvestment Department
100 University Avenue, 9th Floor
Toronto, Ontario M5J 2Y1Toll-Free Tel: 1-800-564-6253
Communications to Fort Chicago Energy Partners L.P. may be directed to:
Fort Chicago Energy Partners L.P.
c/o Fort Chicago Energy Management Ltd.
Suite 440, Livingston Place
222 - 3rd Avenue S.W.
Calgary, Alberta T2P 0B4Attention: Investor Relations
Tel: (403) 213-3633
Fax: (403) 213-3648
Effective Date
The effective date of the Plan, as amended and restated hereby, is March 19, 2009.
