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AT TE14T 1 014: MR. PAT SHEEHY
kE: TExT OF LETTER SENT TO THE HONOURABLE HERB GRAY. M1141STER
OFF- INDUSTRY. TRADE Al-U CO,-V4ERCE CANADA 01,@ 1-40VEIABER 20, i0,81
-- - - - - - - - - - --T- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
r.-L-
-AR MR. GRAY:
AS YOU ARE AWARE. ON DECEMBER 22. 1,00-1 I,1AASCO SUBMITTED A14 APPLI-
CATIG@ TO YOU FOR AN 00114101\1 U14DER SL8SECTION 4(1 ) OFF THE FOREIGN
INVESTSENT REvI Ew ACT F I R ACT THAT 114ASCO I S NOT A NO14-
ELIGIBLE PERSON.
IAASCO BELIEVES THAT IT HAS ESTABLISHED THAT, NOTWITHSTANDING
1riE FACT THAT B.A.T.. INDUSTRIES LIMITED (THE 'SENIOR SHAREHOLDER')
OP-74S OR CONTROLS 4C-8 PER CE14T OF THE VOTING SHARES OF IMASCO,
THE RELATIONSHIP BETWEEN THE SENIOR SHARCHOLDER AND IMASCO HAS
BEEN AND CONTINUES TO BE ONE @-IHERE IMA56-0 PROVIDES APPROPRIATE
INFORMATION TO AND HAS CONSULTATIONS WITH THE SENIOR SHAREHOLDER
SO THAT IMIASCO CAN RECEIVE THE BENEFIT OF THE ADVICE AND EXPE-
RIENCE OF THE SENIOR SHAREHOLDER, IT BEING RECOGI-41ZED '
Ha-/EVER THAT THE ULTIMATE DECISIOI`4-M&KING AUTHORITY IN IMASCO,
.INCLUDINt DECISIONS AS TO THE SELECTION OF DIRECTORS. IS WITH THE
JrBOARD OF DIRECTORS OF IMASCO AND ITS SENIOR MANAGEMENT.
NOTWITHSTANDING THE FOREGOING, YOU INDICATED AT OUR AEETING 01-4
SEPTEMSER 18 LAST THAT YOU WOULD HAVE DIFFICULTY 114 FURNISHING
CPII-41014 TO IMASCO U14DER SUBSECTION 40) OF THE FIR ACT. THAT
ASCO IS NOT A NOINI-ELIGIBLE PERSON IN THAT, BECAUS-- OFTAE AFORE-
:EKTIONED VOTING SHARE OW114ERSHIP, THE SENIOR SHARE-ribLEjER HAS THE
PNER TO CONTROL IMASCO.
AS A RESULT OF THE FOREGOING IMIASCO HAS HAD DISCUSSIOI,@S wITHITS
EDARD OF DIRECTORS AND SE141OR SHAREHOLDER '.-.1ITH A VIEW TO FINDING
A SOLUT ION TO fKE PROBLEM. AS A RESULT, WI TH THE APPROVAL OFF ITS
BOARD 07 DIRECTORS AI%JD ITS SENIOR SHAREHOLDER, i;4ASCO M.AKES THE
FOLLOwING PROPOSAL WITH A VlEw TO RESOLVIIN* THE PROBLEM:
(A) THE SE141OR SHAREHOLDER wOULD TO GIVE THE
rQ
A A
RIGHT TO THE: CA14ADIAN NOW-EXECUTIVF DIRECTORS OF I.- SCO TO VOTE
ITS SHARES AT THEIR DISCRETION.
'sK
C:)
THIS RIGHT 110JLD EXIST FRO64
fill- DATE OF A FAVOURAdLE b4INIS7ERIAL OPIWION. THE CURRENT
r,u- -EXECUTIVE DIRECTORS OF Ii4A5'- ARE M.R. JOHN CULEMAN,
- AD I A14 NON '_0 E CD
MR. PURDY CkAhIFORV, -ili. PETER KILBU;<14 Alri MR. JEAN RICH=R,
CO
EA::H Aki D I ST I WGUI SHED CANAU I AN KAT I OWALS I k! THi I x X I GKT.
A -:'.-jlj;ZT ElOGRAPHY OF EA(>4 PL--;:'-'-Cjl\- 15 ATTA@;-J.ED AS AD'0-_JZ)j,< IkI.
BAT Industries document for Province of British Columbia 13 April 1999

3
E) EVERY REASONABLE- EFFORT WOULD BE MADE BY IMASCO
(IN LINE WITH EARLIER UNDERTAKINGS TO FIRA) TO
REDUCE THE SENIOR SHAREHOLDER'S VOTE TO 40% BY THE
END OF 1983.
NJ
CD
co
BAT Industries document for Province of British Columbia 13 April 1999

.., - 6 .
t - I
'A
--C"24 `441
-T4 At -
T -OULI; 4ETAIN iH@- PEj.-.1LK I(.,
.1 it. b-- I @'k kc HOL UL k
T-IL PIL-@rsT GII'Liv TO 1HE C,4NADIAN NOW-EXEC1011vE DIREC.TORS TU No
I-GTE I-,S SHAIeES BY NOTICE IN wRITIk!:; TO THE MINISTER IN T.-iz_.' EVENT
Ox' UEV::I_0-_)i-1EI4T5 WHICH
AFF'ECi THE SE141OR SHAREHOLDER'S INTERESTS. 10
IN THE EVENT OF WITHDRAI.IAL OF THESE AkRANIGZWENTS, Ii4A.SCO I OULD
U.-HEDIATELY CEASE TO REGARD ITSELF AS AN ELIGIULE PERSON Al
?@,OULE) SUd,-',IT @1_1_ FUTURE AMISITIONS OF CANADIAW CORPANIES AND
Khl BuSINIESS VENTURES TO THE MINISTER FOR APPROVAL. HUREOVEk,
ml 'OR -UK-._uA HiCr-bv@54 i iE 65 -C 1 m.
;;F-; I FEW -STE-4:4, O..%',+& C4"41
b
11 ILL
1HE RELATIONSHIP SE,TwEEI-4 THE SENIOR SHAREHOLDER AND I-MASCO W
Cal!_1 INLF- TO BE ONE WHERE IMASCO PROVIDES APPROPRIATE IWORMATION
TO AND HAS CONSULTATION wITM THE SENIOR SHAREHOLDER SO THAT
1@41ASCO CAN RECEIVE THE BEIF-FIT OF THE ADVICE AND ExPERIENI-11
07 THE SENIOR SHAREHOLDER. IT WOULD BE AGREED. HWEVER. THAT
THE LX_TI,4ATE DECISION MAKING AUTHORITY IN 114ASCO, INCLUDING
DECISIONS AS TO THE SELECTION OF DIRECTORS. WOULD BE EXCLUSIVELY
WITH THE BOAPD 0-7 DIRECTORS OF IIAASCO.
(F) A PRO-ZEDUREE WILL BE ESTABLISHED PkOVIDIWG FOR HINIMLF.4 I-JIU43ERS
C-:- N0ii---yECj-TI\,Z DIRECTORS, THC :C-THOD OF TriEIR SELECTION AKID
THE PRO,.x_r_',Ur-E FO1% EyERCISII%-GP TAE'IR RIGHT TO VOTE iHE SHARES
OF THE SENIOR SHAREHOLDER.
(G) PE-ASE- !,T,5 i4i%-A&94; I"-.
J.4ASM;AND EVEERY REASOhA81 E EFFORT WOULD BE MADE BY IAASCO ( IN
LINE wITH EARLIER FIPA L04j'ERTAKINGGS) TO REDLK.`_E THE SENIUR
SHAREHOLDER'S INTEkEST TO 40 PER CENT. IN THIS CON4ECTION IT
WOULD BE PROPOSED THAT AT TM--- NEEXT AN@NLJAL GENERAL MEET114G OF
SHAPEHOLVERS THE CHARTER OF IMASCO WOULD BE AWENDED TO PROVIDE
POR ; M,`,XI-k4LtA LIMIT ON THE NU-ISER OF SHARES WHICH MAY BE ISKED
BY THE DIRECTORS WITHOUT THE FURTHER APPROVAL OF A SHAREHOLDER'S
;,F-ETING. THE KAXIMUA WILL BE CALCULATED SO THAT THE SENIOR
SHAREHCLDER'S INTEREST WCULD NOT FALL BELO.-I 40 PER CENT.
NOT LESS THAN 80 PER CE14T OF THE BOARD OF DIRECTORS OF Iw&kSC0 wO
@110ULD BE CAwAD 1ANS. TM IS DE RCENTAGE IS ACTUALLY L --SS THAN HAS
BEEN THE CASE OVER THE PAST LLO YEARS BUT HAS BEEN SELECTED TO
WAaLE INDIVIDUALS ASSOCIATED wITH HARDEE'S FOOD SYSTEMS,
INC., OUR RECENT U.S. AC41.11SITION, TO PARTICIPATE ON THE BOARD.
:1) li-iASCOIS CHIEF.EXECUTIVE 4DFFICER tIOULD ALh1AYS BE A CA1,4ADIAN.
J) TriE SENIOR SHAREHOLDER WOULD NOT HAVE ANY. NO-AINEES ON TKE ECARD
OF 61RECTORS OF I.AASCO. THIS CONTINUES INTO THE INDEFINITE
FUTURE A SITUATION 145HICK HAS EYISTED FOR AOREE THAN 33 'YEARS.
I','%AS1_'C11S HEAD OFFICE AND EXECUTIVE OFFICE 40UCD AT ALL TIAES BE
LOZATED IN CANADA. THESE OFFIQiS .4A';E BEEN LOCATED IN MON-IR-AL
SINIZE T;HE CO.A:,)ANY1S INCEPTION.
L) ".-OT LESS TriAN THREE JUARTEPS 01? ALL ;4r_ETIINr4S OF' THE 80AkD
O7- VjIH6CT0kS AND Or THE EyECUTIVE CO.W-UTTEE OF TK_;z t!CARD O-F
I;4A-;--0 -0ULD BE HELD INI CANADA. IT HAS BEEN OUR P;ZACT I
I H. 5LD -
10 'LL SUt>1 1EETINrss Ilq CANADA bUT AGAII,4, 1;Ni ;ZECL)Gi_JIT10iq CO
C.'-- T.-:rE A--- UISCITION OF HARDEE15, WOULD Lie,'-: TO RETAIN SCA= fun
:'Lm_yI=1LI'TY I:%J1 THIS AREA.
BAT Industries document for Province of British Columbia 13 April 1999

T:;: .5T TKAT T'Ir-_ FOR-i-GOIWG PR020SAL wILL SERVE AS A BASIS,
-:0RIAT-ELY DOCU-*.:I4TED. FOR THE ISSLJAWM OF A FAVOURABLE FIRA
S@i,71-'S 001WION TO IMASCO.
'E AVAILAE!LE TO ;*@--T -IT.-i
I Aif) OTH R WEDRE SEENTAT I VES OF IAASC0 Ak
Y-7AJ r.i: OrrICIALS AT YOUR TO DISCUSS rMIS AATT--:R.
PA',JL PARE
C1 f, I C% IAT P M
CD
CD
co
ON.
BAT Industries document for Province of British Columbia 13 April 1999