Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: An amendment to the proposed transactions that involves the composition of the board of directors.
Position: Does not affect the rulings given.
Reasons: As a result of the amendment, XCO will still not have de jure control of Aco. Consequently, the rulings given in the original ruling will continue to apply.
XXXXXXXXXX 2004-006915
XXXXXXXXXX, 2004
Dear XXXXXXXXXX:
Re: XXXXXXXXXX
This is in reply to your letter of XXXXXXXXXX, wherein you requested an addition to the proposed transactions described in the Advance Income Tax Ruling dated XXXXXXXXXX, 2003, (2003-003182) as amended by the Supplemental Ruling dated XXXXXXXXXX, 2004, (2004-005650) (collectively the "Ruling").
All capitalized terms have the meaning assigned in the Ruling.
Paragraph 47 is added as follows:
"Providing the arrangement receives the relevant shareholder and court approval, and pursuant to the Plan of Arrangement, the directors of Aco will be appointed to hold office commencing at the Effective Time of the arrangement. Prior to the Effective Time, the board of Aco consists of XXXXXXXXXX directors. XXXXXXXXXX of the directors are employees/officers of XCO or of one of its affiliates. A XXXXXXXXXX director of Aco is also a director of XCO. The remaining XXXXXXXXXX directors of Aco are not connected with XCO (the "Independent Directors").
At the XXXXXXXXXX, Aco board meeting each existing director of Aco was asked if he would continue as a director of Aco after the Effective Time. Only XXXXXXXXXX of the Independent Directors are prepared to continue after the Effective Time. The remaining XXXXXXXXXX Independent Directors refused to continue for various reasons. To avoid the XXXXXXXXXX continuing Independent Directors constituting a minority of the board of Aco after the Effective Time, XXXXXXXXXX of the directors connected to XCO will not continue as directors of Aco after the Effective Time. After the Effective Time, the Chairman of the board of Aco will be one of the XXXXXXXXXX continuing Independent Directors, although the Chairman has no second or casting vote."
We confirm that the above amendment to the Ruling will not affect the rulings given in the Ruling.
Yours truly,
XXXXXXXXXX
Manager
Corporate Reorganizations Section 1
Reorganizations and Resources Division
Income Tax Rulings Directorate
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