ENERFLEX SYSTEMS LTD. ANNUAL INFORMATION FORM For the ...

ENERFLEX SYSTEMS LTD. – ANNUAL INFORMATION FORM
On December 4, 1997, the Company implemented a shareholder rights plan (the "Rights Plan"), the terms and
conditions of which are set out in the Shareholder Rights Plan Agreement dated as of December 4, 1997 (the "1997
Agreement") between the Company and Montreal Trust Company of Canada, as rights agent. On February 12,
2003, the Board of Directors passed a resolution approving the continuation of the Rights Plan and approving certain
amendments to the 1997 Agreement (which was confirmed by the Toronto Stock Exchange and the shareholders of
the Company) (the “Amended Rights Plan”). On the same date, the Company entered into an amended and
restated shareholder rights plan agreement (the “2003 Agreement”) with Computershare Trust Company of Canada,
the successor to Montreal Trust Company of Canada, the original rights agent. The 2003 Agreement continued to
the Rights Plan and incorporated certain amendments to the 1997 Agreement in order to update the Rights Plan and
conform its provisions to current shareholder rights plan design practices prevalent for Canadian issuers.
The primary objectives of the Amended Rights Plan are to ensure that, in the context of a bid for control of the
Company through an acquisition of Common Shares, the Board of Directors has sufficient time to explore for and
develop alternatives for maximizing shareholder value, to provide adequate time for competing bids to emerge, to
ensure that shareholders have an equal opportunity to participate in such a bid and have adequate time to properly
assess the bid and to lessen the pressure to tender typically encountered by a shareholder of a corporation that is
subject to a bid. The Amended Rights Plan utilizes the mechanism of the Permitted Bid (as defined in the 2003
Agreement) to ensure that a person seeking control of the Company allows shareholders and the Board of Directors
sufficient time to evaluate the bid. The purpose of the Permitted Bid is to allow a potential bidder to avoid the dilutive
features of the Amended Rights Plan by making a bid that conforms with the conditions specified in the Permitted
Bid provisions. If a person makes a takeover bid that is a Permitted Bid, the Amended Rights Plan will not affect the
transaction in any respect.
The Board of Directors may, from time to time, supplement or amend the Amended Rights Plan in order to cure any
ambiguity or to correct or supplement any provisions contained in the Amended Rights Plan that may be inconsistent
with any other provision thereof or otherwise defective. Any supplement or amendment made after the date of
shareholder ratification of the Amended Rights Plan but prior to the Separation Time (as defined in the Amended
Rights Plan) may only be made with the prior consent of shareholders. In addition, no supplement or amendment
may be made to the Amended Rights Plan without the approval of the Toronto Stock Exchange.
AUDIT COMMITTEE
The Audit Committee is appointed annually by the Board of Directors and consists of a minimum of three directors of
the Company. Every Audit Committee member has been determined by the Board to be independent, as defined in
Multilateral Instrument 52-110 and is financially literate as they are able to read and understand a set of financial
statements that represents the breadth and level of complexity of accounting issues that can reasonably be expected
to arise in the Company’s financial statements.
The Audit Committee of the Company is composed of the following members: Patrick D. Daniel, Robert B. Hodgins,
J. Nicholas Ross, and Hon. Barbara J Sparrow. The responsibilities and duties of the Committee are set out in the
Charter of which is outlined in Appendix “A”.
The following is a brief summary of the education and experience of each member of the Committee that is relevant
to his or her performance of his or her responsibilities as a member of the Audit Committee:
Patrick D. Daniel
Mr. Daniel has been the President and Chief Executive Officer for Enbridge Inc. since January 2001 and has over 30
years of experience in the energy industry. In addition to serving on Enerflex’s Board of Directors, Mr. Daniel is also
a director for several Enbridge subsidiary companies including Enbridge Energy Company Inc., and Enbridge
Commercial Trust. He is also a Director of EnCana Corporation. Mr. Daniel earned his Bachelor of Science from the
University of Alberta and his Masters of Science degree from the University of British Columbia, both in Chemical
Engineering.
Robert B. Hodgins
Mr. Hodgins has recently retired from a full time position following a career that spanned more than 25 years with
several senior Canadian corporations and is now an investor and corporate director. From 2002 to 2004, Mr.
Hodgins served as the Chief Financial Officer at Pengrowth Energy Trust. Prior to this, Mr. Hodgins was a Vice-
President and Treasurer of Canadian Pacific Limited, a Chief Financial Officer of TransCanada Pipelines Limited
from 1993 to 1998 and held various other positions at TransCanada commencing in 1981. Mr. Hodgins is also a
trustee of Calpine Power Income Fund. Mr. Hodgins holds a Bachelor of Arts in Business from the Richard Ivey
School of Business and is a Chartered Accountant.
Mr. Hodgins is currently the Chair of the Audit Committee.
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