TransCanada Yves Fortier

8/11/2019 TransCanada Yves Fortier

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Notice to NOVA Shareholders of Petition to theCourt of Queens Bench of Alberta for

Approval of an Arrangement under theBusiness Corporati ons Act(Alberta)

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Notice to TransCanada Common Shareholders of Petition to theCourt of Queens Bench of Alberta for

Approval of an Arrangement under theCanada Business Corporations Act

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JOINT MANAGEMENT INFORMATION CIRCULAR

WITH RESPECT TO AN

ARRANGEMENT INVOLVING

NOVA CORPORATION

- and -

TRANSCANADA PIPELINES LIMITED

May 19, 1998


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Action No. 9801-06653

IN THE COU RT OF QU EE NS BE NCH O F ALBERTA

JUDICIAL CENTRE OF CALGARY

IN THE MATTER OF SECTION 186 OF THE BUSINESS CORPORATIONS ACT,S.A. 1981, c.B -15, AS AME ND E D

IN THE MATTER OF SECTION 192 OF THE CANADA BUSINESS CORPORATIONS ACT,R.S.C. 1985, c.C-44, AS AMENDED

AND IN THE MATTER OF AN ARRANG EME NT PR OPO SED BYNOVA C OR PO RATION, TRANSCANADA P IP ELI NES LIM ITED AND 3399508 CANADA LTD .

INVOLVING NOVA COR POR ATION AND ITS HOLD ER S OF COMM ON SHARE S ANDPR EFER RE D SHARES AND TRANSCANADA PIP ELINES LIMITED

AND ITS HOLDERS OF COMMON SHARES AND 3399508 CANADA LTD.

NOTICE TO NOVA SHAREHOLDERS OF PETITION

NOTICE IS HEREBY GIVENthat a petition (the Petition) has been filed with the Co urt of Q ueens B enchof Alberta, Judicial Centre of Calgary (the Court), by NOVA Corporation (NOVA) under section 186 of theBusiness Corporations Act, S.A. 1981, c.B -15, a s amend ed (the AB CA), by TransCa nad a P ipeLines Limited(TransCa nad a ) and by 3399508 Cana da Ltd . (Arra ngeCo.) und er section 192 of the Canada BusinessCorporations Act, R.S.C. 1985, c.C-44, as amended (the CBCA) with respect to a proposed Arrangement (theArrangement) involving NOVA, its holders of Co mmon Sha res and its holders of Preferred Shares(collectively, the NOVA Shareho lders), TransCa nad a a nd its holders of C ommon Shares (the TransCa nad aShareholders) and ArrangeCo., which Arrangement is described in greater detail in the Joint ManagementInforma tion C ircular o f NOVA and TransCa nada dat ed Ma y 19, 1998 accompanying this Notice of Petition.

AND NOTICE IS FURTHER GIVEN that the said Petition will be heard before the presiding Chambers

Justice at the C ourt H ouse, 611 - 4th Street S.W., Calgary, Alberta, C ana da, on the 30th da y of J une, 1998 at0900 hrs. (Mountain D aylight Savings Time) or as soon t hereafter a s counsel may be heard .

At the hearing of the Petition, NOVA intends to seek the following:

(i) an order a pproving the Arrangement pursuant to the provisions of section 186 of the AB CA (theFinal Order); and

(ii) such other further orders, declarations and directions as the Co urt may deem just.

The Final O rder will constitute the basis for a n exemption from certa in requirements of the Securi ties Act of1933, as amended, of the United States of America with respect to the securities of NOVA (herein referred to,upon the Arrangement becoming effective, as NOVA Chemicals) and TransCa nada (herein referred to, upon theArrangement becoming effective, as EnergyCo.) issued pursuant to the Arrangement.

Any NOVA Shareholder or other interested party desiring to support or oppose the Petition may appear andbe heard at the time of hearing in person or by counsel for that purpose, provided such shareholder or otherinterested party files with the Court and serves upon NOVA and TransCanada on or before June23 , 1998, aNotice of Intention to Appear, together with any evidence or materials which is to be presented to the Court,setting out such shareholders, or other interested partys, address for service in Calgary, Alberta (oralternatively, a telecopier number for service by telecopier).Service on NOVA is to be effected by delivery to thesolicitors for NOVA at the address set forth below.

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AND NOTICE IS FURTHER GIVENthat , at the hearing and subject to the f oregoing, NOVA Shareholders,and a ny other interested person will be entitled to make representations as to, a nd the Court will be requested toconsider, the fa irness of the terms and conditions of the Arrangement to such shareholders. If you do no t at tend,either in person or by counsel, at that time, the Court may approve or refuse to approve the Arrangement aspresented, or may approve it subject to such terms and conditions as the Court shall deem fit, without anyfurther notice.

AND NOTICE IS FURTHER GIVEN that the C ourt, by an Interim Order da ted Ma y 19, 1998 has given

directions as to the calling and holding of the Special Meeting of the NOVA Shareholders for the purpose ofsuch shareholders voting upon the special resolution to a pprove the Arra ngement and, in particular, has directedthat the NOVA Common Shareholders and the NOVA Preferred Shareholders shall have the right to dissentunder the provisions of section 184 of the ABCA upon compliance with the terms of, and as modified by theInterim Order.

AND NOTICE IS FURTHER GIVENthat a copy of the said Petition and other documents in the proceedingswill be furnished to any NOVA Shareholder or other interested party requesting the same by theundermentioned solicitors for NOVA upon written request delivered to such solicitors as follows:

Howard, Mackie1000, 400 - 3 Avenue S.W.

Calgary, Alberta

T2P 4H2

Attention: Frank R. Foran, Q.C.

DATED at the City of Calgary, in the Province of Alberta, this 19th day of May, 1998.

NOVA Corporation

Jack S. Mustoe

Jack S. MustoeSenior Vice President and G eneral Counsel

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Action No. 9801-06653

IN THE COU RT OF QU EE NS BE NCH O F ALBERTA

JUDICIAL CENTRE OF CALGARY

IN THE MATTER OF SECTION 186 OF THE BUSINESS CORPORATIONS ACT,S.A. 1981, c.B -15, AS AME ND E D

IN THE MATTER OF SECTION 192 OF THE CANADA BUSINESS CORPORATIONS ACT,R.S.C. 1985, c.C-44, AS AMENDED

AND IN THE MATTER OF AN ARR ANGE MENT PR OPO SED BY NOVA COR POR ATION,TRANSCANADA PI PE LINE S LI MITED AND 3399508 CANADA LTD .

INVOLVING NOVA COR POR ATION AND ITS HOLD ER S OF COMM ON SHARE S ANDPR EFER RE D SHARES AND TRANSCANADA PIP ELINES LIMITED

AND ITS HOLDERS OF COMMON SHARES AND 3399508 CANADA LTD.

NOTICE TO TRANSCANADA COMMON SHAREHOLDERS OF PETITION

NOTICE IS HEREBY GIVENthat a petition (the Petition) has been filed with the Co urt of Q ueens B enchof Alberta, Judicial Centre of Calgary (the Court), by NOVA Corporation (NOVA) under section 186 of theBusiness Corporati ons Act, S.A. 1981 c.B -15, a s amend ed (the AB CA), by TransCa nad a PipeL ines Limited(TransCa nad a ) and by 3399508 Cana da Ltd . (Arra ngeCo.) under section 192 of the Canada BusinessCorporations Act, R .S.C. 1985, c.C-44, a s amended (the CB CA), with respect to a proposed arra ngement (theArra ngement) involving TransCa nad a a nd its holders of C ommon Shares (the TransCa nad a Sha reholders),ArrangeCo. and NOVA Corpora tion (NOVA), and its holders of Common Sha res and holders of PreferredShares (collectively, the NOVA Shareholders), which Arrangement is described in greater detail in the JointMa nagement Inf ormation C ircular o f TransCa nada and NO VA da ted M ay 19, 1998 accompanying this Notice ofPetition.

AND NOTICE IS FURTHER GIVEN that the said Petition will be heard before the presiding ChambersJustice at the C ourt H ouse, 611 - 4th Street S.W., Calgary, Alberta, C ana da, on the 30th da y of J une, 1998 at0900 hrs. (Mountain D aylight Savings Time) or as soon t hereafter a s counsel may be heard .

At the hearing of the Petition, TransCana da intends to seek the following:

(i) an order a pproving the Arrangement pursuant to t he provisions of section 192 of the C B CA (theFinal Order); and

(ii) such other further orders, declarations and directions as the Co urt may deem just.

The Final O rder will constitute the basis for a n exemption from certa in requirements of the Securi ties Act of1933, as amended , of the U nited Stat es of America with respect to the securities of TransCana da (hereinreferred to, upon the Arrangement becoming effective, as E nergyCo.) and NOVA (herein referred to, upon theArrangement becoming effective, as NOVA Chemicals) issued pursuant to the Arrangement.

Any TransCanada Common Shareholder or other interested party desiring to support or oppose the Petitionmay appear and be heard at the time of hearing in person or by counsel for that purpose, provided suchshareholder or other interested party files with the Court and serves upon TransCanadaand NOVA on or before

June23, 1998, a Notice of Intention to Appear, together with any evidence or materials which is to be presented tothe Court, setting out such shareholders, or other interested partys, address for service in Calgary, Alberta (oralternatively, a telecopier number for service by telecopier). Service on TransCa nad a is to be effected by deliveryto the solicitors for TransCa nada at t he add ress set forth below.

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AND NOTICE IS FURTHER GIVEN that , at the hearing and subject to the f oregoing, TransCa nadaCommon Shareholders, and any other interested person will be entitled to make representations as to, and theCourt will be requested to consider, the fairness of the terms and conditions of the Arrangement to suchshareholders. If you do not attend, either in person or by counsel, at that time, the Court may approve or refuseto approve the Arrangement as presented, or may approve it subject to such terms and conditions as the Courtshall deem fit, without any further notice.

AND NOTICE IS FURTHER GIVEN that the C ourt, by an Interim Order da ted Ma y 19, 1998 has given

directions as to the calling and holding of the Special Meeting of t he TransCa nada Co mmon Shareholders forthe purpose of such shareholders voting upon the special resolution to approve the Arrangement and, inparticular, has directed tha t the TransCana da Shareholders shall have the right to d issent under the provisions ofsection 190 of the CBCA, as modified by the Interim Order, upon compliance with the terms of theInterim Order.

AND NOTICE IS FURTHER GIVENthat a copy of the said Petition and other documents in the proceedingswill be furnished to any TransCa nada Shareholder or other interested party req uesting the same by theundermentioned solicitors for TransCa nada upon written req uest delivered t o such solicitors a s follows:

Bennett Jones Verchere4500 Bankers Hall East855 - Second Street S .W.

Calgary, AlbertaT2P 4K7

Attention: A.L. Friend, Q.C.

D ATE D at the C ity of Ca lgary, in the Province of Alberta, this 19th day of M ay, 1998.

TransCana da PipeLines Limited

Robert A.M. Young

Robert A.M. Young, Q.C.Senior Vice President, Law andChief Compliance Officer

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JOINT MANAGEMENT INFORMATION CIRCULAR

This Joint Management Information Circular (hereinafter referred to as the Joint Circular) is beingfurnished to holders of common shares and preferred shares of NOVA Corporation (NOVA), a corporationorganized under the laws of Alberta, in connection with the solicitation of proxies by NOVAs management foruse at the NOVA Annual and Special Meeting (the NOVA Meeting) to be held at 1030 hrs., (MountainD aylight Savings Time) on J une 29, 1998, at the C algary C onvention Centre, 120 - 9th Avenue S.E., C algary,Alberta, Canada and any adjournment or postponement thereof.

This Joint C ircular is a lso being furnished to holders of common shares of TransCa nada PipeLines Limited(TransCa nada ), a corpora tion organized under t he laws of C ana da, in connection with the solicitation ofproxies by TransCa nada s management fo r use at the TransCa nada Annual and Special Meeting (theTransCa nad a M eeting) to be held a t 1330 hrs., (Mo unta in D aylight Sa vings Time) on J une 29, 1998, at TheWestin Calgary, 320 - 4th Avenue S.W., Ca lgary, Alberta, C ana da and a ny adjournment or postponementthereof.

All information in this Jo int Circular relat ing to NOVA, NOVA C hemicals Ltd. and the chemicals businessand the energy services businesses of NOVA has been supplied by NOVA, and all information relating toTransCa nad a and the energy services businesses of TransCa nad a ha s been supplied by TransCa nad a. C erta incapitalized terms used in this Joint Circular without definition have the meanings ascribed thereto in theG lossary of Terms. The information contained in t his Joint C ircular supersedes the information contained in t heMa terial Change Reports of NOVA and TransCa nada each da ted February 2, 1998 and filed with the applicablesecurities regulatory authorities. Unless otherwise specified the information contained herein is given as at thedate hereof.

No person is authorized to give any information or to make any representation not contained in this Joint

Circular and, if given or made, such information or representation should not be relied upon as having beenauthorized. This Joint Circular does not constitute an offer to sell, or a solicitation of an offer to purchase, anysecurities, or the solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation isnot a uthorized or in which the person making such offer o r solicitation is not q ualified to do so or to any personto whom it is unlawful to make such an offer or solicitat ion of a n offer or proxy solicitation. Neither d elivery ofthis Joint Circular nor any distribution of the securities referred to in this Joint Circular shall, under anycircumstances, create an implication that there has been no change in the information set forth therein since thedate of this Joint Circular.

La versio n franca ise du present document est presentement en cours de traduction et nous prevoyonsquelle sera disponible vers le 7 juin 1998. D es exemplaires d e la version fra ncaise seront distribues aux

actionnaires qui ont demande par le pass

e la version fra ncaise des rapports a nnuels et des aut res documents. Sivous navez pas fait une telle demande auparavant et que vous desirez recevoir un exemplaire de la version

franca ise d e la presente circulaire conjointe, veuillez communiquer avec le 1-800-361-6522.

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FORWARD-LOOKING INFORMATION

Cert ain information in this Jo int Circular is forward-looking information and rela tes to, among other t hings,anticipated financial performa nce, business prospects, strategies, new services, market forces, commitments a ndtechnological developments. Certain of this information appears in NOVAs, NOVA Chemicals Ltd.s andTransCa nada s Mana gement D iscussion & Analysis, included in Appendices G , I and H to this J oint C ircular.This forward-looking information is subject to various risks and uncertainties, including those discussed below,that could cause actual results and experience to differ materially from the anticipated results or other

expectations expressed. R eaders a re cautioned not to place undue reliance on this forwa rd-looking informat ion,which is provided as of the date of this Joint Circular unless otherwise stated, and none of NOVA, NOVAChemicals Ltd. or TransCa nada undertake any obligation to update publicly or revise any forwa rd-lookinginformation, whether as a result of new information, future events or otherwise.

Forward-looking information typically contains statements with words such as anticipate, believe,expect, plan, intend, should or similar words suggesting future outcomes. The following discussion isintended to identify certain fa ctors, though not necessarily all factors, tha t could cause future outcomes to differmaterially from those set forth in the forward-looking information.

The risks and uncertainties that may affect the operations, performance, development and results of thebusinesses of NOVA, NOVA C hemicals Ltd. a nd TransCa nada include, but a re not limited t o, the followingfactors: availability and price of energy commodities; commodity chemicals and feedstock prices; regulatorydecisions; competitive factors and pricing pressures; overcapacity in an industry or segment thereof; shifts in

market demands; changes in laws and regulations, including environmental and regulatory laws; expectedsynergies arising from the Arrangement; costs relating to the Arrangement and the combination of the energyservices businesses of TransCa nada and NOVA; potentia l increases in maintenance, opera ting and overheadcosts; uncertainties of litigation; the ability to generate adequate cash flow or finance future businessrequirements through outside sources; compliance with debt covenants; completion of capital or maintenanceprojects; the availability of adequate levels of insurance; currency and interest rate fluctuations; various eventswhich could disrupt operations (including explosions, fires, and severe weather conditions); and managementretention and development.

MANAGEMENT INFORMATION CIRCULARS

This Joint Management Information Circular forms part of and is incorporated by reference into theMa nagement Informa tion Circulars of NOVA and TransCana da, ea ch dated M ay 19, 1998 (collectively theManagement Circulars). The Management Circulars contain important information and should be read inconjunction with this Joint C ircular. Additional copies of the appropriate Ma nagement C ircular ma y be obtainedby calling the respective companies or transfer agents, as follows:

For NOVA: For TransCanada :

NOVA Corporation TransCanada PipeLines LimitedShareholder Relations Investor Relationsphone: 1-800-661-8686 phone: 1-800-361-6522

CIB C Mellon Trust Company Montreal Trust Company of Canada,

phone: 1-800-387-0825 Shareholder Servicesphone: 1-800-558-0046

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TABLE OF CONTENTS

Page Page

SU MMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Auditors, Transfer Agent and Registrar . . . . . . . . . 47ENERGYCO. NORTH AMERICAN PIPELINE D ividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

SYSTEM MAP . . . . . . . . . . . . . . . . . . . . . . . . . 12 EnergyCo. Stock Option P lan . . . . . . . . . . . . . . . 48G LOSSARY OF TE R MS . . . . . . . . . . . . . . . . . . . . 13 EnergyCo. D ividend Reinvestment a nd ShareTHE AR RANG EMENT . . . . . . . . . . . . . . . . . . . . 17 Purchase Plan . . . . . . . . . . . . . . . . . . . . . . . 48

G eneral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 TransCanada Shareholder Rights P lan . . . . . . . . . 50

B ackground to the Arrangement . . . . . . . . . . . . . . 17 NOVA CHEMICALS . . . . . . . . . . . . . . . . . . . . . 52The Effect of the Arrangement on B usiness Strategy . . . . . . . . . . . . . . . . . . . . . . 52

Shareholdings . . . . . . . . . . . . . . . . . . . . . . . . . 18 B usiness Activities . . . . . . . . . . . . . . . . . . . . . . 52Share Exchange . . . . . . . . . . . . . . . . . . . . . . . 18 D irectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Ownership of EnergyCo. Common Shares and Management . . . . . . . . . . . . . . . . . . . . . . . . . 55

NOVA Chemicals Common Shares . . . . . . . . . . 19 C orpora te G overna nce of NOVA Chemica ls . . . . . 57Regular D ividends . . . . . . . . . . . . . . . . . . . . . . 19 Principal H olders of Securities . . . . . . . . . . . . . . 57

NOVA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Auditors, Tra nsfer Agent a nd R egistra r . . . . . . . . . 57TransCanada . . . . . . . . . . . . . . . . . . . . . . . . 19 D ividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Schematic Representations of the Arrangement NOVA Chemicals Stock Option P lan . . . . . . . . . . 57Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 NOVA Dividend Reinvestment and Share Purchase

B ENEFITS OF THE AR RANG EMENT . . . . . . . . . . 21 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Energy Services . . . . . . . . . . . . . . . . . . . . . . . . . 21 NOVA Chemica ls Sha reholder R ights P la n . . . . . . 58NOVA Chemicals . . . . . . . . . . . . . . . . . . . . . . . . 23 INVESTMENT CONSID ERATIONS . . . . . . . . . . . . 60

RECOMMENDATIONS, REASONS FOR AND CAP ITALIZATION OF E NER GYCO . AND NOVAAPP R OVALS RE LATING TO THE

CHEMICALS . . . . . . . . . . . . . . . . . . . . . . . . . . 61AR RANG EMENT . . . . . . . . . . . . . . . . . . . . . . . 23Pro Forma Capitalization of EnergyCo. and NOVA

Recommendation of NOVAs Boa rd of Directors;Chemica ls . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Reasons for the Arrangement . . . . . . . . . . . . . . 23Share Capital of EnergyCo. . . . . . . . . . . . . . . . . . 62

Recommendation of TransCanada s Board ofEnergyCo. Common Shares . . . . . . . . . . . . . . . . 62

D irectors; R ea sons for the Arra ngement . . . . . . . . 24EnergyCo. Preferred Shares . . . . . . . . . . . . . . . . 62

Opinions of Financial Advisors . . . . . . . . . . . . . . . 25Principal Chara cteristics of Series S First Preferred

The Arrangement Agreement . . . . . . . . . . . . . . . . 26Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Arrangement Steps . . . . . . . . . . . . . . . . . . . . . . . 28Principal Chara cteristics of Series T First Preferred

KE Y APPR OVALS . . . . . . . . . . . . . . . . . . . . . . . . 29Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Court Approval . . . . . . . . . . . . . . . . . . . . . . . . . 29Other C hara cteristics of Series S and Series T First

Shareholders Approvals . . . . . . . . . . . . . . . . . . . . 29Preferred Shares . . . . . . . . . . . . . . . . . . . . . 64

Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . 30P ref er red Sha res D ivid end a nd Asset C ove ra ges . . . . 64

Other Conditions Precedent . . . . . . . . . . . . . . . . . 31EnergyCo. Preferred Share Ratings . . . . . . . . . . . . 65

P R OC ED U R ES FO R EX CH ANG E OF SE CU R ITI ES . 31Share Capital of NOVA Chemicals . . . . . . . . . . . . . 65

D eposit of NOVA Shares . . . . . . . . . . . . . . . . . . . 31NOVA Chemicals Common Shares . . . . . . . . . . . 65

Distribution of NOVA Chemicals NOVA Chemicals Preferred Shares . . . . . . . . . . . 65Common Shares . . . . . . . . . . . . . . . . . . . . . . . 32C ERTAIN INC OME TAX CO NSID ER ATIO NS . . . . . 66EnergyCo. Common Shares . . . . . . . . . . . . . . . . . 32

C ana dia n Federa l I ncome Ta x C onsidera tions . . . . . . 66Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . 32Shareholders Resident in Canada . . . . . . . . . . . . 66EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . 32Shareholders Not Resident in Canada . . . . . . . . . 69ACCOU NTING TR E ATMENT . . . . . . . . . . . . . . . . 33

U nit ed St at es Federa l I nco me Ta x C onsid erat io ns . . . 70STOCK EXCHANG E LISTING S . . . . . . . . . . . . . . . 33NOVA SH AR E HO LD E RS R IG H TS O F D ISSE NT . . . 75TR EATME NT OF OU TSTAND INGTRANSCANADA COMMON SHAREHOLDERSSTOCK OPTIONS . . . . . . . . . . . . . . . . . . . . . . . 33

R IG H TS OF D ISSENT . . . . . . . . . . . . . . . . . . . . 76Outstanding NOVA Options . . . . . . . . . . . . . . . . . 33NOVA DOCU MENTS INCORPORATED BYOutstanding TransCanada Options . . . . . . . . . . . . . 34

R EFER ENCE . . . . . . . . . . . . . . . . . . . . . . . . . 78EMPLOYEE MATTER S . . . . . . . . . . . . . . . . . . . . 35TRANSCANADA DO CU MENTS INCOR POR ATEDELIG IB ILITY FOR INVESTMENT . . . . . . . . . . . . . 36

BY R EFER ENCE . . . . . . . . . . . . . . . . . . . . . . . 79RESALE OF ENERGYCO. COMMON SHARES,STOCK EXCHANGE LISTINGS PRICE RANGEENERGYCO. PREFERRED SHARES AND NOVA

AND TRAD ING VOLU MES . . . . . . . . . . . . . . . . 80CHEMICALS COMMON SHARES RECEIVED IN

NOVA Common Shares . . . . . . . . . . . . . . . . . . . . 80THE AR RANG EMENT . . . . . . . . . . . . . . . . . . . 37NOVA Preferred Shares . . . . . . . . . . . . . . . . . . . 81COSTS OF THE AR RANG EMENT . . . . . . . . . . . . . 37TransCanada Common Shares . . . . . . . . . . . . . . . . 81TH E CO MPANI ES AF TE R TH E AR R ANG E M ENT . . 38

INTER EST OF MANAG EME NT IN THEENER GYCO. . . . . . . . . . . . . . . . . . . . . . . . . . . 38AR RANG EMENT . . . . . . . . . . . . . . . . . . . . . . . 81B usiness Strategy . . . . . . . . . . . . . . . . . . . . . . 38

LEG AL MATTER S . . . . . . . . . . . . . . . . . . . . . . . 82B usiness Activities . . . . . . . . . . . . . . . . . . . . . . 38EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82D irectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43AVAILAB LE I NFOR MATION . . . . . . . . . . . . . . . . 83Management . . . . . . . . . . . . . . . . . . . . . . . . . 46NOVA CERTIFICATE . . . . . . . . . . . . . . . . . . . . . 84Corporate G overnance of EnergyCo. . . . . . . . . . . 47

Principal H olders of Securities . . . . . . . . . . . . . . 47 TRANSCANAD A CERTIFICATE . . . . . . . . . . . . . . 85

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Page Page

SCHED U LE I TransCanada PipeLines Limited 1998 First QuarterReport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-75REP ORTING CUR RENCIES AND ACCOUNTING

PR INCIPLES . . . . . . . . . . . . . . . . . . . . . . . . . . S-1 APPE NDIX I INFORMATION RELATING TOE XC HANG E RATE OF CANAD IAN DOLLAR . . . . . S-1 NOVA CHEMICALS LTD . . . . . . . . . . . . . . . . . . I-1APPENDICES

NOVA Chemicals Ltd. Annual Information FormAP PE ND IX A SPE CIAL R ESOLU TIONS . . . . . . . A-1

including Audited Comparative ConsolidatedAPPENDIX B Financial Statements for the year ended

Arrangement Agreement . . . . . . . . . . . . . . . . . . . B -2 December 31, 1997, together with the auditorsreport thereon and Managements Discussion andAmending Agreement . . . . . . . . . . . . . . . . . . . . . B -49Analysis contained therein . . . . . . . . . . . . . . . . . I-2Plan of Arrangement . . . . . . . . . . . . . . . . . . . . . B -52

EnergyCo. Common Share Terms . . . . . . . . . . . . . . B -64 NOVA Chemicals Ltd. Interim ConsolidatedEnergyCo. Preferred Share Terms . . . . . . . . . . . . . B -65 U naudited Financial Statements for the period

ended March 31, 1998 together with ManagementsD i rect ors o f TransC a na da Af te r Arrangement . . . . . . B -83D iscussio n and A na lysis co nt ain ed t her ein . . . . . . . I -61Directors o f NOVA Chemicals af ter Arrangement . . . B-84

APPE ND IX C I NTER IM OR D ER . . . . . . . . . . . . C-1 APPENDIX J ENERGYCO. UNAUD ITED PROFOR MA CONSOLID ATED FINANCIALAPPE ND IX D PROC E D U RE TO E XE RC I SESTATE MENTS . . . . . . . . . . . . . . . . . . . . . . . . . J -1D ISSENT R IG HT U ND ER THE AB CA . . . . . . . . D -1

APPENDIX E PROCEDU RE TO EXERCISE Compilation Report . . . . . . . . . . . . . . . . . . . . . . J -2D ISSENT R IG HT U ND ER THE CB CA . . . . . . . . E-1

Comments for United States Readers on DifferencesAPPE ND IX F FAIR NESS OPINIONS . . . . . . . . . . F-1Between Canadian and United States Reporting

O pinion of RB C Dominion Securities I nc. . . . . . . . . F-2 Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . J -2Opinion of Nesbitt B urns Inc. . . . . . . . . . . . . . . . . F-7

EnergyCo. Pro Forma Consolidated FinancialOpinion of Merrill Lynch, Pierce, Fenner & SmithStatements . . . . . . . . . . . . . . . . . . . . . . . . . . J -3Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . F-10

APPENDIX G INFORMATION RE LATING TO EnergyCo. Notes to Pro Forma Consolidated FinancialNOVA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G -1 Statements . . . . . . . . . . . . . . . . . . . . . . . . . . J -5

NOVA C orporation Annual Information Form for theAPPENDIX K NOVA CHEMICALS UNAUD ITED

year ended D ecember 31, 1997 . . . . . . . . . . . . . . G -2PRO FORMA CONSOLIDATED FINANCIAL

NOVA Corporation Managements Discussion STATE MENTS . . . . . . . . . . . . . . . . . . . . . . . . . K-1and Analysis for the year ended December 31, 1997 G -38

Compilation Report . . . . . . . . . . . . . . . . . . . . . . K-2NOVA Corporation Audited ComparativeConsolidated Financial Statements for the year Comments for United States Readers on Differencesended D ecember 31, 1997 together with the Between Canadian and United States Reportingauditors report thereon . . . . . . . . . . . . . . . . . . G -66 Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . K-2

NOVA C orporation Interim Consolidated U nauditedNOVA C hemicals Una udited Pro Forma ConsolidatedFinancial Statements for the period ended

Financial Sta tements . . . . . . . . . . . . . . . . . . . . K-3March 31, 1998 together with ManagementsDiscussion and Analysi s conta ined therein . . . . . . . G -102 NOVA Chemicals Notes to Pro Forma Consolidated

Financial Sta tements . . . . . . . . . . . . . . . . . . . . K-4APPENDIX H INFORMATION RE LATING TOTRANSCANADA . . . . . . . . . . . . . . . . . . . . . . . H -1

APPENDIX L STOCK OPTION ADJU STMENTTransCa nada PipeLines Limited Annual Informa tion FOR MU LAE . . . . . . . . . . . . . . . . . . . . . . . . . . L -1

Fo rm fo r t he yea r e nd ed D ecembe r 31, 1997 . . . . . H -2APPENDIX M TRANSCANADATransCa nada P ipeLines Limited Mana gements

DIVIDEND REINVESTMENT AND SHAREDiscussion and Analysis for the year endedPU RCH ASE PLAN MATER IALS . . . . . . . . . . . . . M-1D ecember 31, 1997 . . . . . . . . . . . . . . . . . . . . . H -27

TransCanada PipeLines Limited Audited Comparative U .S. Prospectus Cover Page . . . . . . . . . . . . . . . . . M-1Consolidated Financial Statements for the year

Canadian B rochure . . . . . . . . . . . . . . . . . . . . . . . M-C-1ended D ecember 31, 1997 together with theauditors report thereon . . . . . . . . . . . . . . . . . . H -43 Additional Information for U nited States Residents . . . M-S-1

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(2) No fractiona l NOVA Chemicals Common Shares or EnergyCo. Co mmon Shares will be issued. In lieu of fractiona l shares, NOVACommon Sha reholders and TransCa nada Common Sha reholders will receive cash. See Procedures for E xchange of Securities Fractional Shares.

(3) EnergyC o. Preferred Shares will have substantia lly the same terms as the NOVA Preferred Shares except that, the redemptionamount attributable to EnergyCo. Preferred Shares will be $50 rather than the $25 redemption amount attributable to the NOVAPreferred Shares and the dividend amount per share will be adjusted proportionately. No fractional EnergyCo. Preferred Shareswill be issued. In lieu of fractional shares, NOVA Preferred Shareholders will receive cash equal to the proportion such fractionrepresents of the $50 redemption amount plus accumulated but undeclared dividends on such fractional portion to the EffectiveD ate a s if such shares had been issued on Ma y 1, 1998.

Benefits of the Arrangement

The Arrangement brings together two of Canadas largest companies with complementary energy servicesbusinesses, corporate objectives and growt h strat egies. TransCa nada and NOVA believe that the two companiesmanagement, technical, operating and financial expertise will enhance EnergyCo.s strength and depth in theenergy services industry.

As part of the Arrangement, NOVA Chemicals will be split off f rom E nergyCo. TransCa nada and NOVAbelieve that, as a separate, publicly traded company, NOVA Chemicals will be better positioned to furtherdevelop and implement its highly focused, commodity chemicals corporate strategy. NOVA Chemicals is alsoexpected to be more easily analyzed and compared to its publicly-traded chemical company peers as astand-alone entity.

For a more detailed explanation of the benefits of the Arrangement, see Benefits of the Arrangement.

Recommendations of the Boards of Directors

NOVA

The NOVA board of directors has unanimously concluded that the Arrangement is in the best interests ofNOVA and is fair to NOVA Common Shareholders and NOVA Preferred Shareholders. The board of directorsof NOVA unanimously recommends that NOVA Common Shareholders and NOVA Preferred Shareholders votein favour of the Arrangement.

In reaching the foregoing conclusions, the NOVA board of directors obtained and considered financial,legal and accounting advice, and considered a number of other factors which it believed to be relevant. SeeRecommendations of NOVAs Board of Directors; Reasons for the Arrangement.

TransCanada

The TransCa nada board of d irectors has unanimously concluded t hat the Arra ngement is in the bestinterests of TransCa nada and is fair t o TransCa nada Co mmon Shareholders. The board of directors ofTransCanada unanimously recommends that TransCanada Common Shareholders vote in favour of theArrangement.

In rea ching the foregoing conclusions, the TransCa nada board of directors obta ined and consideredfinancial, legal and a ccounting ad vice, and considered a number of other f actors which it believed to be relevant.See Recommenda tions of TransCana das B oard of D irectors; Reasons for the Arrangement.

Opinions of Financial Advisors

RBC Dominion Securities Inc.R B C D ominion Securities Inc. has acted as financial ad visor to NOVA in connection with the Arrangement.

In the opinion of RBC Dominion Securities Inc., as at the date of its written opinion and based upon theassumptions made, matters considered and limits of review set forth in its written opinion, the Arrangement isfair from a financial point of view to the NOVA Shareholders. See Appendix F Fairness Opinions Opinionof RBC Dominion Securities Inc.

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Nesbitt Burns Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated

Each of Nesbitt Burns Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated has acted as financialadvisor to TransCa nada in connection with the Arrangement. In the o pinion of Nesbitt B urns Inc., as at the da teof its written opinion and ba sed upon the assumptions made, ma tters considered a nd limits of review set forth intheir written opinion, the Arrangement is fair from a financial point of view to the shareholders of TransCa nada .See Appendix F Fairness Opinions Opinion of Nesbitt B urns Inc.

In the opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated, as at the date of its written opinionand based upon the assumptions made, matters considered and limits of review set forth in its written opinion,the Exchange Ra tio is fair from a financial point of view to the TransCa nada Co mmon Shareholders. SeeAppendix F Fairness Opinions Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated .

Effective Time of the Arrangement

It is anticipated that the Arrangement will become effective after the requisite court, shareholder andregulatory approvals have been obtained and all other conditions to the Arrangement have been satisfied orwaived. As at the d ate hereof , it is anticipated that the Arrangement will become effective on or about 1800 hrs.(Mountain Daylight Savings Time) (the Effective Time) on the effective date of the Arrangement (theEf fective Da te), expected to be t he 2nd day of July, 1998.

Stock Exchange Listings After the Effective Date

Each of the VSE, ASE, WSE, TSE and ME have conditionally approved the continued listing of theEnergyCo. Common Shares and the additional listing of EnergyCo. Preferred Shares and each of the ASE, TSEand ME have conditionally approved the continued listing of the NOVA Chemicals Common Shares, includingin each case the shares to be issued in connection with the Arrangement, subject to EnergyCo. and NOVAChemicals fulfilling all of the requirements of such stock exchanges. The NYSE has confirmed that, subject tosatisfaction of applicable listing requirements, the EnergyCo. Common Shares and the NOVA ChemicalsCommon Shares will be listed on the NYSE, upon official notice of issuance.

The Companies After the Arrangement

EnergyCo.

Business Strategy

In recognition of the increasingly dynamic and competitive North American and global energy servicessector, EnergyCo.s strategy will be to further develop and evolve its principal lines of business. M ana gement ofeach of TransCa nada and NOVA believe that the fo llowing factors will provide the founda tion for future growth:

1. the extensive competencies now resident within the energy services businesses of TransCa nada andNOVA;

2. the extensive asset position within, or connected to, the Western Cana dian Sedimentary Basin, thatresults from the Arrangement; and

3. the combination of the existing energy assets and expertise of TransCanada and NOVA in LatinAmerica, the Asia-Pacific and other international regions.

EnergyCo.s development strategy relating to its fundamental businesses will be to provide competitive,

coordinated and innovative services to hydroca rbon producers a nd energy consumers across its principal lines ofbusiness.

Business Acti vit ies

EnergyCo. is expected to be North Americas fourth largest energy services company with extensiveoperations in four principal lines of business: energy transmission, energy marketing, energy processing, andinternational energy services.

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NOVA applies this stra tegy in its two commodity chemica ls businesses, olefins/polyolefins and styrenics.NOVA also has an equity investment in Methanex Corporation (Methanex). Methanex produces methanol,another commodity chemical, using a similar focused strategy.

Business Acti vit ies

NOVA Chemicals will continue to operate NOVAs two existing commodity chemicals businesses: olefins/polyolefins and styrenics. The olef ins/polyolefins business produces ethylene, polyethylene and a variety o f

chemical and energy products. The styrenics business produces styrene and styrenic polymers, which includesolid polystyrene, expandable polystyrene, engineering resins and certain specialty polymers. NOVA Chemicalswill continue to o wn major olefins/polyolefins production fa cilities at J offre, Alberta and in the Sa rnia a rea o fOntario as well as styrenics production facilities at: Sarnia, Ontario; Montreal, Quebec; Beaver Valley,Pennsylvania; Painesville, Ohio; Decatur, Alabama; and Springfield, Massachusetts.

NOVA Chemicals will continue to own approximately 27% of the common shares of Methanex and 26%of the common shares of NG C. M ethanex is the worlds largest producer and marketer of methanol, anot hercommodity chemical, and NG C is a lead ing gatherer, processor, transporter and ma rketer of energy productsand services in North America and the U nited Kingdom. See The Co mpanies After the Arrangement NOVA Chemicals.

NOVA C hemicals pro forma net income a pplicable to common shares from its businesses and investmentswas a pproximately $225 million (which excludes a $57 million loss representing NOVA Chemicals share o f

NG C s restructuring charge) for the year ended D ecember 31, 1997.

Dividends

EnergyCo.

It is anticipated that EnergyCo. will initially pay annual dividends on EnergyCo. Common Shares in anamount equal to $1.12 per share commencing with a quarterly payment in respect of the third quarter of 1998.However, there can be no assurance that such dividends will be declared. The declaration and payment ofdividends will be at the discretion of the board of directors of EnergyCo. which will consider earnings, capitalrequirements, the financial condition of EnergyCo. and other relevant factors.

NOVA Chemicals

It is anticipated that NOVA Chemicals will initially pay annual dividends on NOVA Chemicals CommonShares in an amount equal to $0.40 per share, after giving effect to the Consolidation, commencing with aquarterly payment in respect of the third quarter of 1998. However, there can be no assurance that suchdividends will be declared. The declaration and payment of dividends will be at the discretion of the board ofdirectors of NOVA Chemicals which will consider earnings, capital requirements, the financial condition ofNOVA Chemicals and other relevant factors.

NOVA and TransCanada Regular Dividends

NOVA

On May 19, 1998, NOVA declared its second quarter dividend of $0.10 per NOVA Common Share, payableto holders of record on June 29, 1998. It is expected that such dividend will be paid on July 3, 1998. The NOVADividend Reinvestment and Share Purchase Plan will be suspended for the purposes of this dividend payment

and will be terminated on the Effective Date. See NOVA Dividend Reinvestment and Share Purchase Plan.

Holders of NOVA Preferred Shares will receive EnergyCo. Preferred Shares under the Arrangement. Adividend of $0.64375 per EnergyCo. Preferred Share in respect of the period from the date of issue to July 31,1998 will be payable upon declaration by EnergyCo. on August 15, 1998. After giving effect to the Arrangement,such dividends will be equal to the dividends that would otherwise have been payable in respect of the NOVAPreferred Shares from May 1, 1998 to July 31, 1998.

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TransCanada

On M ay 19, 1998, TransCa nad a decla red its second quart er dividend of $0.31 per TransCa nad a C ommonShare, payab le to holders of record on J une 29, 1998. It is expected that such dividend will be paid on J une 30,1998. After the Effective Date, NOVA Shareholders will have the opportunity to participate in the EnergyCo.Dividend Reinvestment and Share Purchase Plan in respect of their EnergyCo. Common Shares and EnergyCo.Preferred Sha res. See Appendix M TransCana da D ividend Reinvestment and Share P urchase Plan.

Accounting TreatmentIt is expected that the Arrangement will be accounted for using the pooling of interests method under

Canadian generally accepted accounting principles.

Selected Pro Forma Consolidated Financial Information

The following selected pro fo rma consolidat ed financial informa tion is based on the assumptions describedin the respective notes to each of the EnergyCo. and NOVA Chemicals pro forma consolidated financialstatements attached hereto as Appendices J and K, respectively, including the compilation reports of KPMGwith respect to EnergyCo. and Ernst & Young with respect to NOVA Chemicals. The pro forma consolidatedstatements of income assume, among other things, the completion of the Arrangement effective on January 1,1997, and the pro fo rma consolidated ba lance sheets assume, among other things, that the Arrangement hadoccurred on D ecember 31, 1997. The pro forma statements are not necessarily indicative of wha t either

EnergyCo.s or NOVA Chemicals financial position or results of operations would have been if the eventsreflected therein had been in effect on t he dat es indicated, nor do they purport to project either E nergyCo.s orNOVA C hemicals financial position or results of opera tions for a ny future periods. The pro fo rma consolidatedfinancial informa tion is based on certa in assumptions and adjustments, including the nonrecurring expendituresrelating to the Arrangement. The selected pro forma consolidated financial information should be read inconjunction with the description of the Arrangement, each of EnergyCo.s and NOVA Chemicals pro formaconsolidated financial statements attached to this Joint Circular as Appendices J and K, respectively, and the1997 financial statement information relating to ea ch of NOVA, TransCa nada and NOVA Chemicals Ltd.contained in Appendices G , H and I , respectively, to this Joint C ircular.

Pro Forma Consolidated Statements of Income

Year Ended December 31, 1997

EnergyCo. NOVA Chemicals

(unaudited)(millions of dollars except

per share data)

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,807 3,360Operating Costs and E xpenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,960(1) 3,017

Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,847 343Other E xpenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 905 4(2)

Income before Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942 339Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263 114

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679 225Preferred Share D ividends and Preferred Securities Charges . . . . . . . . . . . . . . 58

Net Income Applicable to Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 621 225Net Income Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.37(1) $2.47(2)

Average Shares Outstanding (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454 91

Notes:

(1) Excludes an unusual charge of $65 million related to P an-Alberta G as Ltd. Net income per share a fter this charge would be $1.22.

(2) Excludes a $57 million loss representing NOVA Chemicals share of NG C s restructuring charge. Net income per share after t hischarge would be $1.85.

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Pro Forma Consolidated Balance Sheets

December 31, 1997


(unaudited)(millions of dollars)

Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,331 922Long-Term Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669 1,051Property, P lant and E quipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,976 1,817Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,406 3,790

Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,663 713D eferred Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 346Long-Term D ebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,480 1,015Non-Recourse Long-Term D ebt of Joint Ventures . . . . . . . . . . . . . . . . . . . . . . 1,220 D eferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 Junior Subordinated D ebentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 Non-Controlling Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Shareholders E quity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,365 1,716

Tota l Liabilities and Shareholders Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,406 3,790

Preferred Share Dividend and Asset Coverages

Pro FormaEnergyCo. TransCanada

December 31, 1997 March 31, 1998

D ividend Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.2 times 13.0 timesNet Tangible Asset Coverage ;

B efore deduction of recorded deferred income taxes . . . . . . . . . . . . . . 9.1 times 8.7 timesAfter deduction of recorded deferred income taxes . . . . . . . . . . . . . . . 8.8 times 8.2 times

See Ca pitalization of E nergyCo. and NOVA Chemicals Preferred Shares D ividend andAsset Coverages.

Key Approvals and Conditions

Court Approval

The Arrangement requires approval by the Court of Queens Bench of Alberta (the Court). The Courtwill consider the Arrangement, insofar as TransCa nada and t he TransCa nada Co mmon Shareholders areconcerned, under the provisions of the Canada Business Corporations Act (the CBCA), and insofar as NOVAand t he NOVA Shareholders are concerned, under the provisions of the Business Corporations Act(Alberta) (theAB CA). Prior to t he mailing of this Joint Circular, NOVA and TransCa nada jointly obtained an interim orderof the Court (the Interim Order) providing for the calling and holding of each of the NOVA Meeting and theTransCa nada Meeting and o ther procedural matt ers as such Meetings pertain to the Arra ngement. Subject toapproval of the Arrangement by the NOVA Shareholders and the TransCa nada Co mmon Shareholders at theNOVA Meeting a nd the TransCana da Meeting, respectively, the hearing in respect of the f inal order of t he

Court (the Final Order) is scheduled to take place on June 30, 1998 at 0900 hrs. (Mountain Daylight SavingsTime) in the Court. All NOVA Shareholders and TransCa nada Co mmon Shareholders and other interestedparties have the right to participate in, be represented or to present evidence or arguments at the hearing inrespect of the Final Order subject to serving and filing a Notice of Appearance as set out in the Notice ofPetition for the Final Order and satisfying any other applicable requirements. At the hearing of the applicationin respect of the Final Order, the Court will consider, among other things, the fairness of the Arrangement tothe NOVA Shareholders and to the TransCana da C ommon Shareholders. The Co urt may approve theArrangement as proposed or as amended in any manner the Court may direct, subject to compliance with such

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terms and conditions, if any, as the Court deems fit. In the event any amendment is not acceptable to either ofNOVA or TransCana da, either part y may terminate the Arrangement Agreement and its obligation toconsummate the Arrangement, notwithstanding the Final Order.

Shareholder Approvals

Pursuant to the Interim Order, the Court has directed that the NOVA Common Shareholders and NOVAPreferred Shareholders, voting together, be asked to approve the NOVA Special Resolution at the NOVA

Meeting and t he TransCa nada Co mmon Shareholders be asked to a pprove the TransCa nada Special Resolutionat the TransCa nada Meeting. Pursuant to the I nterim Order, the C ourt has directed that the respective Meetingsas they pertain to the Special Resolutions be held as follows:

NOVA Meeting: The NOVA Meeting is scheduled to be held at 1030 hrs. (Mountain D aylightSavings Time) on June 29, 1998, at the Calgary Convention Centre,120 - 9th Avenue S.E., Calgary, Alberta, Canada.

TransCanada Meeting: The TransCanada Meeting is scheduled to be held at 1330 hrs. (MountainDaylight Savings Time) on June 29, 1998, at The Westin Calgary,320 - 4th Avenue S.W., Calga ry, Alberta , Cana da .

Each Special Resolution must be approved by at least two-thirds of the votes cast at the respectiveMeetings, subject to further order of the Court. At the NOVA Meeting, each NOVA Common Shareholder and

each NOVA Preferred Sha reholder will be entitled to vote on the basis of one vote per share for the purpose ofvoting upon the NOVA Special R esolution. NOVA Preferred Sha reholders will not be entitled to vote on annua lmeeting matters or other special business unrelated to t he NOVA Special R esolution. At t he TransCa nadaMeeting, each TransCa nada Co mmon Shareholder will be entitled to vote on the TransCana da SpecialResolution on the basis of one vote per common share.

Regulatory Approvals

Alberta Energy and Uti li ties Board

NOVA and TransCana da, a nd af filiates of NOVA and TransCa nada , have applied to the Alberta E nergyand U tilities Bo ard (AEU B ) for a pproval of the union of owners of gas utilities and public utilities. NOVA hasalso applied to the AEUB, as required under the Gas Util iti es Act (Alberta), for approval: (i) to transfer all ofNOVAs interest in NGTL to a wholly-owned subsidiary of NOVA, which will become a wholly-owned subsidiary

of TransCa nada pursuant to the Arrangement; a nd (ii) of the possible merger and consolidation of t he property,franchises, privileges and rights of NGTL pursuant to the Arrangement. The order of the AEUB approvingthese matters wa s received by NOVA and TransCa nada on M ay 19, 1998.

Nati onal Energy Board

The National E nergy Boa rd (NEB ), which regulates certain of the activities of TransCa nada s Ca nadianMainline operations, has reviewed the Arrangement and has determined that no further action on the part ofthe NEB pursuant to the Nati onal Energy Board Act is required.

Competi ti on Act

The Arrangement is a notifiable tra nsaction for the purposes of Part IX of the Competition Act(Canada).On February 16, 1998, NOVA and TransCa nad a completed the submission of the required short -form pre-

merger notification filing to the Director of Investigation and Research, under the Competition Act (Canada)(the Competition Director) in respect of the Arrangement.

On Ma y 15, 1998 the Competition D irector advised NOVA and TransCana da tha t a review of theArrangement had been completed and that the Competition Director would not challenge the Arrangementbefore the Competition Tribuna l.

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Hart-Scott-Rodino

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (United States) provides that the Arrangementmay not be consummated until proper notifications have been filed with the appropriate agencies and theapplicable waiting period has expired. The proper notifications have been filed and the waiting period expiredon April 5, 1998.

Federal Energy Regulatory Commi ssion

The Federal Power Act (United States) provides that no public utility or power marketer shall merge orconsolidate facilities or operations which are subject to the jurisdiction of the Federal Energy RegulatoryCo mmission (FE RC ) without the prior approval of that agency. TransCa nada and NOVA submitted a jointapplication on February 11, 1998 and FERC issued its formal approval of the Arrangement on April 6, 1998.

Other Conditions Precedent

The Arrangement is subject to certain ot her conditions being satisfied including: (i) the issuance of the TaxRuling by Revenue Ca nada in respect of certain C ana dian federa l income tax consequences of the Arrangement;and (ii) the reaffirmation at the Effective Date of the opinions of each of the auditors of NOVA andTransCa nada regarding the expected use of the pooling of interest method under C ana dian generally acceptedaccounting principles to account for the Arrangement. Revenue Cana da ha s issued the Tax Ruling datedMay 14, 1998.

Certain Income Tax Considerations

Canadian Federal Income Tax

Holders of NOVA Common Shares

The exchange by a NOVA Common Sha reholder of NOVA Common Shares for TransCana da Co mmonShares will constitute a taxable transaction for Canadian resident holders who hold such shares as capitalproperty, with the result that a holder may realize a capital gain or, subject to certain limitations, a capital losson the transfer. Such holders will be considered to have disposed of their NOVA Common Shares for proceedsequal to the fair ma rket value at t he Ef fective Time of the TransCa nada Common Shares received by the holdersand to ha ve acquired the TransCa nada Co mmon Shares at a cost equa l to the fair market value of their NOVACommon Shares at the Effective Time. Since holders of NOVA Common Shares will become holders of

TransCa nada Co mmon Shares, the fo llowing para graph will also apply to such holders.

Holders of TransCanada Common Shares

On the exchange by a C ana dian resident shareholder of TransCa nada Common Shares (includingTransCa nada Co mmon Shares acq uired in exchange for NOVA Common Sha res), held by the holder as capitalproperty, for NOVA Chemicals Common Shares and EnergyCo. Common Shares, the holder will generally bedeemed to have: (i) acquired the NOVA Chemicals Common Shares at a cost equal to their fair market value atthe Effective Time; (ii) acquired the EnergyCo. Common Shares at a cost equal to the amount, if any, by whichthe holders adjusted cost ba se of the TransCa nada Co mmon Shares exceeds the cost to the holder o f the NOVAChemicals Common Sha res; and (iii) disposed of the TransCa nada Co mmon Shares for an a mount equal to theaggregate cost to the holder of the NOVA Chemicals Common Shares and EnergyCo. Common Shares.

Holders of NOVA Preferred SharesCanadian resident holders of NOVA Preferred Shares who hold such shares as capital property will

generally be deemed not t o have realized a capital gain or ca pital loss on the exchange of their NOVA PreferredShares for EnergyCo. Preferred Shares unless such holder chooses to recognize and report a capital gain or acapital loss in the holders income tax return for the taxation year in which the exchange occurs.

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Non-Resident Shareholders

H olders of NOVA Common Sha res, NOVA Preferred Shares and/or TransCa nada Co mmon Shares who a renot resident in Canada and who participate in the Arrangement will generally not be subject to tax in respect ofany capital gains realized on: (i) the exchange of NOVA Co mmon Shares for TransCa nada Co mmon Shares,(ii) the exchange of NOVA Preferred Shares for EnergyCo. Preferred Shares, or (iii) the exchange ofTransCa nada Common Shares for NOVA Chemicals Co mmon Shares and E nergyCo. Co mmon Shares, providedthat t he NOVA Co mmon Shares, the NOVA Preferred Shares and t he TransCa nada Co mmon Shares (as the

case may be) are not taxable Canadian property to the holder at the time of the transfer or exchange.For a more deta iled discussion of Ca nadian federal income tax consequences, see Certain I ncome Tax

Co nsiderations Ca nadia n Federal Income Tax Co nsiderations.

United States Federal Income Tax

Holders of NOVA Common Shares

The exchange of NOVA Common Shares for TransCa nada Co mmon Shares will constitute a ta xableexchange for United States holders of NOVA Common Shares and, consequently, such holders that hold theNOVA Common Shares as a capital asset will recognize capital gain or loss. Such holders will be considered tohave disposed of their NOVA Common Sha res for proceeds equal to the f air ma rket value of the TransCana daCo mmon Shares on the E ffective Da te received in the exchange and t o have acq uired such TransCana da

Common Shares with an initial tax basis equal to their fair market value on the Effective Da te and with aholding period that begins on the day after the Effective Date. Since holders of NOVA Common Shares willbecome holders of TransCa nada Co mmon Shares, the fo llowing para graph will also apply to such holders.

Holders of TransCanada Common Shares

On t he exchange by a U nited Stat es holder of TransCa nada Co mmon Shares (including TransCa nadaCommon Shares acquired in exchange for NOVA Common Shares) for EnergyCo. Common Shares and NOVAChemicals Common Shares, such United States holder generally will be deemed to have (i) acquired suchEnergyCo. Common Shares with an initial tax basis and holding period that are the same as the adjusted taxbasis and holding period for the TransCa nada Co mmon Shares surrendered; (ii) received a taxable distributiongenerally equal to the fair ma rket value of the NOVA Chemicals Common Shares on the E ffective Da te receivedby the holder, which distribution will be treated first, as dividend income in an amo unt equal t o such holders prorata share of EnergyCo.s current and accumulated earnings and profits as of the end of 1998 (EnergyCo.intends to report to such holders in February 1999 the amount of such dividend income, which it is anticipatedshould be substantially less than the fair market value of the NOVA Chemicals Common Shares received) and,then, as a reduction to such holders tax basis in the E nergyCo. C ommon Shares (referred t o in (i) above) to theextent tha t the fa ir market value of the NOVA Chemicals Co mmon Shares received exceeds the amount o f suchdividend income, with any excess being treat ed a s capital gain; a nd (iii) acquired the NOVA Chemicals CommonShares (referred to in (ii) above) generally with an initial tax basis equal to their fair market value on theEffective Date and with a holding period that begins on the day after the Effective Date.

Holders of NOVA Preferred Shares

The exchange of NOVA Preferred Shares for E nergyCo. P referred Sha res will constitute a t axable exchangefor United States holders of NOVA Preferred Shares and, consequently, such holders that hold the NOVAPreferred Shares as a capital asset will recognize capital gain or loss. Such holders will be considered to have

disposed of their NOVA Preferred Shares for proceeds equal to the fair market value of the EnergyCo.Preferred Shares on the Effective Date received in the exchange and to have acquired such EnergyCo. PreferredShares with an initial tax basis equal to their fair market value on the Effective Date and with a holding periodthat begins on the day after the Effective Date.

For a more deta iled discussion of U nited Sta tes federal income tax consequences, see Certain I ncome TaxCo nsiderations U nited States Federal Income Tax Co nsiderat ions.

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Summary of Qualification for Tax Plans

Provided the EnergyCo. Common Shares, EnergyCo. Preferred Shares and NOVA Chemicals CommonShares are listed on a prescribed stock exchange, such securities will be qualified investments under the ITA fortrusts governed by registered retirement savings plans, registered retirement income funds and deferred profitsharing plans. See Stock Exchange Listings and Eligibility for Investment.

Investment Considerations

In a ddition to reviewing the entire contents of this Joint C ircular, NOVA Shareholders and TransCa nadaCo mmon Shareholders a re asked to carefully consider the matt ers set forth under Investment Considerationscontained in this Joint Circular.

Dissent Rights

NOVA

Registered NOVA Shareholders have the right to dissent in respect of the Arra ngement and to be paid thefair value of their shares upon compliance with the provisions of section 184 of the AB CA, a s provided in, and a smodified by, the Interim Order. See NOVA Shareholders Rights of Dissent and Appendix D.

TransCanada

Registered TransCana da Co mmon Shareholders, have the right to d issent in respect of the Arrangementand t o be paid the fa ir value of their shares upon compliance with the provisions of Section 190 of the C B CA, a sprovided in, and as modified by, the Interim Order. See TransCanada Common Shareholders Rights ofDissent and Appendix E.

Procedures For Exchange of Securities

Deposit of NOVA Shares

For the NOVA Shareholders, this Joint Circular is mailed with a letter of transmittal. NOVA Shareholdersshould complete the letter of transmittal and deliver such letter and the certificates representing their NOVACo mmon Shares and NO VA Preferred Shares to M ontreal Trust Company of C ana da o n or before 1700 hrs.(Mountain Daylight Savings Time) on Friday, June 26, 1998 in order to receive EnergyCo. Common Sharecertificates and/or E nergyCo. P referred Sha re certificates, respectively, commencing as soon a s practicable a fterJuly 9, 1998, assuming the Arrangement becomes effective. In the event the Arra ngement does not becomeeffective, such certificates will be promptly returned. NOVA Shareholders are advised to use registered mail.

Distribution of NOVA Chemicals Common Shares

It is currently expected that all TransCana da Co mmon Sha reholders of record on J uly 7, 1998 (or such otherdate as to which shareholders will receive advance notice), including all former NOVA Common Shareholderswho will become TransCa nada Common Sha reholders pursuant t o the Arrangement, will receive certificatesrepresenting NOVA Chemicals Common Shares to which they may be entitled to assuming the Arrangementbecomes effective.

EnergyCo. Common Shares

Cert ificates representing TransCa nada Common Shares will represent EnergyCo. C ommon Shares upon theArrangement becoming effective. No exchange or d eposit of TransCana da Co mmon Share certificates will benecessary.

See Procedures For Exchange of Securities.

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ENERGYCO. NORTH AMERICAN PIPELINE SYSTEM MAP

TransCanada - Canadian Mainline

NOVA Gas Transmission

Great Lakes

Trans Qubec & Maritimes

Foothills

Northern Border

Iroquois

ANG Pipeline

Portland (under construction)

Tuscarora

ExpressMillennium (under development)

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GLOSSARY OF TERMS

ABCAmeans the Business Corporations Act, S.A. 1981, c.B -15, as a mended .

AEUB means the Alberta Energy and Utilities Board.

agreed amount has the meaning assigned by subsection 85(1) of the ITA. Any agreed amounts that areexpressly referred to in this Joint Circular are expressed in Canadian dollars.

arms lengthhas the meaning assigned by section 251 of the ITA.Amending Agreementmeans the a greement between NOVA and TransCana da dat ed Ma y 19, 1998, which

amended the Arrangement Agreement.

ArrangeCo. means 3399508 Cana da L td., a wholly-owned subsidiary of TransCa nad a.

Arrangementmeans the arra ngement in respect of TransCa nada and Arra ngeCo. under the provisions ofsection 192 of the CBCA and the arrangement in respect of NOVA under the provisions of section 186 of theABCA, on the terms and conditions set forth in the Plan of Arrangement.

Ar rangement Agreementmeans the a rrangement a greement dated as of Ja nuary 24, 1998, as amended by theAmending Agreement between TransCa nada and NO VA, copies of which are reproduced as Appendix B to thisJoint Circular.

Articles of Arrangement means the articles of arrangement in respect of the Arrangement regardingTransCa nada and Arra ngeCo. req uired by the CB CA to be sent to the Director, a nd in respect of NOVArequired by the ABCA to be sent to the Registrar, in each case, after the Final Order is made.

ASE means The Alberta Stock Exchange.

CBCAmeans the Canada Business Corporations Act, R.S.C. 1985, c.C-44, as amended.

Canadian GAAP means generally accepted accounting principles, as recommended in the Handboo k of theCanadian Institute of Chartered Accountants or, where there is no provision in the Handbook, as reflected inpractice.

capi tal property has the meaning assigned by section 54 of the ITA.

Certi fi cate of Amendment means a certificate of amendment issued to NOVA in respect of the Plan ofArrangement pursuant to the ABCA.

Certi fi cate of Ar rangement means the certificate of a rrangement issued to TransCa nada and Arra ngeCo. inrespect of the Plan of Arrangement pursuant to the CBCA.

Certificates means the Certificate of Amendment and Certificate of Arrangement.

Competi tion Actmeans the Competition Act, R.S.C. 1985, c.C-34, as amended.

Competi tion Di rector means the Director of Investigation and Research under the Competition Act.

Consolidation means the consolidation of NOVA Common Shares whereby the number of NOVAChemicals Common Shares issued under the Arrangement will equal one-fifth of the then outstandingTransCa nada Co mmon Shares (af ter giving effect to t he exchange of ea ch NOVA Common Share for 0.52 of aTransCa nada Co mmon Share).

Court means the Court of Queens Bench of Alberta.Depository means M ontreal Trust Company of C ana da , 600, 530 - 8th Avenue S.W., Calga ry,

Alberta, T2P 3S8 and other offices specified in the letter of transmittal.

Directormeans the Director appointed pursuant to section 260 of the CBCA.

Ef fecti ve Datemeans the later of the effective dates, as applicable, indicated upon the Certificates.

Ef fecti ve Timemeans 1800 hrs. (Mountain Daylight Savings Time) on the Effective Date.

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EnergyCo.is the term used in this Jo int C ircular to d escribe and distinguish TransCa nada , as it will beconstituted immediately after the Arra ngement becoming effective, from TransCa nada as it is constitutedimmediately prior to the Arra ngement. For greater certainty, EnergyCo . means TransCa nada , as it will beconstituted immediately upon the Arrangement becoming effective.

EnergyCo. Common Sharesmeans the common shares in the capital of E nergyCo. to be crea ted and issuedpursuant to the Plan of Arrangement.

EnergyCo. Preferred Shareholders means the holders of EnergyCo. Preferred Shares.

EnergyCo. Pr eferred Shares means the TransCa nada Cumulative Redeemable First P referred Shares,Series S which will be issued to the NOVA Preferred Shareholders on the share exchange under theArrangement.

EnergyCo. Stock Option Plan means the key employee stock option incentive plans of TransCa nad a a samended and continued by EnergyCo. on the Effective Date.

Exchange Ratiowith respect to the NOVA Common Shares means 0.52 TransCa nada Common Shares fo reach NOVA Common Share.

fai r market valuemeans the highest price available in a n open and unrestricted market between informedprudent parties acting at arms length and under no compulsion to act.

FERCmeans the Federal Energy Regulatory Commission (United States).

Final Order means the order of the Court approving the Arrangement, as such order may be amended atany time prior to the E ffective Time or, if a ppealed, then unless such appeal is withdrawn or denied, a s affirmed.

I nterim Order means an order of the Court, as the same may be amended, containing declarations anddirections in respect of TransCana da a nd ArrangeC o. under the CB CA a nd in respect of NOVA under theABCA, in each case, with respect to the Arrangement.

IRCmeans the I nternal Revenue Code of 1986(U nited Sta tes), as a mended.

ITAmeans the Income Tax Act, R.S.C. 1985 (5th Supp.) c.1, as amended.

Joint Cir cularmeans this J oint Mana gement Informat ion Circular of TransCa nada and NOVA, preparedand sent to the TransCa nada Common Shareholders a nd the NOVA Shareholders in connection with theMeetings.

MEmeans the Montreal Exchange.

Meeting or Meeti ngsmeans the TransCa nada Meeting or the NOVA Meeting, or both, a s applicable.

Methanex means Methanex Corporation.

NGC means NG C C orporation.

NGImeans NOVA G as Interna tional Ltd., a subsidiary of NOVA.

NGTL means NOVA G as Transmission Ltd., a subsidia ry of NOVA.

NOVA means NOVA Corporation, a corporation incorporated under the ABCA.

NOVA Chemicals is the term used in this Joint Circular to describe and distinguish NOVA, as it will beconstituted immediately aft er the Arra ngement becoming effective, from NOVA as it is constituted immediately

prior to the Arrangement. For greater certainty, NOVA Chemicals means NOVA as it will be constitutedimmediately after the Arrangement becomes effective (except in Appendices G and I).

NOVA Chemicals Common Shares means the NOVA Common Shares as affected by the Plan ofArrangement and which are distributed by TransCa nada as part of t he Pla n of Arrangement.

NOVA Chemicals L td.means NOVA Chemicals Ltd., a wholly owned subsidiary of NOVA.

NOVA Common Shareholdersmeans the holders of NOVA Common Shares at such time.

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NOVA Common Sharesmeans the common shares in the capital of NOVA.

NOVA Meeti ng means the annual and special meeting of NOVA Common Shareholders (or anyadjournment thereof) to be held to, a mong other things, consider annual a nd special business of NOVA and thespecial meeting of NOVA Common Shareholders and NOVA Preferred Shareholders to be held in conjunctiontherewith as required by the Interim Order, to consider and if deemed advisable, to approve the Arrangement.

NOVA Optionholdersmeans holders of NOVA Stock Options as at the Effective Date.

NOVA Pr eferred Shareholdersmeans the holders of NOVA Preferred Shares.NOVA Preferred Sharesmeans the Cumulative Redeemable First Preferred Shares, Series 1 of NOVA.

NOVA Ser ies 1 Preferr ed Shares means the outstanding Cumulative Redeemable First Preferred Shares,Series 1 of NOVA.

NOVA Shareholder Ri ghts Plan means the Shareholder R ights Plan of NOVA, as set out in the ShareholderR ights Pla n Agreement da ted a s of Ma y 6, 1994 between NO VA and The R-M Trust Company (nowCI B C-Mellon Trust C ompany).

NOVA Shareholdersmeans NOVA Common Shareholders and NOVA Preferred Shareholders.

NOVA Sharesmeans the NOVA Common Shares and NOVA Preferred Shares.

NOVA Special Resoluti on means the special resolution of NOVA Common Shareholders and NOVA

Preferred Shareholders approving the Arrangement to be considered at the NOVA Meeting, the full text ofwhich is reproduced in Appendix A to this Joint Circular.

NOVA Stock Option Plan means the NOVA Corporation E mployee Incentive Stock Option P lan, (1982), asamended.

NOVA Stock Optionsmeans the stock options granted by NOVA pursuant to t he NOVA Stock Option P lan.

NOVA Transfer Agent means CIB C Mellon Trust C ompa ny, 600 The D ome Tower, 333 - 7th Avenue S.W.,Calgary, Alberta, T2P 2Z1.

NYSEmeans the New York Stock Exchange.

paid-up capital means paid-up capital as that expression is defined in subsection 89(1) of the ITA.

Plan of Ar rangement means the plan of a rrangement dat ed Ma y 19, 1998 att ached as part of Appendix B ,including any amendments or variation thereto made in accordance with such plan or the ArrangementAgreement.

Registrarmeans the Registrar of Corporations appointed pursuant to section 253 of the ABCA.

SECmeans the Securities and Exchange Commission of the United States.

Securi ti es Act of 1933means the United States Securities Act of 1933, as amended.

Securi ti es Exchange Act of 1934means the U nited Sta tes Securities Exchange Act of 1934, as a mended.

Special Resolution(s) means the TransCa nada Special Resolution and the NOVA Special Resolution, orboth, as applicable.

Tax Ruli ngmeans the advance income tax rulings issued by Revenue Ca nada , as may be amended.

TransCanada means TransCa nada PipeLines Limited, a corporat ion incorporated under the CB CA.

TransCanada Common Shareholdersmeans the holders of TransCa nada Co mmon Shares.

TransCanada Common Sharesmeans the common shares in the ca pital of TransCana da.

TransCanada Meeti ngmeans the annual a nd special meeting of TransCana da C ommon Shareholders (orany adjournment thereof) to be held to consider, among other things, the annual and special business of

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TransCa nada and, the special meeting to be held in conjunction therewith as required by the Interim Order, toconsider and if deemed advisable, to approve the Arrangement.

TransCanada Optionholdersmeans the holders of TransCa nada Stock Options as of the Eff ective D ate.

TransCanada Preferred Shareholdersmeans the holders of the TransCa nada Preferred Shares.

TransCanada Pr eferred Shares means the $2.80 Cumulative Redeemable First Preferred Shares, theCumulative Redeemable First Preferred Shares, Series O and Series P and the Cumulative Redeemable

Retra ctable First Preferred Shares, Series Q a nd Series R of TransCa nada .TransCanada Shareholder Rights Plan means the Shareholder R ights P lan of TransCa nada as set out in the

Shareholder R ights Plan Agreement da ted a s of D ecember 2, 1994 and amended a nd restated as of April 7, 1995between TransCa nada and M ontreal Trust Company of C ana da.

TransCanada Special Resolution means the special resolution of TransCa nada Co mmon Shareholdersapproving the Arrangement to be considered at the TransCa nada Meeting, the full text of which is reproduced inAppendix A to this Joint Circular.

TransCanada Stock Option Plan means the Key Employee Stock Incentive Plan and the Key EmployeeStock Incentive Plan (1995).

TransCanada Stock Options means t he stock options granted by TransCana da pursuant t o TransCa nadaStock Option Plan.

TransCanada Transfer Agent mea ns Montrea l Trust C ompany of Cana da , 600, 530 - 8th Avenue S.W.,Calgary, Alberta, T2P 3S8.

TSEmea ns The Toronto Stock E xchange.

VSE means the Vancouver Stock Exchange.

WSEmeans the Winnipeg Stock Exchange.

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On Saturda y, Ja nuary 24, 1998, NOVA and TransCa nada entered into the Arra ngement Agreement. TheArrangement was announced in a joint press release issued prior to the opening of the financial markets onMonday, January 26, 1998.

The merger of TransCa nada and NOVA and the subsequent split off of t he chemicals business from t heenergy services businesses is expected to create: (i) the fourth largest energy services company in North Americawith approximately $16.8 billion in annual revenues, $21.4 billion in assets and an improved competitive positionin North America a nd globally, and (ii) the fifth largest publicly traded commodity chemicals company in North

America with approximately $3.4 billion in annual revenues and $3.8 billion in assets.

The Effect of the Arrangement on Shareholdings

Share Exchange

U nder the Arra ngement, the following share exchanges will occur: (i) each NOVA Common Sha re will beexchanged for 0.52 of a TransCa nada Co mmon Share; (ii) each NOVA Preferred Sha re will be exchanged for0.5 of an E nergyCo. P referred Share; and (iii) each TransCa nada Co mmon Share (including TransCana daCommon Shares exchanged for NOVA Common Shares pursuant to (i) above) will be exchanged for 0.2 of aNOVA Chemicals Common Share and one EnergyCo. Common Share. The foregoing reflects theCo nsolidat ion. No fra ctional shares will be issued. Shareholders will receive cash in lieu of fra ctional shares. Alloutstanding TransCana da P referred Shares will remain preferred shares of E nergyCo. without any amendmentto their terms.

The effect of the Arrangement on the holdings of NOVA Shareholders a nd TransCa nada Co mmonShareholders is illustrated below based on a shareholding immediately prior to the Arra ngement of 100 shares.See Procedures for Exchange of Securities.

Holdings Immediately Prior to the Arrangement Holdings Immediately After the Arrangement

100 NOVA C ommon Sha res . . . . . . . . . . . . . . . . . . 52 E nergyC o. C ommon Sha res a nd 10 NOVAChemicals Common Shares(1)(2)

100 Tra nsCa na da Commo n Sha res . . . . . . . . . . . . . . 100 E nergyCo . Commo n S ha res a nd 20 NO VAChemicals Common Shares(2)

100 NOVA P referred Sha res . . . . . . . . . . . . . . . . . . 50 E nergyC o. P referred Sha res(3)

Notes:

(1) A holder of 100 NOVA Common Sha res would be entitled to 10.4 NOVA Chemicals Common Sha res but will receive cash in lieuof the 0.4 NOVA Chemicals Common Shares fractional amount.

(2) No fractiona l NOVA Chemicals Common Shares or EnergyCo. Co mmon Shares will be issued. In lieu of fractiona l shares, NOVACommon Sha reholders and TransCa nada Common Sha reholders will receive cash. See Procedures for E xchange of Securities Fractional Shares.

(3) EnergyC o. Preferred Shares will have substantia lly the same terms as the NOVA Preferred Shares except that, the redemptionamount attributable to EnergyCo. Preferred Shares shall be $50 rather than the $25 redemption amount attributable to the NOVAPreferred Shares and the dividend amount per share will be adjusted proportionately. No fractional EnergyCo. Preferred Shareswill be issued. In lieu of fractional shares, NOVA Preferred Shareholders will receive cash equal to the proportion such fractionrepresents of the $50 redemption amount plus accumulated but undeclared dividends on such fractional portion to the EffectiveDa te as if such shares had been issued May 1, 1998.

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Ownership of EnergyCo. Common Shares and NOVA Chemicals Common Shares

Immediat ely after t he Arrangement, ba sed on the outstanding number of securities as at April 30, 1998, theNOVA Common Shareholders and the TransCa nada Co mmon Shareholders will hold the following approximatepercentages of the outstanding EnergyCo. Common Shares and NOVA Chemicals Common Shares.

Holdings ImmediatelyAfter the Arrangement


Shareholders Immediately Prior to the Arrangement Common Shares Common Shares

NOVA Common Shareholders . . . . . . . . . . . . . . . . . . . . . . . 51% 51%TransCanada Common Shareholders . . . . . . . . . . . . . . . . . . . 49% 49%

Regular Di vidends

NOVA

On May 19, 1998, NOVA declared its second quarter dividend of $0.10 per NOVA Common Share, payableto holders of record on June 29, 1998. It is expected that such dividend will be paid on July 3, 1998. The NOVADividend Reinvestment and Share Purchase Plan will be suspended for the purposes of this dividend paymentand will be terminated on the Effective Date. See NOVA Dividend Reinvestment and Share Purchase Plan.

Holders of NOVA Preferred Shares will receive EnergyCo. Preferred Shares under the Arrangement. A

dividend of $0.64375 per EnergyCo. Preferred Share in respect of the period from the date of issue to July 31,1998 will be payable upon declaration by EnergyCo. on August 15, 1998. After giving effect to the Arrangement,such dividends will be equal to the dividends that would otherwise have been payable in respect of the NOVAPreferred Shares from May 1, 1998 to July 31, 1998.

TransCanada

On M ay 19, 1998, TransCa nad a decla red its second quart er dividend of $0.31 per TransCa nad a C ommonShare, paya ble to holders of record on J une 29, 1998. It is expected that such dividend will be paid o n J une 30,1998. NOVA Shareholders will have the opportunity to part icipate in the E nergyCo. D ividend R einvestment andShare Purchase Plan in respect of their EnergyCo. Common Shares and EnergyCo. Preferred Shares after theEffective D ate. See Appendix M TransCanada D ividend R einvestment and Share P urchase Plan.

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Schematic Representations of the Arrangement Process

The following schematic representations have been simplified to illustrate the Arrangement process and arefor illustrative purposes only.

I . NOVA and TransCanada Before the Arr angement

NOVA PreferredShareholdersNOVA

NOVAChemicals

Ltd.NGTL (1) NG I (1)

NOVA CommonShareholders

TransCa nadaPreferred

ShareholdersTransCa nada

TransCa nadaSubsidiaries

TransCa nada CommonShareholders

Note:

(1) NGTL and NG I will be indirect subsidiaries of NOVA.

I I . NOVA and TransCanada as Merged Pur suant to the Arr angement(1)

TransCanad a C ommonShareholders(2)(includesformer NOVA Common

Shareholders)

TransCana da PreferredShareholders(3)(includesformer NOVA Preferred

Shareholders)

TransC ana da

TransC ana daSubsidiaries

NOVA

NOVAChemicals

Ltd.NGTL (4) NG I (4)

Notes:

(1) At this step under the Plan o f Arrangement, TransCa nada will indirectly hold NOVAs entire interest in its energy services andchemicals businesses. At the conclusion of the Plan of Arrangement, there will be a separation of the aggregated energy servicesbusinesses of TransCa nada and NOVA under EnergyCo ., from the chemicals business of NOVA under NOVA Chemicals, asillustrated in Schematic III.

(2) Each NOVA Common Share is exchanged for 0.52 of a TransCanada Common Share, hereafter referred to as EnergyCo. CommonShares.

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(3) Each NOVA Preferred Share is exchanged for 0.5 of a TransCanada Preferred Share, Series S, hereafter referred to as E nergyCo.Preferred Shares.

(4) NGTL and NG I will be indirect subsidiaries of NOVA.

I I I . Spli t off of NOVA Chemicals from EnergyCo. Pursuant to the Arrangement Post Ar rangement Structur e

NOVAChemicals

Ltd.

NOVA Chemicals Common

Shareholders(1)

NOVA Chemicals (2) EnergyCo. (2)

TransC ana daSubsidiariesNGTL

(4) NG I (4)

EnergyCo. Common

Shareholders(1)

EnergyCo. PreferredShareholders (3)

Notes:

(1) Formerly TransCanada Common Shareholders and NOVA Common Shareholders.

(2) For ease of reference, NOVA, after the E ffective D ate, is referred to as NOVA Chemicals in this Joint Circular (except inAppendices G and I). Also, for ease of reference, TransCanada, a fter the Effective Date, is referred to a s EnergyCo., in this JointCircular.

(3) After the Arrangement, the holders of EnergyCo. preferred shares will consist of the TransCanada Preferred Shareholders and theformer NOVA Preferred Shareholders.

(4) NGTL and NG I will be indirect subsidiaries of EnergyCo.

BENEFITS OF THE ARRANGEMENT

NOVA and TransCa nada believe that the Arrangement will result in an enhancement of shareholder valuefor the reasons set out below.

Energy Services

The Arrangement brings together two of Canadas largest companies with complementary energy servicesbusinesses, corporate objectives and growt h strat egies. TransCana da and NOVA believe that the companiesmanagement, technical, operating and financial expertise will enhance EnergyCo.s strength and depth in theenergy services industry. Benefits are anticipated to be realized from the following:

Cost Synergies

Management of both companies believe that their similarities and shared competencies in natural gastransmission, gas gathering and processing, liquids processing and transportation, energy marketing andinternational energy services, should allow EnergyCo. to capture cost synergies from the Arrangement. Thecompanies estimate t hat aggregate annual opera ting cost savings for t he regulated a nd non-regulated businesses

could amount to approximately $100 million, and annual capital cost savings could amount to approximately$50 million. It is anticipated that these savings could be fully realized within approximately three years.

The operating cost savings are anticipated to be realized primarily in areas such as corporate governanceand common head office services. The capital cost savings are expected to be achieved through enhancedpurchasing power, inventory efficiencies, and the ability to ma nage procurement and capital projects on a largerscale. That portion of cost savings realized in the regulated businesses will be shared between EnergyCo.sshareholders and customers in accordance with regulatory requirements and existing incentive settlement

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agreements. The existing incentive agreements were approved by the AEUB in the case of NGTL and by theNEB in the case of TransCana da a nd provide for the sharing of certain cost savings between

TransCanada Yves Fortier

Documents

Transcript of TransCanada Yves Fortier