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EXHIBIT 10.7    
  

 
 

PML EMPLOYEE (EVCC) CORP.    
    STOCK OPTION PLAN    
  

    The purpose of this Stock Option Plan is to retain and encourage the active interest of eligible employees in the business of Power Measurement Ltd. ('PML')
and its associated employee venture capital company, PML Employee (EVCC) Corp. (the 'EVCC') and to provide an incentive for employees to be actively involved in and to continue to support the growth
of PML and the EVCC.

 
 

Article I—Interpretation    
  

    1.1  Definitions:  The following terms shall have the following meanings: 

    (a) 'Base
Price' shall mean $ 102.83 per share; 

    (b) 'Company'
or 'EVCC' shall mean PML Employee (EVCC) Corp.; 

    (c) 'Control'
means the right to elect a majority of the directors to the Board of Directors of the Company; 

    (d) 'Employee'
shall mean an employee of PML who has acquired shares in the EVCC pursuant to the 1996 Share Offering Document of the EVCC dated January 14, 1996; 

    (e) 'Exercise
Date' shall mean January 15 immediately succeeding the date upon which the EVCC receives written notice of the Employee's intention to exercise its
option in accordance with Article 3; 

    (f)  'Option'
shall mean the option to acquire Shares of the Company as set out in Article 2 herein; 

    (g) 'PML'
shall mean Power Measurement Ltd. 

    (h) 'Shares'
shall mean the Class 'B' Common shares of the Company or such other class of shares as the Board of Directors of the EVCC shall determine; and 

    (i)  'Termination
of Employment' shall mean the termination of employment with PML or an affiliated, associated or subsidiary company of PML for any reason, whether
voluntary or involuntary. 

    1.2  Nature of Option:  Nothing in this Option Plan shall grant or confer to the Employee any additional
right to remain as an employee, a shareholder, a director or in any other capacity with PML or the EVCC, and this Plan shall be interpreted as a grant of an option only. 

 
 

Article 2—Grant of Option    
  

    2.1  Grant of Option:  In connection with the 1996 Employee Venture Capital Plan, the EVCC grants to each
Eligible Employee who has acquired one Class 'B' Common share of the EVCC the option and right to acquire one additional Class 'B' Common share of the EVCC. The terms and conditions of
that Option are subject to the provisions of this Plan. 

    2.2  Vesting:  The grant of the option shall vest immediately but shall not be exercisable until the
earlier to occur of: 

    (a) January 24,
2000; or 

    (b) a
change in Control of the ownership of PML to a party other than 416606 B.C. Ltd., GFI-PML Investors Corp., or OCM Principal Opportunities Fund LP. 

 

    2.3  Term of Option:  The Option to which each Employee is entitled shall terminate, for each Employee,
upon the earlier to occur of: 

    (a) January 24,
2007; or 

    (b) the
Employee's Termination of Employment; 

and
the right of each Employee to acquire Shares under the Option and this Plan shall terminate on such date. 

    2.4  Dilution:  In the event that, during the term of the Option, the total outstanding share capital of
the Company is increased or decreased by reason of a share dividend, a share consolidation, a share division or split, or a reclassification of any or all of the shares or classes of shares of the
Company then an appropriate adjustment shall be made to the number of Shares subject to the grant of the Option herein either by an increase in the number of shares subject to the Option and a
corresponding decrease in the Exercise Price or a decrease in the number of Shares subject to the Option and a corresponding increase in the Exercise Price so as to enable the Employee to maintain
under the Option the right to acquire the same proportionate interest in the Company at an equivalent exercise price per share as he held immediately preceding the share dividend, consolidation,
division or split or reclassification. In making such adjustments, no fractional shares shall be issued or shall be issuable by the Company and the Employee will receive only the number of full shares
to which he may be entitled by reason of such adjustment at the adjusted option price per share. 

 
 

Article 3—Exercise Price and Manner of Exercise    
  

    3.1  Exercise Price:  The Exercise Price of the Option shall be the Base Price plus 5% of the Base Price
for each full year (365 days) that has passed since January 15, 1997 up to the Exercise Date. 

    3.2  Notice:  Subject to Article 2, the Option may be exercised in whole or in part on
January 15 of each year during the term of the Option by delivery of written notice to the registered office of the Company prior to the expiry of the term of the Option which: 

    (a) sets
out the number of Shares to be acquired; 

    (b) is
accompanied by payment of the Exercise Price in full by a certified cheque or banker's draft; and 

    (c) is
received by the Company prior to January 15th of the year in which the option is to be exercised. 

    3.3  Delivery of Share Certificate:  Upon satisfactory receipt of the notice and payment of the Exercise
Price, the Company shall issue the required number of Shares and deliver a share certificate in the name of the Employee for the number of Shares purchased on or as soon after January 15 as is
practicable. The Shares issued pursuant to the exercise of the Option shall be fully paid up and non-assessable. 

    3.4  Legend:  The share certificates issued by the Company may be inscribed with such legend and notice
of the terms and conditions of this Plan as the Company may require. 

 
 

Article 4—Restrictions on Transfer
  and Repurchase of Shares by Company    
  

    4.1  Restriction on Transfer of Option:  The Option is personal to the Employee and shall not be
assigned, transferred or pledged by the Employee. 

    4.2  Restriction on Transfer of Shares:  The Shares acquired by the Employee pursuant to the exercise of
the Option shall not be sold, transferred, assigned, pledged or otherwise disposed of to a 

2

 

third party except in accordance with the procedure and the terms and conditions of section 4.3 hereunder party unless and until the shares of the Company are listed for trading on a public stock
exchange or trading facility. 

    4.3  Right of Resale:  While the restriction on transfer pursuant to section 4.2 is in effect, the
Employee may only resell the Shares acquired pursuant to the Option: 

    (a) to
an Eligible Investor, as that term is defined under the Employee Venture Capital Plan of the EVCC dated January 10, 1997 either by private sale or through
the Transfer Notice Procedure set out in Article 20 of the Articles of Association of the Company; or 

    (b) to
the Company. 

    4.4  Re-Sale to Company:  In the event that the Employee wishes to resell the Shares to the Company, the
following procedure shall apply: 

    (a) The
Employee may deliver a request for repurchase to the EVCC who shall deliver a corresponding repurchase request to PML and the EVCC shall repurchase the number
of shares specified therein on the following January 1 or July 1, whichever is earlier, ( the 'Repurchase Date') for a purchase price per share equal to the share value calculated in
accordance with the formula set out in Appendix A as at the prior Repurchase Date provided that the Company may decline to complete a repurchase if: 

    (i)  the
repurchase would create a working capital deficiency for PML on a corresponding request by the EVCC for repurchase of PML shares; 

    (ii) the
amount repurchased when added to the total amount of previous repurchases in the fiscal year would exceed the lesser of: 

    (x) 20%
of the PML's retained earnings; or 

    (y) 50%
of the PML's net earnings after taxes for the preceding fiscal year; 

    (iii) the
repurchase request of PML by the EVCC would cause PML to be in default of its financial obligations under a bona fide arm's-length loan agreement; or 

    (iv) PML
is insolvent, or if the repurchase request by the EVCC of PML would render PML insolvent. 

Even
though a request for repurchase may be declined under this paragraph, it shall remain in effect until withdrawn or fulfilled. 

    (b) If
at any time the Company declines to complete a repurchase pursuant to paragraph (a) above and the Company has received requests for repurchase from other
Employees pursuant to other employee share ownership plans, the Company will thereafter, until all requests for repurchase have been fulfilled, fulfill requests for redemption from all employees of
the Company in the following order or priority: 

    (i)  first,
requests for repurchase made as a consequence of an employee's death; 

    (ii) second,
requests for repurchase made as a consequence of an employees's retirement; 

    (iii) third,
requests for repurchase made as a consequence of an employees's involuntary loss of employment; and 

    (iv) lastly,
all other requests for repurchase 

and,
to the extent necessary, the repurchase will be completed on a pro rata basis among repurchases within the same level of priority. 

3

 

    On
completion of a repurchase the EVCC will deliver payment in full for the repurchased shares to the Employee against delivery to the EVCC of the share certificates representing the
shares repurchased, duly endorsed for transfer, free and clear of all liens, encumbrances and adverse claims. 

    4.5  Termination of Employment:  If the Employee experiences Termination of Employment for any reason,
the EVCC shall cause the Shares to be repurchased at a purchase price per share equal to the share value calculated in accordance with the formula set out in Appendix A as at the prior Repurchase Date
and the Employee shall be obligated to sell the Shares to the Company. The provisions of section 4.4(a) and 4.4(b) shall apply to the repurchase of Shares by the Company on Termination
of Employment. 

 
 

Article 5—General    
  

    5.1  Governing Law:  This Agreement shall be governed by the laws of the Province of British Columbia and
insofar as they are applicable the federal laws of Canada without reference to the principles of conflict of laws. 

    5.2  Time of the Essence:  Time shall be of the essence of this Agreement. 

    5.3  Notices:  Any notices required to be given hereunder shall be sufficiently given if delivered to the
Company at its principal head office or its registered office and if delivered to the Employee at the most recent address shown on the shareholders register of the Company. 

    SIGNED
on behalf of the Board of Directors of PML Employee (EVCC) Corp. this 13th day of January, 1997. 

	 	 	PML Employee (EVCC) Corp.
	

 	
 	

/s/ Carol Pendray
 Director
	

 	
 	

/s/ [ILLEGIBLE]   
 Director

4

  

 
 

APPENDIX A    
  

    The value of a Class "B" common share will be determined on the basis of fair market value as defined below as of January 1 or July 1 of
each year by PML's accountant, or by such other independent member in good standing of the Canadian Institute of Chartered Business Valuators as PML and the EVCC may agree upon from time to time. In
determining the fair market value of a Share, the valuator may not provide for a premium for control, a discount for minority interests, or any adjustment based on any tax credit allowable under the
Income Tax Act (British Columbia) or the Income Tax Act (Canada) in respect of the Share. The valuator may rely on annual financial statements and internally prepared quarterly financial statements in
the event that externally prepared or review quarterly financial statements are not available. 

    The
fair market value of the Class "B" Common Shares of the EVCC shall be based on the corresponding fair market value of the Class "F" Common Shares of PML determined
in accordance with the following valuation: 

    (A) in
the event that the shares of PML are not posted for trading on a public share exchange: 

    (i)  the
amount equal to the sum of (x) the product of four times the sum of PML's EBITDA (as defined below) during the eight completed fiscal quarters of PML most
recently preceding the Share Valuation Date and for which quarterly financial statements are available as of the Share Valuation Date (the "Test Period") [excluding any Acquisition-Derived
EBITDA (as defined below) referred to in clause (y), to avoid duplication], plus (y) in the event that PML acquires any business, material line of business or material product line after the date of
this Agreement, the product of four times the sum of the relevant Acquisition Derived EBITDA during the eight completed fiscal quarters most recently preceding the Exercise Date and for which
quarterly financial statements are available as of the exercise date minus the Acquisition Indebtedness related thereto, such sum in turn divided by 

    (ii) the
total number of outstanding common shares (including all series thereof) of PML, including such shares then issuable upon exercise or conversion of any other
instruments or securities, as of the business day immediately preceding the Share Valuation Date; 

    (iii) which
sum shall then be discounted by 22.5%. 

    The
parties agree that, in the case of each acquisition to which clause (i)(y) is applicable, for the first two years following the acquisition, if the computation in that clause
would result in a negative number, then the amount in such clause will be deemed to equal zero notwithstanding such computation; following such two-year period, the result of the computation will be
applied literally whether the result is a negative or a positive number. For purposes of this Agreement, the following terms have the following meanings: 

    "EBITDA" means the income from operations before interest expense and income taxes plus depreciation and amortization expense,
determined in accordance with Canadian generally accepted accounting principles consistently applied ("GAAP"), plus, to the extent any of the following were deducted from income from operations for
the applicable Test Period, 

    (a) any
amounts paid by PML in settlement of its litigation with Square D Company, exclusive of any legal fees or other expenses incurred in connection therewith, 

    (b) any
Management Fees [as defined in the Securityholder Agreement of even date herewith (the "Securityholder Agreement")] paid by PML to GFI Energy
Ventures LLC or any affiliate thereof, and 

    (c) all
expenses of the transaction contemplated by the Share Acquisition and Repurchase Agreement dated August 26, 1996 paid by PML pursuant to Section 5.3 of
the said Agreement. 

5

 

    "Acquisition-Derived EBITDA" means the EBITDA derived from a business, material line of business or material product line acquired by
PML after the date of this Agreement from a third person or entity, whether such EBITDA was derived prior to the acquisition or thereafter. 

    "Acquisition Indebtedness" means indebtedness incurred, assumed or guaranteed by PML following the date hereof in connection with PML's
acquisition (by way of asset or securities purchase, amalgamation, consolidation or otherwise) of a business, any material line of business or any material product line, or any capital expenditure
related thereto. 

OR

    (B) in
the event that shares of PML are posted for trading at a public share exchange, the average trading price of the listed shares at the close of trading on PML's principal
stock exchange or trading facility over the seven (7) day period immediately preceding the Share Valuation Date. 

6

 
 

SUBSCRIPTION FORM    
  

    This subscription form must be completed by Eligible Employees of Power Measurement Ltd. (the "Eligible Business") or its affiliates who wish to subscribe for
Shares of PML Employee (EVCC) Corp. (the "EVCC") during the offering period of January 13, 1997 to January 24, 1997. 

1.  EMPLOYEE INFORMATION  

	(a)
	Name: ________________________________________________
(the "Investor")

	(b)
	Address: ________________________________________________________________________

_________________________________________________________________________________.

	(c)
	Social
Insurance Number: _________________________________________________________ 

2.  SUBSCRIPTION ENTITLEMENT  

    Under the Employee Venture Capital Plan (the 'Plan'), the Investor is entitled to purchase up to 98 Plan Shares of the EVCC under this offering at a price of $
102.83 per share. The Investor is also entitled, on a pro rata basis and subject to availability, excess Plan Shares for which subscriptions have not
been received. 

    The
Investor is also entitled to purchase Additional Shares of the EVCC under this offering at a price of $102.83. 

3.  SUBSCRIPTION  

    (a) The
Investor hereby subscribes for and agrees to purchase: 

________________________ Plan
Shares (the "Shares")

(under the Initial Entitlement, Investor may subscribe for up to 98 shares) 

of
the EVCC pursuant to the Plan. This subscription is made based on the representations, warranties and covenants of the EVCC contained in the Plan, the share offering document accompanying this
form, and herein and the Investor acknowledges is subject to the terms and conditions of such documents. 

    (b) In
the event that the total amount of Plan Shares under the Offering is not fully subscribed for, the Investor hereby subscribes for and agrees to purchase: 

________________________ Plan
Shares (the "Shares")

(in addition to the Maximum Initial Entitlement of 98 Plan Shares, an Investor may subscribe for up to 31 more Plan Shares before the annual maximum provincial tax credit of $2,000.00 will be
exceeded) 

in
addition to his or her initial subscription entitlement and hereby subscribes for and agrees to purchase, subject to availability, said Plan Shares. 

    (c) The
Investor is willing to take up to ___________________ Additional Shares and hereby subscribes for and agrees to purchase, subject to availability and his or her  pro rata entitlement, said number of
Additional Shares. The Investor acknowledges that Additional Shares are not subject to provincial or federal tax
credits and are subject to the terms and conditions as set forth in the Confidential Share Offering Document and, as applicable, the Plan. 

4.  PAYMENT  

    (a) A
cheque payable to the EVCC in the amount of $_________ is attached as payment for the Initial Entitlement of Plan Shares. This amount
should equal the sum of the number of shares subscribed for under section 3(a) above x $102.83.

    (b) The
Investor agrees that he or she will, on being notified of any excess Plan Shares or Additional Share to which he or she shall be entitled and for which he or
she has subscribed for above 

 

pursuant to section 3(b) and 3(c) above, issue a cheque to the EVCC for the balance owing forthwith and in any event within three (3) business days of receiving such notice. 

5.  SHARE CERTIFICATE (check one)  

    The Investor hereby directs that the share certificate representing the Shares be issued: 

    (a) in
the Investor's name; 

    (b) in
the Investor's name, and later transferred into the name of the trustee of the Investor's registered retirement savings plan as follows: 

________________________________________________________________________

(insert trustee name, address and RRSP number)

________________________________________________________________________;
or 

    (c) in
the name of the trustee of the Investor's registered retirement savings plan as follows: 

________________________________________________________________________

(insert trustee name, address and RRSP number)

________________________________________________________________________; 

and
acknowledges that, with respect to Plan Shares, the share certificate will be held by Royal Trust, as authorized depository, pending expiry of the 5 year hold period under the Employee Investment
Act. 

6.  REPRESENTATIONS BY THE EVCC  

    By delivering this subscription form to the Investor, the EVCC additionally represents and confirms to the Investor that: 

    (a) the
Plan has been duly registered as an employee venture capital plan under the Employee Investment Act, S.B.C. 1989, c.24 (the "Act"); and 

    (b) upon
delivery of this subscription form to the EVCC duly completed by the Investor, it will constitute a binding agreement between the EVCC and the Investor. 

7.  REPRESENTATIONS BY THE INVESTOR  

    The Investor hereby certifies and confirms that: 

    (a) he/she
has received and read the share offering document accompanying this form; 

    (b) he/she
meets the criteria for an "eligible investor" set out on page 2 of the share offering document and is acquiring the shares as a principal and not on behalf
of or for the benefit of any other party; 

    (c) since
(insert the date which is 1 year prior to the date of application for registration of the Plan), he/she has not disposed of any shares of the Eligible
Business other than as follows: 

________________________________________________________________________

________________________________________________________________________;

    (d) he/she
has not acquired any other shares of the EVCC (or any other corporation) for which a tax credit certificate under the Act was issued or has been or will be
applied for other than as follows: 

________________________________________________________________________

________________________________________________________________________;

2

 

    (e) during
the two year period preceding the date on which the Shares will be paid for in full, the Investor has not disposed of (and will not dispose of) any other
shares of the EVCC for which a tax credit under the Act was issued other than as follows: 

________________________________________________________________________

________________________________________________________________________;
and 

    (f)  he/she
has not received or applied for and will not receive or apply for tax credit certificates under the Act totaling more than: 

	 	 	(i)	 	$2,000 in value in respect of any one calendar year; and
	 	 	(ii)	 	$10,000 in value in grand total.

    (g) he/she
requests that for tax credit application purposes purchase of the Plan Shares be allocated as follows: 

	Calendar Year

	 	No. of Shares

	 	Cost ($) Allocated to

	1996	 	____________

	 	________________________

	1997	 	____________

	 	________________________

8.  AUTHORIZATION BY INVESTOR  

    (a) The
Investor hereby authorizes the EVCC to make application on the Investor's behalf for a tax credit certificate pursuant to section 24 of the Act for the Plan
Shares, to use the information provided under Part 7 of this subscription form as the basis for such application and to provide to the
administrator under the Act any information required by the administrator for the purpose of processing such application. 

    (b) The
Investor hereby authorizes the EVCC to execute on behalf of the Investor the form of escrow agreement contained in Appendix I to the Plan providing for the
holding of certificates representing the Shares by an authorized depository as contemplated by the Regulations, and hereby irrevocably appoints the EVCC as the Investor's attorney for the purpose of
executing such agreement. 

    (c) The
Investor hereby irrevocably appoints the EVCC with full power of substitution as the Investor's attorney to execute such waivers or consents on the Investor's
behalf as may be necessary from time to time to ensure compliance by the EVCC with section 41 of the Company Act (British Columbia). 

    (d) The
Investor acknowledges and agrees that the authorizations and appointments set out in this Part 8 are irrevocable and shall survive the death, disability
or incapacity of the Investor and be binding upon the Investor's heirs, executors, administrators and legal representatives. 

    (e) The
Investor agrees that the Investor's address, as shown in Part 1, may be used for the purpose of sending any document to him or her pursuant to the Plan
or the Act, unless the Investor shall have notified the EVCC of a different address. 

3

 

Dated the      day of            , 199  . 

	SIGNED in the presence of:	 	)	 	 
	 	 	)	 	 
	________________________________________________

(Witness' Name - Please Print)	 	)

)	 	________________________________________________

(Investor Signature)
	________________________________________________

(Witness Address)	 	)

)	 	 

9.  TAX CREDIT APPLICATION (to be completed by the EVCC)  

    To: The
Administrator under the Employee Investment Act (British Columbia) 

    Pursuant
to section 24 of the Act, the EVCC hereby applies for a tax credit certificate on behalf of the Investor on the basis of the information provided by the Investor set forth
above. For the purpose of such application, the EVCC hereby certifies that: 

    (a) the
Plan Shares have been issued to the Investor under the Plan and the EVCC received payment in full for the Plan Shares on
________________________________________________; 

    (b) the
EVCC has to the date hereof complied with the Plan, the Act the regulations thereto and any conditions of registration specified by the Administrator; 

    (c) all
Eligible Investors (as defined in the Plan) were fully informed of their right to purchase shares under the Plan; and 

    (d) no
tax credit has previously been allowed for the Shares under the Income Tax Act (British Columbia) or the Income Tax Act (Canada), and the Investor is not
entitled in respect of the acquisition of the Shares to claim any tax credit (except that contemplated hereby) or deduction or receive any other financial assistance from any government, municipality
or public authority. 

    I,
the undersigned, am a director or officer of the EVCC duly authorized to make this application, and, to the best of my knowledge after due examination and inquiry, all statements
made in this application are true and correct. I have read sections 30 and 36 of the Act and I understand that it is an offense and may expose me to personal liability to make a false or misleading
statement in this application. 

	 	 	 	 	PML Employee (EVCC) Corp.
	

Date:	
 	

________________________________________________

  	
 	

Per:	
 	

________________________________________________

Carol Pendray, Director

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EXHIBIT 10.7

PML EMPLOYEE (EVCC) CORP. STOCK OPTION PLAN

Article I—Interpretation

Article 2—Grant of Option

Article 3—Exercise Price and Manner of Exercise

Article 4—Restrictions on Transfer and Repurchase of Shares by Company

Article 5—General

APPENDIX A

SUBSCRIPTION FORMPrepared by MERRILL CORPORATION

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EXHIBIT 10.8    
  

 
 

EVCC/ELIGIBLE BUSINESS INVESTMENT AGREEMENT    
  

THIS
AGREEMENT made the 25th day of September, 1996. 

BETWEEN:

PML
EMPLOYEE (EVCC) CORP., a British Columbia company, having an office at Suite 1212, 1175 Douglas Street, Victoria, British Columbia, Canada. 

(the
"EVCC") 

AND: 

POWER
MEASUREMENT LTD., a British Columbia company, having an office at Suite 1212, 1175 Douglas Street, Victoria, British Columbia, Canada. 

("PML")

WHEREAS:

	A.
	The
EVCC was formed with the support of PML and its employees with the following objectives in mind:

	(i)
	to
give employees of PML an opportunity to continue to participate in the ownership of their employer;

	(ii)
	to
encourage teamwork and cooperation amount all members and units of PML;

	(iii)
	to
improve PML's ability to retain a skilled workforce;

	(iv)
	to
provide an additional source of equity capital to PML; and

	(v)
	to
provide employees of PML a collective voice in the ownership of their employer. 

	B.
	This
Agreement sets forth the terms and conditions upon which the EVCC may invest in PML from time to time; and

	C.
	The
EVCC intends to seek registration as an employee venture capital corporation under the Employee Investment Act, and this Agreement will form part of the EVCC's registration
application; 

NOW
THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the premises and the representations, warranties, covenants and agreements hereinafter set forth, the parties hereto represent,
warrant, covenant and agree as follows: 

1.  DEFINITIONS AND INTERPRETATION  

	1.1
	In
this Agreement, the following terms have the following meanings:

	(a)
	"Act"
means the Employee Investment Act, S.B.C. 1989, c.24, as amended from time to time;

	(b)
	"Administrator"
means the person designated under the Act from time to time to perform the duties of administrator under the Act;

	(c)
	"Agreement"
means this agreement, including all the appendices attached hereto, as supplemented and amended from time to time;

	(d)
	"Constitution"
means the constitution of PML, a certified true copy of which as of the date hereof is attached as Appendix A, as amended from time to time; 

1

 

	(e)
	"Financial
Assistance" means financial assistance in the ordinary meaning of the term except that it does not include:

	(i)
	any
financial assistance provided to the EVCC by PML pursuant to paragraph 6.1(g)(h) of this Agreement; and

	(ii)
	employment
remuneration paid by PML (or an affiliate thereof) to shareholders, directors or officers of the EVCC solely as a result of their
employment by PML (or an affiliate thereof); 

	(f)
	"Financial
Statements" means:

	(i)
	the
financial statements of PML attached as Appendix B; or

	(ii)
	if
any subsequent financial statements of PML have been delivered by PML to the EVCC, the latest of those financial statements; 

	(g)
	"Fiscal
Period" means the fiscal period specified in Item 3 of Appendix D;

	(h)
	"Share
Value" means the value per Share determined from time to time in accordance with Appendix F;

	(i)
	"Shares"
means the shares of PML of the class identified in Item 1 of Appendix D;

	(j)
	"Redemption
Date" means each of the following days in the following months of each year: 

January
1, 

July
1, 

	(k)
	"Regulations"
means the regulations enacted pursuant to the Act in force from time to time; and

	(l)
	"Request
for Redemption" means a request for redemption a repurchase of Shares in the form attached as Appendix G. 

	1.2
	In
this Agreement, the words "redeem" and "redemption" include a purchase of shares.

	1.3
	In
this Agreement, unless otherwise defined herein, words and phrases defined in the Act or the Regulations have the meanings given to them in the Act or the Regulations.

	1.4
	In
this Agreement, words (including defined terms) importing the singular number include the plural and vice versa and words importing the masculine gender include the feminine and
neuter genders. 

2.  COMMENCEMENT, TERM AND AMENDMENT  

	2.1
	This
Agreement will become effective only upon registration of the EVCC as an employee venture capital corporation under the Act.

	2.2
	This
Agreement will terminate only upon receipt by PML of consent in writing to its termination from the EVCC and the Administrator.

	2.3
	This
Agreement may not be amended without the prior consent in writing of the EVCC and the Administrator. 

3.  REPRESENTATIONS AND WARRANTIES OF PML  

	3.1
	PML
represents and warrants to the EVCC that: 

2

 

	(a)
	PML
is a company duly incorporated, validly existing and in good standing under the laws pursuant to which it was incorporated;

	(b)
	PML
meets the requirements of an eligible business specified in the Act and the Regulations;

	(c)
	as
at the date of this Agreement, the authorized share capital of PML is as set out in PML' Constitution which is attached as Appendix A;

	(d)
	as
at the date of this Agreement, the issued and outstanding share capital of PML is as set out in Item 2 of Appendix D;

	(e)
	the
Shares are of a class of shares of PML that:

	(i)
	carry
voting rights under all circumstances;

	(ii)
	are
not directly restricted in their right to share in the profits of PML or in the division of PML' assets on dissolution or winding up; and

	(iii)
	do
not have any rights and restrictions prohibited by the Regulations; 

	(f)
	the
Shares to be issued pursuant to this Agreement will be from the treasury of PML and will not have been previously issued;

	(g)
	the
Financial Statements were prepared in accordance with generally accepted accounting principles, present fairly the financial position and condition of PML as at the date thereof
and do not omit to state any material liability or financial obligation of PML as at the date thereof;

	(h)
	since
the date of the Financial Statements there has been no material adverse change in the financial position or condition of PML except as separately disclosed in writing to the
EVCC;

	(i)
	Appendix C
discloses all outstanding options, warrants and conversion rights granted by PML in respect of its securities;

	(j)
	PML
is not party to any agreement which prohibits or restricts it from completing any of the transactions contemplated hereunder or complying with the terms hereof; and

	(k)
	the
representation and warranties set out in paragraphs (a) to (j) above will be true and correct on each date on which Shares are purchased pursuant to this Agreement. 

	3.2
	The
EVCC will be deemed to have relied on the representations and warranties contained in paragraphs (a) to (k) above in respect of each subscription and purchase of Shares pursuant
to this Agreement. 

4.  PURCHASE OF SHARES  

	4.1
	The
EVCC intends to make the share offerings described in Item 2 of Appendix A to its Employee Venture Capital Plan.

	4.2
	Within
30 days of the end of each such share offering, the EVCC will be entitled to subscribe for and purchase that number of Shares which is equal to the number of EVCC shares
subscribed for pursuant to the offering at price per Share equal to the Share Value in effect at the commencement of the offering.

	4.3
	All
subscriptions for Shares under paragraph 4.2 will be in the form attached as Appendix E.

	4.4
	Upon
receipt of payment(s) for Shares subscribed for pursuant to this Article, PML will forthwith duly allot, issue and deliver to the EVCC the Shares in respect of which such
payment(s) was made. 

3

  

	4.5
	Under
a share offering, the EVCC intends on acquiring Class "C" Common Shares of PML from the current holders of such shares. Upon receipt and closing of this offering, PML
will forthwith repurchase all Class "C" Common Shares held by the EVCC and in exchange for each Class "C" Common Share repurchased, duly allot, issue and deliver to the EVCC one (1)
Class "C" Preferred Share in the share capital of PML. 

5.  REPURCHASE/REDEMPTION OF SHARES  

	5.1
	Whenever
the EVCC receives a request from an EVCC shareholder for redemption of a number of EVCC shares, the EVCC will deliver a Request for Redemption to PML in respect of an equal
number of Shares, and subject to paragraph 5.2, PML will redeem such number of Shares on the next Redemption Date at a price per Share equal to the Share Value in effect as at the date of
delivery of the Request for Redemption.

	5.2
	PML
may decline to complete a redemption pursuant to a request under paragraph 5.1 if the redemption would render PML insolvent, or if:

	(a)
	the
redemption would create a working capital deficiency for PML;

	(b)
	the
amount redeemed when added to the total amount of previous redemptions in the fiscal year would exceed the lesser of:

	(i)
	20%
of PML's retained earnings, or

	(ii)
	50%
of PML's net earnings after taxes for the preceding fiscal year; 

	(c)
	the
redemption would cause PML to be in default of it's financial obligations under a bona fide arm's length loan agreement; or

	(d)
	PML
is insolvent. 

Even
though a Request for Redemption may be declined under this paragraph, it shall remain in effect until withdrawn or fulfilled. 

	5.3
	If
at any time PML declines to complete a redemption pursuant to paragraph 5.2, PML will, thereafter until all Requests for Redemption have been fulfilled, fulfill Requests
for Redemption in the following order of priority:

	(a)
	first,
Requests for Redemption made as a consequence of an EVCC shareholder's death;

	(b)
	second,
Requests for Redemption made as a consequence of an EVCC shareholder's retirement;

	(c)
	third,
Requests for Redemption made as a consequence of an EVCC shareholder's involuntary loss of employment; and

	(d)
	lastly,
all other Requests for Redemption; 

and,
to the extent necessary, the redemptions will be completed on a pro rata basis among redemptions within the same level of priority. 

	5.4
	On
completion of a redemption under this Article 5:

	(a)
	PML
will deliver payment in full for the redeemed Shares to the EVCC; and

	(b)
	the
EVCC will deliver, or cause to be delivered, to PML a Share Certificate representing (or including) the Shares redeemed, duly endorsed for transfer. 

	5.5
	PML
may arrange for an affiliate of PML to redeem any Shares requested to be redeemed by the EVCC pursuant to paragraph 5.1, provided that the tests specified in
paragraph 5.2 will continue to be applied in respect of PML and not the affiliate. 

4

 
	6.
	COVENANTS OF PML

	6.1
	PML
covenants and agrees with the EVCC that:

	(a)
	it
will take all required corporate action to duly allot and issue Shares purchased under this Agreement from the treasury of PML and, upon receipt by PML of payment in full for
Shares subscribed for hereunder, the Shares will be validly issued as fully paid and nonassessable shares in the capital of PML;

	(b)
	it
will endeavour to obtain waivers of pre-emptive rights, if applicable, from other shareholders of the Company with respect to each offering;

	(c)
	within
30 days after the end of each Fiscal Period, it will provide to the EVCC for disclosure to the EVCC's shareholders:

	(i)
	the
Share Value established in accordance with Appendix F;

	(ii)
	the
basis on which the Share Value was established; and

	(iii)
	disclosure
with respect to major decisions made by PML during the Fiscal Period which materially affected the Share Value; 

and,
if applicable, 

	(iv)
	a
summary (including price information) of all new share issuances and options, warrants or conversion rights granted by PML during the Fiscal
Period; and

	(v)
	a
separate expression of the Share Value on a fully diluted basis; 

	(d)
	it
will promptly provide to EVCC with all information required by the EVCC to prepare and file its annual return with the Administrator pursuant to section 31 of the Act;

	(e)
	if
PML no longer meets the requirements of an eligible business set out in section 15 of the Act, it will promptly notify the EVCC of the non-conformity and the particulars
thereof;

	(f)
	it
will provide the EVCC with written notice of all meetings of the members or shareholders of PML in accordance with the Act pursuant to which it was incorporated and attach to
each such notice a memorandum listing and discussing each matter to be acted and/or voted on at the meeting;

	(g)
	it
will allow shareholders Directors of the EVCC to attend any and all meetings of the members or shareholders of PML;

	(h)
	it
will pay all reasonable expenses incurred by the EVCC of the nature and kind described in Appendix H net of any reimbursements or financial assistance the EVCC may receive
from other sources in respect of such expenses;

	(i)
	it
will not, directly or indirectly, use any of the funds raised through the sale of Shares to the EVCC for any of the purposes or uses specified in section 16 of the Act or
section 9 of the Regulations;

	(j)
	when
the funds raised by a sale of Shares to the EVCC hereunder have been fully expended, PML will provide the EVCC with a detailed accounting of how the funds were used;

	(k)
	it
will not enter into any agreement which would prohibit or restrict it from completing any of the transactions contemplated hereunder or complying with the terms hereof;

	(l)
	it
will not in the future provide, directly or indirectly, as part of any transaction or series of transactions, a loan, guarantee or any other Financial Assistance to the EVCC, an
associate or 

5

 

affiliate
of the EVCC, a director, officer or major shareholder of the EVCC or a member of a group that controls the EVCC; and 

	(m)
	it
will not accept an investment from any other employee venture capital corporation if the aggregate amounts received by PML from the EVCC and such other employee venture capital
corporation, directly or indirectly, would exceed $5 million within a 2 year period. 

7.  PRICE AND DILUTION PROTECTIONS  

	7.1
	The
aggregate number of shares of PML under any type of purchase option (not including rights under this Agreement) granted by PML to directors, officers or employees (and their
associates) of PML (and its affiliates) will not exceed 10% of the issued shares of PML.

	7.2
	The
aggregate number of shares of PML under any type of purchase option (not including rights under this Agreement) granted by PML will not exceed 20% of the issued shares of PML.

	7.3
	If
a share offering by PML outside of this Agreement would reduce the percentage of shares of PML held by the EVCC by more than 10%, the EVCC will be entitled to make an additional
offering under its employee venture capital plan of a size that would allow the EVCC to maintain its percentage ownership of PML.

	7.4
	Notwithstanding
the foregoing, PML may proceed with a transaction ordinarily prohibited by one or more of paragraphs 7.1 through 7.3 if PML obtains the prior written consent of the
EVCC and the Administrator for the transaction. 

8.  GENERAL  

	8.1
	Time
will be of the essence in respect of this Agreement.

	8.2
	This
Agreement will be governed by and construed in accordance with the laws of the Province of British Columbia.

	8.3
	The
representations, warranties, covenants and agreements of PML contained herein will survive the execution and delivery of this Agreement and the completion of the transactions
contemplated hereby.

	8.4
	Any
notice required to be given hereunder by any party will be deemed to have been well and sufficiently given if mailed by prepaid registered mail, telexed or faxed to, or
delivered at, the address of the other parties set forth on page 1 of this Agreement or at such other address or addresses as the parties may from time to time give notice of, and any such
notice will be deemed to have been received, if mailed, telexed or faxed, 72 hours after the time of mailing, telexing or fax transmission, and if delivered, upon the date of delivery. If
normal mail service, telex service or fax service is impaired by strike, slowdown, force majeure or other cause, a notice set by the impaired means of communication will not be deemed to be received
until actually received, and the party sending the notice will utilize another unimpaired means of communication or will deliver such notice in order to ensure prompt receipt thereof.

	8.5
	The
parties each agree to execute and deliver all such further documents and assurances and to do all acts and things which either before or after the execution of this Agreement
may be necessary to carry out the full intent and meaning of this Agreement.

	8.6
	This
Agreement and the instruments referred to herein or contemplated hereby constitute the whole agreement between the parties in respect of the matters contemplated hereby and
there are no warranties, representations, covenants, terms, conditions or collateral agreements, express implied of statutory, other than those expressly set forth in this Agreement. 

6

 
	8.7
	Should
a disagreement or dispute arise between the parties with respect to this Agreement or the interpretation thereof, such disagreement or dispute will be referred to a single
arbitrator pursuant to the Commercial Arbitration Act of British Columbia, and the determination of such arbitrator will be final and binding upon the parties.

	8.8
	This
Agreement will enure to the benefit of and be binding upon the parties and their respective successors and assigns. 

    IN
WITNESS WHEREOF the parties have executed this Agreement under seal as of the day, month and year first above written. 

	PML EMPLOYEES (EVCC) LTD.	 	 
	by its Authorized Signatory	 	 
	

 	
 	

 	
 	

 
	Per:	 	/s/ CAROL PENDRAY   
	 	 
	

 	
 	

 	
 	

 
	POWER MEASUREMENT LTD.	 	 
	by its Authorized Signatory	 	 
	

 	
 	

 	
 	

 
	Per:	 	/s/ RON HART   
	 	 

7

 
 

APPENDIX D    
  

	Item 1—	 	Name or Designation of Class of Shares	 	 
	

1996:	
 	

Class "F" Common Shares	
 	

 
	1997:	 	Class "F" Common Shares	 	 
	1998:	 	Class "F" Common Shares	 	 
	

Item 2—	
 	

Issued and Outstanding Share Capital	
 	

 
	

Present:	
 	

 	
 	

 	
 	

 	
 	

 
	 	 	200,000	 	Class "A" Common Shares	 	 
	 	 	200,000	 	Class "B" Common Shares	 	 
	 	 	9,709	 	Class "C" Common Shares	 	 
	 	 	13,996	 	Class "D" Common Shares	 	 
	

Post Transaction:	
 	

 	
 	

 	
 	

 	
 	

 
	 	 	95,849	 	Class "A" Common Shares	 	 
	 	 	95,850	 	Class "B" Common Shares	 	 
	 	 	215,404	 	Class "A" Preferred Shares	 	 
	 	 	9,709	 	Class "C" Preferred Shares	 	 
	 	 	13,996	 	Class "D" Preferred Shares	 	 
	

Item 3—	
 	

Fiscal Period (check one)	
 	

 
	

 	
 	

(a)  fiscal year	
 	

X

	

 	
 	

(b)  first six months and last six months of fiscal year	
 	

	

 	
 	

(c)  fiscal quarter	
 	

	

Item 4—	
 	

EVCC:	
 	

 	
 	

Proposed Share Offering	
 	

 
	

 	
 	

1996:	
 	

4,308	
 	

Class "B" Common Shares or that number of Class "B" Shares numerically equivalent to 1% of the then current issued and outstanding share capital of PML.	
 	

 
	

 	
 	

1997:	
 	

4,351	
 	

Class "B" Common Shares or that number of Class "B" Shares numerically equivalent to 1% of the then current issued and outstanding share capital of PML.	
 	

 
	

 	
 	

1998:	
 	

4,394	
 	

Class "B" Common Shares or that number of Class "B" Shares numerically equivalent to 1% of the then current issued and outstanding share capital of PML.	
 	

 

 
 

APPENDIX F
  
    Share Valuation    

The
value of a Share will be determined on the basis of Fair Market Value as defined below as of December 31 of each year by the Company's accountant or a Chartered Business Valuator, or by
such other independent member in good standing of the Canadian Institute of Chartered Business Valuators as PML and the EVCC may agree upon from time to time. In determining the value of a Share, the
valuator may not provide for a premium for control, a discount for minority interests, or any adjustment based on any tax, credit allowable under the Income Tax Act (British Columbia) or the Income
Tax Act (Canada) in respect of the Share. The valuator's determination must be rendered by March 1st of each year and will effective for Share purchases and repurchases hereunder until the last
day of February of the following year. 

A.  Fair Market Value of Class "B" Common Shares 

Share Valuation 

	 
	 	Low Case
	 	High Case

	Estimated future maintainable earnings (A)	 	$	X	 	$	X
	Earnings multiplier	 	 	10	 3/4	 	13
	Aggregate estimated "en bloc" value	 	 	 	 	 	 
	Less: outstanding long-term debt (B)	 	$	Z	 	$	Z
	Aggregate estimated equity value	 	$	 	 	$	 
	

Rounded to the nearest hundred thousand	
 	
$	

 	
 	
$	

 
	Number of common and preferred shares outstanding (C)	 	 	 	 	 	 
	

Estimated redemption value per share (A)	
 	
$	

 	
 	
$	

 

Notes:

A.  As
determined by valuator. 

B.  Long-term
debt, including lease-purchase obligations, per the financial statements. 

C.  Obtained
from the financial statements. 

D.  Accrual
redemption price is the average of the high case and the low case. 

 
 

APPENDIX G
  
    Request for Redemption    

	To:	 	Power Measurement Ltd. (the "Company")
	

 	
 	

 (address)	
 	

 
	

 	
 	

	
 	

 
	

 	
 	

	
 	

 
	

Attn.:	
 	

	
 	

(position)

Re:
Redemption of Shares 

Pursuant
to the terms of our Investment Agreement dated                          (the "Agreement"), the undersigned hereby requests
that the Company (redeem/purchase)
           shares (the "Shares") of the Company currently owned by the undersigned on the next Redemption Date (as defined in the Agreement). 

The
undersigned hereby certifies that the Shares: 

	 	(i)	were acquired under the Agreement; and
	

 	

(ii)	

are free and clear of any encumbrances and will be so on the Redemption Date.

DATED
the          day of                         , 199  .

	 	PML Employee (EVCC) Corporation
	

 	

Per:	

 (signature)
	

 	

 	

 (Name of Signatory)

(please print)

 
 

APPENDIX H
  
    EVCC Expenses    

All
reasonable net costs, fees and expenses associated with the following: 

	1.	Registration of the EVCC as an employee venture capital corporation under the Act;
	

2.	

Implementation of the EVCC's employee venture capital plan;
	

3.	

Offerings under the EVCC's employee venture capital plan;
	

4.	

Complying with the requirements (filings, etc.) of the Act, the Company Act (British Columbia) and the Income Tax Act (Canada);
	

5.	

Keeping necessary records and accounts; and
	

6.	

Applications for tax credit certificates on behalf of EVCC shareholders.

But
not including the following: 

	1.	Fees or extra remuneration of any kind paid or payable by the EVCC to directors, officers or shareholders of the EVCC.

QuickLinks

EXHIBIT 10.8

EVCC/ELIGIBLE BUSINESS INVESTMENT AGREEMENT

APPENDIX D

APPENDIX F Share Valuation

APPENDIX G Request for Redemption

APPENDIX H EVCC Expenses

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