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ENERCARE INC.
GOVERNANCE AND COMPENSATION COMMITTEE MANDATE
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Table of Contents
1.INTRODUCTION
(a)Responsibilities
(b)Committee Members
(c)Purpose
2.CERTAIN DUTIES OF THE COMMITTEE
(a)Conflicts of Interest
(b)Approach to Governance
(c)Senior Management Development
(d)Incentive Compensation Plans and Equity-Based Plans
(e)Human Resources Strategies
(f)Benefit Plans and Perquisites
(g)Pension Plans
(h)Employment Agreements and Severance Arrangements
(i)Evaluation and Compensation of the Chief Executive Officer
(j)Compensation of Senior Management
(k)Appointment to Committees of the Board
(l)Performance Assessments
(m)Director Equity Ownership
(n)Filling Vacancies of Directors
(o)Reporting
3.COMMITTEE MEETINGS
(a)Procedure
(b)Chair of the Governance and Compensation Committee
4.RETENTION OF ADVISORS
5.REVIEW AND DISCLOSURE
Enercare Inc. and Enercare Solutions Inc.
(together, the “Corporation”)
governance and compensation COMMITTEE MANDATE
1.INTRODUCTION
(a)Responsibilities
The Governance and Compensation Committee is responsible, subject to the determination of the Board of Directors (the “Board”) from time to time, for:
(i)annually reviewing the compliance by the Corporation and its subsidiaries of their respective undertakings in respect of the Corporation’s continuous disclosure obligations;
(ii)developing the Corporation’s approach to corporate governance;
(iii)advising the Directors in filling Director vacancies;
(iv)periodically reviewing the compensation and effectiveness of the Directors and the contribution of individual Directors;
(v)assisting in orientating and providing for continuing education for the Directors;
(vi)advising the Directors in the selection and retention of senior management;
(vii)periodically reviewing the compensation and performance of senior management;
(viii)assisting in the professional development of senior management;
(ix)assisting in developing and managing benefit plans for employees;
(x)administering and managing the Corporation’s pension plans;
(xi)annually reviewing the director and officer insurance coverage maintained by theCorporation and all director and officer indemnification agreements; and
(xii)performing the additional duties set out in this Mandate or otherwise delegated to the Governance and Compensation Committee from time to time by the Board or otherwise required by law.
(b)Committee Members
The Board shall appoint the Committee consisting of at least three Directors, all of whom shall, in the judgment of the Board, be independent Directors. Independent shall have the meaning, as the context requires, given to it in National Instrument 58-101 - Disclosure of Corporate Governance Practices, as replaced or amended from time to time (including any successor rule or policy thereto). Each member shall hold office until his or her term as a member of the Governance and Compensation Committee expires or is terminated.
Each member of the Governance and Compensation Committee shall have direct experience that is relevant to his or her responsibilities in executive compensation so as to enable the Governance and Compensation Committee to make decisions on the suitability of the Corporation’s compensation policies and practices, including (without limiting the generality of the foregoing) in respect of the due consideration of the implications of the risks associated with such policies and practices.
(c)Purpose
The purpose of this Mandate is to expand upon certain of the above described responsibilities of the Governance and Compensation Committee.
2.CERTAIN DUTIES OF THE COMMITTEE
(a)Conflicts of Interest
The Governance and Compensation Committee has the authority and responsibility to:
(i)study and recommend the implementation of structures and procedures to ensure that the Directors can function independently of management and without conflicts of interest. Consideration should be given to:
(A)applicable law relating to conflicts of interest, including independent Director matters;
(B)scheduling, at regular intervals, meetings of the Directors without management present; and
(C)delineating the roles, duties and responsibilities of the Directors and management and ensuring that these boundaries are understood and respected.
(b)Approach to Governance
The Governance and Compensation Committee has the authority and responsibility to:
(i)oversee the development and presentation to the Directors for approval of policies addressing the timely disclosure of information material to the Corporation, the confidentiality of undisclosed information that is material to the Corporation and the prohibitions against trading in securities of the Corporationand other issuers while in possession of undisclosed information material to the Corporationor other such issuers;
(ii)examine the size of the Board and recommend a Board size that facilitates effective decision-making;
(iii)monitor the relationship between senior management and the Directors and recommend a process whereby the Directors will have access to, and an effective relationship with, senior management;
(iv)work with the Chief Executive Officer and other members of senior management to ensure that the Corporation has a healthy corporate governance culture;
(v)monitor developments in the area of corporate governance and undertake other initiatives that may be desirable to maintain the highest standards of corporate governance;
(vi)on at least an annual basis, review and assess the mandate adopted by the Board and recommend any amendments to the Board;
(vii)on at least an annual basis, review the mandate of each committee of the Board and recommend any amendments to the Board;
(viii)periodically review the position description for the Chair of the Board and recommend any amendments to the Board;
(ix)be available as a forum for addressing the concerns of individual Directors;
(x)recommend to the Board a process for evaluating the effectiveness of the Board, committeesof the Board and the contributions of individual Directors to assist the Board in assessing Directors’ suitability for re-election; and
(xi)monitor the compliance by the Corporation with statutory and regulatory requirements applicable to the Corporation.
(c)Senior Management Development
The Governance and Compensation Committee will:
(i)review and monitor executive development programs, including training and retention programs for members of senior management;
(ii)recommend policies and principles for performance reviews of members of senior management, and review and monitor the practices used to evaluate members of senior management;
(iii)review the Chief Executive Officer’s recommendations with respect to the recruitment, promotion, transfer and termination of other members of senior management; and
(iv)on an annual basis, review the executive management succession planand talent management plan and monitor the development andperformance of the Chief Executive Officer and other senior officers ofthe Corporation against such plans.
(d)Incentive Compensation Plans and Equity-Based Plans
The Governance and Compensation Committee will:
(i)make recommendations to the Board with respect to senior management compensation and the adoption and amendment of incentive compensation plans, including equity-based plans;
(ii)approve any equity-compensation plans and amendments to such plans, subject to shareholder approval, as appropriate;
(iii)approve all stock options granted under any stock option plan adopted by the Corporation, including the entitlement, vesting, exercise price and all other matters relating to any such plan;
(iv)approve all grants of participation units under the terms of any long term incentive plan adopted by the Corporation;
(v)approve all grants under any deferred or restricted unit plan adopted by the Corporation; and
(vi)approve all annual incentive bonus plans and long-term incentive bonus plans.
(e)Human Resources Strategies
The Governance and Compensation Committee will:
(i)review and monitor the Corporation’s compliance with applicable human rights laws;
(ii)review with the appropriate personnel the Corporation’s human resource management policies and procedures and compliance with or any violations thereof, and review any actions taken to ensure compliance with such policies and procedures and the results of such actions; and
(iii)review and monitor the Corporation’s human resources strategies for consistency with the Corporation’s vision, mission and core values.
(f)Benefit Plans and Perquisites
The Governance and Compensation Committee will review and approve all benefit plans designed primarily for members of senior management and any other perquisites granted to members of senior management.
(g)Pension Plans
The Governance and Compensation Committee will:
(i)administer and manage the pension plans of the Corporation in compliance with the terms of the pension plans and all applicable laws;
(ii)establish the roles and responsibilities of the officers and employees of the Corporation and of third party agents and service providers with respect to the operation and governance of the pension plans;
(iii)establish a Pension Management Sub-Committee, delegate to such committee the Governance and Compensation Committee’s duties of oversight of the pension plans, and receive regular reports from the Pension Management Sub-Committee regarding pension plan oversight; and
(iv)review and recommend to the Board of Directors any action regarding the Corporation’s responsibilities as sponsor and administrator of the pension plans.
(h)Employment Agreements and Severance Arrangements
The Governance and Compensation Committee will approve employment agreements, severance arrangements and any changes to contractual agreements and provisions, including pension arrangements, for all members of senior management.
(i)Evaluation and Compensation of the Chief Executive Officer
The Governance and Compensation Committee will have direct responsibility to:
(i)together with the Chief Executive Officer, develop a position description for the Chief Executive Officer, setting out the Chief Executive Officer’s authority and responsibilities, and present the same to the Board of Directors;
(ii)review and approve the goals and objectives that are relevant to the Chief Executive Officer’s compensation;
(iii)evaluate the Chief Executive Officer’s performance in meeting his or her goals and objectives in connection with the achievement of the Corporation’s annual business plan and multi-year strategic plan;
(iv)make specific recommendations to the Board with respect to the Chief Executive Officer’s compensation based on the evaluation referred to above, compensation paid to chief executive officers and senior management in comparable organizations and the Corporation’s performance and relative shareholder return;
(v)recommend to the Board remedial action where necessary; and
(vi)review any executive compensation disclosure prior to disclosure by the Corporation.
(j)Compensation of Senior Management
The Governance and Compensation Committee will, after obtaining and considering the recommendation of the Chief Executive Officer, make recommendations to the Board concerning the compensation of members of senior management. The Committee will assess the compensation of members of senior management in light of the Corporation’s performance, shareholder return, the compensation paid to senior management in comparable organizations and other criteria established by the Governance and Compensation Committee from time to time. In addition, in assessing the compensation of the Chief Financial Officer and other key financial personnel, the Governance and Compensation Committee will obtain and consider input from the Audit Committee regarding their competence and performance.In particular, but without limiting the generality of the foregoing, the Governance and Compensation Committee shall assess and consider the implications of the risks associated with the Corporation’s compensation policies and practices in determining senior management and director compensation. Further, the Governance and Compensation Committee will assess the practices used by the Corporation and the Governance and Compensation Committee to mitigate compensation policies and practices that could encourage senior management and/or the directors to take inappropriate or excessive risks and shall report to the Board in respect of such assessment not less than annually.
(k)Appointment to Committees of the Board
The Governance and Compensation Committee will recommend to the Board those Directors it considers qualified for appointment to each committee of the Board and for appointment as chairs of such committees. Where a vacancy occurs at any time in the membership of any Board committee, the Committee will recommend a Director to fill such vacancy to the Board.
(l)Performance Assessments
The Governance and Compensation Committee will annually review the effectiveness of the Board, the Investment Committee and the Governance and Compensation Committee in fulfilling their respective responsibilities and duties as set out in the applicable mandates. It will annually review the performance of the Board, the Investment Committee and the Governance and Compensation Committee with consideration being given to skills and expertise, group dynamics, core competencies, personal characteristics, accomplishment of specific responsibilities, meeting attendance, participation and candour. The assessment will be conducted by way of peer review evaluation questionnaire and board assessment questionnaire. The Governance and Compensation Committee will establish minimum attendance standards for Directors and will ensure that the Corporation’s public disclosure reflects each Director’s attendance record, the frequency of Board and committee meetings and the Board performance assessment process. The Audit Committee members conduct self-assessments of the performance of the committee in comparison to its responsibilities as outlined in its mandate and are obligated to report on the outcome of its assessment to the Board.
(m)Director Equity Ownership
The Governance and Compensation Committee will encourage Directors to hold meaningful equity positions in the Corporation and recommend whether or not Directors should hold minimum equity ownership positions and will review this matter annually.
Unless otherwise approved by the Governance and Compensation Committee (or, if so delegated by the Governance and Compensation Committee, the Corporation’s Chief Legal Officer or Chief Executive Officer pursuant to the Corporation’s Insider Trading Policy), no director, officer or employee of the Corporation or its subsidiary entities, or, to the extent practicable, any other person (or their associates) in a special relationship with the Corporation (within the meaning of applicable securities laws), may, at any time, purchase financial instruments, including, prepaid variable forward contracts, instruments for the short sale or purchase or sale of call or put options, equity swaps, collars, or units of exchangeable funds, that are designed to or that may reasonably be expected to have the effect of hedging or offsetting a decrease in the market value of any securities of the Corporation.
(n)Filling Vacancies of Directors
(i)Establish Director Qualifications
The Governance and Compensation Committee must establish the qualification standards for Directors relating to, among other things:
(A)the competencies, skills and personal qualities that the Board determines should be sought in candidates for board membership; and
(B)the number of committees on which a Director may sit, Director tenure, retirement and succession.
(ii)Identifying Candidates for Nomination as a Director
(A)The Governance and Compensation Committee must develop a list of candidates for board membership with a view to enhancing the independence and quality of nominees to be selected by the shareholders at the next annual general meeting of shareholders;
(B)The Governance and Compensation Committee must determine if each candidate identified in paragraph (i) of this section would be an independent Director; and
(C)The Chair of the Governance and Compensation Committeemust, with the assistance of the Chair of the Board and one or more other Directors appointed by the Board of Directors, approach candidates for board membership, with or without the Chief Executive Officer, to:
(x)explore the candidates’ interest in joining the Board and seek their consent to act as a Director; and
(y)ensure that interested candidates fully understand the role of a Director and the contribution they are expected to make, including the commitment of time and energy that the Corporation expects of its Directors.
(iii)Education of Directors
(A)The Governance and Compensation Committee must ensure that new Directors are given a proper orientation to both the Corporation and their responsibilities and duties as Directors; and
(B)The Governance and Compensation Committee must ensure that the Corporation provides the Directors with an appropriate continuing education program.
(o)Reporting
(i)The Governance and Compensation Committee must report to the Board on all significant matters dealt with by the Governance and Compensation Committee.
(ii)The Governance and Compensation Committee must oversee the preparation of the compensation and governance sections of the Corporation’s management information circular, annual report or offering document.
3.COMMITTEE MEETINGS
(a)Procedure
Unless otherwise determined by the Board, a quorum for meetings of the Governance and Compensation Committee shall be a majority of its members and the rules for calling, holding, conducting and adjourning meetings of the Governance and Compensation Committee shall be the same as those governing the Board.
(b)Chair of the Governance and Compensation Committee
The Board shall appoint one member to be Chair of the Committee. If, in any year, the Board does not appoint a Chair, the incumbent Chair shall continue in office until a successor is appointed.
4.RETENTION OF ADVISORS
The Governance and Compensation Committee may engage such advisors, without approval of the Board and at the expense of the Corporation, as it considers necessary to perform its duties. The Governance and Compensation Committee has the sole authority to retain and to terminate any search firm to be used to identify candidates for board membership, including sole authority to approve the search firm’s fees and other retention terms. In engaging any advisor to assist the Governance and Compensation Committee in its determination of compensation for senior management and/or directors, the Governance and Compensation Committee shall have due regard to any other services provided by that advisor to the Corporation or to its affiliated or subsidiary entities, or to any of its or their directors or members of senior management. Once an advisor has been retained by the Governance and Compensation Committee in respect of such compensation determination, the Governance and Compensation Committee shall pre-approve any other services to be provided by that advisor, or any of its affiliates, to the Corporation at the request of senior management during the term of engagement of that advisor by the Governance and Compensation Committee and for a period of two years thereafter.
5.REVIEW AND DISCLOSURE
The Governance and Compensation Committee will review this Mandate at least annually or otherwise as it deems appropriate, and propose recommended changes to the Board.
This Mandate will be posted on the Corporation’swebsite.
Last reviewed by the Board of Directors on March5, 2018.
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