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Cavvy Energy Ltd. — Proxy Solicitation & Information Statement 2022
Apr 29, 2022
45516_rns_2022-04-29_bb60158f-2e89-4d9d-bd79-42a2c674a623.pdf
Proxy Solicitation & Information Statement
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Notice�of�Annual�&�Special�Meeting�of� Shareholders�to�be�held�on�May�26,�2022� Management�Information�Circular April�12,�2022�
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PIERIDAE�ENERGY�LIMITED
NOTICE�OF�ANNUAL�AND�SPECIAL�MEETING�OF�SHAREHOLDERS
Please�join�us�at�our�2022�annual�and�special�meeting�of�shareholders�(the�“ Meeting ”),�which�will�be�held�in�a�virtual� only�meeting�format.��
When��
May�26,�2022�� commencing�at�8:30�a.m.�(Mountain�Time)��
Where��
The�Meeting�will�be�held�via�live�audio�webcast�online�at:�meetnow.global/M4UGSLX
To�continue�to�mitigate�risks�to�the�health�and�safety�of�our�shareholders,�employees,�other�stakeholders�and� communities,�Pieridae�Energy�Limited�(“ Pieridae ”)�will�hold�the�Meeting�in�a�virtual�only�format,�which�will�be� conducted�via�live�audio�webcast.�Thus,�shareholders�will�have�the�opportunity�to�participate�in�the�Meeting�online� regardless�of�their�geographic�location.�During�the�Meeting,�participants�will�have�the�opportunity�to�ask�questions� and�to�vote�on�a�number�of�important�matters.�Interested�shareholders�are�encouraged�to�participate�in�the� Meeting.�Inside�this�document,�you�will�find�important�information�and�detailed�instructions�about�how�to� participate�in�the�Meeting�on�a�virtual�basis.��
What�the�Meeting�will�cover��
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Receiving �the�2021�consolidated�financial�statements�of�Pieridae�and�the�related�auditor’s�report;��
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Fixing� the�number�of�directors�of�Pieridae�to�be�elected�at�8;��
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Electing �the�directors�of�Pieridae;��
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Appointing �Ernst�&�Young�LLP�as�auditors�of�Pieridae;��
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Approving �the�amended�and�restated�stock�option�plan�of�Pieridae�(the�text�of�which�is�set�forth�in�Schedule� A�attached�to�the�Management�Information�Circular);��
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Advisory�Vote� on�our�approach�to�executive�compensation�(say�on�pay); and��
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Considering �any�other�business�that�is�properly�brought�before�the�Meeting�or�any�adjournment�or� postponement�thereof.���
Please�refer�to�the�attached�Management�Information�Circular�for�more�details.��
Your�vote�is�important��
The�attached�Management�Information�Circular�tells�you�about�the�items�of�business�for�consideration,�who�may� vote�and�how�you�can�vote.��Please�read�the�Management�Information�Circular�carefully�and�remember�to�vote.���
Non�Registered�Shareholders�(as�defined�in�the�accompanying�Management�Information�Circular)�who�receive�these� materials�through�their�broker�or�other�intermediary�are�requested�to�follow�the�instructions�for�voting�provided�to� you�by�your�broker�or�intermediary,�which�may�include�the�completion�and�delivery�of�a�voting�instruction�form.�� Shareholders�that�are�unable�to�participate�in�the�Meeting� or�any�adjournment�or�postponement�thereof�via�live�
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audio�webcast�are�requested�to�date�and�sign�either�the�accompanying�form�of�proxy�or�the�voting�instruction�form� issued�to�you�by�your�broker�or�other�intermediary,�and�mail�it�in�the�envelope�provided,�so�that� it�is�received�no� later�than�8:30�am�(Mountain�Time)�on�May�24,�2022 ,�to:�Computershare�Trust�Company�of�Canada,�Attention:� Proxy�department,�8th�floor,�100�University�Avenue,�Toronto,�Ontario�M5J�2Y1.��Alternatively,�Shareholders�may�use� the�internet�(www.investorvote.com)�or�the�telephone�(1�866�732�VOTE�(8683))�to�transmit�voting�instructions.�In� each�case,�proxies�must�be�received�by�Computershare�Trust�Company�of�Canada�not�later�than�8:30�am�(Mountain� Time)�on�May�24,�2022,�or�48�hours�before�the�time�of�the�adjourned�or�postponed�meeting�(excluding�weekends� and�holidays).�����
If�you�are�a�Non�Registered�Shareholder�(as�defined�in�the�accompanying�Management�Information�Circular)�and� do�not�complete�and�return�the�voting�instruction�form�and�other�materials�in�accordance�with�the�instructions� for�voting�provided�to�you�by�your�broker�or�intermediary,�you�may�not�be�entitled�to�vote�at�the�Meeting,�either� online�or�by�proxy.�
If�you�have�any�questions�about�the�Meeting�or�about�voting,�please�contact�Computershare�Trust�Company�of� Canada�by�telephone�(toll�free)�at�1�800�564�6253.�
By�order�of�the�Board�of�Directors�of�Pieridae�Energy�Limited�
dated�April�12,�2022�at�Calgary,�Alberta��
“ Thomas�E.�Valentine ”�� Thomas�E.�Valentine� Corporate�Secretary
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MANAGEMENT�INFORMATION�CIRCULAR
You�have�received�this�Management�Information�Circular�(the�“ Circular ”)�because�you�owned�common�shares� (“ Common�Shares ”)�of�Pieridae�Energy�Limited�(the�“ Corporation ”�or�“ Pieridae ”)�as�of�the�close�of�business�on�April� 12,�2022�(the�“ Record�Date ”).��
You�are�entitled�to�receive�notice�of,�and�to�vote�your�Common�Shares�at,�the�annual�and�special�meeting�(the� “ Meeting ”)�of�the�Corporation’s�shareholders�(the�“ Shareholders ”)�to�be�held�via�live�audio�webcast�online�at:� meetnow.global/M4UGSLX�on�May�26,�2022�commencing�at�8:30�a.m.�(Mountain�Time)�or�at�any�adjournment�or� postponement�thereof.���
The�management�of�Pieridae�is�soliciting�your�proxy�for�the�Meeting,�which�means�that�management�is�hereby� contacting�you�to�encourage�you�to�vote.��We�do�this�primarily�by�mail,�but�we�may�also�telephone�you.��All�associated� costs�(which�we�expect�to�be�minimal)�will�be�paid�by�the�Corporation.��
Within�the�Circular�you�will�find�important�information�about�the�Meeting,�the�items�of�business�to�be�considered� during�the�Meeting�and�detailed�instructions�about�how�to�participate�in�the�Meeting,�and�how�to�vote�your�Common� Shares,�on�a�virtual�basis.�Unless�otherwise�indicated,�all�information�contained�in�this�Circular�is�given�as�of�the�� Record�Date�and�all�dollar�amounts�referenced�herein�are�stated�in�the�Canadian�currency.���
The�Board�of�Directors�of�the�Corporation�has�approved�this�Circular�and�its�distribution�to�the�Shareholders.�
Dated�at�Calgary,�Alberta�on�April�12,�2022.��
Pieridae�Energy�Limited��
“ Alfred�Sorensen ”��
Alfred�Sorensen�
Chief�Executive�Officer��� Pieridae�Energy�Limited��
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| TABLEOFCONTENTS | |
|---|---|
| LETTERTOSHAREHOLDERS | 8 |
| PROXYINFORMATION | 12 |
| INTERESTOFCERTAINPERSONSORCOMPANIESINMATTERSTOBEACTEDUPON | 15 |
| SHAREHOLDERQUESTIONSANDANSWERS | 16 |
| WhyisPieridaehavingavirtualonlyMeeting? | 16 |
| HowwillShareholdersbeabletoparticipateattheMeeting? | 16 |
| Whoissolicitingmyproxy? | 16 |
| WillthefinancialstatementsoftheCorporationbepresentedattheMeeting? | 16 |
| OnwhatwillIbeaskedtovote? | 17 |
| HowwillthesemattersbedecidedattheMeeting? | 17 |
| HowmanyvotesdoIhave? | 17 |
| HowmanyCommonSharesareeligibletovote? | 17 |
| HowdoIvote? | 17 |
| HowdoIparticipateintheMeeting? | 18 |
| HowcanaNon�RegisteredShareholdervote? | 18 |
| HowcanaShareholdervotebyproxy? | 19 |
| Howwillmyproxybevoted? | 20 |
| WhatifIwanttorevokemyproxy? | 20 |
| Howareproxysolicited? | 20 |
| HowareMeetingMaterialsdeliveredtoShareholders? | 20 |
| BUSINESSOFTHEMEETING | 21 |
| RECEIVINGTHEANNUALREPORT | 21 |
| FIXINGTHENUMBEROFDIRECTORSTOBEELECTED | 21 |
| ELECTIONOFDIRECTORS | 21 |
| APPOINTMENTOFAUDITORS | 23 |
| ExternalAuditorServiceFees | 23 |
| PROPOSEDAPPROVALOFTHEAMENDEDANDRESTATEDSTOCKOPTIONPLAN | 23 |
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| ADVISORYVOTEONEXECUTIVECOMPENSATION(SAYONPAY) | 24 |
|---|---|
| INFORMATIONCONCERNINGNOMINEESFORELECTIONTOTHEBOARD | 25 |
| BIOGRAPHICALINFORMATIONREGARDINGTHENOMINEES | 25 |
| AlfredSorensen—DirectorandChiefExecutiveOfficer | 25 |
| CharlesBoulanger—Director | 25 |
| AndrewJudson—Director | 26 |
| KirenSingh—Director | 26 |
| RichardCouillard–DirectorNominee | 27 |
| PatriciaMcLeodQ.C.–DirectorNominee | 28 |
| GailHarding–DirectorNominee | 28 |
| DougDreisinger–DirectorNominee | 29 |
| COMPETENCIESANDSKILLSOFDIRECTORS | 29 |
| CEASETRADEORDERS,BANKRUPTCIES,PENALTIESANDSANCTIONS | 30 |
| MAJORITYVOTINGPOLICY | 31 |
| INFORMATIONCONCERNINGEXECUTIVECOMPENSATION | 31 |
| COMPENSATIONDISCUSSIONANDANALYSIS | 32 |
| ObjectivesofNEOCompensationProgramandCompensationPhilosophy | 32 |
| BaseCompensation | 33 |
| GroupRetirementSavingsPlan | 33 |
| DiscretionaryBonusProgram | 33 |
| TheStockOptionPlans | 34 |
| TheStockOptionsthatareOutstandingattheRecordDate | 39 |
| TheAnnualBurnRate | 40 |
| RisksAssociatedwithCompensationPoliciesandPractices | 40 |
| SUMMARYCOMPENSATIONTABLE | 41 |
| INCENTIVEPLANAWARDS | 42 |
| OutstandingShare�basedandOption�basedAwards | 42 |
| IncentivePlanAwards–ValueVestedorEarnedduringtheYear | 43 |
| SHAREOWNERSHIPPOLICY | 44 |
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| TERMINATIONANDCHANGEOFCONTROLBENEFITS | 45 |
|---|---|
| INFORMATIONCONCERNINGDIRECTORCOMPENSATION | 46 |
| DIRECTORCOMPENSATIONTABLE | 47 |
| SHARE�BASEDANDOPTION�BASEDAWARDS | 48 |
| INCENTIVEPLANAWARDS–VALUEVESTEDOREARNEDDURINGTHEYEAR | 49 |
| INDEMNIFICATIONOFDIRECTORSANDSENIORMANAGEMENT | 49 |
| LIABILITYINSURANCEFORDIRECTORSANDSENIORMANAGEMENT | 49 |
| EQUITYCOMPENSATIONPLANINFORMATION | 50 |
| StockOptionPlans | 50 |
| INDEBTEDNESSOFDIRECTORSANDEXECUTIVEOFFICERS | 50 |
| INTERESTOFINFORMEDPERSONSINMATERIALTRANSACTIONS | 51 |
| MANAGEMENTCONTRACTS | 51 |
| INFORMATIONCONCERNINGGOVERNANCE | 51 |
| BOARDOFDIRECTORS | 51 |
| ORIENTATIONANDCONTINUINGEDUCATION | 52 |
| ETHICALBUSINESSCONDUCT | 52 |
| ESGCOMMITMENT | 52 |
| NOMINATIONOFDIRECTORS | 53 |
| INFORMATIONCONCERNINGDIVERSITY | 53 |
| DIVERSITYSTATEMENT | 53 |
| CANADABUSINESSCORPORATIONSACTREQUIREDDISCLOSUREONDIVERSITY | 53 |
| COMPENSATION | 55 |
| BOARDCOMMITTEES | 55 |
| AuditCommittee | 56 |
| Governance&ESGCommittee | 56 |
| Reserves&Health,Safety&EnvironmentCommittee | 57 |
| Nomination&CompensationCommittee | 57 |
| REGISTRARANDTRANSFERAGENT | 58 |
| OTHERBUSINESS | 58 |
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| SHAREHOLDERPROPOSALS | 58 |
|---|---|
| ADVANCENOTICEBY�LAW | 59 |
| ADDITIONALINFORMATION | 60 |
| APPROVALOFDIRECTORS | 60 |
| SCHEDULEA–AMENDEDANDRESTATEDSTOCKOPTIONPLAN | 61 |
| SCHEDULEB–BOARDOFDIRECTORSMANDATE | 71 |
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LETTER�TO�SHAREHOLDERS��
Turning�the�Page�
We�have�begun�to�look�beyond�the�pandemic�that�has�held�the�world�in�its�grasp�since�2020,�while�recognizing�its� profound�impact�on�the�macroeconomic�environment�within�our�industry.�It�was�encouraging�to�see�commodity�prices� offer�a�tangible�sign�of�hope�in�2021�many�had�been�looking�for,�surging�to�a�10�year�high�last�fall.[1] �Increased�demand� kickstarted�a�global�economic�recovery�the�likes�of�which�had�not�been�seen�since�the�negative�days�brought�on�by�the� pandemic.�One�needs�to�look�no�further�than�energy�prices�ending�2021�59%�higher�than�the�first�trading�day�of�the� year.[2]
From�an�overall�macroeconomic�perspective,�the�rise�in�energy�prices�helped�to�stabilize�the�ship�somewhat.�In�2022,� the�reopening�of�world�economies�is�placing�enormous�stress�on�existing�energy�production�infrastructure�worldwide.� Multi�year�under�investment�in�the�industry�the�past�three�years�means�energy�demand�has�and�will�likely�continue�to� surge�past�existing�production�capacity,�resulting�in�higher�and�more�volatile�energy�prices�for�the�foreseeable�future.� We�believe�this�macro�supply�demand�imbalance�will�take�many�years�to�correct.�Fortunately,�with�the�asset�mix� Pieridae�possesses,�we�are�exceptionally�well�placed�to�capitalize�on�these�circumstances�and�grow�our�business�across� all�commodity�lines.��
Building�on�strong�economics�and�the�Government�of�Alberta�lifting�COVID�restrictions,�we�now�have�the�opportunity� to�further�build�company�culture.�Bringing�collaboration�back�into�the�office�after�two�years�of�working�apart�will�help� energize�our�focus�and�direction.�Through�this�improved�environment,�we�can�better�pursue�synergies,�tackle�our� issues,�take�advantage�of�our�opportunities�and�build�on�past�successes.�
Pieridae�achieved�a�number�of�operational�successes�in�2021.�We�had�large�turnarounds,�which�are�planned� maintenance�shutdowns,�at�two�of�our�gas�complexes:�Jumping�Pound�and�Caroline.�Both�were�completed�very�close� to�budget�and�on�time,�which�took�a�significant�amount�of�planning�and�effort.�The�fact�that�we�were�able�to�complete� those�two�turnarounds�without�any�degree�of�COVID�related�interruption�is�a�testament�to�the�efforts�of�the�entire� Pieridae�team.�These�projects�ensured�the�facilities�were�ready�for�the�harsh�cold�of�winter�and�beyond.�
An�ongoing�commitment�to�safety�and�watching�COVID�move�to�our�rearview�mirror�were�offset�by�the�state�of�flux� our�company�experienced�for�a�number�of�months�in�2021.�This�was�primarily�due�to�the�announced�Strategic�Review� that�kicked�off�at�the�end�of�July.�The�process�initiated�opportunities�to�either�recapitalize�the�balance�sheet�or�to� monetize�certain�assets�or�the�company�itself.��
In�the�end,�the�special�Board�committee�set�up�to�oversee�the�Review�concluded�the�various�alternatives�presented� were�not�compelling�relative�to�the�company’s�stand�alone�prospects.�The�restructuring�of�Pieridae’s�credit�agreement� announced�January�4,�2022�played�a�pivotal�role�in�the�special�committee’s�conclusion�and�it�was�fully�supported�by� the�entire�Pieridae�Board.�
One�of�the�big�lessons�coming�out�of�that�process�is�that�the�marketplace�sees�Foothills�development�opportunities�as� challenging.�Our�job�in�2022�is�to�prove�that�while�yes,�they�are�challenging,�there�is�significant�economic�opportunity� in�doing�so�successfully.�We�need�to�prove�that�and�show�the�marketplace�the�Foothills�are�an�economic�place�to� develop�oil�and�gas�resources�that�are�competitive�with�the�Montney.�And�that’s�why�drilling�wells�this�year�is�such�an�
1 Bloomberg�‘Commodities�Prices�Are�Surging�Again’�–�September�13,�2021�
2�S&P�Goldman�Sachs�Commodity�Index�(GSCI)�
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important�part�of�our�overall�plan,�demonstrating�we�are�able�to�drill�economically�in�Alberta�to�bring�on�new� production�to�help�fill�up�our�gas�plants,�lower�per�unit�operating�costs�and�increase�revenue.�
Pieridae�also�continues�to�look�at�ways�to�strengthen�the�relationship�with�our�First�Nations�neighbours�on�Stoney� Nakoda�reserve�lands.�These�reserve�lands�contain�the�largest�untouched�conventional�resources�so�the�opportunity� to�bring�that�gas�supply�to�our�Jumping�Pound�facility�is�important�and�we�hope�to�initiate�that�process�in�2022.�It's�a� way�for�us�to�work�with�the�Indigenous�community�and�allow�the�Stoney�access�into�the�gas�plant�and�the�benefits�that� come�with�it.�
As�we�look�for�ways�to�add�additional�gas�to�those�plants,�we�continue�to�evolve�our�risk�management�processes�to� ensure�we�balance�meeting�our�obligations�to�hedge�and�protect�revenue�while�also�taking�advantage�of�rising� commodity�prices.�Hedging�was�very�expensive�for�us�in�2021�as�we�came�into�the�year�with�a�larger�percentage�of�our� gas�production�hedged�at�prices�far�below�market,�particularly�in�the�last�half�of�the�year.�
Hedging�can�be�a�useful�tool�but�it�can�become�very�expensive�because�you've�got�to�have�credit�to�do�it�and�ensure� volumes�are�available�when�needed.�It’s�a�delicate�balance�when�it�comes�to�understanding�the�impact�hedges�have� on�our�overall�business.�It�is�difficult�to�hedge�in�a�rising�market�and�you�also�need�to�be�prepared�to�hedge�in�a�falling� market.�Just�to�put�it�in�context,�look�at�what�happened�in�2020�when�natural�gas�and�crude�oil�prices�collapsed� significantly,�more�so�than�they�had�ever�had�before.�Pieridae�was�hedged�going�into�2020�and�those�hedges�performed� very�well.�One�of�the�reasons�we�survived�that�period�was�the�fact�that�we�took�advantage�of�our�hedge�position�and� it�allowed�us�to�monetize�our�position�and�participate�in�the�price�recovery.�So,�hedging�is�a�bit�of�a�double�edged� sword,�but�it�can�be�used�effectively�to�manage�the�capital�requirements�of�the�company�to�ensure�our�long�liquidity.�
Subsequent�to�the�Strategic�Review,�we�continue�to�look�for�ways�to�recapitalize�Pieridae’s�balance�sheet.�Nothing�is� more�important�than�refinancing�the�company’s�debt.�Discussions�to�find�solutions�that�make�sense�for�both� shareholders�and�for�our�lender�are�ongoing.�The�company�did�reach�an�agreement�with�our�main�lender�to�incorporate� the�$50�million�deferred�fee�owing�to�them�into�the�overall�loan�currently�due�in�October�of�2023.�The�deferred�fee�will� not�accrue�interest�while�outstanding.�
The�issue�of�the�transfer�of�licenses�from�Shell�to�Pieridae�for�the�Foothills�assets�we�purchased�in�the�fall�of�2019�must� be�resolved.�Late�in�2021,�the�Alberta�Energy�Regulator�or�AER�released�updated�guidelines�for�companies�when� transferring�assets.�Those�guidelines�are�significantly�more�stringent�than�what�existed�when�we�originally�did�the� transaction�with�Shell.�As�a�result,�both�Shell�and�Pieridae�decided�to�revise�the�application�and�plan�to�resubmit�at�a� future�date�under�the�new�regulatory�framework.�Importantly,�Pieridae�continues�to�own�the�Foothills�assets�and�has� responsibility�for�their�safe�operation�while�Shell�remains�the�licensee�� of�record.��
While�we�did�not�experience�any�significant�production�setbacks�due�to�the�COVID�pandemic�in�2021,�it�had�a�significant� impact�on�the�company�by�contributing�to�our�inability�to�reach�a�final�investment�decision�to�build�the�Goldboro�LNG� project,�fully�integrate�it�into�the�natural�gas�markets�in�Western�Canada,�and�finance�that�whole�process�by�having�our� long�term�natural�gas�sales�agreement�with�German�energy�company�Uniper.�Reaching�a�final�investment�decision�for� the�Project�would�have�allowed�us�the�ability�to�access�a�much�lower�cost�of�capital.�Our�business�plan�was�sidelined� as�a�result�of�the�inability�to�achieve�FID.��
This�outcome�has�changed�the�primary�focus�of�Pieridae�from�an�integrated�LNG�company�with�an�upstream�business� to�an�upstream�company�with�a�potential�LNG�option.��
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Fast�forward�to�early�2022�and�there�is�now�renewed�interest�in�our�project.�With�the�outbreak�of�war�between�Russia� and�Ukraine,�the�issue�of�security�of�supply�has�become�front�and�centre.�Pieridae�could�provide�a�solution�that�would� allow�Canada�to�take�a�leadership�role�in�supplying�much�needed�natural�gas�overseas�for�20�30�years,�pushing�back� against�the�dangers�presented�by�the�dependence�of�Europe�on�Russian�gas.�That�solution�is�in�the�form�of�a�net�zero� emissions�floating�LNG�facility.�The�potential�project�the�company�has�been�analyzing�has�a�capacity�of�2.4�million� tonnes�per�annum,�with�natural�gas�needs�of�400�mmcf/d,�which�is�5%�of�total�German�daily�consumption�–�an�amount� that�would�make�a�true�difference.�
What�we�need�is�a�commitment�of�support�from�the�Government�of�Canada�that�this�initiative�is�a�national�priority.�If� deemed�so,�then�pipeline�capacity�to�transport�the�gas�must�be�worked�out,�as�well�as�resolving�emissions�constraints� under�Nova�Scotia’s�cap�and�trade�program.�Having�the�Mi’kmaq�involved�as�partners�so�that�they�might�share�in�the� benefits�of�this�project�is�also�a�priority.�And�above�all,�there�will�be�no�project�unless�Pieridae�finds�a�partner�as�funding� for�an�LNG�initiative�will�not�be�done�on�the�back�of�the�company’s�current�balance�sheet.�
Natural�gas�continues�to�be�viewed�as�a�bridge�fuel�as�the�world�continues�a�methodical,�even�paced�transition�to�lower� carbon�fuels.�While�the�Ukraine�invasion�has�turned�energy�policy�on�its�head,�the�path�of�decreasing�CO2�emissions� along�with�a�greater�focus�on�diversity�and�equity�in�the�workplace�have�propelled�ESG,�or�Environmental,�Social�and� Governance,�into�the�spotlight�in�recent�years.�Pieridae�recognized�this�and�we�were�proud�to�release�our�inaugural� ESG�Report�in�2021.��
Some�important�steps�were�taken�such�as�implementing�diversity�surveys,�measuring�and�tracking�emissions�to� understand�how�we�can�best�reduce�them,�and�structuring�our�committees�at�the�Board�level�to�break�out�a�separate� Governance�and�ESG�Committee�to�give�this�area�the�focus�it�deserves.�
We�are�also�following�through�on�a�previous�commitment�to�add�additional,�senior�level�bench�strength�in�this�area�by� hiring�an�ESG�Director.�This�individual�will�report�directly�to�the�President�and�Chief�Operating�Officer�and�will�be�tasked� with�building�a�strategic�partnership�with�the�company’s�executive�leadership�team,�while�fulfilling�the�role�of�thought� leader�for�ESG�initiatives,�performance,�reporting,�governance�and�execution.�
Pieridae�has�a�plan�to�achieve�carbon�neutrality�by�2050.�A�lot�of�that�is�centered�around�carbon�sequestration�and� methane�emissions�reduction.�Although�it�is�going�to�be�challenging�to�meet�some�of�the�requirement’s�government� has�put�in�the�path�of�industry,�we�intend�to�show�the�marketplace�the�company�is�serious�about�meeting�this�goal,� and�we�will�be�devoting�the�appropriate�resources�to�these�efforts.�
Our�Caroline�Carbon�Capture�Blue�Power�Project�announced�in�May�of�2021�could�provide�a�long�term�solution�to� meeting�those�requirements.�It�is�quite�an�innovative�plan�where�we�combine�large�scale�carbon�storage�underground� while�producing�clean�power�to�both�operate�our�Caroline�Gas�Plant�and�then�sell�the�remaining�clean�electricity�to�the� Alberta�grid.�Our�goal�in�2022�is�to�conduct�an�updated�feasibility�study�for�the�project.�If�the�concept�makes�sense,�it� would�be�a�key�part�of�our�carbon�management�plan�which�we�also�aim�to�develop�and�deliver�this�year.�That�plan� would�be�aligned�with�our�ongoing�ESG�work.�
As�we�look�to�the�remainder�of�2022,�energy�continues�to�be�an�important�part�of�the�Canadian�story.�Canadian�exports� remain�driven�by�energy�which�plays�a�big�part�in�our�ability�to�finance�our�nation’s�social�programs.�We�remain�bullish� that�commodity�prices�will�remain�robust,�which�is�good�news�for�Pieridae.��
Our�strategic�plan�and�budget�for�2022�are�absolutely�focused�on�supporting�our�upstream�business,�refinancing�our� debt�and�delivering�growth�on�the�asset�base�we�have.�We�must�operate�as�efficiently�as�possible�and�increase�
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production�in�order�to�extend�the�life�of�our�facilities�and�lower�operating�costs,�leaning�on�a�revived�‘performance� culture’�to�make�this�all�happen.�
We�know�we�can�provide�the�energy�to�fuel�people’s�lives�during�the�energy�transition�and�our�industry�is�a�fundamental� core�component�of�that�transition.�Access�to�cheap,�low�cost�energy�is�one�of�the�things�that�has�a�dramatically�positive� impact�on�the�health�and�wealth�of�countries�and�their�‘security’�in�the�world�where�a�global�tyrant�can�upend�the� delicate�balance�at�any�time.�We�must�work�to�ensure�this�never�happens�again.�
Pieridae�would�not�have�achieved�what�it�did�in�2021�without�the�extraordinary�efforts�of�our�staff,�management�team� and�directors.�We�thank�them�for�their�dedication�and�loyalty�during�a�tumultuous�year.�We�also�thank�our�shareholders� and�other�stakeholders�for�their�support�of�and�belief�in�Pieridae.���
April�12,�2022��
- �������“ Myron�Tétreault ”��
“ Alfred�Sorensen ”��
-
��������Myron�Tétreault��
-
��������Chair�of�the�Board�of�Directors��
Alfred�Sorensen� Chief�Executive�Officer���
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PROXY�INFORMATION��
DATE�OF�THE�INFORMATION�CIRCULAR
The�date�of�this�this�Management�Information�Circular�(the�“ Circular ”)�is�April�12,�2022�(the�“ Record�Date ”).���
VOTING
As�a�shareholder�of�Pieridae,�you�are�entitled�to�receive�notice�of,�and�to�vote�your�Common�Shares�at,�the�annual� and�special�meeting�(the�“ Meeting ”)�of�the�Corporation’s�shareholders�(the�“ Shareholders ”)�to�be�held�via�live�audio� webcast�online�at:�meetnow.global/M4UGSLX�on�May�26,�2022�commencing�at�8:30�a.m.�(Mountain�Time)�or�at�any� adjournment�or�postponement�thereof.���
At�least�two�persons�who�hold�or�represent�by�proxy�at�least�5%�of�the�issued�and�outstanding�Common�Shares�must� be�present�at�the�Meeting�in�order�to�constitute�a�quorum�thereby�enabling�the�Meeting�to�proceed.�If�you�submit� a�properly�executed�form�of�proxy�or�vote�by�telephone�or�the�internet,�you�will�be�considered�to�be�part�of�the� quorum.��
As�at�April�12,�2022�(the�“ Record�Date ”),�the�Corporation�had�157,681,871�Common�Shares�issued�and�outstanding.� Each�Common�Share�entitles�the�holder�thereof�to�one�vote�on�each�resolution�proposed�at�a�meeting�of� Shareholders.�Except�for�Common�Shares,�the�Corporation�has�not�issued�any�other�voting�security.��The�outstanding� Common�Shares�are�listed�on�the�Toronto�Stock�Exchange�under�the�symbol�“PEA”.���
With�the�exception�of�the�advisory�vote�on�executive�compensation,�we�must�receive�a�simple�majority�of�votes�cast� (50%�plus�1�vote)�for�each�of�the�items�put�forward�at�the�Meeting�in�order�for�that�item�to�be�approved.�� Computershare�Trust�Company�of�Canada�(“ Computershare ”),�our�transfer�agent�and�registrar,�will�count�the�votes� during�the�Meeting�in�its�capacity�as�the�Corporation’s�scrutineer.��
WHO�CAN�VOTE
If�you�held�Common�Shares�at�5:00�p.m.�(Mountain�Time)�on�the�Record�Date�(April�12,�2022),�you�are�entitled�to� receive�notice�of�and�vote�at�the�Meeting.�Each�Common�Share�that�you�own�entitles�you�to�one�vote�at�the�meeting� or�any�adjournment�or�postponement�thereof.��
We�are�not�aware�of�any�person�who�beneficially�owns�or�exercises�control�or�direction�over�(directly�or�indirectly)� more�than�10%�of�the�voting�rights�attached�to�the�Common�Shares�as�at�the�Record�Date,�except�the�following:��
-
(a) Alberta�Investment�Management�Corporation�is�the�registered�holder�of�23,419,546�(or�approximately� 14.9%)�of�the�issued�and�outstanding�Common�Shares�on�the�Record�Date;�and��
-
(b) Erikson�National�Energy�Inc.�is�the�registered�holder�of�23,255,813�(or�approximately�14.7%)�of�the� issued�and�outstanding�Common�Shares�on�the�Record�Date.��
HOW�TO�VOTE
You�can�vote�in�one�of�two�ways:��
-
(a) by�participating�in�the�Meeting�via�live�audio�webcast�online�at�meetnow.global/M4UGSLX; or�
-
(b) by�having�someone�else�vote�for�you�at�the�Meeting�via�live�audio�webcast�(called�voting�by�proxy).�
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The�rules�for�voting�depend�on�whether�you�are�a�“registered�shareholder”�or�a�“non�registered�shareholder”,�as� discussed�below.�
Registered�shareholders�
You are�a� registered�shareholder �of�Common�Shares�(a�“ Registered�Shareholder ”)�if�you�hold�the�share�certificate�in� your�name�or�your�shares�are�recorded�electronically�in�the�direct�registration�system.���
We�have�sent�you�a� proxy�form �with�this�package�if�you�would�like�someone�else�to�vote�for�you�at�the�Meeting.���
Non�registered�(beneficial)�shareholders�
You�are�a �non�registered�shareholder �of�Common�Shares�(a�“ Non�Registered�Shareholder ”)�if�you�hold�your�shares� through�an�intermediary�where�the�shares�are�registered�in�your�intermediary’s�name�and�you�are�the�beneficial� shareholder.�More�particularly,�you�are�a�Non�Registered�Shareholder�if�your�Common�Shares�are�held�on�your� behalf�but�registered�either:�(a)�in�the�name�of�an�intermediary�that�you�deal�with�in�respect�of�the�Common�Shares� (intermediaries�include,�among�others,�banks,�trust�companies,�securities�dealers�or�brokers�and�trustees�or� administrators�of�self�administered�RRSPs,�RRIFs,�RESPs�and�similar�plans);�or�(b)�in�the�name�of�a�clearing�agency� (such�as�The�Canadian�Depository�for�Securities�Limited)�of�which�the�intermediary�is�a�participant.��
We�do�not�have�the�names�of�Non�Registered�Shareholders�or�a�record�of�the�number�of�shares�that�are�owned�by� Non�Registered�Shareholders.��
Non�Registered�Shareholders�who�have�not�objected�to�their�intermediary�disclosing�certain�ownership�information� about�themselves�to�the�Corporation�are�referred�to�as�“Non�Objecting�Beneficial�Owners”�(“ NOBOs ”).�Non� Registered�Shareholders�who�have�objected�to�their�intermediary�disclosing�ownership�information�about� themselves�to�the�Corporation�are�referred�to�as�“Objecting�Beneficial�Owners”�(“ OBOs ”).���
In�accordance�with�the�requirements�as�set�out�in�National�Instrument�54�101�(Communications�with�Beneficial� Owners�of�Securities�of�a�Reporting�Issuer�of�the�Canadian�Securities�Administrators),�the�Corporation�has�distributed� copies�of�the�Notice�of�Meeting,�this�Circular,�the�form�of�proxy�and�the�supplemental�mailing�list�return�card� (collectively,�the�“ Meeting�Materials ”)�to�intermediaries�for�onward�distribution�to�NOBOs�and�OBOs.��
Intermediaries�are�required�to�forward�the�Meeting�Materials�to�Non�Registered�Shareholders�unless�a�Non� Registered�Shareholder�has�waived�the�right�to�receive�them.�The�Corporation�will�reimburse�intermediaries�for�the� cost�incurred�by�them�in�delivering�the�Meeting�Materials�to�OBOs.��
Only�Registered�Shareholders�or�duly�appointed�proxyholders�are�permitted�to�vote�at�the�Meeting.�Non� Registered�Shareholders�should�carefully�follow�the�instructions�of�their�intermediary,�including�those�regarding� when�and�where�the�proxy,�proxy�authorization�form�or�voting�instruction�form�is�to�be�delivered.���
REVOCABILITY�OF�PROXY�
Only�Registered�Shareholders�have�the�right�to�revoke�a�proxy.���
A�Non�Registered�Shareholder�who�wishes�to�change�its�vote�must�arrange�for�its�intermediary�to�revoke�its�proxy� on�its�behalf.�Your�intermediary�will�send�you�a� voting�instruction�form .��You�must�comply�with�the�instructions�on� the�voting�instruction�form�and�return�it�your�intermediary�for�your�vote�to�be�counted�at�the�Meeting.��
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VOTING�PROCEDURE
| registeredshareholders | registeredshareholders | non�registered(beneficial)shareholders |
|---|---|---|
| Votingbyproxy YourCommonShareswillbevotedatthe Meetingaccordingtoyourinstructions.Send yourvotinginstructionsbyusingyour_proxy_ form. Youcansendyourinstructionsbymailinthe addressedenvelopeenclosedherewithto Computershare.Followtheinstructionsonthe formcarefully.Yourinstructionsmustbe receivedby8:30am(MountainTime)onMay 24,2022foryourvotetobecounted.Ifyouare mailingtheform,besuretoallowenoughtime fortheenvelopetobedelivered. Ifyouareappointingaproxyholderotherthan AlfredSorensenoralternatively,DarcyReding, youmustregistersuchproxyholderwith Computershare,whichisanadditionalstepto becompletedonceyouhavesubmittedyour formofproxy.Followtheinstructionsbelow undertheheading“Registeryourproxyholder”. Failuretoregistertheproxyholderwillresultin theproxyholdernotreceivingaControlNumber tovoteduringtheMeetingandwillonlybeing abletoattendasaguestwithoutvoting privileges. IftheMeetingisadjournedorpostponed,your proxymustbereceived48hoursbeforethe timeofthereconvenedmeeting(excluding weekendsandholidays). |
Beneficialshareholdersshouldvotethrough Broadridgeatwww.proxyvote.com. YourCommonShareswillbevotedattheMeeting accordingtoyourinstructions.Sendyourvoting instructionsusingyour_votinginstructionform._ Mostintermediariesallowyoutosendyour instructionsbymail,internet,telephoneorfax,but eachhasitsownprocesssomakesureyoufollow theinstructionsontheform.Yourintermediary mustreceiveyourinstructionsinenoughtimeto actonthem.Checkthedeadlineontheform.If youaremailingyourinstructions,besuretoallow enoughtimefortheenvelopetobedelivered. Ifyouareappointingaproxyholderotherthan AlfredSorensenoralternatively,DarcyReding,you must register such proxyholder with Computershare,whichisanadditionalsteptobe completedonceyouhavesubmittedyourformof proxy.Followtheinstructionsbelowunderthe heading“Registeryourproxyholder”.Failureto registertheproxyholderwillresultinthe proxyholdernotreceivingaControlNumbertovote duringtheMeetingandwillonlybeingableto attendasaguestwithoutvotingprivileges. |
|
| Votingatthe Meetingvialive audiowebcast |
IfyouwishtovoteattheMeeting,donot completeandreturntheproxyform–yourvote willbetakenandcountedattheMeeting,via webcast. Loginonlineat: meetnow.global/M4UGSLX Werecommendthatyoulogininatleastone hourbeforetheMeetingstarts.Youwillneed yourControlNumbertoaccesstheMeeting. |
TovoteattheMeeting,youshouldstrikeoutthe namesoftheManagementProxyholdersnamedin thevotinginstructionformsenttoyoubyyour intermediary,insertyourownnameinthespace providedonthevotinginstructionform,followall oftheapplicableinstructionsprovidedbyyour intermediary AND register yourself as a proxyholder,asdescribedbelow. |
| Registeryour proxyholder |
To register a third�party proxyholder, registeredshareholdersmustvisit: http://www.computershare.com/Pieridae by8:30am(MountainTime)onMay24,2022 andprovideComputersharewiththerequested informationincludingyourHolderID. Computersharewillprovidethethird�party proxyholderwithan“invitecode”whichis requiredtovoteattheMeeting. |
Toregisteryourselforathird�partyproxyholder, non�registeredshareholdersmustvisit: http://www.computershare.com/Pieridae by8:30am(MountainTime)onMay24,2022and provideComputersharewiththerequested informationincludingyourCUIDwhichisa4� character code used to identify the financial/participantinstitution.IfyourCommon Sharesareheldatabrokeragefirmandifyouhave |
by�8:30�am�(Mountain�Time)�on�May�24,�2022�and� provide�Computershare�with�the�requested� information�including�your�CUID�which�is�a�4� character� code� used� to� identify� the� financial/participant�institution.�If�your�Common� Shares�are�held�at�a�brokerage�firm�and�if�you�have� received�a�Broadridge�Voting�Instruction�Form,�the� CUID�is�located�on�the�second�page�of�your�Voting
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| registeredshareholders | non�registered(beneficial)shareholders | |
|---|---|---|
| InstructionForm,topleft�handcornerbesidethe | ||
| “ProxyDepositDate”. | ||
| Computersharewillprovidetheregistered | ||
| proxyholderwithan“invitecode”aftertheproxy | ||
| votingdeadlinehaspassed,whichisrequiredto | ||
| voteattheMeeting. | ||
| Changingyourvote | Ifyouvotedbyphoneorinternet,thenvoting | Thevotesofaproperlyappointedproxyholderare |
| againbyphoneorinternetwillrevokeyour | notcounteduntiltheproxyholderattendsthe | |
| previousvote. | Meeting.Therefore,itwillnotbepossibleforanon� | |
| Ifyoufaxedormailedyourproxy,youcan revokeyourvoteandprovidenewvoting |
registered(beneficial)shareholdertorevoketheir proxyvote. |
|
| instructionsbyfaxormail.Thelettermustbe | ||
| signedbyyouoryourauthorizedattorney.If | ||
| the shareholder is a corporation, the |
||
| instructionsmustincludeacorporatesealorbe | ||
| signedbyanauthorizedofficerorattorney. | ||
| Yourpreviousinstructionswillberevokedas | ||
| longas: | ||
| • thenewvotinginstructionsarereceived |
||
| by8:30am(MountainTime)onMay24, | ||
| 2022,or | ||
| • youprovidethenewvotinginstructions |
||
| inanyotherwaypermittedbylaw. | ||
| Ifyouhavefollowedtheprocessforattending | ||
| andvotingattheMeetingonline,votingatthe | ||
| Meetingonlinewillrevokeyourpreviousproxy. | ||
| Moreaboutvoting | Whenyousendintheproxyform,bydefaultyouareappointingAlfredSorensenand,inthe | |
| byproxy | alternative,DarcyReding,toactasyourproxyholderandvoteonyourbehalf.Theywillvoteyour | |
| CommonSharesaccordingtothevotinginstructionsyouprovideontheproxyform.Ifyoudonot | ||
| providevotinginstructions,theywillvoteFORtheresolutionstobevotedonattheMeeting.Theproxy | ||
| formconfersdiscretionaryauthorityuponthepersonsnamedthereinwithrespecttoothermatters | ||
| whichmayproperlycomebeforetheMeetingoranyadjournmentorpostponementthereof.Asofthe | ||
| dateoftheCircular,Managementisnotawareofanysuchamendment,variationorothermatterto | ||
| comebeforetheMeeting. | ||
| Youalsohavetherighttoappointsomeone | elsetorepresentyouattheMeetingoratany | |
| adjournmentorpostponementthereof.Thispersondoesnotneedtobeashareholderofthe | ||
| Corporation.Simplywritethatperson’snameintheblankspaceprovidedontheproxyform.That | ||
| persondoesnotneedtobeashareholder.Yourvotewillbecountedaslongasthepersonyou | ||
| appointattendstheMeetingandvotesonyourbehalf.Ifamendmentsornewitemsarebrought | ||
| beforetheMeeting,yourproxyholdercanvoteasheorsheseesfit. |
INTEREST�OF�CERTAIN�PERSONS�OR�COMPANIES�IN�MATTERS�TO�BE�ACTED�UPON���
Other�than�as�set�forth�in�this�Circular,�the�management�of�the�Corporation�(the�“ Management ”)�is�not�aware�of�any� material�interest,�direct�or�indirect,�by�way�of�beneficial�ownership�of�securities�or�otherwise,�of�any�person�who�has� been�a�director�or�executive�officer�of�the�Corporation�at�any�time�since�January�1,�2021�(the�beginning�of�the�
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Corporation’s�last�financial�year)�or�any�proposed�nominee�for�election�as�a�director,�or�any�associate�or�affiliate�of� any�of�the�foregoing�persons,�in�any�matter�to�be�acted�upon�at�the�Meeting�other�than�the�election�of�directors�or� the�appointment�of�auditors.��All�the�directors�and�executive�officers�of�the�Corporation�may�receive�incentive�stock� options�pursuant�to�the�Stock�Option�Plans.���
SHAREHOLDER�QUESTIONS�AND�ANSWERS��
Why�is�Pieridae�having�a�virtual�only�Meeting?��
To�continue�to�mitigate�risks�to�the�health�and�safety�of�our�shareholders,�employees,�other�stakeholders�and� communities,�the�Corporation�will�hold�the�Meeting�in�a�virtual�only�format,�which�will�be�conducted� via �live�audio� webcast.�Shareholders�will�have�the�opportunity�to�participate�in�the�Meeting�online�regardless�of�their�geographic� location.��
How�will�Shareholders�be�able�to�participate�at�the�Meeting?��
Registered�Shareholders�and�duly�appointed�third�party�proxyholders�who�participate�at�the�Meeting�online�will�be� able�to�listen�to�the�Meeting,�ask�questions�and�vote,�all�in�real�time,�provided�that�they�are�connected�to�the�internet� and�comply�with�all�of�the�requirements�set�out�below�under�“How�do�I�vote”�and�“How�do�I�participate�at�the� Meeting”.��
Non�Registered�Shareholders�should�have�received�this�Circular,�together�with�either�(a)�the�voting�instruction�form� (or�proxy�authorization�form)�from�your�intermediary�to�be�completed�and�signed�by�them�and�returned�to�the� intermediary�in�accordance�with�the�instructions�provided�by�the�intermediary,�or�(b)�a�form�of�proxy,�which�has� already�been�signed�by�the�intermediary�and�is�restricted�as�to�the�number�of�Common�Shares�beneficially�owned� by�you.�The�voting�instructions,�proxy�authorization�form�or�form�of�proxy�is�to�be�completed�by�you�and�delivered� to�Computershare’s�address:�Attention:�Proxy�Department,�8[th] �floor,�100�University�Avenue,�Toronto,�Ontario�M5J� 2Y1�by�8:30�am�(Mountain�Time)�on�May�24,�2022,�or�by�48�hours�before�the�Meeting�is�reconvened�if�it�was� postponed�or�adjourned�or�by�any�other�manner�permitted�by�law.�To�participate�in,�and�to�vote�during,�the�Meeting,� a�Non�Registered�Shareholder�must�complete,�sign,�and�return�the�voting�instruction�form�in�accordance�with�the� directions�provided�and�a�form�of�proxy�giving�the�right�to�participate�and�vote,�will�be�forwarded�to�the�Non� Registered�Shareholder.�
Non�Registered�Shareholders�who�have�not�duly�appointed�themselves�as�proxyholders�may�still�participate�in�the� Meeting�as�a�“guest”.�Guests�will�be�able�to�listen�to�the�Meeting�but�will�not�be�able�to�ask�questions�or�vote�at�the�� Meeting.�See�“How�do�I�vote”�and�“How�do�I�participate�at�the�Meeting”�below.��
Who�is�soliciting�my�proxy?���
The�Management�of�Pieridae�is�soliciting�your�proxy�for�use�at�the�Meeting�to�be�held�on�May�26,�2022.���
Will�the�financial�statements�of�the�Corporation�be�presented�at�the�Meeting?���
The�financial�statements�for�the�year�ended�December�31,�2021,�together�with�the�auditors’�report�on�these� statements,�will�be�presented�at�the�Meeting�as�the�first�order�of�business.���
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On�what�will�I�be�asked�to�vote?���
You�will�be�asked�to�vote�on�the�following:���
-
(a) to�fix�the�number�of�directors�of�the�Corporation�to�be�elected�as�8;��
-
(b) to�elect�the�directors�of�the�Corporation�for�the�ensuing�year;���
-
(c) to�appoint�Ernst�&�Young�LLP�as�the�auditors�of�the�Corporation�for�the�ensuing�year�and�authorize�the� board�of�directors�to�fix�their�remuneration;���
-
(d) to�consider�and,�if�deemed�advisable,�to�pass�an�ordinary�resolution�approving�the�amended�and�restated� stock�option�plan�(the�text�of�which�is�set�forth�in�attached�Schedule�A);��
-
(e) to�accept�our�approach�to�executive�compensation;�and��
-
(f) to�transact�any�other�business�which�may�be�properly�brought�before�the�Meeting.���
How�will�these�matters�be�decided�at�the�Meeting?���
A�majority�of�votes�cast�by�the�Shareholders,�either�by�proxy�or�in�person,�will�constitute�approval�of�each�of�the� matters�specified�in�this�Circular.���
How�many�votes�do�I�have?���
You�will�have�one�vote�for�each�Common�Share�that�you�hold�at�the�close�of�business�on�the�Record�Date�(April�12,� 2022).���
How�many�Common�Shares�are�eligible�to�vote?���
At�the�close�of�business�on�the�Record�Date,�there�were�157,681,871 Common�Shares�issued�and�outstanding.�Each� Common�Share�held�by�you�at�that�Record�Date�entitles�you�to�one�vote.���
How�do�I�vote?���
If�you�are�eligible�to�vote�and�your�Common�Shares�are�registered�in�your�name�at�the�close�of�business�on�the�Record� Date,�you�can�vote�your�Common�Shares:��
-
(a) by�completing�a�ballot�online�during�the�Meeting,�as�further�described�below�under�the�heading� “How�do�I� participate�at�the�Meeting” ;�or��
-
(b) by�proxy,�as�further�described�below�under�the�heading� “How�can�a�Registered�Shareholder�vote�by�proxy” ;� or��
-
(c) by�phone�by�calling�the�toll�free�number�listed�on�the�form�of�proxy�from�a�touch�tone�phone,�entering�your�� Control�Number�listed�on�the�form�of�proxy�and�following�the�voting�instructions.���
In�order�to�vote�the�Common�Shares�that�you�acquired�after�the�Record�Date,�you�must,�no�later�than�the� commencement�of�the�Meeting:���
-
(d) request�that�the�Corporation�add�your�name�to�the�list�of�voters;�and���
-
(e) properly�establish�ownership�of�the�Common�Shares�or�produce�properly�endorsed�share�certificates� evidencing�that�the�Common�Shares�have�been�transferred�to�you.���
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If�your�Common�Shares�are�registered�in�the�name�of�an�intermediary,�such�as�a�bank,�trust�company,�securities� broker�or�other�financial�institution,�(an�“ Intermediary ”)�please�see�the�instructions�below�under�the�heading� “How� can�a�Non�Registered�Shareholder�vote?” .��
How�do�I�participate�in�the�Meeting?��
Pieridae�is�holding�the�Meeting�in�a�virtual�only�format,�which�will�be�conducted� via �live�audio�webcast.�� Consequently,�Shareholders�will�not�be�able�to�attend�the�Meeting�in�person.��
Participating�in�the�Meeting�online�enables�Registered�Shareholders�and�duly�appointed�proxyholders,�including� Non�Registered�Shareholders�who�have�duly�appointed�themselves�as�proxyholder,�to�participate�at�the�Meeting� and�ask�questions,�all�in�real�time.�Registered�Shareholders�and�duly�appointed�proxyholders�can�vote�at�the� appropriate�times�during�the�Meeting.��
Guests,�including�Non�Registered�Shareholders�who�have�not�duly�appointed�themselves�as�proxyholder,�may�log�in� to�the�Meeting�as�a�Guest,�as�set�out�below,�and�may�listen�to�the�Meeting�but�will�not�be�able�to�vote.����
Log�in�online�at�meetnow.global/M4UGSLX�and�proceed�based�on�the�following�instructions.��
| InstructionsforRegisteredShareholdersand | InstructionsforGuests |
|---|---|
| Proxyholders | |
| Registeredshareholders: | Click“Guest”andthencompletetheonline |
| form. |
The�Control�Number�is�located�on�the�form�of�proxy� or�in�the�email�notification�you�received�is�your� Control�Number.��
Duly�appointed�proxyholders:���
Computershare�will�provide�the�proxyholder�with�an� “invite�code”�by�e�mail�after�the�proxy�voting� deadline�has�passed�and�the�proxyholder�has�been� duly�appointed�AND�has�registered�as�described� under�the�heading�“ Appointment�of�a�third�party�as� proxy ”�above.��
If�you�participate�in�the�Meeting�online,�it�is�important�that�you�are�connected�to�the�internet�at�all�times�during�the� Meeting�in�order�to�vote�when�balloting�commences.�It�is�your�responsibility�to�ensure�connectivity�for�the�duration� of�the�Meeting.�You�should�allow�ample�time�to�check�into�the�Meeting�online�and�complete�the�related�procedure� and�we�recommend�that�you�log�in�at�least�thirty�minutes�before�the�Meeting�is�scheduled�to�begin.��
How�can�a�Non�Registered�Shareholder�vote?���
If�your�Common�Shares�are�not�registered�in�your�name,�they�will�be�held�by�an�Intermediary�such�as�a�bank,�trust� company,�securities�broker�or�other�financial�institution.� Each�Intermediary�has�its�own�procedures�that�should�be� carefully�followed�by�Non�Registered�Shareholders�to�ensure�that�their�Common�Shares�are�voted�at�the�Meeting,� including�when�and�where�the�proxy�or�voting�instruction�form�(or�proxy�authorization�form)�is�to�be�delivered.��
18
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How�can�a�Shareholder�vote�by�proxy?��
The�following�applies�to�Shareholders�who�wish�to�appoint�someone�as�their�proxyholder�other�than�the� Management�Proxyholders�named�in�the�form�of�proxy�or�voting�instruction�form.�This�includes�Non�Registered�� Shareholders�who�wish�to�appoint�themselves�as�proxyholder�to�participate�and�vote�at�the�Meeting.��
Shareholders�who�wish�to�appoint�someone�other�than�the�Management�Proxyholders�as�their�proxyholder�to� participate�in,�and�to�vote�their�Common�Shares�during,�the�Meeting�as�their�proxy�(including�Non�Registered� Shareholders�who�wish�to�appoint�themselves�as�their�proxyholder�to�participate�in,�and�to�vote�their�Common� Shares�during,�the�Meeting)�MUST�submit�their�form�of�proxy�or�voting�instruction�form,�as�applicable,�appointing� that�person�as�proxyholder�AND�register�that�proxyholder�online,�as�described�below.�Registering�your�proxyholder� is�an�additional�step�to�be�completed�AFTER�you�have�submitted�your�form�of�proxy�or�voting�instruction�form.� Failure�to�register�the�proxyholder�will�result�in�the�proxyholder�not�receiving�a�Control�Number�that�is�required�to� vote�at�the�Meeting.��
Step�1.���Submit�your�form�of�proxy�or�voting�instruction�form:���
To�appoint�someone�other�than�the�Management�Proxyholders�as�proxyholder,�insert�that�person’s�full�legal�name� in�the�blank�space�provided�in�the�form�of�proxy�or�voting�instruction�form�(if�permitted)�and�follow�the�instructions� for�submitting�such�form�of�proxy�or�voting�instruction�form.�This�must�be�completed�before�registering�such� proxyholder,�which�is�an�additional�step�to�be�completed�once�you�have�submitted�your�form�of�proxy�or�voting� instruction�form.��
If�you�are�a�Non�Registered�Shareholder�and�wish�to�vote�at�the�Meeting,�you�have�to�insert�your�own�name�in�the� space�provided�on�the�voting�instruction�form�sent�to�you�by�your�Intermediary,�follow�all�of�the�applicable� instructions�provided�by�your�intermediary�AND�register�yourself�as�your�proxyholder,�as�described�below.�By�doing� so,�you�are�instructing�your�Intermediary�to�appoint�you�as�proxyholder.�It�is�important�that�you�comply�with�the� signature�and�return�instructions�provided�by�your�Intermediary.�Please�also�see�further�instructions�above�under� the�heading�“How�do�I�participate�at�the�Meeting”.��
If�you�are�a�Non�Registered�Shareholder�located�in�the�U.S.A.�and�wish�to�vote�at�the�Meeting�or,�if�permitted,� appoint�a�third�party�as�your�proxyholder,�in�addition�to�the�steps�described�above�under�“How�do�I�participate�at� the�Meeting”,�you�must�obtain�a�valid�legal�proxy�from�your�Intermediary.�Follow�the�instructions�from�your� Intermediary�included�with�the�legal�proxy�form�and�the�voting�information�form�sent�to�you�or�contact�your� Intermediary�to�request�a�legal�proxy�form�or�a�legal�proxy�if�you�have�not�received�one.�After�obtaining�a�valid�legal� proxy�from�your�Intermediary,�you�must�then�submit�such�legal�proxy�to�Computershare.�Requests�for�registration� from�Non�Registered�Shareholders�located�in�the�U.S.A.�that�wish�to�vote�at�the�Meeting�or,�if�permitted,�appoint�a� third�party�as�their�proxyholder�must�be�sent�by�e�mail�or�by�courier�to:�[email protected]�(if�by� email),�or�Computershare,�Attention:�Proxy�Dept.,�8th�Floor,�100�University�Avenue,�Toronto,�Ontario�M5J�2Y1,� Canada�(if�by�courier),�and�in�both�cases,�must�be�labeled�“Legal�Proxy”�and�received�no�later�than�the�voting�deadline� of�8:30�a.m.�(Mountain�Time)�on�May�24,�2022.��
Step�2.���Register�your�proxyholder:���
To�register�a�third�party�proxyholder,�shareholders�must�visit�www.computershare.com/Pieridae�by�8:30�a.m.� (Mountain�Time)�on�May�24,�2022�and�provide�Computershare�with�the�required�proxyholder�contact�information� so�that�Computershare�may�provide�the�proxyholder�with�a�Control�Number�via�email.�Without�a�Control�Number,� proxyholders�will�not�be�able�to�vote�at�the�Meeting�but�will�be�able�to�participate�as�a�guest.�
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How�will�my�proxy�be�voted?���
On�the�form�of�proxy,�you�can�indicate�how�you�would�like�your�proxyholder�to�vote�your�Common�Shares�for�any� matter�put�to�a�vote�at�the�Meeting�and�on�any�ballot�that�may�be�called�for,�and�your�Common�Shares�will�be� voted�accordingly.���
If�you�do�not�indicate�how�you�want�your�Common�Shares�to�be�voted,�the�Management�Proxyholders�named�in�the� form�of�proxy�intend�to�vote�your�Common�Shares�in�the�following�manner:��
FOR the�fixing�of�the�number�of�the�number�directors�of�the�Corporation�to�be�elected�as�8;� FOR the�election�of�Management’s�nominees�for�directors;��
FOR the�appointment�of�Management’s�nominee,�Ernst�&�Young�LLP,�as�the�auditors�and�for�the�authorization� of�the�directors�to�fix�their�remuneration;���
FOR the�approval�of�the�amended�and�restated�stock�option�plan�(the�text�of�which�is�set�forth�in�attached� Schedule�A);�
FOR� our�approach�to�executive�compensation,�as�described�in�this�circular;�and� FOR� transacting�any�other�business�which�may�be�properly�brought�before�the�Meeting.��
What�if�I�want�to�revoke�my�proxy?���
If�you�are�a�registered�shareholder�you�can�revoke�your�voting�instructions�by�sending�us�a�notice�in�writing�(from� you�or�a�person�authorized�to�sign�on�your�behalf).�This�request�must�be�delivered�to�Computershare’s�address:� Attention:�Proxy�Department,�8th�floor,�100�University�Avenue,�Toronto,�Ontario�M5J�2Y1�by�8:30�am�(Mountain� Time)�on�May�24,�2022�or�by�48�hours�before�the�Meeting�is�reconvened�if�it�was�postponed�or�adjourned�or�by�any� other�manner�permitted�by�law.�Alternatively,�if�you�have�followed�the�process�for�attending�and�voting�at�the� Meeting�online,�voting�at�the�Meeting�online�will�revoke�your�previous�proxy.���
If�you�are�a�beneficial�shareholder,�contact�your�intermediary�to�find�out�how�to�change�or�revoke�your�voting� instructions�and�the�timing�requirements.�Intermediaries�may�set�deadlines�for�the�receipt�of�revocation�notices� that�are�farther�in�advance�of�the�Meeting�than�those�set�out�above�and,�accordingly,�any�such�revocation�should� be�completed�well�in�advance�of�the�deadline�prescribed�in�the�proxy�card�or�voting�instruction�form�to�ensure�it�is� given�effect�at�the�Meeting.���
How�are�proxy�solicited?���
The�solicitation�of�proxies�will�be�primarily�by�mail;�however,�proxies�may�be�solicited�personally�or�by�telephone�by� directors,�officers�and�regular�employees�of�the�Corporation.�The�cost�of�this�solicitation�will�be�paid�by�the� Corporation.���
How�are�Meeting�Materials�delivered�to�Shareholders?���
Meeting�Materials�are�sent�to�Registered�Shareholders�directly.�Meeting�Materials�are�sent�to�Intermediaries�to�be� forwarded�to�all�Non�Registered�Shareholders.�If�you�are�a�Non�Registered�Shareholder,�and�the�Corporation�or�its� agent�has�sent�these�materials�directly�to�you,�your�name�and�address�and�information�about�your�holdings�of� securities�have�been�obtained�in�accordance�with�applicable�securities�regulatory�requirements�from�the� Intermediary�holding�on�your�behalf.�The�Corporation�pays�the�cost�of�delivery�of�Meeting�Materials�for�all� Registered�Shareholders�and�Non�Registered�Shareholders,�including�to�Intermediaries�for�delivery�to�objecting�Non� Registered�Shareholders.���
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BUSINESS�OF�THE�MEETING
The�following�matters�will�be�presented�during�the�Meeting�for�consideration�by�the�Shareholders.��
As�of�the�Record�Date,�no�director�of�the�Corporation�has�informed�management�in�writing�that�he�or�she�intends�to� oppose�any�action�that�is�intended�to�be�taken�by�Management�at�the�Meeting.���
RECEIVING�THE�ANNUAL�REPORT���
A�copy�of�the�annual�report�of�the�Corporation�(the�“ Annual�Report ”),�including�the�consolidated�financial�statements� of�the�Corporation�for�the�year�ended�December�31,�2021,�the�report�of�auditors�thereon�and�the�related� management�discussion�and�analysis�(“ MD&A ”),�will�be�sent�under�a�separate�cover�to�all�Registered�Shareholders� and�to�those�Non�Registered�Shareholders�who�have�requested�a�copy�of�the�Annual�Report.���
The�Annual�Report�and�other�information�concerning�the�Corporation�is�available�on�the�Corporation’s�website�at� www.pieridaeenergy.com�and�under�the�Corporation’s�profile�on�SEDAR�at�www.sedar.com.���
FIXING�THE�NUMBER�OF�DIRECTORS�TO�BE�ELECTED���
It�is�proposed�that�the�number�of�directors�to�be�elected�at�the�Meeting�of�the�Shareholders�be�fixed�at�eight�(8).���
The�text�of�the�proposed�resolution�is�set�out�below.���
“IT�IS�RESOLVED�as�an�ordinary�resolution�that�the�number�of�directors�to�be�elected�at�the�annual� and�special�meeting�of�shareholders�of�Pieridae�Energy�Limited�held�on�May� 26 ,�2022�be�hereby�fixed� at�eight�(8)”��
The�Board�recommends�that�Shareholders�vote�FOR�this�resolution.���
In�the�absence�of�a�contrary�instruction�or�if�no�choice�is�specified�in�the�proxy�with�respect�to�the�following�matter,� the�Management�Proxyholders�intend�to�vote�FOR�the�resolution�fixing�the�number�of�directors�to�be�elected�at�the� Meeting�by�Shareholders�at�eight.���
ELECTION�OF�DIRECTORS���
The�members�of�the�board�of�directors�of�the�Corporation�(the�“ Board ”)�are�elected�at�each�annual�meeting�of� Shareholders�to�hold�office�until�the�conclusion�of�the�next�such�annual�meeting�of�Shareholders�unless�prior�to�that� meeting,�the�particular�director�resigns,�or�the�position�becomes�vacant�for�any�other�reason.�In�such�an�event,�the� bylaws�of�the�Corporation�(the�“ Bylaws ”)�permit�the�Board�to�fill�such�vacancy�subject�to�the�provisions�of�the� Canada�Business�Corporations�Act ,�R.S.C.�1985,�c�C�44,�as�amended,�(the�“ CBCA ”).��In�addition,�the�articles�of�the� Corporation�(the�“ Articles ”)�permit�the�Board�to�appoint�one�or�more�additional�directors�of�the�Corporation�who� shall�hold�office�for�a�term�expiring�not�later�than�the�close�of�the�next�annual�meeting�of�Shareholders�but�the�total� number�of�directors�so�appointed�may�not�exceed�one�third�of�the�number�of�directors�elected�at�the�previous� annual�meeting�of�Shareholders.����
21
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Mark�Horrox�resigned�from�his�position�as�director�on�August�11,�2021�due�to�the�potential�for�a�conflict�of�interest� between�Mr.�Horrox’s�employer�and�the�Corporation�related�to�the�strategic�review�process�undertaken�by�the� Special�Review�Committee,�the�details�of�which�can�be�found�on�page�46�–� Information�Concerning�Director� Compensation .�Mr.�Horrox� was�the�representative�of�Third�Eye�Capital�Corporation�pursuant�to�an�agreement� entered�into�among�Third�Eye�Capital�Corporation,�Erikson�National�Energy�Inc.�and�the�Corporation�and�became�a� director�in�2019.��In�compliance�with�the�by�laws,�the�Board�determined�not�to�replace�this�position�at�that�time.� The�Corporation�wishes�the�thank�Mr.�Horrox�for�his�contributions�during�his�time�as�director.���
Myron�Tétreault,�Charle�Gamba�and�Kjell�Pedersen�will�not�be�standing�for�re�election�to�the�Board.�Mr.�Tétreault� has�been�a�director�since�2009,�Mr.�Pedersen�since�2018�and�Mr.�Gamba�since�2019.�The�Corporation�would�like�to� take�the�opportunity�to�thank�Mr.�Tétreault,�Mr.�Pedersen�and�Mr.�Gamba�for�their�contributions�during�their�time� as�directors.��
The�Articles�allow�for�a�minimum�of�three,�and�a�maximum�of�eleven�directors�of�the�Corporation.�The�current� approved�number�of�directors�of�the�Corporation�is�eight[3] .�The�eight�proposed�nominees�for�election�to�the�Board� (collectively,�the�“ Nominees ”�and�each,�a�“ Nominee ”)�being:���
| NAMEOFNOMINEE |
DATEFIRSTELECTEDORAPPOINTED ASADIRECTOROFTHECORPORATION |
|---|---|
| AlfredSorensen | May29,2012 |
| CharlesBoulanger | December11,2012 |
| AndrewJudson | June12,2015 |
| KirenSingh | May26,2020 |
| RichardCouillard | newdirectornominee |
| PatriciaMcLeodQ.C. | newdirectornominee |
| GailHardingQ.C. | newdirectornominee |
| DougDreisinger | newdirectornominee |
TABLE 1
Except�for�Alfred�Sorensen,�all�of�the�other�Nominees�are�considered�to�be�independent.����
Please�refer�to�the�text�under�the�heading�“ Information�Concerning�Nominees�for�Election�to�the�Board ”�for�particular� biographical�and�other�information�concerning�each�Nominee�and�to�the�text�under�the�heading�“ INFORMATION� CONCERNING�GOVERNANCE ”�for�a�further�discussion�of�the�independence�of�the�Nominees.��
Each�Nominee�who�is�elected�as�a�director�will�hold�that�office�until�the�conclusion�of�the�next�annual�meeting�of�the� Corporation�or�until�their�resignation,�if�sooner.���
In�the�absence�of�a�contrary�instruction�or�if�no�choice�is�specified�in�the�proxy�with�respect�to�the�following�matter,� the�Management�Proxyholders�intend�to�vote�FOR�the�fixing�of�the�number�of�directors�to�be�elected�at�the�Meeting� at�eight�and�FOR�the�election�as�directors�of�the�Nominees�whose�names�are�set�forth�above.��
3 Due�to�Mr.�Horrox’s�resignation�the�number�of�directors�sitting�on�the�Board�is�currently�seven.�See�page�20�for�further�information.�
22
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APPOINTMENT�OF�AUDITORS���
Ernst�&�Young�LLP�has�been�the�Corporation’s�auditors�since�2014.�The�Board�proposes�to�re�appoint�Ernst�&�Young�� LLP, chartered�professional�accountants,�as�auditors�of�the�Corporation�at�remuneration�to�be�fixed�by�the�Board.�� The�proposed�resolution�is�set�out�below.���
“IT�IS�RESOLVED�as�an�ordinary�resolution�that�Ernst�&�Young�LLP�be�hereby�appointed�auditors�of� Pieridae�Energy�Limited�to�hold�office�until�the�close�of�the�next�annual�meeting�of�shareholders�of� the�corporation,�at�such�remuneration�as�may�be�fixed�by�the�corporation’s�board�of�directors.”��
The�Board�recommends�that�Shareholders�vote�FOR�this�resolution.����
In�the�absence�of�a�contrary�instruction�or�if�no�choice�is�specified�in�the�proxy�with�respect�to�the�following�matter,� the�Management�Proxyholders�intend�to�vote�FOR�the�appointment�of�Ernst�&�Young�LLP�as�auditors�of�the� Corporation�to�hold�office�until�the�next�annual�meeting�of�Shareholders�or�until�a�successor�is�appointed�and� authorizing�the�Board�to�fix�the�remuneration�of�the�auditors.���
External�Auditor�Service�Fees���
Information�regarding�the�amount�and�nature�of�the�fees�that�were�paid�by�the�Corporation�to�its�external�auditors� is�disclosed�on�page�37�of�the�annual�information�form�of�the�Corporation�for�the�year�ended�December�31,�2021,�a� copy�of�which�can�be�found�under�the�Corporation’s�profile�on�SEDAR�at�www.sedar.com�and�which�was�filed�on� SEDAR�on�March�24,�2022.��
PROPOSED�APPROVAL�OF�THE�AMENDED�AND�RESTATED�STOCK�OPTION�PLAN���
The�Corporation�has�made�further�amendments�to�the�stock�option�plan�that�was�approved�by�Shareholders�at�the� last�Annual�and�Special�Meeting�of�Shareholders�on�May�27,�2021.��The�further�amended�and�restated�plan�is�in�the� form�attached�hereto�as�Schedule�A�(the�“Amended�and�Restated�Stock�Option�Plan”),�as�approved�and�adopted�by� the�Board�on�May�19,�2021�and�posted�on�SEDAR�on�May�21,�2021.��
The�further�amendments�to�the�Amended�and�Restated�Stock�Option�Plan�were�occasioned�following�a�review�by�a� leading�proxy�advisory�firm�of�the�2021�Management�Information�Circular.��All�legitimate�concerns�of�shareholders� or�noted�deficiencies�in�best�practice�offered�by�leading�proxy�advisory�firms�are�taken�seriously�by�the�Corporation.� As�such,�having�duly�considered�the�concerns�identified,�the�Board�approved�and�adopted�the�proposed�revisions� for�submission�to�Shareholders.���
The�amendments,�as�contained�in�Schedule�A�of�the�Circular,�are�the�inclusion�of�a�new�section�2.7�and�a�fully�revised� section�5.3.�The�first�revision�addressed�the�recommendation�that�it�is�considered�more�appropriate�that�non� employee�director�participation�limits�be�introduced,�as�opposed�to�a�discretionary�participation,�as�was�the�policy’s� previous�basis.�The�second�revision�addressed�the�concern�that�the�plan�did�not�sufficiently�limit�the�ability�of�the� Board�to�amend�the�plan�without�shareholder�approval.�The�Board�fully�accepted�and�adopted�the�revisions�to�reflect� corporate�best�practice.���
The�Toronto�Stock�Exchange[4] �does�not�require�the�Corporation�to�seek�Shareholder�approval�for�the�amendment� introducing�non�employee�director�participation�limits�as�such�amendments�are�permitted�under�the�rules�and� under�the�Corporation’s�current�plan.��However,�the�Corporation�has�elected�to�submit�both�amendments�to� Shareholders�for�their�approval.��To�be�effective,�the�resolution�respecting�the�amended�and�restated�stock�option�
4�Security�Based�Compensation�Policy�
23
==> picture [108 x 37] intentionally omitted <==
plan�(the�“Stock�Option�Plan�Resolution”)�must�be�approved�by�a�majority�of�the�votes�cast�by�the�Shareholders� present�or�represented�by�proxy�at�the�Meeting.��The�text�of�the�Stock�Option�Plan�Resolution�is�set�out�below.����
“IT�IS�RESOLVED�as�an�ordinary�resolution�that:��
-
a. the�amendments�to�the�provisions�governing�non�employee�director�participation�limits,�which�were� approved�by�the�board�on�May�19,�2021,�the�text�of�which�is�reproduced�in�Schedule�A�to�the� Management�Information�Circular�dated�April�12,�2022,�be�accepted�and�adopted;�
-
b. the�amendments�to�the�provisions�governing�amendments�requiring�shareholder�approval,�which�were� approved�by�the�board�on�May�19,�2021,�the�text�of�which�is�reproduced�in�Schedule�A�to�the� Management�Information�Circular�dated�April�12,�2022,�be�accepted�and�adopted;�and
-
c. any�director�or�officer�of�Pieridae�Energy�Limited�is�hereby�authorized�to�execute�and�deliver,�whether� under�corporate�seal�or�otherwise,�any�agreements,�instruments,�notices,�consents,�acknowledgements,� certificates�and�other�documents�(including�any�documents�required�under�applicable�laws�or�regulatory� policies),�and�to�perform�and�do�all�such�other�acts�and�things,�as�any�such�director�or�officer�in�his�or� her�discretion�may�consider�to�be�necessary�or�advisable�from�time�to�time�in�order�to�give�effect�to�this� resolution.”��
The�Board�recommends�that�Shareholders�vote�FOR�the�approval�of�the�Stock�Option�Plan�Resolution.����
In�the�absence�of�a�contrary�instruction�or�if�no�choice�is�specified�in�the�proxy�with�respect�to�the�following�matter,� the�Management�Proxyholders�intend�to�vote�FOR�the�Stock�Option�Plan�Resolution.����
ADVISORY�VOTE�ON�EXECUTIVE�COMPENSATION�(SAY�ON�PAY)�
The�Corporation�is�pleased�to�provide�shareholders,�from�this�year�forward,�the�opportunity�to�vote�on�a�non�binding� advisory�resolution�to�accept�or�reject�our�approach�to�executive�compensation�as�more�particularly�described�in� this�Circular.���
The�Board�believes�its�executive�compensation�program�aligns�the�interests�of�the�executives�and�employees�with� those�of�the�Corporation’s�shareholders�through�our�commitment�to�providing�an�equitable�yet�market�competitive� compensation�program�that�will�attract,�motivate,�retain�and�reward�a�diverse,�qualified�and�dedicated�employee� cohort�at�all�levels�within�the�Corporation.�Please�review�“ INFORMATION�CONCERNING�EXECUTIVE�COMPENSATION ”� before�voting�on�this�matter.��
The�proposed�resolution�is�set�out�below.�
- “ IT�IS�RESOLVED,�on�an�advisory�basis�and�not�to�diminish�the�role�and�responsibilities�of�the�Board� of�Directors,�that�the�shareholders�accept�the�approach�to�executive�compensation�disclosed�in�the� Management�Information�Circular�delivered�in�advance�of�the�2022�annual�and�special�meeting�of� shareholders. ”�
The�Board�recommends�that�Shareholders�vote�FOR�the�advisory�vote�to�accept�our�approach�to�executive� compensation.���
In�the�absence�of�a�contrary�instruction�or�if�no�choice�is�specified�in�the�proxy�with�respect�to�the�following�matter,� the�Management�Proxyholders�intend�to�vote�FOR�the�advisory�vote�to�accept�our�approach�to�executive� compensation.���
24
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As�this�is�an�advisory�vote,�the�results�are�not�binding�upon�the�Board,�however�the�Board�will�report�on�and�take� into�account�the�results�when�considering�compensation�in�the�future.��
INFORMATION�CONCERNING�NOMINEES�FOR�ELECTION�TO�THE�BOARD�
BIOGRAPHICAL�INFORMATION�REGARDING�THE�NOMINEES���
Alfred�Sorensen�—�Director�and�Chief�Executive�Officer�
| NameofNominee:AlfredSorensen Credentials:B.Comm.,CPA,CA Age:61 Residence:Calgary,Alberta,Canada Non�Independent |
Mr.SorensenhasbeenthechiefexecutiveofficerofPieridaeEnergyLimited sinceitsfoundingin2012. HeobtainedaBachelorofCommercedegreefromtheUniversityofAlberta in1983,qualifiedasacharteredaccountant(CA)in1987andiscurrentlya charteredprofessionalaccountant(CPA). Mr.Sorensenisaleadingentrepreneurintheenergyindustrywithover30 yearsofCanadianandinternationalexperience.Mr.Sorensenservedasthe chiefexecutiveofficerofCanadianSpiritResourcesfrom2013to2015. |
Mr.SorensenhasbeenthechiefexecutiveofficerofPieridaeEnergyLimited sinceitsfoundingin2012. HeobtainedaBachelorofCommercedegreefromtheUniversityofAlberta in1983,qualifiedasacharteredaccountant(CA)in1987andiscurrentlya charteredprofessionalaccountant(CPA). Mr.Sorensenisaleadingentrepreneurintheenergyindustrywithover30 yearsofCanadianandinternationalexperience.Mr.Sorensenservedasthe chiefexecutiveofficerofCanadianSpiritResourcesfrom2013to2015. |
Mr.SorensenhasbeenthechiefexecutiveofficerofPieridaeEnergyLimited sinceitsfoundingin2012. HeobtainedaBachelorofCommercedegreefromtheUniversityofAlberta in1983,qualifiedasacharteredaccountant(CA)in1987andiscurrentlya charteredprofessionalaccountant(CPA). Mr.Sorensenisaleadingentrepreneurintheenergyindustrywithover30 yearsofCanadianandinternationalexperience.Mr.Sorensenservedasthe chiefexecutiveofficerofCanadianSpiritResourcesfrom2013to2015. |
|---|---|---|---|
| Boardmembershipsofotherpubliccorporations:none | |||
| Votingresultsat2021annualmeeting: For:64,403,146(99.90%) Withheld:67,623(0.10%) |
DirectorsinceMay29,2012 CurrentlyholdspositionofChiefExecutiveOfficer |
||
| Boardmeetingattendance: | 15outof15 | ||
| NumberofCommonSharesbeneficiallyowned,controlledor directedontheRecordDate:12,299,053 |
Mr.Sorensendidnotserveonanycommitteesof theBoardduring2021. |
Charles�Boulanger�—�Director���
| NameofNominee:CharlesBoulanger Credentials:B.Sc.A.,MechanicalEngineering Age:64 Residence:QuebecCity,Quebec,Canada Independent |
Mr.BoulangeristhechiefexecutiveofficerofLeddartechInc.,aprivate companythatoffersuniqueADAS(AdvancedDriverAssistanceSystem) andAD(autonomousdriving)sensingandperceptiontechnologies.Heis alsothepresidentofMoodyManagementInc.,aprivateinvestmentfirm. Mr.Boulangerhasover35yearsofexperienceinseniormanagement positionsinseveralindustrialsectorswithcompaniessuchShellCanada Limited,asubsidiaryofRoyalDutchShell,IrvingOil,asubsidiaryofIrving GroupofCompanies,GSIEnvironnementInc.andProlabTechnolubInc. HecurrentlysitsontheboardsofChimieParachems.e.c.,andLeddarTech Inc. Mr.BoulangerearnedadegreeinmechanicalengineeringfromUniversité Lavalin1981andgraduatedfromtheseniormanagementprogramatthe InternationalCenterforResearchandStudiesinManagement(CIREM)in 1990. |
Mr.BoulangeristhechiefexecutiveofficerofLeddartechInc.,aprivate companythatoffersuniqueADAS(AdvancedDriverAssistanceSystem) andAD(autonomousdriving)sensingandperceptiontechnologies.Heis alsothepresidentofMoodyManagementInc.,aprivateinvestmentfirm. Mr.Boulangerhasover35yearsofexperienceinseniormanagement positionsinseveralindustrialsectorswithcompaniessuchShellCanada Limited,asubsidiaryofRoyalDutchShell,IrvingOil,asubsidiaryofIrving GroupofCompanies,GSIEnvironnementInc.andProlabTechnolubInc. HecurrentlysitsontheboardsofChimieParachems.e.c.,andLeddarTech Inc. Mr.BoulangerearnedadegreeinmechanicalengineeringfromUniversité Lavalin1981andgraduatedfromtheseniormanagementprogramatthe InternationalCenterforResearchandStudiesinManagement(CIREM)in 1990. |
|---|---|---|
| Boardmembershipsofotherpubliccorporations:none | ||
| Votingresultsat2021annualmeeting: For:64,389,544(99.87%) |
DirectorsinceDecember11,2012 ThetermofofficewillexpireonMay26,2022 |
25
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| Withheld:81,225(0.13%) | Boardmeetingattendance: | 15outof15 |
|---|---|---|
| NumberofCommonSharesbeneficiallyowned,controlledor directedontheRecordDate:352,795 |
AuditCommitteemeeting attendance: |
4outof4 |
| Reserves&HSECommittee meetingattendance: |
3outof4 |
- Andrew�Judson�—�Director���
| NameofNominee:AndrewJudson Credentials:B.A.,M.B.A. Age:54 Residence:Calgary,Alberta,Canada Independent |
Mr.JudsonisadirectorofCondorPetroleumInc.,apublicCanadian companyoperatingoilandgasdevelopmentsinTurkeyandKazakhstan. Mr.JudsonalsoservesasaSeniorAdvisorforFortisCapitalAdvisors,a partnerownedinvestmentbank.PreviouslyMr.JudsonwasaManaging DirectorofCamcorPartnersInc. Mr.Judsonhasmorethan25yearsofexperienceinCanadianenergy capitalmarketsandhasadvisedsomeofthelargestinstitutionalinvestors inCanada,theU.S.A.andEuropeonenergyinvestments. |
Mr.JudsonisadirectorofCondorPetroleumInc.,apublicCanadian companyoperatingoilandgasdevelopmentsinTurkeyandKazakhstan. Mr.JudsonalsoservesasaSeniorAdvisorforFortisCapitalAdvisors,a partnerownedinvestmentbank.PreviouslyMr.JudsonwasaManaging DirectorofCamcorPartnersInc. Mr.Judsonhasmorethan25yearsofexperienceinCanadianenergy capitalmarketsandhasadvisedsomeofthelargestinstitutionalinvestors inCanada,theU.S.A.andEuropeonenergyinvestments. |
Mr.JudsonisadirectorofCondorPetroleumInc.,apublicCanadian companyoperatingoilandgasdevelopmentsinTurkeyandKazakhstan. Mr.JudsonalsoservesasaSeniorAdvisorforFortisCapitalAdvisors,a partnerownedinvestmentbank.PreviouslyMr.JudsonwasaManaging DirectorofCamcorPartnersInc. Mr.Judsonhasmorethan25yearsofexperienceinCanadianenergy capitalmarketsandhasadvisedsomeofthelargestinstitutionalinvestors inCanada,theU.S.A.andEuropeonenergyinvestments. |
|---|---|---|---|
| Boardmembershipsofotherpubliccorporations:CondorPetroleumInc. | |||
| Votingresultsat2021annualmeeting: For:64,249,014(99.66%) Withheld:221,755(0.34%) |
DirectorsinceJune12,2015 ThetermofofficewillexpireonMay26,2022 |
||
| Boardmeetingattendance: | 14outof15 | ||
| NumberofCommonSharesbeneficiallyowned,controlledor directedontheRecordDate:332,697 |
AuditCommittee meetingattendance: |
4outof4 | |
| Governance&Compensation Committeemeetingattendance5: |
2outof2 | ||
| Nomination&Compensation Committeeattendance6: |
2outof2 | ||
| SpecialReviewCommittee meetingattendance: |
26of27 |
Kiren�Singh�—�Director���
| NameofNominee:KirenSingh Credentials:B.Comm.,MBA,CFA,CRM, ICD.D Age:57 Residence:Canmore,Alberta,Canada Independent |
Ms.Singhisafinancialexecutiveandcorporatedirector.Ms.Singhserved asChiefFinancialOfficer,VicePresidentRiskManagementandTreasurer duringher30�yearcareerintheenergysectorwheresheledand participatedinmorethan$4.5billioncorporatefinancingsand$11billionof globalprojectfinancingsandinsuranceprogramsrepresentingprivately heldandpubliclytradedCanadian(TorontoStockExchange)andUS(New YorkStockExchange)corporationsincludingGibsonEnergyInc.,OPTI CanadaInc.,ValueCreationInc.,ExxonMobilCorporationandMobil Corporation. Ms.SinghservesontheboardofTravelAlberta(Chair,Audit,Financeand RiskCommittee). |
|---|---|
5 Mr.�Judson�was�Chair�of�the�Governance�&�Compensation�Committee�until�it�ceased�following�a�reorganisation�effective�May�27,�2021.��
6 Mr.�Judson�became�Chair�of�the�Nomination�&�Compensation�Committee�effective�May�27,�2021.�
26
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She�holds�a�Masters�of�Business�Administration�and�Bachelor�of�Commerce� degrees�(University�of�Calgary),�a�Certified�Financial�Analyst�designation� (CFA�Institute),�CRM�(Global�Risk�Management�Institute)�and�ICD.D� (University�of�Toronto).
Board�memberships�of�other�public�corporations:�none�
| SheholdsaMastersofBusinessAdministrationandBachelorofCommerce degrees(UniversityofCalgary),aCertifiedFinancialAnalystdesignation (CFAInstitute),CRM(GlobalRiskManagementInstitute)andICD.D (UniversityofToronto). |
SheholdsaMastersofBusinessAdministrationandBachelorofCommerce degrees(UniversityofCalgary),aCertifiedFinancialAnalystdesignation (CFAInstitute),CRM(GlobalRiskManagementInstitute)andICD.D (UniversityofToronto). |
SheholdsaMastersofBusinessAdministrationandBachelorofCommerce degrees(UniversityofCalgary),aCertifiedFinancialAnalystdesignation (CFAInstitute),CRM(GlobalRiskManagementInstitute)andICD.D (UniversityofToronto). |
|
|---|---|---|---|
| Boardmembershipsofotherpubliccorporations:none | |||
| Votingresultsat2021annualmeeting: For:64,404,679(99.90%) Withheld:66,090(0.10%) |
DirectorsinceMay26,2020 ThetermofofficewillexpireonMay26,2022 |
||
| Boardmeetingattendance: | 15outof15 | ||
| NumberofCommonSharesbeneficiallyowned,controlledor directedontheRecordDate:232,800 |
Governance&Compensation Committeemeetingattendance7: |
2outof2 | |
| Governance&ESGCommittee meetingattendance8: |
3outof3 | ||
| AuditCommitteemeeting attendance9: |
2outof2 | ||
| Nomination&Compensation Committeemeeting attendance10: |
2outof2 | ||
| SpecialReviewCommittee meetingattendance: |
27outof27 |
- Richard�Couillard�–�Director�Nominee�[11]
| RichardCouillard–DirectorNominee11 | |||
|---|---|---|---|
| NameofNominee:RichardCouillard Credentials:B.SC.(Hons.)geologyand geophysics Age:71 Residence:Calgary,Alberta,Canada Independent |
Mr.CouillardiscurrentlyPresidentandCEOofCouilOilEnergyInc.aprivate corporation.Mr.Couillardhasover40years’experienceindomesticand internationaloilandgasexploration,developmentandproductionactivities whichincludes21yearswithChevronCorporationinavarietyoftechnical andmanagementroles.Themajorityofhiscareerhasbeenfocussedonthe WesternCanadianSedimentaryBasin. Mr.Couillard’sdirectorshipshaveincludedCanadianSpiritResourcesInc. (2003�2020),BadgerInfrastructureSolutionsincludingitspredecessors 2005�2015andKensingtonEnergyInc.2002�2005.Mr.Couillardholdsa BachelorofScience(Honours)degreeingeologyandgeophysicsandisa memberoftheCanadianSocietyofPetroleumGeologists(CSPG). |
||
| Boardmembershipsofotherpubliccorporations:none | |||
| Votingresultsat2021annualmeeting:N/A | |||
| NumberofCommonSharesbeneficiallyowned,controlledor directedontheRecordDate:20,000 |
Boardmeetingattendance: | N/A |
7 Ms.�Singh�was�a�committee�member�until�it�ceased�following�a�reorganisation�effective�May�27,�2021.�
8 Ms.�Singh�became�the�Chair�of�the�Governance�&�ESG�Committee�effective�May�27,�2021.
9 Ms.�Singh�became�a�committee�member�following�the�reorganisation�effective�May�27,�2021.
10 Ms.�Singh�became�a�committee�member�following�the�reorganisation�effective�May�27,�2021.
11 Mr.�Couillard�is�not�currently�a�director�of�the�Corporation.�Accordingly,�voting�results�for�2021�nor�Board�or�committee�meeting�attendance� results�are�applicable.�
27
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Patricia�McLeod�Q.C.�–�Director�Nominee�[12]
| NameofNominee:PatriciaMcLeodQ.C. Credentials:Q.C.,ICD.D,MBA Age:53 Residence:Calgary,Alberta,Canada Independent |
Ms.McLeod,Q.C.isanexperiencedcorporateboarddirector,formersenior legalprofessionalandPrivacyandComplianceOfficerofmultipleregulated companies. Ms.McLeodQ.C.hasheldvicepresidentandGeneralCounselrolesin energyutilitiesandelectricityretail,propertydevelopment,insuranceand financialservicescompanies.Shehasextensivecorporate/commerciallegal experienceaswellasadvisingonmergersandacquisitions,business developmentandjointventuresforlargeinfrastructureprojects. Ms.McLeodalsoservesontheboardsofAlbertaInnovates(Chair, Governance&HRCommittee;Member,ExecutiveCommitteeandBusiness PlanningandStrategyCommittee),theGreenLineBoard(Member, Governance&HRCommitteeandBudget&RiskCommittee),theBeverage ContainerManagementBoard(Chair,Governance&Compensation Committee)andMINDDInc..PatriciaisalsotheBoardChairoftheCalgary FilmCentreandaformerViceChairofCalgaryEconomicDevelopment.Ms. McLeodisaformerChairoftheboardsofCalgaryCo�operativeAssociation, theRealEstateCouncilofAlberta,theYWCAofCalgaryandcSPACEProjects. SheholdsanMBA(QueensUniversity)andBachelorofLawsandaBachelor ofCommerce(UniversityofAlberta)andanICD.D(Universityof Calgary/InstituteofCorporateDirectors). |
Ms.McLeod,Q.C.isanexperiencedcorporateboarddirector,formersenior legalprofessionalandPrivacyandComplianceOfficerofmultipleregulated companies. Ms.McLeodQ.C.hasheldvicepresidentandGeneralCounselrolesin energyutilitiesandelectricityretail,propertydevelopment,insuranceand financialservicescompanies.Shehasextensivecorporate/commerciallegal experienceaswellasadvisingonmergersandacquisitions,business developmentandjointventuresforlargeinfrastructureprojects. Ms.McLeodalsoservesontheboardsofAlbertaInnovates(Chair, Governance&HRCommittee;Member,ExecutiveCommitteeandBusiness PlanningandStrategyCommittee),theGreenLineBoard(Member, Governance&HRCommitteeandBudget&RiskCommittee),theBeverage ContainerManagementBoard(Chair,Governance&Compensation Committee)andMINDDInc..PatriciaisalsotheBoardChairoftheCalgary FilmCentreandaformerViceChairofCalgaryEconomicDevelopment.Ms. McLeodisaformerChairoftheboardsofCalgaryCo�operativeAssociation, theRealEstateCouncilofAlberta,theYWCAofCalgaryandcSPACEProjects. SheholdsanMBA(QueensUniversity)andBachelorofLawsandaBachelor ofCommerce(UniversityofAlberta)andanICD.D(Universityof Calgary/InstituteofCorporateDirectors). |
Ms.McLeod,Q.C.isanexperiencedcorporateboarddirector,formersenior legalprofessionalandPrivacyandComplianceOfficerofmultipleregulated companies. Ms.McLeodQ.C.hasheldvicepresidentandGeneralCounselrolesin energyutilitiesandelectricityretail,propertydevelopment,insuranceand financialservicescompanies.Shehasextensivecorporate/commerciallegal experienceaswellasadvisingonmergersandacquisitions,business developmentandjointventuresforlargeinfrastructureprojects. Ms.McLeodalsoservesontheboardsofAlbertaInnovates(Chair, Governance&HRCommittee;Member,ExecutiveCommitteeandBusiness PlanningandStrategyCommittee),theGreenLineBoard(Member, Governance&HRCommitteeandBudget&RiskCommittee),theBeverage ContainerManagementBoard(Chair,Governance&Compensation Committee)andMINDDInc..PatriciaisalsotheBoardChairoftheCalgary FilmCentreandaformerViceChairofCalgaryEconomicDevelopment.Ms. McLeodisaformerChairoftheboardsofCalgaryCo�operativeAssociation, theRealEstateCouncilofAlberta,theYWCAofCalgaryandcSPACEProjects. SheholdsanMBA(QueensUniversity)andBachelorofLawsandaBachelor ofCommerce(UniversityofAlberta)andanICD.D(Universityof Calgary/InstituteofCorporateDirectors). |
|---|---|---|---|
| Boardmembershipsofotherpubliccorporations:none | |||
| Votingresultsat2021annualmeeting:N/A | |||
| NumberofCommonSharesbeneficiallyowned,controlledor directedontheRecordDate:0 |
Boardmeetingattendance: | N/A |
Gail�Harding�–�Director�Nominee�[13]
| NameofNominee:GailHardingQ.C. Credentials:B.Ed.,LL.B.,ICD.D Age:63 Residence:Calgary,Alberta,Canada Independent |
Ms.HardingwastheSeniorVicePresident,ChiefLegalOfficerandCorporate SecretaryforCanadianWesternBankFinancialGroupuntilherretirementin 2018.ShewaspreviouslyapartneratthelawfirmFraserMilnerCasgrain LLP,(whereshespecializedincapitalmarketsandmergersandacquisitions), andLegalCounselandExchangeSecretaryattheAlbertaStockExchange. Ms.Hardingbringsextensiveboardexperiencehavingservedontheboards oftheAlbertaElectricSystemOperator,TheWorkers’CompensationBoard (Alberta),ACEnergy(TSX�V),AlbertaBalletandnumeroussubsidiariesofthe CWBFinancialGroup.ShecurrentlyservesontheboardsofMeridianCredit Union(Chair,RiskCommittee)andtheAlbertaSecuritiesCommission.Ms. HardingwasarecipientoftheCanadianGeneralCounselAward,theWomen inLawLeadershipAward,andtheQueen’sCounseldesignationfromthe ProvinceofAlberta.SheholdsBachelorofEducationandBachelorofLaws degrees(UniversityofAlberta),ICD.D(InstituteofCorporateDirectors)and FSA(SustainabilityAccountingStandardsBoard)designationsandisaFellow oftheCanadianInstituteofBankers. |
|---|---|
12 Ms.�McLeod�Q.C.�is�not�currently�a�director�of�the�Corporation.�Accordingly,�voting�results�for�2021�nor�Board�or�committee�meeting�attendance� results�are�applicable.�
13 Ms.�Harding�is�not�currently�a�director�of�the�Corporation.�Accordingly,�voting�results�for�2021�nor�Board�or�committee�meeting�attendance�results� are�applicable.�
28
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| Boardmembershipsofotherpubliccorporations:none | ||
| Votingresultsat2021annualmeeting:N/A | ||
| NumberofCommonSharesbeneficiallyowned,controlledor directedontheRecordDate:25,000 |
Boardmeetingattendance: | N/A |
Doug�Dreisinger�–�Director�Nominee�[14]
| NameofNominee:DougDreisinger Credentials:B.Sc(Honours)Chemical Engineering Age:61 Residence:Calgary,Alberta,Canada Independent |
Mr.Dreisingerhasover35years’experienceintheenergyand chemicalindustryhavingworkedinbothdomesticandinternational markets.Heisaconsultantprovidingstrategicandbusiness developmentservicespredominantlyintheenergysector. Mr.DreisingerworkedforNexen(nowCNOOC)for20yearsin positionsrangingfromVicePresidentBusinessOperationsforthe chemicalbusiness,toPresidentofGlobalEnergyMarketingand Trading.HisskillsandexperienceatNexenincludetheLNG developmentofAuroraLNGinconjunctionwiththeirdevelopment partner,Inpex. Mr.DreisingeriscurrentlyadirectorofConnacherOil&GasLimited, aprivatelyheldCalgarybasedexploration,developmentand productioncompany.HeisamemberoftheAssociationof ProfessionalEngineersandGeoscientistsofAlberta(APEGA). |
Mr.Dreisingerhasover35years’experienceintheenergyand chemicalindustryhavingworkedinbothdomesticandinternational markets.Heisaconsultantprovidingstrategicandbusiness developmentservicespredominantlyintheenergysector. Mr.DreisingerworkedforNexen(nowCNOOC)for20yearsin positionsrangingfromVicePresidentBusinessOperationsforthe chemicalbusiness,toPresidentofGlobalEnergyMarketingand Trading.HisskillsandexperienceatNexenincludetheLNG developmentofAuroraLNGinconjunctionwiththeirdevelopment partner,Inpex. Mr.DreisingeriscurrentlyadirectorofConnacherOil&GasLimited, aprivatelyheldCalgarybasedexploration,developmentand productioncompany.HeisamemberoftheAssociationof ProfessionalEngineersandGeoscientistsofAlberta(APEGA). |
Mr.Dreisingerhasover35years’experienceintheenergyand chemicalindustryhavingworkedinbothdomesticandinternational markets.Heisaconsultantprovidingstrategicandbusiness developmentservicespredominantlyintheenergysector. Mr.DreisingerworkedforNexen(nowCNOOC)for20yearsin positionsrangingfromVicePresidentBusinessOperationsforthe chemicalbusiness,toPresidentofGlobalEnergyMarketingand Trading.HisskillsandexperienceatNexenincludetheLNG developmentofAuroraLNGinconjunctionwiththeirdevelopment partner,Inpex. Mr.DreisingeriscurrentlyadirectorofConnacherOil&GasLimited, aprivatelyheldCalgarybasedexploration,developmentand productioncompany.HeisamemberoftheAssociationof ProfessionalEngineersandGeoscientistsofAlberta(APEGA). |
|---|---|---|---|
| Boardmembershipsofotherpubliccorporations:none | |||
| Votingresultsat2021annualmeeting:N/A | |||
| NumberofCommonSharesbeneficiallyowned,controlledor directedontheRecordDate:0 |
Boardmeetingattendance: | N/A |
COMPETENCIES�AND�SKILLS�OF�DIRECTORS���
The�following�table�indicates�the�competencies�and�skills�possessed�by�each�Nominee�(as�determined�by�the� Governance�&�Compensation�Committee)�in�those�particular�categories�that�are�most�relevant�to�the�Corporation� and�important�to�enable�the�Board�to�discharge�its�statutory�and�common�law�responsibilities.��
14 Mr.�Dreisinger�is�not�currently�a�director�of�the�Corporation.�Accordingly,�voting�results�for�2021�nor�Board�or�committee�meeting�attendance� results�are�applicable.�
29
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| RANGE | RANGE | RANGE | RANGE | RANGE | RANGE | RANGE | RANGE | |
|---|---|---|---|---|---|---|---|---|
| 3=HIGHEXPERTISE2=MODERATEEXPERTISE1=MINIMALORNOEXPERTISE | ||||||||
| ALFRED SORENSEN |
CHARLES BOULANGER |
ANDREW JUDSON |
KIREN SINGH |
RICHARD COUILLARD |
PATRICIA McLEOD |
GAIL HARDING |
DOUG DREISINGER |
|
| STRATEGICPLANNING | 3 | 3 | 2 | 3 | 3 | 3 | 3 | 3 |
| BUSINESSDEVELOPMENT | 3 | 3 | 3 | 2 | 2 | 3 | 1 | 3 |
| ENTERPRISERISKMANAGEMENT | 3 | 2 | 2 | 3 | 3 | 3 | 3 | 2 |
| OIL&GASOPERATIONS | 2 | 2 | 2 | 2 | 3 | 1 | 1 | 2 |
| RESERVESEVALUATION | 2 | 2 | 2 | 1 | 3 | 1 | 1 | 2 |
| HEALTH&SAFETY | 3 | 2 | 2 | 2 | 3 | 2 | 2 | 2 |
| AUDITANDFINANCIALREPORTING | 3 | 3 | 2 | 3 | 2 | 2 | 3 | 2 |
| CAPITALMARKETS | 3 | 3 | 3 | 3 | 2 | 2 | 3 | 3 |
| ENVIRONMENTAL,SOCIAL, GOVERNANCE |
3 | 2 | 2 | 3 | 2 | 3 | 3 | 2 |
| HUMANRESOURCES& COMPENSATION |
3 | 3 | 2 | 2 | 2 | 3 | 2 | 2 |
| LEGALANDREGULATORY | 3 | 2 | 2 | 1 | 2 | 3 | 3 | 2 |
| INFORMATION TECHNOLOGY/CYBERSECURITY |
2 | 2 | 1 | 2 | 2 | 2 | 2 | 2 |
TABLE 2
CEASE�TRADE�ORDERS,�BANKRUPTCIES,�PENALTIES�AND�SANCTIONS���
Except�as�noted�below,�to�the�knowledge�of�the�Corporation,�none�of�the�Nominees�are,�as�at�the�date�of�this�Circular,� or�have�been,�within�the�10�years�before�the�date�of�this�Circular,�a�director,�chief�executive�officer�(“ CEO ”)�or�chief� financial�officer�(“ CFO ”)�of�any�company�(including�the�Corporation)�that:�(a)�was�subject�to�a�cease�trade�order,�an� order�similar�to�a�cease�trade�order�or�an�order�that�denied�the�relevant�company�access�to�any�exemption�under� securities�legislation�that�was�in�effect�for�a�period�of�more�than�30�consecutive�days�(an�“ Order ”)�that�was�issued� while�the�proposed�director�was�acting�in�the�capacity�as�director,�CEO�or�CFO;�or�(b)�was�subject�to�an�Order�that� was�issued�after�the�proposed�director�ceased�to�be�a�director,�CEO�or�CFO�and�which�resulted�from�an�event�that� occurred�while�that�person�was�acting�in�the�capacity�as�director,�CEO�or�CFO;�(c)�are,�as�at�the�date�of�this�Circular,� or�have�been�within�ten�years�before�the�date�of�this�Circular,�a�director�or�executive�officer�of�any�company� (including�the�Corporation)�that,�while�that�person�was�acting�in�that�capacity,�or�within�a�year�of�that�person�ceasing� to�act�in�that�capacity,�became�bankrupt,�made�a�proposal�under�any�legislation�relating�to�bankruptcy�or�insolvency� or�was�subject�to�or�instituted�any�proceedings,�arrangement�or�compromise�with�creditors�or�had�a�receiver,� receiver�manager�or�trustee�appointed�to�hold�its�assets.��In�addition,�to�the�knowledge�of�the�Corporation,�no� Nominees�have�been�subject�to:�(i)�any�penalties�or�sanctions�imposed�by�a�court�relating�to�securities�legislation�or� by�a�security�regulatory�authority�or�has�entered�into�a�settlement�agreement�with�a�security�regulatory�authority,� or�(ii)�any�other�penalties�or�sanctions�imposed�by�a�court�or�regulatory�body�that�would�likely�be�considered� important�to�a�reasonable�security�holder�in�deciding�whether�to�vote�for�a�proposed�director.�except�as�described� below.�
30
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Mr.�Doug�Dreisinger�was�a�director�of�Connacher�Oil�and�Gas�Limited�(“Connacher”)�from�June�3,�2015�to�September� 30,�2019.�In�May�2016�Connacher�announced�that,�due�to�high�debt�and�depressed�oil�prices,�amongst�other�things,� it�had�initiated�proceedings�at�the�Court�of�Queen’s�Bench�of�Alberta�to�seek�creditor�protection�under�the� Companies’�Creditors�Arrangement�Act�(“CCAA”).�On�May�16,�2016�the�TSX�suspended�trading�of�Connacher’s� common�shares�subject�to�an�expedited�review�of�Connacher’s�ability�to�meet�the�requirements�for�continued�listing.� Effective�June�20,�2016,�the�common�shares�ceased�to�be�listed�on�the�TSX�for�failure�to�meet�continued�listing� requirements.�Connacher�obtained�a�stay�of�proceedings,�among�other�things,�under�the�CCAA�pursuant�to�an�Initial� Order�dated�May�17,�2016.�Under�the�Initial�Order,�Ernst�&�Young�Inc.�were�appointed�Monitor�of�Connacher�during� the�CCAA�proceedings.�The�stay�of�proceedings�was�extended�multiple�times�to�assist�Connacher�in�undertaking�two� sale�and�investment�solicitation�processes.�On�September�30,�2019�Connacher�announced�that�the�Amended�and� Restated�Plan�of�Compromise�and�Arrangement�(“Plan”)�dated�July�16,�2019�was�sanctioned�by�the�Court�of�Queen’s� Bench�of�Alberta�on�July�16,�2019�in�the�proceedings�under�the�CCAA.��The�Plan�became�effective�September�30,� 2019.�All�existing�equity�interests�(including�outstanding�common�shares)�were�cancelled�for�no�consideration�and� the�first�lien�lenders�(First�Lien�Credit�Agreement�May�23,�2014)�acquired�all�of�Connacher’s�new�share�capital�and.� Connacher�also�ceased�to�be�a�reporting�issuer.�Upon�the�successful�completion�of�the�Plan,�Mr.�Dreisinger�resigned� from�the�Board.�In�January�2020�Mr.�Dreisinger�joined�the�“new”�privately�held�Connacher�as�a�director�and�the� company�is�a�successful�and�growing�oilsands�company.���
No�proposed�director�of�the�Corporation�is�to�be�elected�under�any�arrangement�or�understanding�between�the� proposed�director�and�any�other�person�or�company,�except�the�directors�and�executive�officers�of�the�Corporation� acting�solely�in�such�capacity.�
MAJORITY�VOTING�POLICY���
The�Corporation�believes�that�each�member�of�the�Board�should�have�the�confidence�and�support�of�the� Shareholders.�To�that�end,�the�Corporation�approved�and�adopted�on�February�6,�2020�a�majority�voting�policy�for� directors�which�provides�that�if�any�nominee�in�an�uncontested�election�fails�to�receive�votes�in�favour�of�his�or�her� election�that�collectively�constitute�a�majority�(50%�+�1)�of�the�votes�cast,�that�nominee�will�be�considered�by�the� Board�not�to�have�received�the�support�of�the�Shareholders,�even�though�duly�elected�as�a�matter�of�corporate�law,� and�will�be�expected�to�submit�his�or�her�resignation�to�the�Board�immediately�upon�its�acceptance�by�the�Board.����
In�determining�the�Board’s�acceptance�of�a�resignation,�the�Board�will�refer�the�resignation�to�the�Nomination�&� Compensation�Committee�for�determination�of�the�possible�existence�of�any�exceptional�circumstances�relating�to� the�nominee,�the�composition�of�the�Board�or�the�voting�results�that�should�delay�the�acceptance�of�the�resignation� or�justify�rejecting�it.�The�majority�voting�policy�does�not�apply�if�there�are�contested�director�elections.�The� Corporation�shall�promptly�issue�a�news�release�regarding�the�election�of�directors�and�the�Board’s�decision�on�any� such�resignation.���
INFORMATION�CONCERNING�EXECUTIVE�COMPENSATION���
For�the�financial�year�ended�December�31,�2021�the�Corporation�had�five�named�executive�officers�(each�an�“ NEO ”� and�collectively,�the�“ NEOs ”)�namely,�Alfred�Sorensen�(CEO),�Adam�Gray�(CFO),�Darcy�Reding�(Chief�Operating� Officer),�Yvonne�McLeod�(Vice�President,�Drilling�&�Completions,�Health,�Safety,�Environment�&�Regulatory)�and� Thom�Dawson�(Senior�Vice�President,�Business�Development).��Each�NEO�is�an�employee�of�the�Corporation.���
31
==> picture [108 x 37] intentionally omitted <==
COMPENSATION�DISCUSSION�AND�ANALYSIS���
Objectives�of�NEO�Compensation�Program�and�Compensation�Philosophy�
The�objectives�of�the�Corporation’s�NEO�compensation�program�are�to:�(a)�attract,�motivate�and�retain�highly� qualified�and�dedicated�individuals;�(b)�align�the�interests�of�the�NEOs�with�those�of�the�Corporation’s�shareholders;� (c)�establish�an�objective�connection�between�NEO�compensation�and�the�Corporation’s�financial�and�business� performance;�and�(d)�incentivize�the�NEOs�to�lead�the�Corporation�in�achieving�its�corporate�objectives�and�fulfilling� its�corporate�strategy.�The�NEO�compensation�program�is,�therefore,�designed�to�reward�the�NEOs�for�increasing� shareholder�value.���
The�Corporation�maintains�an�incentive�program�which�financially�rewards�NEOs�to�the�degree�that�the�Corporation� achieves�its�pre�established�annual�goals.�In�addition,�the�Corporation�recognizes�the�importance�of�ensuring�that� overall�compensation�for�NEOs�is�not�only�internally�equitable,�but�also�competitive�within�the�market�segment.� Specifically,�the�Nomination�&�Compensation�Committee’s�review�and�evaluation�of�corporate�compensation�will� include�measurement�of,�among�others,�the�following�areas:�(a)�the�achievement�of�corporate�objectives,�such�as� financings,�partnerships,�and�other�business�development,�in�particular�having�regard�to�budgetary�constraints�and� other�challenges�facing�the�Corporation;�(b)�the�Corporation’s�financial�condition;�and�(c)�the�Corporation’s�share� price�and�market�capitalization.���
Compensation�policies,�practices�and�amounts�are�continuously�reviewed�and�compared�to�“best�practice”�standards� as�undertaken�by�peer�public�companies.��Compensation�amounts�and�structures�are�compared�to�available�relevant� industry�data�provided�by�independent�sources.�Additionally,�compensation�amounts�reflect�prevailing�market� conditions�and�the�performance�of�the�corporation,�and�the�individual�as�evaluated�by�the�Corporate�Goals�and� metrics�which�are�aligned�with�the�strategic�priorities�of�the�Corporation�as�determined�annually�by�the�Board.��
The�Corporation’s�compensation�program�for�employees�(including�NEOs)�consists�of�two�principal�components:�(a)� compensation�(other�than�paid�under�an�“incentive�plan”�as�defined�by�Form�51�102F6)�consisting�of�base� compensation;�and�(b)�compensation�awarded�under�an�incentive�plan�consisting�of�the�discretionary�bonus� program�and�the�stock�option�plans.�Each�component�has�a�different�function,�as�described�in�greater�detail�below,� but�all�elements�operate�in�unison�to�reward�the�NEOs�appropriately�for�personal�and�corporate�performance.���
The�following�line�graph�depicts�the�cumulative�total�shareholder�return�of�the�Corporation�(PEA)�over�the�five�most� recently�completed�financial�years.[15]
==> picture [258 x 144] intentionally omitted <==
----- Start of picture text -----
Total�Shareholder�Return
$200
$175
$150
$125
$100
$75
$50
$25
$0
2017 2018 2019 2020 2021 2022
PEA S&P�TSX�Comp S&P�TSX�Venture
----- End of picture text -----
The�trend�shown�by�this�graph�is�not�reflective�of� the�trend�in�compensation�reported�under�this� Circular�which�the�executive�officers�received�from� the�Corporation�over�the�same�five�year�period.��As� described�below,�the�compensation�received�by� executive� officers� is� composed� of� base� compensation,�which�has�remained�substantially� constant�over�the�time�period,�and�possibly� incentive�awards�which�are�received�by�executive� officers�periodically,�if�at�all,�upon�the�achievement� of�certain�of�the�pre�determined�objectives.�
15This�line�graph�is�based�on�the�assumption�that�$100�was�invested�on�the�first�day�of�the�five�year�period.�
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However,�the�achievement�of�those�objectives�does�not�necessarily�impact�the�trading�value�of�the�Common�Shares�of�the� Corporation�in�the�long�term.�
Base�Compensation��
The�Corporation�enters�into�a�written�contract�of�service�with�each�of�its�employees�(including�each�NEO)�which� requires�the�Corporation�to�pay�base�compensation�(including�overtime�pay�when�statutorily�mandated)�as�well�as� other�monetary�perquisites�(collectively,�“ base�compensation ”)�to�its�employees�in�consideration�for�the� performance�of�their�respective�duties�of�employment.��
The�payment�of�base�compensation�to�employees,�in�amounts�which�are�comparable�to�the�amounts�paid�to�similar� positions�in�the�natural�resource�industry,�is�essential�to�the�Corporation’s�ability�to�attract�and�retain�outstanding� employees�(including�each�NEO).�Base�compensation,�and�changes�in�base�compensation,�are�established�by�the� Corporation�taking�into�account�each�employee’s�expertise�and�experience�as�well�as�their�level�of�responsibility�and� competitive�pay�practices.�Base�compensation�is�reviewed�periodically,�and�adjusted�as�appropriate,�by�the� Corporation�to�reflect�performance�and�market�conditions.���
Any�increase�in�the�base�compensation�of�the�CEO�must�be�approved�by�the�Board�taking�into�consideration�the� recommendation�of�the�Nomination�&�Compensation�Committee.�The�CEO�is�responsible�for�determining�and� approving�any�increase�in�the�base�compensation�of�other�employees�(including�other�NEOs).����
Group�Retirement�Savings�Plan���
The�Corporation’s�group�retirement�savings�plan�implemented�in�late�2019�is�a�non�equity,�non�incentive�plan�that� is�available�to�all�permanent�employees�(including�the�NEOs).�This�plan�is�sponsored�by�the�Corporation�and�is� administered�by�The�Manufacturers�Life�Insurance�Company.��
The�plan’s�primary�purpose�is�to�provide�a�flexible�and�multi�faceted�retirement�savings�vehicle�to�employees�to� assist�them�in�saving�for�their�retirement.�This�plan�offers�each�participating�employee�the�ability�to�make�personal� contributions�to�the�plan�(up�to�certain�prescribed�limits)�which�the�employee�may�designate�toward�(a)�a�registered� retirement�savings�plan�(or�spousal�registered�retirement�savings�plan),�(b)�a�tax�free�savings�account�and�(c)�a� nonregistered�savings�plan.��In�order�to�further�assist�employees,�the�Corporation�has�agreed�to�contribute�to�the� registered�retirement�savings�plan�of�each�participating�employee�an�amount�equal�to�6%�of�the�employee’s�base� compensation�and�an�additional�amount�equal�to�the�lesser�of�the�contribution�made�by�the�participating�employee� to�the�group�retirement�savings�plan�and�4%�of�the�employee’s�base�compensation.��������
Discretionary�Bonus�Program�
The�Corporation’s�discretionary�bonus�program�is�a�non�equity�incentive�plan�that�is�available�to�all�permanent� employees�(including�the�NEOs).�Participation�in�the�program�is�a�component�of�overall�compensation�that� incentivizes�employees�to�meet�short�term,�pre�determined�objectives�which�are�intended�to�improve�the�overall� value�of�the�Corporation.�The�discretionary�bonus�program�also�serves�to�assist�the�Corporation�in�rewarding�and� retaining�valued�employees�and�are�understood�to�be�common�in�the�marketplace.����
Under�the�discretionary�bonus�program,�each�employee�(including�each�NEO)�is�eligible�for�an�annual�cash�bonus� which�is�quantified�on�a�rational�basis�and�informed�by�the�employee’s�level�of�responsibility,�base�compensation,� personal�performance�measured�against�pre�set�objectives�while�also�taking�into�account�the�overall�performance� of�the�Corporation.�The�amount�of�the�proposed�annual�bonus�award�to�the�CEO�and�the�aggregate�amount�of�the� proposed�annual�bonus�award�to�all�other�employees�is�approved�by�the�Board�taking�into�consideration�the�
33
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recommendation�of�the�Nomination�&�Compensation�Committee.�If�warranted�for�performance�or�other�reasons,� special�cash�bonuses�may�also�be�considered�from�time�to�time.��
The�Stock�Option�Plans���
The�Corporation�sponsors�two�distinct�stock�option�plans��the�Stock�Option�Plan�Number�One�and�the�Stock�Option� Plan�Number�Two).���
The�Stock�Option�Plan�Number�One�and�the�Stock�Option�Plan�Number�Two�(collectively,�the�“ Stock�Option�Plans ”)� were�established�and�designed�to�allow�the�Corporation,�through�Common�Shares,�to�retain�and�motivate�competent� directors,�senior�executives�and�other�employees�and�“consultants”�to�whom�the�Board�may�grant�stock�options� pursuant�to�the�Stock�Option�Plans�from�time�to�time�further�to�their�efforts�in�attaining�the�goals�of�the�Corporation� and�to�allow�such�individuals�to�purchase�Common�Shares�as�an�investment,�and�to�encourage�them�to�act�in�this� manner.����
BACKGROUND��
The�Stock�Option�Plan�Number�One�was�approved�and�adopted�by�the�Board�as�of�October�24,�2017,�and�was� amended�and�restated�by�the�Board�as�of�November�23,�2017,�and�again�as�of�March�19,�2020�and�approved�at�the� annual�and�special�meeting�of�Shareholders�held�on�June�27,�2018,�May�26,�2020,�and�on�May�27,�2021�respectively.���
As�Stock�Option�Plan�Number�One�was�not�presented�to�the�Shareholders�for�consideration�and�approval�at�the� annual�and�special�meeting�of�Shareholders�held�on�June�18,�2019,�as�was�required�by�the�policy�of�the�TSX�Venture� Exchange�at�that�time.��Therefore,�as�an�interim�measure,�the�Board�approved�and�adopted�a�second�stock�option� plan�(the�“ Stock�Option�Plan�Number�Two ”),�as�permitted�under�Section�3.9�of�Policy�4.4�of�the�TSX�Venture� Exchange,�on�June�18,�2019,�to�facilitate�the�granting�of�stock�options�until�the�Stock�Option�Plan�Number�One�was� able�to�be�put�forward�for�approval�by�the�Shareholders�at�the�next�meeting�of�Shareholders�held�on�May�26,�2020.�� Stock�Option�Plan�Number�Two�is�a�fixed�number�stock�option�plan�under�which�the�Corporation�is�authorized�to� grant�stock�options�up�to�a�maximum�of�8,412,199�Common�Shares�being�the�difference�between�10%�of�the�total� number�of�Common�Shares�that�were�issued�and�outstanding�as�at�June�18,�2019�and�the�number�of�Common�Shares� that�underlie�all�unexercised�and�unexpired�stock�options�that�were�previously�granted�by�the�Corporation�under� the�Stock�Option�Plan�Number�One.��Stock�Option�Plan�Number�Two�governs�only�those�stock�options�that�were� granted�thereunder�in�2019�and�it�is�intended�that�Stock�Option�Plan�Number�Two�will�be�terminated�by�the� Corporation�when�the�last�of�those�stock�options�is�exercised,�expires�or�is�otherwise�terminated.����
As�discussed�in�greater�detail�on�page�23�of�this�Circular,�the�Stock�Option�Plan�has�again�been�amended�and�restated� by�the�Board�on�May�19,�2021,�which�will�be�considered�at�the�annual�and�special�meeting�of�Shareholders�scheduled� for�May� 26 ,�2022.��
THE�PARTICULARS�OF�THE�STOCK�OPTION�PLANS
As�at�December�31,�2021,�and�as�at�the�Record�Date,�there�were�157,645,871�and�157,681,871 Common�Shares� issued�and�outstanding�respectively.��
Each�Eligible�Person�(as�defined�below)�is�eligible�for�an�annual�stock�option�grant�that�may�be�approved�from�time� to�time�by�the�Board�on�the�recommendation�of�the�Nomination�&�Compensation�Committee.�The�number�of�stock� options�granted�to�Eligible�Persons�is�informed�by�prevailing�competitive�and�market�conditions�and�is�based�on�the� level�of�their�respective�responsibility�as�well�as�their�respective�personal�performance,�and�the�performance�of�the� Corporation,�relative�to�pre�determined�objectives.�Stock�option�grants�may�also�be�considered�and�approved�by�the� Board,�if�warranted,�for�specific�performance�or�for�other�reasons�in�special�circumstances.�For�example,�directors�
34
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or�employees�may�be�granted�stock�options�upon�the�commencement�of�their�engagement�or�employment�with�the� Corporation.�When�determining�whether�and�how�many�new�stock�option�grants�will�be�approved,�the�Board� considers�all�relevant�factors.���
The�Stock�Option�Plan�Number�One�is�the�operative�plan�for�all�stock�option�grants�that�are�awarded�after�May�26,� 2020.��That�Stock�Option�Plan�Number�One�is�a�“rolling”�stock�option�plan�under�which�stock�options�may�be�granted� up�to�a�maximum�of�10%�of�the�Common�Shares�issued�and�outstanding�at�the�time�of�the�grant.�The�number�of� Common�Shares�that�may�be�reserved�under�the�Stock�Option�Plan�Number�One�automatically�increases�or� decreases�as�the�number�of�issued�and�outstanding�Common�Shares�increases�or�decreases.��
The�Stock�Option�Plan�Number�Two�was�established�by�the�Board�as�an�interim�measure�as�discussed�above�and�the�� Corporation�does�not�intend�to�grant�any�stock�options�under�that�plan�in�the�future.��
| STOCKOPTIONPLAN NUMBERONE |
STOCKOPTIONPLAN NUMBERTWO |
|
|---|---|---|
| Aggregatenumberof CommonSharesthat underliethestockoptions awardedundereachofthe StockOptionPlansasat December31,2021. |
4,567,690CommonSharesareissuableunder thestockoptionswhichweregrantedunder thePlanandareoutstandingasatDecember 31,2021. TheseCommonSharesrepresent2.9%ofthe aggregatenumberofCommonSharesthat areissuedandoutstandingasatDecember 31,2021. |
2,472,775CommonSharesareissuable underthestockoptionswhichweregranted underthePlanandareoutstandingasat December31,2021. TheseCommonSharesrepresent1.6%ofthe aggregatenumberofCommonSharesthat areissuedandoutstandingasatDecember 31,2021. |
| Aggregatenumberof CommonSharesundereach oftheStockOptionPlans thatareavailableforgrant asstockoptionsasat December31,2021. |
8,724,122CommonSharesunderthePlan thatareavailableforgrantasstockoptions. TheseCommonSharesrepresent5.5%ofthe aggregatenumberofCommonSharesthat areissuedandoutstandingasatDecember 31,2021. |
TheCorporationdoesnotintendinthe futuretograntanystockoptionsunderStock OptionPlanNumberTwo. Accordingly,asat31December,2021there arenoCommonSharesunderStockOption PlanNumberTwothatareavailableforgrant asstockoptions. |
| Aggregatenumberof CommonSharesthat underliethestockoptions awardedundereachofthe StockOptionPlansasatthe RecordDate. |
4,429,690CommonSharesareissuableunder thestockoptionswhichweregrantedunder thePlanandareoutstandingasoftheRecord Date. TheseCommonSharesrepresent2.8%ofthe aggregatenumberofCommonSharesthat areissuedandoutstandingasoftheRecord Date. |
2,468,950CommonSharesareissuable underthestockoptionswhichweregranted underthePlanandareoutstandingasofthe RecordDate. TheseCommonSharesrepresent1.6%ofthe aggregatenumberofCommonSharesthat areissuedandoutstandingasoftheRecord Date. |
35
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| STOCKOPTIONPLAN NUMBERONE |
STOCKOPTIONPLAN NUMBERTWO |
|
|---|---|---|
| Aggregatenumberof CommonSharesundereach oftheStockOptionPlans thatareavailableforgrant asstockoptionsasatthe RecordDate. |
AsattheRecordDatethereare8,869,547 CommonSharesunderthePlanthatare availableforgrantasstockoptions. TheseCommonSharesrepresent5.6%ofthe aggregatenumberofCommonSharesthat areissuedandoutstandingasoftheRecord Date. |
TheCorporationdoesnotintendinthe futuretograntanystockoptionsunderStock OptionPlanNumberTwo.Therefore,all stockoptionsgrantedinthefuturewillbe grantedunderStockOptionPlanNumber One,asamended. Accordingly,asattheRecordDatethereare noCommonSharesunderStockOptionPlan NumberTwothatareavailableforgrantas stockoptions. |
Stock�Option�Plan�Number�Two�has�not�been�used�since�2019�and�will�not�be�used�by�the�Corporation�thereafter�to� issue�options.�As�such,�its�salient�terms�are�not�summarised�in�this�Circular.�The�following�table�summarizes�the� salient�terms�of�Stock�Option�Plan�Number�One�including�the�provisions�prior�to�the�amendments�proposed�to�be� accepted�by�Shareholders�herein.��
| STOCKOPTIONPLANNUMBERONE (INCLUDINGPROPOSEDAMENDMENTS) |
CURRENTPROVISIONS | |
|---|---|---|
| Numberof Shares |
Theoptionstobegrantedmustnotbeexercisableformore than10%oftheCommonSharesissuedandoutstandingat thetimetheoptionsaregranted,providedthatifthe optionsexpireorareterminatedforanyreasonbeforethey vestandareexercised,thenumberofCommonShares underlyingsuchexpiredorterminatedoptionsmayagainbe availableunderthePlan. |
same |
| ExercisePrice | TheBoardofDirectorsshallestablishtheexerciseprice, whichwillnotbelessthantheclosingpriceoftheshareson theExchangeonthetradingdayimmediatelyprecedingthe dateofgrant. |
same |
| Participation Limits |
(a) ThemaximumnumberofSharesissuableatanytime toEligiblePersonswhoareInsiderspursuanttothe exerciseofOptionsgrantedunderthisPlanand securitiesgrantedunderanyotherSecurityBased CompensationArrangementoftheCorporationmust notexceed10%oftheaggregatenumberofShares issuedandoutstandingfromtimetotime(calculated onanon�dilutedbasis). (b) ThemaximumnumberofSharesissuedtoEligible PersonswhoareInsiderswithinanyoneyearperiod pursuanttotheexerciseofOptionsgrantedunderthis PlanandsecuritiesgrantedunderanyotherSecurity BasedCompensationArrangementoftheCorporation mustnotexceed10%oftheaggregatenumberof Sharesissuedandoutstandingfromtimetotime (calculatedonanon�dilutedbasis). (c) Thenumberofsharesthatareissuabletoeligible personswhoarenon�employeedirectorsunderthis PlanandanyotherSecurityBasedCompensation |
(a) ThemaximumnumberofShares issuableatanytimetoEligible PersonswhoareInsiderspursuantto theexerciseofOptionsgrantedunder thisPlanandsecuritiesgrantedunder any other Security Based CompensationArrangementofthe Corporationmustnotexceed10%of theaggregatenumberofShares issuedandoutstandingfromtimeto time(calculatedonanon�diluted basis). (b) ThemaximumnumberofShares issuedtoEligiblePersonswhoare Insiderswithinanyoneyearperiod pursuanttotheexerciseofOptions grantedunderthisPlanandsecurities grantedunderanyotherSecurity BasedCompensationArrangementof |
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| STOCKOPTIONPLANNUMBERONE (INCLUDINGPROPOSEDAMENDMENTS) |
CURRENTPROVISIONS | |
|---|---|---|
| ArrangementoftheCorporationshallnotatanytime exceed$150,000worthofSharesannuallypernon� employeedirector,ofwhichnomorethan$100,000 maybeintheformofOptions. |
theCorporationmustnotexceed10% oftheaggregatenumberofShares issuedandoutstandingfromtimeto time(calculatedonanon�diluted basis). |
|
| TermofOptions | SubjecttoothertermswithinthePlan,theexpirydateofan optionisthedateestablishedbytheBoardofDirectorsat thetimeofthegrantingoftheparticularoption,provided thatsuchdatedoesnotextendbeyondthefifthanniversary ofthedateofgrantoftheoption. |
same |
| Expiryofoptions | SubjecttoothertermswithinthePlan,optionswillexpireon thefollowingevents: (a) Theexpirydateoftheoption; (b) 90daysfollowingdeathoftheoptionholder; (c) 90daysfollowingcessationofemploymentforall optionsissuedonorafterOctober24,2017; (d) Atthediscretionoftheboardofdirectorsand subjecttotheapprovaloftheTorontoStock Exchangeandwithpriornoticetotheoption holder; (e) Onthefirstdaytheoptioneeceasedemployment iftheoptionholderwasterminatedforcause; |
same |
| Assignment | SubjecttoothertermswithinthePlan,optionscannotbe assignedortransferred. |
same |
| Changeof Control |
Thesuccessorcorporationmayeither(i)assumethe Corporation'srightsandobligationsunderoutstanding options,or(ii)substituteforoutstandingoptions substantiallyequivalentoptionsinthesuccessorcorporation inamannerthatsubstantiallypreservesanddoesnotimpair therightsoftheoptioneeinanymaterialrespect. Intheeventthatanassumptionorsubstitutionofoptionsis notmadebythesuccessorcorporationpriortoorin connectionwithaChangeofControl,alloptionsheldbyan optioneeasatthedateoftheChangeofControl,whether vestedorunvested,willautomaticallyvestasofthedateof theChangeofControl. Iftheemploymentofanoptioneeisterminatedduringthe one(1)yearperiodafteraChangeofControlforanyreason otherthanforcause,ortheoptioneeresignsasaresultof constructivedismissal,thenanyunvestedoptionsheldby theoptioneeasatthedateoftheChangeofControlshall accelerateandwillfullyvesteffectiveonthedateofthe ChangeofControlandalloptionsthatarevestedordeemed tobevestedmaybeexercisedbytheoptioneewithin30 daysfromtheterminationdate. |
same |
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| STOCKOPTIONPLANNUMBERONE (INCLUDINGPROPOSEDAMENDMENTS) |
CURRENTPROVISIONS | |
|---|---|---|
| Retroactive Amendments |
TheBoardofDirectorsmay,subjecttotheapprovalofthe ExchangeandsubjecttoothertermswithinthePlan, retroactivelyamendthePlanand,withtheconsentofthe affectedoptionees,retroactivelyamendthetermsand conditionsoftheoptionsthathavebeengranteduntilthen. |
same |
| Amendments notrequiring shareholder approval |
TheBoardofDirectorsmay,withouttheapprovalofthe shareholders(otherthananyrequiredregulatoryorExchange approvals)butsubjecttoothertermswithinthePlan, suspend,discontinueoramendthisPlanoranyoption. Examplesofthetypesofamendmentsthatmaybemadeby theBoardwithoutShareholderapprovalinclude,without limitation,thefollowing: a) amendmentstoensurecontinuingcompliancewith applicablelaws,regulations,requirements,rulesor policiesoranygovernmentalauthorityoranystock exchange; b) amendmentsofa“housekeeping”nature,whichinclude amendmentstoeliminateanyambiguityorcorrector supplementanyprovisioncontainedherein; c) amendmentsrespectingtheadministrationofthePlan; d) changingthevestingprovisionsofthePlanoranyoption certificate; e) changingtheterminationprovisionsofanyOptionthat doesnotentailanextensionbeyondtheoriginalexpiry date;and f) anyotheramendmentthatdoesnotrequiretheapproval ofShareholders. |
same |
| Amendments requiring shareholder approval |
SubjecttoothertermswithinthePlan,specific shareholderapprovalisrequiredfor: a) anychangetothemaximumnumberofsharesissuable underthePlan,includinganincreasetothefixed maximumpercentageorachangefromafixedmaximum percentagetoafixedmaximumnumberofshares; b) anyamendmentwhichreducestheexercisepriceofany optionaftertheoptionshavebeengrantedorany cancellationofanoptionandthesubstitutionofthat optionbyanewoptionwithareducedprice; c) anyamendmentwhichextendstheoptiontermbeyond theoriginalexpirydate; |
SubjecttoothertermswithinthePlan, specific shareholder approval is requiredfor: (a) areductionintheexerciseprice underthePlanbenefitingan InsideroftheCorporation; (b) anextensionoftheoriginalExpiry DateunderthePlanbenefitingan InsideroftheCorporation; (c) anyamendmenttoremoveorto exceedtheInsiderParticipation Limits; (d) anincreasetothemaximum numberofSharesissuableunder thePlan; |
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| STOCKOPTIONPLANNUMBERONE (INCLUDINGPROPOSEDAMENDMENTS) |
CURRENTPROVISIONS | |
|---|---|---|
| d) anyamendmenttoremoveortoexceedtheparticipation limits; e) anyamendmentwhichwouldallownon�employee directorstobeeligibleforawardsunderthePlanona discretionarybasisoranamendmentwhichwould increaselimitsimposedonnon�employeedirector participation; f) anyamendmentwhichwouldpermitanyoptiongranted underthePlantobetransferableorassignablebyany EligiblePersonotherthanasalreadypermittedunderthe Plan; g) anyamendmenttotheamendmentprovision(section 5.2)ortheamendmentsrequiringshareholderapproval provision(section5.3). |
(e) anyamendmenttoSections5.2or 5.3hereof. |
TABLE�3
The�Stock�Options�that�are�Outstanding�at�the�Record�Date��
Table�4,�below,�summarizes�the�Stock�Options�that�are�issued�and�outstanding�under�the�Stock�Option�Plans�as�at� the�Record�Date.���
| GROUP | DATEOFGRANT | AGGREGATE NUMBEROF SHARESISSUABLE |
EXERCISEPRICE ($) |
EXPIRYDATE |
|---|---|---|---|---|
| TheStockOptionPlanNumberOne: | ||||
| OfficersandEmployees | January29,2018 | 388,500 | 5.67 | January28,2023 |
| Directors | January29,2018 | 300,000 | 5.67 | January28,2023 |
| Directors | June27,2018 | 125,000 | 5.67 | June27,2023 |
| OfficersandEmployees | October8,2020 | 1,168,600 | 0.86 | October8,2025 |
| Directors | November17,2020 | 390,000 | 0.86 | November17,2025 |
| OfficersandEmployees | November17,2020 | 100,000 | 0.86 | November17,2025 |
| Directors | August19,2021 | 263,590 | 0.30 | August19,2026 |
| OfficersandEmployees | August19,2021 | 1,694,000 | 0.30 | August19,2026 |
| Total | 4,429,690 | |||
| TheStockOptionPlanNumberTwo: | ||||
| Directors | July3,2019 | 525,000 | 0.89 | July3,2024 |
| OfficersandEmployees | July3,2019 | 1,368,950 | 0.89 | July3,2024 |
| OfficersandEmployees | October21,2019 | 575,000 | 0.92 | October21,2024 |
| Total | 2,468,950 |
TABLE�4
The�4,429,690�Common�Shares�underlying�the�then�issued�and�outstanding�Stock�Options�of�the�Corporation�granted� under�Stock�Option�Plan�Number�One�had�a�weighted�average�exercise�price�of�approximately�$1.50�per�Common� Share�and�the�2,468,950�Common�Shares�underlying�the�then�issued�and�outstanding�Stock�Options�of�the�
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Corporation�granted�under�Stock�Option�Plan�Number�Two�had�a�weighted�average�exercise�price�of�approximately� $0.90�per�Common�Share.��The�Corporation�is�permitted�under�the�Stock�Option�Plans�to�grant�stock�options,�in� aggregate,�up�to�a�maximum�of�10%�of�the�then�total�number�of�issued�and�outstanding�Common�Shares.���
The�Annual�Burn�Rate���
| EQUITYCOMPENSATIONARRANGEMENT | 2019 | 2020 | 2021 |
|---|---|---|---|
| TheStockOptionPlanNumberOne: StockOptionsissued(1) WeightedAverageCommonSharesOutstanding |
0 | 2,200,100 | 1,993,590 |
| 95,306,838 | 157,638,343 | 157,642,287 | |
| AnnualBurnRate | 0 | 1.4% | 1.3% |
| TheStockOptionPlanNumberTwo: StockOptionsissued(1) WeightedAverageCommonSharesOutstanding |
4,264,341 | 0 | 0 |
| 95,306,838 | 157,638,343 | 157,642,287 | |
| AnnualBurnRate | 4.5% | 0 | 0 |
| DirectorCompensationPolicy CommonSharesIssued WeightedAverageCommonSharesOutstanding |
146,544 | 80,697 | 0 |
| 95,306,838 | 157,638,343 | 157,642,287 | |
| AnnualBurnRate | 0.2% | 0.1% | 0 |
TABLE�5 (1) Each�to�acquire�one�Common�Share�
The�Corporation�did�not�issue�any�Common�Shares�at�any�time�during�the�twelve�months�prior�to�the�Record�Date,� other�than�40,000�issued�to�employees�on�exercise�of�stock�options.����
Risks�Associated�with�Compensation�Policies�and�Practices�
The�Board�and�its�Governance�&�ESG�Committee�and�Nomination�&�Compensation�Committee�have�considered�the� implications�of�the�risks�associated�with�the�Corporations’�compensation�policies�or�practices�and�has�concluded�that� the�programs�do�not�encourage�excessive�or�inappropriate�risk�taking�and�are�aligned�with�the�long�term�interests� of�shareholders.�In�particular,�it�is�noted�that�compensation�awards�are�granted�under�the�discretionary�bonus� program�and�under�the�Stock�Option�Plans�primarily�on�the�basis�of�the�degree�to�which�pre�established�individual� and�corporate�objectives�are�achieved.�In�each�case�the�Corporation�has�concluded,�at�the�time�that�each�such� objective�is�established,�that�its�concomitant�risk�profile�is�acceptable�to�the�Corporation�and�the�objective,�if� achieved,�aligns�with�the�long�term�interests�of�its�shareholders.�Additional�alignment�between�the�interests�of� directors�and�senior�employees�on�the�one�hand�with�the�interests�of�shareholders�on�the�other�hand,�is�achieved� through�the�Share�Ownership�Policy�which�prohibits�each�director�and�relevant�senior�employee�from�entering�into� any�agreement,�and�from�effecting�any�hedge�or�other�transaction,�which�has�as�one�of�its�purposes,�or�has�as�one� of�its�consequences�or�possible�consequences,�the�amelioration,�in�whole�or�in�part,�of�the�economic�impact�of�a� decrease,�or�possible�decrease,�in�the�market�value�of�the�Common�Shares�which�are�held�by�such�director�or�senior� employee.��
Each�member�of�the�Governance�&�ESG�Committee�and�Nomination�&�Compensation�Committee�has�been�in�a�senior� leadership�position�in�various�organizations,�and�in�those�capacities�obtained�direct�experience�relevant�to�executive� compensation�and�has�the�skills�and�experience�that�enable�the�Governance�&�ESG�Committee�and�Nomination�&�
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Compensation�Committee�to�make�recommendations�to�the�Board�on�the�suitability�of�the�Corporation’s� compensation�policies�and�practice�giving�due�regard�to�the�related�risk�factors.��
An�electronic�copy�of�the�mandate�of�the�Board�and�each�of�the�committees,�including�the�Governance�&�ESG� Committee,�can�be�obtained�from�the�Corporation’s�website�(www.pieridaeenergy.com).��
Compensation�policies�are�continuously�reviewed�and�updated�to�“best�practice”�standards�as�undertaken�by�peer� public�companies�and�applicable�regulatory�changes.��In�addition,�the�business�conduct�of�NEOs�and�individual� employees�are�evaluated�against�the�Corporation’s�prevailing�policies�including�(a)�the�Code�of�Ethical�Conduct,�(b)� the�Anti�Corruption�Policy,�(c)�the�Disclosure�Policy�and�the�Trading�Restrictions�and�Blackout�Period�Policy,�(d)�the� Hedging�Policy,�(e)�the�Policy�Establishing�Financial�Authority,�(f)�the�Credit�Policy�and�the�Investment�Policy�and�(g)� the�Policy�for�the�Prevention�of�Harassment,�each�of�which�further�protect�the�Corporation�from�the�adverse� consequences�of�inappropriate�conduct�and�excessive�risk�taking.���
Further,�on�March�23,�2022,�the�Board�approved�the�addition�of�a�“Clawback�Policy”.�This�policy�requires�all�members� of�senior�management[16] ,�whether�current�or�former,�to�immediately�repay�or�forfeit,�that�portion�of�bonuses�or� equity�based�compensation�paid,�granted�or�vested�by�them�if�the�Corporation�is�required�to�prepare�a�restatement� of�any�or�all�its�financial�statements�due�to�either�(i)�material�non�compliance�with�any�financial�reporting� requirements�under�applicable�securities�laws,�or�(ii)�gross�negligence�or�fraud�of�such�member�of�senior� management�as�either�admitted�to�or�as�proven�in�a�court�of�competent�jurisdiction.��
Compensation�plans�and�awards�are�compared�to�available�relevant�industry�data�provided�by�independent�sources.�� Additionally,�compensation�amounts�reflect�prevailing�market�conditions�and�the�performance�of�the�Corporation� and�the�individual�as�evaluated�by�the�Corporate�Goals�and�metrics�which�are�aligned�with�the�strategic�priorities�of� the�corporation�as�set�out�annually�by�the�Board�of�Directors.��
SUMMARY�COMPENSATION�TABLE���
The�following�table�presents�information�concerning�all�compensation�paid,�payable,�awarded,�granted,�given,�or� otherwise�provided�to�NEOs�by�the�Corporation�for�services�in�all�capacities�to�the�Corporation�during�the�last�three� financial�years:�����
| NAMEAND PRINCIPAL POSITION |
YEAR | SALARY | SHARE BASED AWARDS |
OPTION BASED AWARDS |
NON�EQUITY INCENTIVEPLAN COMPENSATION (BONUS) |
ALLOTHER COMPENSATION |
TOTAL COMPENSATION |
|---|---|---|---|---|---|---|---|
| ($) | ($) | ($) | ($) | ($) | ($) | ||
| AlfredSorensen, CEO(a) |
2021 | 300,000 | nil | 23,148(d) | 99,000 | 15,000 | 437,148 |
| 2020 | 278,307 | nil | 34,146(e) | 155,315 | 15,576 | 483,344 | |
| 2019 | 300,000 | nil | 77,885(f) | 129,065 | 41,380 | 600,530 | |
| 52,200(g) | |||||||
| AdamGray,CFO(b) | 2021 | 238,500 | nil | 25,197(d) | 77,006 | 7,115 | 347,818 |
| 2020 | 185,000 | nil | 22,100(e) | nil | 5,000 | 212,100 | |
| 2019 | n/a | n/a | n/a | n/a | n/a | n/a | |
| 2021 | 265,000 | nil | 26,212(d) | 64,171 | 7,692 | 363,075 |
16 Senior�Management�is�defined�as�collectively�the�CEO,�the�CFO,�the�COO�and�each�senior�vice�president.���
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| NAMEAND PRINCIPAL POSITION |
YEAR | SALARY | SHARE BASED AWARDS |
OPTION BASED AWARDS |
NON�EQUITY INCENTIVEPLAN COMPENSATION (BONUS) |
ALLOTHER COMPENSATION |
TOTAL COMPENSATION |
|---|---|---|---|---|---|---|---|
| ($) | ($) | ($) | ($) | ($) | ($) | ||
| DarcyReding,COO (c) |
2020 | n/a | n/a | n/a | n/a | n/a | n/a |
| 2019 | n/a | n/a | n/a | n/a | n/a | n/a | |
| YvonneMcLeod, Vice�President, HSERDrilling& Completions |
2021 | 250,000 | nil | 7,175(d) | 32,287 | 10,000(j) | 299,462 |
| 2020 | 249,519 | nil | 15,483(e) | 116,724 | 221,584(j) | 603,310 | |
| 2019 | 260,000 | nil | 64,904(f) | 500 | 62,800(j) | 420,829 | |
| 32,625(g) | |||||||
| ThomasDawson, SeniorVice� President,Business Development |
2021 | 250,000 | nil | 6,277(d) | 80,719 | 10,000 | 346,996 |
| 2020 | 249,519 | nil | 15,470(e) | 80,266 | 10,385 | 355,640 | |
| 2019 | 250,000 | nil | 64,890(f) | 80,266 | 36,330 | 464,125 | |
| 32,639(g) |
TABLE 6
Notes:��
-
(a) Mr.�Sorensen�has�not�received�any�compensation�for�his�role�as�a�director�of�the�Corporation.�
-
(b) Mr.�Gray�was�appointed�CFO�effective�March�28,�2022.�Prior�to�this�Mr.�Gray�was�Interim�CFO�from�August�1,�2021.�Prior� thereto�Mr.�Gray�was�Vice�President�&�Controller�from�November�1,�2020,�until�July�31,�2021,�and�joined�the�Corporation�as� Controller�on�January�13,�2020.����
-
(c) Mr.�Reding�became�COO�when�he�joined�the�Corporation�on�April�5,�2021.
-
(d) To�align�with�market�practice,�the�estimated�fair�value�of�these�options�granted�on�August�19,�2021,�has�been�calculated�using� the�Black�Scholes�Merton�model,�with�the�following�assumptions:�expected�volatility�of�89%,�risk�free�interest�rate�of�0.60%� and�an�expected�life�of�3.3�years.�
-
(e) To�align�with�market�practice,�the�estimated�fair�value�of�these�options�granted�on�October�8,�2020,�has�been�calculated�using� the�Black�Scholes�Merton�model,�with�the�following�assumptions:�expected�volatility�of�86%,�risk�free�interest�rate�of�0.37%� and�an�expected�life�of�5.0�years.�
-
(f) To�align�with�market�practice,�the�estimated�fair�value�of�these�options�granted�on�April�24,�2019,�has�been�calculated�using� the�Black�Scholes�Merton�model,�with�the�following�assumptions:�expected�volatility�of�66%,�risk�free�interest�rate�of�1.44%� and�an�expected�life�of�4.6�years.�
-
(g) To�align�with�market�practice,�the�estimated�fair�value�of�these�options�granted�on�October�21,�2019,�has�been�calculated� using�the�Black�Scholes�Merton�model,�with�the�following�assumptions:�expected�volatility�of�67%,�risk�free�interest�rate�of� 1.58%�and�an�expected�life�of�3.3�years.�
INCENTIVE�PLAN�AWARDS���
Outstanding�Share�based�and�Option�based�Awards�
The�following�table�sets�forth�information�in�respect�of�all�awards�outstanding�as�at�December�31,�2021�granted�to� the�NEOs:���
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| OPTION�BASEDAWARDS | ||||
| NAME | NUMBEROF SECURITIES UNDERLYING UNEXERCISED OPTIONS |
OPTIONEXERCISE PRICE |
OPTIONEXPIRY DATE |
VALUEOF UNEXERCISED INTHE�MONEY OPTIONS(a) |
| AlfredSorensen | 195,000 | $5.67 | January29,2023 | nil |
| 163,934 | $0.89 | July3,2024 | nil | |
| 120,000 | $0.92 | October21,2024 | nil | |
| 100,000 | $0.86 | November17,2025 | nil | |
| 143,500 | $0.30 | August19,2026 | $1,435 | |
| AdamGray | 50,000 | $0.86 | October8,2025 | nil |
| 141,000 | $0.30 | August19,2026 | $1,410 | |
| DarcyReding | 146,000 | $0.30 | August19,2026 | $1,460 |
| YvonneMcLeod | 136,612 | $0.89 | July3,2024 | nil |
| 75,000 | $0.92 | October21,2024 | nil | |
| 35,000 | $0.86 | October8,2025 | nil | |
| 40,000 | $0.30 | August19,2026 | $400 | |
| ThomasDawson | 150,000 | $5.67 | January28,2023 | nil |
| 136,612 | $0.89 | July3,2024 | nil | |
| 75,000 | $0.92 | October21,2024 | nil | |
| 35,000 | $0.86 | October8,2025 | nil | |
| 35,000 | $0.30 | August19,2026 | $350 |
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----- Start of picture text -----
�TABLE�7
----- End of picture text -----
Notes:�
(a) The�value�is�calculated�based�on�the�difference�between�the�market�value�of�the�underlying�shares�at�December�31,�2021�and� the�exercise�price�of�the�option.�The�closing�trading�value�on�the�Toronto�Stock�Exchange�of�a�Common�Share�on�December� 31,�2021�was�$0.31.
Incentive�Plan�Awards�–�Value�Vested�or�Earned�during�the�Year����
The�following�table�provides�the�value�vested�in�relation�to�awards�held�by�each�NEO�during�the�financial�year�ended� December�31,�2021:���
| NAME | OPTION�BASEDAWARDS–VALUEVESTED | NON�EQUITYINCENTIVEPLAN COMPENSATION–VALUE EARNEDDURINGTHEYEAR |
| DURINGTHEYEAR(a) | ||
| ($) | ($) | |
| AlfredSorensen | nil | 99,000 |
| AdamGray | nil | 77,006 |
| DarcyReding | nil | 64,171 |
| YvonneMcLeod | nil | 32,287 |
| ThomasDawson | nil | 80,719 |
TABLE�8
Notes:�
(a) Because�the�exercise�price�was�above�the�market�price�at�the�time�of�granting�and�vesting,�the�value�vested�during�the�year�is� nil.�
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SHARE�OWNERSHIP�POLICY���
The�Board�believes�that,�in�order�to�achieve�better�alignment�of�the�interests�of�the�directors�and�the�senior� employees�of�the�Corporation�with�those�of�the�Corporation’s�shareholders,�its�directors�and�each�senior�employee� of�the�Corporation�should�maintain�a�minimum�value�of�Common�Share�ownership.�To�that�end,�the�Corporation�has� adopted�a�mandatory�share�ownership�policy�(the�“ Share�Ownership�Policy ”)�that�requires�each�non�executive� director�(other�than�any�such�director�who�is�nominated�to�the�Board�pursuant�to�a�contractual�obligation�of�the� Corporation)�and�each�senior�employee�of�the�Corporation,�no�later�than�the�date�that�is�three�years�after�the�later� of�(a)�October�24,�2017�and�(b)�the�day�that�the�individual�first�became�a�director�or�a�senior�employee�of�the� Corporation�(the�“ Application�Date ”),�to�directly�or�indirectly�acquire,�and�to�hold�throughout�the�period� commencing�on�the�Application�Date�and�continuing�while�they�remain�a�director�or�senior�employee�of�the� Corporation,�Common�Shares�which�in�aggregate�have�a�market�value�that:�(i)�is�at�least�three�times�the�annualized� cash�compensation�that�is�paid�or�payable�to�such�director�or�three�times�the�annual�base�salary�that�is�paid�or� payable�to�the�Chief�Executive�Officer,�as�the�case�may�be,�and�(ii)�is�at�least�two�times�the�annual�base�salary�that�is� paid�or�payable�to�each�other�senior�employee�of�the�Corporation.��
Directors�and�senior�employees�of�the�Corporation�have�confirmed�their�respective�Common�Share�ownership� position,�which�is�reported�in�the�table�below�for�each�such�director�and�senior�employee,�and�each�has�also� confirmed�that�such�position�is�their�beneficial�and�legal�ownership�position.����
Each�director�and�senior�employee�to�whom�the�Share�Ownership�Policy�applies�is�prohibited�by�the�Share�Ownership� Policy�from�entering�into�any�agreement,�and�from�effecting�any�hedge�or�other�transaction,�which�has�as�one�of�its� purposes,�or�has�as�one�of�its�consequences�or�possible�consequences,�the�amelioration,�in�whole�or�in�part,�of�the� economic�impact�of�a�decrease,�or�possible�decrease,�in�the�market�value�of�the�Common�Shares�which�are�held�by� such�director�or�senior�employee�determined�in�accordance�with�this�policy.���
As�the�number�of�Common�Shares�that�are�beneficially�owned,�or�controlled�or�directed,�either�directly�or�indirectly,� by�each�non�executive�director,�and�by�each�senior�employee,�is�not�within�the�knowledge�of�the�Corporation,�the� information�in�the�following�table�has�been�provided�to�the�Corporation�as�at�the�Record�Date�by�each�such�director� or�senior�employee�personally�and�individually.���
| NAMEOFEACH DIRECTOR ANDSENIOR EMPLOYEE |
POSITION HELD |
COMMENCEMENT DATE |
APPLICATION DATE(a) |
NUMBEROF COMMON SHARESHELD ONTHE RECORDDATE |
DEEMEDVALUEOF COMMONSHARES HELDONTHE RECORDDATE(b) |
|---|---|---|---|---|---|
| MYRONTÉTREAULT |
Director(Chairofthe Board) |
October24,2017 | October24,2020 | 683,284 | $587,624 |
| CHARLESBOULANGER |
Director | October24,2017 | October24,2020 | 352,795 | $303,404 |
| KJELLPEDERSEN |
Director | June27,2018 | June27,2021 | 128,329 | $110,363 |
| ANDREWJUDSON |
Director | October24,2017 | October24,2020 | 332,697 | $286,119 |
| CHARLEGAMBA |
Director | June18,2019 | June18,2022 | 26,344 | $22,656 |
| KIRENSINGH |
Director | May26,2020 | May26,2023 | 232,800 | $200,208 |
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| NAMEOFEACH DIRECTOR ANDSENIOR EMPLOYEE |
POSITION HELD |
COMMENCEMENT DATE |
APPLICATION DATE(a) |
NUMBEROF COMMON SHARESHELD ONTHE RECORDDATE |
DEEMEDVALUEOF COMMONSHARES HELDONTHE RECORDDATE(b) |
|---|---|---|---|---|---|
| ALFREDSORENSEN | DirectorandChief ExecutiveOfficer |
October24,2017 | October24,2020 | 12,299,053 | $10,577,186 |
| ADAMGRAY | ChiefFinancialOfficer | August1,2021 | August1,2024 | 150,000 | $129,000 |
| DARCYREDING | ChiefOperatingOfficer | April5,2021 | April5,2024 | 0 | $0 |
| THOMASDAWSON | SeniorVicePresident BusinessDevelopment |
October24,2017 | October24,2020 | 2,606,415 | $2,241,517 |
TABLE�9��
Notes:�
-
(a) “Application�Date”�in�respect�of�an�individual�is�the�date�that�is�three�years�after�the�later�of�(i)�October�24,�2017�and�(ii)�the� date�that�the�individual�first�became�a�director�or�senior�employee�of�the�Corporation.�
-
(b) The�value�of�each�Common�Share�held�on�the�Record�Date�is�deemed�under�the�Share�Ownership�Policy�to�be�the�greater�of� (i)�$0.79,�being�the�quotient�obtained�when�the�aggregate�of�the�price�of�each�Share�which�was�traded�on�a�stock�exchange� during�the�twenty�five�consecutive�calendar�days�immediately�preceding�the�Record�Date�is�divided�by�the�aggregate�number� of�Shares�which�were�traded�on�a�stock�exchange�during�the�twenty�five�consecutive�calendar�days�immediately�preceding� the�Record�Date�and�(ii)�$0.86,�being�the�quotient�obtained�when�the�aggregate�proceeds�that�were�received�by�the�Company� on�the�issuance�of�Shares�in�the�course�of�the�most�recent�private�placement�is�divided�by�the�aggregate�number�of�Shares� which�were�issued�in�the�course�of�that�private�placement.�
Based�on�the�above�table,�with�the�exception�of�Mr.�Pedersen�and�Mr.�Judson[17] ,�each�of�the�remaining�directors�and� all�senior�employees�whose�corresponding�Application�Date�precedes�the�Record�Date,�is�in�compliance�with�the� Share�Ownership�Policy.�Consistent�with�the�Share�Ownership�Policy,�the�above�information�does�not�include� Common�Shares�that�are�issuable�upon�the�exercise�of�options,�warrants�or�other�convertible�securities�of�the� Corporation.��
TERMINATION�AND�CHANGE�OF�CONTROL�BENEFITS���
As�at�December�31,�2021�the�Corporation�was�a�party�to�an�employment�agreement�(each�a�“ Contract�of�Service ”)� with�each�NEO.�
Each�Contract�of�Service�stipulates�that�the�Corporation�may�terminate�the�Contract�of�Service�without�prior�notice� irrespective�of�whether�the�termination�is�for�“just�cause”�or�is�“without�just�cause”�by�providing�to�the�particular� NEO�either:�(a)�the�minimum�period�of�prior�notice�of�termination�that�the�Corporation�is�required�to�provide�to�the� NEO�pursuant�to�the�employment�standards�legislation�applicable�in�the�province�in�which�the�NEO�is�employed�or� (b)�a�payment�in�lieu�of�notice�in�an�amount�that�is�equal�to�the�amount�of�wages�that�would�have�been�earned�by� the�NEO�during�such�minimum�period�of�prior�notice,�computed�in�accordance�with�the�employment�standards� legislation�applicable�in�the�province�in�which�the�NEO�was�employed.���
Notwithstanding�the�foregoing,�each�Contract�of�Service�also�stipulates�that�if�the�Corporation�terminates�the� employment�of�the�particular�NEO�within�one�hundred�(100)�days�before,�or�at�any�time�after,�the�day�that�a�person� or�entity�(or�a�group�of�persons�or�group�of�entities�acting�jointly�or�in�concert)�becomes�the�owner�of,�or�is�able�to� exercise�control�or�direction�over,�more�than�50%�of�the�Common�Shares�of�the�Corporation,�the�minimum�period� of�prior�notice�determined�above�shall�be�deemed�to�be�the�lesser�of�(a)�twenty�four�months�and�(b)�the�aggregate�
17�Pursuant�to�the�terms�of�the�Share�Ownership�Policy,�Mr.�Pedersen�and�Mr�Judson�have�until�June�10,�2022�to�comply.��
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of�six�months�and�one�additional�month�for�each�calendar�year�throughout�which�the�NEO�was�employed�by�the� Corporation,�by�Pieridae�Alberta�Production�Ltd.�to�the�extent�that�such�employment�transpired�after�December�20,�� 2018�or�by�any�other�corporation�affiliated�with�the�Corporation.��
Each�Contract�of�Service�includes,�among�other�things,�a�covenant�of�confidentiality,�non�solicitation�and�non� competition.�If�at�any�time�the�Contract�of�Service�is�terminated�by�the�Corporation,�or�the�employee�resigns,�the� employee�will�continue�to�be�subject�to�the�covenant�of�confidentiality�indefinitely�and�to�be�subject�to�the� covenants�of�non�solicitation�and�non�competition�for�twelve�months�thereafter.���
| NAME | PAYMENTINTHEEVENT OFTERMINATIONOF EMPLOYMENTWITH NOCHANGEOFCONTROL |
ADDITIONALPAYMENTIN THEEVENTOFTERMINATION OFEMPLOYMENTAFTER ACHANGEOFCONTROL |
TOTALPAYMENT |
| AlfredSorensen | $34,615 | $375,000 | $409,615 |
| AdamGray | $4,587 | $159,000 | $163,587 |
| DarcyReding | $5,096 | $139,125 | $144,221 |
| YvonneMcLeod | $24,038 | $187,500 | $211,538 |
| ThomDawson | $19,231 | $208,333 | $227,564 |
TABLE�10
INFORMATION�CONCERNING�DIRECTOR�COMPENSATION
-
The�Corporation�has�structured�director�compensation�with�the�following�goals�in�mind:��the�imperative�of� attracting�and�retaining�knowledgeable�and�experienced�individuals�who�have�integrity�and�who�possess�the� specific�skills�commensurate�with�the�Corporation’s�requirements�and�objectives;����
-
external�market�competitiveness�for�talent�and�to�the�principles�of�equity�and�fairness�while�recognizing�the� Corporation’s�objectives�of�fiscal�prudence�and�good�governance;����
-
the�need�to�align�the�Corporation’s�long�term�success�with�the�basis�of�compensation;����
-
the�importance�of�recognizing�the�additional�responsibilities�undertaken�by�the�Chair�of�the�Board�and�the� Chair�of�each�committee;�and���
-
the�application�of�the�Share�Ownership�Policy�of�the�Corporation�on�directors�(excluding�those�directors�who� have�otherwise�waived�all�compensation).���
The�following�table�discloses�the�annual�fee�that�is�payable�by�the�Corporation,�pursuant�to�its�directors’� compensation�policy�(the�“ Directors’�Compensation�Policy ”),�to�each�non�executive�director�of�the�Corporation�in� consideration�for�the�services�that�each�performed�during�2021�as�directors�of�the�Corporation.���
| POSITION | VALUE |
|---|---|
| ChairmanoftheBoard | $135,000 |
| ChairmanoftheAuditCommittee | $100,000 |
| ChairmanofallotherCommittees | $95,000 |
| otherDirectors | $85,000 |
TABLE�11
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The�Directors’�Compensation�Policy�requires�that�annual�retainer�shall�be�paid�in�cash�(the�“ Payment�in�Cash ”)�at�or� about�the�end�of�the�first�pay�period�following�the�end�of�each�quarter.�Such�Payment�in�Cash�shall�be�prorated�on� the�basis�of�time�served�as�a�director�during�the�calendar�year.��
On�July�15,�2021,�the�Board�approved�the�establishment�of�and�a�mandate�for�a�special�review�committee�(“ Special� Review�Committee ”).�Its�role�was�to�steward�a�fully�marketed�process�with�advice�from�a�qualified�financial�advisor� to�pursue�and�evaluate�all�possible�strategic�options�for�the�Corporation�to�maximise�shareholder�value.��The�Special� Review�Committee�concluded�that�the�various�alternatives�presented�were�not�compelling�relative�to�the� Corporation’s�stand�alone�prospects�and�that�the�restructuring�of�the�Corporation’s�credit�agreement�played�a� significant�role�in�reaching�those�conclusions.�On�January�11,�2022,�the�Special�Review�Committee�was�disbanded.���
The�Special�Review�Committee�comprised�of�Andrew�Judson,�who�served�as�the�Chair,�Charle�Gamba�and�Kiren�Singh� (each�of�whom�were�considered�to�be�an�independent�member).�As�the�Corporation�had�no�precedent�for�the� establishment�of�nor�compensation�payable�for�one�off�committees,�the�Board�considered�similar�transactions�and� determined�fair�compensation�for�each�Committee�member�would�be�$5,000�per�month�with�the�Chair�to�be� compensated�$7,500�per�month.���
For�the�year�ended�December�31,�2021,�the�directors�of�the�Corporation�earned�an�aggregate�total�of�$705,968�in� director’s�fees�(exclusive�of�option�based�awards).�The�directors�are�reimbursed�for�all�reasonable�expenses�incurred� in�the�execution�of�their�functions�as�directors�of�the�Corporation.�The�aggregate�total�of�such�expenses�was�$114.30.��
DIRECTOR�COMPENSATION�TABLE���
The�following�table�sets�forth�information�with�respect�to�all�compensation�elements�paid�to�the�non�executive� directors�of�the�Corporation�during�the�year�ended�December�31,�2021.��
| OPTION�BASED | NON�EQUITY | ||||
|---|---|---|---|---|---|
| NAME | FEESEARNED(a) | AWARDS(b) | INCENTIVEPLAN | ALLOTHER | TOTAL |
| COMPENSATION(d) | COMPENSATION | ||||
| COMPENSATION | |||||
| MyronTétreault | 135,000 | 8,065 | 20,000 | nil | $163,065 |
| CharlesBoulanger | 100,000 | 7,259 | nil | 0 | $107,259 |
| AndrewJudson | 95,000 | 7,259 | nil | 45,000 | $147,259 |
| KjellPedersen | 95,000 | 6,225 | nil | nil | $101,225 |
| CharleGamba | 85,000 | 6,452 | nil | 30,000 | $121,452 |
| MarkHorrox(c) | notapplicable | notapplicable | notapplicable | notapplicable | notapplicable |
| KirenSingh | 90,968 | 7,259 | nil | 30,000 | $128,227 |
TABLE�12
����Notes:�
(a) Represents�the�Payment�in�Cash�made�or�due�to�directors�for�services�in�2021,�as�set�forth�in�the�Directors’�Compensation� Policy.���
(b) To�align�with�market�practice,�the�estimated�fair�value�of�these�options�granted�on�August�19,�2021�has�been�calculated� using�the�Black�Scholes�Merton�model,�with�the�following�assumptions:�expected�volatility�of�89%,�risk�free�interest�rate�of� 0.60%�and�an�expected�life�of�3.3�years.�
-
(c) In�accordance�with�the�Directors’�Compensation�Policy�adopted�by�the�Corporation,�Mark�Horrox�was�not�entitled�to�receive� compensation�for�serving�as�a�director�of�the�Corporation�due�to�the�fact�that�he�was�nominated�for�election�to�the�Board� pursuant�to�an�agreement�entered�into�among�Third�Eye�Capital�Corporation,�Erikson�National�Energy�Inc.�and�the� Corporation.�
-
(d) Represents�payment�in�cash�for�the�Special�Review�Committee.
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SHARE�BASED�AND�OPTION�BASED�AWARDS���
The�following�table�provides�information�concerning�awards�to�the�non�executive�directors�of�the�Corporation�during� the�year�ended�December�31,�2021.���
| OPTION�BASEDAWARDS(a) | ||||
| NAME | NUMBEROF SECURITIES UNDERLYING UNEXERCISED OPTIONS |
OPTIONEXERCISE PRICE |
OPTION EXPIRYDATE |
VALUEOFUNEXERCISED IN�THE�MONEY OPTIONS(b) |
| MyronTétreault | 50,000 | $0.30 | Aug19,2026 | 500 |
| CharlesBoulanger | 45,000 | $0.30 | Aug19,2026 | 450 |
| AndrewJudson | 45,000 | $0.30 | Aug19,2026 | 450 |
| KjellPedersen | 38,590 | $0.30 | Aug19,2026 | 386 |
| CharleGamba | 40,000 | $0.30 | Aug19,2026 | 400 |
| MarkHorrox(c) | notapplicable | notapplicable | notapplicable | notapplicable |
| KirenSingh | 45,000 | $0.30 | Aug19,2026 | 450 |
TABLE�13
���Notes:�
(a) No�share�based�awards�were�issued�during�2021.�
(b) The�closing�trading�value�on�the�Toronto�Stock�Exchange�of�a�Common�Share�on�December�31,�2021,�was�$0.31.�The�value� is�calculated�based�on�the�difference�between�the�market�value�of�the�underlying�shares�at�December�31,�2021�and�the� exercise�price�of�the�option.
(c) In�accordance�with�the�Directors’�Compensation�Policy�adopted�by�the�Corporation�Mark�Horrox�is�not�entitled�to�receive� compensation�for�serving�as�a�director�of�the�Corporation�due�to�the�fact�that�he�was�nominated�for�election�to�the�Board� pursuant�to�an�agreement�entered�into�among�Third�Eye�Capital�Corporation,�Erikson�National�Energy�Inc.�and�the� Corporation.�
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INCENTIVE�PLAN�AWARDS�–�VALUE�VESTED�OR�EARNED�DURING�THE�YEAR���
The�following�table�provides�the�value�vested�in�relation�to�awards�held�by�each�non�executive�director�during�the� financial�year�ended�December�31,�2021����
| NAME | OPTION�BASEDAWARDS (VALUEVESTEDDURING THEYEAR)(a) |
SHARE�BASEDAWARDS(VALUE VESTEDDURINGTHEYEAR)(b) |
| MyronTétreault | nil | nil |
| CharlesBoulanger | nil | nil |
| KjellPedersen | nil | nil |
| AndrewJudson | nil | nil |
| CharleGamba | nil | nil |
| MarkHorrox(c) | notapplicable | notapplicable |
| KirenSingh | nil | nil |
TABLE�14
Notes:�
(a) All�options�granted�to�non�executive�directors�vest�immediately�at�the�time�of�grant.�Because�the�exercise�price�was�above� the�market�price�at�the�time�of�granting�and�vesting,�the�value�vested�during�the�year�is�nil.��
(b) No�share�based�awards�were�issued�to�directors�during�2021.
(c) In�accordance�with�the�Directors’�Compensation�Policy�adopted�by�the�Corporation�Mark�Horrox�is�not�entitled�to�receive� compensation�for�serving�as�a�director�of�the�Corporation�due�to�the�fact�that�he�was�appointed,�or�was�nominated�for� election,�to�the�Board�at�the�request�of�a�principal�shareholder�that�owns�more�than�10%�of�the�issued�and�outstanding� Common�Shares.��
INDEMNIFICATION�OF�DIRECTORS�AND�SENIOR�MANAGEMENT���
The�Corporation�covenants�to�indemnify�and�save�harmless�the�directors�and�senior�management�of�the�Corporation� and�its�affiliated�entities�from�and�against�any�and�all�losses,�liabilities,�claims,�damages,�fines,�penalties,�costs,� charges�or�expenses�(including,�but�not�limited�to,�an�amount�paid�to�settle�any�action�or�to�satisfy�any�judgment,� legal�fees�on�a�solicitor�and�client�basis,�other�professional�fees,�out�of�pocket�expenses�for�attending�proceedings� including�discoveries,�trials,�hearings�and�meetings,�and�any�amount�for�which�the�indemnified�is�liable�by�reasons� of�any�statutory�provision�whether�civil,�criminal�or�otherwise,�and�whether�such�claim�is�anticipated,�threatened,� pending,�commenced,�continued�or�completed�and�the�foregoing�includes�any�appeal,�as�well�as�the�amount�of�any� taxes�or�interest�payable�as�a�result�of�other�payments�made�thereunder)�suffered�or�incurred�by�the�indemnified,� directly�or�indirectly,�as�a�result�or�by�reason�of�the�indemnified�being�or�having�been�a�director�or�officer�of�the� Corporation�or�any�of�its�affiliated�entities�or�by�reason�of�any�action�taken�or�not�taken�by�the�indemnified�in�the� capacity�of�director�or�officer�of�the�Corporation�or�of�any�of�its�affiliated�entities,�provided�that�he�or�she�acted� honestly�and�in�good�faith�with�a�view�to�the�best�interests�of�the�Corporation,�and,�in�the�case�of�a�criminal�or� administrative�action�or�proceeding,�that�he�or�she�had�reasonable�grounds�for�believing�that�his�or�her�conduct�was� lawful.�The�policy�provides�further�that�such�costs,�charges�or�expenses�must�not�be�suffered�or�incurred�as�a�result� of�the�fraud,�dishonesty�or�willful�default�by�the�indemnified.��
LIABILITY�INSURANCE�FOR�DIRECTORS�AND�SENIOR�MANAGEMENT���
The�Corporation�maintains�a�policy�of�insurance�for�the�benefit�of�its�directors�and�members�of�its�senior� management�which�cover�them�from�losses�(including�damages,�costs�and�similar�amounts)�which�they�suffer�or� incur�as�a�result�or�by�reason�of�being,�or�having�been,�a�director�or�a�member�of�its�senior�management�except�to�
49
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the�extent�that�such�losses�are�suffered�or�are�incurred�as�a�result�of�their�own�fraud,�dishonesty�or�willful�default.� The�insurance�policy,�effective�October�1,�2021,�and�expiring�on�September�30,�2022,�provides�coverage�of�$20� million�per�event�and�per�policy�year.��
EQUITY�COMPENSATION�PLAN�INFORMATION�
Other�than�the�Stock�Option�Plan�Number�One�and�Stock�Option�Plan�Number�Two,�the�Corporation�does�not� maintain�any�other�compensation�plans�under�which�Common�Shares�are�authorized�for�issuance.�The�following� table�sets�forth�information�regarding�the�Corporation’s�Stock�Option�Plans�as�at�December�31,�2021:��
| PLANCATEGORY | NUMBEROFCOMMON SHARESTOBEISSUED UPONEXERCISEOF OUTSTANDINGOPTIONS |
WEIGHTED�AVERAGE EXERCISEPRICEOF |
NUMBEROFCOMMONSHARES REMAININGAVAILABLEFOR FUTUREISSUEUNDEREUITY |
| OUTSTANDINGOPTIONS | Q COMPENSATIONPLANS(a) |
||
| Equitycompensationplansapprovedby securityholders(i.e.StockOptionPlan NumberOne) |
4,567,690(b) | $1.47 | 8,724,122(c) |
| Equitycompensationplansnot approvedbysecurityholders(i.e. StockOptionPlanNumberTwo) |
2,472,775(d) | $0.90 | 0(e) |
| Total | 7,040,465 | $1.27 | 8,724,122 |
TABLE 15�
Notes:�
-
(a) The�number�of�Common�Shares�remaining�available�for�future�issuance�under�equity�compensation�plans�exclude�the� number�of�Common�Shares�that�are�to�be�issued�upon�the�exercise�of�the�options�which�are�currently�outstanding.��
-
(b) Represents�the�number�of�Common�Shares�to�be�issued�upon�exercise�of�outstanding�options�that�were�granted�under�the� Stock�Option�Plan�Number�One�with�the�approval�of�the�Board.�
-
(c) Represents�the�number�of�Common�Shares�remaining�available�for�future�issuance�under�the�Stock�Option�Plan�Number� One�excluding�the�number�of�Common�Shares�remaining�available�for�future�issuance�under�the�Stock�Option�Plan�Number� Two.��
-
(d) Represents�the�number�of�Common�Shares�to�be�issued�upon�exercise�of�outstanding�options�that�were�granted�under�the� Stock�Option�Plan�Number�Two�with�the�approval�of�the�Board.�
-
(e) The�Corporation�does�not�intend�in�the�future�to�grant�any�stock�options�under�Stock�Option�Plan�Number�Two.�Therefore,� all�stock�options�granted�in�the�future�will�be�granted�under�Stock�Option�Plan�Number�One,�as�amended.�
As�at�the�Record�Date,�the�number�of�common�shares�remaining�available�for�future�issue�under�the�Amended�and� Restated�Stock�Option�Plan�is�8,724,122.��
Stock�Option�Plans���
As�of�the�Record�Date�stock�options�for�the�issuance�of�a�total�of�157,681,871 Common�Shares�are�outstanding.�See� the�section�entitled� “Information�Concerning�Executive�Compensation”� for�additional�information�pertaining�to�stock� options�held�by�the�executive�officers�and�the�directors�of�the�Corporation.�
INDEBTEDNESS�OF�DIRECTORS�AND�EXECUTIVE�OFFICERS
None�of�the�current�or�former�directors,�executive�officers�or�employees�of�the�Corporation,�nor�any�associate�or� affiliate�of�any�of�them,�is�or�was�indebted,�directly�or�indirectly,�to�the�Corporation�or�any�of�its�subsidiaries�at�any� time�since�January�1,�2021.����
50
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INTEREST�OF�INFORMED�PERSONS�IN�MATERIAL�TRANSACTIONS
Other�than�as�disclosed�in�this�Circular,�there�were�no�material�interests,�direct�or�indirect,�of�any�director�or� executive�officer�of�the�Corporation,�any�proposed�director�of�the�Corporation,�any�other�“informed�person”�(as�such� term�is�defined�in�NI�51�102�–� Continuous�Disclosure�Obligations ),�any�person�who,�to�the�knowledge�of�the�directors� or�officers�of�the�Corporation,�beneficially�owns�or�exercises�control�or�direction�over�securities�carrying�more�than� 10%�of�the�voting�rights�attached�to�any�class�of�outstanding�voting�securities�of�the�Corporation,�or�any�associate� or�affiliate�of�any�of�the�foregoing,�in�any�transaction�since�January�1,�2021�or�in�any�proposed�transaction�which�has� materially�affected,�or�would�materially�affect,�the�Corporation�or�any�of�its�subsidiaries.����
MANAGEMENT�CONTRACTS���
Although�the�Corporation�and�certain�of�its�subsidiaries�do�regularly�engage�persons�under�contracts�for�service,� none�of�those�persons�have�authority�to�enter�into�legal�relations�for�or�on�behalf�of�the�Corporation�or�those� subsidiaries�or�the�authority�to�incur�expenses�or�liabilities�on�their�behalf.��Accordingly,�there�are�no�management� functions�of�the�Corporation�or�any�of�its�subsidiaries�that�are�performed�to�any�substantial�degree�by�persons�other� than�their�respective�directors�or�executive�officers.���
INFORMATION�CONCERNING�GOVERNANCE���
BOARD�OF�DIRECTORS���
The�mandate�of�the�Board�is�to�supervise�the�management�of�the�affairs�of�the�Corporation�and�to�act�in�the�best� interests�of�the�Corporation.�The�Board�has�a�written�mandate�which�includes�a�position�description�of�the�Chair,� the�text�of�which�is�reproduced�in�Schedule�B�to�this�Circular.���
���
The�Board�meets�at�least�once�quarterly�and�at�each�meeting�it�reviews�the�activities�of�the�Corporation.�The� frequency�of�the�meetings�of�the�Board�and�the�nature�of�the�items�on�the�agenda�will�vary�depending�on�the� activities�and�priorities�of�the�Corporation.�The�non�executive�directors�do�not�hold�regularly�scheduled�meetings�at� which�members�of�management�are�not�in�attendance.�However,�during�each�meeting�of�the�Board�and�each� meeting�of�its�committees�an�in�camera�session�is�held�which�excludes�members�of�management�(including�directors� who�hold�an�executive�office).�������
Independent�members�of�the�current�Board�are�Myron�Tétreault,�Charles�Boulanger,�Andrew�Judson,�Kjell�Pedersen,� Charle�Gamba,�and�Kiren�Singh.�Alfred�Sorensen�is�deemed�to�be�a�non�independent�director�of�the�Corporation� pursuant�to�relevant�securities�legislation.��Of�the�director�nominees�being�proposed�for�election�on�pages�25�to�26� of�this�Circular,�Alfred�Sorensen�remains�the�only�non�independent�director.��
Each�director,�whether�or�not�independent,�is�expected�to�exercise�independent�judgement�at�all�times�when� discharging�their�responsibilities�as�a�director�of�the�Corporation.��The�Board�is�able�to�exercise�independent� supervision�over�management�due�to�the�fact�that�a�majority�of�the�members�of�the�Board�and�of�each�of�its� committees�is�composed�of�non�executive�directors�and�at�every�meeting�of�the�Board�and�of�each�of�its�committees,� the�non�executive�directors�on�the�Board�and�each�committee�meet�in�camera�in�the�absence�of�management.��In� addition,�the�Board’s�responsibilities�include�the�appointment�of�the�CEO,�the�approval�of�the�CEO’s�primary�duties� as�well�as�the�terms�and�conditions�(including�compensation)�of�the�CEO’s�employment�by�the�Corporation.��The�role� and�responsibilities�of�the�CEO�are�delineated�and�described�in�the�Mandate�of�the�Board�and�in�the�various�policies� approved�by�the�Board�and�adopted�by�the�Corporation,�including�the�Policy�Establishing�Financial�Authorities.��
51
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ORIENTATION�AND�CONTINUING�EDUCATION��
Directors�keep�themselves�informed�and�receive�copies�of�all�up�to�date�required�information�on�boards�of�directors� or�committees.�Due�to�the�limited�number�of�directors�and�the�emerging�nature�of�the�Corporation,�no�formal� training�system�has�been�established.��However,�upon�election�to�the�board,�new�directors�are�provided�with�copies� of�all�mandates,�policies�and�other�key�documents,�and�are�given�an�orientation�by�the�Chairman�and�CEO.��As�well,� they�are�provided�with�opportunities�to�meet�with�key�management�personnel�and�to�visit�corporate�sites�in�order� to�familiarize�themselves�with�the�operations�of�the�Corporation.�Directors�are�expected�to�update�their�knowledge� base�on�relevant�matters.�No�formal�continuing�education�program�has�been�established,�but�many�of�the�directors� have�pursued�continuous�learning�opportunities�independently.��
ETHICAL�BUSINESS�CONDUCT��
The�directors�and�senior�management�of�the�Corporation�lead�by�example�in�setting�the�highest�standards�in�ethical� business�conduct.��
The�Board�has�adopted�a�written�code�of�ethical�conduct�for�the�directors,�officers�and�other�employees�of�the� Corporation.�The�code�of�ethical�conduct�is�posted�on�the�website�which�the�Corporation�maintains�at� https://www.pieridaeenergy.com.���
In�addition,�the�Corporation�has�adopted�and�maintains�a�whistleblower�policy�whereby�individuals�are�invited�to� report�incidents�of�actual�or�suspected�non�compliance�with�the�code�of�conduct,�or�any�policy�adopted�by�the� Corporation,�to�the�Chair�of�the�Audit�Committee�via�a�third�party�email�address.�All�such�reports�are�investigated�in� accordance�with�the�whistleblower�policy.���
The�Board�has�approved,�and�the�Corporation�has�adopted,�a�disclosure�policy�which�requires�inter�alia�the�disclosure� of�conflicts�of�interest.�When�the�Board�becomes�aware�of�a�transaction�or�an�agreement�in�which�a�director�or� executive�officer�has�a�material�interest,�that�transaction�or�agreement�is�carefully�considered�by�those�directors� who�do�not�have�a�conflict�of�interest�and�is�discussed�and�voted�upon�by�them�without�the�participation�of�any� director�or�executive�officer�who�has�a�conflict�of�interest.��
ESG�COMMITMENT�
On�June�22,�2021�the�Corporation�launched�its�inaugural�ESG�Report,�a�copy�of�which�can�be�downloaded�at� https://pieridaeenergy.com/our�responsibility/esg�report.�This�report�defined�the�top�material�ESG�risks�and� opportunities�and�the�Corporation�made�a�number�of�commitments�including:��
-
Achieving�net�zero�emissions�by�2050,�with�plans�to�use�carbon�sequestration�and�other�technologies,�as�part� of�the�global�transition�to�a�low�carbon�energy�economy;�
-
Growing�and�honouring�relationships�with�the�Indigenous�Peoples�of�Canada�based�on�the�principles�of�trust,� mutual�respect,�fairness,�openness,�transparency�and�reconciliation;�
-
Being�a�good�neighbour�through�constructive�community�and�stakeholder�engagement�and�support�in�the� communities�where�we�live�and�operate;�
-
Meeting�our�Path�to�Zero�goals�for�Health,�Safety�and�Environment,�progressing�safety�competence,� safeguarding�our�culture�and�upholding�our�reputation�for�compliance;�and�
-
Building�a�diverse�culture�and�workplace�through�a�strong�and�sustainable�governance�framework.�
The�ESG�Report�will�be�updated�in�Fall�2022.��
52
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NOMINATION�OF�DIRECTORS��
The�Nomination�&�Compensation�Committee�is�responsible�for�identifying�and�assessing�new�candidates�for� nomination�and�election�to�the�Board.�The�members�of�the�Nomination�&�Compensation�Committee�and�the�CEO� identify�the�critical�skills�that�are�underrepresented�on�the�Board�and�they�collectively�identify�and�interview� potential�candidates�that�possess�those�critical�skills.���
The�Governance�&�ESG�Committee[18] �is�responsible�for�reviewing�and�assessing�the�size,�composition�and�operation� of�the�Board�and�its�committees�to�ensure�effective�decision�making�and�to�periodically�assess�and�review�the�skills,� areas�of�expertise,�backgrounds,�independence�and�qualifications�of�each�of�the�existing�members�of�the�Board.��
The�Board�regularly�considers�its�size�when�it�considers�the�number�of�directors�to�recommend�to�the�Shareholders� for�election�at�the�annual�meeting�of�shareholders,�taking�into�account�the�number�required�to�carry�out�the�Board's� duties�effectively�and�to�maintain�a�diversity�of�view�and�experience.��
INFORMATION�CONCERNING�DIVERSITY���
DIVERSITY�STATEMENT����
The�Corporation�values�the�benefits�that�diversity�can�bring�to�its�Board,�senior�management�team�and�employee� group.��These�benefits�include�the�promotion�of�differing�perspectives�and�the�broadening�of�ideas�while�improving� oversight,�decision�making�and�governance.��Moreover,�diversity�on�the�Board�and�the�senior�management�team� evidences�the�Corporation’s�dedication�to�diversity�at�all�levels�within�the�organization�and�its�commitment�to�foster� an�inclusive�corporate�culture�that�is�based�on�merit�and�is�free�of�bias�whether�conscious�or�unconscious.���
The�Corporation�believes�that�promotion�of�diversity�within�the�organization�is�best�served�through�an�objective� evaluation�of�the�knowledge,�experience,�expertise�and�backgrounds�of�each�nominee�for�director,�and�each� potential�employee,�in�close�proximity�to�the�needs�of�the�Corporation�and�enhanced�diversity�but�without�undue� focus�on�any�single�diversity�characteristic.�The�Corporation�at�all�times�strives�to�maintain�a�Board�and�a�senior� management�team�which�is�comprised�of�talented�and�dedicated�individuals�with�a�diverse�mix�of�knowledge,� experience,�expertise�and�backgrounds�who�collectively�are�able�to�execute�upon�the�strategic�objectives�of�the� Corporation�while�reflecting�the�diversity�within�the�society�in�which�the�Corporation�operates.�Thus,�the� Corporation�will�always�consider�candidates�based�on�objective�criteria�having�due�regard�to�the�benefits�of�diversity� and�the�needs�of�the�Corporation�when�assessing�the�composition�of�the�Board,�the�senior�management�team�and� employee�group�and�when�identifying�suitable�candidates�for�election�or�appointment�to�the�Board�or�for� employment�at�every�level.���
CANADA�BUSINESS�CORPORATIONS�ACT�REQUIRED�DISCLOSURE�ON�DIVERSITY
The�following�information�is�disclosed�by�the�Corporation�pursuant�to�Section�172.1�of�the�CBCA�and�Part�8.2�of�the� Canada�Business�Corporations�Regulations,�2001�SOR/2001�512,�as�amended�(collectively,�the�“ Applicable� Legislation ”).��
18�Prior�to�May�27,�2021�this�was�the�remit�of�the�Governance�&�Compensation�Committee
53
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For�the�purposes�of�complying�with�these�disclosure�obligations�under�Applicable�Legislation,�“designated�groups”� means�women,�Aboriginal�peoples[19] ,�persons�with�disabilities[20] �and�members�of�visible�minorities[21] �and,�at�the� election�of�the�Corporation,�includes�LGBT�persons[22] �and�“members�of�senior�management”�means�the�CEO,�CFO,� COO,�Chair�of�the�Board�of�Directors�and�each�vice�president�and�senior�vice�president.��
As�stated�in�its�written�diversity�statement,�the�Corporation�values�the�benefits�that�diversity�can�bring�to�its�Board,� management�and�employees.��Thus,�the�level�of�the�representation�of�designated�groups�on�its�Board�and�among� members�of�senior�management�will�be�considered�by�the�Corporation�among�the�relevant�factors�in�identifying�and� nominating�candidates�for�election�or�re�election�on�the�Board�and�in�appointing�members�of�senior�management.�� That�said,�at�this�time�the�Corporation�has�not,�for�any�designated�group,�established�a�target�number�or�a� percentage,�or�a�range�of�target�numbers�or�percentages,�for�members�of�that�group�to�hold�positions�on�its�Board� or�to�be�members�of�senior�management�by�a�specific�date.��Each�candidate�for�nomination�to�the�Board�or�for� membership�to�senior�management�must�be�evaluated�on�a�broad�spectrum�of�criteria�(including�their�degree�of� diversity)�and�in�each�case,�the�Corporation�must�engage�the�best�candidate�for�each�position.
As�of�the�Record�Date,�the�following�table�discloses�the�current�level�of�diversity�on�the�Corporation’s�Board�and� among�the�membership�of�senior�management.�
| BOARD | BOARD | SENIORMANAGEMENT | SENIORMANAGEMENT | |
|---|---|---|---|---|
| NUMBER | % | NUMBER | % | |
| WOMEN | 1 | 20% | 1 | 14.2% |
| ABORIGINALPEOPLES | 0 | 0% | 0 | 0% |
| PERSONSWITHDISABILITIES | 0 | 0% | 0 | 0% |
| MEMBERSOFVISIBLEMINORITIES | 1 | 20% | 1 | 14.2% |
| LGBTPERSONS | 0 | 0% | 0 | 0% |
TABLE 17����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
With�the�adoption�of�its�written�diversity�statement,�the�Corporation�will�thereafter�monitor�the�level�of�diversity,� including�with�reference�to�each�designated�group,�that�exists�within�the�organization�and�will�prepare�a�written� diversity�report�at�least�annually�that�discloses�the�level�of�that�diversity�that�exists�at�that�time�on�the�Board,�among� the�members�of�senior�management�and�within�the�broader�employee�group.�It�is�anticipated�that�over�time,� progress�will�be�evident�from�a�chronological�comparison�of�the�results�disclosed�in�these�written�diversity�reports.��
The�Corporation�conducted�its�annual�diversity�survey�among�its�directors,�members�of�senior�management�and� employees�in�February�2022.��The�survey�is�undertaken�on�a�confidential�basis�and�participation�was�encouraged�but� was�not�mandatory.��An�email�invitation�to�participate�in�the�diversity�survey�was�sent�to�two�hundred�and�sixty�four� individuals�constituting�all�of�the�Corporation’s�directors�and�employees.��One�hundred�and�sixty�eight�responses� were�received�representing�a�63%�response�rate.���
19“Aboriginal�peoples”�means�persons�who�are�Indians,�Inuit�or�Métis.��
20�“Persons�with�disabilities”�means�persons�who�have�a�long�term�or�recurring�physical,�mental,�sensory,�psychiatric�or�learning�
impairment�and�who�either�(a)�consider�themselves�to�be�disadvantaged�in�employment�by�reason�of�that�impairment,�or�(b)�believe�that� a�employer�or�potential�employer�is�likely�to�consider�them�to�be�disadvantaged�in�employment�by�reason�of�that�impairment,�and� includes�persons�whose�functional�limitations�owing�to�their�impairment�have�been�accommodated�in�their�current�job�or�workplace.��
21�“Members�of�visible�minorities”�means�persons,�other�than�Aboriginal�peoples,�who�are�non�Caucasian�in�race�or�non�white�in�colour.���
22�“LGBT�persons”�means�persons,�other�than�members�of�any�other�designated�group,�who�self�identify�as�either�lesbian,�gay,�bisexual�or� transgender.
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The�following�table�depicts�certain�of�the�personal�characteristics�of�the�individuals�who�participated�in�the�diversity� survey.
| NUMBEROF INDIVIDUALS |
% | |
|---|---|---|
| WOMEN | 33 | 19.64% |
| ABORIGINALPEOPLES | 9 | 5.36% |
| PERSONSWITHDISABILITIES | 9 | 5.36% |
| MEMBERSOFVISIBLEMINORITIES | 20 | 11.98% |
| LGBTQ2S+PERSONS | 12 | 7.19% |
TABLE 18�����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
The�Corporation�has�neither�adopted�term�limits�for�the�directors�on�its�Board�nor�adopted�any�formal�mechanisms� of�board�renewal.��However,�the�Nomination�&�Compensation�Committee�regularly�reviews�the�size�and�composition� of�the�Board�and�makes�appropriate�recommendations�to�the�Board�to�ensure�that�it�has�the�necessary�mix�of�skill� sets�and�backgrounds�to�effectively�perform�its�functions.��������
COMPENSATION��
Please�refer�above�to�the�sections�entitled� “Information�Concerning�Executive�Compensation” �and� “Information� Concerning�Director�Compensation” .��
BOARD�COMMITTEES��
In�exercising�its�mandated�duties,�in�2021�the�Board�undertook�a�review�and�assessment�of�the�effectiveness�and� contributions�of�individual�directors�and�the�committees.�Driven�by�the�changing�needs�of�the�Corporation,�it�was� determined�that,�effective�May�27,�2021,�the�committees�would�be�expanded�from�three�to�four�in� acknowledgement�of�the�growing�importance�ESG�plays�within�the�Corporation.�Accordingly,�the�membership�and� mandates�of�the�committees�were�reviewed�and,�where�appropriate,�refreshed.�This�included�the�movement�of� board�members�within�committees�and�the�updating�of�the�mandates�for�the�Governance�&�ESG�Committee,�the� Nomination�&�Compensation�Committee�and�the�Reserves�&�HSE�Committee.�The�Audit�Committee�and�the�Board� of�Directors�mandates�remained�unchanged.��
The�Board�now�has�four�standing�committees�as�indicated�below.��
| PREVIOUSCOMMITTEES | NEWCOMMITTEES |
|---|---|
| AuditCommittee | AuditCommittee |
| Reserves&HSE | Reserves&HSE |
| Governance&Compensation | Governance&ESG |
| Nomination&Compensation |
The�Board�will�continue�to�ensure�the�proper�functioning�of�the�Board,�the�Audit�Committee,�the�Governance�&�ESG� Committee,�the�Nomination�&�Compensation�Committee�as�well�as�the�Reserves�&�HSE�Committee�by�periodically� reviewing�and�assessing�the�effectiveness�and�contribution�of�individual�directors.�The�Board�has�adopted�a�written� mandate�of�each�committee.�Each�such�mandate�includes�a�position�description�of�the�Chair�of�each�committee.���
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Audit�Committee���
Information�regarding�the�composition�of�the�Audit�Committee,�the�relevant�education�and�experience�of�each�audit� committee�member,�the�amount�and�nature�of�the�fees�that�were�paid�by�the�Corporation�to�its�external�auditors� and�a�copy�of�the�mandate�of�the�Audit�Committee�are�disclosed�on�page�36�and�Appendix�D�of�the�annual� information�form�of�the�Corporation�for�the�year�ended�December�31,�2021,�a�copy�of�which�can�be�found�under�the� Corporation’s�profile�on�SEDAR�at www.sedar.com�and�which�was�filed�on�SEDAR�on�March�24,�2022.��
Governance�&�ESG�Committee�
The�Corporation�has�established�a�governance�&�ESG�committee�(the�“ Governance�&�ESG�Committee ”)�the�primary� objective�of�which�is�to�assist�the�directors�of�the�Corporation�in�satisfying�their�responsibilities�in�respect�of�the� effective�governance�of�the�Corporation�and�relevant�environment,�social�and�other�governance�matters.
Specifically,�the�Governance�&�ESG�Committee�is�charged�with�the�overall�responsibility�for�the�adequacy�and� effectives�of�the�Board’s�governance�practices.�This�includes,�amongst�other�things,�periodically�assessing,�reviewing,� and�making�appropriate�recommendations�on�its�governance�practices,�the�composition,�and�skills�of�serving� directors�and�new�directors�as�appropriate.��
It�also�provides�oversight�of�the�Corporation’s�global�human�resources�strategy,�policies�and�programs�with�special� focus�on�management�development�and�succession�and�leadership�planning.�
With�regards�to�the�Corporation’s�ESG�framework,�it�will�review�and�offer�guidance�and�recommendations�on�the� Corporation’s�ESG�framework�and�consider�and�recommend�policies�that�conform�with�this�framework.�In� conjunction�with�the�CEO,�it�shall�assist�the�Board�in�setting�the�Corporation’s�general�strategy�on�ESG�matters� including,�amongst�other�things,�the�identification�and�management�of�material�ESG�risks�and�opportunities,� reviewing�any�concomitant�ESG�goals,�setting�realistic�future�targets�and�the�integration�of�such�matters�into�the� business�strategy,�processes�and�compensation�philosophy�of�the�Corporation.��
The�Governance�&�ESG�Committee�is�currently�comprised�of�and�Kiren�Singh,�who�serves�as�the�Chair),�Kjell�Pedersen� and�Charle�Gamba�(each�of�whom�is�considered�to�be�an�independent�member).��
Ms.�Singh�has�more�than�25�years�of�experience�in�the�energy�industry�including�executive�roles�for�publicly�traded� corporations.��She�has�served�as�a�board�member�and�on�Human�Resource�and�Governance�committees�which�has� included�oversight�of�strategic�planning�and�development,�monitoring�and�measuring�executive�objective�setting,� performance�metrics�and�compensation�programs�for�private�and�crown�corporations.��Ms.�Singh�completed�her� Directors�Education�Program�and�received�her�ICD.D�designation�which�included�education�on�the�role�of�the� compensation�committee�and�evaluating�the�CEO�and�succession�planning.����
Mr.�Pedersen�has�filled�top�management�positions,�including�CEO,�in�large�international�and�national�oil�and�gas� companies�for�more�than�twenty�years�in�various�countries.�He�has�also�served�as�Chairman�of�boards�and�director� of�compensation�committee�in�other�public�and�private�companies�in�the�industry.�Mr.�Pedersen�has�through�his�MSc� education,�people�management�courses�and�extensive�experience�in�our�industry�in�several�countries,�gained� knowledge�of�the�opportunities�and�risks�associated�with�different�compensation�systems.�Through�his�board� memberships�in�private�and�public�companies�he�has�also�gained�a�good�understanding�of�corporate�governance�and� compensation�systems�relative�to�expectations�of�employees,�shareholders�and�the�public.���
Mr.�Gamba�founded�Canacol�Energy�Ltd.�in�2008.�He�has�held�a�variety�of�technical�and�management�roles�with�major� and�mid�sized�international�oil�companies,�with�the�majority�of�his�professional�career�focused�on�E&P�in�South�
56
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America.�Prior�to�creating�Canacol,�Mr.�Gamba�was�Vice�President�of�Exploration�for�Occidental�Oil�&�Gas�Company� based�in�Bogota,�Colombia.�In�his�8�years�with�Occidental,�he�has�lived�and�worked�in�Ecuador,�Qatar,�Colombia,�and� the�United�States,�working�in�a�variety�of�technical�and�management�roles.�He�started�his�career�as�a�geologist�with� Imperial�Oil�in�Calgary,�and�holds�an�MSc�and�PhD�in�Geology.�
Reserves�&�Health,�Safety�&�Environment�Committee�
The�Reserves�&�Health,�Safety�and�Environment�Committee�(“ Reserves�&�HSE�Committee ”)�is�responsible�for,�among� other�things,�consulting�with�the�Corporation's�senior�personnel�responsible�for�oil�and�gas�reserves�and�other� information�regarding�the�Corporation's�oil�and�gas�activities,�and�reviewing�and�reporting�to�the�Board�on:�(i)�the� Corporation's�procedures�relating�to�the�disclosure�of�such�information;�(ii)�the�appointment�of,�or�any�changes�to,� the�independent�consultants�engaged�to�report�on�the�Corporation's�oil�and�gas�reserves�pursuant�to�the� requirements�of�National�Instrument�51�101� Standards�of�Disclosure�for�Oil�and�Gas�Activities �(“ NI�51�101 ”);�and�(iii)� the�Corporation's�procedures�for�providing�information�to�the�consultants.���
The�Reserves�&�HSE�Committee�is�also�responsible�for,�among�other�things,�reviewing�the�health,�safety�and� environment�policies�of�the�Corporation�and�exercising�oversight�of�the�Corporation’s�compliance�with�all�applicable� law�in�the�conduct�of�its�activities.�Prior�to�filing�the�Statement�of�Reserves�Data�and�Other�Oil�and�Gas�Information� and�related�consultants'�report�required�under�NI�51�101,�the�Reserves�&�HSE�Committee�meets�with�responsible� management�of�the�Corporation�and�the�independent�consultants�to�review�the�evaluation�report,�and�thereafter� reports�to�the�Board�and�recommends,�as�appropriate,�the�approval,�release�and�filing�of�the�Statement�of�Reserves�� Data�and�Other�Oil�and�Gas�Information�and�related�reports�required�under�NI�51�101.���
The�Reserves�&�HSE�Committee�is�comprised�of�Kjell�Pedersen,�who�serves�as�the�Chair,�Charles�Boulanger�and�Charle� Gamba�(each�of�whom�is�considered�to�be�an�independent�member).���
Nomination�&�Compensation�Committee�
The�Corporation�has�established�the�Nomination�&�Compensation�Committee�(“ Nomination�&�Compensation� Committee ”)�the�primary�objective�of�which�is�to�assist�the�directors�of�the�Corporation�in�satisfying�their� responsibilities�in�respect�of�the�effective�management�of�its�human�resources�and�the�compensation�of�its�directors� and�the�CEO�and�the�evaluation�of�their�respective�performance.��
It�is�responsible�for�developing�and�recommending�policies�regarding�the�director�nomination�process�and�to�assess� the�qualifications,�expertise�and�characteristics�of�its�Board�members,�with�the�goal�of�developing�a�diverse,� experienced�and�high�quality�representation.��In�so�doing,�the�Committee�will�consider�such�factors�as� independence,�integrity,�diversity,�age,�skills,�financial�and�other�expertise,�breadth�of�experience,�knowledge�about� the�Corporation’s�business�or�industry�and�willingness�and�ability�to�devote�adequate�time�and�effort�to�Board� responsibilities�in�the�context�of�the�existing�composition,�other�areas�that�are�expected�to�contribute�to�the�Board’s� overall�effectiveness�and�needs�of�the�Board�and�its�committees.��
The�Nomination�&�Compensation Committee�is�also�charged�with�the�overall�responsibility�of�reviewing�and� administering�the�Corporation’s�compensation�philosophy,�establishing�and�fostering�its�compensation�policies�that� rewards�the�creation�of�shareholder�value�and�reflects�an�appropriate�balance�between�short�and�long�term� performance�and�monitoring�the�implementation�of�those�policies.�It�is�important�to�the�Corporation�to�ensure�that� it�is�capable�of�attracting,�motivating�and�retaining�individuals�who�will�contribute�to�the�success�of�the�Corporation.
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To�that�end,�the�Nomination�&�Compensation�Committee�is�specifically�responsible�for,�among�other�things,� establishing�the�overall�compensation�policies�of�the�Corporation�and�monitoring�their�implementation,�periodically� reviewing�those�policies�and�specific�compensation�practices�and�plans�of�the�Corporation�and�recommending� appropriate�changes�to�the�Board�for�consideration,�administering�the�Corporation’s�incentive�plans,�including�the� Stock�Option�Plans,�in�accordance�with�their�terms�and�recommending�to�the�Board�the�granting�of�incentives� (including�stock�option�grants)�as�appropriate.�The�Nomination�&�Compensation�Committee�periodically�reviews�and� approves�the�goals�and�objectives�of�the�Corporation�relative�to�the�evaluation�of�the�CEO’s�performance�and� compensation,�and�periodically�reviews�the�level�of�compensation�of�the�members�of�the�Board�and�its�committees� and�recommends�appropriate�changes�to�the�Board�for�consideration.�
In�discharging�its�responsibilities,�the�Nomination�&�Compensation�Committee�will�seek�the�advice�of�the�CEO.� However,�the�CEO�will�not�participate�in�the�deliberations�of�the�Nomination�&�Compensation Committee�or�the� Board�in�regard�to�the�evaluation�of�the�CEO’s�performance�or�on�matters�concerning�his�compensation.�The� Nomination�&�Compensation�may�not�delegate�any�of�its�responsibilities�under�its�mandate�to�another�entity�or�to� an�individual�without�the�approval�of�the�Board.���
The�Nomination�&�Compensation�Committee�is�comprised�of�Andrew�Judson,�who�serves�as�the�Chair,�Myron� Tétreault�and�Kiren�Singh�(each�of�whom�is�considered�to�be�an�independent�member).���
REGISTRAR�AND�TRANSFER�AGENT���
The�transfer�agent�and�registrar�for�the�Common�Shares�is�Computershare�Investor�Services�Inc.,�having�offices�at� 530�–�8th�Ave�SW,�Suite�600,�Calgary,�Alberta,�T2P�3S8.���
OTHER�BUSINESS���
Management�knows�of�no�amendment,�variation�or�other�matter�to�come�before�the�Meeting�other�than�those�set� forth�in�the�Notice�of�Meeting.�However,�if�any�other�matter�properly�comes�before�the�Meeting,�the�Common� Shares�represented�by�the�accompanying�proxy�will�be�voted�on�such�matter�in�accordance�with�the�best�judgment� of�the�person�or�persons�voting�the�proxy.���
SHAREHOLDER�PROPOSALS���
Pursuant�to�the�provisions�of�the�Canada�Business�Corporations�Act�(“CBCA”),�any�Shareholder�wishing�to�present�a� proposal�to�be�considered�for�inclusion�at�the�next�annual�meeting�of�Shareholders�in�2023�must�submit�such� proposal�to�the�Corporation�to�be�received�during�the�prescribed�period�which�is�the�60�day�period�that�begins�on� the�150th�day�before�the�anniversary�of�the�previous�annual�meeting�of�shareholders[23] .�Any�such�proposal�must� meet�all�the�requirements�of�the�CBCA�and�the�regulations.�A�shareholder�proposal�must�be�addressed�to�the� Corporate�Secretary�and�either�(i)�posted�to�Pieridae�Energy�Limited�at�308���4th�Avenue�S.W.,�Suite�3100,�Calgary,� Alberta,�Canada�T2P�0H7,�or�(ii)�emailed�to�[email protected].���
23�Pursuant�to�Section�16�of�Regulation�SOR/2022�40�when�read�in�conjunction�with�Section�137(5)(a)�of�the�CBCA.�
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ADVANCE�NOTICE�BY�LAW�
By�Law�No.3:�The�Advance�Notice�By�Law�(the�“By�Law”)�was�adopted�by�the�Board�on�February�6,�2020�and� confirmed�by�the�Shareholders�at�the�Annual�and�Special�Meeting�of�Shareholders�on�May�26,�2020.�The�by�law� establishes�the�procedures,�timeframe�and�forms�which�a�shareholder�must�follow�in�order�to�nominate�a�person�for� election�as�a�director�of�the�Corporation�at�the�Meeting.���
To�be�timely,�a�nominating�shareholder’s�notice�to�the�Corporate�Secretary�of�the�Corporation�must�be�made:��
-
(a) in�the�case�of�an�annual�meeting�(including�an�annual�and�special�meeting)�of�shareholders,�not�less�than� thirty�(30)�days�prior�to�the�date�of�the�annual�meeting�of�shareholders;�provided,�however,�that�in�the� event�that�the�annual�meeting�of�shareholders�is�to�be�held�on�a�date�that�is�less�than�fifty�(50)�days�after� the�date�on�which�the�first�public�announcement�(the�“Notice�Date”)�of�the�date�of�the�annual�meeting�was� made�by�the�Corporation,�notice�by�the�Nominating�Shareholder�may�be�made�not�later�than�the�close�of� business�on�the�tenth�(10th)�day�following�the�Notice�Date;���
-
(b) in�the�case�of�a�special�meeting�(which�is�not�also�an�annual�meeting)�of�shareholders�called�for�the�purpose� of�electing�directors�(whether�or�not�called�for�other�purposes�as�well),�not�later�than�the�close�of�business� on�the�fifteenth�(15th)�day�following�the�day�on�which�the�first�public�announcement�of�the�date�of�the� special�meeting�of�shareholders�was�made�by�the�Corporation;�and��
-
(c) in�the�case�of�an�annual�meeting�(including�an�annual�and�special�meeting)�of��shareholders�or�a�special� meeting�of�shareholders�called�for�the�purpose�of�electing�directors�(whether�or�not�also�called�for�other� purposes)�where�notice�and�access�is�used�for�delivery�of�proxy�related�materials,�not�less�than�forty�(40)� days�prior�to�the�date�of�the�meeting�(but�in�any�event,�not�prior�to�the�Notice�Date);�provided,�however,� that�in�the�event�that�the�meeting�is�to�be�held�on�a�date�that�is�less�than�fifty�(50)�days�after�the�Notice� Date,�notice�by�the�Nominating�Shareholder�shall�be�made,�in�the�case�of�an�annual�meeting�of� shareholders,�not�later�than�the�close�of�business�on�the�tenth�(10[th] )�day�following�the�Notice�Date�and,�in� the�case�of�a�special�meeting�of�shareholders,�not�later�than�the�close�of�business�on�the�fifteenth�(15[th] )�day� following�the�Notice�Date.��
-
(d) Each�of�the�notice�periods�set�forth�above�shall�reset�if�the�meeting�is�adjourned�and/or�postponed,�and�for� these�purposes�the�date�on�which�the�first�public�announcement�of�the�date�of�the�meeting�was�made�shall� be�the�date�of�the�first�public�announcement�of�the�adjournment�and/or�postponement.
Delivery�of�the�notice�must�be�addressed�for�the�attention�of�the�Corporate�Secretary�and�delivered�by�either�(i)� personal�delivery�to�Pieridae�Energy�Limited�308���4[th] �Avenue�S.W.,�Suite�3100�,�Calgary,�Alberta,�Canada�T2P�0H7��(ii)� facsimile�to�(403)�261�5902,�or�(iii)�email�to [email protected]�and�shall�be�deemed�to�have�been�given�and� made�only�at�the�time�it�is�served�by�personal�delivery,�email�or�sent�my�facsimile�transmission�(provided�that�receipt� of�confirmation�of�such�transmission�has�been�received)�to�the�Corporate�Secretary�at�the�address�noted�above.�If� delivery�or�electronic�communications�is�made�on�a�day�which�is�not�a�business�day�or�later�than�5.00�pm�Mountain� Time�on�a�day�which�is�a�business�day,�then�such�delivery�or�electronic�communication�shall�be�deemed�to�have�been� made�on�the�subsequent�day�that�is�a�business�day.��
The�chair�of�the�meeting�shall�have�the�power�and�duty�to�determine�whether�a�nomination�was�made�in�accordance� with�the�procedures�set�forth�in�the�By�Law�and,�if�any�proposed�nomination�is�not�in�compliance�with�the�B�Law,�to� declare�that�such�defective�nomination�shall�be�disregarded.�Notwithstanding�the�foregoing,�the�Board�may,�in�its�
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sole�discretion,�waive�all�or�any�requirements�in�the�By�Law.�A�copy�of�the�By�Law�can�be�found�on�our�website� (www.pieridaeenergy.com).��
ADDITIONAL�INFORMATION���
Additional�information�relating�to�the�Corporation�can�be�found�under�the�Corporation’s�profile�on�SEDAR�at� www.sedar.com.���
Additional�financial�information�is�provided�in�the�Corporation’s�comparative�financial�statements�for�the�year�ended� December�31,�2021,�and�related�and�management�discussion�and�analysis�which�can�be�found�under�the� Corporation’s�profile�on�SEDAR�at�www.sedar.com�or�on�the�Corporation’s�website�at�www.pieridaeenergy.com.� Shareholders�may�also�obtain�these�documents,�without�charge,�upon�request�sent�by�mail�to�the�CFO�at�Pieridae� Energy�Limited,�308�–�4th�Avenue�SW,�Suite�3100,�Calgary,�Alberta,�Canada�T2P�0H7�or�sent�by�email�to� [email protected].���
APPROVAL�OF�DIRECTORS���
The�contents�and�the�sending�of�this�Circular�have�been�approved�by�the�directors�of�the�Corporation.���
DATED�as�of�the�April�12,�2022.���
“Alfred�Sorensen“�
Alfred�Sorensen��� Chief�Executive�Officer�
60
SCHEDULE�A�–�AMENDED�AND�RESTATED�STOCK�OPTION�PLAN
==> picture [108 x 37] intentionally omitted <==
1�� Definitions�and�interpretation��
1.1� Definitions���
Unless�otherwise�required�by�the�context�or�subject�matter,�the�following�terms,�as�used�herein,�have�the� meanings�set�forth�below.����
-
a) Affiliate� has�the�meaning�given�to�that�term�in�the� Securities�Act �(Alberta),�including�the�rules�and� regulations�promulgated�thereunder,�as�may�be�amended�from�time�to�time.��
-
b) Black�Out�Period� has�the�meaning�given�to�that�term�in�Section�3.4�hereof.��
-
c) Board�of�Directors �means�the�board�of�directors�of�the�Corporation.���
-
d) Business�Day �means�a�day�that�is�not�a�Saturday,�Sunday�or�a�general�holiday�in�Alberta.��
-
e) Change�of�Control �means:��
-
(i) any�transaction�(other�than�a�transaction�described�in�clause�(iii)�below)�pursuant�to�which� any�person�or�group�of�persons�acting�jointly�or�in�concert�acquires�the�direct�or�indirect� beneficial�ownership�of�securities�of�the�Corporation�representing�50%�or�more�of�the� aggregate�voting�power�of�all�of�the�Corporation’s�then�issued�and�outstanding�securities� entitled�to�vote�in�the�election�of�directors�of�the�Corporation;��
-
(ii) a�consummated�arrangement,�amalgamation,�merger,�consolidation,�take�over�bid,� compulsory�acquisition�or�similar�transaction�involving�(directly�or�indirectly)�the� Corporation�if,�immediately�after�the�consummation�of�such�arrangement,�amalgamation,� merger,�consolidation�or�similar�transaction,�the�shareholders�of�the�Corporation� immediately�prior�thereto�do�not�beneficially�own,�directly�or�indirectly,�either�(A)� outstanding�voting�securities�representing�more�than�50%�of�the�combined�outstanding� voting�power�of�the�surviving�or�resulting�entity�in�such�arrangement,�amalgamation,� merger,�consolidation�or�similar�transaction��or�(B)�more�than�50%�of�the�combined� outstanding�voting�power�of�the�parent�of�the�surviving�or�resulting�entity�in�such� arrangement,�amalgamation,�merger,�consolidation�or�similar�transaction;��
-
(iii) the�sale,�lease,�exchange,�license�or�other�disposition�of�all�or�substantially�all�of�the� Corporation’s�assets�to�a�person�other�than�a�person�that�was�an�Affiliate�of�the�Corporation� at�the�time�of�such�sale,�lease,�exchange,�license�or�other�disposition,�other�than�a�sale,� lease,�exchange,�license�or�other�disposition�to�an�entity,�more�than�fifty�percent�(50%)�of� the�combined�voting�power�of�the�voting�securities�of�which�are�beneficially�owned�by� shareholders�of�the�Corporation�in�substantially�the�same�proportions�as�their�beneficial� ownership�of�the�outstanding�voting�securities�of�the�Corporation�immediately�prior�to�such� sale,�lease,�exchange,�license�or�other�disposition;��
-
(iv) the�passing�of�a�resolution�by�the�Board�of�Directors�or�Shareholders�to�substantially� liquidate�the�assets�of�the�Corporation�or�wind�up�the�Corporation’s�business�or�significantly� rearrange�its�affairs�in�one�or�more�transactions�or�series�of�transactions�or�the� commencement�of�proceedings�for�such�a�liquidation,�winding�up�or�re�arrangement� (except�where�such�re�arrangement�is�part�of�a� bona�fide� reorganization�of�the�Corporation� in�circumstances�where�the�business�of�the�Corporation�is�continued�and�the�shareholdings� remain�substantially�the�same�following�the�re�arrangement);���
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(v) the�election�at�a�meeting�of�the�Corporation’s�Shareholders�of�a�number�of�directors�to�the� Board�of�Directors�who�were�not�director�nominees�proposed�to�the�Corporation’s� Shareholders�by�the�Corporation’s�prior�Board�of�Directors,�and�would�represent�a�majority� of�the�Board�of�Directors;�or��
-
(vi) the�appointment�of�a�number�of�directors�to�the�Board�of�Directors�which�would�represent� a�majority�of�the�Board�of�Directors�and�which�were�nominated�by�any�holder�of�Shares�of� the�Corporation�or�by�any�group�of�holders�of�Shares�of�the�Corporation�acting�jointly�or�in� concert�and�not�approved�by�the�Corporation’s�prior�Board�of�Directors.
-
f) Constructive Dismissal �means�constructive�dismissal�as�defined�at�common�law;�however,�it�does�not� include�any�of�the�following�with�respect�to�an�Optionee:��
-
(i) a�reduction�in�compensation�unless�greater�than�15%�of�the�Optionee's�total�compensation;��
-
(ii) a�reduction�in�compensation,�regardless�of�quantum,�where�such�reduction�in� compensation�has�been�applied�in�a�similar�manner�to�all�or�substantially�all�employees�of� the�Corporation;��
-
(iii) a�change�in�duties�where�such�change�is�reasonably�required�pursuant�to�a�reorganization� or�restructuring�of�the�Corporation;��
-
(iv) a�re�location�of�position;��
-
(v) any�material�change�to�the�Optionee’s�terms�and�conditions�of�employment�made�with�the� consent�of�the�Optionee;�and��
-
(vi) a�promotion.��
-
g) Corporation� means�Pieridae�Energy�Limited�and�any�corporation�which�it�controls�pursuant�to�the� Canada�Business�Corporations�Act .���
-
h) Date�of�Grant �in�respect�of�an�Option�means�the�date�on�which�the�Board�of�Directors�grants�the� particular�Option�in�favour�of�an�individual.���
-
i) Eligible�Persons� means�directors,�senior�executives�and�employees�of�the�Corporation�and�Service� Providers�to�the�Corporation.��
-
j) Event� has�the�meaning�given�to�that�term�in�Section�3.8�hereof.��
-
k) Exchange �means�the�Toronto�Stock�Exchange.���
-
l) Exercise�Notice �in�respect�of�an�Option�means�the�notice�regarding�the�exercise�of�the�particular� Option,�in�the�form�approved�by�the�Corporation,�duly�executed�by�the�Optionee.���
-
m) Exercise�Period �in�respect�of�an�Option�means�the�period�during�which�the�particular�Option�may�be� exercised,�which�runs�from�the�Date�of�Grant�inclusively,�provided�that�all�of�the�regulatory�approvals� have�been�obtained,�up�to�and�including�the�Expiry�Date.���
-
n) Exercise�Price� in�respect�of�an�Option�means�the�price�at�which�the�Option�may�be�exercised,�as� established�pursuant�to�Section�3.6�hereof.���
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o) Expiry�Date �in�respect�of�an�Option�means�the�date�established�in�respect�thereof�pursuant�to�Section� 3.3�hereof.���
-
p) Insider� has�the�meaning�given�to�that�term�in�the�TSX�Company�Manual�[1] .��
-
q) Insider�Participation�Limits �means,�collectively,�the�limits�set�out�in�Section�2.6�hereof.���
-
r) Market�Value �means�the�closing�price�of�the�Shares�on�the�Exchange�on�the�trading�day�immediately� preceding�the�Date�of�Grant.���
-
s) Notice �has�the�meaning�given�to�that�term�in�Section�3.4�hereof��
-
t) Option�Certificate �in�respect�of�an�Option�means�the�certificate�representing�the�Option.���
-
u) Option� or� Options �means,�as�the�case�may�be,�one�or�several�options�granted�pursuant�to�the�Plan�for� the�purpose�of�purchasing�Shares.���
-
v) Optionee �in�respect�of�an�Option�means�the�employee,�director,�senior�executive�or�Service�Provider,� as�the�case�may�be,�their�Personal�Representative�that�hold�the�Option.���
-
w) Personal�Representative �of�an�Optionee�means�(i)�in�the�case�of�a�deceased�Optionee,�the�Optionee’s� legatees�in�accordance�with�the�terms�and�conditions�of�the�Optionee’s�last�will�or�the�Optionee’s� representative�with�respect�to�the�Optionee’s�estate;�and�(ii)�in�the�case�of�an�Optionee�who,�for�any� reason�whatsoever,�is�incapable�of�managing�his�or�her�affairs,�the�person�legally�authorized�to�act�on� behalf�of�such�Optionee.���
-
x) Plan �means�this�Stock�Option�Plan.���
-
y) Security�Based�Compensation�Arrangement �has�the�meaning�given�to�that�term�in�the�TSX�Company� Manual�[17] .��
-
z) Service�Provider� has�the�meaning�given�to�that�term�in�the�TSX�Company�Manual�[18] .��
-
aa) Share �or� Shares �means,�as�the�case�may�be,�one�or�several�common�shares�in�the�share�capital�of�the� Corporation.���
-
bb) Shareholder� means�a�holder�of�one�or�more�Shares.�
-
cc) Successor�Corporation �has�the�meaning�given�to�that�term�in�Section�5.4�a)�hereof.���
-
dd)� Termination�Date means�the�date�on�which�an�Optionee�ceases�to�be�an�Eligible�Person�as�a�result�of�a� termination�of�employment�or�engagement�with�the�Corporation�for�any�reason,�including�death,� disability,�resignation,�or�termination�with�or�without�cause,�but�not�including�an�Optionee’s�absence� from�active�employment�or�engagement�with�the�Corporation�during�a�period�of�authorized�leave�of� absence.�For�greater�certainty,�the�Termination�Date�shall�be�the�last�day�of�the�Optionee’s�actual�and� active�employment�or�engagement�with�the�Corporation,�whether�such�day�is�selected�by�agreement� with�the�individual,�unilaterally�by�the�Corporation�and�whether�with�or�without�advance�notice�to�the��
Optionee.�No�period�of�notice,�if�any,�or�payment�instead�of�notice�that�is�given�or�that�ought�to�have� been�given�under�applicable�law,�whether�by�statute,�imposed�by�common�law�or�otherwise,�in�respect� of�such�termination�of�employment�or�engagement�that�follows�or�is�in�respect�of�a�period�after�the� Optionee’s�last�day�of�actual�and�active�employment�or�engagement�will�be�considered�as�extending� the�Optionee’s�period�of�employment�or�engagement�for�the�purposes�of�determining�his�or�her� entitlement�under�this�Plan.��
See�“Interpretation”�in�the�TSX�Company�Manual�
Section�613(b)�of�the�TSX�Company�Manual� 3. ibid .�
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1.2�� Governing�Law���
The�Plan�is�established�pursuant�to�the�laws�in�effect�in�the�Province�of�Alberta�and�the�policies�of�the�Exchange,� and�its�provisions�shall�be�interpreted�pursuant�to�such�laws�and�policies.���
1.3�� Headings���
The�headings�herein�are�for�the�convenience�of�the�reader�and�shall�in�no�way�affect�the�interpretation�of�the� Plan.���
2�� Purpose�and�Participation��
2.1�� Purpose���
The�Plan�was�designed�to�allow�the�Corporation,�through�Shares,�to�retain�and�motivate�competent�directors,� senior�executives,�employees�and�Service�Providers,�to�compensate�directors,�senior�executives,�employees�and� Service�Providers�to�whom�the�Board�of�Directors�may�grant�Options�pursuant�to�the�Plan�from�time�to�time� further�to�their�efforts�in�attaining�the�goals�of�the�Corporation�and�to�allow�such�individuals�to�purchase�Shares� as�an�investment,�and�to�encourage�them�to�act�in�this�manner.���
2.2�� Participation���
From�time�to�time,�the�Board�of�Directors�will�designate,�at�its�discretion,�the�Eligible�Persons�who�are�to�be� granted�Options�and�will�establish�the�number�of�Shares�with�respect�to�which�each�Option�may�be�exercised� and�grant�the�Options�based�on�these�decisions.�The�granting�of�an�Option�to�an�Eligible�Person�will�not,�at�any� time,�entitle�such�person�to�receive�Options�thereafter,�nor�will�it�prevent�such�person�from�receiving�Options� thereafter.���
2.3�� Notice�of�Granted�Options���
-
a) After�the�Board�of�Directors�has�approved�the�granting�of�an�Option,�any�member�of�the�Board�of� Directors�or�any�other�individual�designated�by�the�Board�of�Directors�for�such�purpose�shall�give� written�notice�of�the�grant�(a� Notice )�to�the�applicable�Eligible�Person�and�shall�include�therewith� the�Option�Certificate�representing�the�Option�thus�granted.���
-
b) In�the�case�of�an�Option�which�is�proposed�to�be�granted�to�an�employee�of�the�Corporation�or�a� Service�Provider,�no�such�Option�shall�be�granted�by�the�Board�of�Directors�to�such�individual�unless� and�until�the�Corporation�has�declared�that�such�individual�is�a� bona�fide �employee�of�the� Corporation�or�a�Service�Provider,�as�the�case�may�be.���
2.4�� Copies�of�the�Text�of�the�Plan���
At�the�time�that�a�Notice�is�delivered�to�an�Eligible�Person�upon�the�initial�granting�of�an�Option,�that�Eligible� Person�must�be�provided�with�either�one�copy�of�the�text�of�the�Plan�or�the�address�of�the�website�from�which� the�text�of�the�Plan�can�be�downloaded�by�the�Eligible�Person,�and�within�ten�(10)�days�following�the�receipt�of� the�Notice�and�the�accompanying�Option�Certificate,�each�such�Eligible�Person�shall�sign�that�Notice� acknowledging�that�the�Eligible�Person�has�read�the�Plan�and�unconditionally�agreeing�to�the�terms�and� conditions�stipulated�in�the�Plan,�the�Option�Certificate�and�the�Notice.�Notwithstanding�any�other�provision� hereof,�the�grant�of�such�Option�by�the�Corporation�to�that�Eligible�Person�shall�not�be�effective�unless�and�until� the�Eligible�Person�complies�with�the�requirements�of�this�Section�2.4�and�all�of�the�other�conditions�herein� relating�to�such�Grant�are�satisfied.����
64
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2.5�� No�Additional�Rights���
The�Plan�does�not�entitle�an�Optionee�to�be,�or�continue�to�be,�an�employee�or�a�director�of�the�Corporation� nor�does�it�create�an�obligation�on�the�part�of�the�Optionee.�The�Plan�does�not�grant�the�Optionee�any�rights�as� a�Shareholder�with�respect�to�the�Shares�underlying�the�Options�before�such�time�as�the�Optionee�has�exercised� his�or�her�Options,�or�a�part�thereof,�and�he�or�she�is�duly�registered�as�a�Shareholder.�All�decisions�regarding� the�granting�of�Options�shall�be�made�at�the�sole�discretion�of�the�Board�of�Directors.�The�Plan�does�not�hinder,� limit,�force,�restrict,�or�prevent�the�Board�of�Directors�with�respect�to�the�allocation�or�the�issuance�of�Shares� or�of�any�other�security�of�the�Corporation,�except�as�specified�in�the�Plan.���
2.6�� Participation�Limits��
-
a) The�maximum�number�of�Shares�issuable�at�any�time�to�Eligible�Persons�who�are�Insiders�pursuant� to�the�exercise�of�Options�granted�under�this�Plan�and�securities�granted�under�any�other�Security� Based�Compensation�Arrangement�of�the�Corporation�must�not�exceed�10%�of�the�aggregate� number�of�Shares�issued�and�outstanding�from�time�to�time�(calculated�on�a�non�diluted�basis).��
-
b) The�maximum�number�of�Shares�issued�to�Eligible�Persons�who�are�Insiders�within�any�one�year� period�pursuant�to�the�exercise�of�Options�granted�under�this�Plan�and�securities�granted�under� any�other�Security�Based�Compensation�Arrangement�of�the�Corporation�must�not�exceed�10%�of� the�aggregate�number�of�Shares�issued�and�outstanding�from�time�to�time�(calculated�on�a�non� diluted�basis).���
-
2.7 Non�Employee�Director�Participation�Limits�
-
a)� The�number�of�Shares�that�are�issuable�to�Eligible�Persons�who�are�non�employee�directors�under� this�Plan�and�any�other�Security�Based�Compensation�Arrangements�of�the�Corporation�shall�not�at� any�time�exceed�$150,000�worth�of�Shares�annually�per�non�employee�director,�of�which�no�more� than�$100,000�may�be�in�the�form�of�Options.�
3�� Terms�and�Conditions�of�the�Options��
3.1�� Issuance�of�Shares�by�the�Board�of�Directors���
The�Shares�to�be�issued�to�Optionees�upon�the�exercise�of�the�Options�shall�not�be�issued�by�the�Corporation� unless�and�until�the�issuance�of�such�Shares�is�duly�authorized�by�the�Board�of�Directors.���
3.2�� Number�of�Shares���
The�Options�to�be�granted�under�the�Plan�must�not�be�exercisable�for�more�than�10%�of�the�Shares�issued�and� outstanding�at�the�time�the�Options�are�granted,�provided�that�if�the�Options�expire�or�are�terminated�for�any� reason�before�they�vest�and�are�exercised,�the�number�of�Shares�underlying�such�expired�or�terminated�Options� may�again�be�available�under�the�Plan.���
3.3�� Term�of�Options���
Subject�to�Sections�3.5�and�5.2�hereof,�the�Expiry�Date�of�an�Option�is�the�date�established�by�the�Board�of�� Directors�at�the�time�of�the�granting�of�the�particular�Option,�provided�that�such�date�does�not�extend�beyond� the�fifth�anniversary�of�the�Date�of�Grant�of�the�Option,�or�such�later�date�as�determined�in�accordance�with� Section�3.4�hereof.���
65
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3.4�� Black�Out�Periods��
Despite�any�other�provision�of�this�Plan,�if�the�Expiry�Date�of�an�Option�falls�on,�or�within�nine�(9)�Business�Days� immediately�following,�a�date�upon�which�an�Optionee�is�prohibited�from�exercising�an�Option�due�to�a�blackout� period�or�other�trading�restriction�imposed�by�the�Corporation�(but,�for�greater�certainty,�not�a�cease�trade� order�or�other�restriction�imposed�by�any�person�other�than�the�Corporation)�(a�Black�Out�Period),�then�the� Expiry�Date�of�such�Option�will�be�automatically�extended�to�the�tenth�(10th)�Business�Day�following�the�date� the�relevant�black�out�period�or�other�trading�restriction�imposed�by�the�Corporation�is�lifted,�terminated�or� removed.��
3.5�� Termination�of�Options���
Subject�to�Section�3.1�hereof,�Optionees�may�exercise�an�Option�in�whole�or�in�part,�at�any�time�or�from�time�to� time�during�the�Exercise�Period,�provided�that�the�Option�has�vested�on�or�before�such�time�pursuant�to�the� terms�of�the�Option�Certificate�evidencing�such�Option�and�provided�that,�with�respect�to�the�exercise�of�a�part� of�an�Option,�the�Board�of�Directors�shall�be�entitled,�at�any�time�and�from�time�to�time,�to�establish�the�number� of�Shares�with�respect�to�which�an�Optionee�may�exercise�a�part�of�the�Option�held�by�such�Optionee.�All�of�the� Options,�or�parts�of�an�Option,�that�have�not�been�exercised�during�the�Exercise�Period�will�terminate�and� become�null�and�void�on�the�day�immediately�following�the�Expiry�Date.�The�Expiry�Date�of�an�Option�will� correspond�to�the�earlier�of:��
-
a) the�date�established�by�the�Board�of�Directors�as�the�Expiry�Date�at�the�time�of�the�granting�of�the� Option;�and���
-
b) the�date�established�pursuant�to�subparagraphs�(i)�to�(v)�hereinafter:���
-
(i) Death �–�Upon�the�death�of�an�Optionee�who�is�an�Eligible�Person,�the�date�established� hereby�in�respect�of�each�Option�held�by�such�Optionee�at�the�date�of�death�is�the�earlier�of� (A)�the�Expiry�Date�of�the�Option�and�(B)�the�expiry�of�a�period�of�ninety�(90)�days�following� the�Termination�Date;�provided�that�any�such�Options,�or�the�remainder�thereof,�which�are� vested�at�the�Termination�Date�and�which�have�been�granted�to�such�Optionee�may�be� exercised�on�or�before�such�date�by�the�Optionee’s�Personal�Representative�in�accordance� with�the�terms�of�the�Plan���
-
(ii) Cessation�of�Employment �–�If�an�Optionee�at�any�time�on�a�particular�day�ceases�to�be� employed�by�the�Corporation�(other�than�as�a�consequence�of�the�termination�of� employment�by�the�Corporation�for�cause),�or�ceases�to�hold�an�office�of�director�of�the� Corporation,�or�ceases�to�be�engaged�by�the�Corporation�as�a�Service�Provider,�for�any� reason�other�than�death�and�the�Option�is�held�by�the�Optionee�at�that�time,�the�date� established�hereby�in�respect�of�such�Option�is�three�hundred�and�sixty�five�(365)�days�after� the�Termination�Date�if�such�Option�was�granted�to�the�Optionee�by�the�Corporation�at�any� time�on�or�before�October�24,�2017,�and�in�any�other�case,�the�date�established�hereby�in� respect�of�such�Option�is�ninety�(90)�days�after�the�Termination�Date.��
-
(iii) Notwithstanding�subparagraphs�(i)�and�(ii)�above,�the�Board�of�Directors�may,�at�its� discretion�and�subject�to�the�approval�of�the�Exchange,�if�required,�by�means�of�a�prior� notice�sent�to�an�Optionee�or�to�his�or�her�Personal�Representative,�allow�an�Option,�or�part� of�an�Option,�to�remain�valid�and�in�effect,�and�may�direct�that�the�Expiry�Date�of�an�Option� or�part�of�an�Option�held�by�the�Optionee�be�deemed�to�be�the�Termination�Date,�or�a�date� after�any�of�such�events.���
66
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-
(iv) Termination�of�Employment�for�Cause �–�If�the�employment�of�an�Optionee�is�terminated�for� cause,�the�date�established�hereby�in�respect�of�each�Option�held�by�such�Optionee�is�the� first�day�that�the�Optionee�ceased�to�be�employed�by�the�Corporation�after�expiration�of� the�applicable�period�of�notice�of�termination,�if�any.��
-
(v) Discretion�of�the�Board�of�Directors �–�The�Board�of�Directors�may,�at�any�time�or�from�time� to�time,�with�the�consent�of�an�Optionee�and,�subject�to�the�approval�of�the�Exchange,� accelerate�or�postpone�the�Expiry�Date�of�an�Option�or�of�any�part�of�an�Option�held�by�the� Optionee�if�the�Board�of�Directors�establishes,�at�its�discretion,�that�this�measure�is� warranted�under�the�circumstances�and�provided�that�the�Expiry�Date�of�the�Option�does� not�extend�beyond�the�fifth�anniversary�of�the�Date�of�Grant.���
3.6�� Exercise�Price���
-
a) No�consideration�will�be�payable�with�respect�to�the�granting�of�an�Option.�Consideration�will�be� payable�pursuant�to�paragraph�3.6(b)�hereunder.���
-
b) At�the�time�of�the�granting�of�an�Option,�the�Board�of�Directors�shall�establish�the�price�at�which� an�Optionee�may�purchase�an�underlying�Share�upon�the�exercise�of�his�or�her�Option.�Said�price� will�not�be�less�than�the�Market�Value.���
-
c) The�Board�of�Directors�may�reduce�the�Exercise�Price�of�an�Option�with�the�consent�of�the� Optionee,�subject�to�the�prior�approval�of�the�disinterested�Shareholders�of�the�Corporation�and� any�other�requirements�of�the�Exchange,�if�the�Optionee�is�an�insider.����
3.7�� Assignment�of�Options���
Options�may�not�be�assigned�or�transferred.�However,�to�the�extent�provided�for�pursuant�to�Section�4.1�hereof,� the�Personal�Representative�of�an�Optionee�may�exercise�Options�during�the�Exercise�Period.���
3.8�� Adjustments���
Prior�to�the�exercise�of�an�Option,�if�a�stock�dividend�is�paid�with�respect�to�the�Shares�or�if�the�Shares�are� consolidated,�subdivided,�converted,�exchanged,�or�redesignated,�or�if�they�are�in�any�way�replaced�(collectively� an� Event ),�the�Option,�to�the�extent�that�it�has�not�been�exercised,�will,�subject�to�the�approval�of�the�Exchange,� entitle�the�holder�thereof,�upon�its�exercise�pursuant�to�its�terms�and�conditions,�to�the�number�and�type�of� Shares,�other�securities�or�assets�that�the�holder�would�have�been�entitled�to�receive�as�a�result�of�the�Event�as� if�such�holder�were�the�owner�of�the�underlying�Shares�at�the�time�the�Event�occurred,�and�the�Exercise�Price� of�the�Option�will�be�the�same�as�if�the�underlying�Shares�initially�subject�to�the�Option�had�been�purchased� pursuant�hereto.�No�fractional�Shares�will�be�issued�upon�the�exercise�of�the�Options,�and�if�an�Optionee�is� entitled�to�a�fraction�of�a�Share�as�a�result�of�an�Event,�then�such�Optionee�will�only�be�entitled�to�purchase�the� nearest�lower�full�number�of�Shares�and�no�payment�or�any�other�adjustment�will�be�made�with�respect�to�the� fractional�participation�that�is�not�taken�into�account.�If�an�Event�occurs,�the�number�of�Shares�that�the�Board� of�Directors�has�authorized�pursuant�to�the�Plan�as�set�forth�in�Section�3.2�hereof�will�be�adjusted�accordingly.��
4�� Exercise�of�Options��
4.1�� Exercise�of�Options���
Only�the�Optionee�or�his�or�her�Personal�Representative,�as�the�case�may�be,�has�the�right�hereunder�to�exercise� an�Option�in�accordance�with�the�provisions�of�the�Plan.�An�Optionee,�or�his�or�her�Personal�Representative,� may�exercise�an�Option�in�whole�or�in�part,�at�any�time�or�from�time�to�time�during�the�Exercise�Period�provided�
67
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that�the�Option�has�vested�on�or�before�such�time�pursuant�to�the�terms�of�the�Option�Certificate�evidencing� such�Option,�by�delivering�to�the�Board�of�Directors:���
-
a) an�Exercise�Notice�duly�signed�by�the�Optionee�or�his�or�her�Personal�Representative,�as�the�case� may�be;���
-
b) the�applicable�Option�Certificate;���
-
c) if�the�Exercise�Notice�is�signed�by�a�Personal�Representative�of�the�Optionee�whose�Options�are� exercised,�any�documentation�that�the�Corporation�may�request;�and��
-
d) and�a�certified�cheque�or�bank�draft�payable�to�the�Corporation�in�an�amount�equal�to�the� aggregate�of�(i)�the�aggregate�Exercise�Price�of�the�underlying�Shares�that�are�being�purchased�as� a�result�of�the�exercise�of�the�Option�and�(ii)�the�amount�of�the�applicable�withholding�tax�as� determined�by�the�Corporation.���
4.2��
Issuance�of�Shares���
As�soon�as�possible�after�the�receipt�of�the�Exercise�Notice,�the�Board�of�Directors�will�direct�management�to� ensure�that�a�certificate�for�the�Shares�thus�purchased�on�the�exercise�of�an�Option�is�delivered�to�the�Optionee� or�his�or�her�Personal�Representative,�as�the�case�may�be.�If�the�number�of�Shares�thus�purchased�is�less�than� the�number�of�Shares�represented�by�the�Option�Certificate�that�is�surrendered,�the�Board�of�Directors�shall� make�a�note�thereon�indicating�the�number�of�Shares�with�respect�to�which�the�Option�was�exercised�and�shall� return�such�Option�Certificate�to�the�Optionee�or�his�or�her�Personal�Representative,�as�the�case�may�be,�at�the� same�time�as�the�Share�certificate�mentioned�above�is�issued.���
4.3�� Conditions�of�the�Issuance���
The�issuance�of�Shares�by�the�Corporation�as�a�result�of�the�exercise�of�an�Option�is�subject�to�the�laws�(including� the� Income�Tax�Act �(Canada),�rules,�and�regulations�of�all�of�the�authorities�and�public�bodies�applicable�with� respect�to�the�issuance�and�the�distribution�of�Shares,�including�but�not�limited�to�the�Exchange.�The�Optionee� agrees�to�comply�with�all�of�these�laws,�rules,�and�regulations,�to�provide�the�Corporation�with�the�information,� reports,�and�covenants�necessary�in�order�to�comply�with�such�laws,�rules,�and�regulations,�and�to�fully� collaborate�with�the�Corporation�with�respect�to�such�compliance.���
5�� Administration,�Amendments�and�Termination�of�the�Plan�
5.1�� Administration��
The�Board�of�Directors�will�administer�the�Plan�in�its�sole�discretion.�The�Board�of�Directors�will�have�the�full� power�and�sole�responsibility�to�interpret�the�provisions�of�the�Plan�and�to�make�regulations�and�formulate� administrative�provisions�for�its�implementation,�and�to�make�such�changes�in�the�regulations�and� administrative�procedures�as,�from�time�to�time,�the�Board�of�Directors�deems�proper�and�in�the�best�interests� of�the�Corporation,�and�to�reserve�and�issue�Shares�issuable�pursuant�to�the�exercise�of�Options.��Such� regulations�and�provisions�may�include�the�delegation�to�a�committee�of�the�Board�of�Directors�of�such� administrative�duties�and�powers�of�the�Board�of�Directors�as�it�may,�in�its�sole�discretion,�deem�fit.�The� determinations�of�the�Board�of�Directors�in�the�administration�of�the�Plan�shall�be�final�and�conclusive.��
5.2�� Amendment��
The�Board�of�Directors�may,�at�any�time�and�from�time�to�time,�without�the�approval�of�the�Shareholders�(other� than�any�required�regulatory�or�Exchange�approvals),�suspend,�discontinue�or�amend�this�Plan�or�any�Option.��
68
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Examples�of�the�types�of�amendments�that�may�be�made�by�the�Board�without�Shareholder�approval�include,� without�limitation,�the�following:��
-
a) amendments�to�ensure�continuing�compliance�with�applicable�laws,�regulations,�requirements,� rules�or�policies�or�any�governmental�authority�or�any�stock�exchange;��
-
b) amendments�of�a�“housekeeping”�nature,�which�include�amendments�to�eliminate�any�ambiguity� or�correct�or�supplement�any�provision�contained�herein;��
-
c) amendments�respecting�the�administration�of�the�Plan;��
-
d) changing�the�vesting�provisions�of�the�Plan�or�any�Option�Certificate;���
-
e) changing�the�termination�provisions�of�any�Option�that�does�not�entail�an�extension�beyond�the� original�Expiry�Date;�and���
-
f) any�other�amendment�that�does�not�require�the�approval�of�Shareholders�under�Section�5.3� hereof.��
5.3�� Amendments�Requiring�Shareholder�Approval��
Notwithstanding�Section�5.2�hereof,�specific�Shareholder�approval�is�required�for:���
-
a) any�change�to�the�maximum�number�of�Shares�issuable�from�treasury�under�the�Plan,�including�an� increase�to�the�fixed�maximum�percentage�or�a�change�from�a�fixed�maximum�percentage�to�a�fixed� maximum�number�of�Shares,�other�than�an�adjustment�pursuant�to�Section�3.8;�
-
b) any�amendment�which�reduces�the�exercise�price�of�any�Option�after�the�Options�have�been�granted� or�any�cancellation�of�an�Option�and�the�substitution�of�that�Option�by�a�new�Option�with�a�reduced� price,�except�in�the�case�of�an�adjustment�pursuant�to�Section�3.8;�
-
c) any�amendment�which�extends�the�Option�Term�beyond�the�original�expiry�date,�except�as�provided� in�Section�3.4�hereof;�
-
d) any�amendment�to�remove�or�to�exceed�the�Insider�Participation�Limits;��
-
e) any�amendment�which�would�allow�non�employee�directors�to�be�eligible�for�awards�under�the�Plan� on�a�discretionary�basis�or�an�amendment�which�would�increase�limits�imposed�on�non�employee� director�participation�pursuant�to�Section�2.7;�
-
f) any�amendment�which�would�permit�any�Option�granted�under�the�Plan�to�be�transferable�or� assignable�by�any�Eligible�Person�other�than�as�allowed�by�Section�3.7;�
-
g) any�amendment�to�the�amendment�provisions�of�this�Plan�found�in�Section�5.2�or�this�Section�5.3.�
5.4�� Change�of�Control��
- a) In�the�event�of�a�Change�of�Control,�the�surviving,�continuing,�successor�or�purchasing�corporation� or�Affiliate�thereof,�as�the�case�may�be�(the� Successor�Corporation ),�may�either�assume�the� Corporation's�rights�and�obligations�under�outstanding�Options�or�substitute�for�outstanding� Options�substantially�equivalent�options�in�the�Successor�Corporation�in�a�manner�that� substantially�preserves�and�does�not�impair�the�rights�of�the�Optionees�thereunder�in�any�material� respect.���
69
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-
b) In�the�event�that�an�assumption�or�substitution�of�Options�is�not�made�by�the�Successor� Corporation�in�accordance�with�paragraph�a)�prior�to�or�in�connection�with�a�Change�of�Control,�all� Options�held�by�an�Optionee�as�at�the�date�of�the�Change�of�Control,�whether�vested�or�unvested,� will�automatically�vest�as�of�the�date�of�the�Change�of�Control.��
-
c) If�the�employment�of�an�Optionee�is�terminated�by�the�Corporation�during�the�one�(1)�year�period� after�a�Change�of�Control�for�any�reason�other�than�for�Cause,�or�the�Optionee�resigns�from�his� employment�as�a�result�of�Constructive�Dismissal,�then�any�unvested�Options�held�by�the�Optionee� as�at�the�date�of�the�Change�of�Control�shall�accelerate�and�will�fully�vest�effective�on�the�date�of� the�Change�of�Control�and�all�Options�that�are�vested�or�deemed�to�be�vested�may�be�exercised�by� the�Optionee�within�30�days�from�the�Termination�Date.��
5.5��
�Retroactive�Amendment���
The�Board�of�Directors�may,�from�time�to�time�and�subject�to�the�approval�of�the�Exchange,�retroactively�amend� the�Plan�provided�they�are�permitted�to�do�so�under�this�Section�5�hereof,�and,�with�the�consent�of�the�affected�� Optionees,�retroactively�amend�the�terms�and�conditions�of�the�Options�that�have�been�granted�until�then.���
5.6�� Termination�of�the�Plan���
The�Board�of�Directors�may�terminate�the�Plan�at�any�time,�provided�that�such�termination�does�not�affect�the� rights�of�any�Optionee�pursuant�to�any�Option�and�does�not�amend�the�terms�and�conditions�of�any�Option�that� has�been�granted�to�such�Optionee�before�the�date�of�such�termination�and,�notwithstanding�such�termination,� the�Corporation,�the�Options,�and�the�Optionees�will�continue�to�be�subject�to�the�provisions�of�the�Plan.��
70
SCHEDULE�B�–�BOARD�OF�DIRECTORS�MANDATE��
==> picture [108 x 37] intentionally omitted <==
1. PRIMARY�OBJECTIVE���
The�primary�objective�of�the�Board�in�discharging�its�mandate�is�the�effective�and�efficient�conduct�by�the�Corporation� of�its�business�and�affairs�in�accordance�with�its�articles,�by�laws�and�policies,�and�in�a�manner�and�to�the�extent� consistent�with�applicable�law�and�with�the�purpose�of�enhancing�and�preserving�shareholder�value�while�taking�into� account�the�legitimate�interests�of�employees,�customers,�lenders�and�the�wider�communities.��
Accordingly,�the�Board�will�be�concerned�with�such�matters�as�strategic�and�financial�planning,�risk�assessment�and� mitigation,�senior�management�determination,�corporate�governance,�public�disclosure�and�compliance�monitoring.��
���
2. DIRECTORS��
Each�director�has�the�duty�to�act�in�the�best�interests�of�the�Corporation�and�in�so�doing�must�thoroughly�understand� the�nature�and�extent�of�the�Corporation’s�business�and�affairs�while�maintaining�an�acute�awareness�of�the�political,� economic,�social,�legal�and�environmental�realities�and�constraints�prevailing�in�all�jurisdictions�in�which�the� Corporation�conducts,�or�proposes�to�conduct,�its�business�and�affairs.��In�exercising�their�powers�and�in�discharging� their�duties,�the�directors�shall:�
-
act�honestly�and�in�good�faith�with�a�view�to�the�best�interests�of�the�Corporation;�
-
exercise�the�care,�diligence�and�skill�that�a�reasonably�prudent�person�would�exercise�in�comparable� circumstances;�
-
disclose�to�the�Corporation�the�nature�and�extent�of�any�interest�that�the�director�has�in�a�material� contract�or�material�transaction�with�the�Corporation�if�the�director�is�a�party�to�the�contract�or� transaction,�is�a�director�or�an�officer,�or�an�individual�acting�in�a�similar�capacity,�of�a�party�to�the�contract� or�transaction�or�has�a�material�interest�in�a�party�to�the�contract�or�transaction;�
-
comply�with�the�CBCA�and�the�regulations�enacted�thereunder�as�well�as�with�the�Corporation’s�articles� and�by�laws;�and�
-
comply�with�their�obligations�under�applicable�law�and�the�policies�adopted�by�the�Corporation.�
3. MANDATE�
(a)�� statutory�responsibilities��
-
�The�Board�has�the�statutory�responsibility:���
-
to�supervise�the�management�of�the�business�and�affairs�of�the�Corporation;���
-
to�review�and�to�approve�the�annual�consolidated�financial�statements�of�the�Corporation;���
-
to�place�before�the�shareholders�at�every�annual�meeting�the�annual�consolidated�financial�statements� of�the�Corporation,�the�report�of�the�auditor�and�any�further�information�respecting�the�financial�position� of�the�Corporation�and�the�results�of�its�operations�required�by�the�articles�and�by�laws�of�the� Corporation.���
The�Board�is�also�responsible�for�considering�the�following�matters�as�a�full�Board�which�in�law�may�not�be�delegated� to�management�or�to�a�committee�of�the�Board:���
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-
any�submission�to�the�shareholders�of�a�question�or�matter�requiring�the�approval�of�the�shareholders;���
-
the�filling�of�a�vacancy�among�the�directors�or�in�the�office�of�auditor,�or�appointment�of�additional� directors;���
-
the�declaration�of�dividends;���
-
the�purchase,�redemption�or�any�other�form�of�acquisition�of�securities�issued�by�the�Corporation;���
-
the�approval�of�a�management�proxy�circulars;���
-
the�approval�of�any�take�over�bid�circular�or�directors'�circular;���
-
the�approval�of�annual�consolidated�financial�statements�of�the�Corporation;�and���
-
the�adoption,�amendment�or�repeal�of�the�by�laws�of�the�Corporation.���
(b)�� strategic�and�financial�planning��
-
�The�Board�has�the�responsibility:���
-
to�review�and�consider�for�approval�the�strategic�and�financial�objectives�of�the�Corporation�proposed�by� management;���
-
to�review�and�consider�for�approval�the�operating�and�capital�budgets�of�the�Corporation�proposed�by� management;���
-
to�review�and�consider�for�approval�all�amendments�or�departures�from�the�established�strategic�and� financial�objectives�and�budgets�of�the�Corporation�as�proposed�by�management;�and���
-
to�review�financial�performance�of�the�Corporation�measured�against�the�financial�objectives�and�budgets� of�the�Corporation.���
(c)�� risk�assessment�and�mitigation��
The�Board�has�the�responsibility:���
-
to�ensure�that�management�has�identified�and�assessed�the�principal�risks�attendant�on�the�business�and� affairs�of�the�Corporation�and�has�achieved�an�appropriate�balance�between�the�risks�incurred�and�the� anticipated�benefits;�and���
-
to�confirm�that�there�are�systems�in�place�which�effectively�monitor�and�mitigate�those�risks�with�a�view� to�achieving�the�strategic�and�financial�objectives�of�the�Corporation.���
(d)�� senior�management�determination��
-
�The�Board�has�the�responsibility:���
-
to�appoint�the�CEO�and�approve�the�primary�duties�of�the�CEO;���
-
to�approve�the�terms�and�conditions�(including�compensation)�of�the�CEO’s�employment�by�the� Corporation;���
-
to�monitor�and�assess�the�performance�of�the�CEO�measured�against�the�strategic�and�financial�objectives� of�the�Corporation;���
-
if�requested�by�the�CEO,�to�advise�and�counsel�the�CEO�in�the�execution�of�the�CEO's�duties;���
-
in�consultation�with�the�CEO,�to�approve�the�appointment�of�the�other�Officers�and�to�approve�the�terms� and�conditions�(including�compensation)�of�those�Officer’s�employment�by�the�Corporation;�and���
-
to�assess�the�adequacy�of�the�processes�implemented�by�the�Corporation�to�train�and�develop�the�Officers� and�other�members�of�senior�management�and�to�achieve�the�orderly�succession�of�management.���
72
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(e)�� corporate�governance��
-
�The�Board�has�the�responsibility:���
-
to�implement�appropriate�structures�and�procedures�to�permit�the�Board�to�function�independently�of� management;���
-
to�analyze�the�definition�of�independence�and�its�application�to�individual�directors�on�a�periodic�basis;���
-
to�establish�appropriate�practices�for�the�regular�evaluation�of�the�effectiveness�of�the�Board,�its� committees�and�individual�directors;���
-
to�establish�committees�and�approve�their�respective�mandates�and�the�limits�of�authority�delegated�to� each�committee;���
-
to�establish�limits�of�authority�delegated�to�Officers;�and���
-
to�assess�the�integrity�and�professional�conduct�of�the�Officers�and�other�members�of�senior� management,�to�monitor�their�compliance�with�applicable�law�and�the�policies�adopted�by�the� Corporation�and�to�evaluate�their�success�in�creating�a�corporate�culture�of�integrity,�professionalism�and� compliance�with�legal�and�corporate�standards.���
(f)�� public�disclosure��
-
�The�Board�has�the�responsibility:���
-
to�supervise�the�Corporation’s�compliance�with�its�public�disclosure�obligations;���
-
to�verify�that�the�Corporation�has�in�place�policies�and�programs�that�ensure�that�the�Corporation� communicates�effectively�and�on�a�timely�basis�with�shareholders,�employees,�other�stakeholders�and� the�public�generally;���
-
to�verify�that�management�of�the�Corporation�discharges�its�responsibilities�in�relation�to�the�preparation� and�fair�presentation�of�the�Corporation’s�annual�consolidated�financial�statements�in�accordance�with� International�Financial�Reporting�Standards;���
-
to�verify�that�the�financial�performance�of�the�Corporation�is�adequately�reported�to�shareholders�and� regulators�on�a�timely�and�regular�basis;���
-
to�verify�the�timely�disclosure�of�any�other�developments�that�have,�or�could�have,�a�material�or� significant�impact�on�the�business�or�affairs�of�the�Corporation;�and���
-
to�report�at�least�annually�to�the�shareholders�of�the�Corporation�on�its�stewardship�of�the�business�and� affairs�of�the�Corporation.���
(g)�� compliance�monitoring��
-
�The�Board�has�the�responsibility�to:���
-
to�monitor�the�Corporation’s�compliance�with�applicable�law�in�the�conduct�of�its�business�and�affairs� including�compliance�with�each�of�its�contractual�obligations;���
-
to�monitor�the�Corporation’s�compliance�with�its�policies�and�procedures�in�the�conduct�of�its�business� and�affairs�including�compliance�with�policies�and�procedures�concerning�such�matters�as�the�health�and� safety�of�its�employees,�the�protection�of�the�environment�and�ethical�business�conduct;���
-
to�verify�that�the�Corporation�maintains�adequate�internal�controls�and�information�systems�for�the� purpose�of�ensuring�that�the�Corporation�satisfies�all�of�its�compliance�obligations;�and���
-
to�take�remedial�action�if�the�Corporation�fails�to�satisfy�any�of�its�compliance�obligations.���
73
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(h)�� other�responsibilities��
The�Board�has�the�responsibility�to:���
-
to�ensure�that�all�new�directors�receive�an�orientation�respecting�the�Corporation's�business�and�affairs� and�receive�continuing�education�opportunities�to�enhance�their�skills;�and���
-
to�take�such�other�action�that�is�consistent�with�this�mandate,�the�Corporation's�articles,�bylaws�and� policies�and�applicable�law�as�the�Board�considers�necessary�or�appropriate�acting�reasonably.���
4.������MEETINGS�AND�OPERATION��
The�Chair�or�any�two�directors�may�call�a�meeting�of�the�Board,�at�such�time�and�at�such�place�as�they�determine,�by� giving�at�least�forty�eight�hours’�notice�of�such�meeting�to�all�directors.���
The�Board�shall�meet�as�often�as�it�determines,�but�not�less�frequently�than�quarterly.���
Independent�directors�shall�meet�regularly�and�as�often�as�necessary�to�fulfill�their�responsibilities,�without�non� independent�directors�and�management�participation.���
A�quorum�for�meetings�of�the�Board�will�be�a�majority�of�directors�and�the�rules�for�calling,�holding,�conducting�and� adjourning�meetings�of�the�Board�will�be�those�prescribed�by�the�articles�and�by�laws�of�the�Corporation.���
The�affirmative�vote�of�a�majority�of�the�directors�participating�in�any�meeting�of�the�Board�is�necessary�for�the� adoption�of�any�resolution.���
The�Chair�will�preside�at�all�meetings�of�the�Board,�unless�the�Chair�is�not�present,�in�which�case�the�directors�that� are�present�will�designate�from�among�such�members�the�Chair�for�the�purposes�of�the�meeting.���
���
Agendas,�approved�by�the�Chair,�will�be�circulated�to�the�directors�along�with�background�information�on�a�timely� basis�prior�to�the�Board�meetings.�Minutes�of�all�meetings�of�the�Board�will�be�taken.�The�minutes�of�the�Board�will� be�recorded�and�maintained.���
All�directors�are�expected�to�allow�sufficient�time�to�review�meeting�materials�and�be�prepared�for�Board�meetings.� Directors�are�expected�to�attend�most,�if�not�all,�Board�meetings.���
A�director�or�directors�may�participate�in�a�meeting�of�the�Board�by�means�of�such�telephonic,�electronic�or�other� communication�facilities�that�permit�all�persons�participating�in�the�meeting�to�communicate�adequately�with�each� other,�and�a�director�participating�in�such�a�meeting�by�any�such�means�is�deemed�to�be�present�at�that�meeting.���
The�CEO�will�attend�meetings�of�the�Board�where�matters�relating�to�the�functions�as�the�Board�are�dealt�with,�unless� otherwise�excused�from�all�or�part�of�any�such�meeting�by�the�Chair.�The�Board�may�invite�such�other�Officers,� directors�and�employees�of�the�Corporation�as�it�sees�fit�from�time�to�time�to�attend�at�meetings�of�the�Board�and� assist�in�the�discussion�and�consideration�of�the�matters�being�considered�by�the�Board.���
Subject�to�the�articles�and�by�laws�of�the�Corporation�and�applicable�law,�the�Board�may�delegate�powers,�duties� and�responsibilities�to�committees�of�the�Board�and�the�Board�retains�the�responsibility�of�managing�its�own�affairs� including�selecting�its�Chair,�nominating�candidates�for�election�to�the�Board,�constituting�committees�of�the�full�
74
==> picture [108 x 37] intentionally omitted <==
Board,�determining�directors'�compensation�and�assessing�the�effectiveness�of�the�Board,�committees�and�directors� in�fulfilling�their�responsibilities.���
5. INDEPENDENT�ADVISORS��
The�Board�has�the�authority�to�retain�such�independent�advisors�as�it�may�consider�necessary�or�advisable�for�its� purposes.�The�expenses�related�to�such�engagement�shall�be�funded�by�the�Corporation.���
6. RESPONSIBILITIES�OF�THE�CHAIR��
The�Chair�of�the�Board�is�appointed�at�the�pleasure�of,�and�reports�to�the�Board.�The�responsibilities�of�the�Chair� include:���
-
working�collaboratively�with�the�CEO�to�coordinate�the�affairs�of�the�Board�and�to�ensure�effective� relations�with�Officers,�shareholders,�other�stakeholders�and�the�public;�and���
-
ensuring�that�the�Board�is�organized�properly,�functions�effectively,�and�meets�its�obligations�and�� responsibilities�in�all�aspects�of�its�work.���
(a)�� relationship�with�the�CEO��
The�Chair�will�maintain�unfettered�bi�lateral�communication�with�the�CEO.�The�Chair's�interaction�with�all�other� Officers�is�permitted�as�appropriate.���
The�Chair�will�work�collaboratively�with�the�CEO:���
-
to�act�as�the�principal�sounding�board,�counselor�and�confidant�for�the�CEO,�including�helping�to�review� strategies,�define�issues,�maintain�accountability,�and�build�relationships;���
-
to�ensure�the�CEO�is�aware�of�concerns�of�the�directors,�other�Officers,�shareholders,�other�stakeholders� and�the�public;���
-
to�assess,�in�conjunction�with�the�relevant�committees,�the�performance�of�the�CEO�and�provide�input� with�respect�to�compensation�and�succession;���
-
to�work�closely�with�the�CEO�to�ensure�management�strategies,�plans,�and�performance�are�appropriately� presented�to�the�Board;�and���
-
at�the�request�of�the�CEO,�to�provide�assistance�on�major�policy�issues�such�as�acquisitions,�divestitures,� and�new�strategic�initiatives.���
(b)�� relationship�with�the�board��
The�Chair�will�work�collaboratively�with�the�other�members�of�the�Board:���
-
to�lead�the�Board�in�monitoring�and�evaluating�the�performance�of�the�CEO,�the�accountability�of�the� CEO,�and�the�implementation�of�management�succession�and�development�plans;���
-
to�ensure�the�Board�receives�adequate�and�regular�updates�from�the�CEO�on�all�issues�important�to�the� interests�of�the�Corporation;���
-
to�maintain�a�liaison�and�communication�with�all�directors�and�committee�chairs�to�coordinate�input�from� directors,�and�optimize�the�effectiveness�of�the�Board�and�its�committees;�and���
-
in�collaboration�with�the�CEO,�to�ensure�data�requested�by�directors�or�committees�is�provided�in�a�timely� manner�and�meets�their�needs.���
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(c)�� board�meetings���
The�Chair�has�the�responsibility:���
-
to�chair�meetings�of�the�Board;���
-
to�ensure�the�directors�are�alert�to�their�obligations�to�the�Corporation,�shareholders,�management,�other� stakeholders�and�pursuant�to�law;���
-
to�establish�the�frequency�of�meetings�of�the�Board�and�review�such�frequency�from�time�to�time,�as� considered�appropriate�or�as�requested�by�the�directors;���
-
to�assist�the�appropriate�committee�in�identifying�a�slate�of�directors�to�be�nominated�for�election�to�the� Board;���
-
to�recommend�board�committees�and�their�composition,�review�the�need�for,�and�the�performance�and� suitability�of,�those�committees�and�make�such�adjustments�as�are�deemed�necessary�from�time�to�time,� all�in�conjunction�with�the�CEO�and�the�relevant�committees;���
-
to�prepare�the�agenda�and�coordinate�the�distribution�of�the�agenda,�information�packages�and�related� materials�for�meetings�of�the�Board�in�consultation�with�the�CEO;���
-
to�coordinate�the�review�and�assessment�of�individual�attendance,�performance�and�compensation�of� directors�and�the�size�and�composition,�and�overall�performance�of�the�Board,�all�in�conjunction�with�the� relevant�committees�of�the�Board;���
-
to�endeavor�to�ensure�that�the�Board's�key�discussions�take�place�when�as�many�of�the�directors�as� possible�are�present�and�that�essential�decisions�are�made�when�as�many�directors�as�possible�are�present� (either�in�person�or�by�telephone);���
-
to�endeavor�to�ensure�that�Board�meetings�can�be�scheduled�to�deal�with�important�business�that�arises� outside�of�the�regular�periodic�meetings;���
-
to�endeavor�to�ensure�that�the�Board�is�able�to�function�independently�of�management;���
-
to�consider,�and�allow�for,�when�appropriate�a�meeting�of�all�independent�directors,�so�that�Board� meetings�can�take�place�without�management�being�present;���
-
to�endeavor�to�ensure�reasonable�procedures�are�in�place�to�allow�for�directors�to�engage�outside� advisors�at�the�expense�of�the�Corporation,�in�appropriate�circumstances;�and���
-
to�apply�the�Rules�of�Order:���
-
to�ensure�that�the�meeting�is�duly�constituted;���
-
to�ensure�the�meeting�provides�for�reasonable�accommodation;���
-
to�confirm�the�admissibility�of�all�persons�at�the�meeting;���
-
to�preserve�order�and�the�control�of�the�meeting;�and���
-
to�ascertain�the�sense�of�the�meeting�by�a�vote�on�all�questions�properly�brought�before�the�meeting.���
(d)�� shareholder�meetings��
The�Chair�has�the�responsibility:���
-
to�chair�meetings�of�shareholders;���
-
to�ensure,�in�collaboration�with�the�CEO�and�relevant�committees,�that�the�Corporation's� management�and,�where�applicable,�the�Board�are�appropriately�represented�at�official�functions� and�meetings�with�major�shareholder�groups,�and�other�stakeholder�groups;���
-
at�the�request�of�the�CEO,�to�assist�in�representing�the�Corporation�at�specific�shareholder� presentations,�or�with�senior�levels�of�industry�or�government�to�promote�specific�corporate� objectives;���
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at�the�request�of�the�CEO,�to�undertake�public�service�activities�in�conjunction�with�the� Corporation's�charitable,�educational�and�cultural�objectives;�and���
-
to�apply�the�Rules�of�Order:���
-
to�ensure�that�the�meeting�is�duly�constituted;���
-
to�ensure�the�meeting�provides�for�reasonable�accommodation;���
-
to�confirm�the�admissibility�of�all�persons�at�the�meeting;���
-
to�preserve�order�and�the�control�of�the�meeting;���
-
to�appoint�scrutineers�if�requested�and�instructing�them�in�their�duties;���
-
to�rule�on�the�validity�of�proxies;�and���
-
to�ascertain�the�sense�of�the�meeting�by�a�vote�on�all�questions�properly�brought�before�the� meeting.���
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Head�Office:���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
308���4[th] �Avenue�S.W.,�Suite�3100���� Calgary,�Alberta�� Canada�T2P�0H7��� Telephone:�403�261�5900�� Attention:�Director,�External�Relations���� [email protected]
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