FormerXBC Inc. - Proxy Solicitation & Information Statement 2022

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ANNUAL MEETING OF SHAREHOLDERS Virtual meeting live webcast on May 12, 2022, at 11:00 a.m. (EDT)

AND

MANAGEMENT INFORMATION CIRCULAR March 31, 2022

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2022 Management Information Circular

Letter to Shareholders

March 31, 2022

Dear Shareholders:

On behalf of the board of directors and management of Xebec Adsorption Inc. (“ Xebec ”), we are pleased to invite you to the 2022 annual meeting (the “ Meeting ”) of holders of common shares of Xebec Adsorption Inc. (the “ Shareholders ”) which will be held on May 12, 2022 at 11:00 a.m. (EDT).

This year as we continue to deal with the impact of the coronavirus pandemic (“ COVID-19 ”), and in light of remaining risks that the public health protocols that federal, provincial, and local governments may impose to protect the health and safety of our communities, we will hold our Meeting in a virtual only format, which will be conducted via live audio webcast online at https://virtual-meetings.tsxtrust.com/1266. Shareholders will have an equal opportunity to participate at the Meeting online regardless of their geographic location.

The notice of Meeting (the “ Notice ”) and related materials are enclosed. The management information circular (the “ Circular ”) describes the business to be conducted at the Meeting and contains information on our governance practices and our approach to executive compensation. We hope that you take the time to review these meeting materials and that you exercise your vote. Whether or not you plan to participate at the Meeting, we encourage you to vote promptly, in advance of the Meeting. In the Circular, you will find important information and detailed instructions about how to participate at the Meeting online and vote on the business to be conducted at the Meeting.

The Meeting is an opportunity to listen to and ask questions of the people who are responsible for the performance of Xebec. The webcast of the Meeting will be archived on our website following the Meeting.

We thank you for your continued support of Xebec and look forward to your participation at this year’s Meeting.

Sincerely,

(s) Kurt Sorschak

Kurt Sorschak Chairman of the Board

Record Date ....................................................... 1 Notice-and-Access ............................................. 1 How to Access the Meeting Materials and the Financial Statements .................................... 2 How to Request a Paper Copy of the Meeting Materials and of the Financial Statements ........................................................ 2 Voting and Participating at the Meeting ............. 3 Questions .......................................................... 3 General Information .......................................... 5 Share Information .............................................. 5 Principal Shareholders ....................................... 5 General Proxy Information ................................. 6 How to Request a Paper Copy of the Meeting Materials and of the Financial Statements ........................................................ 6 How to Participate at the Meeting ..................... 7 Voting ............................................................... 8 How to Vote your Common Shares .................... 10 Interest of Certain Persons or Companies in Matters to be Acted Upon ............................. 11 Nominees for Election to the Board of Directors .......................................................... 16 Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions ................. 23 Compensation of Directors ................................ 23

Summary Compensation Table ......................... 24 Equity Ownership ............................................ 25 Board Attendance ............................................ 27 Human Resources Committee .......................... 34 Audit Committee ............................................. 34 Corporate Governance Committee ................... 35 Mergers and Acquisitions Committee ............... 35 Special Committee or Ad Hoc Committee ......... 36 Board Assessments .......................................... 36 Message from the Human Resources Committee....................................................... 37 Compensation Discussion and Analysis ............. 38 Compensation Summary and Process Outline ............................................................ 38 Compensation Risk Oversight ........................... 39 Independent Advisors ...................................... 39 Compensation Comparator Group .................... 40 Named Executive Officers ................................ 41 Summary Compensation Table ......................... 41 Compensation Mix ........................................... 43 Employment, Consulting and Management Agreements ................................ 51 Outstanding Share-Based and OptionBased Awards .................................................. 52

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Equity Based Award – Value Vested or Earned During the Year ..................................... 53 Performance Graph .......................................... 54 Anti-Hedging Policy........................................... 54 Pension Plan ..................................................... 55 Incentive Compensation Clawback Policy .......... 55 Share Ownership Policy .................................... 55 Securities Authorized for Issuance Under Equity Compensation Plans ............................... 56 Shareholder Proposals ...................................... 56 Interest of Informed Persons in Material Transactions ..................................................... 57 Particulars of Other Matters to Be Acted Upon ................................................................ 57 Additional Information ..................................... 57 Approval of Circular .......................................... 58

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Notice of Annual Meeting of Shareholders

NOTICE IS HEREBY GIVEN THAT the virtual annual meeting (the “ Meeting ”) of holders of common shares (the “ Shareholders ”) in the capital of Xebec Adsorption Inc. (the “ Corporation ”) will be held in a virtual only format on Thursday, May 12, 2022 at 11 :00 a.m. (Eastern Time) for the following purposes:

to receive the consolidated audited financial statements of the Corporation for its fiscal year ended December 31, 2021 and the report of the auditor thereon;
to elect the directors of the Corporation for the ensuing year;
to appoint the independent auditor of the Corporation for the ensuing year and to authorize the directors of Corporation to fix the auditor’s remuneration;
to vote, in an advisory, non-binding manner, on the Corporation’s approach to executive compensation described in the management information circular accompanying this notice of the Meeting (the “ Circular ”); and
to transact such other business as may properly come before the Meeting, or any postponement or adjournment thereof.

This year again, the Corporation is holding the Meeting as a virtual meeting only, which will be conducted via live audio webcast online at https://virtual-meetings.tsxtrust.com/1266, where all Shareholders and their proxyholders regardless of geographic location will have an equal opportunity to participate at the Meeting. Shareholders and proxyholders will not be able to attend the Meeting in person. This decision was made has we continue to deal with the impact of COVID 19. The Circular contains further details and instructions about virtual participation.

Please see section “How to Participate at the Meeting” on page 7 of the management information circular for additional instructions on how to attend the Meeting.

Record Date

The record date for the determination of Shareholders entitled to receive notice of and to vote at the Meeting is the close of business on March 23, 2022 (the “ Record Date ”).

Notice-and-Access

If your name appears on a share certificate, you are considered a “ Registered Shareholder ”. If your shares are listed in an account statement provided to you by an intermediary, you are considered a “ Beneficial Shareholder ”. Only Shareholders as of the Record Date are entitled to receive notice of the Meeting and, only Registered Shareholders and proxyholders (including Beneficial Shareholders which have appointed themselves as proxyholders) are entitled to vote at the Meeting.

This year, as permitted by Canadian corporate and securities regulators, the Corporation is using notice-andaccess to deliver the Circular and other proxy-related materials (the “ Meeting Materials ”) to both its Registered

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Shareholders and Beneficial Shareholders. Beneficial Shareholders are either objecting beneficial owners (“ OBOs ”) who object that intermediaries disclose information about their ownership, or non-objecting beneficial owners (“ NOBOs ”), who do not object to such disclosure. This notice is being sent by the Corporation to OBOs and NOBOs indirectly through intermediaries.

Notice-and-access is a set of rules that allows issuers to post electronic versions of proxy-related materials online, via SEDAR and one other website, rather than mailing paper copies of such materials to Shareholders. Under notice-and-access, Shareholders still receive a proxy form or voting instruction form enabling them to vote at the Meeting.

However, instead of paper copies of the Meeting Materials and of the Financial Statements, Shareholders receive this notice which contains information on how they may access the Meeting Materials and the Financial Statements online and how to request paper copies of such documents. The use of notice-and-access will directly benefit the Corporation by substantially reducing its printing and mailing costs and is more environmentally friendly as it reduces paper use.

How to Access the Meeting Materials and the Financial Statements

Our Website On SEDAR www.xebecinc.com www.sedar.com under “Investor Briefcase” under the Corporation’s profile

Shareholders are reminded to read the Circular and other Meeting Materials carefully before voting their shares.

How to Request a Paper Copy of the Meeting Materials and of the Financial Statements

Before the Meeting

Whether you are a Registered Shareholder or a Beneficial Shareholder you may request paper copies of the Meeting Materials and of the Financial Statements at no cost to you by contacting the Corporate Secretary of the Corporation at 1-877-469-3232 or by email at [email protected].

In any case, requests for paper copies should be received at least five (5) business days prior to the proxy deposit date and time, which is set May 10, 2022 at 11:00 a.m. (Eastern Time) in order to receive the Meeting Materials in advance of such date and the Meeting date. To ensure receipt of the paper copies in advance of the voting deadline and Meeting date, we estimate that your request must be received by no later than 5:00 p.m. (Montréal time) on May 2, 2022.

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After the Meeting

Call the Corporate Secretary at of the Corporation at 1-877-469-3232 or by email at [email protected]. A copy of the Meeting Materials and the Financial Statements will be sent to you within ten (10) calendar days of receiving your request.

Voting and Participating at the Meeting

Regardless of whether or not Shareholders are able to participate at the Meeting or any postponement or adjournment of the virtual Meeting:

(i) Registered Shareholders may virtually participate and vote in real time by audio webcast at the Meeting or be represented by proxy. Registered Shareholders may vote by proxy by following the instructions set out on the form of proxy, or are requested to date, sign and return the accompanying form of proxy to the registrar and transfer agent for use at the Meeting or any postponement or adjournment of the Meeting. A proxy will not be valid unless the completed form of proxy is received by TSX Trust Company, Attention Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1at the latest at 11:00 a.m. (Montréal time) on May 10, 2022 or not less than 48 hours (excluding Saturdays, Sundays, and holidays) before the date and time to which the Meeting has been rescheduled if it has been adjourned or postponed. Shareholders are invited to participate at the Meeting as there will be an opportunity to ask questions.
(ii) Beneficial Shareholders are requested to date, sign and return the voting instruction form or the form of proxy provided by their intermediary in accordance with the instructions provided to them by such intermediary. Intermediaries may have different and earlier deadlines. Beneficial owners may virtually participate and vote in real time by audio webcast at the Meeting provided they have appointed themselves as proxyholder and registered with TSX Trust by no later than 11:00 a.m. (Montréal time) on May 10, 2022.

We invite you to review the Circular, which provides you with background information on the matters that will be addressed at the Meeting and details information on how to virtually participate at the Meeting and how to vote.

Questions

Registered Shareholders

If you are a Registered Shareholder and have any questions regarding this notice, the matters to be dealt with at the Meeting, the notice-and-access mechanism, the procedures for voting or completing the form of proxy or any information contained in the Circular, please contact TSX Trust Company at 1-866-600-5869 (within North America) or (416) 361-0930 (outside of North America).

Beneficial Shareholders

If you are a Beneficial Shareholder and have any questions regarding this notice the matters to be dealt with at the Meeting or the notice-and-access mechanism, please contact TSX Trust Company at 1-866-600-5869 (within

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North America) or (416) 361-0930 (outside of North America). If you have questions regarding completing the voting instruction form or form of proxy, please contact your intermediary.

BY ORDER OF THE BOARD OF DIRECTORS

(s) Nathalie Théberge

Nathalie Théberge Chief Legal Officer and Corporate Secretary Montreal, Québec March 31, 2022.

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Management Information Circular

General Information

This management information circular (the “Circular”) is furnished in connection with the solicitation of proxies by the management (“Management”) of Xebec Adsorption Inc. (the “Corporation”) for use at the annual meeting (the “Meeting”) of the holders of common shares (“Common Shares”) in the capital of the Corporation (“Shareholders”) on Thursday, May 12, 2022 at 11:00 a.m. (Eastern Time), and at any adjournment or postponement thereof, for the purposes set forth in the notice of annual meeting of shareholders (the “Notice”).

No person has been authorized to give any information or make any representation in connection with any other matters to be considered at the Meeting other than those contained in this Circular and, if given or made, any such information or representation must not be relied upon as having been authorized.

This year again, the Meeting will be held in a virtual format only, which will be conducted via live audio webcast online at https://virtual-meetings.tsxtrust.com/1266.

In this Circular, references to “ Xebec ”, the “ Corporation ”, “ we ” and “ our ” refer to Xebec Adsorption Inc., a corporation governed by the Canada Business Corporations Act (the “ CBCA ”).

References in this Circular to the “ Board of Directors ” or “ Board ” refer to the board of directors of the Corporation.

Unless otherwise specified, all information in this Circular is current as of March 31, 2022, except as indicated otherwise. All references to “$” or dollars are to Canadian dollars.

Share Information

The record date for determination of Shareholders entitled to receive notice of and to vote at the Meeting is March 23, 2022 (the “ Record Date ”). As of March 31, 2022, there were 154,717,934 Common Shares issued and outstanding. Each Common Share carries the right to one vote on all matters which come before the Meeting. Shareholders of record are entitled to receive notice of and vote at the Meeting.

Principal Shareholders

To the knowledge of the directors (the “ Directors ”) and officers of the Corporation (from records and publicly filed reports), there is no person who beneficially owns or exercises control or direction over more than 10% of the Common Shares.

All Directors and executive officers as a group beneficially owned or exercised control or direction over 12,731,964 Common Shares representing 8.23% of the class as of March 31, 2022.

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General Proxy Information

Solicitation of Proxies

The solicitation of proxies by this Circular is being made by or on behalf of Management primarily by mail, but proxies may also be solicited via the Internet, by telephone, in writing or in person, by Directors, officers or regular employees of the Corporation who will receive no compensation therefor in addition to their regular remuneration. The solicitation of proxies from Beneficial Shareholders will be carried out indirectly through their respective intermediaries. The cost of the solicitation of proxies will be borne by the Corporation.

Notice-and-Access

As permitted by Canadian securities regulators, the Corporation is using the “notice-and-access” mechanism set out in National Instrument 54–101 – Communication with Beneficial Owners of Securities of a Reporting Issuer for delivery of the Meeting Materials as well as the Financial Statements to the Shareholders. The Corporation has adopted notice-and-access for both Registered Shareholders and Beneficial Shareholders. Notice-and-access is a set of rules that allows issuers to post electronic versions of proxy-related materials online, via SEDAR and one other website, rather than mailing paper copies of such materials to Shareholders. Instead of receiving this Circular with the form of proxy or voting instruction form, Shareholders received a Notice with instructions on how to access the remaining Meeting Materials online. The Notice and proxy form or voting instruction form have been sent to both registered and Beneficial Shareholders. Beneficial Shareholders are either “objecting beneficial owners” (“ OBOs ”) who object that intermediaries disclose information about their ownership in the Corporation, or “non-objecting beneficial owners” (“ NOBOs ”), who do not object to such disclosure. The Notice and voting instruction form are being sent by the Corporation to OBOs and NOBOs indirectly through intermediaries and the Corporation assumes the delivery costs thereof. The Circular and other relevant materials are available on the Internet at www.xebecinc.com under “Investors”/ “Financial Reports & Documents”/ “Information Circular” and on the Canadian Securities Administrators’ website at www.sedar.com.

If your name appears on a share certificate or a DRS statement, you are considered as a “ Registered Shareholder ”. If your Common Shares are listed in an account statement provided to you by an intermediary, you are considered as a “ Beneficial Shareholder ”. Only Shareholders as of the Record Date are entitled to receive notice of the Meeting and only Registered Shareholders and proxyholders (including Beneficial Shareholders who have appointed themselves as proxyholders) are entitled to vote at the Meeting.

How to Request a Paper Copy of the Meeting Materials and of the Financial Statements

Before the Meeting

Requests for paper copies should be received at least five (5) business days prior to the proxy deposit date and time, which is set for May 10, 2022 at 11:00 a.m. (Eastern Time) in order to receive the Meeting Materials and the Financial Statements in advance of such date and the Meeting date. To ensure receipt of the paper copies in advance of the voting deadline and Meeting date, we estimate that your request must be received by no later than 5:00 p.m. (Eastern Time) on May 2, 2022.

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After the Meeting

Call the Corporate Secretary of the Corporation at 1-877-469-3232 or send an email at [email protected]. A copy of the Meeting Materials will be sent to you within ten (10) calendar days of receiving your request.

How to Participate at the Meeting

This year again, the Corporation is holding the Meeting as a virtual meeting only, which will be conducted via live audio webcast online at https://virtual-meetings.tsxtrust.com/1266 where all Shareholders and proxyholders regardless of geographic location will have an equal opportunity to participate at the Meeting. Shareholders and proxyholders will not be able to attend the Meeting in person. This decision was made once again in an effort to contain the spread of the coronavirus (COVID-19) and to prioritize and support the wellbeing of our Shareholders, employees, directors and other Meeting attendees. All Shareholders and proxyholders will be able to participate, submit questions and vote at the Meeting by logging in online and following the instructions set forth below.

To access the Meeting, follow the instructions below:

STEP ONE: Log into the Virtual Platform online at https://virtual-meetings.tsxtrust.com/1266

STEP TWO: Follow these instructions:

`o` Registered Shareholders:

Click “I have a control number” and then enter your unique 13-digit control number and password “xebec2022” (case-sensitive). The 13-digit number located on the form of proxy received from TSX Trust is your control number. If you use your control number to log into the Meeting, any vote you cast at the Meeting will revoke any proxy you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote during the Meeting.

`o` Duly appointed proxyholders (including Beneficial Shareholders who have appointed themselves as proxyholder):

Click “I have a control number” and then enter your unique 13-digit control number and password “xebec2022” (case-sensitive) which was provided by email from TSX Trust following your registration of your proxyholder with TSX Trust at 1-866-751-6315 (within North America) or (212) 235-5754 (outside of North America) or by completing the online form at www.tsxtrust.com/control-number-request by no later than 11:00 a.m. (Eastern Time) on May 10, 2022. Failing to register will result in the proxyholder not receiving a control number, which is required to vote at the Meeting.

Beneficial Shareholders who have not duly appointed themselves as proxyholder will be able to participate at the virtual Meeting as guests but will not be able to vote at the virtual Meeting.

`o` Guests:

Guests can log into the meeting as well by clicking “Guest” and completing the online form. Guests can listen to the meeting but are not able to vote or ask questions at the meeting.

We encourage you to log into the Meeting at least one hour (1 hr) prior to the commencement of the Meeting. You may begin to log into the Meeting virtual platform beginning at 10:00 a.m. (Eastern Time), on May 12, 2022. The Meeting will begin promptly at 11:00 a.m. (Eastern Time) on May 12, 2022.

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You may access the website via your smartphone, tablet or computer and you will need the latest version of Chrome, Safari, Edge or Firefox (note that the use of Internet Explorer is not recommended). Please ensure that you are connected to the Internet at all times to be able to vote. If you are not connected, your vote may not be recorded. It is your responsibility to ensure you stay connected for the duration of the meeting. You should allow ample time to log into the meeting online and complete the related procedure.

The chair of the meeting and other members of management present will answer questions relating to matters to be voted on at the Meeting before a vote is held on each matter, if applicable. General questions will be addressed during a question and answer period following the conclusion of the meeting. So that as many questions as possible are answered, Shareholders and proxyholders are asked to be brief and concise and to address only one topic per question. Multiple questions on the same topic or that are otherwise related may be grouped, summarized and answered together.

All Shareholder questions are welcome. However, we do not intend to address questions that are irrelevant to the business of the Meeting or to the Corporation’s operations, are related to personal grievances, are related to non-public information about the Corporation, constitute derogatory references to individuals or that are otherwise offensive to third parties, are repetitious or have already been asked by other shareholders, are in furtherance of a shareholder’s personal or business interest, or are out of order or not otherwise appropriate as determined by the chair or secretary of the meeting in their reasonable judgment. The chair of the Meeting has broad authority to conduct the Meeting in an orderly manner. To ensure the meeting is conducted in a manner that is fair to all Shareholders, the chair of the Meeting may exercise broad discretion with respect to, for example, the order in which questions are asked and the amount of time devoted to any one question.

Voting

Your vote is important. Please read the information below to ensure your Common Shares are properly voted.

Voting by proxy

You can virtually participate at the Meeting or you can appoint someone else to vote for you as your proxyholder. Shareholders may appoint a proxyholder or one or more alternate proxyholders, who are not required to be Shareholders, to virtually participate and act at the Meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy. Voting by proxy means that you are giving the person named on your form of proxy (the “ Proxyholder ”) the authority to vote your Common Shares for you in accordance with your instructions at the Meeting or any adjournment thereof.

Proxy voting instructions must be received by TSX Trust by 11:00 a.m. (Eastern Time) on May 10, 2022 or not less than 48 hours (excluding Saturdays, Sundays, and holidays) before the date and time to which the Meeting has been rescheduled if it has been adjourned or postponed (the “ Proxy Deadline ”).

The persons named as proxyholder in the accompanying form of proxy or voting instruction form are Directors and officers of the Corporation. A Registered Shareholder desiring to appoint some other person, who need not be a Shareholder, to participate and act on the Registered Shareholder’s behalf at the Meeting has the right to do so by inserting the desired person’s name in the blank space provided in the form of proxy .

If you want to appoint someone other than the Directors and officers of the Corporation named as proxyholder in the accompanying form of proxy or voting instruction form, you must:

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submit proxy voting instructions with the name of your chosen proxyholder; and
register your chosen proxyholder with TSX Trust at 1-866-751-6315 (within North America) or (212) 2355754 (outside of North America) or by completing the online form at www.tsxtrust.com/control-numberrequest by no later than 11:00 a.m. (Eastern Time) on May 10, 2022. Failing to register will result in the proxyholder not receiving a control number, which is required to vote at the Meeting.

Registered Shareholders

Registered Shareholders will have received a form of proxy with their Meeting Materials. Unless you are voting on the Internet, the form of proxy must be in writing and signed by the Registered Shareholder, or by the Registered Shareholder’s attorney duly authorized in writing or, if the Registered Shareholder is a body corporate or association, by a duly authorized officer or attorney, indicating the capacity under which such officer or attorney is signing. If the form of proxy is executed by an attorney or an authorized officer, you may be asked to provide evidence of the attorney’s or authorized officer’s authority. A proxy will not be valid unless the completed form of proxy is received by TSX Trust by mail: Attention Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1, by facsimile at 1-866-781-3111 (within North America) or 416-368-2502 (outside of North America) or by email at [email protected], by the Proxy Deadline.

Beneficial Shareholders

Regulatory policy requires intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of the Meeting. Beneficial Shareholders will have received a voting instruction form or form of proxy from the intermediary/broker through which they hold their shares. Beneficial Shareholders should carefully follow the instructions of their intermediary/broker, including those on how and when voting instructions are to be provided, in order to have their Common Shares voted at the Meeting. Beneficial Shareholders should provide their instructions to their intermediary/broker sufficiently in advance of the Meeting to enable their intermediary/broker to provide those instructions to TSX Trust by the Proxy Deadline. See “Beneficial Shareholders” below.

Revocation of Proxies

In addition to revocation in any other manner permitted by law, a Shareholder may revoke their proxy voting instructions by providing new proxy voting instructions on a proxy form with a later date, or at a later time if you are voting on the Internet. Any new voting instructions, however, will only take effect if received by TSX Trust by the Proxy Deadline.

A Registered Shareholder may revoke their proxy voting instructions without providing new proxy voting instructions by an instrument in writing executed by the Shareholder or the Shareholder’s authorized attorney at TSX Trust’s office, located at 1 Toronto Street, Suite 1200, Toronto, On M5C 2V6, at any time up to and including the last business day preceding the day of the Meeting or to the Chair of the Meeting on the day of the Meeting, or any adjournment thereof, at which the proxy is to be used. If as a Registered Shareholder, you log in to the virtual Meeting using your unique 13-digit control number and password “xebec2022” (casesensitive), you will be revoking any and all previously submitted proxies for the meeting and will be provided the opportunity to vote by online ballot on the matters put forth at the Meeting. If you wish to log in to the virtual Meeting but do not wish to revoke a previously submitted proxy, you may log in as a guest (see instructions above), but you will be unable to vote at the Meeting.

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Beneficial Shareholders who wish to revoke their proxy voting instructions after the Proxy Deadline but prior to voting should contact their intermediary/broker for assistance.

A revocation of a form of proxy does not affect any matter on which a vote has been taken prior to the revocation.

How to Vote your Common Shares

Registered Shareholders

If you are a Registered Shareholder, you may vote your Common Shares in the following ways:

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By mail or hand delivery. Complete and return or deliver the accompanying form of proxy to:

TSX Trust Company, Attention Proxy Department 1 Toronto Street, Suite 1200

Toronto, Ontario, M5C 2V6

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On the Internet . Registered Shareholders must go to the following Internet site: www.tsxtrust.com/vote-proxy and enter their personalized 13-digit e-voting control number printed on their Form of Proxy and follow the instructions on the screen.

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By email. Registered Shareholders must scan their completed and signed form of proxy, and email it to [email protected].

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By facsimile . Registered Shareholders must fax their completed and signed form of proxy to 1-866-781-3111 (within North America) or 416-368-2502 (outside of North America).

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In real time. Vote in real time by audio webcast at the Meeting.

If you wish to appoint as your proxyholder someone other than the Directors and officers of the Corporation named as proxyholder in the accompanying form of proxy, you must insert the name of your chosen proxyholder in the space provided online (if voting on the Internet) or in the proxy form before returning it by mail, hand delivery, email or facsimile.

Beneficial Shareholders

The information set forth in this section is important to all Shareholders of the Corporation. Beneficial Shareholders should note that only a Shareholder whose name appears on the records of the Corporation as

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a registered holder of Common Shares or a person they appoint as a proxy can be recognized and vote at the Meeting. Beneficial Shareholders cannot be recognized at the Meeting for purposes of voting their Common Shares in real time by audio webcast or by way of depositing a form of proxy.

Applicable regulatory policy requires intermediaries to seek voting instructions from Beneficial Shareholders in advance of Shareholders’ meetings. Every intermediary has its own mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Shareholders in order to ensure that their Common Shares are voted at the Meeting. Beneficial Shareholders should carefully follow the instructions of their intermediaries/brokers, including those on how and when voting instructions are to be provided, in order to have their Common Shares voted at the Meeting. This can be done by mail, or your intermediary/broker may also allow you to do this online or by telephone. You need to act promptly to allow enough time for your intermediary to receive the form, and provide your instructions to TSX Trust before the Proxy Deadline.

If you are a Beneficial Shareholder and wish to vote in real time by audio webcast at the Meeting, you must:

appoint yourself as your chosen proxyholder instead of the Directors and officers of the Corporation named as proxyholder in the accompanying form of proxy or voting instruction form; and
register yourself as your chosen proxyholder with TSX Trust at 1-866-751-6315 (within North America) or -

(212) 235-5754 (outside of North America) or by completing the online form at www.tsxtrust.com/control number-request by no later than 11:00 a.m. (Eastern Time) on May 10, 2022. Failing to register will result in you not receiving a control number, which is required to vote at the Meeting.

In order to appoint yourself as your chosen proxyholder:

Canadian Beneficial Shareholders

Print your name as your chosen proxyholder in the blank space provided for appointing a proxyholder on the voting instruction form and follow the instructions provided by your intermediary/broker for mailing your voting instructions. Your intermediary may allow you to do this online or by telephone instead. Do not complete the voting section because you will vote in real time at the meeting. You need to act promptly to allow enough time for your intermediary to receive your instructions and to forward them to TSX Trust prior to the Proxy Deadlines o that you can register your proxyholder to vote at the Meeting.

U.S. Beneficial Shareholders

Follow the instructions your intermediary has provided in the voting instruction form sent to you about how to request a legal proxy to appoint someone else as a proxyholder, or contact your intermediary/broker right away to request a legal proxy form if you have not received a voting instruction form. Your intermediary/broker should send to you a legal proxy that you must complete and submit to TSX Trust by mail or hand delivery, on the Internet, by email or by facsimile in the same manner as for Registered Shareholders (see “How to Vote your Common Shares - Registered Shareholders”). Your legal proxy must be received by TSX Trust prior to the Proxy Deadline so that you can register your proxyholder to vote at the Meeting.

Interest of Certain Persons or Companies in Matters to be Acted Upon

To the knowledge of the Directors and executive officers of the Corporation, except as set out herein and except insofar as they may be Shareholders of the Corporation, no Director or executive officer of the Corporation, nor

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any proposed nominee for election to the office of Director of the Corporation, nor any associate or affiliate of the aforementioned persons, has a material interest, directly or indirectly, by way of beneficial ownership or otherwise, in the matters to be acted on at the Meeting.

Matters to be Acted Upon at the Meeting

The following items will be covered at the Meeting:

to receive the consolidated audited financial statements of the Corporation for its fiscal year ended December 31, 2021 and the report of the auditor thereon;
to elect the Directors of the Corporation for the ensuing year;
to appoint the independent auditor of the Corporation for the ensuing year and to authorize the directors of the Corporation to fix the auditor’s remuneration;
to vote, in an advisory, non-binding manner, on the Corporation’s approach to executive compensation described in the Circular accompanying this notice of the Meeting; and
to transact such other business as may properly come before the Meeting, or any postponement or adjournment thereof.

As of the date of this Circular, Management is not aware of any changes to these items and does not expect any other items to be brought forward at the Meeting. If there were changes or new items, your Proxyholder can vote your Common Shares on these items as he or she sees fit.

1. Presentation of the Financial Statements

The consolidated audited financial statements of the Corporation and related Management’s discussion and analysis for the year ended December 31, 2021, will be presented to Shareholders at the Meeting. These documents are available on SEDAR at www.sedar.com and on our website at www.xebecinc.com. No Shareholder vote is required in connection with the financial statements.

2. Election of Directors

The Articles of Arrangement of the Corporation dated June 12, 2009, as amended, provide that the Corporation must have a minimum of three and a maximum of ten Directors, and the Corporation’s By-laws provide that the Directors of the Corporation are empowered to determine the number of Directors to sit on the Board of Directors. The Board fixed the number of Directors for the coming year at seven.

The seven individuals nominated for election as Directors are listed in the “Nominees for Election to the Board of Directors” section beginning on page 16 of this Circular. Each Director elected at the Meeting will hold office until the end of the next annual meeting of Shareholders, or until his or her successor is duly elected or appointed. Management does not expect that any of the nominees will be unable to serve as Directors of the Corporation.

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Majority Voting Policy

The Corporation has a majority voting policy that applies to uncontested elections whereby any nominee for election as a Director at the annual meeting of shareholders, for whom the number of votes withheld exceeds the number of votes cast in his or her favor will be deemed not to have received the support of Shareholders, even if he or she is elected ( “Majority Voting Policy” ). A Director elected in such circumstances must immediately tender his or her resignation to the Chairman of the Board following the Corporation’s Shareholders’ meeting. The Corporate Governance Committee shall consider the resignation offer and recommend to the Board whether or not to accept it. The Board shall consider the Corporate Governance Committee’s recommendation within 90 days following the Shareholders’ meeting at which the Director whose resignation has been tendered was elected. The Board shall issue a press release announcing the resignation of the Director or explaining the reasons justifying its decision not to accept the resignation. In the event that any Director who received a Majority Withheld Vote (as defined in the Majority Voting Policy) does not tender his or her resignation in accordance with this policy, he or she will not be re-nominated by the Board. For more details, please refer to the Majority Voting Policy available on the Corporation’s website at www.xebecinc.com.

By filling in the accompanying form of proxy, Shareholders may vote for all Directors or choose to withhold their vote from some or all of the Directors proposed for election.

The Board of Directors recommends that Shareholders vote FOR the election of each of the seven proposed nominees whose names are set out in the “Nominees for Election to the Board of Directors” section of this Circular.

Unless otherwise directed, the persons named in the enclosed form of proxy intend to vote FOR the election, as Directors, of each of the seven proposed nominees whose names are set out in the “Nominees for Election to the Board of Directors” section of this circular starting on page 16.

3. Appointment of Auditor

Raymond Chabot Grant Thornton LLP has been appointed auditor of the Corporation since November 28, 2016.

The Board of Directors, on the advice of the Audit Committee, recommends that Shareholders vote FOR Raymond Chabot Grant Thornton LLP, Chartered Professional Accountants, to be reappointed as independent auditor of the Corporation at a remuneration and term of engagement to be fixed by the Directors of the Corporation.

Unless otherwise directed, the persons named in the enclosed form of proxy intend to vote FOR the appointment of Raymond Chabot Grant Thornton LLP, as independent auditor of the Corporation for the ensuing year, until the close of the next annual meeting of Shareholders, at a remuneration to be fixed by the Directors.

For the years ended December 31, 2021 and December 31, 2020, the following fees were paid by the Corporation to its external auditor Raymond Chabot Grant Thornton LLP and its affiliates:

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Year ended December 31, 2021 Year ended December 31, 2020
Audit fees [(1)] $731,000 $159,750
Audit-related fees [(2)] $135,592 $75,824
Tax fees [(3)] $160,678 $148,172
All other fees [(4)] $106,295 $239,095
Total $1,133,565 $622,841
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(1) Audit Fees: Audit fees were for professional services rendered by Raymond Chabot Grant Thornton LLP in 2021 and 2020 for the audit of the annual consolidated financial statements of the Corporation.

(2) Audit–Related Fees: Audit-related fees were for assurance and related services reasonably related to the performance of the audit or review of the annual statements and are not reported under the heading “Audit Fees” above. These services consisted of consultations related to accounting matters and amounts incurred in respect of interim reviews of the Corporation’s quarterly financial statements.

(3) Tax Fees: Tax fees were for tax compliance and tax advice. These services consisted of tax compliance related to the preparation of tax returns and tax advice related to various agreements the Corporation entered into.

(4) All Other Fees: These fees are mainly related to the public offerings in 2021 and 2020 and acquisitions.

4. Non-Binding Advisory Vote on Executive Compensation

The Human Resources Committee and the Board spend considerable time and effort overseeing the Corporation’s executive compensation program, and are satisfied that the policies and programs in place are based on fundamental principles of pay-for-performance aimed at aligning the interests of Management with those of the Shareholders while aiming to reflect competitive market practices. This compensation approach allows the Corporation to attract, retain and motivate high-performing executives who will be incentivized to increase business performance and enhance Shareholder value on a sustainable basis.

The Board is also committed to maintaining an ongoing engagement process with Shareholders by adopting effective measures to receive shareholder feedback. In this light, the Board is holding an advisory vote on executive compensation to provide Shareholders with a formal opportunity to provide their views on the Corporation’s approach to executive compensation, which is described in further detail under the section “Compensation Discussion and Analysis” starting on page 38 of this Information Circular. Shareholders are encouraged to carefully review the information provided in this Information Circular before voting on this matter. While Shareholders Last year, Shareholders voted will provide their collective advisory vote, the Directors remain fully 91.46% in favour of our approach responsible for their compensation decisions and are not relieved of to executive compensation. these responsibilities by a positive advisory vote by Shareholders.

As this is an advisory vote, the results will not be binding upon the Board. The Board will, however, take the results of the vote into account, as appropriate, when considering future compensation policies, procedures, and decisions.

The Corporation will disclose the results of the Shareholder advisory vote as a part of its report on voting results and related press release to be posted on SEDAR at www.sedar.com and on the Corporation’s website at www.xebecinc.com shortly after the Meeting.

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The Board of Directors recommends, on an advisory basis, and not to diminish the role and responsibilities of the Board of Directors, that Shareholders vote FOR the approach to executive compensation disclosed in the Corporation’s Circular delivered in advance of the 2022 Meeting.

The persons named in the accompanying form of proxy intend to vote FOR the non-binding advisory resolution on executive compensation, unless the shareholder who has given the proxy has directed that the Common Shares represented thereby be voted against in respect of the Corporation’s approach to executive compensation.

5. Other Matters

Management is not aware of any matters to be brought before the Meeting other than those set forth in the Notice accompanying this Circular.

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Nominees for Election to the Board of Directors

The following pages set forth the name of each person proposed to be nominated for election as Director (each a “ Nominee ”), the position such person holds within the Corporation if applicable, or the present principal occupation or employment of each such person for the five preceding years, the date on which such person was first elected a Director of the Corporation, and the number of voting securities of the Corporation beneficially owned, directly or indirectly, or over which control or direction is exercised by each person. The information related to the number of Common Shares beneficially owned, directly or indirectly, or over which control or direction is exercised, not being within the knowledge of the Corporation, has been provided by the proposed Directors individually, as of March 31, 2022.

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William (Bill) Beckett, Lead Director

Pointe-Claire, QC, Canada Age: 70 Director Since: 2011 Independent

Bill Beckett is a corporate director who serves as the Lead Director of the Corporation. He is the former President and CEO of Dart Aerospace with extensive operations and executive management experience in the Industrial and Aerospace sectors. He started his career with Canadian General Electric and continued his professional development with other industry leaders including Pratt & Whitney Canada.

Mr. Beckett is a graduate in Mechanical Engineering (High Distinction) from Carleton University in Ottawa and has completed the Queen’s University Executive MBA program.

Mr. Beckett brings to the Board strong management and technical skills, including expertise in Lean Manufacturing.

Committees: Corporate Governance Committee (Chair)

No Other Current Public Board Service

AGM Voting results for 2021	Securities held or controlled	Director Share Ownership Met
For Withheld	Common Shares DSUs
90.74% 9.27%	209,837 21,875	Yes

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Peter Bowie

Toronto, ON, Canada Age: 76 Director since: 2020 Independent

Peter Bowie is a corporate director who previously served as the Chief Executive of Deloitte China from 2003 to 2008, as well as senior partner and a member of the board and the management committee of Deloitte China until his retirement from the firm in 2010. Mr. Bowie was also previously Chairman of Deloitte Canada (1998-2000), a member of the firm’s management committee and a member of the board and governance committees of Deloitte International. He is a past member of the board of the Asian Corporate Governance Association and has served on a variety of boards in the private and non-governmental organization sectors.

Mr. Bowie has a B.Comm from St. Mary’s, as well as an MBA from the University of Ottawa. Mr. Bowie completed the Advanced Management Program at Harvard University and is a Fellow of the Institute of Chartered Accountants of Ontario, as well as the Australian Institute of Corporate Directors.

In 2021, Mr. Bowie completed the Cambridge University Business and Climate Change program, the Climate Competent Board’s Certificate Program, and the AICD Essential Director Update.Mr. Bowie brings to the Board financial expertise, a dedication to Audit Committee excellence, a strong understanding of strategy and risk, as well as insight of political and economic dynamics within China.

Committees: Audit Committee (Chair) , Corporate Governance Committee

Current Other Public Board Service:

Board member since 2012 and Member of the Audit Committee of Magna International Inc. (TSX: MG, NYSE: MGA).

	AGM Voting results for 2021	Securities held or controlled	Director Share Ownership Met
	For Withheld	Common Shares DSUs
	86.77% 13.23%	116,950 42,424	Yes

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Sara Elford

Shawinigan Lake, BC, Canada

Age: 52 Director since: 2020

Independent

Sara Elford is a corporate director. She previously worked in capital markets for over twenty years as both an investment banking and equity research analyst where she followed an extensive range of industries and companies in the small to mid cap range and clean tech space. Ms. Elford has served on the boards of several formerly TSX and/or Nasdaq-listed companies including Hydrogenics Corporation (hydrogen technology company) from 2016 to 2019, Carmanah Technologies (solar LED technology company) from 2015 to 2019, TSO3 Inc. (medical device sterilization technology company) in 2019, and Pure Technologies Ltd. (pipeline leak detection company) from 2015 to 2017. In addition to Xebec, she presently serves on the boards of BioSyent Inc., BQE Water Inc., EcoSynthetix and WeCommerce Holdings.

Ms. Elford is a CFA Charter holder and holds a B.B.A. from Bishop’s University with a Finance Major and Economics Minor. She also completed the Institute of Corporate Directors’ education program in 2015.

Ms. Elford brings to the Board substantial financial, capital markets, Cleantech (including hydrogen) and corporate governance experience.

Committees: Audit Committee, Human Resources Committee

Current Other Public Board Service:

Board member since 2018 and Member of the Audit Committee and Disclosure Policy Committee of BioSyent Inc. (TSXV: RX).
Board member since 2020 of BQE Water Inc. (TSXV: BQE).
Board member since 2020 of WeCommerce Holdings (TSXV: WE).
Board member since 2021 of EcoSynthetix Inc. (TSX: ECO).

	AGM Voting results for 2021	Securities held or controlled	Director Share Ownership Met
	For Withheld	Common Shares DSUs
	86.77% 13.23%	─ 17,216	To be met by August 25, 2025

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Brian Levitt

Kingston, ON, Canada

Age: 74 Director since: 2021 Independent

Brian Levitt is the Board Chair of TD Bank Group. He is the former president and Chief Executive of Imasco Limited, at the time one of Canada’s largest consumer goods and services companies. Mr. Levitt also serves as a director of the Charles Schwab Corporation and Vice-Chair of the C.D. Howe Institute. He served as a director of Domtar Inc. until November of 2021.

Mr. Levitt brings to the Board a plethora of insight and experience in strategic, commercial and corporate governance matters as well as in mergers and acquisitions and executive compensation.

Committees: Human Resources Committee , Corporate Governance Committee

Current Other Public Board Service:

o Board member since 2008 of The Toronto Dominion Bank (TSX: TD).

	AGM Voting results for 2021	Securities held or controlled	Director Share Ownership Met
	For Withheld	Common Shares DSUs
	n/a n/a	100,000 28,237	Yes

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Guy Saint-Jacques

St. Lambert, QC, Canada Age: 70 Director since: 2017 Independent

Guy Saint-Jacques is a corporate director. He joined the Government of Canada’s Department of External Affairs in 1977, holding office in New York City, Mexico City, Kinshasa, and Hong Kong as well as twice in Washington, D.C., the last time as Minister and Deputy Head of Mission. He has been Deputy High Commissioner at the High Commission of Canada in London, UK, and has been posted three times to Beijing (he speaks fluent Mandarin). He also served as Deputy Director of the Energy and Environment division and Director General of Human Resources. Before his last posting in China, Mr. Saint-Jacques was Chief Negotiator and Ambassador for Climate Change. His last Public Service posting was as Ambassador Extraordinary and Plenipotentiary for Canada to the People’s Republic of China through to October 2016. Mr. Saint-Jacques currently provides strategic advice on China to companies and governments and is a Senior Fellow at the China Institute of the University of Alberta, at the Institut d’études internationales de Montréal (IEIM) and at the C.D. Howe Institute. He is also a Director of the Montréal Clinical Research Institute Foundation.

Mr. Saint-Jacques brings to the Board experience-based insight into political and economic conditions in China and other foreign markets of interest to the Corporation, as well as on public policies related to climate change.

Committees: Human Resources Committee , Corporate Governance Committee

No Other Current Public Board Service

AGM Voting results for 2021	Securities held or controlled	Director Share Ownership Met
For Withheld	Common Shares DSUs
85.41% 14.59%	68,048 19,829	Yes

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Francis Séguin

Vaughan, ON, Canada Age: 61 Director since: 2021 Independent

Francis Séguin is a corporate director. He retired from Magna International in 2020 as Executive VicePresident of Corporate Projects and Strategy Development. As Executive Vice-President, Mr. Séguin was responsible for working directly with Magna’s CEO and other members of senior management to support the company’s long-term strategy development. Mr. Séguin is a seasoned engineering and operations executive in the automotive industry, where he has worked throughout the past 32 years. He served as the President of Magna Closures and Mirrors from 2010 to 2016 which included the full financial and P&L responsibility for more than $5.0 billion US in revenues across 60 manufacturing sites in 29 countries. Mr. Séguin joined Magna in 1988 at Cosma International, Magna’s body and chassis operating unit. Prior to joining Magna in 1988, Mr. Séguin worked for General Motors in Oshawa, Ontario, for five years.

A native of Windsor, Ontario, Mr. Séguin graduated in 1984 with a degree in Electrical Engineering from the University of Windsor.

Mr. Séguin brings to the Board expertise in manufacturing operations and senior executive experience in multinational business operations.

Committees: Audit Committee, Human Resources Committee

No Other Current Public Board Service

AGM Voting results for 2021	Securities held or controlled	Director Share Ownership Met
For Withheld	Common Shares DSUs
99.84% 0.16%	100,000 22,777	Yes

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3
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Dimitrios (Jim) Vounassis, President and CEO

Laval, QC, Canada

Age: 51 New Nominee Non-Independent

Jim Vounassis is a transformational senior executive with strong international experience and a proven track record in driving organizational performance. He was most recently COO at Bombardier Transportation (TSX: BBD. B), now part of Alstom, which is one of the world’s largest rail equipment manufacturing companies. Mr. Vounassis was responsible for the operations aspects of the $8 billion revenue business and empowered over 15,000 employees to deliver innovative rail solutions across global markets. Before being appointed COO at Bombardier Transportation, Mr. Vounassis held the position of Chief Transformation and Procurement Officer at Bombardier Corporation. Previous to that, he held positions as Vice President Global Operations at Pharmascience, Vice President Global Manufacturing and Strategic Sourcing at Baker Hughes and Vice President Global Strategic Sourcing at Pratt and Whitney.

Mr. Vounassis is a graduate of University of Waterloo with an Honours Bachelor of Science in Mechanical Engineering. He also completed an Executive MBA at the Smith School of Business at Queen’s University.

Mr. Vounassis brings to the Board a solid experience in global operations and strategic vision.

Committees: None.

No Other Current Public Board Service

AGM Voting results for 2021	Securities held or controlled	Director Share Ownership Met
For Withheld	Common Shares DSUs
─ ─	11,000 ─	To be met by May31,2026

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Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the knowledge of the Corporation, none of the Nominees (a) is, as of the date of this Circular, nor has been within ten years before the date of this Circular, a director, chief executive officer or chief financial officer of a corporation that (i) was subject to a cease-trade order, an order similar to a cease-trade order or an order which denied the relevant corporation access to any exemption under securities legislation which was in effect for a period of more than 30 consecutive days that was issued while the Nominee was acting in the capacity of director, chief executive officer or chief financial officer, or (ii) was subject to a cease-trade order, an order similar to a cease-trade order or an order which denied the relevant corporation access to any exemption under securities legislation that was issued after the Nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity of director, chief executive officer or chief financial officer; (b) is, as of the date of this Circular, nor has been within ten years before the date of this Circular, a director or executive officer of any corporation, 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; or (c) has, within ten years before the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the Nominee.

Compensation of Directors

The compensation program of the Board of Directors is designed to attract and retain highly talented and experienced directors, leading to the long-term success of the Corporation. This requires that Directors be adequately and competitively compensated.

Directors’ compensation is based on a fixed annual retainer paid on a quarterly basis and no additional attendance fee is paid to the members for attending the meetings of our Board and standing Committees. Directors may also elect to receive up to 100% of their compensation in DSUs (as defined herein). In addition, the Corporation reimburses Directors for reasonable travel and out-of-pocket expenses relating to Directors’ duties.

No director compensation is paid to Directors who are employees of the Corporation.

The following table displays the annual retainers for non-executive Directors (“ NEDs ”) since July 1, 2020.

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Director Position Annual Retainer ($)
Lead Director and Chair of the Corporate Governance Committee 82,500
Chair of the Audit Committee 80,000
Chair of the Human Resources Committee 80,000
Other Directors 70,000
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Summary Compensation Table

The following table provides a summary of the compensation earned by the independent directors of the Corporation. Kurt Sorschak and Prabhu Rao, who also acted as officers of the Corporation during the fiscal year ended December 31, 2021 ( “ Fiscal 2021 ”), did not receive any compensation for their services as director during Fiscal 2021. All Directors are paid in Canadian dollars, except for U.S. resident directors for who the cash portion is paid in U.S. Dollars.

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Director Compensation Table
Share-based All other Total
Fees earned awards [(1)] compensation compensation
Name ($) ($) ($) ($)
─
William Beckett, Lead Director [(2)] 41,250 41,250 82,500
Peter Bowie [(3)] 0 80,000 ─ 80,000
Sara Elford [(4)] 35,000 35,000 ─ 70,000
Brian Levitt [(5)] 0 52,500 17,500 70,000
Karen Nielsen [(6)] 37,500 20,000 ─ 57,500
Joseph Petrowski [(7)] 17,500 17,500 ─ 35,000
─
Guy Saint Jacques [(8)] 37,500 37,500 75,000
Ouma Sananikone [(9)] 0 35,000 ─ 35,000
Francis Séguin [(10)] 0 50,166 15,167 65,333
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(1) Since July 1[st] 2020, Directors have the ability to elect to receive their fees in deferred share units (“ DSUs ”) pursuant to the Stock Incentive Compensation Plan of the Corporation. Share-based awards granted to directors in Fiscal 2021 were DSUs. The number of DSUs granted was calculated by dividing the Share-based award by the closing price of the Common Shares on the TSX the day prior to the grant date.
DSUs were granted (i) on September 14, 2020 at a price of $3.94 per unit and vested in four (4) equal tranches, two of which vested in 2021 on March 14 and June 4; (ii) on July 8, 2021 at a price of $4.43 each and (iii) on October 14, 2021 at a price of $2.63 each.
(2) William Beckett is Lead Director and Chair of the Corporate Governance Committee. Mr. Beckett elected to receive 50% of his fees in DSUs.
(3) Peter Bowie is Chair of the Audit Committee. Peter Bowie elected to receive 100% of his fees in DSUs.
(4) Sara Elford elected to receive 50% of her fees in DSUs.
(5) Brian Levitt acted as Special Advisor to the Board until August 10, 2021. As such, he received a total compensation of $42,800 of which $17,500 was paid in cash and $25,300 was paid in DSUs. Mr. Levitt was appointed on the Board on August 11, 2021. Mr Levitt elected to receive 100% of his fees in DSUs as such he received a value of $27 200 in DSUs.
(6) Karen Nielsen was appointed on the Board on April 7, 2021 and was Chair of the HR Committee starting June 29, 2021. She elected to receive 50% of her fees in DSUs starting on July 1[st] , 2021. Ms. Nielsen resigned from the Board on February 23, 2022.
(7) Joseph Petrowski did not stand for re-election to the Board at the Annual General and Special Meeting of Shareholders held on June 29, 2021.
(8) Guy Saint-Jacques was Chair of the HR Committee until June 29, 2021. He elected to receive 50% of his fees in DSUs.
(9) Ouma Sananikone was elected to the Board on June 29, 2021. She elected to receive 100% of her fees in DSUs.
(10) Francis Séguin acted as Special Advisor to the Board from January 25, 2021 to June 29, 2021. As such, he received a total compensation of $30,333.34 of which $15,166.67 was paid in cash and $15,166.67 was paid in DSUs. Mr. Séguin was elected on the Board on June 29, 2021. He elected to receive 100% of his fees in DSUs as such he received a value of $35,000 in DSUs.

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DSU

On June 25, 2020, the Shareholders of the Corporation approved a long-term incentive plan, the Stock Incentive Compensation Plan (the “ LTIP ”). The DSU feature of the LTIP was adopted to allow the payment of a portion of the compensation of NEDs and of senior executives in the form of equity-based deferred share units (“ DSUs ”). The DSU feature of the LTIP was designed to enhance the Corporation’s ability to attract and retain talented individuals to serve as members of the Board, to promote alignment of interests between Directors and the Shareholders, to provide an efficient means for Directors to meet Director Share Ownership Requirements and to invest in the common equity of the Corporation.

Unless otherwise determined, DSUs vest immediately upon being granted. However, no Director who is a holder of DSUs has any right to receive any payment of DSU until he or she ceases to be an eligible Director (and is not at that time an employee of the Corporation) by death, disability, retirement or resignation (a “ Termination Date ”).

Equity Ownership

Non-Executive Director Minimum Share Ownership Requirement

The Corporation believes that the long-term economic interests of Directors in the Corporation should be aligned with those of Shareholders. In 2020, the Board, upon a recommendation of the Corporate Governance Committee, established minimum share ownership requirements applicable to NEDs (the “ share ownership ”). In 2021, the minimum share ownership requirements for NEDs under the policy was the equivalent of three times their annual retainer. Such ownership requirements are to be achieved over a period of not more than five years from their appointment to the Board. The applicable method of calculation for the purpose of determining the value of the share ownership is based on the higher of (i) cost of the acquisition or (ii) market value at time of determination. The Director Share Ownership Requirement can be fulfilled through the ownership of equity-based awards, such as DSUs, or through the purchase of Common Shares on the open market or a combination of both.

Directors may not purchase financial instruments to hedge or offset a decrease in the market value of Common Shares. As former President and CEO, Kurt Sorschak was required to comply with the share ownership requirement policy applicable to senior management (see “Share Ownership Policy” on page 55 for additional details).

The following table discloses the equity ownership as of December 31, 2021 of non-executive directors who are nominees for election to the Board of Directors at the Meeting; the value of those share for the purposes of compliance with the ownership policy and the date by which each director who has not achieved the minimum ownership must do so.

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Minimum
Value of requirement for If not already met, date
Common Shares Director Share by which the minimum
Number of and DSUs Ownership share requirement
Director Nominees Common Shares Number of DSUs ($) [(1)] ($) ownership must be met
William Beckett 209,837 16,718 596,979 247,500 Already met
Peter Bowie 116,950 32,424 470,297 240,000 Already met
Sara Elford ─ 12,841 47,203 210,000 August 25, 2025
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Minimum
Value of requirement for If not already met, date
Common Shares Director Share by which the minimum
Number of and DSUs Ownership share requirement
Director Nominees Common Shares Number of DSUs ($) [(1)] ($) ownership must be met
Brian Levitt 100,000 19,487 484,998 210,000 Already met
Guy Saint-Jacques 68,048 15,454 242,692 210,000 Already met
Francis Séguin 100,000 14,027 461,012 210,000 Already met
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(1) Value is determined using the higher of the Common Share closing price on the TSX on December 31, 2021 ($2.51), or the cost of acquisition or, as for the DSUs, the share price on the TSX the day prior to the grant date (September 11, 2020: $3.94, July 7, 2021: $4.43, October 13, 2021: $2.63).

Outstanding Share-Based and Option-Based Awards

The table below indicated, for each NED, stock option grants and restricted share units outstanding as of December 31, 2021.

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Outstanding Equity Awards at Fiscal Year End
Stock Option Awards Deferred Share Unit Awards
Market or
payout
Market or value of
Number payout vested
Number of Value of of shares value of share-based
securities unexercised or units of share based awards not
underlying Option in-the- share that awards that paid out or
unexercised exercise Option money have not have not distributed
Name and options price expiration options [(1)] vested vested (2)
Position (#) ($/share) date ($) (#) ($) ($)
200,000 0.55 Dec. 19, 2022 392,000
William Beckett 200,000 0.05 Aug. 1, 2023 492,000 ─ ─ 41,962
37,000 0.55 Dec. 19, 2024 72,520
Peter Bowie ─ ─ ─ ─ ─ ─ 81,384
Sara Elford ─ ─ ─ ─ ─ ─ 32,231
Brian Levitt ─ ─ ─ ─ ─ ─ 48,912
Karen Nielsen [(3)] ─ ─ ─ ─ ─ ─ 15,208
Guy Saint-
─ ─ ─ ─ ─ ─ 38,790
Jacques
Ouma
─ ─ ─ ─ ─ ─ 26,616
Sananikone
Francis Séguin ─ ─ ─ ─ ─ ─ 35,208
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(1) The value of unexercised in-the-money options is calculated using the difference between the closing price of the Common Shares on December 31, 2021 on the TSX ($2.51) and the exercise price of the stock options. As of December 31, 2021, the options were

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not exercised and may never be. The actual gains, if any, depend on the value of the aforesaid shares on the date of exercise, if case arises.

(2) The market value of share-based awards is calculated by multiplying the number of DSUs by the closing price of the Common Share on December 31, 2021 on the TSX ($2.51). The actual gains will depend on the value of the aforesaid shares on the date of payment or distribution.
(3) Karen Nielsen resigned from the Board on February 23, 2022.

Equity Based Award – Value Vested or Earned During the Year

The following table indicates, for each NED, the aggregate dollar value of the share-based awards vested or of non-equity incentive plan compensation earned during the 2021 Fiscal Period. No option-based awards were vested during the 2021 Fiscal Period.

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Share-based award Value vested during the year [(1)(2) ]
Directors
($)
William Beckett 45,038
Peter Bowie 87,353
Sara Elford 35,035
Brian Levitt 55,414
Karen Nielsen [(3)] 19,643
Guy Saint Jacques 41,223
Ouma Sananikone 34,377
Francis Séguin 49,233
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(1) The share-based awards for the 2021 Financial Period are DSUs.

(2) The market value of share-based awards is calculated by multiplying the number of Deferred Share Units by the closing price of the Common Share on the date of the vesting (March 15, 2021: $4.84, June 4, 2021: $4.63, July 8, 2021: $4.34, October 14, 2021: $2.59).

(3) Karen Nielsen resigned from the Board on February 23, 2022.

Options exercised during Fiscal 2021

On August 23, 2021, Mr. Guy Saint-Jacques exercised 12,334 stock options at a price of $0.55 per option. Mr. Saint-Jacques kept the underlying shares, which were outstanding as of March 31, 2022.

Board Attendance

The following table summarizes the attendance of the Directors for the period from January 1, 2021 to December 31, 2021:

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Directors Board Meetings
William Beckett 17/18
Peter Bowie 17/18
Sara Elford 18/18
Brian Levitt [(1)] 16/18
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Directors Board Meetings
Karen Nielsen [(2)] 13/13
Joseph H. Petrowski [(3)] 7/8
Prabhu Rao [(3)] 7/8
Guy Saint-Jacques 18/18
Ouma Sananikone [(4)] 9/10
Kurt Sorschak 18/18
Francis Séguin [(5)] 18/18
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(1) Brian Levitt acted as Special Advisor to the Board and as such, he was invited to attend the Board meetings. Mr. Levitt was appointed to the Board on August 11, 2021.

(2) Karen Nielsen was appointed to the Board of Directors of the Corporation on April 7, 2021. Ms. Nielsen resigned from the Board on February 23, 2022.

(3) Joseph Petrowski and Prabhu Rao did not stand for re-election to the Board at the Annual General and Special Meeting of Shareholders held on June 29, 2021.

(4) Ouma Sananikone was elected to the Board of Directors on June 29, 2021.

(5) Francis Séguin acted as Special Advisor to the Board and as such, he was invited to attend the Board meetings. Mr. Séguin was elected to the Board on June 29, 2021.

Statement of Corporate Governance Practices

National Instrument 58–101 - Disclosure of Corporate Governance Practices (“NI 58-101”) of the Canadian Securities Administrators requires the disclosure by each listed reporting issuer of its approach to corporate governance. This statement discloses the Corporation’s corporate governance practices.

The corporate governance practices described below are subject to change as the Corporation evolves. The Board shall remain sensitive to corporate governance issues and shall continuously seek to set up the necessary measures, control mechanisms and structures to ensure an effective discharge of its responsibilities without creating undue additional overhead costs or reducing the return on Shareholders’ equity.

Board of Directors

The Board is currently composed of nine Directors: William Beckett, Peter Bowie, Sara Elford, Brian Levitt, Guy Saint-Jacques, Ouma Sananikone, Francis Séguin, Kurt Sorschak and Jim Vounassis. Except for Ouma Sananikone and Kurt Sorschak, all of the current Directors are nominees proposed for election at the Meeting.

Board Mandate

The Board is responsible for the stewardship of the Corporation overseeing the management of the Corporation in accordance with applicable requirements under corporate and securities regulations and, jointly with Executive Management, seeks to create long-term shareholder value.

To better discharge its responsibilities, the Board has established the following standing committees: the Human Resources Committee, the Audit Committee and the Corporate Governance Committee.

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The responsibilities of the Board are fully described in the Board mandate attached hereto as Appendix “B” to this Circular.

Director Independence

The Board has determined that in accordance with applicable standards in National Instrument 52–110 - Audit Committees (“ NI 52-110 ”), six of seven nominees proposed for election to the Board by the Management of the Corporation are considered “independent”. Jim Vounassis as President and CEO of the Corporation is not considered independent under NI-52-110 due to his position within the Corporation.

Chairman of the Board and Lead Director

As at March 31, 2022, the position of the Chairman of the Board is held by Mr. Kurt Sorschak. Due to the fact that Mr. Sorschak was not previously considered to be independent due to occupying the position of President and CEO of the Corporation, the Board of the Corporation appointed Mr. William Beckett, an independent Director, as lead director (the “ Lead Director ”).

The Lead Director assumes the responsibilities of the Chair during meetings of the Board when Directors who are not independent declare a conflict or otherwise excuse themselves from discussion on an agenda item and do not participate in a vote. The Lead Director is responsible to take reasonable measures to ensure that the meetings of independent Directors (or agenda items during which Directors who INDEPENDENT CHAIR OF THE BOARD are not independent excuse themselves) are As at May 12, 2022, the Board intends to name an conducted in such a way as to promote independent director as Chair of the Board. Therefore discussion and allow for the efficient and starting May 12, 2022, there will be no more need for a Lead effective review and discussion of the issues Director. submitted to the independent Directors.

In-Camera Sessions

In camera Sessions (Board). Independent Directors meet regularly during or at the end of each meeting to discuss matters of interest without the presence of members of Management. Such meetings are chaired by the Lead Director. In addition, the independent members of the Board regularly hold unofficial meetings to review specific matters when needed, to discuss matters that need attention before the following regular meeting is held or that require additional time.

In camera Sessions (Committees). The standing Board committees, being the Audit Committee, the Human Resources Committee and the Corporate Governance Committee, are composed exclusively of independent Directors. The Audit Committee meets at least quarterly with the auditor and members of Management in separate sessions to discuss any matters they believe should be discussed privately. The Audit Committee also meets i) with the Chief Financial Officer without other members of Management being present; and ii) without any members of Management being present. The other committees meet during or after each meeting without members of Management being present. In addition, the Committees hold regularly unofficial meetings to review specific matters when needed, to discuss matters that need attention before the following regular meeting is held or that require additional time.

Number of Board and Committee Meetings

The table below describes the number of Board and Committee meetings held during year 2021:

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Number of In-Camera
Number of Meetings held
Sessions held during Fiscal
during Fiscal 2021
Board / Standing Committees [(1)] 2021
Board 18 14
Audit Committee 7 5
Human Resources Committee 5 5
Corporate Governance Committee 4 4
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(1) In addition, the Board and its Committees hold regularly unofficial meetings to review specific matters when needed, to discuss matters that need attention before the following regular meeting is held or that requires additional times.

Directors’ Membership on Other Public Company Boards

No Director Nominees serve on the board of more than four reporting issuers other than the Corporation.
No Director Nominees serve together on the board of reporting issuers other than the Corporation.
Jim Vounassis, President and CEO does not serve on any board of reporting issuers other than the Corporation.

Orientation and Continuing Education

The Corporation has a formal process to orient and educate new recruits to the Board regarding the role of the Board, its committees, and its Directors, as well as the nature and operations of the Corporation’s business.

With respect to the role of the Board, its committees, and its Directors, this process provides for an orientation day, and the Corporation also provides new Directors with the Terms of Reference for Directors, the Terms of Reference for the Chairman of the Board, the Terms of Reference for the CEO, the Code of Conduct, and the charters for each committee of the Board, each of which have been approved by the Board.

With respect to the nature and operation of the Corporation’s business, this process provides for an orientation day with key members of the management staff, and further provides key reference and background materials, such as the current Board approved business and strategic plan, the most recent Board approved budget, the most recent annual information form, the most recent audited financial statements, and copies of the interim quarterly financial statements together with the management discussion & analysis related thereto.

All Directors are also provided with organizational charts for the Corporation, a summary of key responsibilities of each of the executives, the vision statement for the Corporation, and the corporate milestones.

Presentations are made to the Board from time to time to educate and keep Directors informed of changes within the Corporation, as well as regulatory and industry requirements and standards. In addition, the Corporation supports Directors’ attendance at professionally presented continuing education programs for Directors.

During Fiscal 2021, the following topics (among others) were addressed during Board meetings: Overview of the trends for the hydrogen and renewable gas industries and markets, ESG and climate change, internal controls over financial reporting, mergers & acquisitions, insurance and risk management, cybersecurity, corporate governance matters including disclosure requirements, the biogas market and human resources management.

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As continuing education for the Audit Committee, all Audit Committee members have read the documentation regarding the CSA’s introduction of new non-GAAP and other financial measures disclosure requirements.

In addition, Directors participated in a strategic planning meetings, which provided a comprehensive overview of the Corporation and its operating environment. Moreover, the Corporation subscribes to a Global membership for the Board with the Institute of Corporate Directors. This membership ensures that the Corporation’s Directors benefit from and have access to quality up-to-date information, tools and training.

Ethical Business Conduct

On November 10, 2021, the Board has adopted a restated Code of Conduct (the “ Code ”).

The Code has been filed on SEDAR and can be found at www.sedar.com and, upon request, the Corporation will promptly provide a copy of it free of charge to a Shareholder. The Code is also available on the Corporation’s website at www.xebecinc.com.

Pursuant to the Code, Directors are instructed to declare any conflicts of interest in matters to be acted on by the Board, to ensure that such conflicts are handled in an appropriate manner, and to disclose any contracts or arrangements with the Corporation in which the Director has an interest. Any Director expressing a conflict or interest in a matter to be considered by the Board is asked to leave the meeting for the duration of the discussion related to the matter at hand, and to abstain from voting with respect to such matter.

The Board encourages and promotes a culture of ethical business conduct through the adoption and monitoring of the Code, the whistle blower policy, the information disclosure policy, the insider trading policy and the antibribery and anti-corruption policy, and regularly reviews compliance with management.

All directors, officers and employees have a duty to comply with the Code, to report any violation to the Code or file a complaint if they suspect fraud, unethical behavior, or wrongdoing, without fear or retaliation for reporting in good faith a violation to the Code or participating to an investigation. All directors, and named executive officers confirmed their adherence or compliance with this Code and in 2022, a mandatory ethics training program will be performed to all director, officers and other employees of the Corporation. A secured online portail and an EthicLine provide an avenue for employees to file a complaint or raise concerns associated with unethical or illegal activities, while maintaining anonymity and confidentiality.

No material change report related to conduct of a director or executive officer constituting a violation to the Code was filed during year 2021.

Nomination of Directors

The Corporate Governance Committee is responsible for assisting the Board in identifying new director nominees. In identifying candidates for membership on the Board, the Corporate Governance Committee takes into account all factors it considers appropriate, which may include competencies, expertise, skills, background and other qualities the Corporation identifies from time to time as being important.

As part of the process, the Corporate Governance Committee is responsible for conducting background searches, and is empowered to retain search firms to assist in the nominations process. Once candidates have gone through a screening process and met with a number of the existing Directors, they are formally put forward as nominees for approval by the Board.

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Skill Matrix

As part of the process to identify board candidates, the Corporate Governance Committee has developed a competency matrix to identify the key skills and competencies which it believes are important to oversee the business and the growth of the Corporation. The Board also takes into consideration business experience, diversity as well as independence, qualifications, financial acumen, business judgment, board dynamics and geographical experience.

The following table identifies the top skills and experience of each Nominee to the Board. The skills matrix, where the determination of skill level is based on self-assessment, may also serve as a guide for the Corporate Governance Committees to identify specific development needs for each Board member and of the Board as a whole.

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Skills / Competencies
Nominees
Directors
William Beckett ● ● ● ● ●
Peter Bowie ● ● ● ● ●
Sara Elford ● ● ● ● ● ●
Brian Levitt ● ● ● ● ● ●
Guy Saint-Jacques ● ● ● ● ●
Francis Séguin ● ● ● ● ● ●
Jim Vounassis ● ● ● ● ● ●
Audit & Accounting Relevant Industry Experience Relevant Operating Experience Capital Markets &Treasury Technology Management Corporate Responsibility & ESG Government & Public Affairs Talent Management & Executive Compensation Prior Board Experience Senior Executive Experience
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Board of Directors Diversity

The Board recognizes the benefits of promoting diversity. It believes that a board with a diverse mix of experience, backgrounds, gender, age, and geographic experience representing the locations where the Corporation does business has a positive impact on governance.

In 2020, the Board determined that it would be appropriate to increase board diversity both in terms of gender and regional knowledge. The Board retained the services of a global search firm and required the search firm to develop a list of potential Board candidates that included women and individuals with U.S. and western Canada regulated energy, infrastructure financing or hydrogen expertise. As a result of this initiative, the Corporation has been successful in increasing board diversity by adding two highly qualified women to its Board of Directors.

As at December 31, 2021, three of the nine (33%) board members were women. One of the seven (14%) current nominees for election to the Board is a woman. Xebec’s Board expects to reach again a level of at least 30% women on the Board by the year-end 2022.

The CBCA defines “Designated Groups” to include women, Aboriginal peoples, persons with disabilities and members of visible minorities. While the Corporation respects the value of diversity, the Corporation does not

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have a written diversity policy relating to the identification and nomination of Directors who are part of designated groups and the Corporation has not adopted a target number or percentage (or range) for members of the designated groups to hold positions on the Board or to be members of management by a specific date.

The Corporation attempts to recruit and select candidates for the Board and for management positions that represent both gender diversity and business understanding and experience. This will be achieved through ensuring that diversity considerations are taken into account to fill vacancies, continuously monitoring the level of women, visible minorities, aboriginal persons, persons with disabilities and gender represented on our Board and in our executive team, continuing to broaden recruiting efforts to attract and interview qualified candidates, and committing to retention and training to ensure that our most talented employees are promoted from within our organization.

The Board and the Corporate Governance Committee consider merit as the key requirement for Board and executive appointments and as such, it is not expected to adopt a target regarding women, aboriginal persons, visible minorities and persons with disabilities in executive officer positions or as Directors of the Corporation.

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Board Diversity Executive Management Diversity
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Board Diversity Executive Management Diversity	Board Diversity Executive Management Diversity
Assuming that all the Nominees are elected, the Board will be composed of: `o` a total of seven Directors `o` one woman (14%) `o` no member of visible minority (0%) `o` no Indigenous person (0%) `o` no person with disabilities (0%) `o` one member of more than one Designated Group.	As of March 31, 2022, the executive officers’ team is composed of: `o` a total of five Executive Officers `o` one woman (20%) `o` no member of the other Designated Groups (0%).

Board Tenure

The Corporation has not established a Board tenure policy given the current average tenure. As illustrated below, the average tenure of the Directors’ Nominees standing for election to the Board is 2.9 years.

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Length of Tenure of the Directors' Nominees
14%
43%
14%
29%
Less than 1 year 1-3 years 4-10 years Over 10 years
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Enterprise Risk Management

The Board and its committees provide oversight and carry out its risk management mandate to ensure that risks are properly identified, assessed and effectively managed at all levels of the Corporation’s activities. The Corporation is committed to proactive and strong risk governance practices. Responsibility for risk management is shared across the organization, including each segment of activities. The Board is responsible for overviewing and assessing material risks associated with the Corporation’s business and activities which may adversely affect its activities, financial condition and reputation. The Board ensures that the Corporation has implemented a system to identify, manage, mitigate and report such risks and their potential impact. New risks or important risks are identified and reported together with mitigation plans. Risk appetite and tolerance are discussed across all levels of the organization.

Human Resources Committee

Charter of the Human Resources Committee

The Human Resources Committee is responsible for, among other things, developing the Corporation’s approach to executive compensation and periodically reviewing the compensation of the Directors. The Human Resources Committee assists the Board in determining compensation of the senior management as well as reviewing the adequacy and form of Directors’ compensation. It also reviews annually the CEO’s goals and objectives for the upcoming year and performs, annually, an appraisal of the CEO’s performance. In addition, the Human Resources Committee administers and makes recommendations regarding the operation of the long term and other incentive plans. In assessing compensation, the Human Resources Committee looks at data obtained from relevant salary and Director compensation surveys, which takes into account the size and stage of the Corporation’s development, its industry, and location, to ensure that compensation of the Corporation’s Directors and officers is in line with industry practices. The Human Resources Committee also takes into account the performance of the officers and the Corporation as a whole in determining appropriate compensation levels for the officers. Performance and compensation of senior management including the CEO is then reviewed at least annually with the Board during an in camera session of Directors.

Composition of the Human Resources Committee

Ouma Sananikone (Chair), Sara Elford, Brian Levitt, Guy Saint-Jacques and Francis Séguin are the members of the Human Resources Committee.

Audit Committee

Charter of the Audit Committee

The primary function of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities with respect to monitoring the Corporation’s accounting and financial reporting and practices and procedures; the adequacy of the Corporation’s internal accounting controls and procedures; the quality and integrity of financial statements and other financial information provided by the Corporation to Shareholders, and others; and for liaising with the external auditors of the Corporation. The Audit Committee Charter of the Corporation, which sets out the Audit Committee’s responsibilities and duties, is available on the Corporation’s website at www.xebecinc.com.

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Composition of the Audit Committee

The Audit Committee of the Corporation currently consists of Peter Bowie (Chair), Sara Elford, Ouma Sananikone and Francis Séguin all of whom are the independent directors. All members are financially literate, as such term is defined in NI 52-110 .

Relevant Education and Experience

The education and experience of each Audit Committee’s member of the Corporation that is relevant to the performance of his or her responsibilities as an Audit Committee’s member is described in the “Nominees for Election to the Board of Directors” of this Circular, and in the “Audit Committee/Relevant Education and Experience” section of the Corporation’s Annual Information Form.

Pre-Approval Policies and Procedures

The Corporation’s Audit Committee annually reviews and approves the terms and scope of the external auditors’ engagement. The Audit Committee oversees the procedures and the conditions pursuant to which permissible services proposed to be performed by Raymond Chabot Grant Thornton LLP, the Corporation’s external auditors, are pre-approved.

All non-audit service engagements of Raymond Chabot Grant Thornton LLP, regardless of the cost estimate, are required to be coordinated and approved by the Audit Committee to further ensure that adherence to preapproval policies and procedures is monitored.

Corporate Governance Committee

Charter of the Corporate Governance Committee

The Corporate Governance Committee is responsible for oversight of Xebec’s corporate governance practices including environmental, social and governance (ESG) matters. It also reviews the Board composition, identifies candidates for nomination to the Board and ensures that a process is in place, and performed annually, for the assessment of the performance of the Board, its committees and each director. The responsibilities, powers, and operation of the Corporate Governance Committee are detailed in its Charter. The Charter of the Corporate Governance Committee is available on the Corporation’s website at www.xebecinc.com.

Composition of the Corporate Governance Committee

William Beckett (Chair), Peter Bowie, Brian Levitt and Guy Saint-Jacques are the current members of the Corporate Governance Committee.

Mergers and Acquisitions Committee

In 2020, the Board created a Mergers and Acquisitions Committee which was responsible, among other things, to review and assess, recommend for approval mergers, acquisitions, dispositions, investments, joint ventures, collaborations, partnerships, licensing arrangements or similar transactions. The Mergers and Acquisitions Committee held its last meeting on January 13, 2021 and was dissolved by the Board on January 25, 2021.

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Special Committee or Ad Hoc Committee

The Board may establish from time to time new standing or ad hoc committee with not less than a majority of the members being Independent directors.

Board Assessments

In order to ensure continuous improvement of the Board effectiveness, the Corporate Governance Committee has the mandate to ensure that a process is in place for the annual review of the:

Current performance, effectiveness, and composition of the Board as a whole and of each of its committees.
Contribution and qualifications of individual directors.
Recommendations on focus for the coming fiscal year.
Appropriateness of information provided by management in advance of meetings.
Performance and areas for improvement.

The Corporate Governance Committee reviews and approves a performance questionnaire that is forwarded annually to Directors. The answers are compiled by the Lead Director who meets with each of the Board members and with members of the Executive Management to discuss the Board’s and committees’ evaluations, as well as individual Directors’ performance, including that of the committees’ chairs. The Lead Director then reports the results to the Board and implements a continuous improvement plan. This formal evaluation process is performed annually. Such assessment was performed during Fiscal 2021 and the Assessment Report and Continuous Improvement Plan was presented to the Board in the first Quarter of 2022.

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Message from the Human Resources Committee

Dear Shareholders,

The mandate of the Human Resources Committee includes the review and establishment of the Corporation’s executive compensation program, making recommendations to the Board on executive compensation and compensation plan matters and the review and approval of compensation policies and governance, as well as general risk oversight. In that respect, we wanted to take this opportunity to directly share with you our summary thoughts and approach on executive compensation generally and some of the key steps we have undertaken to evaluate our current executive compensation program and policies, the changes we have made to compensation governance and some of the key highlights from this past year as they impacted compensation and the various considerations relating thereto. For more fulsome details and discussion on our compensation program, we invite you to read the following sections set out under “Compensation Discussion and Analysis”.

During the last 18 months, the Corporation has transitioned to the next generation of leadership at the executive officer’s level with a 2022-2024 strategic plan to build on the foundation of the Company, realize the value of its technology portfolio, and focus on organic growth and integration activities for a strong global organization. In light of this transition, we undertook a complete review of the compensation framework for our executive officers in 2021. The objective of the review was to ensure that our executive compensation framework enables the Corporation to attract, motivate and retain key leaders through the provision of fair and balanced compensation that aligns the interests of management with the interests of our shareholders and delivers the strategic plan. The review process was undertaken with the support of an external firm, Hugessen Consulting, a leading independent compensation consultant to Canadian boards of directors.

The starting point was to review and revise the compensation comparator group, the basis for establishing appropriate compensation levels relative to Canadian and U.S. based organizations primarily engaged in similar business sectors where the Corporation currently operates and having comparable total enterprise value, assets and revenues. Based on the results obtained from this compensation comparator group, among other things, we observed that the total compensation of some of our executive officers was generally below relevant market levels and that changes in the design of certain of our compensation plans were required to achieve our objectives. We also diversified the Long Term Incentive Plan to introduce performance share units and stock options starting in 2022 to better align the interests of the Executive Officers with the interests of shareholders and increased the portion of “pay at risk”. The compensation discussion and analysis included herein highlights the 2022 revised compensation framework.

Fiscal 2021 was a unique year, and we believe that the challenges faced and lessons learned have provided us with insights and the opportunity to implement positive and sustainable changes for the future. With a clear 2024 Strategic Plan, the unique positioning and technology of the Corporation, built with the vision of Kurt Sorschak, our recently retired Founder as President and CEO, along with a renewed management team, we believe the Corporation is now stronger and better positioned than ever to support sustainable organic growth.

We will continue to discharge our responsibilities as members of the Human Resources Committee with the utmost care and attention and will review the various compensation policies, practices and guidelines on an ongoing basis, with a view of making recommendations to the Board that ensure such policies, practices and guidelines remain in line with the core principles and values of the Corporation, market dynamics and the expectations of our shareholders.

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We encourage all shareholders to carefully review the following compensation discussion and analysis, along with the other disclosures provided for in this Information Circular.

(s): Ouma Sananikone, Chair of the Human Resources Committee

(s): Sara Elford (s): Brian Levitt (s): Francis Séguin (s): Guy St-Jacques

Compensation Discussion and Analysis

Compensation Summary and Process Outline

Xebec Adsorption’s compensation program for executive officers is comprised of the following four primary elements:

Base salary
Short-term incentives in the form of an annual cash bonus
Long-term incentives
Other perquisites and benefits

The mandate of the Human Resources Committee includes the review and establishment of the Corporation’s executive compensation program on a global basis and making recommendations to the Board on executive compensation and compensation plan matters. In addition, the committee oversees the human resources’ organizational structure efficiency, the risks related to compensation as well as succession planning for the President and Chief Executive Officer and all other executive officers of the Corporation. The responsibilities, power and operation of the Human Resources Committee are further described in the Charter of the Human Resources Committee of the Corporation that is available on the Corporation’s website at www.xebecinc.com.

The current members of the Human Resources Committee are Ouma Sananikone (Chair), Sara Elford, Brian Levitt, Guy Saint-Jacques and Francis Séguin, all of whom are independent directors within the meaning of Section 1.4 of NI 52-110. Each committee member has skills and experience that are relevant to his responsibilities in compensation, talent management, organizational development, leadership, governance, and risk management gained by being a director, a former senior officer with oversight of compensation decisionmaking processes or human resources functions, or as chair or members of the human resources committee of other public issuers.

In 2021, the Human Resources Committee’s work included, among other things:

Setting performance objectives for the Corporation and the President and Chief Executive Officer and evaluating his performance;
Reviewing, adjusting and redesigning the Corporation’s executive compensation program, including base remuneration, short-term and long-term incentives;
The introduction for 2022 of Restricted Share Units based on performance and the establishment of the performance criteria.
Reviewing the Corporation’s succession planning for the President and Chief Executive Officer and the executive officers, including the recruiting of a new Chief Operating Officer.

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Compensation Risk Oversight

The Human Resources Committee reviews and approves the Corporation’s compensation policies and practices, taking into account any associated risks. As further described hereunder, the components of compensation include a base salary, a short-term incentive plan (“Performance Bonus”) and a long-term incentive plan of the Corporation. The Board believes that the balanced use of these key components of the compensation program eliminates reliance on any single performance metric together with caps on payouts under the short-term incentive plan and long-term incentive plan. The Corporation’s Clawback Policy and minimum shareholder requirements for executive officers mitigate risks related to compensation to ensure that compensation is aligned with the interests of Shareholders. During the review performed for Fiscal 2021, the Human Resources Committee did not identify any risks arising from the Corporation’s compensation policies and practices that are reasonably likely to have a material adverse effect on the Corporation.

As part of the compensation risk management measures:

✓ We ensure that the Human Resources Committee is composed solely of independent directors. ✓ We do not guarantee the payment of variable incentive bonuses. ✓ We do not offer executive officers a single trigger indemnity in case of a change of control.
✓ We retain, as required, the services of external independent compensation consultants to review our executive officer’s compensation program to ensure it is in line with the shareholder’s and the Corporation’s objectives, long term value creation, and good practices and principles of governance.
✓ We do not issue stock options at a price below the share price and we do not allow the price of options to be reduced or options to be exchanged for options having a lower exercise price.
✓ We do have anti-hedging provisions whereby the Corporation’s executive officers and directors are prohibited from purchasing financial instruments relating to the Corporation’s Common Shares.
✓ We do have a Clawback Policy that allows the Board to claw back incentive compensation from executive officers when financial results have to be materially restated or corrected because of executive fraud or misconduct, and
✓ We do have a minimum shareholding requirements for executive officers, as further described below.

Independent Advisors

To assist the Human Resources Committee in reviewing, adjusting and redesigning the Corporation’s executive compensation program, the Committee retained the services of Hugessen Consulting, an independent compensation consultant (the “ Compensation Consultant ”), who reported solely to the Chair of the Human Resources Committee, in August 2021.

The mandate of the Compensation Consultant was to assist in establishing a revised executive pay comparator group, benchmark executive pay components against that comparator group, including base salary, short-term incentive (bonus), long-term incentive programs and all other compensation, and support the Human Resources Committee with respect to compensation level adjustments and incentive program design changes for Fiscal Year 2022 (the “ Mandate ”).

The Committee considers, among other information, the advice provided by Hugessen in making its executive compensation decisions; however, it may or may not follow Hugessen’s advice in making such decisions.

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The following table outlines the fees paid to the Compensation Consultant for services provided during fiscal years 2021 and 2020.

Advisor	Executive Compensation Related Fees ($)	Executive Compensation Related Fees ($)	All other Fees(1) ($)	All other Fees(1) ($)
	2021	2020	2021	2020
Hugessen Consulting	75,432	43,741	─	475

(1) The fees included in this category relate to services provided for the review of the Corporate Governance Committee Charter.

Compensation Comparator Group

In order to establish appropriate compensation levels relative to the Corporation’s peer group, the Human Resources Committee worked with the Compensation Consultant in 2021 to perform a benchmarking exercise with a comparator group of Canadian and U.S. based organizations primarily engaged in the Corporation’s business sectors. The lack of sufficient direct industry peers in Canada and in the U.S. of similar size required broader selection criteria to develop an appropriate peer group. The comparator group was developed using the following screening criteria:

Screening Category	Specific Criteria Rationale
Location	`o` Canada `o` United states `o` Reflective of headquarters location,operations and sales
Industry Classification (Primary)	`o` Diversified Chemicals `o` Specialty Chemicals `o` Industrial Gases `o` Machinery `o` Oil and Gas Equipment and Services `o` Companies operating in similar industries to Xebec
Size (CAD)	`o` Market Capitalization (“Cap”) between C$150MM and C$2.4B `o` Total Enterprise Value (“TEV”) between C$138MM and $C2.2B `o` Revenue Between C$42MM and C$680MM `o` Roughly ¼ - 4X Xebec’s Market Cap at the time of Screening `o` Roughly ¼ - 4X Xebec’s TEV `o` Roughly ¼ - 4X Xebec’s forecasted revenues
Further Screening / Refinement	Depending on desired size of peer group, group narrowed by: `o` Further refined sizing criteria `o` Preference to retain previous peers, as long as size relevant `o` Attempting to position Xebec at approximately the median of the peers across the size metrics `o` Reviewing business description for closest industry matches `o` Reviewingmanagement identifiedpeers

Out of the application of the above-criteria, the new Comparator Group adopted by the Board in October 2021 consists of thirteen (13) companies as follows:

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Company Name Industry Head Quarter Listing
Clean Energy Fuels Corp. Oil and Gas Refining and Marketing United States Nasdaq
Montauk Renewables, Inc. Renewable Electricity United States Nasdaq-CM
Anaergia Inc. Environmental and Facilities Services Canada TSX
Westport Fuel Systems Inc. Construction Machinery and Heavy Trucks Canada TSX/Nasdaq
Neo Performance Materials Inc. Specialty Chemicals Canada TSX
The ExOne Company Industrial Machinery United States Nasdaq
FutureFuel Corp. Specialty Chemicals United States NYSE
EcoSynthetix Inc. Specialty Chemicals Canada TSX
Greenlane Renewables Inc. Coal and Consumable Fuels Canada TSX
5N Plus Inc. Specialty Chemicals Canada TSX
H2O Innovation Inc. Industrial Machinery Canada TSXV
Velan Inc. Industrial Machinery Canada TSX
Graham Corporation Industrial Machinery United States NYSE
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Named Executive Officers

For purposes of this Circular, Named Executive Officer (“ NEO s”) of the Corporation means, at any time during the most recently completed fiscal year:

(i) the CEO;
(ii) the chief financial officer (“ CFO ”);
(iii) the three most highly compensated executive officers other than the CEO and CFO at the end of the most recently completed financial year whose total compensation was more than $150,000 for that financial year; and
(iv) each individual who would be a named executive officer under paragraph (iii) but for the fact that the individual was not an executive officer of the Corporation, and was not acting in a similar capacity, at the end of the most recently completed financial year.

Summary Compensation Table

The following tables set forth the compensation paid to the Corporation’s NEOs during the fiscal years ended December 31, 2021, December 31, 2020, and December 31, 2019.

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Equity Incentive plan Non-equity
compensation incentive plan
compensation
($)
Name and Year Salary Share-Based Option-based Annual All other Total
principal position ($) awards awards Incentive Plans compensation [(2)] compensation
($) ($) ($) ($) ($)
Kurt 2021 390,740 ─ [(3)] ─ [(3)] 157,517 [(4)] 34,094 582,351
Sorschak [(1) ]
2020 390,740 ─ ─ ̶ [(3)] 25,157 415,897
CEO
2019 390,345 ─ ─ 140,000 61,178 591,523
Stéphane 2021 246,016 [(5)] 84,000 [(6)] ─ 101,888 [(4)] 7,380 439,284
Archambault
CFO 2020 27,692 [(5)] 158,400 [(7)] ─ 9,658 831 196,581
Nathalie Théberge 2021 231,323 [(8)] 55,000 [(6)] ─ 101,888 [(4)] 4,525 392,736
CLO & Secretary 2020 46,847 [(8)] 42,120 [(9)] ─ 16,338 ─ 105,305
Jim Vounassis
2021 245,000 [(10) ] 250,500 [(11)] 166,000 [(11)] 98,766 [(4)] 7,027 767,293
COO
Marinus Van Driel
2021 276,150 [(12)] 81,829 [(6)] ─ 167,090 [(4)] 35,825 560,894
President Europe
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(1) On March 17, 2022 the Corporation announced Mr. Sorschak’s retirement as a member of Xebec’s executive management team.
(2) All other compensation includes (i) for Kurt Sorschak an amount of $15,000 related to payment made to an insurance company for individual Long Term Disability Insurance coverage for each of years 2021, 2020 and 2019, plus Deferred Profit Sharing Plan (“ DPSP ”) contributions of $9,029 for 2021, $1,900 for 2020 and $10,301 for 2019, plus payment of accrued vacations not taken during preceding years for amounts of $10,065 for 2021, $8,257 in 2020 and $46,178 in 2019; (iv) DPSP contributions for the CFO, CLO and COO; and a car allowance for Marinus Van Driel.
(3) Kurt Sorschak voluntarily waived his right to his 2020 STIP and 2021 LTIP (as defined herein).
(4) On March 16, 2022, the Board of Directors approved 2021 STIP awards to the NEOs as detailed above. These amounts were not paid in cash. The 2021 STIP awards to NEO are to be awarded in DSUs, which the NEO must retain until they leave the Corporation. Such DSUs have not yet been granted as of the date hereof.
(5) Stéphane Archambault joined the Corporation on November 9, 2020 and was appointed Chief Financial Officer effective November 10, 2020. His annual base salary for 2020 was set at $240,000 and was increased to $260,000 as at September 6, 2021.
(6) For valuation purposes of the Compensation, the RSUs are valued using the market price of a Common Share at the time of grant of $5.01. The restriction period ends three years after the grant date.
(7) Upon joining the Corporation Stéphane Archambault was entitled to receive 20,000 RSUs which were granted on December 24, 2020. This award vests as one-third of the grant on November 10, 2021, 2022 and 2023 respectively. The restriction period ends three years after Mr. Archambault’s hire date. The award is subject to the terms and conditions of the Grant Agreement and of the Stock Incentive Compensation Plan as further discussed at page 47 of the Circular. For purpose of compensation, the RSUs are valued using the market price of a Common Share at the time of grant of $7.92.
(8) Nathalie Théberge joined the Corporation as Vice-President Legal Affairs and Secretary on October 5, 2020. Her annual base salary was set at $220,000 and was increased to $260,000 as at September 6, 2021.
(9) Upon joining the Corporation, Nathalie Théberge was entitled to receive 9,000 RSUs which were granted on October 5, 2020. This award vests as one-third of the grant on October 4, 2021, 2022 and 2023 respectively. The restriction period ends three years after of her hire date. The award is subject to the terms and conditions of the Grant Agreement and of the Stock Incentive Compensation Plan further discussed at page 47 of the Circular. For purposes of compensation, the RSUs are valued using the market price of a Common Share at the time of grant of $4.68.
(10) Jim Vounassis Joined the Corporation as Chief Operation Officer on May 31, 2021. His annual base salary was set at $420,000.

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(11) Upon joining the Corporation Jim Vounassis was entitled to receive (i) 50,000 RSUs which were granted on May 21, 2021. This award vests as one-third of the grant on May 20, 2022, 2023 and 2024 respectively. The restriction period ends three years after the grant date; and (ii) 50,000 stock options. The award is subject to the terms and conditions of the Grant Agreement and of the Stock Incentive Compensation Plan as further discussed at page 47 of the Circular. For purpose of compensation, the RSUs are valued using the market price of a Common Share at the time of grant of $7.92; and 50,000 stock option. All stock options values are based on the Black-Scholes model, for valuation purposes, which establishes a value of $3.32 per option granted on May 21, 2021. The Black-Scholes valuation methodology is used to value stock options because it is the predominant methodology in the marketplace. The following data represent the assumptions used to calculate the Black-Scholes: Stock Price $5.01; Exercise Price $5.01, interest rate 1.42% maturity time 7 years; Volatility 70.1% and dividend Yield 0%.
(12) Marinus van Driel joined the Corporation as President Europe at the closing of the HyGear acquisition on December 31, 2020, his annual base salary was set at €185,000. Ro report the numbers in Canadian dollars we have used an exchange rate of 1.4927 used by the Corporation in its financial statements for the of the year ending on December 31, 2021.

Compensation Mix

The 2021 compensation program was based on concepts of market competitiveness, considering the roles and responsibilities of each employee of the Corporation upon joining the Corporation. Alignment of employee and long-term Shareholder interests is promoted through a performance-based compensation system linked directly to the Corporate objectives (as defined under the heading “Annual Short-Term Incentive Plan” below) and individual objectives, as defined and discussed in greater detail below.

In keeping with the Corporation’s philosophy to link senior executive compensation to corporate performance and to motivate senior executives to achieve high levels of performance, the Corporation has adopted a model that includes both base salary and at-risk compensation comprised of both short-term performance incentives (which are subject to targets being achieved) and long-term incentives linked to the creation of Shareholder value.

The at-risk components for annual short-term incentives depend on the achievement of corporate performance objectives and individual objectives. Incentive compensation plans are designed to pay larger amounts for superior performance and smaller amounts if target performance is not achieved.

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Compensation Mix 2021
Short-term Incentive
Position Base Salary (target) Long-Term Incentive Pay-at-risk
CEO 56% 28% 16% 44%
CFO 61% 18% 21% 39%
CLO 65% 19% 16% 35%
COO 47% 24% 29% 53%
President Europe 56% 28% 16% 44%
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The table above shows the percentage weighting of each component of the total target direct compensation for the NEOs in 2021. In 2021, the program was re-designed to attract, retain, and motivate outstanding talent in a competitive business environment, to reward participants when corporate and personal objectives are achieved, to promote internal equity and a high-performance culture among the Corporation’s employees by increasing the portion of the at risk pay for the NEO. You will find the 2022 Compensation Mix in the table below.

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In setting the recommended compensation elements of the NEOs (base salary, target short-term incentive and target long-term incentive), the Human

Resources Committee takes into consideration the advice and recommendations provided by the independent advisor which are based on the compensation earned by similar executive officers in the relevant Comparator Group (see discussion on page 40 under the heading “Compensation Comparator Group”).

2022 Compensation Mix Highlight BASE SALARY STIP LTIP PAY-AT - RISK	2022 Compensation Mix Highlight BASE SALARY STIP LTIP PAY-AT - RISK
CEO	42% 25% 33% 58%
CFO/COO/PRESIDENT EUROPE	50% 25% 25% 50%
CLO	52% 24% 24% 48%

Base Salary

Base salaries of the NEOs are established at levels which are meant to be reasonably competitive with other companies and entities similar and of comparable size to the Corporation. The Corporation has not targeted base salaries of the NEOs with reference to a specific level for comparable positions in the Comparator Group for 2021. However, the Human Resources Committee initiated a progressive scale up of the base salary of the CFO, CLO and President Europe whose salaries where positioned below the 25[th] percentile of the Comparator Group in 2021. Base salaries are not a function of any specific relationship to the performance of the Corporation and are reviewed annually by the Human Resources Committee.

Annual Short-Term Incentive Plan

The Short-Term Incentive Plan of the Corporation (“ STIP ”) is a cash bonus which aims to:

Drive employee behaviour towards the achievement of critical results in the short-term (1 year) to support longterm organizational success;
Maximize the development and performance of employees and the overall performance of the organization within the industry; and
Ensure market competitiveness of compensation, enhancing employee morale and retention.
In light of the economic
uncertainties created by the COVID
19 pandemic, the war in Ukraine and the supply chain crisis, the 2021 STIP to the NEOs was awarded in DSU instead of cash

Exceptionally, the Human Resources Committee decided that the 2021 STIP awarded to NEOs would be made only in DSUs instead of cash.

The STIP provides select participants with an opportunity to earn annual incentive compensation (bonus) based upon corporate results and their personal contributions towards the achievement of the Company’s strategic business objectives during each fiscal year. The STIP also provides a structured annual employee goal setting, development and performance review process that builds a “line of sight” to organizational goals.

The Board reviews an annual strategic plan and budget outlining corporate objectives in line with the Company’s key strategies for growth and long-term value creation. These quantitative and qualitative objectives are utilized to inform metric selection and target setting on an annual basis. The Human Resources Committee and the Board may also apply upward or downward discretion to adjust the payouts of the annual bonus as necessary.

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	2021 STIP allocation (as a percentage of base salary)	2021 STIP allocation (as a percentage of base salary)
NEO	Threshold	Target	Maximum
CEO	0%	45%	90%
COO	0%	60%	120%
CFO and CLO	0%	30%	60%
President Europe	0%	50%	100%

The table above outlines the target and maximum annual bonuses of the NEOs. Bonuses are not guaranteed and are pay at risk. Note: actual payouts are determined based on actual results, but may not exceed the annual bonus maximum.

The table on the right shows the 2022 short term incentive redesigned allocation adopted for the NEO compensation program.

	2022 STIP Allocation Highlight (as a percentage of base salary) TARGET PAYOUT CEO 85% From 0 to 2 times the Target CFO/COO/PRESIDENT EUROPE 50% CLO 45%

2021 Corporate Performance (Weighting for 50% of the STIP)

The 2021 corporate objectives included financial, operational, organization development and strategic drivers of overall business performance results. The following corporate objectives, measures and performance results were determined and approved by the Board using its discretion.

The 2021 corporate objectives and performance results were as follows:

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Objectives Weighting Target Performance Performance Results Payout
Financial Objectives
Threshold: $110 Million
 Revenue 25% $125.9 Million 24.25%
Target: $130 Million
Threshold: (3.5)% of revenue
 Adjusted EBITDA [(1)] 25% (7)% 0%
Target: (4.0)% of revenue
Operational/ Strategic/ Organisational Development
o HyGear integration
 Integrate HyGear & Inmatec Successful integration as progressed as planned
10% 5%
in Xebec structure planned o Inmatec integration
behind plan
 Go live on ERP 10% Go live according to schedule 90% Achievement 9%
 Achieve supply chain
10% At least 7% of direct costs 25% Achievement 2.5%
reduction cost
 Deploy the ESG 2020 2020 ESG report published
Publish Report in collaboration
project and develop a 10% and 2021 report will 10%
with all business units
Xebec score include all subsidiaries
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Objectives Weighting Target Performance Performance Results	Payout
 Expand industrial business 10% M&A target of $35 Million annualized revenue $37.1 Million annualized revenue	10.5%
Total Result for Corporate Performance portion (50%) of STIP	61.25%

(1) Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) is a Non-IFRS measure and is not considered an alternative to income from operations or net (loss) earnings. Adjusted EBITDA does not have a standardized meaning and is therefore not likely to be comparable with similar measures used by other publicly traded companies. The Corporation uses Adjusted EBITDA because this measure enables management to assess the Corporation’s operational performance. This measure is a widely accepted financial indicator of a company’s ability to repay and assume its debt. Investors should not regard it as an alternative to operating revenues or cash flows, or as a measure of liquidity. Please refer to page 39 of our March 16, 2022 Fourth Quarter and Fiscal 2021 MD&A for a reconciliation of the Adjusted EBITDA in percentage of sales reconciliation of non-IFRS measures.

Individual Performance (Weighting for 50% of the STIP)

Individual objectives are identified annually based on discussion between the participant and his or her supervisor in order to ensure that the objectives selected align with the employee’s role and the Company’s strategic plan. These individual objectives represent employee role

2022 Changes to the Weighting of the Objectives for the NEOs CORPORATE INDIVIDUAL	2022 Changes to the Weighting of the Objectives for the NEOs CORPORATE INDIVIDUAL
2021	50% 50%
2022	80% 20%

objectives, which have direct impact to financial performance, support other roles and contribute to the overall achievement of organizational objectives.

The identification and weighting of the personal objectives occur at the beginning of the year. Objectives are assessed by the direct

supervisor at the end of the year. The aggregate rating for this measure is calculated on the proportional weightings of the individual components.

Starting in 2022, the STIP weighting amongst the corporate and individual performance of the NEOs has been re-balanced to increase weighting of corporate objectives as provided by the table above.

Long Term Incentive Plan (“LTIP”)

On June 25, 2020, the Shareholders of the Corporation approved the LTIP which replaced a former Stock Option Plan (the “ Former SOP ”). The Options granted prior to the LTIP approval date are still governed by the terms and conditions of the Former SOP.

Initially the grants to be made to NEOs under the LTIP were solely composed of RSUs. Therefore the 2021 NEOs compensation program adopted in 2020 provided for the grant of three-year vesting RSUs. The target awards were 60% of base salary for the CEO and the former COO, 35% for the CFO and 25% for the other NEOs. At the time of the award in

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2021 LTIP MIX
100%
RSUs
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the first quarter of 2021, Kurt Sorschak, the CEO, advised the Board that he would not accept any award under the LTIP in 2021.

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Starting in 2022, the LTIP mix was adjusted for all NEOs to increase the “pay at risk” proportions with the addition of the grant of performance share units (“ PSUs ”) and stock options to better align the interests of the NEO with those of the shareholders.

The LTIP is intended to furnish an incentive to any employee, officer or non-employee Director and certain non-U.S. consultants of the Corporation or any Affiliate (as defined in the Securities Act (Québec)) of the Corporation (the “ Eligible Participants ”), and when such Eligible Participants are granted Awards (as defined below), the Eligible Participants, whose skills, performance and loyalty to the objectives and interests of the Corporation, are encouraged to continue their services in favour of the Corporation’s success.

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LTIP MIX Starting in 2022
25%
SO
50%
RSU
25%
PSU
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The LTIP permits the granting of options (“ LTIP Options ”), Restricted Stock Units (“ RSUs ”) and Differed Shares Units (“ DSUs ”) (and together with LTIP Options and RSUs, the “ Awards ”) to Eligible Participants of the Corporation. The LTIP is administered by the Human Resources Committee.

The LTIP also includes specific provisions applicable to Participants resident of the United States and provisions for the compliance of the LTIP with requirements of United States laws, including the application of the Securities Exchange Act of 1934 and the Internal Revenue Code of 1986.

General Terms Applicable to Awards

The total number of Common Shares reserved and available for grant and issuance pursuant to Awards (including the Common Shares issuable upon exercise of the outstanding options previously granted under the Former SOP of the Corporation, which, as of the date of this Circular, is equal to 1,195,866 Common Shares, representing approximately 0.8% of the total issued and outstanding Common Shares (the “ Existing Options ”) shall not exceed a number of Common Shares equal to 8,393,115 (representing 5.9% of the total issued and outstanding Common Shares). A summary of the Former SOP is attached hereto as Appendix “A”.

The LTIP provides that the aggregate number of Common Shares (a) issued to insiders and associates of such insiders under the LTIP or any other proposed or established share compensation arrangement within any oneyear period and (b) issuable to insiders and associates of such insider at any time under the LTIP or any other proposed or established share compensation arrangement, shall not in each case exceed 10% of the issued and outstanding Common Shares.

Moreover, the aggregate number of Common Shares issuable to any one consultant, within any one-year period, under the LTIP, or when combined with any other proposed or established share compensation arrangement, shall not exceed 2% of the issued and outstanding Common Shares. Finally, the aggregate number of Common Shares issuable to all Participants retained to provide Investor Relations Activities (as such term is defined in the TSX policies), within any one-year period, under the LTIP, or when combined with any other proposed or established share compensation arrangement, shall not exceed 2% of the issued and outstanding Common Shares.

Except as otherwise provided by the Human Resources Committee, Awards granted or awarded under the LTIP may not be assigned or transferred with the exception of an assignment made to a personal representative of a deceased Participant. The Board will not provide financial assistance to Participants to assist them in exercising

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their Awards, provided, however, that the Board may, in its discretion, amend the LTIP to authorize the administrator under the LTIP to make arrangements to provide a form of financial assistance to the Participants.

Specific Terms Related to the Options

The Human Resources Committee will (i) set the term of the Options granted under the LTIP which term cannot exceed 10 years and (ii) fix the vesting terms of Options as it deems appropriate at the time of the grant of such Options. Should the expiration date for an Option fall within a period during which designated persons cannot trade in any securities of the Corporation pursuant to the Corporation’s policy respecting restrictions on insider trading which is in effect at that time (a “ Black-Out Period ”) or within nine business days following the expiration of a Black-Out Period, the expiry date of the Option (other than an Incentive Stock Option intended to meet the requirement of Section 422 of the Internal Revenue Code of 1986 of the United States) shall be extended until that date, which is the tenth business day following the end of the Black-Out Period.

The exercise price of any Options granted pursuant to the LTIP will be determined by the Human Resources Committee at the time of the grant, provided that the exercise price shall not be less than the market value of the Common Shares at the time of the grant. The market value of the Common Shares shall be the closing price of the Common Shares on the TSX the day before the determination is made.

Specific Terms Related to RSUs

The Human Resources Committee will fix the period during which RSUs may vest (the “ Restriction Period ”). Each RSU grant will be subject to certain vesting conditions (which may include performance criteria), such conditions to be determined by the Human Resources Committee and to be provided to the Participant under a separate agreement. The RSUs grants which include performance criteria are referred to as “PSUs” .

The Participant will be entitled to receive, after the vesting determination date, which is the date on which the Human Resources Committee determines that the vesting conditions are met, but no later than the last day of the Restriction Period, payment for each awarded RSU. The RSUs to be granted under the LTIP will evidence the right to receive a Common Share or a cash payment equal to the fair market value of a Common Share as determined under the LTIP. The Human Resources Committee may at it sole discretion determine if RSUs of any grant earn dividend equivalents in the form of additional RSUs or not.

Specific Terms Related to the DSUs

The Human Resources Committee may grant DSUs to Eligible Persons subject to the terms of the LTIP and any applicable Award Agreement. A DSU granted under the LTIP shall confer on the holder thereof a right to receive on termination of the holder’s employment and service with the Corporation and its affiliates the market value of one Common Share at such time (which will be payable by the Corporation in such form or forms as the Human Resources Committee may determine including, without limitation, cash, Common Shares, other securities, other Awards or other property or any combination thereof). The Award market value of a DSU at the date of grant shall not be less than the market value of the Common Shares at the time of the grant. The market value of the Common Shares shall be the closing price of the Common Shares on the TSX the day before the determination is made. The Human Resources Committee may, at it sole discretion determine if DSUs of any grant earn dividend equivalents in the form of additional DSUs or not.

Forms of Payment under Awards

Payments or transfers to be made by the Corporation upon the grant, exercise or payment of an Award may be made in such form or forms as the Human Resources Committee shall determine (including, without limitation,

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cash, Common Shares, other securities (but excluding promissory notes), other Awards or other property or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Human Resources Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments with respect to installment or deferred payments.

Termination of Awards

When a Participant ceases to be eligible, each Award held by such Participant will be exercisable only up to the number of Common Shares under such Awards that the Human Resources Committee decides to be exercisable and only during a period starting on the date such Participant ceases to be eligible and ending on the date the Human Resources Committee so decides but in any event, not later than the initial expiration date of such Awards, as the case may be, whichever occurs first.

Impact of a Change in Control

Subject to the provisions contained in any employment agreement between a holder of Awards and the Corporation, if (i) any person becomes the beneficial owner, directly or indirectly, of 50% or more of either the issued and outstanding Common Shares or the combined voting power of the Corporation’s then outstanding voting securities entitled to vote generally; (ii) any person acquires, directly or indirectly, securities to which is attached the right to elect the majority of the Directors; or (iii) the Corporation undergoes a liquidation or dissolution or sells all or substantially all of its assets, the Board may make such provision for the protection of the rights of the Participants as the Board, in its discretion, considers appropriate in the circumstances, including, without limitation, changing the performance criteria and/or the vesting conditions for the Awards and/or the date on which any Award expires or the restricted period, the performance criteria and/or the vesting conditions for the Awards provided that an acceleration of vesting conditions will only be possible upon the consummation of such change in control.

Income Tax Withholding

In order to comply with all applicable federal, provincial, state, local or foreign income tax laws or regulations, the Corporation may take such action under the LTIP as it deems appropriate and the Human Resources Committee will have complete discretion to permit a Participant to satisfy such tax obligation, to ensure that all applicable federal, provincial, state, local or foreign payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from such Participant.

Amendment and Termination

The Board may from time to time amend, suspend or terminate the LTIP, and the Human Resources Committee may amend the terms of any previously granted Award, provided that no amendment to the terms of any previously granted Award may (except as expressly provided in the LTIP) materially and adversely alter or impair the terms or conditions of the Award previously granted to a Participant under the LTIP without the written consent of the Participant or holder thereof.

Any amendment to the LTIP, or to the terms of any Award previously granted, is subject to compliance with all applicable laws, rules, regulations and policies of any applicable governmental entity or securities exchange, including receipt of any required approval from the governmental entity or stock exchange. For greater certainty and without limiting the foregoing, the Board may amend, suspend, terminate or discontinue the LTIP, and the

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Human Resources Committee may amend or alter any previously granted Award, as applicable, without obtaining the approval of Shareholders of the Corporation in order to:

(a) make changes that are necessary or desirable to comply with applicable laws, rules, regulations and policies of any applicable governmental entity or stock exchange (including amendments to Awards necessary or desirable to avoid any adverse tax results under Section 409A of the Internal Revenue Code of 1986 of the United States), and no action taken to comply shall be deemed to impair or otherwise adversely alter or impair the rights of any holder of an Award or beneficiary thereof; or
(b) amend any terms relating to the administration of the LTIP, including the terms of any administrative guidelines or other rules related to the LTIP.

Prior approval of the shareholders of the Corporation shall be required for any amendment to the LTIP or an Award that would:

(c) require Shareholder approval under the rules or regulations of the TSX or any other securities exchange that are applicable to the Corporation;
(d) amend any terms relating to the granting or exercise of Awards, including but not limited to terms relating to the amount and payment of the exercise price, or the vesting, expiry, assignment or adjustment of Awards, or otherwise waive any conditions of or rights of the Corporation under any outstanding Award, prospectively or retroactively;
(e) amend the LTIP for the introduction or amendment of a cashless exercise feature payable in securities, whether or not such feature provides for a full deduction of the number of underlying securities from the LTIP reserve;
(f) increase the number of Common Shares authorized under the LTIP;
(g) increase the number of Common Shares or value subject to the limitations or remove such limitations in the LTIP;
(h) permit repricing of Options;
(i) permit the award of Options at a price less than 100% of the market value of a Common Share on the date of grant of such Option except as permitted under the LTIP;
(j) increase the maximum term permitted for an Award; or
(k) amend the amendment provisions of the LTIP.

Term of the LTIP

No Award shall be granted under the LTIP, and the LTIP shall terminate, on April 14, 2030 or any earlier date of discontinuation or termination established by the Board; however, any Award granted under the LTIP may extend beyond such dates, and the authority of the Human Resources Committee provided for under the LTIP with respect to the LTIP and any Awards, and the authority of the Board to amend the LTIP, shall extend beyond the termination of the LTIP.

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Employment, Consulting and Management Agreements

Each of the NEOs has a written employment agreement with the Corporation that provides for standard contractual covenants in favour of the Corporation, such as one-year non-competition and non-solicitation agreements, confidentiality agreements, and the continuation of their employment for an indeterminate term.

In addition, each employment agreement provides that certain amounts are payable to the NEO in the event of termination without cause or in the context of a change of control as described as follows.

Kurt Sorschak

Kurt Sorschak entered into an employment agreement effective June 12, 2009 which agreement was terminated on March 16, 2022 as Mr. Sorschak retired as President and CEO of the Corporation. Under the terms of this agreement, the Corporation was entitled to terminate the employment of Mr. Sorschak without cause, by providing Mr. Sorschak with one year’s notice in writing; or, in lieu of written notice, by paying Mr. Sorschak a lump sum equal to one year of the then current base salary. The severance value in such a case, had such event occurred on December 31, 2021, is estimated at approximately $390,740.

In addition, if the Corporation had terminated Mr. Sorschak’s employment contract in connection with a change of control resulting in a material change in his executive officer position, a reduction in his remuneration, a failure by the Corporation to obtain an assumption of the obligations of the agreement or a breach of the agreement by the Corporation, Mr. Sorschak would have been entitled to receive an amount equal to two years of his then-current base salary, and an amount equal to the cash bonuses earned in the immediately preceding year. The severance value in such a case that would apply, had such an event occurred on December 31, 2021, is estimated at approximately $781,480. Following such termination, all options held by Mr. Sorschak would become immediately exercisable and his employee benefits (other than long term disability) would have continued for 12 months.

Jim Vounassis

Jim Vounassis entered into an employment agreement with the Corporation as Chief Operating Officer effective May 31, 2021 (the “ Initial Agreement ”). The Initial Agreement was modified effective March 17, 2022 as Mr. Vounassis was appointed as President and CEO of the Corporation. Under the terms of the Initial Agreement, the Corporation was entitled to terminate the employment of Mr. Vounassis without cause, by paying Mr. Vounassis a lump sum equal to one year of his then current base salary. The severance value in such a case, had the event occurred on December 31, 2021, is estimated at approximately $420,000.

In addition, if the Corporation had terminated Mr. Vounassis’ Initial Agreement in connection with a change of control resulting in a material change in his executive officer position, a reduction in his remuneration, a failure by the Corporation to obtain an assumption of the obligations of the Initial Agreement or a breach of the agreement by the Corporation, Mr. Vounassis would have been entitled to receive an amount equal to two years of his then-current base salary, and an amount equal to the cash bonuses earned in the immediately preceding year. The severance value in such a case that would apply, had such an event occurred on December 31, 2021, is estimated at approximately $840,000. Following such termination, all options held by Mr. Vounassis would become immediately exercisable and his employee benefits (other than long term disability) would have continued for 12 months.

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All other Named Executive Officers

As at December 31, 2021, the employment agreements of the CFO and of the CLO contained minimum compensation of six months of their base salary in the event of a termination without cause and the payment of any vested units under the LTIP while the employment agreement of the President Europe contained no provisions with regard to termination without cause and the payment of any vested units under the LTIP.

Incremental payments on termination, retirement and death

The following table shows the value of the estimated incremental payments, payables, and benefits to each NEO that would have resulted had the relevant triggering event occurred on the last business day of the most recently completed financial year.

Name and Position	Estimated incremental value of termination as of December 31, 2021(1)
	Compensation component Termination without cause Termination following change of control Retirement / resignation/ death Termination with cause
Kurt Sorschak	Severance payment $390,740 $781,480 ─ ─
	Accelerated vesting of equity ─ ─ ─ ─
	Other Benefits $18,000 $18,000 ─ ─
	Total $408,740 $799,480 ─ ─
Stéphane Archambault	Severance payment $130,000 $130,000 ─ ─
	Accelerated vesting of equity ─ ─ ─ ─
	Benefits ─ ─ ─ ─
	Total $130,000 $130,000 ─ ─
Nathalie Théberge	Severance payment $130,000 $130,000 ─ ─
	Accelerated vesting of equity ─ ─ ─ ─
	Benefits ─ ─ ─ ─
	Total $130,000 $130,000 ─ ─
Jim Vounassis	Severance payment ─(3) $420,000 ─ ─
	Accelerated vesting of equity ─ ─ ─ ─
	Benefits ─ ─ ─ ─
	Total ─ $420,000 ─ ─
Marinus Van Driel	Severance payment ─(3) ─ ─ ─
	Accelerated vesting of equity ─ ─ ─ ─
	Benefits ─ ─ ─ ─
	Total ─ ─ ─ ─

(1) This table reflects the estimated incremental payments that are triggered under each circumstance identified in the respective headings.

(2) Upon death or change of control, RSUs and options do not vest immediately. No other incremental amounts would be paid.

(3) The Initial Agreement of Jim Vounassis provided for 2 month of severance payment per complete year of services and the Employment Agreement of Marinus van Driel does not contain any provision for termination without cause.

Outstanding Share-Based and Option-Based Awards

The table below indicated, for each NEO, stock option grants and RSUs outstanding as of December 31, 2021.

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Outstanding Equity Awards at Fiscal Year End
Stock Option Awards Restricted Share Unit Awards
Market or Market or
Number of payout payout value
Number of Value of shares or value of of vested
securities unexercised units of share-based share-based
underlying Option in-the- share that awards that awards not
unexercised exercise Option money have not have not paid out or
options price expiration options [(1)] vested vested [(2)] distributed [(2)]
Name and Position (#) ($/share) date ($) (#) ($) ($)
Kurt Sorschak
CEO
─ ─ ─ ─ ─ ─ ─
Stéphane Archambault
CFO ─ ─ ─ ─ 24,510 61,521 30,762
Nathalie Théberge
Chief Legal Officer and ─ ─ ─ ─ 13,319 33,430 16,715
Corporate Secretary
Jim Vounassis May 21,
50,000 5.01 0 50,000 125,500 0
Chief Operating Officer 2028
Marinus Van Driel
─ ─ ─ ─ 10,889 27,331 13,665
President Europe
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(1) The value of unexercised in-the-money options is calculating using the difference between the closing price of the Common Shares on December 31, 2021 on the TSX ($2.51) and the exercise price of the stock options. As of December 31, 2021, the options were not exercised.

(2) The market value of share-based awards is calculated by multiplying the number of Restricted Share Units by the closing price of the Common Share on December 31, 2021 on the TSX ($2.51). The actual gains will depend on the value of the aforesaid shares on distribution date.

Equity Based Award – Value Vested or Earned During the Year

The following table indicates, for each NEO, the aggregate dollar value of option-based and share-based awards vested or of non-equity incentive plan compensation earned during the 2021 Fiscal Period:

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Non-equity incentive plan
Option-based award Value Share-based award Value compensation Value
vested during the year vested during the year [(1)] earned during the year [(2)]
($) ($) ($)
Kurt Sorschak
─ ─ 157,517
CEO
Stéphane Archambault
─ 38,896 101,888
CFO
Nathalie Théberge
─ 17,074 101,888
CLO and Corporate Secretary
Jim Vounassis
─ ─ 98,766
Chief Operating Officer
Marinus Van Driel
─ 13,664 167,090
President, Europe
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(1) This amount is calculated using the market price of the Common Shares on the date of vesting (October 13, 2021: $2.63, November 8, 2021: $3.73, December 31, 2021: $2.51).
(2) These amounts were awarded under the 2021 Annual Incentive Plan of the Corporation and not paid in cash, they are to be awarded in DSUs.

Performance Graph

The Corporation’s Common Shares commenced trading on the TSX on January 7, 2021 and were delisted from TSXV at the same time, following final approval from the TSX to list its common shares on the TSX, as previously announced on January 6, 2021.

The graph below shows the cumulative total return on a $100 investment on December 31, 2016 in Common Shares and the cumulative total return of the TSX Composite Index (the “ Index ”) over the five year period ending December 31, 2021. A $100 investment made on December 31, 2016 in Common Shares would have yielded $2,281.82 over the five year period ending December 31, 2021 and a $100 investment in the Index would have yielded $137.78 over the five year period ending December 31, 2021.

==> picture [408 x 186] intentionally omitted <==

----- Start of picture text -----

Total Shareholder Return XBC
December 31, 2016 to December 31, 2021
TSX S&P
$10,000.00
$8,000.00
$6,000.00
$4,000.00
$2,000.00
$0.00
Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21
----- End of picture text -----

As discussed above, the Corporation has adopted a model that includes both base salary and at-risk compensation comprised of both short-term performance incentives (which are subject to targets being achieved) and long-term incentives linked to the creation of Shareholder value. Accordingly, while there is no direct link between the Index and executive compensation as determined by the Human Resources Committee, the actual realized value of any equity-based incentive compensation is correlated with the Company’s performance over time. See “Compensation Mix” and “Compensation Discussion and Analysis”.

Anti-Hedging Policy

A NEO or Director is not permitted to engage, directly or indirectly, in any kind of transaction or purchase any kind of financial instruments, including, for greater certainty, prepaid variable forward contracts, equity swaps, collars, or units of exchange funds that are designed or would have the effect of hedging the value of equity securities granted to, or held by such NEO or Director or that could reduce or limit such NEOs or Director’s economic risk with respect to the holdings, ownership or interest in or to Common Shares or other securities of the Corporation, including without limitation outstanding stock options, stock appreciation rights, RSUs or other compensation awards the value of which are derived from, referenced to or based on the value or market price of Common Shares.

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Pension Plan

The Corporation does not offer a defined contribution pension plan, defined benefits pension plan or other deferred compensation plan to its employees or NEOs.

Incentive Compensation Clawback Policy

The Incentive Compensation Clawback Policy (the “ Clawback Policy ”) was adopted by the Board in 2020, upon the recommendation of the Corporate Governance Committee. The Clawback Policy applies to the President, CEO, COO, CFO, CLO and any person holding the position of Executive Vice-President or Vice-President (the “ Affected Officers ”) of the Corporation. This Clawback Policy allows the Board, in its discretion, to establish and reserve the right to recover all or portion of any incentive or deferred compensation granted to the Affected Officers in circumstances where (i) there has been a material misrepresentation or material error resulting in the restatement of the Corporation’s financial statements for any reason other than a restatement caused by a change in applicable accounting rules or interpretation and the Affected Officers would have received less incentive or deferred compensation based upon the restated financial statements or (ii) the Board determined that the Affected Officer engaged in misconduct (a “ Trigger Event ”).

For the purposes of this Clawback Policy, “misconduct” means an act of fraud, dishonesty or wilful negligence or material non-compliance with legal requirements or the Corporation’s policies, any act or omission which would justify termination with cause or any failure to report or take action to stop “misconduct” of another employee that the Affected Officer knew, or ought to have known, about.

Under the Clawback Policy, the following elements of compensation paid to the Affected Officers can be recovered or cancelled by the Board: (i) an annual performance bonus; (ii) unvested stock options, RSUs and performance share units; (iii) vested but unexercised options; and (iv) any monetary payments and Common Shares received from the exercise of options or payment of RSUs and performance share units, net of the exercise price paid by the Affected Officer, as applicable.

The Board may look back in the application of this policy up to three years preceding the date upon which the Board makes its determination that a Trigger Event has occurred or such longer period required by applicable laws.

Share Ownership Policy

The Board adopted in 2020 a share ownership requirement policy (the “ Ownership Policy ”) for all NEDs and NEOs, in order to further align the long-term interests of the Shareholders and that of its Directors and NEOs. The Ownership Policy provides direction as to the level and amounts of ownership considered satisfactory in meeting the ownership requirements. The shares ownership requirements under the Ownership Policy are as follows:

President and CEO: 3 times his annual base salary CFO, COO and CLO: 1.5 times his/her annual base salary Executive Vice-President: one time his/her annual base salary

The applicable method of calculation for the purpose of determining the value of the Common Shares held, is based on the higher of (i) cost of the acquisition or (ii) market value at time of determination. Each NED and NEO shall have five years to comply with the Ownership Policy starting from the date of approval of the Policy or from

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the date of appointment whichever comes last. As of the date of this Circular, all NEOs were in compliance with the Ownership Policy.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information regarding the number of Common Shares to be issued upon the exercise of outstanding options and the weighted-average exercise price of the outstanding options in connection with the LTIP as of December 31, 2021.

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----- Start of picture text -----

Number of securities Number of securities
to be issued upon Weighted-average price remaining available for
Plan Category exercise of outstanding of outstanding options, future issue under
options, warrants and warrants and rights Equity Compensation
rights Plans [(1) ]
Stock Incentive
1,127,115 $5.01 [(2)] 5,952,167
Compensation Plan [(1)]
─
Former Stock Option Plan [(3)] 787,000 $0.40
----- End of picture text -----

(1) During Fiscal 2021, RSUs, DSUs and Stock Options were granted under the LTIP. The reserve of 8,393,115 includes an equivalent number of the stock options outstanding under the Former SOP.
(2) Represents the weighted average price of the outstanding options.

(3) On April 14, 2020, the Board of Directors approved the LTIP replacing the Former Stock Option Plan. Since that date, no stock options are granted under the Former Stock Option Plan.

Burn Rate

The stock options granted to participants of the Corporations resulted in the following burn rate in each of the last three fiscal years calculated based on the number of securities granted during the fiscal year divided by the weighted average number of securities outstanding for the fiscal year:

	2021	2020	2019
Stock Options	0.04%	─	─
RSUs	0.14%	0.26%	─
DSUs	0.05%	0.07%	─

Shareholder Proposals

The CBCA provides that a registered holder or beneficial owner of shares that is entitled to vote at the annual meeting of the Corporation may submit to the Corporation notice of any matter that the person proposes to raise at the meeting (a “ Proposal ”), and discuss at the meeting any matter in respect of which the person would have been entitled to submit as a Proposal. The CBCA further provides that the Corporation must set out the Proposal in its management proxy circular along with, if so requested by the person who makes the Proposal, a statement in support of the Proposal by such person. However, the Corporation will not be required to set out the Proposal in its management proxy circular or include a supporting statement if, among other things, the Proposal is not submitted to the Corporation at least 90 days before the anniversary date of the notice of meeting that was sent to the Shareholders in connection with the previous annual meeting of Shareholders of

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the Corporation. As such, Proposals intended to be presented at the next annual meeting of Shareholders of the Corporation must be received by the Corporation c/o TSX Trust Company, Attention Proxy Department, 100 Adelaide Street West, Suite 301, Toronto, Ontario, M5H 4H1, or by email at [email protected], no later than February 11, 2023, for inclusion in the Corporation’s management proxy circular relating to that meeting. It is recommended that Proposals be delivered to the Corporation by registered mail.

Indebtedness of Directors and Executive Officers

As of March 31, 2022, there was no indebtedness owing to the Corporation by a present executive officer and Director.

Interest of Informed Persons in Material Transactions

To the best of our knowledge, other than as disclosed elsewhere in this Circular, no informed person or proposed Director, or associate or affiliate of an informed person or proposed Director, had any material interest, direct or indirect, in any proposed material transaction or material transaction entered into by the Corporation during Fiscal 2021.

Particulars of Other Matters to Be Acted Upon

Management knows of no matters to come before the Meeting other than those referred to in the Notice of Meeting and in this Circular. However, should any other matters arise, please contact: the Corporate Secretary at Xebec Adsorption Inc., 1130 Sherbrooke West, Suite 700, Montreal, Quebec, Canada, H3A 2M8, by telephone at (450) 979-8700 or by email at: [email protected].

Additional Information

Additional information relating to the Corporation is available at www.sedar.com under the name Xebec Adsorption Inc., including the Corporation’s Annual Information Form, the annual audited consolidated financial statements and related Management’s discussion & analysis for Fiscal 2021. You can ask us for a copy of the following documents at no charge:

annual audited consolidated financial statements of the Corporation;
related Management’s discussion & analysis for Fiscal 2021;
any interim financial statements of the Corporation that are filed after the annual audited consolidated financial statements of the Corporation for the Fiscal 2021 and the Management’s discussion & analysis for such interim financial statements; and
the Annual Information Form, together with any document, or the relevant pages of any document, incorporated by reference therein.

The above documents are also available on the Corporation’s website at www.xebecinc.com and on SEDAR at www.sedar.com.

All of the Corporation’s news releases are also available on its website. In addition, Shareholders may request a copy of these documents by telephone at 1-877-469-3232 or by email at [email protected].

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Approval of Circular

The undersigned hereby certifies that the contents and the sending of this Circular have been approved by the Directors of the Corporation.

DATED in Blainville, Québec, this 31[st] day of March, 2022.

(s) Nathalie Théberge

Nathalie Théberge

Chief Legal Officer and Corporate Secretary

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APPENDIX “A”

Summary of the Prior Stock Option Plan

The Human Resources Committee can, from time to time, grant options to purchase Common Shares (the “ Options ”), pursuant to the Xebec Adsorption Stock Option Plan (the “ Stock Option Plan ”), to any Director, officer, employee, consultant or any individual, company or other person engaged to provide ongoing valuable services to the Corporation or its affiliates (the “ Eligible Person ”).

For the purposes of the Stock Option Plan, the following definitions shall apply:

“ Discounted Market Price ” means a “ Discounted Market Price ” as defined in the policies of the TSX.

“ Market Price ” of Common Shares at any grant date means the last closing price per Common Share on the trading day immediately preceding the day on which the Corporation announces the grant of the option or, if the grant is not announced, on the grant date.

“ Merger and Acquisition Transaction ” means (i) any merger; (ii) any acquisition; (iii) any amalgamation; (iv) any offer for shares of the Corporation which if successful would entitle the offer or to acquire all of the voting securities of the Corporation; or (v) any arrangement or other scheme of reorganization.

“ Options ” means stock options granted under the Stock Option Plan to purchase Common Shares from treasury pursuant to the terms and conditions thereof and as evidenced by an option agreement.

“ Participant ” means an Eligible Person designated to be granted an Option under the Stock Option Plan.

The following is a description of the material terms of the Stock Option Plan:

Exercise Price. The exercise price per Common Share for the Options is fixed by the Human Resources Committee but under no circumstances can the exercise price at the time of the grant be lower than the Discounted Market Price of the Common Shares.

Term. The term of the Options granted will be determined by the Human Resources Committee and specified in the option agreement pursuant to which such Option is granted, provided that the expiry date not be later than the date which is the seventh anniversary of the date on which such Option is granted. In addition, the term of the Options will be extended ten business days following the end of a blackout period, if the expiry date occurs during a blackout period (the interval of time during which the Corporation determines that one or more Participants cannot trade any securities because they may be in possession of undisclosed material information). See paragraph below entitled “ Causes of Cessation ” for the other expiration delays of the Options.

Vesting. Vesting is at the discretion of the Human Resources Committee. Except as determined from time to time by the Human Resources Committee, all Options will cease to vest as of the date upon which the Participant ceases to be an Eligible Person (which, in the case of an employee or consultant, will be the date on which active employment or engagement, as applicable, terminates, specifically without regard to any period of reasonable notice or any salary continuance).

Maximum Grant to Insiders. The number of Common Shares that may be purchased under Options granted pursuant to the Stock Option Plan (or when combined with all of the Corporation’s other security-based

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compensation arrangements that provide for the issuance from treasury or potential issuance from treasury of Common Shares):

i) to Participants that are insiders (as a group), at any point in time, shall not exceed 10% of the total number of issued and outstanding Common Shares; and
ii) to Participants that are insiders, within any one-year period, shall not exceed 10% of the total number of outstanding Common Shares calculated on the date an Option is granted to any insider.

The Common Shares issued pursuant to an entitlement granted prior to the Participant becoming an insider will be included in determining the number of Common Shares issuable to insiders.

Maximum Grant to Independent Directors . The number of Common Shares issuable to Participants that are independent Directors of the Corporation, pursuant to the Stock Option Plan or when combined with all other previously established and outstanding or proposed share compensation arrangements, shall not, in aggregate, exceed 1% of the total number of outstanding Common Shares, excluding Common Shares reserved for issuance to such Participant at a time when such Participant was not an independent Director of the Corporation.

Maximum Grant to Any One Participant. The aggregate number of Common Shares issuable to any one Participant, pursuant to the Stock Option Plan, within any one-year period cannot exceed 5% of the total number of outstanding Common Shares, calculated on the date the Option is granted to the Participant.

Maximum Grant to a Consultant. The aggregate number of Common Shares issuable to a Participant that is a consultant, pursuant to the Stock Option Plan, within any one-year period cannot exceed 2% of the total number of outstanding Common Shares, calculated on the date the Option is granted to the consultant.

Maximum Grant to all Participants Retained to Provide Investor Relations Activities. The aggregate number of Common Shares issuable to all Participants retained to provide Investor Relations activities, pursuant to the Stock Option Plan, within any one-year period cannot exceed 2% of the total number of outstanding Common Shares, calculated on the date the Option is granted to the Participant, and Options granted to Participants retained to provide Investor Relations activities must vest in stages over a period of not less than one year with no more than ¼ of the Options vesting in any three-month period.

Causes of Cessation. In the event the Participant ceases to be an Eligible Person for any reason, other than the death of the Participant or the termination of the Participant for cause, the Options will expire on the date which is 90 days after the date of termination (specifically without regard to any period of reasonable notice or any salary continuance) of the Participant’s directorship, active employment or active engagement, as applicable, with the Corporation or its subsidiaries, or such earlier or later date as the Human Resources Committee may determine.

In the event of the termination of the Participant as a Director, officer, employee or consultant for cause, all Options will expire or be forfeited on the date of notice of such termination, specifically without regard to any period of reasonable notice or any salary continuance.

In the event of the death of a Participant prior to: (i) the Participant ceasing to be an Eligible Person (which, in the case of an employee or consultant, will be the date on which active employment or engagement, as applicable, terminates, specifically without regard to any period of reasonable notice or any salary continuance); or (ii) the date on which the Option, but for (i), would have expired pursuant to the above paragraph, the date

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which is one year after the date of death of such Participant or such earlier or later date as the Human Resources Committee may determine.

Assignability. Options granted under the Stock Option Plan are non-transferable and non-assignable.

Procedure for Amending. The Human Resources Committee has the right at any time to amend the Stock Option Plan or any Option agreement under the Stock Option Plan provided that Shareholder approval has been obtained by ordinary resolution, including any amendment that would: (i) increase the number of Common Shares, or rolling maximum percentage, reserved for issuance under the Stock Option Plan; (ii) reduce the exercise price per Common Share under any Option or cancel any Option and replace such Option with an Option with a lower Exercise Price per Common Share, it being understood that any reduction in the Exercise Price of Options held by insiders shall require disinterested shareholder approval, as required under the policies of the TSX; (iii) extend the term of an Option beyond its original expiry time; (iv) increase the limit on the participation by independent Directors in the Stock Option Plan; or (v) permit an Option to be transferable or assignable to any person other than in accordance with the Stock Option Plan. Notwithstanding the foregoing, Shareholder approval is not required for amendments of a clerical nature, amendments to reflect any regulatory authority requirements (including those of the TSX), and acceleration of or other amendments to any vesting provisions of option agreements, amendments to the expiry date of Options so long as such amendments do not extend Options past the original date of expiration.

Financial Assistance. The Corporation does not provide financial assistance to Participants to facilitate the purchase of Common Shares upon the exercise of Options granted under the Stock Option Plan.

Other Material Information. Appropriate adjustments to the Stock Option Plan and to Options granted there under will be made by the Human Resources Committee to give effect to adjustments in the number and type of Common Shares resulting from subdivisions, consolidations, substitutions, or reclassifications of the Common Shares, the payment of stock dividends (other than dividends in the ordinary course) or other changes in the Corporation’s capital or from a Merger and Acquisition Transaction. In the event of a Merger and Acquisition Transaction that results in a change of control, (a) the Board will, in an appropriate and equitable manner, determine the purchase price or exercise price with respect to any Option, provided, however, that the number of Common Shares covered by any Option or to which such Option relates is always a whole number; or (b) the Board will, in an appropriate and equitable manner, determine the manner in which all unexercised Option rights granted under the Stock Option Plan will be treated; or (c) the Board will offer any Participant the opportunity to obtain a new or replacement option over any securities into which the Common Shares are changed or are convertible or exchangeable, on a basis proportionate to the number of Common Shares under Option and the exercise price (and otherwise substantially upon the terms of the Option being replaced, or upon terms no less favourable to the Participant); or (d) the Board will, in an appropriate and equitable manner, determine any adjustment to the number and type of Common Shares (or other securities or other property) that thereafter shall be made the subject of Options; or (e) the Board will, in an appropriate and equitable manner, determine the number and type of Common Shares (or other securities or other property) subject to outstanding Options; (f) the Human Resources Committee may commute for or into any other security or any other property or cash, any Option that is still capable of being exercised, upon giving to the Participant to whom the Option has been granted at least 30 days written notice of its intention to commute the Option, and during such period of notice, the Option, to the extent it has not been exercised, can be exercised by the Participant without regard to any vesting conditions attached thereto, and on the expiry of such period of notice, the unexercised portion of the Option will lapse and be cancelled.

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APPENDIX “B”

Board of Directors Mandate

1. Introduction

The Board of Directors (the “Board”) is responsible for the stewardship of Xebec Adsorption Inc. (the “Corporation”), and overseeing the management of the Corporation in accordance with applicable requirements under corporate and securities regulations and jointly with Executive Management, seeks to create long-term shareholder value. The Board may discharge its responsibilities by delegating certain duties to committees of the Board and to management. The specific duties delegated to each committee of the Board are outlined in the committee charters and in the minutes of Board meetings. The Board may not delegate any matter which is required under applicable corporate or securities laws to be decided by the Board as a whole.

2. Meetings

(a) The Board will hold regularly scheduled meetings in person at least once each quarter, and will hold additional meetings via teleconference periodically as required.
(b) The Chair, with the assistance of the Corporate Secretary and the input of the Lead Director, will be responsible for the agenda for each Board meeting.
(c) The Board encourages management to attend Board meetings, where appropriate, to provide additional insight to matters being considered by the Board.
(d) The Board should have an in-camera session without management present, including any management directors, as a regular feature of each Board meeting.
(e) Resolutions may not be approved by the Board during any in-camera session of a Board meeting in the absence of directors who have been excluded from such in-camera sessions but who have attended the Board meeting, unless such excluded directors have consented to such resolution being approved in their absence during the in-camera session.
(f) The quorum necessary for the transaction of business of the directors will be a majority of the directors.

3. Election or Appointment of Directors

The Board should be constituted with a majority of individuals who are qualified as independent in accordance with National Policy 58–201. A director is independent if such director has no relationship with the Corporation, as defined in section 1.4 of Regulation 52–110 respecting the Audit Committees as amended from time to time.

The Board, following recommendation by the Corporate Governance Committee, will:

(a) approve the management nominees proposed for election by shareholders at annual general meetings of the Corporation;
(b) approve candidates to fill any casual vacancy occurring on the Board; and

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4. Remuneration

Members of the Board shall receive such remuneration for their services as the Board may determine from time to time, upon a recommendation of the Human Resources Committee.

5. Time to perform Duties and over boarding

Each director shall have sufficient time to devote to the performance of their duties and no member of the Board may serve, together with another member of the Board, on the board of directors of more than two public companies.

6. Committees of the Board

The Board will have the following committees and, after considering the recommendation of the Corporate Governance Committee, approve and/or modify their committee charters:

(a) Audit Committee
(b) Governance Committee
(c) Human Resources Committee

The Board may establish a new standing or ad hoc committee. Not less than a majority of the members of any new standing or ad hoc committee will be Independent Directors.

Each committee will report to the Board on its meetings and each member of the Board will have access to minutes of committee meetings, regardless of whether the director is a member of such committee.

7. Selection of Management

(a) The Board is responsible for appointing and replacing the Chief Executive Officer of the Corporation and, after considering the recommendation of the Human Resources Committee, approving the Chief Executive Officer’s compensation.
(b) Upon considering the advice of the Chief Executive Officer and the recommendation of the Human Resources Committee, the Board will approve the appointment of all officers of the Corporation.
(c) The Board is responsible for satisfying itself as to the integrity of the Chief Executive Officer and other senior management of the Corporation, and ensuring that management creates a culture of integrity throughout the organization.
(d) The Board is responsible for overseeing leadership development and succession planning.
(e) The Board shall evaluate the risks associated with the Corporation’s compensation policies and practices.

8. Corporate Strategy

The Board will:

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(a) annually consider and approve the Corporation’s objectives and goals, its strategic plan to achieve those objectives and goals and approve any material changes thereto;
(b) monitor and assess the resources required to implement the Corporation’s strategic plan;
(c) monitor and assess developments which may affect the Corporation’s strategic plan;
(d) evaluate and, as required, enhance the effectiveness of the strategic planning process; and
(e) monitor and, as required, enhance the execution of the strategic plan by management and monitor corporate performance against the Corporation’s objectives and goals.

9. Material Transactions

Subject to delegation by the Board to management and to committees of the Board, the Board will review and approve all material transactions.

10. Public Reporting

The Board is responsible for:

(a) overseeing that the financial performance of the Corporation is adequately reported to shareholders, other security holders and regulators on a timely and regular basis;
(b) overseeing that the financial results are reported fairly and in accordance with generally accepted accounting standards and related legal disclosure requirements;
(c) reviewing the policies and procedures to ensure the timely disclosure of any other developments that have a significant and material impact on the Corporation;
(d) providing for measures that accommodate feedback from shareholders; and
(e) monitoring and reviewing the application of the Corporation’s Corporate Disclosure and Trading Policy.

11. Risks Oversight and Internal Controls

The Board shall satisfy itself that:

(a) The review and assessment of Executive Management maintain an effective process to identify and mitigate the principal risks of the Corporation’s business and that appropriate systems are implemented to manage and monitor these risks and mitigate or reduce their potential negative impacts; and
(b) effective systems are in place to monitor the integrity of the Corporation’s internal control and its critical management information systems.

12. Sustainability

The Board oversees the Corporation’s approach to health, safety and environmental policies matters as well as diversity, inclusion and corporate social responsibility practices and reporting, including the

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adequacy of management systems to identify and manage related risks and opportunities, adoption of appropriate standards and monitoring of the Corporation’s performance and disclosure.

13. Procedures and Policies

The Board establishes the overall policies for the Corporation, and monitors compliance with all significant policies and procedures by which the Corporation is operated.

14. Legal Requirements

(a) The Board will monitor compliance with all applicable laws and regulations.
(b) The Board will strive to ensure that all corporate documents and records have been properly prepared, approved and maintained.

15. Evaluation

The Board will evaluate annually the effectiveness of the Board as a whole, individual directors and committees. The Corporate Governance Committee will review such evaluations and provide a report to the Board for its consideration.

16. Access to Outside Advisors

The Board and its Committees, with the approval of the Corporate Governance Committee, may retain and compensate outside legal and other advisors at the expense of the Corporation where reasonably required to assist and advise the Board and Committees in carrying out their duties and responsibilities.

17. Review of the Charter

The Corporate Governance Committee shall annually review this Charter and revise it from time to time and suggest any changes to the Board for approval.

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AI assistant

FormerXBC Inc. — Proxy Solicitation & Information Statement 2022

46443_rns_2022-04-05_5971a5c1-e0c6-4d9d-bf28-421dea9c7a13.pdf

AND

Letter to Shareholders

(s) Kurt Sorschak

Table of Contents

Notice of Annual Meeting of Shareholders

Record Date

Notice-and-Access

Shareholders are reminded to read the Circular and other Meeting Materials carefully before voting their shares.

Before the Meeting

After the Meeting

Voting and Participating at the Meeting

Questions

Registered Shareholders

Beneficial Shareholders

(s) Nathalie Théberge

Management Information Circular

General Information

Share Information

Principal Shareholders

General Proxy Information

Solicitation of Proxies

Notice-and-Access

Before the Meeting

After the Meeting

How to Participate at the Meeting

o Registered Shareholders:

o Duly appointed proxyholders (including Beneficial Shareholders who have appointed themselves as proxyholder):

o Guests:

Voting

Voting by proxy

Registered Shareholders

Beneficial Shareholders

Revocation of Proxies

How to Vote your Common Shares

Registered Shareholders

Beneficial Shareholders

a registered holder of Common Shares or a person they appoint as a proxy can be recognized and vote at the Meeting. Beneficial Shareholders cannot be recognized at the Meeting for purposes of voting their Common Shares in real time by audio webcast or by way of depositing a form of proxy.

Canadian Beneficial Shareholders

U.S. Beneficial Shareholders

Interest of Certain Persons or Companies in Matters to be Acted Upon

Matters to be Acted Upon at the Meeting

1. Presentation of the Financial Statements

2. Election of Directors

Majority Voting Policy

3. Appointment of Auditor

4. Non-Binding Advisory Vote on Executive Compensation

5. Other Matters

Nominees for Election to the Board of Directors

No Other Current Public Board Service

Peter Bowie

Current Other Public Board Service:

Sara Elford

Current Other Public Board Service:

Brian Levitt

Current Other Public Board Service:

Guy Saint-Jacques

No Other Current Public Board Service

Francis Séguin

No Other Current Public Board Service

Dimitrios (Jim) Vounassis, President and CEO

Committees: None.

No Other Current Public Board Service

Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions

Compensation of Directors

Summary Compensation Table

DSU

Equity Ownership

Outstanding Share-Based and Option-Based Awards

Equity Based Award – Value Vested or Earned During the Year

Options exercised during Fiscal 2021

Board Attendance

Statement of Corporate Governance Practices

Board of Directors

Board Mandate

Director Independence

Chairman of the Board and Lead Director

In-Camera Sessions

FormerXBC Inc. Proxy Solicitation & Information Statement 2022

`o` Registered Shareholders:

`o` Duly appointed proxyholders (including Beneficial Shareholders who have appointed themselves as proxyholder):

`o` Guests: