their views on the disclosed objectives of the executive compensation plans, and on the plans themselves, for the
past, current and future fiscal years. While NACG Shareholders will provide their collective advisory vote, the directors of the Corporation remain fully responsible for their compensation decisions and are not relieved of these responsibilities by
a positive advisory vote by NACG Shareholders.
As this is an advisory vote, the results will not be binding on the Board. However, the Board will take the results
of the vote into account, as appropriate, when considering future compensation policies, procedures and decisions and in determining whether there is a need to significantly increase their engagement with NACG Shareholders on compensation and
related matters. The Corporation will disclose the results of the Say-on-Pay vote as a part of its report on voting results for the Meeting.
In the event that a significant number of Shareholders oppose the resolution, the Chairman of the Board, Chair of the Human Resources and Compensation Committee and the
Lead Director will oversee a consultation process with NACG Shareholders, particularly those who are known to have voted against it, in order to better understand their concerns. The Human Resources and Compensation Committee will review the
Corporations approach to compensation in the context of those concerns. Shareholders who have voted against the resolution will be encouraged to contact the Lead Director to discuss their specific concerns.
Following the review by the Human Resources and Compensation Committee, the Corporation will disclose to Shareholders a summary of the significant comments relating to
compensation received from Shareholders in the process, a description of the process undertaken and a description of any resulting changes to executive compensation or why no changes will be made. The Corporation will provide this disclosure within
six months of the Say-on-Pay vote, and no later than in the management information circular for its next annual meeting.
The Board recognizes that Say-on-Pay is an evolving area and will review this policy
annually to ensure that it is effective in achieving its objectives.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR the Corporations approach to executive compensation as described in the Compensation Discussion and
Analysis portion of this Circular.
Unless a NACG Shareholder otherwise directs, or directs that his or her NACG Common Shares are to be withheld from
voting in connection with the above resolution with respect to approval of the Corporations approach to executive compensation, the persons named in the enclosed form of Proxy intend to vote for the above resolution with respect to approval of
the Corporations approach to executive compensation.
3. Special Item of Business: Approval of Unallocated Options Under the Share Option Plan
The Corporations Share Option Plan is described further below under the heading Outstanding Option-Based Awards. The Share Option Plan provides that
the maximum number of NACG Common Shares issuable under the Plan is equal to 10% of the Corporations issued and outstanding NACG Common Shares. The rules of the Toronto Stock Exchange (the TSX) provide that all unallocated options,
rights or other entitlements under a security-based compensation arrangement which do not have a fixed number of securities issuable must be re-approved every three (3) years. Accordingly, at the Meeting,
NACG Shareholders will be requested to consider, and if deemed appropriate, to approve, with or without amendment, the reservation of the unallocated options under the Share Option Plan, as specified in the Resolution set forth in Schedule
A.
As of March 15, 2021, the Corporation had 29,949,528 NACG Common Shares outstanding, therefore providing for a current maximum of 2,994,952
NACG Common Shares to be reserved for issuance under the Share Option Plan. As at March 15, 2021, the Corporation had 110,400 options to purchase Common Shares outstanding (or approximately 0.37% of the outstanding NACG Common Shares), leaving
unallocated options to purchase an aggregate of 2,884,552 NACG Common Shares (or approximately 9.63% of the outstanding NACG Common Shares) available for future option grants as at that date. Previously allocated options will continue, unaffected,
whether or not this resolution is approved by NACG Shareholders. Unallocated options and previously granted options that are cancelled, terminated or exercised subsequent to the Meeting will not, however, be available for grants if this resolution
is not approved by shareholders. Approval of the Resolution requires confirmation by a majority of the votes cast at the meeting. The persons named in the accompanying Proxy intend to vote for approval of the Resolution unless instructions to the
contrary are given. The adoption of the Resolution requires the favourable vote of a majority of the votes cast thereon at the Meeting.
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Management Information Circular |
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March 23, 2021 |
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North American Construction Group Ltd. |