CIRCULAR CIRCULAR NOTICE OF 2019 ANNUAL GENERAL MEETING oF SHAREHOLDERS OF CASCADES INC. CIRCULAR and Management Proxy Circular
CIRCULAROur Annual General Meeting of Shareholders will be held at 11:00 am local time, Thursday, May 9, 2019, at the Centrexpo Cogeco Drummondville, 550 St-Amant Street, Drummondville, Quebec. As a shareholder of Cascades Inc., you may exercise the voting rights attached to your shares by proxy or in person at the Meeting. Your vote is important. This document sets forth who is entitled to vote, the matters upon which you will be asked to vote and how to exercise your shareholder CIRCULARvoting rights. CIRCULARPlease read it carefully. CIRCULAR CIRCULAR 02 02 CASCADES MANAGEMENT PROXY CIRCULAR The specific details of the foregoing matters to be put before the Meeting are set forth inthe tobeputbeforetheMeetingaresetforth The specificdetailsoftheforegoingmatters TO THE SHAREHOLDERS OF CASCADES INC. OF CASCADES SHAREHOLDERS THE TO 4 Kingsey Falls, Québec, March15, 2019. By OrderoftheBoard, Robert F. HallRobert CHIEF LEGALOFFICERANDCORPORATE SECRETARY provided forthatpurpose. person arerequestedtocomplete,person date, toComputershare signanddelivertheenclosedproxyform Notice ishereby (the“Meeting”) giventhattheAnnualGeneralMeetingofShareholders Investor Services Inc.,Investor Services nolaterthanTuesday, May 7, 2019at5:00p.m., local time, intheenvelope of Cascades Inc. (the “Corporation” or“Cascades”)willbeheldonThursday,of CascadesInc.(the“Corporation” May 9, 2019at accompanying Management Proxy Circular. whoare unable to attend the Meeting in Shareholders 1 3 at 11:00a.m., localtime, forthefollowingpurposes: 2 the CentrexpoCogecoDrummondville, 550St-AmantStreet, (Québec) Drummondville 6 5 MEETING OFTHESHAREHOLDERS NOTICE OFANNUALGENERAL OF CASCADESINC. To transactsuchotherbusinessasmay bebroughtbeforetheMeeting orany properly To inScheduleAtotheManagementProxy considertheshareholderproposalssetforth To considerand, ifdeemedadvisable, approve, basis, onanadvisory aresolutionaccepting To fortheensuingyearandauthorize appointtheIndependentAuditorofCorporation To fortheensuingyear; of the Corporation electtheDirectors To forthefiscalyearended receivetheconsolidatedfinancialstatementsofCorporation the Corporation’s approachtoexecutivecompensation; December 31, 2018, andtheIndependentAuditor’s thereon; report Board of Directors tofixtheirremuneration; Board ofDirectors Circular; and Circular; adjournment thereof. adjournment
These stepswere taken withaview tooptimizingourbusinessprocesses. Althoughmajorchallenges Alain Lemaire Against thisexcitingbackdrop, andmanagement onbehalfoftheCascades BoardofDirectors the market. This, however, didnotprecludetheannouncementofa major investment inWagram, tabled atthemeetingarelistedinattachedNoticeofMeetingandproxysolicitationcircular. Drummondville, onMay 9, 2019, at11a.m.Thetopicstobediscussedand theproposalstobe team, Iinvite youtoourAnnualGeneralMeetingwhichwillbeheldattheCentrexpoCogecoin this important meeting, andwe arecountingonyoursupport. this important Like every year,Like every sum tohearCascades’seniormanagers thismeetingwillbeauniqueopportunity Finally, Mr. David McAusland, whohasbeenaboardmember since2003, hasannouncedthathe Because we valueyouropinion, we askyoutoreadthecompany’s andproxycircular, annualreport found inthepresentproxycircular. Hiscwwredentialsasarenownedbusinesslawyer, combinedwith North Carolina, assets. itsconverting North tomodernize plant in New Jersey. In addition, the company four plants by modernized lines, adding extrusion will notbesolicitinganew mandatefortheupcomingyearandwe wouldlike toextendoursincerest water-based coating capacity and digital presses. Conversely, the Tissue Group experienced difficult In thepackagingsector, buoyed by afavourable economicclimate, theorganizationmadeacquisitions in Virginia, IndianaandIowa. thanplannedatthenew Italsokicked Piscataway offproductionearlier sit on our board of directors and we are fortunate tohave himasaboardnominee. andwesit onourboardofdirectors arefortunate Cascades enjoyed arecordyearin2018, ofinvestments bothinterms andsales. Cascades attheupcomingAnnualGeneralMeetingofShareholders, whichnomination canbe Concurrently, mandateasadirectorof Lacroixwhoissolicitingafirst we wishtowelcome Hubert knowledge inthemanagementofpubliccompanies, heplayed akey roleontheboardofdirectors remain, thecompany its ambitious2017-2022strategicplan, ispursuing tocreatevalueby and thenexercisethevotingrightsthatgowithyourshares.We hopeyouwillbeabletojoinusfor and itscommittees.David, we wishyouallthebestinyourfutureendeavours. his extensiveexperienceinthemanagementofpubliccompanies, make himanidealcandidateto up theprevious yearand outlinethecompany’s prioritiesfor2019. EXECUTIVE CHAIROFTHEBOARDDIRECTORS andfocusingoninnovation ourmanufacturing platform andourcustomers. modernizing market conditions:record-highraw materialprices,costsandovercapacity in hightransportation DEAR SHAREHOLDERS, DEAR gratitude for his invaluable contributions to Cascades over the years. Through his expertise and gratitude forhisinvaluable contributionstoCascadesover Throughhisexpertise theyears. LETTER TO SHAREHOLDERS 03 03 CASCADES MANAGEMENT PROXY CIRCULAR 04 04 CASCADES MANAGEMENT PROXY CIRCULAR 3.1 STATEMENT OFEXECUTIVECOMPENSATION SECTION 3 2.2 2.1 SECTION 2 1.6 1.5 1.4 1.3 1.2 1.1 VOTING INFORMATION SECTION 1
2.3 3.2 3.3 3.4 2.4 3.5 2.5 3.6 3.7 BUSINESS OFTHEMEETING table ofcontents table ofcontents Compensation Discussionand Analysis 2.2.2 Majority Voting Policy 2.2.1 BoardNominees Election ofDirectors Statements Financial Non-Registered Holders Voting SharesandPrincipalHolders Record DateforNoticeofMeeting Exercise ofDiscretionby Proxies Appointment andRevocation ofProxies Solicitation ofProxies 3.1.1 CompensationandHumanResourcesCommittee 2.2.3 ShareholdersEngagement Policy 3.1.2 CompensationofNamedExecutive Officers 2.2.4 Additional DisclosureRelatingtoDirectors 3.1.3 BenchmarkingPractices 2.2.5 BoardInterlocks 3.1.4 CompensationComponents Appointment ofIndependent Auditor 2.2.6 Executive CompensationSummary 2.3.1 Auditors’ Independence Incentive Plan Awards Incentive 3.2.1 2.3.2 Independent Auditor Fees Share PurchasePlan 3.3.3 3.3.2 3.3.1 Advisory Vote onExecutive Compensation 2.3.3 Retirement Plans Shareholder Proposals Termination andChange ofControlBenefits Performance Graph
and CommitteeMeetings Directors Attendance RecordtoBoard Summary ofExecutive Compensation Summary Table Compensation Plans Securities Authorized forIssuanceunderEquity the Yearduring Incentive Plan Awards - Value Vested orEarned Share-Based Awards and Outstanding Option-Based Awards and Non-Audit Services Policies andProceduresfortheEngagement of Audit 15 12 15 12 16 12 17 13 12 19 13 23 23 13 25 25 24 24 14 13 25 14 25 14 27 27 15 5 7 7 7 6 6 5 5 5 5 7 4.8 4.7 4.6 4.5 4.4 4.3 4.2 4.1 OTHER INFORMATION SECTION 4 MANDATE OF THELEADDIRECTOR SCHEDULE H OF THECOMMITTEESBOARD OFDIRECTORS DESCRIPTION OFTHERESPONSIBILITIES OFTHECHAIRS SCHEDULE G MANDATE OFTHECHIEFEXECUTIVEOFFICER SCHEDULE F OF THEBOARDDIRECTORS MANDATE OFTHEEXECUTIVECHAIR SCHEDULE E CHARTER OFTHEBOARDDIRECTORS SCHEDULE D CHARTER OFTHEAUDITANDFINANCECOMMITTEE SCHEDULE C STATEMENT OFCORPORATE GOVERNANCEPRACTICES SCHEDULE B SHAREHOLDER PROPOSALS SCHEDULE A 3.8 Director Approval Additional Information Shareholder Proposals Other Business onthe Information Committee Audit andFinance Corporate Governance Indebtness ofDirectorsandExecutive Officers Interest ofInsidersandOtherPersons inMaterial Transactions 3.8.6 3.8.5 Compensation 3.8.4 Summary Table ShareUnitPlan 3.8.3 Deferred 3.8.2 GuidelineonShareOwnershipforDirectors 3.8.1 Retainer Compensation ofDirectors Share-Based Awards Incentive Plan Awards -Outstanding the Yearduring Incentive Plan Awards - Value Vested orEarned
49 42 50 45 36 48 33 32 32 32 32 31 31 31 31 30 29 29 28 28 28 28 51 31 the NoticeofMeeting. The Board of Directors has fixed March 15, 2019 asthe record date (the shareholdersentitledto receive “Record Date”) for the purpose ofdetermining 1.4 Management oftheCorporationknows ofnosuchamendment, variation orothermatterexpected tocomebeforetheMeeting. in theNoticeofMeetingandtoothermatterswhich may comebeforetheMeeting(orany properly thereof). adjournment As ofthedateCircular, authorityonthepersons named thereinwithrespecttoamendmentsorvariations tomattersidentified ofproxyconfersdiscretionary The enclosedform to executivecompensationasdescribedonpage 14oftheCircular and AGAINST theshareholderproposalssetoutinSchedule A totheCircular. Auditor, describedonpage 13oftheCircular, allasmoreparticularly INFAVOUR resolutionacceptingtheCorporation’s oftheadvisory approach professional accountants, asIndependent Auditor, and conditionssetoutundertheheading inaccordancewiththeterms Appointment ofIndependent of Directors on pages 7 to 11 of the Circular, IN FAVOUR of PricewaterhouseCoopers of the appointment of the firm LLP, of chartered Partnership voting rightswillbeexercised INFAVOUR oftheelectioneachtwelve(12)nomineeswhosenamesappearhereinunderheadingElection direction oftheshareholderappointingthemor, intheabsenceofsuchdirection, ofproxy. asindicated intheform Intheabsenceofsuchdirection, said ofproxywillvoteThe personsnamedintheenclosedform orwithholdfromvoting thesharesinrespectofwhich they areappointedinaccordancewiththe 1.3 of theMeetingorany thereof, adjournment orinany by othermannerpermitted law. business day precedingtheday oftheMeetingorany thereofatwhich oftheMeetingonday adjournment theproxyistobeusedorwithChairman with ComputershareInvestorInc., Services at100University Avenue, 9thFloor, Toronto (Ontario)M5J2Y1notlaterthan5:00p.m., localtime, onthelast her attorney authorized inwriting or, if the shareholder is a corporation, by a duly authorized officer or thereof. attorney shouldbedeposited Suchinstrument A shareholderwho hasgiven a proxymay revoke itat any timepriorto its use, byinwritingexecuted by meansofaninstrument theshareholderorby hisor the secondbusinessday precedingtheday oftheMeetingorany thereofatwhich adjournment theproxyistobeused. proxy tothetransfer agent andregistrar oftheCorporation, ComputershareInvestorInc., Services inMontreal, nolaterthan5:00p.m., localtime, on orbyand,in theblankspaceprovidedproxyform completinganotherappropriate ineithercase, of deliverthecompletedform need notbeashareholderoftheCorporation) thenameofhisorherchosenrepresentative torepresenthimorherattheMeetingeitherby inserting areDirectorsandOfficersoftheCorporation.The personsnamedintheenclosedproxyform Ashareholderhastherighttoappointanotherperson(who 1.2 time, onthesecondbusinessday precedingthedateofMeeting, orany thereof, adjournment asthiswillenableyourvotetoberecorded. Inc.,Services inMontréal, in the envelope provided. Your proxy mustbe delivered toComputershareInvestor Inc., Services nolaterthan5:00p.m., local If you cannotattendtheMeetinginperson, ofproxytothetransferagent theenclosedform andregistrar, completeandreturn ComputershareInvestor bythe costofsolicitationwillbeborne theCorporation. aresolicitedbyProxies intheenclosedform theBoardofDirectorsandmanagement oftheCorporation. The solicitationwillbeprincipallyby mailand as otherwiseindicated, containedhereinisgivenasofMarch 15, theinformation 2019. “Meeting’’) intheforegoing tobeheld atthetimeandplaceforpurposessetforth NoticeofsaidMeeting(the “Notice ofMeeting”). Except “Corporation’’ or “Cascades’’), tobeusedatthe Annual General MeetingofShareholderstheCorporation thereof(the orany adjournment This management proxycircular (the “Circular’’) issentinconnectionwiththesolicitationofproxiesby themanagement ofCascadesInc. (the voting information section 1 section 1 1.1
RECORD DATE FOR NOTICE OF MEETING NOTICE FOR DATE RECORD PROXIES BY OF DISCRETION EXERCISE OF PROXIES AND REVOCATION APPOINTMENT SOLICITATION OF PROXIES OF SOLICITATION 05 05 CASCADES MANAGEMENT PROXY CIRCULAR
06 06 CASCADES MANAGEMENT PROXY CIRCULAR
that instructions respectingthevotingoftheirCommonSharesarecommunicated totheappropriateperson. that instructions form. Holder’s (orsuchotherperson’s) nameintheblankspaceprovided, or, inthecaseofavoting form, instruction followdirections onthe thecorresponding of theNon-RegisteredHolder), theNon-Registered theNon-RegisteredHolder shouldstrike outthenames ofthepersonsnamedinproxyandinsert who receives wish to attend and vote either a proxy or a voting form atthe Meeting in person (or have instruction another person attend and vote on behalf Non-RegisteredHolderstodirectthevotingthese proceduresistopermit oftheCommonSharesthey beneficially own. ShouldaNon-RegisteredHolder specificinstructions,Without brokers andtheiragents andnomineesareprohibitedfrom voting CommonSharesforthebroker’s clients. Thepurposeof Common Sharesheldby brokers ortheiragents ornominees canbevoted fororagainst oftheNon-RegisteredHolder. resolutionsonlyupontheinstructions well inadvance oftheMeetinginordertohave theCommonSharesvoted. fromBroadridgereceiving aproxyform cannotusethatproxytovote CommonSharesdirectlyattheMeeting, toBroadridge theproxymustbereturned and providesrespectingthevoting appropriateinstructions ofCommonSharestoberepresentedata shareholders’ meeting. A Non-RegisteredHolder alsoallows byform completionofthevoting form telephoneorby instructions Internet). Broadridge received thentabulatestheresultsofallinstructions toBroadridge suchproxyform (theBroadridge totheNon-Registered Holders andaskssuch Non-RegisteredHolderstoreturn typically mailsaproxyform The majorityofbrokers now delegate fromclientstoBroadridgeSolution, responsibilityforobtaininginstructions Financial Inc. (“Broadridge”). Broadridge 2 1 who have notwaived therighttoreceive theMeetingMaterialswilleither: them. companiestoforwardtheMeetingMaterialsNon-RegisteredHolders.Very often, willuseservice Generally, Intermediaries Non-RegisteredHolders arerequiredtoforwardtheMeetingMaterialsNon-RegisteredHoldersunlessa Holder haswaivedIntermediaries therighttoreceive foronwarddistributiontoNon-RegisteredHolders. and Intermediaries of proxy, Statements including management’s the Financial discussion and analysis (collectively, the “Meeting Materials”) to the clearing agencies 54-101”)oftheCanadianSecurities Instrument Administrators, theCorporationhasdistributedcopiesofNoticeMeeting, thisCircular, theform Issuer(“National 54-101CommunicationwithBeneficialOwners ofSecuritiesaReporting In accordancewiththerequirementsofNationalInstrument 2 1 of theCorporationbeneficially owned by aNon-RegisteredHolderareregisteredeither: the CorporationasregisteredholdersofCommonSharescanberecognizedandacteduponatMeeting. However, inmany cases, CommonShares (the “Non-Registered Holders”). Non-RegisteredHoldersshouldnotethatonlyproxiesdepositedby shareholderswhose namesappearontherecordsof totheshareholderswho inthissectionisofimportance donotholdtheirCommonSharesoftheCorporationinown setforth name The information 1.6 (2) (1) morethan10%ofthevoting rightsattachedtoallvoting securities,carrying withtheexceptionoffollowing persons: On March 15, 2019, no person, to the knowledge of the Directors and Officers of the Corporation, beneficially owned, directly or indirectly, voting securities one onthesharesjointlyheldby them. Shares”) were issuedandoutstanding. Iftwo ormorepersonsholdingsharesjointlyarepresent, inpersonorby proxy, attheMeeting, they shallvote as The Corporationisauthorizedtoissueanunlimitednumberofcommonshares. As atMarch15, 2019, 93,747,515commonshares(the “Common totheMeeting. pertaining transferee andnotthetransferorshallbeentitledtovote hissharesattheMeeting. EachCommonShareisentitledtoonevote withrespecttothematters later thanten(10)days beforetheMeeting, thathisnamebeincludedinthelistofshareholdershaving therighttovote attheMeeting, inwhich casethe orotherwiseestablishesthathe endorsedsharecertificates owns thesharesanddemandsno Date andthetransfereeofthosesharesproducesproperly the righttovote attheMeetingor at any thereof, adjournment theownership exceptifashareholderhastransferred ofany ofhissharesaftertheRecord Holders ofCommonSharestheCorporationwho areincludedinthelistofshareholdersregisteredatclosebusinessonMarch15, 2019, shallhave 1.5 Common Shares Common Shares SECURITY CLASS Based on the Alternative Monthly Report under Part 4 of NI 62-103 filed with the securities regulatory authoritiesbyLetko,regulatory Brosseauand 4ofNI62-103filedwiththesecurities underPart Based onthe AssociatesInc. MonthlyReport Alternative onNovember7, 2018. Theseshares on thevoting form. instruction more typically, begiven avotingform, instruction which mustbecompletedandsigned by theNon-RegisteredHolder inaccordancewiththedirections in thenameofaclearingagency (suchas forSecuritiesLimited,The CanadianDepository or “CDS”), isaparticipant. ofwhich theIntermediary were acquired in the ordinary course of business and not with the purpose ofinfluencingorchangingthecontrolCorporation ofbusinessandnotwiththepurpose course intheordinary acquired were orthroughawholly-ownedHeld personally holdingcompany. deposit itwithComputershareInvestorInc., Services asdescribedabove; Non-Registered Holder. Inthiscase, ofproxy and theNon-RegisteredHolderwho completetheform wishestosubmitaproxyshouldotherwiseproperly of CommonSharesbeneficially owned by theNon-RegisteredHolderbut which isotherwiseuncompleted. ofproxyneednotbesigned Thisform bythe be given (typicallyby aproxywhich afacsimile, hasalready been signedby theIntermediary stampedsignature)which iscompletedastothenumber banks, companies, trust oradministratorsofself-administeredRRSPs, securitiesdealersorbrokers andtrustees RRIFs, RESPsandsimilarplans;or thattheNon-RegisteredHolderdealswithinrespectofCommonShares, (an suchas,“Intermediary”) in thenameofanintermediary amongothers,
In either case, Non-Registered Holders should carefully follow the instructions of their Intermediaries and their service companies and ensure In either case, andtheirservice Non-Registered oftheirIntermediaries Holdersshouldcarefully follow the instructions NON-REGISTERED HOLDERS NON-REGISTERED AND PRINCIPAL HOLDERS SHARES VOTING Letko, Brosseau& Associates Inc. NAME OFBENEFICIAL OWNER Montréal, Québec Laurent Lemaire (2) (1) NUMBER OFCOMMONSHARES AND NATURE OFOWNERSHIP 14,576,150 12,406,762 PERCENTAGE OF CLASS 13.2% 15.5%
2.2 2.1 their discretionINFAVOUR ofothercandidates. becomes thecaseforany reasonwhatsoever therighttovote at priortotheMeeting, ofproxyreserve thepersonsnamedasproxiesinenclosedform in respectoftheelectionDirectors. Management doesnotanticipatethatany oftheproposednomineeswillbeunabletoactasaDirector. Ifsuch proposed by management, unlesstheshareholdergranting thisproxyhasindicatedthatthe sharesaretobevotedotherwiseornot of proxy intend to vote the shares represented byThe persons named as proxies in the enclosed form such proxy IN FAVOUR of each of the nominees proxy, shareholdersmay vote foreachnomineeindividuallyasDirectorsoftheCorporation. the numberofsharesbeneficially owned or over which they exercisecontrolwasprovided by therespective nominees. of Asindicatedintheattachedform at December 31, 2018aswell asthe percentage ofvotes voted in favour oftheirelectionatlastyear’s Meeting, ifapplicable. relatedto The information Board oftheCorporation. Also disclosedintheirrespective biographies iseachnominee’s securityholdings and theirvalue current ofat-riskholdingsas share unitsthey hold, ifthenomineesitsonBoardsofDirectorsandcommitteesotherpubliccompaniesmembership onthecommitteesof Corporation beneficially owned directlyorindirectly by eachofthemor over which they exercisecontrol, theirindependencestatus, thenumberofdeferred and placeofresidence, theirprincipaloccupation, theyear inwhich they firstbecameaDirectoroftheCorporation, thenumberofCommonShares For eachofthetwelve (12)nomineesproposedby management forelectionasDirectorsoftheCorporation, thefollowingsetouttheirname, charts age their successorsareelectedorappointed. of Mr. Hubert T. Lacroix, who isupforelectionthefirsttime. Ifelected, nomineeswillholdofficeuntilthenextannualmeetingofshareholdersor number ofDirectorstobeelectedattheMeeting. All ofthenomineeswere electedasDirectorsatlastyear’s Annual GeneralMeeting, withtheexception As Mr. David McAusland hasnotifiedtheBoardthathedoesnotintendtostandforre-electionasadirector, theBoardhasestablishedtwelve (12)asthe Statement ofCorporateGovernance Practicesunderparagraph 10inScheduleBtotheCircular. in athoroughsuccessionplanningprocess. limitsandothermechanismsofBoardrenewal inthe This policyisdescribedundertheheadingDirectorterm Practices inSchedule B totheCircular. retirementage forDirectorsinordertoenableitengageThe Board has alsoadoptedapolicyonthemandatory The processtonominatetheCorporation’s DirectorsisdescribedundertheheadingNominationofinStatementCorporateGovernance Corporation’s website atwww.cascades.com andwillbeavailable attheMeeting. included in the Corporation’s 2018 Annual Report. The 2018 Annual Report, in English or French, is available on SEDAR at www.sedar.com or on the The audited consolidated financial statements for the year ended December 31, of the Independent 2018) and report 2018 (Fiscal Auditor thereon are BUSINESS OFTHEMEETING section 2 section 2 2.2.1 The Circular contains information relating to the receipt of Cascades’The Circular containsinformation consolidated financial statements, the election of Directors, the appointment to accepttheCorporation’s approachtoexecutivecompensationandtheshareholderproposalssubmitted by MÉDAC ( et de défense des actionnaires des défense de et of theIndependent Auditor includingauthorizingtheBoardofDirectors(the “Board”) tofixtheirremuneration, resolution theapproval ofanadvisory
ELECTION OF ELECTION BOARD NOMINEES FINANCIAL STATEMENTS DIRECTORS ) describedinSchedule A totheCircular. Mouvement d’éducation d’éducation Mouvement
07 07 CASCADES MANAGEMENT PROXY CIRCULAR 08 08 CASCADES MANAGEMENT PROXY CIRCULAR INFORMATION ONEQUITY HOLDINGS INFORMATION ONEQUITY HOLDINGS INFORMATION ONEQUITY HOLDINGS 125,287 SHARES DECEMBER 31, 2018 5,018 SHARES DECEMBER 31, 2018 4,988,718 SHARES DECEMBER 31, 2018 AGE 56 AGE 60 AGE 71 OTTERBURN PARK (QUÉBEC) CANADA ST-AUGUSTIN-DE-DESMAURES, (QUÉBEC) CANADA INDEPENDENT KINGSEY FALLS (QUÉBEC)CANADA DIRECTOR SINCE1999 DIRECTOR SINCE1967 DIRECTOR SINCE1996 NON-INDEPENDENT NON-INDEPENDENT (3) (2) (1)
DSUs 55,746 DSUs 58,748 DSUs 12,670 (4) (4) (4) ALAIN LEMAIRE 2018 ANNUALMEETINGVOTES INFAVOUR (%):92.52 2018 ANNUALMEETINGVOTES INFAVOUR (%):80.51 2018 ANNUALMEETINGVOTES INFAVOUR (%):96.82 Trois-Rivières Companies having successfully completed the governance program offered by the One ofthefoundersCascades, Mr. LemaireisExecutive ChairoftheBoard of theCorporation. Heheldthe position ofPresident COMMITTEE(S): N.A. COMMITTEE(S): COMMITTEE(S): HEALTH ANDSAFETY, ENVIRONMENT ANDSUSTAINABLE DEVELOPMENT(MEMBER) Québec and amemberoftheCorporateGovernance andNominating Committee. SinceJuneof2014, Ms. Directorof Lemaireisacertified and SOMBRIOwiththeGARNEAU banner. GroupisnowThe Garneau lookingtothefuturewithsignificantinvestments ine-commerce. and anOfficeroftheOrderCanada. InJune2007, Doctoratefromthe hewasFacultyofawarded anHonorary Administrationofthe and ChiefExecutive Officerfrom2004toMay 2013. HewasExecutive Vice-President oftheCorporationfrom1992to2004andwas SYLVIE LEMAIRE University of Ottawa. In 2008, he received the “Gloire de l’Escolle” graduate medal as a former having honored President andChiefExecutive OfficerofNorampacInc., from1998to2004. student ofthe Aformer Laval Ms. Lemaireisadirectorofcompanies. Shehasheldproduction, researchanddevelopment andgeneral management positions. She Mr. Inc., Sports clothingandaccessoriesthroughout isPresidentofLouisGarneau amanufactureranddistributorofsports Garneau LOUIS GARNEAU held the position of President until 2007. She is Chair of the Health and Safety, Environment and Sustainable Development Committee received an Honorary Doctorate in Civil Law from Bishop’sreceived an Honorary University in Lennoxville (Québec) in 2013, and cycle racer, Mr. inthe1984OlympicGamesLos participated Garneau Angeles. Heisa of the of the Assembly. Hewasoneofthepersonalities named degree ofBachelorinIndustrialEngineeringfrom de l’Ordre national du Québec du national l’Ordre de d’Université was co-owner ofDismedInc., adistributorofmedicalproductsandFemproInc., amanufacturerofabsorbentproducts, where she the world. Heisamemberofthe HealthandSafety, Environment andSustainableDevelopment Committee. international A former to theextentofhisprofessionalactivitiesandcontributionsociety. InNovember 2014, hewasawarded theMedalofHonour PRINCIPAL OCCUPATION: EXECUTIVECHAIROFTHE BOARD PRINCIPAL OCCUPATION: DIRECTOROFCOMPANIES PRINCIPAL OCCUPATION: PRESIDENT, LOUISGARNEAUSPORTS INC. (Québec). Ms. LemairesitsontheBoardof Assemblée nationale du Québec du nationale Assemblée . Hiscompany, Sports, Louis Garneau acquiredSUGOIin2018, which allowed himtocombinetheCanadianbrandsSUGOI from (Québec), DoctorateinBusiness Administration fromtheUniversity heholdsanHonorary ofSherbrooke (Québec). He HEALTH ANDSAFETY, ENVIRONMENT ANDSUSTAINABLE DEVELOPMENT(CHAIR) CORPORATE GOVERNANCE ANDNOMINATING (MEMBER) Université Laval (Québec) Laval Université SHARES 175,287 SHARES DECEMBER 31, 2017 5,018 DECEMBER 31, 2017 4,983,532 SHARES DECEMBER 31, 2017 (3) (2) (2) in2015. . This medal is awarded of recognition by theto public Members figures who are deserving in2017. Mr. LemaireisanOfficeroftheOrderCanadaandwasnameda Harnois Énergies Harnois — 51,759 DSUs 54,723 DSUs DSUs Polytechnique Montréal Polytechnique Grand Québécois 2017 Québécois Grand , wholesaler ofpetroleumproductsandpropane gas. Sheholds the . (46,013) TOTAL NETCHANGE (#) 4,025 TOTAL NETCHANGE (#) 17,856 TOTAL NETCHANGE (#) Collège des administrateurs de sociétés de administrateurs des Collège by the Chambre de commerce et d’industrie de de d’industrie et commerce de Chambre Chevalier de l’Ordre national du Québec du national l’Ordre de Chevalier Institut des pâtes et papiers de de papiers et pâtes des Institut 1,851,968 DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS 652,326 DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS 51,164,199 DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS Doctorat Honoris Causa Causa Honoris Doctorat Université Laval Université of Université Université Chevalier Chevalier (5) (5) (5) due
INFORMATION ONEQUITY HOLDINGS INFORMATION ONEQUITY HOLDINGS INFORMATION ONEQUITY HOLDINGS — 30,000 SHARES DECEMBER 31, 2018 2,000 SHARES DECEMBER 31, 2018 SHARES DECEMBER 31, 2018 AGE 69 AGE 58 AGE 71 OUTREMONT (QUÉBEC) CANADA SUTTON (QUÉBEC) CANADA INDEPENDENT INDEPENDENT INDEPENDENT DIRECTOR SINCE2011 DIRECTOR SINCE2010 DIRECTOR SINCE2013 POINTE-CLAIRE (QUÉBEC) CANADA
(1) (1) (1)
39,903 34,923 DSUs 23,418 DSUs DSUs (4) (4) (4) Accountant. He holds a Masters degree Languages in Modern and Literature from Oxford University. Mr. Sellyn is also involved in Administrative OfficerofGildan Activewear Inc. between April1999and August 2015. From1992to1999, heheldthepositionof 2018 ANNUALMEETINGVOTES INFAVOUR (%):97.28 2018 ANNUALMEETINGVOTES INFAVOUR (%):99.03 2018 ANNUALMEETINGVOTES INFAVOUR (%):99.21 Vice-President, HumanResources oftheCorporationduringperiodbetween 1995and1998, andthereafter, thepositionof Vice- Senior Vice-President, Communication Papers Divisionfrom1995to 2001. He sat on theBoardof Directors of Norampac Inc., from 1998 Société générale de financement du Québec du financement de générale Société Supremex Inc., aCanadianmanufacturerofstockandcustomenvelopes, andisChairofthePension Investment Committeeandamember COMMITTEE(S): COMMITTEE(S): COMMITTEE(S): Chief Financial OfficerandSeniorFinance andCorporateDevelopmentChief Financial Vice-President of of Wajax Inc. Mr. Sellynheldsuccessive at DomtarInc., includingSenior Vice-President, PulpandPaper Sales, Marketing andCustomerRelationsGroupfrom2001to2005 addition tobeingamemberoftheBoardDirectorsCascades, heisLeadDirectorofLoopIndustries, Inc. HeisaU.K. Chartered as Corporate Director, and an advisor to entrepreneurial CEOs. Mr. Sellyn was Executive Vice-President, and Chief Financial GEORGES KOBRYNSKY Université Laval Université Mr. isadirectorofcompanies. Kobrynsky HeisLeadDirectoroftheBoardDirectors, Chairofthe Committeeandmember Audit andFinance Environment, Health and Safety and Sustainable Development Committee. in She holds a Certificate governance of companies from President with NorampacInc., from 1998 to2003. Shehasextensive knowledge ofthepulpandpaper sector andwasamember Retired since2003, Ms. Pelletier accumulatedover 20years ofexperiencewithintheCorporation, having heldthepositionof of theHumanResourcesCommittee. of theCorporateGovernance andNominatingCommittee. HeheldthepositionofSenior Vice-President, Investments, ForestProductsofthe LAURENCE SELLYN Mr. Sellynretiredattheendof2015fromacareerinleadershiproles management ofpubliccompanies. Heisnow active of the Board of Directors of the Corporation from 1993 to 2001. She is a member of the Human Resources Committee and of the of theCorporateGovernance andNominatingCommittee, andamemberofthe CommitteeoftheCorporation.Audit andFinance In positions ofincreasingresponsibilityatDomtarInc., includingactingasCorporateControllerfrom1987to1991. Mr. SellynisChair ÉLISE PELLETIER fundraising forcharitableandcommunityactivities. to 2006. He holdsa Master of Business Administration from McGill University (Québec), a Bachelor’s degree in Forest Engineering from the the PRINCIPAL OCCUPATION: DIRECTOROF COMPANIES PRINCIPAL OCCUPATION: BUSINESSADVISOR ANDCONSULTANT, CORPORATE DIRECTOR PRINCIPAL OCCUPATION: DIRECTOROFCOMPANIES Université de Montréal de Université Collège des administrateurs de sociétés, Université Laval Université sociétés, de administrateurs des Collège AUDIT ANDFINANCE(CHAIR) AUDIT ANDFINANCE(MEMBER) HUMAN RESOURCES(MEMBER) (Québec)andaBachelorof fromthe Arts CORPORATE GOVERNANCE ANDNOMINATING (MEMBER) CORPORATE GOVERNANCE ANDNOMINATING (CHAIR) HEALTH ANDSAFETY, ENVIRONMENT ANDSUSTAINABLE DEVELOPMENT(MEMBER) LEAD DIRECTOR — 25,000 SHARES DECEMBER 31, 2017 1,500 SHARES DECEMBER 31, 2017 SHARES DECEMBER 31, 2017 (Québec).
from2005to2010. Mr. hasheld, Kobrynsky formorethan30years, various seniorpositions 31,948 DSUs 27,900 DSUs 19,832 DSUs Université de Montréal Montréal de Université (Québec). Sheholdsthedegree ofBachelorinIndustrialRelationsfrom 7,955 12,023 TOTAL NETCHANGE (#) 4,086 TOTAL NETCHANGE (#) TOTAL NETCHANGE (#) (Québec). He isamemberoftheBoardDirectors 408,208 664,162 DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS 260,026 DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS (5) (5) (5) 09 09 CASCADES MANAGEMENT PROXY CIRCULAR
10 10 CASCADES MANAGEMENT PROXY CIRCULAR
INFORMATION ONEQUITY HOLDINGS INFORMATION ONEQUITY HOLDINGS INFORMATION ONEQUITY HOLDINGS SHARES DECEMBER 31, 2018 194,262 SHARES DECEMBER 31, 2018 SHARES DECEMBER 31, 2018 AGE 57 AGE 59 AGE 62 INDEPENDENT INDEPENDENT KINGSEY FALLS (QUÉBEC)CANADA DIRECTOR SINCE2014 DIRECTOR SINCE2016 DIRECTOR SINCE2013 LONGUEUIL (QUÉBEC) CANADA MONTRÉAL (QUÉBEC)CANADA NON-INDEPENDENT 7,000 2,000
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14,106 DSUs DSUs DSUs 21,679 31,974 (4) (4) (4) Audit and Finance CommitteeandoftheHumanResourcesCorporation.Audit andFinance Ms. Vachon isamemberoftheBoard A senior-level executive withexperienceinfinancialmanagement, strategicconsultingas well as corporatefinancing, and turnaround 2018 ANNUALMEETINGVOTES INFAVOUR (%):97.71 2018 ANNUALMEETINGVOTES INFAVOUR (%):98.36 2018 ANNUALMEETINGVOTES INFAVOUR (%):97.12 Chair oftheBoardDirectorsCargo Montreal, metropolitancluster. thelogisticandtransportation SheisamemberoftheBoard Québec Charles-Bruneau COMMITTEE(S): COMMITTEE(S): COMMITTEE(S): N.A. She alsopresidestheBoardofDirectors She alsositsontheboardofGreen Marine, environmental program avoluntary certification fortheNorth Americanmarineindustry. SYLVIE VACHON . duQuébec(LesMercuriades) decommerce des chambres Sheholdsthedegree ofBachelorin Administration, majoringinHuman du Québec.d’affaires In April 2018, SunLifeby Leadership, the édération F she wasawarded Femme d’exception Financière the Mercure du Québec - catégoried’affaires cadre, dirigeante ou professionnelle, organisme public ou parapublic award from Réseau des femmes Inc., where heisChairoftheGovernance CommitteeandalsositsontheBoardofDirectors Bruneau Resources Management fromtheUniversity ofSherbrooke (Québec). Finance fromthe Finance From 1997to2009, shewas Vice-President, Administration andHumanResourcesforthefederalagency. Sheisamemberofthe He joinedtheBoardofDirectorsCascadesonNovember 6, 2014. Mr. PlourdesitsontheBoardofDirectors Transcontinental Products Group. HewasnamedPresident ofthisGroupin2000. In2011, hewasappointedChiefOperatingOfficeroftheCorporation. Uni-Select Inc. andChampionIronOreLtd. & Limited andErnst Young. Ms. Director ofcompaniesandsitsontheBoardDirectorsDorelIndustriesInc., isaCertified Cormier Mr. PlourdeisPresidentandChiefExecutive OfficeroftheCorporationsinceMay 2013. Hehasbeenintheemploy oftheCorporation Ms. Vachon is President andChiefExecutive Officerof The Montreal Port Authority (MPA), an autonomousfederalagency since2009. governance, hasin-depthknowledge MichelleCormier offinancial andpublicmarkets inCanada andtheUnitedStates. Sheis a positions at TNG Capital Inc., and was CFO at a major North American forest products company. She also worked at Alcan Aluminium been actingasanOperatingPartner for Wynnchurch Capital(Canada)Ltdsince2014. Shespent13years inseniormanagement member ofthe committeeandamemberoftheHumanResourcesCorporation.Audit andFinance Ms. has Cormier of Directorsthe Association ofCanadianPort Authorities andagovernor memberofthe of DirectorsHardware RichelieuLtdandamemberoftheirHumanResourcesCorporateGovernance committee. Sheisalso MICHELLE CORMIER, CPA, CA MARIO PLOURDE since 1985andhasheldseveral seniormanagement positionssuch as and ChiefOperatingOfficerofCascades’Vice-President Specialty to protectandpromotetheeconomicinterestsofSt. Lawrence maritimecommunityfromasustainabledevelopment perspective. the implementationofsustainabledevelopment. Ms. Vachon isalsoamemberoftheBoardDirectorsSODESwhose missionis PRINCIPAL OCCUPATION: PRESIDENTANDCHIEFEXECUTIVEOFFICER, THEMONTREALPORT AUTHORITY PRINCIPAL OCCUPATION: OPERATING PARTNER, WYNNCHURCHCAPITAL (CANADA) LTD PRINCIPAL OCCUPATION: PRESIDENTANDCHIEFEXECUTIVEOFFICER whose missionistomobilizeQuébeccompaniesinorderpromotetheircommitmenttowards environmental protectionand , (afoundationforpediatriccancer research). Mr. Plourdeholds aBachelor’s degree inBusiness Administration, majoringin AUDIT ANDFINANCE(MEMBER) AUDIT ANDFINANCE(MEMBER) HUMAN RESOURCES(MEMBER) HUMAN RESOURCES(MEMBER) . Actively involved insocialandcommunityaffairs, hewasawarded in2012, the Université du Québec du Université SHARES DECEMBER 31, 2017 134,070 SHARES DECEMBER 31, 2017 SHARES DECEMBER 31, 2017 7,000 2,000
inMontréal. Cercle des présidents des Cercle — DSUs DSUs DSUs 15,012 7,342 (Québec). InNovember 2018, Ms. Vachon received theFemmes 6,764 TOTAL NETCHANGE (#) 92,166 TOTAL NETCHANGE (#) TOTAL NETCHANGE (#) 6,667 Conseil patronal de l’environnement du du l’environnement de patronal Conseil Fondation Centre de Cancérologie Cancérologie de Centre Fondation Prix bâtisseur - Tour CIBC Charles Charles CIBC Tour - bâtisseur Prix 215,914 DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS 2,314,394 DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS 242,236 (5) (5) (5) (6) (5) (4) (3) (2) (1) INFORMATION ONEQUITY HOLDINGS INFORMATION ONEQUITY HOLDINGS INFORMATION ONEQUITY HOLDINGS — SHARES DECEMBER 31, 2018 13,628 SHARES DECEMBER 31, 2018 21,190 SHARES DECEMBER 31, 2018 AGE 63 AGE 55 AGE 50 INDEPENDENT INDEPENDENT KINGSEY FALLS (QUÉBEC)CANADA DIRECTOR SINCE2016 DIRECTOR SINCE:N/A DIRECTOR SINCE2016 MONTRÉAL (QUÉBEC)CANADA MONTRÉAL (QUÉBEC)CANADA NON-INDEPENDENT Held directly by Foresee Capital, of which Martin Couture isthesole votingshareholder. Capital, Couture by Foresee Held directly of whichMartin onthe oftheCorporation The totalvalueToronto price oftheCommonShares atriskisbased ontheclosingshare StockExchange (TSX)onDecember 31, 2018($10.23). including and Mario Plourde, paid annually,Alain Lemaire DSUs are asdescribedinsection3.1.4 CompensationComponentsonpage attributedonJune1, andwere 19oftheCircular 2018. paidannually, Directors, 15, DSUsare For external Unit Planonpage attributed onJanuary Share andwere 2019. 28oftheCircular asdescribedinsection3.8.3Deferred ForExecutive Officers, by orindirectly helddirectly Tremer are 36,277 shares IIInc., acompany inwhichMs. holdsa50%shareholding. Lemaire byGestion orindirectly Inc.,Held directly Alain Lemaire ofwhich isthesolevotingshareholder.Alain Lemaire Practices). Governance ofindependenceestablishedunderSection 1.2oftheCanadian Securities “Independent” tothe standards ofCorporate Administrators’ refers 58-101(Disclosure NationalInstrument (6) (1) — DSUs DSUs 20,989 DSUs 7,469 (4) (4) (4) 2018 ANNUALMEETINGVOTES INFAVOUR (%):99.32 2018 ANNUALMEETINGVOTES INFAVOUR (%):N/A 2018 ANNUALMEETINGVOTES INFAVOUR (%):96.43 2000 to 2005. Most of Mr. Lacroix’s legal career was spent with McCarthy Tétrault, where he spent close to twenty years, concentrating CEO of CBC/Radio-Canada from January 2008toJune2018, ofthecorporation.CEO ofCBC/Radio-CanadafromJanuary thelongest mandateinthehistory Beforeactingin COMMITTEE(S): COMMITTEE(S): COMMITTEE(S): N.A. and SustainableDevelopment CommitteeoftheCorporation. Combiningstrongleadershipskillswithextensive operationalexperience, Entrepreneur ofthe Year award in2008. Heisanactive memberoftheNationalRenderers Association, theprofessionalassociation Patrick as President and CEO of Boralex Inc. Lemaire has served since September 2006. Over the last decade, he has profoundly Recipient ofaBachelor’s degree inEconomicsfromSt. Lawrence University (Canton, New York), CoutureisCEOofSanimaxInc., Martin He also holds the certified designationofICD.DHe alsoholdsthecertified fromtheICDCorporateGovernance College program. Mr. LacroixactsasstrategiccounselforBlake, Cassels&Graydon, anational law firm. Beforejoiningthem, hewasPresidentand Mr. CouturewasnamedoneofCanada’s “Top 40under40,” aCaldwell Partners award, in2007. Hereceived & theErnst Young of the rendering industry in North inNorth America,of therenderingindustry andhasalsobeendeeplyinvolved withthe Young Presidents’ Organization since2003. boards forbothpublicandprivate companies, aswell as, amemberofboardsforvarious nonprofitorganizations. Hepresentlysits he wasafinalistattheQuebecEYEntrepreneurof year Awards, andranked asthe58thmostinfluentialindividualinwind packaging sector. In 2016, he received the Prix d’excellence from the of projectmanager, maintenancemanager andplantmanager inFranceandtheUnitedStates. Hismanagerial skillsandleadership on mergers and acquisitions of public companies, and securities. Over the years, Mr. Lacroix has been a member of numerous his bachelor of Civil Law (1976) and his MBA (1981) from McGill University. He has been a member of the Quebec Bar since 1977. on theboardofStornoway DiamondCorporation, festival. andchairsBlueMetropolis, literary aninternational Mr. Lacroixreceived degree inMechanicalEngineeringfrom MARTIN COUTURE industry by theBritishmagazine industry where he has worked since 1990. Heis a member of the Committee and of the Health and Safety,Audit and Finance Environment were then put to use as General Manager of five plants and asVice-President and Chief Operating Officer in the containerboard HUBERT T. LACROIX PATRICK LEMAIRE transformed thecompanytransformed leaderinCanadaandFrance. andhelpedpositionitasarenewable energy In1988, after obtaininghis thereto, wasExecutive of Chairman Telemedia Corporationandoftheothercompaniesin Telemedia from corporatestructure that capacity, heheldthepositionofSenior Advisor withtheMontrealofficeofStikeman Elliott, from2005to2008, and, justprior PRINCIPAL OCCUPATION: PRESIDENTANDCHIEFEXECUTIVEOFFICER, SANIMAXINC.(CANADA) PRINCIPAL OCCUPATION: STRATEGIC COUNSEL, BLAKE, CASSELS&GRAYDON LLP PRINCIPAL OCCUPATION: PRESIDENTANDCHIEFEXECUTIVEOFFICER, BORALEXINC. AUDIT ANDFINANCE(MEMBER) N/A HEALTH ANDSAFETY, ENVIRONMENT ANDSUSTAINABLE DEVELOPMENT (MEMBER) — SHARES DECEMBER 31, 2017 13,628 SHARES DECEMBER 31, 2017 12,100 SHARES DECEMBER 31, 2017
A Word about Wind about Word A Université Laval Laval Université — DSUs DSUs DSUs 10,885 4,082 . (Québec), he began hiscareeratCascades. Hesuccessively heldthepositions Cercle des Dirigeants d’Entreprises Franco-Québécois d’Entreprises Dirigeants des Cercle — TOTAL NETCHANGE (#) TOTAL NETCHANGE (#) 19,194 TOTAL NETCHANGE (#) 3,387 — DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS 431,491 DECEMBER 31, 2018 ($) TOTAL VALUEOF AT RISK AS 215,822 . In 2017, (5) (5) (5)
11 11 CASCADES MANAGEMENT PROXY CIRCULAR 12 12 CASCADES MANAGEMENT PROXY CIRCULAR has determined thatnoneofthenomineessit onthesameBoardofDirectors. has determined The BoardofDirectorshasreviewed themembershipofproposednomineestoCorporation’s Boardontheboardsofotherpubliccompaniesand ii) i) vote foraproposednomineetotheBoardofDirectors, save for: body thatwould toareasonableshareholderindecidingwhether likelyor sanctionsimposedbyregulatory beconsideredimportant ornotto acourt authority, authorityorhasenteredintoasettlementagreement withasecuritiesregulatory securities regulatory orhasbeensubjecttoany otherpenalties no proposednomineetotheBoardofDirectorshasbeensubjectany penaltiesorsanctionsimposedbyrelatingtosecuritieslegislation acourt compromise withcreditors, orhad a receiver, receiver manager appointedtoholdhisassets. or trustee Furthermore, totheknowledge oftheCorporation, bankrupt, madeaproposalunderany orinsolvency, legislationrelatingtobankruptcy orbecamesubjecttoinstitutedany proceedings, arrangement or any proceedings, arrangement orcompromisewithcreditorshadareceiver, receiver manager appointed toholditsassets;or(d)became ortrustee to act in that capacity, became bankrupt, made a proposal under any or insolvency legislation relating to bankruptcy or was subject to or instituted such capacity;(c)aDirectororexecutive officerofany company that, while thatpersonwas actinginthatcapacity, orwithina year ofthatpersonceasing Director, chiefexecutive officerorchieffinancialofthatcompany and whichresulted froman eventthatoccurred whilethatpersonwasactingin under securitieslegislationthatwasineffectforaperiodofmorethan30consecutive days thatwasissuedaftertheproposedDirectorceasedtobea of that company; (b)subject to aceasetrade order, anorder similar toaceasetrade orderoranthatdeniedacompany accesstoany exemption 30 consecutive days thatwasissuedwhile theproposedDirectorwasactingincapacityasDirector,Financial Officer ChiefExecutive OfficerorChief to a cease trade order or an order that denied a company access to any exemption under securities legislation that was in effect for a period of more than Directors is, asattherecorddateofthisCircular, orhasbeen, within10years beforethedatehereof;(a)subjecttoaceasetradeorder, anordersimilar To the best knowledge of the Corporation, provided based on the information by the Nominee Directors, no other proposed nominee to the Board of 2.2.4 provided insection4.7 onpageAdditional Information 32oftheCircular. office,with the Board or Committee Chairs through the Corporate Secretary’s by mail or email, with the mention “confidential”, to the contact information and recommendeditsapproval totheBoard. This policyisavailable ontheCorporation’s website atwww.cascades.com. Shareholdersmay communicate Governance andNominatingCommittee approved apolicyoutlininghow theBoardandManagement may communicatewithshareholders, andvice-versa, The Board believes of open and constructive dialogue in the with importance its shareholders. In 2017, to facilitate such engagement, the Corporate 2.2.3 ofoneormorenomineesotherthanthosepresented,be electedtotheBoardandthatnoproxymaterialiscirculatedinsupport by asdetermined theBoard. circumstances involving anuncontestedelectionofDirectors, namelythosewhere thenumber of Directornomineesis the sameas number of Directors to inanyoffered totenderhisresignationshallnottake part totheresignationoffer. committeeorBoarddeliberationspertaining This policyonlyappliesin and announceitinapressreleasewithin90days following themeetingofshareholderswithacopy tothe Toronto StockExchange (TSX). The Directorwho resignation offerandmake arecommendationtotheBoardwhether toacceptit, absentexceptionalcircumstances, ornot. The Boardwillmake itsdecision of theBoardfollowing themeetingofshareholders atwhich theDirectoriselected. The CorporateGovernance andNominatingCommitteewillconsidersuch than votes for, withrespecttotheelectionofDirectorsby shareholders, willbeexpectedtooffertenderhisresignationimmediatelytheExecutive Chair The majorityvoting policyapplies to thiselection. Underthispolicy, anomineeforelectionasDirectorwho receives agreater numberofvotes withheld 2.2.2 BOARD INTERLOCKS 2.2.5 on September15, 2016. the contextoftheseproceedings, the company filedaplanofcompromise, which wasapproved by amajorityofcreditorsandsanctioned by theCourt tobetheonlyway itsbusinesswasdetermined implementation ofaplantorationalizeandrestructure forthecompany tocontinueitsoperations. In for creditorprotectionandobtainedastay ofproceedingsonMarch24, 2016pursuanttotheCompanies’ Creditors Arrangement Act (Canada), asthe capital andmanagement shareholders. After exploringnumerousoptionstofinancethecompany’s operationsandstrategicplan, thecompany filed Mr. Sellyn joined the Board of Beyond 26, the Rack Enterprises Inc. 2014 as an independent Director to complement the company’s on February venture pursuant to the Bankruptcy andInsolvencypursuant totheBankruptcy Act inordertocompletethewinddown of Calyx’s affairsanddischarge hermandate. secured creditor. Given theinsolvency ofCalyx, inhercapacity ofDirectorCalyxapproved assignmentinbankruptcy MichelleCormier avoluntary to repay bankindebtedness, employee severances andsuppliers. Following allsuchpayments, thecashonhandwasinsufficienttorepay theremaining the sale, inDecember2016, by Calyxofallassetsandbusinesses inwhich itoperated. The large majorityofnetproceedsfromsuchsaleswere used (“Calyx”) to becomethesole Director andOfficerofCalyx. Inthiscapacity, hermandatewastowinddown Calyxinthemostefficientmanner, following In January 2017, Ms.In January wasasked by MichelleCormier theremainingseniorsecuredcreditorandby thesoleshareholderofCalyx Transportation Inc.
ADDITIONAL RELATING DISCLOSURE TO DIRECTORS SHAREHOLDERS ENGAGEMENT POLICY POLICY VOTING MAJORITY (4) (3) (2) (1) Accountants, in Canadiandollarsinthepasttwo fiscal providedyears fortotheCorporationandits subsidiaries: various services The following tablepresents, by category, by thefeesincurred theCorporationandpaidtoPricewaterhouseCoopers LLP, Professional Partnership ofChartered approves inadvance provided, requirements. nonauditservices incompliance withapplicablelegal andregulatory The Committee,Audit andFinance inaccordancewithitsCharter, provided approves by theIndependent allauditservices andAuditor anddetermines 2.3.2 Accountants andRule3520on Auditor Independence ofthePublicCompany Accounting Oversight Board. Auditor oftheirindependenceandobjectivitywithrespecttotheCorporation, Professional pursuanttotheCodeofEthicsQuébec OrderofChartered For thefinancial year endedDecember31, 2018, theCorporation’s fromtheIndependent Finance Committeeobtainedwrittenconfirmation Audit and indicated thatthesharesaretobevoted otherwise. Annual GeneralMeetingofShareholders, andtoauthorizetheBoardofDirectors tofixtheircompensationunlesstheshareholder granting theproxyhas PricewaterhouseCoopers LLP, professionalaccountants, Partnership ofchartered asIndependent Auditor oftheCorporation, toholdofficeuntilthenext The persons of proxy named intend as proxies to vote in the enclosed form the shares represented by such proxy IN FAVOUR of the appointment of Auditor toholdofficeuntilthenextannualmeetingofshareholdersandauthorize theBoardofDirectorstofixtheirremuneration. At theMeeting, theshareholderswillbeasked, upontherecommendationof CommitteeandtheBoard,Audit andFinance toappointtheIndependent 2.3 Committee meetingsofwhich they arenotamember, onanon-voting basis. their roles and responsibilities. In addition to attending meetings of the Board and its Committees on which they sit, Directors are invited toattendother and Sustainable Development Committee meetings. The attendance rate at Board and Committeemeetingsattests to theDirectors’ strong commitment to Governance andNominatingCommitteemeetings, 100%forHumanResourcesCommitteemeetingsandtheHealth andSafety, Environment 2018,For Fiscal thetotalattendancerecordofDirectorswas97%forBoardmeetings, 96%for Committeemeetings,Audit andFinance 100%forCorporate (1) DirectorsattheBoardandCommitteemeetingsheldduringlastfiscal The following theattendanceofcurrent tablesetsforth year: Governance andNominatingCommittee, theHumanResourcesCommitteeandHealthSafety, Environment andSustainableDevelopment Committee. The Boardhasestablishedthefollowing four(4)committees, andworkplan: eachwithitsown writtencharter the Committee,Audit andFinance theCorporate 2.2.6 AUDITOR’S INDEPENDENCE 2.3.1 by adirector attended meetings of percentage and Number Audit Fees Alain Lemaire Audit-Related Fees Tax Fees Total Sylvie Vachon Georges Kobrynsky Sylvie Lemaire Other Fees Patrick Lemaire Laurence Sellyn SERVICES Martin Couture Martin Michelle Cormier Mario Plourde Élise Pelletier David McAusland Louis Garneau Professional services consisting primarily of transaction support services. consisting primarily oftransactionsupport Professional services mainlyfor compliance toIncome TaxProfessional services laws. matters. providedinconnectionwithauditing aswellconsultationsonaccountingand regulatory Professional services filingsandauditoftheannualfinancialstatementsCorporation. andregulatory providedinconnectionwithstatutory Professional services In 2018, having declared a conflict of interest, Sylvie Lemaire did not attend one (1) of the meetings of the Corporate Governance andNominatingCommittee. In 2018, Governance aconflictofinterest, didnotattendone(1)ofthemeetingsCorporate havingdeclared SylvieLemaire
APPOINTMENT OF INDEPENDENT AUDITOR INDEPENDENT OF APPOINTMENT INDEPENDENT AUDITOR FEES MEETINGS COMMITTEE AND BOARD TO RECORD ATTENDANCE DIRECTORS (3) (1) (4) (1) (2) 10/10 10/10 10/10 10/10 10/10 10/10 10/10 10/10 BOARD OFDIRECTORS 9/10 9/10 9/10 9/10 (10 MEETINGS) 100% 100% 100% 100% 100% 100% 100% 100% 90% 90% 90% 90% 4/5 5/5 5/5 5/5 5/5 AUDIT AND FINANCE AUDIT AND (5 MEETINGS) COMMITTEE 100% 100% 100% 100% 80% NOMINATING COMMITTEE 6/6 6/6 6/6 5/5 GOVERNANCE AND (6 MEETINGS) CORPORATE 100% 100% 100% 100% 6/6 6/6 6/6 6/6 HUMAN RESOURCES (6 MEETINGS) DECEMBER 31, 2017 COMMITTEE $3,124,843 $1,715,891 100% 100% 100% 100% $619,668 $117,149 $672,135 FEES AND SAFETY AND SUSTAINABLE 3/3 3/3 3/3 3/3 DEVELOPMENT COMMITTEE ENVIRONMENT, HEALTH DECEMBER 31, 2018 $1,967,860 $1,550,145 $130,478 (3 MEETINGS) $262,487 $24,750 100% 100% 100% 100% FEES 13 13 CASCADES MANAGEMENT PROXY CIRCULAR 14 14 CASCADES MANAGEMENT PROXY CIRCULAR executive compensation disclosed in the Circular furnished in advance of the 2019 Annual General Meeting of Shareholders”. of Meeting General Annual 2019 the of advance in furnished Circular the in disclosed compensation executive the proposals, unlesstheshareholdergranting theproxyhasindicatedthatsharesaretobevotedotherwise. intendtovotethesharesrepresentedby form suchproxy ofproxyorvotinginformation The personsnamedasproxiesintheenclosedform AGAINST that theshareholdersvote AGAINST theproposals, forthereasonssetoutinSchedule A. At theMeeting, theshareholderswillbeasked tovote FORorAGAINSTinSchedule theshareholderproposalssetforth A hereto. The Boardrecommends to approach 2.5 Corporation’s the accept shareholders executive compensation, unlesstheshareholdergrantingthe theproxyhasindicatedthatsharesaretobevotedotherwise. that Board, ofproxyintendtovotethesharesrepresentedbyThe personsnamedasproxiesintheenclosedform suchproxyFORCorporation’s approachto the of The BoardandManagement recommendthattheshareholdersvote FORtheCorporation’s approachtoexecutiveresponsibilities compensation. and role the future executive compensationpoliciesand decisions. diminish to not The vote beingadvisory,and theresultswillnotbebindingonBoard. However, theBoardwillconsideroutcomeofvote when reviewing andapproving basis advisory an on “Resolved, At theMeeting, shareholderswillbeasked tovote resolution: onthefollowing advisory program andpractices. This disclosurehasbeenapproved by theBoardonrecommendationofHumanResourcesCommittee. Analysis (CD&A)sectionoftheCircular. The CD&AdescribestheCorporation’s approachtoexecutive compensationandthedetailsof at eachannualshareholdersmeetingontheCorporation’s approachtoexecutive compensation, asdescribedinSection3.1CompensationDiscussionand 94.83% at the May 10, 2018 Annual General Meeting. The purposeofthesay onpay vote istoprovidevote advisory shareholderswiththeopportunity On March 12, 2018, the Board ofDirectors of theCorporation approved asay onpay vote policy, advisory which wasapproved by theshareholdersby 2.4 require pre-approval ofallmemberstheCommittee. Committee that involve the payment of unbudgeted fees up to a maximum of $100,000 per mandate. that involve Services fees of more than $100,000 are pre-approved. The Committeehasdelegated oftheCommitteepre-approval totheChairman notpreviously authorityforany approved services by the the Independent Auditor arepre-approved. ofthePolicy, Undertheterms thatinvolve services feesoflessthan$25,000uptoanannuallimit$50,000 Independent Auditor (the by proposedtobeperformed “Policy”) theproceduresandconditionspursuanttowhich services thatsetsforth permissible The Corporation’s Committee(the Audit andFinance “Committee”) hasadoptedaPre-approval provided Policy by the andProceduresforservices 2.3.3 SHAREHOLDER PROPOSALS SHAREHOLDER COMPENSATION ON EXECUTIVE VOTE ADVISORY POLICIES AND PROCEDURES FOR THE ENGAGEMENT OF AUDIT AND NON-AUDIT SERVICES AND AUDIT OF ENGAGEMENT THE FOR PROCEDURES AND POLICIES care benefitsplanofferedtoemployees intheUnitedStates, retirementplans and governance relatedmatters. $226,980, under thecaption “All OtherFees”, related tonon-executive compensation, were paidtoMercerforservices namelyadvice andguidanceonthehealth caption “Executive Compensation Related Fees” paid to Mercer were in the amount of $19,975 for update of market data for executive compensation. Also, fees of non-executive compensation, namelyadvice andguidanceonthehealthcarebenefitsplanofferedtoemployees intheUnitedStates.Fiscal 2018, In feesunderthe Related Fees” paid toMercerwere intheamountof$128,335andfees$78,381, underthecaption “All OtherFees”, relatedto were paidtoMercerforservices the competitiveness ofeachcompensationcomponentwithinatotalapproach. 2017, InFiscal feesunderthecaption “Executive Compensation including assessingdevelopments intheemployment market forseniorexecutives. theinputofMercer,With theCommitteereviewed thecompensationpolicyand Corporation’s management. 2018, InFiscal morespecifically, totheCommittee, Mercerreported asoutsidecompensationconsultant, oncompensationpolicies, relationshiptotheCommitteeandBoardofDirectorsisparamountthismadeclear andacceptedby andreporting the recognized thatitsadvisory ofMercer, services has alsooccasionallyretainedtheadvisory mainlyonmattersrelatedtoexecutive andnon-executive compensation. Mercerhasspecifically The Committee has for several years, in accordance with its Charter, of Mercer, retained the services outside consultants specialized in compensation. The Corporation Advisors d) - Executive Compensation Compensation on theCorporation’s website. 2018. oftheHumanResourcesCommitteedescribingitsresponsibilities,The Charter powers andoperationisreviewed annuallyby theCommittee andisavailable Governance andNominatingCommittee, theappropriatetypeofcompensationformembersBoardanditsCommittees. The Committeemet6timesin Option Plan, ShareUnitPlanforExecutives Performance ShareUnitPlan andDeferred Key Employees. Inaddition, itrecommends, together withtheCorporate exercise ofstockoptions, ShareUnits(DSUs)tothosepersonseligibleinaccordancewiththeCorporation’s Performance ShareUnits (PSUs)andDeferred Stock Incentive oftheLong-term Planregarding andimportance thegrantingandconditionsof recommendations totheBoardwithrespectpertinence andterms management andsubmitsitsrecommendationstotheBoardonappointmentofChiefExecutive Officerandotherseniorexecutives. Itreviews andmakes executives. The Committeereviews practicesputinplaceby theCorporationrelatingtorecruitment, training, professionaldevelopment andsuccessionofsenior compensation ofexecutive officers. TheCommitteealsorecommendsto the Board overall compensationofthePresidentandChiefExecutive Officerandother Officer. Basedontheforegoing andonmarket dataprovided firm,by anexternal themembersofCommitteediscuss, withoutthepresenceofManagement, the Furthermore, theExecutive ChairoftheBoardsubmitstoCommitteehisassessmentandrecommendationoncompensationforPresidentChiefExecutive attainment by eachmemberoftheManagement Committeeofhisorherpreviously setobjectives, aswell theircompensation. ashisrecommendationsconcerning for theExecutive ChairandthePresidentChiefExecutive Officer. TheCommitteereceives fromthePresidentandChiefExecutive Officerhis evaluation ofthe The Committee’s mandate, amongstothers, is to review and make recommendations to theBoard of Directors (the “Board”) with respect to the annual compensation c) Mandate See section2.2.1BoardNomineesonpages 7to11oftheCircularforbiography ofeachmembertheCommittee. practices, includingwithrespecttowage policies, componentsofmanagement compensation, successionplans, pensionplans, andshare-basedincentive programs. resources functions. Inconnectionwith their responsibilities, all membershave implemented, managed and/or provided advice oncompensation policies and business culture. Morespecifically, all memberseitherholdorhave heldexecutive management positionsordirectorshipsinorganizations with oversight over human the skillsandexperiencethatenablehimorhertomake decisionsonthesuitabilityofCorporation’s policiesandpracticestakingintoaccounttheCorporation’s involving theCorporation. EachoftheCommittee’s membershasdirectexperiencethatisrelevant tohisorherresponsibilitiesinexecutive compensation, aswell as None ofthemembersCommitteeisorhasbeenindebtedtoCorporationany ofitssubsidiariesorhashadaninterestinamaterialtransaction The CommitteeiscomposedentirelyofindependentDirectors, namelyMr. David McAusland (Chair), Ms. ÉlisePelletier, Ms. Sylvie Vachon andMs. MichelleCormier. b) Composition approval totheBoardofDirectorsCorporation. The HumanResourcesCommittee(the “Committee”) hasapproved thecontentsofSection3StatementExecutive Compensationandhasrecommendedits STATEMENT OFEXECUTIVECOMPENSATION section 3 se a) Human Resources Committee report Committee Resources a) Human 3.1 3.1.1
COMPENSATION DISCUSSION AND ANALYSIS DISCUSSION COMPENSATION COMPENSATION COMMITTEE AND HUMAN RESOURCES 15 15 CASCADES MANAGEMENT PROXY CIRCULAR 16 16 CASCADES MANAGEMENT PROXY CIRCULAR
the retention of assets. For more details, see Section 3.1.4 Compensation Components on page 19 of the Circular. 19 the of page on Components 3.1.4 Compensation Section see details, more For assets. of and retention the performance the of recognition the between balance a maintaining of goal Corporation’s the reflect policy compensation the of components The Compensation components year objectivesfor thecurrent oftheirsupervisor’s thereby insupport resultingin abetterbusinessobjectives alignment. were developed as well as sought after behavioral competencies. For each of these axes, salaried employees are required to develop measurable objectives by acompetencies-basedapproach. To theseprocesses, support six(6)strategicaxis of theCorporationby integrating financialresultsandspecificexpectations, measured anchored intheCorporation’s values. The fundamentalpurposeistoreinforcetheculture These processes are aimed at facilitating the client-focused approach and remain profitability. employees towards addingvalue forourcustomersandmaximizingCascades’ overall ofthecontributionall throughout theCorporationandemphasizesimportance The objectives down employees settingprocessiscascadedfurther toincludethehourly compensation increase. personal objectives andtheirbehavioral competencies, andtoimpacttheirannual been designedtotake into consideration theemployees’ capacity to attainboththeir The year’s objectives management are set using a performance processthat has achievement ofCascades’ businessobjectives. and 94%ofthemhave reviews hadtwo performance duringtheyear the tosupport employees developed personal objectives, objectives of their supervisor’s in support Corporation anditsemployees arealignedinacommondirection. In2018, allsalaried realize itsstrategic plan. Byestablishingspecificobjectives foreachstrategicaxis, the The Corporation’s main goal is to attract and retain within its ranks the talent required to Fundamentals behind the Compensation Policy management personnel. Unlessotherwiseindicated, containedhereinisasatDecember31, theinformation 2018. this section essentially describes the compensation policies and programs for the NEOs, these programs and policies also apply to the Corporation’s other Canada ULC(CCP)andthePresidentChiefOperatingOfficerofSpecialtyProductsGroup, adivisionofCascadesCanadaULC(SPG). Although Officer, theFinancial Officer,Vice-President andChief thePresidentandChiefOperatingOfficerofCascadesContainerboard Packaging, adivisionofCascades Executive Officers(NEOs)forthefinancial yearendedDecember31, 2018. TheNEOsaretheExecutive ChairoftheBoard, thePresidentandChiefExecutive Corporation’s annualfinancialstatements. which couldaffecttheCorporationaredisclosedinCorporation’sandmanagement form discussionandanalysisaccompanying annualinformation the Corporation’s compensationpoliciesandpracticesthatarereasonablylikely tohave amaterialadverse effectontheCorporation. The significantrisksanduncertainties the Committeereviewed thepracticesandpoliciesapplicabletoallemployees including theNamedExecutive Officersanddidnotidentifyany risksarisingfromthe up of the Performance Share Unit Plan, Share UnitPlan for Executives the Stock Option Plan and the Deferred and Key Employees) and retirement benefits. In 2018, described hereunder, thecomponentsofcompensationincludeabasesalary, Incentive Plan(profitsharingplan), aShort-term Incentive aLong-term Plan(made The Committee annuallyconductsa review and approves the Corporation’s compensation policies and practices, taking into account any associated risks. As further e) Risk Oversight This sectionisintendedtoprovide shareholdersoftheCorporationwithadescriptionpoliciesandprograms regarding compensationoftheNamed 3.1.2 Long-term IncentiveLong-term Plan Incentive Plan Short-term Base Salary COMPENSATION OF NAMED EXECUTIVE OFFICERS NAMED OF COMPENSATION Reward thecollective asawhole performance divisions andtheCorporation andoperationalresultsforbusinessunits,Reward individualperformance Reward individualperformance, experienceandleadership ES SA E A CE D E A D A A D S C A C S E Compensation Succession planning EC ES A E based a roach S ESS Com etency EA SA E development Training and A D Recruiting Recruiting and hiring Performance management planning Career E A A E CE E CE ES CES A of Executive Compensation Table onpage 23oftheCircular. ended asofJune1, 2017, Incentive Planwasdecreasedin2018. ofhiscompensationbasedontheLong-term andtheproportion See Table 3.2.1Summary the effectonhisoverall compensation, Mr. Incentive asExecutiveismaintained, Lemaire’s Plan Chairman intheShort-term basesalary hisparticipation management inanexecutive teamcontinuestobenefitfromhisparticipation capacityintheCorporation’s decisionsandstrategicorientations. Regarding are described in Schedule E to the Circular. Although he has reached the age of 70 and has received annual pension, his predetermined Cascades’ senior respecttoMr.With Alain Lemaire, who wasappointedExecutive oftheBoardonMay Chairman 9, 2013andcontinuestoholdtheposition, theresponsibilities Industries Inc. In thecaseofPresidentsandChiefOperatingOfficersCCPSPG, thereference group includes15oftheabove corporations, butexcludesDorel Ltd. Winpak been acquiredby MetroInc. andwillberemoved fromReferenceGroupgoing forward), CAEInc., Transcontinental Inc., NorbordInc. , Uni-selectInc. and Inc., BRP Inc., Inc.,TFI International Québécor Inc., CCL Industries Inc., Dorel Industries Inc., Gildan Activewear Inc., Jean Coutu Group (PCJ) Inc. (has since oftheReferenceGroupinclude:DomtarCorporation, part The companiesthatform ResoluteForestProductsInc., West Fraser CompanyTimber Ltd., Canfor understanding andbenchmarkingofthecompetitiveness ofremunerationforseniorexecutives. The Committeeconsidersthattheaforementionedcharacteristicscompaniesinreferencegroups sharewiththeCorporationallow forabetter • • • • and oilcompanieswere excluded), chosenonthebasisofoneormore ofthefollowing criteria: The ReferenceGroupforthePresidentandChiefExecutive Officerconsistedof16Canadiancompanies(gas andthe andChiefFinancial Vice-President by 2.5%toreflect2018remuneration levels. or “Reference Group”. The financialdataforthereference groups wasextractedfrommanagement proxycircularsfiledonSEDAR in2017andincreased andthevariable compensationforalloftheNEOs,salary save for Alain Lemaire, wasbenchmarked by theCommitteein2018, against areferencemarket published by compensationconsultingcompanies, suchasthe2017MercerBenchmarkDatabase(MBD), theannualcashcompensation, namelythebase incentive plan)indicatorsextractedfromnationalcompensationsurveys and short-term In addition to considering annual cashcompensation (base salary NEOs, save for Alain Lemaire, theExecutive ChairoftheBoard. theassistanceofMercer,With revised comparatorgroups orreferencegroups were processforthe usedintheannualcashcompensationdetermination will leadtoaphasingin, over thenextfew years, ofcompetitive adjustmentstoexecutive compensation. adjustment totherelevant comparatorgroup ofcompanies, given thechanges totheCorporationandmarket inwhich itevolves. This anticipatedchange 2018 and beyond,concluded that for Fiscal the competitive objectives of the Corporation and the best interests of its Shareholders necessitated a material In late 2017, the Committee commenced an extensive review regarding its benchmarking of executive compensation in the Corporation. The Committee 3.1.3 these companieshave salesrangingfromonethirdtothreetimesCascades’ sales($4.3billionin2017). the headofficeofthesecompaniesislocatedinQuébec; level;the companiesoperatetheiractivitiesonanationalorinternational the companiesarelistedonastockexchange;
BENCHMARKING PRACTICES BENCHMARKING 17 17 CASCADES MANAGEMENT PROXY CIRCULAR 18 18 CASCADES MANAGEMENT PROXY CIRCULAR The following graphics illustratethebenchmarkingcomparisonforeachNEO, inthousandsofdollars. LUC LANGEVIN LUC CHARLES MALO HOGG ALLAN PLOURDEMARIO Cash Com ensation Cash Com ensation Cash Com ensation Cash Com ensation Total Annual Total Annual Total Annual Total Annual 2,036 665 762 721 8 428 438 464 1 13 2 3 324 2 1 BENCHMARK BENCHMARK BENCHMARK BENCHMARK Cash Com ensation Cash Com ensation Cash Com ensation Cash Com ensation Total Annual Total Annual Total Annual Total Annual 2,051 785 859 859 1 26 481 5 5 1 25 3 4 352 352 Base Salary Base plan, positionedatthemedianofmarket forpositionswithcomparableresponsibilities. The objectiveincentive soughtisto offer toExecutive Officersatotalannualcashcompensation,coupledwithshort-term composedofabasesalary Total annual cash compensation and 20%respectively. The BoardofDirectors may increase orreducethemultiplesand/orpercentages atits discretion. Chief OperatingOfficerofSPG, amultipleof1.5. The grant isdividedamongPSUs, OptionsandDSUsaccordingtothe following percentages 50%, 30% Officeramultipleof1.4, andChiefFinancial Vice-President forthePresident andChiefOperatingOfficerofCCP, amultipleof1.3andforthePresident in 2018 to the NEOs are as follows: for the Executive Chair, a multiple of 1.5, for the President and Chief Executive Officer, a multiple of 2.5, for the The numberofPSUs, OptionsandDSUsattributedisbasedonamultipleofthebasesalary. The multiplesusedforthegrant ofPSUs, OptionsandDSUs Share UnitPlanforExecutives andKey Employees (the “DSU PlanforExecutives”). IncentiveThe Long-term PlanismadeupofthePerformance ShareUnitPlan(the “PSU Plan”), theStockOptionPlan(the “Option Plan”)andtheDeferred Long-term Incentive Plan oftherelevant totheperformance ensures thatthecompensationtobepaidisappropriatelycorrelated businessunits. oftheexecutivethe responsibilitiesandpastperformance aswell asthenumberofbusinessunitsunderhisorherresponsibility. The Committeealso thepercentagedetermines oftheprofitseachbusinessunittobepaidseniorexecutive, manner, itconsidersinadiscretionary theexperience, and effectively encourages seniormanagement’s productivityandalignstheirinterestswiththoseoftheCorporation’s shareholders. When theCommittee The CommitteeremainssatisfiedthattheCorporation’s profitsharingplan whichreflectsaphilosophy thathas been inplacefor several years, ischallenging ofoneunitoverthe strategicimportance ofoperatingprofit. othersinterms management’s compensationisalsoconfidential andsensitive fromacompetitive pointofview. Itsdisclosurecouldprovide indicationstocompetitorsof competitive position and negatively affect its financial situation. As well, the percentage senior of operating profit of each of the units used to determine to itsinterests. Indeed, disclosingtheseresultswould allow theCorporation’s theCorporation’s dataandcouldharm competitorstoisolatecertain products Reference Period. relativeThe Corporation isoftheview thatdisclosureoftheinformation tooperatingprofitofitsbusinessunits would be greatly prejudicial the Corporationdoesnotpubliclydiscloseprofitsderivedfinancialresults basedonthe fromeachofthesebusinessunitsanddoesnotfurnish cannot bedisclosed, asinpastyears, andtheCorporationisrelyingonseriousprejudiceexemption available under securitiesregulations. Indeed, basis, save for the President and Chief Executive Officer. Incentive Theentire compensationderived Plan isbasedon measuresthat fromtheShort-term period, orrestructuring the calculationduringstart-up asthecasemay be. The profitabilityofourEuropeanoperationsisexcludedfromthecalculation the ReferencePeriod commencingonNovember modemay 1andendingonOctober31. orrestructuring businessunitsinastart-up beexcludedfrom Certain theprofitabilityofbusinessunits,In ordertodetermine theirprofitsareaccountedforonanon-consolidatedbasis, unit byunit, month bymonthduring Hogg, 41%ofthetotalcashcompensationMr. Malo, Charles and30%ofthetotalcashcompensationMr. LucLangevin. incentive planrepresents56%ofthetotalcashcompensationMr.from theshort-term MarioPlourde, 42%ofthetotalcashcompensationMr. Allan ended April 30, 2018, afterwhich thepercentage isfixedat0.25%, cappedattwo timeshisannualbasesalary.Fiscal 2018, For compensationderived and ChiefOperatingOfficerofSPG varies between 0.10%and0.25%ofoperatingprofitthebusinessunitsfor whichheisresponsiblefortheperiod 0.20% ofoperatingprofitthebusinessunitsfor which heisresponsible, cappedattwo timeshisannualbasesalary. ProfitsharingpaidtothePresident cappedattwoperformance timeshisannualbasesalary. ProfitsharingpaidtothePresidentandChiefOperatingOfficerofCCP variesbetween 0.03%and amountof$323,903,paid tothe Officerisconstituted ofadiscretionary takingintoaccounthisresponsibilities and and Chief Financial Vice-President entities oftheCorporation, withtheexceptionofGreenpac, forwhich thepercentage is0.15%, cappedattwo timeshisannualbasesalary. Profitsharing Profit sharing paid to the President and Chief Executive Officer represents 0.25% of operating profit of all of the operating subsidiaries, divisions and affiliated and theirpersonalperformance, cappedattwo timestheannualbasesalary. to receive duringtheReferencePeriod abonusbasedonthefinancialresultsofallbusinessunits, takingintoaccounttheirexperience, responsibilities 2) members of senior management,at two times the annual base salary; who have in the profit sharing plan and are eligible function participate a support plus30%onthefinancialresultsofallbusinessunits,ratio: 70%oftheoperatingprofitbusinessunits which areundertheirsupervision capped of eachyear, (the “Reference Period”); 1)theNEOswhose functionsaredirectlyrelatedtooperationseli
COMPENSATION COMPONENTS st and October 31 st
19 19 CASCADES MANAGEMENT PROXY CIRCULAR
20 20 CASCADES MANAGEMENT PROXY CIRCULAR PSUs shall be paid forthwith, once the Corporation has determined that the performance objectives of the Participant have been attained, if applicable. if attained, been have Participant the of objectives performance the that determined has Corporation the once forthwith, paid be shall Such PSUs applicable. if objectives, performance of attainment the to subject whole the period, vesting the within employee key or a officer an as days of worked number the account into take to prorated PSUs, of anumber to entitled be shall Participant the cause, for dismissal or termination than other voluntary reason a for Corporation the of employee key or a officer an be to ceases or policies retirement Corporation’s the under prescribed age the at retires aParticipant where c) acase Date; in Cessation the on expire shall objectives, performance of attainment the to such PSU Award issubject an officeroremployee ordismissal forcausebeforethe termination vesting ofsuchPSU ofCascadesfollowing hisorher voluntary Award, whether ornot Unit Agreement; b)anywhole andconditionsoftheapplicableShare PSU inaccordancewiththeterms Award granted toaParticipant who ceasestobe objectives,of performance suchPSU Award, thereof, orpart shallexpireonthe Vesting objectives Dateifsuchperformance have notbeenattained, the byUnless otherwisedetermined theBoardatoraftertimeofgrant: a)where vesting ofaPSU Award, thereof, orpart issubject totheattainment forpurposesofthePSUPlan. in treasury and conditionsdescribedinthePSUPlan.to theterms The PSUPlanwillnotrelyuponsharesfromtreasury, norarethere any sharesreserved corresponding The PSU Plan isnon-dilutive. Payment market, ofPSUs will be madeincashor Shares purchased from the secondary atthe option ofCascades, pursuant days priortothePayment Date, fortheSharesrepresentedby suchvested PSU thereof),Award (orpart subjecttoany adjustmentrequired. to the Market equal Value, cash in calculated as theaverage closingpriceoftheCommonShareson the Toronto amount an StockExchange (TSX)onthefive trading representatives), legal her or his (or, Award deceased, PSU if vested such of Holder PSU the to Date, Vesting the on pay shall Corporation The Date, basedonthefollowing table. totheaverageThe applicablemultipliershallcorrespond ROCE, by asdetermined theCorporation, forthethreecalendaryears endedbeforethe Vesting Awards andShare-Based Awards onpage 24oftheCircular. The detailsoftheseawards areshown in Table ofExecutive Compensation 3.2.1Summary Table onpage 23andin Table 3.3.1OutstandingOption-Based December 2017, themultiplieris0%basedonaROCE of4.4%. For thosePSUsgranted inJune2018, theexpectedmultiplieris0%basedonanestimatedROCE of4.3%(asdefinedbelow). ForthosePSUs granted in Corporation, itssubsidiaries, divisionsoraffiliated companies. On June1, 2018, theBoard of Directorsgranted 292,920PSUs vesting onMay 31, 2020to34seniorexecutives andkey management employees ofthe of theCorporation, itssubsidiaries, divisionsoraffiliatedcompanies. On December 18, 2017, the Board ofDirectors granted 240,880 PSUs vesting on May 31, 2019to 35 seniorexecutives andkey management employees non-core businessinvestments. specific items asdefinedin theCorporation’s Management Discussion and Analysissection ofthe Annual Report. alsoincludesdividendsfrom Return employed iscalculatedontheaverage foreachyear. ofthelastfour(4)quarters isdefinedasoperatingprofitlessincometaxes, Return andexcludes Corporation’s shareofcapitalemployed ofitscorebusinessinvestments andexcludescapitalemployed attributabletonon-controlling interests. Capital purposes ofthePSUPlan, ROCE isdefinedascapitalemployed which includestotalassetslessaccountspayable liabilities. andaccrued Itincludesthe ofthe Such adjustednumbershallbeobtainedbypart multiplyingthenumberofPSUsforming Award by theapplicablemultiplierasdescribedbelow. For On the Vesting Date, ofthe part thenumberofPSUsforming Award shallbeadjusteddependinguponthethreeyear average ROCE oftheCorporation. of theCorporationfollowing theyear duringwhich suchPSU Award isgranted. Date ofaPSU byAward willbedetermined theBoard at thetimeofgrant. However, the Vesting Datewillnot be laterthantheendofsecondfiscal year objectivesperformance which must be attained for the PSU Award, thereof, or part to vest, applicable to a PSU and other particulars Award. The Vesting The Boardhasthediscretiontoestablishattimeofeachgrant, inthePSUPlan, withintherestrictionssetforth the Award Date, the Vesting Date, the Directors. The BoardofDirectorsapproves thenumberofPSUsgranted andmay amend, thePSUPlanorany suspendorterminate PSUsgranted thereunder. those oftheshareholdersCorporation. The PSUPlanisadministeredby theBoardor, by ifdetermined theBoard, by acommitteeoftheBo 7.5% 7.0% 4.5% 4.0% 6.5% 6.0% AVERAGE ROCE 5.5% 5.0% 2017 AND 2018 AWARDS 2017 AND 8.5% 8.0% 9.0% —% 180% 160% 140% 120% 100% 40% 200% 20% 60% 80% MULTIPLIER transferable or assignable other than by will or pursuant to the laws of succession; and (viii) any amendment to the amendment provisions of the Option Plan. Option the of provisions amendment the to amendment any (viii) and succession; of laws the to pursuant or will by than other assignable or transferable be to Plan Option the under granted option any permit would which amendment any (vii) Plan; Option the in participate to Directors non-employee allow would which Plan Option the to change any (vi) shares); of issuance the to (pertaining Plan Option the of 3.8 article in forth set limits the in (v) increase any participants; to favorable more is which program assistance financial to a amendment any and assistance financial of form any of addition the iv) above; described circumstances the in date expiry original the beyond optionee an by held option an of term the to extension any iii) Plan; Option the to pursuant granted option an by covered share each of price) exercise or price (subscription price purchase the determining of method the to amendment any ii) percentage; maximum fixed toa securities of number maximum fixed a from change or a securities of number maximum afixed to increase an including operation) similar other any or aconsolidation split, ashare from resulting amendment any for (except Plan Option the under issuable shares of number maximum the in increase i) any shareholders: the and authorities regulatory the of approval the with amendments following the make may Directors of Board The optionee. the of consent prior the without granted previously options under optionee an of rights any impair or b) alter not do approval; shareholder any approval, regulatory such by or, required if listed then are shares the which upon exchanges stock the of approval the including approval, regulatory required any obtaining a) without taken: be may actions such that provided time, any at thereunder granted option any or Plan Option the terminate or suspend amend, may Directors of Board The persons. related and insider one any to issued shares of case the in issue, b) or outstanding 5% the of insiders, to issued shares of case the in issue, a) outstanding 10% the of exceed not shall period year aone in arrangements compensation share other and Plan Option the under issued shares of number the iii) issue; outstanding 10% the of exceed not shall arrangements compensation share other to the under pursuant and Plan options of Option exercise the to pursuant insiders to issuance for reserved shares of number total the obtained, is approval shareholder unless ii) grant; of time the at issue outstanding 5% the of exceed not shall arrangement compensation share other any under options or Plan Option the under granted options of exercise the to pursuant person one any to issuance for reserved be may that shares of number maximum i) the that provides Plan Option The employee. eligible an be to ceasing optionee the upon forfeited immediately are mentioned, in hereinabove event b) any of occurrence the of time the at exercisable not are which options the first; occurs whichever option, the of term original the of expiration the to prior or period 2year such of expiration the after days 90 within date such following 2years within vested be to of option an portion the and employment of termination of date the at option an of portion vested the exercise may years, whole only account into least taking at 70 years, total service of years and age whose optionee an retirement, upon iv) disability; permanent to due termination his of date the after or optionee the of death the after 120 days of aperiod during be, may case the as optionee, the of representative personal legal the or optionee the by exercised be may disability permanent to due employment of termination his of date the at or death his of date the at exercisable is that optionee such by held any of option portion the disability, permanent to due terminated is Corporation the with employment his if or dies optionee an if iii) termination; of date the after days 60 of aperiod during optionee the by exercised be may termination of date the at exercisable is that optionee such by
21 21 CASCADES MANAGEMENT PROXY CIRCULAR 22 22 CASCADES MANAGEMENT PROXY CIRCULAR divisions or affiliated companies. or affiliated divisions subsidiaries, its Corporation, the of employees management 117,164 key and granted executives senior 34 to DSUs Directors of 1, June On 2018, Board the Executives. for Plan DSU the under participant such of rights the have shall participant the of representatives legal the dies, aparticipant where case the In aparticipant. by security as given or hypothecated pledged, of, sold, disposed be not may DSUs and transferred or assigned be not may DSUs The taxes. withholding applicable less date), payment the preceding days trading (5) five the during (TSX) Exchange Stock Toronto the on traded Shares Common the of price closing average (the Shares Common the of price closing the by multiplied account employee’s the in recorded DSUs of number the to equal cash in payment sum alump receive will He DSUs. the of date payment the as year that of 1 December following day business fifth the elected have to deemed be will he occurred, termination employee’s the which in year the following year calendar the 1 of December before Secretary Corporate the to anotice such send not does if that employee an understood being it date, this to prior days (5)business five least at DSUs the of date payment of choice their of Secretary Corporate the advise must employees The occurred. termination employee’s the which in year the following year calendar 31 the of December than later be cannot date such but director, and employee an be to ceased he which on date the to subsequent DSUs the for date apayment select may he subsidiaries, its of any or Corporation the of adirector be to ceases applicable, if and, whatsoever reason any for employee an be to ceases Executives for Plan DSU the in aparticipant When Corporation. the of shareholders on conferred normally rights the to holder their entitle they shall nor Corporation the of shares considered be DSUs shall circumstances no Under Corporation. the of Shares Common the on paid dividends the to equal amount an in DSUs additional annually credited are holders DSU Corporation. the of employee an be to ceases he until held and credited are DSUs the which to name his in account an has employee eligible Each awarded. be to DSUs of number the establishes and Executives for Plan DSU the in participate to eligible are its of which any or subsidiaries Corporation the of employees key or officers salaried the designates Board the follows: as are Executives for Plan DSU the of terms principal The thereunder. granted DSUs any or Executives for Plan DSU the terminate or suspend amend, may and granted DSUs of number the approves Board The Directors of Directors. of Board the of acommittee by Board, the by or, determined if Board the by administered is Executives for Plan DSU The the of Corporation. shareholders the of those with employees key and officers such of interests the align to and employees, key and officers such attracting, in motivating and Corporation the retaining assist to Corporation, the of development and growth the in participate and towards work to subsidiaries its and the of employees key Corporation and officers encourage and assist to is Executives for Plan DSU the of purpose The Executives. for Plan DSU the the of with conditions and accordance terms in (“DSUs”) units share deferred subsidiaries its and Corporation the of employees key and officers selected to grant to Board the allow to intended is which Executives”) for Plan (“DSU Employees Key and Executives for Plan Unit Share Deferred the adopted Directors of 2018,In Board the Key Employees and Executives for Plan Unit Share c) Deferred 31, 2018. December at as 0.19% 94,163,515 outstanding the of Shares 31, May on Common representing 2028, expiring share of per $12.39 price exercise the 175,749at collectively Shares Common purchase to opportunity the them giving companies, affiliated or divisions subsidiaries, its Corporation, the of employees management key and executives senior 34 to options granted Directors of 1, June On 2018, Board the 31, 2017. December at as 17, outstanding 94,987,958 Shares December 0.25% the on of Common 2027,expiring of $14.28share (9) (8) (7) (6) (5) (4) (3) (2) (1) 3.2 practices. competitive reflect management senior to provided perquisites and Benefits insurance. disability and dental medical, life, includes management senior of members including employees all to offered program benefit employee Corporation’s The Benefitsand Perquisites guidelines. ownership share the satisfied have NEOs 2018, the of all Fiscal For guideline. ownership the with compliance monitors regularly Committee Human Resources The salary. annual 5% base to equal their of least at in an amount annually shares purchase must shares of amount minimal the hold not do who management senior of Members salary. base annual their 1time least at to equal avalue of shares hold to required are NEOs remaining The salary. base annual his times 1.25 least at to equal value of a shares hold to required is Officer Executive Chief and President The grant. their to equal amount an in Corporation the of shares hold to required are management senior of members Incentive These shares. Long-term the in retain and accumulate to participate Plan who executives expects Corporation the shareholders, of those with management senior of interests the align To further Guideline Ownership December 31, 2018, 2017and2016. The following thetotalexecutive tablesetsforth compensation paidtotheNEOsofCorporationoroneitssubsidiariesforfiscal years ended 3.2.1 Allan Hogg Alain Lemaire Vice-President Charles Malo Charles and Chief Financial Officer and Chief Financial President andChiefOperatingOfficerofSPG Luc Langevin President andChiefOperatingOfficerofCCP President andChiefExecutive Officer Executive Chairofthe Board Mario Plourde NAME AND PRINCIPAL POSITIONNAME AND This includesanamountof$76,744allocatedin2018towards inKingsey themaintenanceofhisprivate Falls. property 2018, forFiscal savefor havenotbeenincluded, of$50,000or10%thebasesalary Perquisites threshold Alain Lemaire. theprescribed asthey donotreach In Fiscal 2018,In Fiscal anamountof$664,845. hereceived Mr. theage annualpensioninJune2017afterhereached of70. 2017, hispredetermined commencedreceiving InFiscal anamountof$368,300.Alain Lemaire hereceived theCorporation’srepresent inthetable contributiononly.The amountsreflected Plansonpagerefer totheheading3.5Retirement 25oftheCircular. Foradditionalinformation Profit-sharing Program. IncentivePlanonpage 19oftheCircular.For additionalinformation, totheheadingShort-term refer As ofJune1, 2017, intheCorporation’s nolongerAlain Lemaire participates (v) Fair value peroption:$3.91 (iv) Expectedlifetime:6years (iii) Volatility 32% inmarketpriceoftheshares: (ii) Dividendrate:1.27% rate:2.30% (i) Risk-free a well-known method, accountingforthefollowing assumptions: model,The fairvalue bymultiplyingthenumberof optionsgrantedbythevalue totheBlack-Scholes-Merton oftheoptionsgrantedondategrantisdetermined establishedaccording Incentive PlanonpagesFor additionalinformation, totheheadingLong-term 19to22oftheCircular. refer 18, 2017($14.28). bytheNEO.This amountdoesnotconstituteacashreceived Equals thenumberofPSUsgrantedmultipliedbyaverage onthe closingpriceoftheCommonshares Toronto StockExchange (TSX)onthefivedayspriortograntdateofDecember of June1, 2018($12.39). bytheNEO.This amountdoesnotconstituteacashreceived Equals thenumberofPSUsandDSUsgrantedmultipliedbyaverage onthe closingpriceoftheCommonshares Toronto StockExchange (TSX)onthefivedayspriortograntdate EXECUTIVE COMPENSATION SUMMARY COMPENSATION EXECUTIVE SUMMARY OF EXECUTIVE COMPENSATION TABLE COMPENSATION EXECUTIVE OF SUMMARY 2016 2016 2016 2016 2016 2018 2018 2018 2018 2018 2017 2017 2017 2017 2017 YEAR 787,350 745,000 464,386 407,250 427,380 438,480 408,830 520,000 362,200 388,500 520,000 520,000 372,050 896,753 398,832 SALARY ($ ) 1,377,867 SHARE-BASED 522,503 429,264 243,263 252,528 340,589 399,094 745,002 299,123 546,003 455,004 207,903 671,005 167,047 289,877 AWARDS ($) (2) (1) (2) (1) (2) (1) (2) (1) (2) (1)
OPTION-BASED 189,258 147,373 134,462 220,162 186,351 47,116 88,396 58,056 74,626 81,760 53,978 61,439 68,613 73,844 46,064 AWARDS ($ (3)(4) ) INCENTIVE PLAN COMPENSATION 1,301,216 1,139,642 1,135,122 NON-EQUITY 338,638 318,409 330,333 323,903 298,794 288,794 178,845 201,102 226,552 744,691 293,291 ANNUAL ($ — (5) ) 157,076 174,418 144,903 54,170 25,370 59,209 53,714 51,924 57,724 52,354 26,230 26,010 81,857 47,591 50,851 PENSION VALUE ($ (7) (7) ) (6) COMPENSATION 76,744 73,940 54,610 ALL OTHER — — — — — — — — — — — — ($) (9)
(8) COMPENSATION 1,078,300 1,269,169 1,085,123 1,029,364 1,527,825 3,044,712 3,051,382 1,047,872 2,014,547 1,212,017 1,159,677 3,775,031 1,242,821 987,910 996,858 TOTAL TOTAL ($
) 23 23 CASCADES MANAGEMENT PROXY CIRCULAR 24 24 CASCADES MANAGEMENT PROXY CIRCULAR (3) (2) (1) The following tablesetsforth, foreachNEO, alltheoption-basedgrants 2018. andshare-basedgrants outstandingattheendofFiscal 3.3 3.3.1 Allan Hogg Alain Lemaire Charles Malo Charles Luc Langevin Mario Plourde NAME This represents DSUs held multiplied by the closing price of the Common Shares onthe DSUsheldmultipliedbytheclosingpriceofCommonShares TorontoThis represents StockExchange (TSX)onDecember 31, 2018, namely$10.23. of theCircular. the applicablemultiplier. The amountdisclosedisbased ontheminimumpayoutasifithadvested December 31, 2018. IncentivePlanonpages Refertotheheading Long-term 19to22 ofROCENumber ofPSUswhichtheNEOmaybeentitled toisbasedontheachievement targets attheendoffiscal2019and2020. payoutsdependingon subjecttodifferent ThePSUsare Long-term IncentivePlanonpagesLong-term 19to22oftheCircular. (TSX) onDecember31, 2018, namely$10.23. Any actualgain, ifany, uponexercise, realized willdependonthevalue date. attheoptionexercise oftheCommonShares Refer totheheading onthe The value priceoftheoptionsandclosingCommonShares betweentheexercise inthemoney ofunexercised options isequaltothedifference Toronto StockExchange
OUTSTANDING OPTION-BASED AWARDS AND SHARE-BASED AWARDS AWARDS AND OPTION-BASED OUTSTANDING INCENTIVE PLAN INCENTIVE UNEXERCISED UNDERLYING 166,143 114,005 NUMBER OF 440,175 168,947 174,441 156,081 256,502 SECURITIES 74,608 18,886 (NUMBER) 14,848 14,559 17,133 17,684 13,805 11,815 47,660 29,496 24,950 58,296 53,590 25,879 11,781 81,070 87,220 91,680 61,794 31,863 34,553 34,783 33,635 98,033 39,872 80,062 20,947 33,877 36,647 29,731 68,821 52,171 87,551 OPTIONS – – – – – – – – – – – AWARDS EXERCISE 14.28 14.28 14.28 14.28 14.28 12.39 12.39 12.39 12.39 12.39 OPTION 7.66 7.66 7.66 7.66 7.66 4.46 4.46 4.46 4.46 4.46 6.26 6.26 6.26 6.26 6.26 6.26 6.10 6.10 6.10 6.10 6.10 2.28 2.28 5.18 5.18 5.18 5.18 5.18 6.43 6.43 6.43 6.43 6.43 9.75 9.75 9.75 9.75 9.75 3.92 3.92 3.92 PRICE ($ ) OPTION-BASED AWARDS March 31, 2019 March 31, 2019 March 31, 2019 March 31, 2019 March 31, 2019 OPTION EXPIRATION June 27, 2021 June 27, 2021 June 27, 2021 June 27, 2021 June 27, 2021 June 27, 2021 Dec. 17, 2027 Dec. 17, 2027 Dec. 17, 2027 Dec. 17, 2027 Dec. 17, 2027 May 31, 2026 May 31, 2026 May 31, 2026 May 31, 2026 May 31, 2026 May 31, 2020 May 31, 2020 May 31, 2020 May 31, 2020 May 31, 2020 May 31, 2028 May 31, 2028 May 31, 2028 May 31, 2028 May 31, 2028 May 31, 2025 May 31, 2025 May 31, 2025 May 31, 2025 May 31, 2025 May 31, 2022 May 31, 2022 May 31, 2022 May 31, 2022 May 31, 2022 June 2, 2023 June 2, 2023 June 2, 2023 June 2, 2023 June 2, 2023 June 5, 2024 June 5, 2024 June 5, 2024 June 5, 2024 June 5, 2024 DATE 1,066,056 1,480,017 2,777,504 IN-THE-MONEY UNEXERCISED 171,079 191,743 138,913 175,654 404,876 151,352 158,292 442,133 208,350 304,236 378,638 593,108 336,368 346,263 575,725 958,645 692,531 356,551 11,976 75,805 14,271 25,723 98,340 33,034 30,365 88,801 VALUE OF OPTIONS 8,224 ($ – – – – – – – – – – – – – – – – – – – – – (1) ) SHARE-BASED NUMBER OF NOT VESTED (NUMBER) 79,434 THAT HAVE 14,559 17,684 19,635 23,008 31,863 24,747 20,947 31,477 52,171 AWARDS – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – (2) May 31, 2020 May 31, 2020 May 31, 2020 May 31, 2020 May 31, 2020 May 31, 2019 May 31, 2019 May 31, 2019 May 31, 2019 May 31, 2019 VESTING DATE – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – AWARDSHAVE THAT MARKET ORPAYOUT SHARE-BASED 148,939 NOT VESTED 200,866 214,288 180,907 322,010 325,958 812,610 533,709 253,162 235,372 VALUE OF
($ – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – ) SHARE-BASED AWARDS MARKET ORPAYOUT AWARDS NOT PAID VALUE OF VESTED VALUE OR DISTRIBUTED SHARE-BASED 101,904 129,617 327,095 94,740 80,852 ($ – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – ) (3) Plourde would have beenentitled toreceive aretirementallowance intheamount of$683,200. by hisyears ofservice.Intheevent ofretirementonDecember31, 2018, andassuminghiseligibility, years takingintoaccounthiscurrent ofservice Mario allowance. Basedonhisdateofhire, Mr. Plourde’s theyear retirementallowance willbebetween priortoretirementmultiplied 2%and 2.5%ofhisbasesalary Additionally, someemployees in specific businessunitshiredpriorto1995areentitledreceive upontheirretirementonoraftertheage of57, aretirement The employer’s contributionstotheregisteredretirementpensionplanaresubjectmaximumamountallowed by the has beenamemberofseniormanagement since1997, untilage 60. theCorporationcontributes4.95%ofhisbasesalary percentage dependingonCascades’contributes acertain between 0% and 3%ofthebasesalary profitabilityintheprior year. Inaddition, asMarioPlourde dateeachmonth. are purchasedonthemarket onapredetermined and, conditionsaremet,5% oftheirsalary ifcertain theCorporationwillcontributetoplan25%ofemployee’s and NEOscontribution. The shares contribute, basis, and other employees on a voluntary up to a maximum of 10% of their salary can contribute, basis, on a voluntary up to a maximum of The Corporation offers toitsCanadianemployees, including the NEOs, asharepurchaseplanofitscommonstock. MembersofSeniorManagement can The following rateduringthelastthreefiscal tablesummarizestheburn years. during theperiod. of outstandingsecuritiestheissueratbeginningapplicablefiscal year adjusted by securitiesboughtbackorissuedunderthearrangement rateisthepercentageThe burn calculatedby dividingthenumberofsecuritiesgranted duringtheapplicablefiscal year by the weighted average number Burn Rate (2) (1) at December31, 2018. The tablebelow thenumberofCommonSharesremainingavailable setsforth forfutureissuanceundertheCorporation’s StockOptionPlanas (3) (2) (1) The following tablesetsforth, foreachNEO, thevalue vested forallgrants andthebonuspayout 2018. duringFiscal 3.3.2 contributions ininvestment fundsavailable. the surplus is paid into an individual unregistered supplemental retirement plan. The employees choose to invest their contributions and the employer’s to enablemembersofseniormanagement toaccumulatecapitalforretirement. The Corporationcontributes13.50%oftheemployee’s and basesalary intheRetirement PlanforExecutivesMario Plourdeparticipates ofCascadesInc. This definedcontribution pensionplanwasestablishedon April1, 2010 3.5 3.4 3.3.3 Plan Pension Allan Hogg Alain Lemaire Total Charles Malo Charles Luc Langevin Equity CompensationPlannotapproved by Securityholders Equity CompensationPlanapproved by Securityholders Mario Plourde BURN RATE PLAN CATEGORY NAME outstanding securitiesoftheCorporation. 1.97%ofthetotalnumberissuedand represents available issuanceundertheEquityCompensationPlanapprovedbySecurityholders The numberofsecuritiesremaining forfuture and outstandingsecuritiesoftheCorporation. 4.68%ofthetotalnumberissued represents ofoutstanding optionsundertheEquityCompensationPlanapprovedbySecurityholders The numberofsecuritiestobeissueduponexercise IncentivePlanonpage 19oftheCircular.Refer totheheadingShort-term UnitPlanforExecutivesandKey Share Employees onpages UnitPlanandDeferred respectively Share 20and22oftheCircular.Refer totheheadingsPerformance Exchange (TSX)onDecember31, priceonsuchvestingdate. 2018($10.23)andtheexercise theestimatedvalue onthevestingdate, iftheoptionshadbeenexercised The amountrepresents namely, onthe betweentheclosingpriceofCommonShares thedifference Toronto Stock
RETIREMENT PLAN PURCHASE SHARE INCENTIVE PLAN AWARDS - VALUE VESTED OR EARNED DURING THE YEAR THE DURING EARNED OR VESTED AWARDS -VALUE PLAN INCENTIVE SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS COMPENSATION EQUITY UNDER ISSUANCE FOR AUTHORIZED SECURITIES — Mario Plourde PLANS NUMBER OFSECURITIES TO BEISSUED UPON EXERCISEOFOUTSTANDING VESTED DURING THEYEAR VESTED PIN AWARDS —VALUE OPTION 4,409,358 4,409,358 107,696 286,460 294,949 122,101 26,582 OPTIONS 0.19% 2018 — ($
)
(1)
(1) WEIGHTED-AVERAGE EXERCISEPRICE OF OUTSTANDING OPTIONS VESTED DURING THEYEAR VESTED HR AWARDS —VALUE SHARE 735,095 420,888 237,616 182,301 269,832 0.25% 7.16 2017 ($) — — ($ )
(2) AVAILABLE FORFUTUREISSUANCE UNDER Income Tax Act (Canada) Act Tax Income NUMBER OFSECURITIESREMAINING (EXCLUDING SECURITIESREFLECTED EQUITY COMPENSATION PLAN NON-EQUITY INCENTIVEPLAN COMPENSATION —PAYOUT DURING THEYEAR IN FIRSTCOLUMN 1,856,379 1,856,379 1,139,642 323,903 201,102 293,291 0.38% 2016 and — — ($ ) )
(2) (3)
25 25 CASCADES MANAGEMENT PROXY CIRCULAR 26 26 CASCADES MANAGEMENT PROXY CIRCULAR the A separate Group Retirement Savings Plan wasestablished for Alain Lemaire. The Corporation’s contribution representsthemaximumamountsallowed by Lemaire Alain for Plan Retirement Luc Langevin would have beenentitledtoreceive aretirementallowance intheamountof$33,900. on December31, 2002. Inthe event ofretirementonDecember31, 2018, andassuminghiseligibility, years takingintoaccounthiscurrent ofservice his dateofhire, Mr. Langevin’s theyear retirementallowance priortoretirementmultipliedby willbe1% ofhisbasesalary accumulated hisyears ofservice Additionally, some employees in specific business units are entitled to receive upon their retirement on or after age 57, a retirement allowance. Based on in investment fundsavailable. is paidintoanindividualunregisteredsupplementalretirementplan. The employees chooseto invest theircontributionsandtheemployer’s contributions In August ofamonthlypensionwasputinplaceforMr. 2010, retirementplanintheform anew individualunregisteredunfundedsupplementary Alain at the beginning and at the end of Fiscal 2018. at thebeginningandendofFiscal valueThe following the accrued of the retirement plans for table sets forth Alain Lemaire, Mario Plourde, Allan Hogg, Malo and Luc Langevin Charles 2018. in theamountof$664,845Fiscal and willbereversible at60%tohisspouseintheevent ofdeath. Having reachedtheage of70years oldin2017, Alain Lemairereceived anannualpension Incentive Plan (ProfitSharingPlan)atagea disbursementof50%theShort-term 70. Thispensionwillbeindexedat50%oftheConsumerPriceIndex Lemaire, oneofthefoundersCascades. Hewillreceive anannualpensionequalto70%ofhisaverage calculatedonthebestthreeyears including salary The employer’s contributionstotheregisteredretirementplanaresubjectmaximumamountallowed by the percentage dependingonCascades’addition contributesacertain between profitabilityintheprior 0%and3%ofthebase salary year. to enablemembersofseniormanagement toaccumulatecapitalforretirement. The Corporationcontributes11.25%oftheemployee’s andin basesalary Luc Langevin intheRetirementPlanforExecutives participates ofCascadesInc. This definedcontributionpensionplanwasestablishedon April1, 2010 Langevin -Luc Plan Pension and assuminghiseligibility, Malowould Charles have beenentitledtoreceive aretirementallowance intheamountof$247,900. accumulatedonDecember31,his years ofservice 2018. Intheevent ofretirementonDecember31, 2018, years takingintoaccount hiscurrent ofservice allowance. Basedonhisdateofhire, Mr. Malo’s theyear retirement allowance priortoretirementmultipliedby willbe1.75%and2.5%ofhisbasesalary Additionally, someemployees inspecificbusinessunitshiredpriorto 1995areentitledtoreceive upontheirretirementonoraftertheage of57, aretirement The employer’s contributionstotheregisteredretirementplanaresubjectmaximumamountallowed by the percentage dependingonCascades’addition contributesacertain between profitabilityintheprior 0%and3%ofthebasesalary year. to enablemembersofseniormanagement toaccumulatecapitalforretirement. The Corporationcontributes11.25%oftheemployee’s andin base salary intheRetirementPlanforExecutives Maloparticipates ofCascadesInc.Charles This definedcontributionpensionplanwasestablishedon April1, 2010 Malo -Charles Plan Pension eligibility, Allan Hoggwould have beenentitledtoreceive aretirementallowance intheamountof$255,000. multiplied by hisyears ofservice.Intheevent ofretirementonDecember31, 2018, andassuming his years takingintoaccounthiscurrent ofservice allowance. Based on his date of hire, Mr. Hogg’s retirement allowance the year will be between prior to retirement 1.75% and 2.5% of his base salary Additionally, someemployees inspecificbusinessunitshiredpriorto1995areentitledreceive upontheirretirementonorafterage 57, aretirement contributions ininvestment fundsavailable. the surplus is paid into an individual unregistered supplemental retirement plan. The employees choose to invest their contributions and the employer’s in investment fundsavailable. is paidintoanindividualunregisteredsupplementalretirementplan. The employees choosetoinvest theircontributionsandtheemployer’s contributions The employer’s contributionstotheregisteredretirementpensionplanaresubjectmaximumamountallowed by the percentage dependingonCascades’contributes acertain between 0%and3%ofthebasesalary profitabilityintheprior year. to enablemembersofseniormanagement toaccumulatecapitalforretirement. The Corporationcontributes11.25%oftheemployee’s and basesalary intheRetirementPlanforExecutivesAllan Hoggparticipates ofCascadesInc. This definedcontributionpensionplanwasestablishedon April1, 2010 Defined Benefit Plan Table Plan Pension Alain Lemaire Allan Hogg Charles Malo Charles Luc Langevin Mario Plourde NAME Income Tax Act (Canada) Act Tax Income — Allan Hogg , namely, $26,230in2018. Hechoosestoinvest hiscontributionandtheemployer’s withthebrokerage ofhischoice. firm ACCUMULATED VALUE AT START OF YEAR 1,727,600 1,692,100 704,000 789,500 824,700 ($ )
COMPENSATORY 174,400 26,230 52,400 59,200 53,700 Income Tax Act (Canada) (Canada) Act Tax Income Income Tax Act (Canada) Act Tax Income ($ ) Income Tax Act (Canada) Act Tax Income ACCUMULATED VALUE andthesurplus and thesurplus 1,627,700 1,796,200 AT YEAR END AT YEAR 840,900 852,400 851,000 and ($ )
Total cumulative return over five years return Total cumulative During thesamefive (5) year period, totalcompensationreceived by theNEOsincreasedglobally atacompoundannual growth rate of2.8%. would have amounted to $121.99forthereferenceindex for thesameperiod. $100 investment insharesoftheCorporationmade onDecember31, 2013would have amountedto$161.34 asatDecember31, 2018. The sameamount ofCascades’The compoundannualreturn stockover thepast5years amounted to 10.0%compared4.1%fortheS&P/TSXCompositeindex. Hencea largely driven by strongresultsfromtheContainerboardPackaging segmentthatreflectedlower raw material costs, higher sellingpricesandstrongdemand. softer resultsfromour papersdivision,Tissue Cascadesgenerated over acompoundannualreturn 5years thereferenceindex. thatoutperformed This was with highersellingpricesandstrong demand aswell businessprocesses. asthepotentialbenefitslinked totheoptimization of ourinternal In2018, despite papersdivision,Tissue Cascades’ thereferenceindexduetopositive slightlyoutperformed perspectives sharetotalreturn inthecontainerboardindustry resulting inCascades’ thereferenceindex. stocktounderperform In2017, increase inraw despiteanimportant materialpricesandmixedresultsfromour productivity. In 2016, lower containerboard prices and higher raw materialcosts and corporate costs negatively impacted the financial results ofthe Corporation, and theCorporation’s positive outlook asaresultofweak Canadiandollar, lower raw materialcosts, robustdemandforitsmainproductsandimproved ofapproximately 84%,return thereby overperforming thereferenceindex. This significantincreasewasmainlydriven by theimprovement ofitsfinancialresults sale ofassetsandtheclosuretwo mills. Forthese reasons, amountedtoapproximately 5%. thetotalreturn In2015, Cascades’ sharepricepostedatotal In 2014, Cascades’ was impacted by share total return the volatility ofthe financial markets and the ongoing implementation of our strategic plan namely the over 5 years Return Annual Compound (1) of alldividends. dividendsof$0.04duringtheperiodinquestion. Cascadespaidquarterly commencing December31, 2013, with acumulativeontheS&P/TSXCompositeIndexforsameperiodassumingreinvestment totalshareholder return The following graph comparesthecumulativeon$100investment shareholderreturn insharesoftheCorporationforfive mostrecentfinancial years to eachNEO, hademployment attheendofmostrecentlycompletedfinancial beenterminated year. The following tableprovides thetotalvalue ofallseverance, incrementalpayments, payables andany benefitsthat othertermination would have beenpaid a non-competeclauseforperiodof24monthsfollowing oftheiremployment, thedateoftermination aswell asaconfidentialityclause. above. respecttoretirementallowances,With refertotheheading3.5RetirementPlansonpage 25oftheCircular. The employment contractsalsoinclude theiremploymentterminate contractby providing writtennoticetothateffectinwhich case, they would beentitledtoreceive severance pay asdescribed management oftheCorporationorifNEOshave reasontobelieve thatachange incontrolwould placetheiremployment atrisk, they have therightto and conditionsasprovided inthe employment contractandwithoutany modificationstotheirresponsibilities, compensation, roleorfunctionwithinsenior notice fromthenew employer withinfifteendays ofan event ofchange ofcontroltotheeffectthattheiremployment iscontinuedunderthesameterms of employment. Healthanddentalinsurancecoverage willbecontinuedfor24months. Intheevent ofachange ofcontrol, iftheNEOsdonotreceive a ofemployment;termination theseamountsarepayable in24monthlyinstallmentsbeginningonthefirstday ofthemonthfollowing thedateoftermination to 24monthsoftheprofitsharingplancalculatedonbasis average monthlyamountpaidtothemduringthe24monthsprecedingdateof allowance asthecasemay be, aswell followingofemployment asanamountequal thetermination ofanamountequalto24monthstheirbasesalary contracts) which includes retirement onoraftertheage of57, orafter35years ofservice,they would beentitledtoreceive severance pay oraretirement death) orintheevent ofachange ofcontrol(asdefinedinthecontracts)orshouldtheytheiremployment terminate for “GoodReason” (asdefinedinthe contract. The employment theiremployment totheirdisabilityor contractsstipulatethatshouldtheCorporationterminate (otherthanforcauseorfurther payments or specific benefits in the event of a change of employment. of control or termination Alain Lemaire has not entered into an employment Mario Plourde, Allan Hogg, Malo and Luc Langevin Charles have each enteredinto employment contracts which have providing anindefinite for term 3.7 3.6 Investment of $100 made on December 31, 2013 December on made $100 of Investment 5 1 15 2 25 Allan Hogg Charles Malo Charles Luc Langevin Mario Plourde NAME Compound annual return over5 years Compound annualreturn
TERMINATION AND CHANGE OF CONTROL BENEFITS OF AND CHANGE CONTROL TERMINATION PERFORMANCE 2 13 2 14 GRAPH 2 15 2 16 2 1 1,820,000 942,000 868,000 884,000 SALARY ($ ) 2 18 10.0% 4.1% (1) (1) INCENTIVE PLAN 2,274,764 SHORT-TERM 379,947 625,297 552,111 ($ ) RETIREMENT ALLOWANCE 247,900 255,000 683,200 33,900 ($ ) 4,777,964 1,355,847 1,764,297 1,668,011 TOTAL ($)
27 27 CASCADES MANAGEMENT PROXY CIRCULAR 28 28 CASCADES MANAGEMENT PROXY CIRCULAR to the rights normally conferred on shareholders oftheCorporation. conferred to therightsnormally on the Common Shares of the Corporation. Under no circumstances shall DSUs be considered shares of the Corporation nor shall they entitle their holder day forwhich atleastone(1)CommonSharewassotraded. DSUholdersarecreditedannually additional DSUsinanamountequaltothedividendspaid that day, orifatleastone(1)CommonShareshallnothave beentraded onthe Toronto StockExchange (TSX)onthatday, ontheimmediately preceding (1) CommonShareonsuchday which shallbecalculatedonthebasisofclosing priceforaCommonShareonthe Toronto StockExchange (TSX)on Corporate Governance andNominatingCommittee. ForthepurposesofDSUPlan, “Market Value” on any day particular meansthemarket value of one 15 of the following year,and credited to their account on January by unless otherwise determined the Human Resources Committee together with the the market value ofone(1)CommonShareontheapplicableexpirationdate beingthelastbusinessday ofDecembertheCorporation’s fiscal year, be aDirectoroftheCorporation. The numberofDSUscreditedtohis account iscalculatedby dividingthe amountoftheannualcashcompensationby intheDSUPlan.is eligibletoparticipate EacheligibleDirectorhasanaccountinhisnametowhich theDSUsarecreditedandhelduntilheceasesto oftheDSU Planareasfollows: eachDirectorwhoThe principalterms isnotafulltimesalariedofficeroremployee oftheCorporationorany ofitssubsidiaries preceding thepayment date), less applicablewithholdingtaxes. price oftheCommonShares(theaverage closingpriceof theCommonSharestradedon Toronto StockExchange (TSX)duringthefive (5)tradingdays date oftheDSUs. Hewillreceive alumpsumpayment incashequaltothenumberofDSUsrecordedparticipant’s accountmultipliedby theclosing which theparticipant’soccurred, termination hewillbedeemedtohave electedthefifthbusinessday following December1ofthat year asthepayment beforeDecember1ofthecalendar year followingit beingunderstoodthatifaDirectordoesnotsendsuchnoticetothe CorporateSecretary theyear in oftheirchoicepaymentThe Directorsmustadvise dateordatesoftheDSUsatleast five theCorporateSecretary (5)businessdays priortothisdate, be aDirectorbutsuchdatescannotlaterthanDecember31ofthe calendaryear following theyear inwhich theparticipant’soccurred. termination ceases tobeaDirectorforany reasonwhatsoever, hemay selectoneortwo payment datesfortheDSUssubsequenttodateonwhich heceasedto when intheDSUPlanceasestobeaDirectorforany aparticipant reasonwhatsoever. Effective November 6, 2018, when intheDSUPlan aparticipant In 2018, theCorporateGovernance andNominatingCommitteeapproved anamendmenttotheDSUPlanrelative tothetimingofpayment ofDSUs successoftheCorporation.in thelong-term DirectorsmayThe external choosetoreceive between 50%and100%oftheirannualcompensationinDSUs. oftheircompensationareintendedtopromote identificationwithshareholderinterestsandtoallow Directorsaspart themtoparticipate the external oftheiroverall DirectorsinrecognitionoftheircontributiontotheCorporationandasanintegral part to theexternal compensation. The DSUsprovided to In 2005, shareunitplan(the theBoardofDirectorsadoptedadeferred “DSU Plan”)which shareunits(“DSUs”) wasestablishedinordertoprovide deferred 3.8.3 “minimum holdingthreshold”). whose value (basedonthemarket value oftheCommonShareson TSX atDecember31)representsleastthreetimesthe Annual Boardfees(the (ii) oneyear fromthedateofadoptionminimumshareownership guideline, whichever comeslast, acquiresharesorDSUsoftheCorporation Corporation who isnotamemberofmanagement must, withinaperiodof(i)threeyears fromthe dateonwhich hejoinstheBoardofCorporationor its Directorstomaintainaminimumvalue incommon sharesorDSUsoftheCorporationacombinationboth. As ofthatdate, eachDirectorofthe In ordertoaligntheirinterestswiththoseoftheshareholders, theBoardadoptedaminimum shareownership guidelineonDecember 14, 2017, requiring 3.8.2 The totalcashcompensationpaidtoDirectorsduringthefinancial year endedDecember31, 2018was$496,762. Compensation Table onpage 29oftheCircular. choose to receive between 0% and 100% of their committee membership fees in DSUs, the remainder to be paid in cash. See Table 3.8.4 Summary may choosetoreceive between shareunits, 50%and100%oftheirannualboardfeesindeferred theremaindertobepaidincash. The Directorscan Directors who arenotemployees areentitledtoreceive travel toattendBoardandCommitteemeetings. expensesandotherincurred Directors to receive, withtheexceptionofDirectorswho were alsoemployees oftheCorporationwho donotreceive asDirectors. any compensationforserving of theBoard. Cashcompensationispaid quarterly. The following tablepresentsthecomponentsofcompensationmembersBoardareentitled 2018,In Fiscal only Directors who were not employees of the Corporation received compensation for acting as members of the Board and of any Committee 3.8 3.8.1 HealthandSafety, Environment andSustainableDevelopment HumanResources CorporateGovernance andNominating Audit andFinance HealthandSafety, Environment andSustainableDevelopment HumanResources CorporateGovernance andNominating Audit and Finance Annual Committeefees(Members) Annual Committeefees(Chair) Annual LeadDirectorfees Annual Boardfees COMPONENTS
RETAINER COMPENSATION OF COMPENSATION DEFERRED SHARE UNIT PLAN UNIT SHARE DEFERRED ONGUIDELINE SHARE OWNERSHIP FOR DIRECTORS DIRECTORS AMOUNT ($) 18,500 18,500 18,500 21,000 25,000 25,000 25,000 28,000 31,000 80,000 (2) (1) 2018. during Fiscal The following for each Director the value table sets forth on vesting of all options-based and share-based awards and the non-equity incentive plan (4) (3) (2) (1) financial year endedDecember31, 2018. thetotalcashcompensationpaidaswellThe following tablesetsforth asthevalue ofDSUsawarded totheDirectorsunderDSUPlanduring 3.8.4 3.8.5 Alain Lemaire Alain Lemaire Georges Kobrynsky Georges Kobrynsky Sylvie Lemaire Sylvie Vachon Sylvie Vachon Sylvie Lemaire David McAusland Patrick Lemaire Laurence Sellyn Élise Pelletier David McAusland Patrick Lemaire Louis Garneau Laurence Sellyn Élise Pelletier Louis Garneau Martin Couture Martin Martin Couture Martin Michelle Cormier Michelle Cormier Mario Plourde Mario Plourde NAME NAME The value unitswhichvestedduringthefinancialyearendedDecember31, the oftheshare represents value atthegrantdates. 2018 ForMessrs. andMarioPlourde,Alain Lemaire see Table 3.3.2IncentivePlan Awards- value duringtheyearonpage vestedorearned 25oftheCircular. Compensation paidtoMessrs. in ispresented andMarioPlourde TableAlain Lemaire ofExecutiveCompensation 3.2.1Summary Table onpage 23oftheCircular. of 2018. The 1stpercentage indicatedappliesforQ1, andthe2ndappliesforQ2toQ4. feesinDSUs, oftheircommitteemembership withthepercentages inaccordance indicated, part chosetoreceive andmodified theirpercentage Quarter afterthefirst These Directors feesincash. thecommitteemembership chosetoreceive These Directors feesinDSUs, oftheircommitteemembership withthepercentage inaccordance indicated. part chosetoreceive These Directors SUMMARY COMPENSATION TABLE COMPENSATION SUMMARY INCENTIVE PLAN AWARDS - VALUE VESTED OR EARNED DURING THE YEAR THE DURING EARNED OR VESTED AWARDS -VALUE PLAN INCENTIVE (2) (1) (4) (3) (1) (4) (2) (2) (1) (2) (2) (2) (3) FEES PAID INCASH 77,000 40,000 46,000 43,500 41,825 58,500 39,500 83,500 66,937 ($) – – – 119,500 77,675 40,000 40,000 40,000 40,000 80,000 80,000 80,000 FEES PAID 90,563 IN DSUs DEFERRED SHAREUNITS(DSUs) ($) – – FEES PAID INDSUs PERCENTAGE OF ANNUAL BOARD OPTIONS-BASED AWARDS VALUE VESTED DURING THEYEAR VESTED 50/60 50/70 100 100 100 100 50 50 50 50 (%) – – INCENTIVE PLAN COMPENSATION ($) – – – – – – – – – – – – NON-EQUITY
(2)
($) – – – – – – – – – – – – SHARE-BASED AWARDS VALUE VESTED DURING THEYEAR VESTED PENSION VALUE 121,254 ($) 48,319 40,655 48,795 95,696 90,988 – – – – – – – – – – – – 43,187 80,084 84,482 81,177 ($) – – (2)
COMPENSATION ALL OTHER ($) – – – – – – – – – – – – NON-EQUITY INCENTIVEPLAN COMPENSATION DURING THEYEAR 123,500 119,500 119,500 126,000 123,500 117,000 157,500 119,500 80,000 98,500 —PAYOUT TOTAL ($) ($) – – – – – – – – – – – – –
29 29 CASCADES MANAGEMENT PROXY CIRCULAR 30 30 CASCADES MANAGEMENT PROXY CIRCULAR (2) (1) The following tablesetsforth, foreachDirector, thevalue ofvested share-basedawards notpaidordistributedasatDecember31, 2018. 3.8.6 Alain Lemaire Georges Kobrynsky Sylvie Vachon Sylvie Lemaire Laurence Sellyn Élise Pelletier David McAusland Louis Garneau Patrick Lemaire Martin Couture Martin Michelle Cormier Mario Plourde NAME Calculated on the closing price of the Common Shares onthe Calculated ontheclosingpriceofCommonShares Toronto StockExchange (TSX)onDecember31, 2018($10.23). For Messrs. andMario Plourde,Alain Lemaire see Table 3.3.1OutstandingOption-Basedawards andShare-Based Awards onpage 24oftheCircular. INCENTIVE PLAN AWARDS - OUTSTANDING SHARE-BASED AWARDS SHARE-BASED AWARDS -OUTSTANDING PLAN INCENTIVE NUMBER OF SHARE-BASED AWARDSOF THATNUMBER HAVE NOTHAVE VESTED (# – – – – – – – – – – – – ) BASED AWARDSNOTHAVE THAT VESTED MARKET ORPAYOUT VALUE OFSHARE- ($ – – – – – – – – – – – – )
MARKET ORPAYOUT VALUE OF VESTED SHARE-BASED AWARDS NOT PAID OR DISTRIBUTED 776,498 144,304 408,208 239,566 221,776 600,992 357,262 570,282 214,717 76,408 ($) – – ) (1) (2) actively supervising oneormorepersonsengaged controlsandproceduresforfinancialreporting. actively insuchactivitiesand(d)anunderstandingofinternal supervising accounting issuesthataregenerally comparabletothosethatcanreasonablybeexpectedraisedby theCorporation’s financialstatementsorexperience such accounting principles, (c) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of understanding oftheaccountingprinciplesusedby theCorporationtoprepareitsfinancialstatements, (b)theabilityto assessthe general applicationof financially literate. Thefollowing describestherelevant educationandexperienceofeachmembertheCommitteethatprovides himorherwith(a)an the membersofCommitteeareindependentasdefinedinsection1.4CanadianSecurities 52-110andare AdministratorsNationalInstrument Couture,Martin Ms. Sylvie Vachon andMs. MichelleCormier. ofthe The Charter CommitteeissetoutinScheduleCtotheCircular.Audit andFinance All The Committee(the Audit andFinance “Committee”) iscomposedoffive independentDirectors, namelyMessrs. (Chair), Georges Kobrynsky LaurenceSellyn, Members its of Experience and Education Committee, Finance and Audit the of Composition 4.4 its corporategovernance practices. issetoutinScheduleBtotheCircular.This information disclosure ofcorporategovernance practicesof the CanadianSecurities Administrators, relatingto theCorporationisrequiredtodiscloseinformation of theCorporation’s corporategovernance practices. UnderNationalPolicy 58-201, corporategovernance 58-101, guidelinesandNationalInstrument definesitsfunctionsandmandate.Charter TheCorporateGovernance andNominatingCommitteeisresponsibleforthedevelopment, update, anddisclosure The BoardoftheCorporationconsidersgood corporategovernance totheeffective tobeimportant operationsoftheCorporation. The Corporation’s Board 4.3 Corporation oritssubsidiariesanddivisions. As at December 31, 2018, there were no outstanding loans to any senior officer, Director or any nominee as Director of the Corporation made by the 4.2 or inany proposedtransactionthathasmateriallyaffectedorwillaffect theCorporation, any ofitssubsidiaries oraffiliatedcompanies. the Corporation orany associate oraffiliate of any such person inany transaction since the beginning ofthe last completed financial year of the Corporation Management isnotaware ofany materialinterestofany DirectororofficeroftheCorporation, any proposedmanagement nomineeforelectionasDirectorof OTHER INFORMATION section 4 section 4 4.1 Georges Kobrynsky Sylvie Vachon Laurence Sellyn Michelle Cormier Martin Couture Martin NAME OFCOMMITTEE MEMBER INFORMATION ON THE AUDIT AND FINANCE COMMITTEE AND FINANCE ON AUDIT INFORMATION THE GOVERNANCE CORPORATE OFFICERS AND EXECUTIVE OF DIRECTORS INDEBTNESS INTEREST OF INSIDERS AND OTHER PERSONS IN MATERIAL TRANSACTIONS IN MATERIAL PERSONS OF INSIDERS AND OTHER INTEREST As PresidentandChiefExecutive OfficeroftheMontreal Port Authority, Ms. Vachon isbothfinanciallyandoperationallyliterate Société générale de financement du Québec du financement de générale Société Since 2014, Ms. Cormier, CPA, CA, hasbeenactingasanOperatingPartner for Wynnchurch Capital(Canada)Inc. A senior-level and understandsthebreadthcomplexityofaccountingissuesthatcanreasonably beexpectedtoraisedinthecourse and understandsthebreadthcomplexityofaccountingissuesthatcanreasonably beexpectedtoraisedinthecourse accounting issuesthatcanreasonablybeexpectedtoraisedinthecourseofreviewing theCorporation’s financial statements. at DomtarInc. Mr. isbothfinanciallyandoperationallyliterateunderstandsthebreadth andcomplexityof Kobrynsky Inc., Uni-SelectInc., andChampionIronOreLtd. Resources forthefederalagency, where shewasresponsible forfinancialservices, immovables, procurement, information Mr. and ChiefFinancial Sellynistheformer Administrative OfficerandExecutiveVice-President ofGildan Activewear Inc. He Mr. isamemberoftheBoardDirectorsSupremexInc. Kobrynsky Mr. is a Director of companies and held the position of Senior Kobrynsky Vice-President, Investments, Forest Products of the Mr. CoutureisChiefExecutive OfficerofSanimaxInc. Combiningstrongleadershipskillswithextensive operationalexperience of reviewing theCorporation’s financialstatements. From1997to2009, shewasVice-President, Administration andHuman of reviewing theCorporation’s financial statements. he understandsthebreadthandcomplexity ofaccountingissuesthatcanreasonablybeexpectedtoraisedinthecourse of financial and public markets in Canada and the United States. Ms. sits on the Board of Directors of Dorel Industries Cormier executive with experience in financial management, strategic consulting and corporate financing, she has in-depth knowledge of reviewing theCorporation’s financialstatements. companies inavariety ofindustries. Mr. SellynisaU.K. accountant andisbothfinanciallyoperationallyliterate chartered served as Chief Financial Officerandothersenior level as ChiefFinancial corporateofficerpositions withlongestablishedCanadianpublic served technology, continuousimprovement andhumanresources. SheisamemberoftheBoardDirectorsHardware RichelieuLtd. RELEVANT EXPERIENCE AND EDUCATIONRELEVANT from2005to2010. Healsoheld formorethan30years, various seniorpositions
31 31 CASCADES MANAGEMENT PROXY CIRCULAR 32 32 CASCADES MANAGEMENT PROXY CIRCULAR The BoardofDirectorstheCorporationhasapproved thecontentsofthisManagement ProxyCircularandthesendingthereoftoShareholders. 4.8 or by [email protected] Kingsey Falls (Québec)J0A 1B0 Blvd.404 Marie-Victorin P.0. Box 30 Corporate Secretariat Cascades Inc. the following address: Form, andManagement ProxyCircularmay beobtainedby shareholders, withoutcharge, oftheCorporationat uponrequesttotheCorporateSecretary Corporation’s mostrecentconsolidatedfinancialstatements, interimfinancialstatements, management’s discussionandanalysis, AnnualInformation analysis forthefiscal year endedDecember31, 2018. relatingtotheCorporationis Additionalinformation available atwww.sedar.com. Acopy ofthe the Corporation is provided concerning in the Corporation’s information Financial comparative financial statements and management’s discussion and 4.7 Corporation by December16, 2019, atthelatest. Proposals forany mattersthatpersonsentitledtovote atthenextannualshareholders’ meetingwishtoraiseatsaidmustbereceived by the 4.6 judgment ofsuchmatters. comebeforetheMeeting, ofproxywillvotematters properly itisintendedthatthepersonsnamedin enclosedform thesameinaccordancewiththeir The Management andtheBoardarenotaware ofany intheNoticeofMeeting. matterstocomebeforetheMeetingotherthanassetforth Ifany other AND CORPORATE SECRETARY 4.5 CHIEF LEGALOFFICER Robert F. HallRobert KINGSEY FALLS (QUÉBEC), MARCH15, 2019
SHAREHOLDER PROPOSALS SHAREHOLDER ADDITIONAL INFORMATION ADDITIONAL BUSINESS OTHER DIRECTOR APPROVAL
held thepositionforseveral years. and toimprove thegovernance oftheCorporation. This change willallow shareholderstoassesstherealobjectivityof directors, when directorshave particularly relationship withtheCorporation, seniormanagement andcontrollingshareholdersinordertoallow shareholderstoexercisetheirrightvoteway inaninformed We believe aboutthevarious thereisaneedtoincreasedisclosureofinformation directorsoftheCorporationtobetterunderstandnatureeachdirector’s of theCorporation. are setoutbelow (translatedfromFrench toEnglish). 13, MÉDAC 2014holding235CommonShares hasbeenashareholder oftheCorporationsinceFebruary For thereasonshereinabovementioned, theBoardandmanagement recommendthatshareholdersvote AGAINST MÉDAC’s proposal. exercise oftheirindependentjudgment, theBoardandCommitteedonotview theprovision ofany details asbeingadvisable further ornecessary. thattheindependentDirectors haveOther thanconfirming nomaterialrelationshipwiththeCorporation which couldreasonablybeexpectedtointerferewiththe no materialrelationshipexistswhich couldreasonably beexpectedtointerferewiththeexerciseofaDirector’s independentjudgment. that determination. As fortheDirectorswhich tobeindependent, aredetermined thework doneby theBoardandCommitteeenablesthemtoconcludethat thisanalysiswithgreatThe BoardandtheCommitteeundertake careanddisclosetheidentityofDirectorswho arenotindependentwhile describingthebasisfor questionnaire completedpriortotheirnominationandannuallythereafter. audit committees. atthisdetermination, Inarriving theCommitteeandBoardreview provided theinformation by theDirectors or thenomineesby way ofa respecting disclosureofcorporategovernance practiceswhich referstothedefinitionof “independence” provided insection1.4ofRegulation52-110respecting Governance andNominatingCommittee(the “Committee”) andtheBoardexamineindependenceofeachDirectorwithinmeaningRegulation58-101 It istheresponsibilityofBoardDirectors(the ifaDirectorisindependentwithinthemeaningofsecuritiesregulations.“Board”) todetermine The Corporate TOMÉDAC’S PROPOSAL RESPONSE CORPORATION’S THE (1) their own career. Basedonthisperspective, directorsareabletofulfillthemanagement onlyexternal oversight function their own objectively. performance Inaddition, they may in criticizing thechief executive experiencereluctanceordiscomfort officer, given theinfluence hehas over who ofmanagement directors. arepart andexternal tofulfillthe Itisdifficultfortheformer oversight functionsincethisisequivalent toaskingthem evaluate derives fromtheoversight roleplayed by theBoard. Inthisregard, directors letusrememberthattheBoardofDirectorsacorporationusuallyincludesinternal “In the view of many, the independence of directors from senior executives is of effective“an essential part governance”. givenThe importance to directors’ independence As iswrittenby ProfessorStéphaneRousseauoftheUniversité deMontréal, agovernance expert: independent andthebasisforthisdetermination. To thisend, Regulation52-110respectingAudit Committeesclarifiesthedefinitionofindependence. As perRegulation58-101respectingDisclosureofCorporateGovernance Practices, issuersarerequiredtodisclosethenamesofdirectorswho reporting arenot PROPOSAL ITS OF SUPPORT IN MÉDAC’S ARGUMENT in theManagement ProxyCircular, aspersecuritiesregulations. thataDirectorisindependentornon-independentbedisclosed thatledtheBoardofDirectorstodetermine It isproposedthatalltheinformation WORDING MÉDAC’S The BoardofDirectorsresponse, includingitsvotingrecommendation, followseachproposal. The The Corporationisrequiredby applicable law toattachthefollowing proposals, statements, andtherelatedsupporting totheManagement ProxyCircular. SHAREHOLDER PROPOSALs schedule A schedule A PROPOSAL A-1: INDEPENDENCEPROPOSAL OF DIRECTORS
https://www.erudit.org/en/journals/cd1/2004-v45-n3-cd3839/043804ar.pdf Volume 45, Numéro3, 2004. ROUSSEAU,règle dujugement surla Stéphane, d’affaires, :réflexions dedroit, LesCahiers Lerôledestribunauxetduconseild’administrationdanslagouvernance dessociétésouvertes Mouvement d’éducation et de défense des actionnaires des défense de et d’éducation Mouvement
(“MÉDAC”), 82Sherbrooke Street West, Montréal, QuébecH2X1X3, submittedthreeproposalswhich 1 .”
33 33 CASCADES MANAGEMENT PROXY CIRCULAR 34 34 CASCADES MANAGEMENT PROXY CIRCULAR For thereasonshereinabovementioned, theBoardandmanagement recommendthatshareholdersvote AGAINST MÉDAC’s proposal. compensationisnecessary.performance-based itattachestointegratingimportance environmental, socialandgovernance metricsintheevaluation processofseniormanagement’s and performance website which offersanoverviewoftheprogression foreachpriorityundertheSDP, assessingthe theBoarddoesnotthinkthat preparationofareport Based onthepreviously describedplans, practicesandpoliciesadoptedby theCorporationandinteractive available report ontheCorporation’s objectives) would helppromotetheCorporation’s objectivesshareholdervalue. andcreatelong-term Human ResourcesCommitteewillcontinuetoevaluate whether measures(which theincorporationofnew performance may includemorespecificESG The HealthandSafety, Environment andSustainableDevelopment reviews Committeeregularly thekey indicatorswithrespecttotheSDP. performance The fundamentals behindthecompensationpolicy. including seniormanagement. This objective settingprocessisanintegraloftheCorporation’s part compensationpolicyandESGobjectives areoneofthe issues. Inaddition, governance oneofthesixstrategicaxesforwhich andsocialresponsibilityforms specificobjectives areestablishedforallemployees, The various plans, todemonstratethecommitmentofBoardandseniormanagement practicesandpoliciesadoptedby toESG theCorporationserve sustainable procurementpractice, acodeofEthicsandBusinessConductcommitmentonhuman rights. pillars, we have establishedten(10)ESGpriorities. InadditiontotheSDP, theCorporationhasadoptedacommitmentonsustainabledevelopment, a on theCorporation’s website. The SDPisbasedonthreepillarswhich seektoachieve more:fortheplanet, forprosperityandourpartners. these Within established in2010. The SDPisperiodicallyevaluated, anditslatestinstallmentwasadoptedfortheperiodbetween 2016and2020canbefound of the Corporation’sAlthough ESG criteria has been at the heart practices since its creation, the firstofficialSustainable Development Plan (“SDP”) was taken social, environmental andeconomicmeasurestofulfillitscommitmentcaringfornaturalhumanresources. ofadoptingenvironmental,importance socialandgovernance (“ESG”)bestpracticesandcontinuallyworks toimprove itspractices. The Corporationhas The Corporationwas, infact, ofsustainabledevelopment: outofaform ofwastepaper. born therecovery The Corporationcontinuestorecognizethe TOMÉDAC’S PROPOSAL RESPONSE CORPORATION’S THE guideintheevaluation asanimportant shareholders andotherstakeholders thatESGmetricsserve oftheCEOandmanagement team’s performance. compensationplay andperformance-based performance acriticalroleinattainingthesespecificfinancial objectives. It toreassure wouldbeimportant to develop longlastingvalue forshareholdersandotherstakeholders. Integrating financialobjectives inthe evaluation processofseniormanagement’s ESG dynamics have abetterreputationamongtheirclientele, adaptmoreeasilytochanges, manage risksbetter, aremore innovating andarebetterequipped automation oftasks, thedeployment ofvarious employee healthandwellness programs, etc. Inthisregard, itshouldbenotedthatbusinessesengage in paper, andwaterconsumptionreductioninitiatives, energy theadoptionofmeasurestoensuresustainableemployability ofpersonnelwithrespecttothe as follows: therateofrepresentation ofwomen inmanagement, theintegration ofpeoplefromdifferentsocial-culturalbackgrounds, theintroductionof Nations GlobalCompactrecognized how toESGmetricscanhelpcreateandprotectvalue resorting forshareholders. These objectives couldbedescribed andforemost,First notingthattheguidelinespublishedin2012by itisworth theUnitedNationsPrinciplesforResponsibleInvestment (PRI)andtheUnited PROPOSAL ITS OF SUPPORT IN MÉDAC’S ARGUMENT compensation. to integrating environmental, socialandgovernance metricsintheevaluation processofseniormanagement’s andperformance-based performance activities,It isproposedthatthecompensationcommitteeprepareareport, oftherecorditsyearly itattaches aspart assessingtheimportance WORDING MÉDAC’S COMPENSATION IN SENIOR MANAGEMENT METRICS (ESG) AND GOVERNANCE A-2: SOCIAL OF ENVIRONMENTAL, INCORPORATION PROPOSAL For thereasonshereinabovementioned, theBoardandmanagement recommendthatshareholdersvote AGAINST MÉDAC’s proposal. looking intotheappropriatenessofimplementingapracticeonrepresentation ofwomen. responsibilities or employment situation, increasing the visibility of role models and offeringprofessionaldevelopment. The committee is also charged with to executive level positions including, creatingcommunitiesforwomen toencourage networking, towomen offeringsupport uponany change intheir positions. ofseniormanagement, thesupport With thecommitteehasidentifiedmeasuresandinitiatives tofacilitateaccess tobeundertaken by women this in mind, senior management of the Corporation put in place a committee with a mandatetoincreasethe representation ofwomen in key leadership perspectives andleadershipstylesthatwomenCompanies needaccesstothebiggest bring. possibletalentpoolandthedifferentcomplementary With and experience. However, we continuetorecognizethatthereisabusinessimperative forincreasingthenumberofwomen inseniormanagement roles. In considering fulfillment of executive roles, the Corporation is sensitive to the value of having representation of both genders, with afocus on competencies ensuring thatwomen arewell representedontheBoardasisevidenced by thenomineesproposedfor electionasDirectorsoftheCorporation. proper representationofwomen onitsBoard. Although theBoardofDirectorshasnotadoptedsuchawrittenpolicy, theBoardremainsfullycommittedto target regarding representationofwomen attheBoardlevel. toensuringthe The Corporationdoesnotview theadoptionofawrittenpolicyasnecessary women representing33%oftheseatsonBoard. The Board ofDirectorsmaintainsitspreviously statedpositionnottoadoptawrittenpolicyorfix and personalattributes, includingtherepresentationofwomen andmenontheBoardofDirectors. nomineesare Itistobenotedthat4ofthe12current It alsoconsiderstheavailability ofthecandidates. The BoardofDirectorsaimstofosterdiversity, ofcompetence, interms experience, particularly skills the BoardofDirectorswhich thenchoosesanomineewhile takingintoaccount, amongotherthings, directors. thelistofskillsandexperiencecurrents and recommendsthenomineeswho bestmeettherequiredprofile. TheCorporateGovernance andNominatingCommitteemakes itsrecommendationsto The CorporateGovernance andNominating Committeereviews theskills, experienceandattributesofeachthenomineesforpositiondirector TOMÉDAC’S PROPOSAL RESPONSE CORPORATION’S THE resources development. The adoptionofspecificobjectives of orientation, interms gender balanceaimstoensurealong-term guidingtherecruitment, promotionandhuman the Corporationdoesnotseerelevance ofadoptingthistypepolicygiven practices. itscurrent according toskills, training, experienceandknowledge. While recognizingthepositive contributionofacriticalnumberwomen withintheorganization, their seniormanagement teams. Untilnow, theCorporationhasnotadoptedsuchapolicyorobjective, statingthatitconsidersitscandidatesonmeritand In December2014, Canadiansecuritiesregulatorsinvited corporationstoadoptapolicyincreasetherepresentationofwomen withintheirBoardsand PROPOSAL ITS OF SUPPORT IN MÉDAC’S ARGUMENT It is proposed that the Board of Directors adopt a written policy on the representation of women on its board of directors and senior management. WORDING MÉDAC’S ON DIVERSITY POLICY A-3: PROPOSAL 35 35 CASCADES MANAGEMENT PROXY CIRCULAR 36 36 CASCADES MANAGEMENT PROXY CIRCULAR g) f) e) d) c) b) a) 1. STATEMENT OFCORPORATE GOVERNANCEPRACTICES schedule B schedule B is setoutundertheheading2.2.6Directors Attendance RecordtoBoardandCommitteeMeetingsonpage 13oftheCircular. 2018.The Boardheldten(10)meetingsduringFiscal 2018 A recordofattendanceby DirectorsatBoardandCommitteemeetingsheldduringFiscal Disclose theattendancerecordofeach Director forallBoardmeetingsheldsincethebeginning oftheissuer’s mostrecently completedfinancialyear. are setoutinScheduleHtotheCircular. Directors andassumesotherresponsibilities, which theIndependent Directorsasawhole mightdesignatefromtimetotime. Hisroleandresponsibilities The Executive Chair of the Board is not independent. Mr. acts asLead Director. Georges Kobrynsky He oversees the responsibilitiesof the Independent that isindependentnoraleadDirectorindependent, describewhattheBoarddoestoprovideleadershipfor itsindependentDirectors. disclose theidentityofindependentChairorleadDirector, anddescribehisorherroleresponsibilities. IftheBoardhasneitheraChair Disclose whether or not the Chair of the Board is anindependent Director. If the Board has aChair or lead Director who is an independent Director, of theindependentDirectorsasthey value theirperspective andindependentmindset. of the Independent Directors once a year. Ms. Sylvie Lemaire and Mr. Patrick Lemaire are invited in in camera sessions and meetings to participate The independentDirectorsmeetwithoutthepresenceofmanagement, following eachscheduledBoardmeeting, andmeettogether foraspecialmeeting to facilitateopenandcandiddiscussionamongitsindependentDirectors. of the issuer’s most recently completed financial year. If the independent Directors do not hold such meetings, describe what the Board does management arenotinattendance. IftheindependentDirectorsholdsuchmeetings, disclosethenumberofmeetingsheldsincebeginning Disclose whetherornottheindependentDirectorsholdregularly scheduledmeetingsatwhichnon-IndependentDirectorsandmembersof ontheDirectorswhoInformation holddirectorshipswithotherpubliccompanies(ortheequivalent) issetoutonpages 7to11oftheCircular. identify boththeDirectorandotherissuer. If aDirectorispresentlyofanyissuer(ortheequivalent) otherissuerthatisareporting inajurisdictionorforeignjurisdiction, Corporation areelected, theBoardwillcontinuetobecomprisedofsameratioindependent Directors. ontheBoardin2018were independent.8 ofthe12Directorsthatserved Iffollowing theMeetingonMay 9, 2019, thenomineesproposedby the outitsresponsibilities. of Directorsdoestofacilitatetheexercise ofindependentjudgmentincarrying Disclose whether or not a majority of Directors are independent. If a majority of Directors are not independent, describe what the Board non-independent asaresultoftheirfamilyties. initsdiscretion,The BoardofDirectorshasdetermined thatitispreferableSylvieLemaireandPatrick Lemairecontinuetobeconsidered Mario PlourdeisaDirectorandtheChiefExecutive OfficeroftheCorporation; Alain LemaireisaDirectorandExecutive Chairof theBoardofCorporation; Disclose theidentityofDirectorswhoarenotindependent, anddescribethebasisforthatdetermination. Louis Garneau, David McAusland, Georges Kobrynsky, LaurenceSellyn, Couture, Martin Ms. Sylvie Vachon, Ms. ÉlisePelletier andMs. MichelleCormier. by theDirectorsor nomineesby way ofaquestionnairecompletedannually. ontheBoardin2018areMessrs.The independentDirectorsthatserved interfere withtheexerciseofaDirector’s independentjudgment. To ifanomineeisindependent, determine theBoardreviews provided theinformation indirect material relationship withtheCorporation. A “material relationship” isonethat could, intheview ofthe Board, bereasonably expectedto “independence” provided insection1.4ofRegulation52-110respectingauditcommittees. A Directoris “independent” ifheorshehasnodirect of eachDirectorwithinthemeaningRegulation58-101respectingdisclosurecorporategovernance practiceswhich referstothedefinitionof The CorporateGovernance andNominating Committee(the “Committee”) andtheBoardofDirectors(the “Board”) have examinedtheindependence Disclose theidentityofDirectorswhoareindependent. BOARD OF DIRECTORS BOARD The independent Directors met five (5) times during Fiscal 2018. The independentDirectorsmetfive (5)timesduring
b) a) 4. b) a) 3. ofexecutive part successionplanning.an important The BoardhasadoptedaCharter, thefulltextofwhich issetoutinScheduleDtotheCircular. basis with members of the seniorleadershipteamof the divisions,meeting also provides for the Board to meet and socialize on an informal an opportunity on thestrategicplanandbudgets aswell astheCorporation’s progress onoperationalandfinancialtargets andtheCorporation’s principalpriorities. The Essential tothisprocessistheBoard’s annualstrategicmeeting, heldeachyear atwhich the Boardandmanagement holdcomprehensive discussions key mandatesistooversee theCorporation’s objectives andgoals. The Boardannuallyreviews andapproves theCorporation’s strategicplanpriorities. The Boardisresponsibleforthestewardship oftheCorporationandoverseeing themanagement oftheCorporation’s businessandaffairs. OneoftheBoard’s and responsibilities. Disclose the text of the Board’s written mandate. If the Board does not have a written mandate, describe how the Board delineates its role 2.
governance trends. best practices. The Directors benefit from access to publications and events enhance their knowledge tofurther of Director’s responsibilities andcurrent andemerging as oncurrent governancequality directoreducationandprofessionalcertification well asanaccesstotimelyinformation issuesand of theInstituteCorporateDirectors(“ICD”), anot-for-profitmember-basedassociation. ICDpromotestheeffectiveness ofdirectors by providing requirements andstandardsthatmay affecttheirroleandresponsibilities. The BoardmembersalsobenefitfromamembershipintheQuébecChapter andindustry From timetotime, onregulatory toattendpresentationskeep theminformed theCorporationoffersBoardmembersopportunity education, tomeettheirobligations asDirectors. describehowtheBoardensuresthatitsDirectorsmaintainskilland knowledge necessary Briefly describewhatmeasures, ifany, theboardtakes toprovidecontinuingeducationforDirectors. Iftheboarddoesnotprovidecontinuing the courseofthisprogram, new DirectorsbenefitfromguidedtoursoftheCorporation’s installationsandmeetwithmanagement ofsame. management todiscusstheCorporation’s operationsandaregiven periodic presentationsonbusinessunitsoraspecificdevelopment. In the BoardanditsCommittees. DirectorsmeetwiththeExecutive ChairoftheBoard, thePresidentandChiefExecutive Officerandmembersofsenior Each DirectorhasaccesstoaDirector’s Manualthatisupdatedperiodically. ontheCorporation, materialandinformation The Manual contains pertinent tobecomefamiliarwiththeCorporation’seach new Directortheopportunity activitiesandtobetterunderstandthechallenges facedby theCorporation. The Boardhasimplementedanorientationandeducationprogram fornew membersoftheBoard. The mainobjective oftheeducationprogram istoafford i) theroleofBoard, itscommitteesandDirectors, and ii)thenatureandoperation oftheissuer’s business. Briefly describewhatmeasurestheBoardtakes toorientnewDirectorsregarding: as itssubsidiariesanddivisionsinordertoattaintheidentifiedobjectives. HisresponsibilitiesaresetoutinScheduleFtotheCircular. strategic and operational objectives and for the execution of the Board’s decisions. He oversees the management of the Corporation’s activities as well The MandateoftheChiefExecutive Officeroutlineshisroleandresponsibilitiesasfollows: heisresponsibleforimplementingtheCorporation’s such apositiondescription, brieflydescribehowtheBoarddelineatesroleandresponsibilitiesofCEO. Disclose whetherornottheBoardandCEOhave developedawrittenpositiondescriptionfortheCEO. IftheBoardandCEOhave notdeveloped Committees which issetoutinScheduleGtotheCircular. Chair whose responsibilitiesaresetoutinScheduleEtotheCircular. The BoardhasalsoadoptedawrittenpositiondescriptionfortheChairsof Upon recommendation of the Corporate Governance and Nominating Committee, the Board has adoptedawritten position description for the Executive delineates theroleandresponsibilitiesofeachsuchposition. Board has not developed written position descriptions for theChairand/orofeachBoardCommittee, brieflydescribehowtheBoard Disclose whether or not the Board has developed written position descriptions for the Chair and theChairofeach Board Committee. If the BOARD MANDATE BOARD POSITION DESCRIPTIONS POSITION ORIENTATION AND CONTINUING EDUCATION CONTINUING AND ORIENTATION
37 37 CASCADES MANAGEMENT PROXY CIRCULAR 38 38 CASCADES MANAGEMENT PROXY CIRCULAR c) b) a) 6. c) b) a) 5.
out anannualassessmentoftheBoard asawhole, itscommittees, theChairsofCommitteesandeachDirector. Lead Director and approved changes to the questionnaire. Together with the Executive Chair, theChair of the Committee and the Lead Director carried the Corporation. In2018, theCommitteereviewed theadequacyofevaluation processandannualself-evaluation questionnairewithinputfromthe regulations in Canada, corporate governance initiatives taken by Canadian securities regulators and emerging best practices and their implications for reviewed andapproved theCommittee’s andwork Charter plan, received and considered withmanagement regularupdatesonchanginglaws, and rules andcontributionofDirectors.performance In2018, theCommitteeheldsix(6) meetings. At eachmeeting, itholdsanin submits its recommendations to the Board. It coordinates the annual assessment of the effectiveness of theBoard and its committees as well as the practices relative tocorporategovernance. ofnew Directors,The Committeecoordinatestherecruitment reviews candidatesfordirectorships, and The CorporateGovernance andNominatingCommittee(the “Committee”) isresponsiblefortheelaboration, update, anddisclosureoftheCorporation’s If theBoardhasanominatingcommittee, describetheresponsibilities, powersandoperation ofthenominatingcommittee. The CorporateGovernance andNominatingCommittee’s mandateincludesthisresponsibility. Seeresponseprovided in6a)above. Disclose whetherornottheBoardhasanominatingCommitteecomposed entirely ofindependentDirectors. experience. size and composition, the Committee and the Board have two objectives: an effectively to form functioning Board with a diversity of views and business oftheBoardmembersandrecommendstoalistcandidatesforelectionBoard.the areasofexpertise When consideringtheBoard’s to identifyandrecommendtheBoard, nomineesforelectiontotheBoard. The Committeeevaluates thecompositionandsizeofBoard, examines Committee (the “Committee”), which iscomposedofthreeindependentDirectorsandonenon-independentDirector. The Committeehastheresponsibility Together with the Executive Chair ofthe Board and the Lead Director, this responsibility has been assigned tothe Corporate Governance and Nominating Describe theprocessby whichtheBoardidentifiesnewcandidatesfornomination. or questionsrelatingtoauditing, accountingmattersandethicalissues. allowing employeesLine andsecuredweb-based service anonymously toreport andconfidentiallyany regarding concerns compliancewiththeCode all employees onthecontentsofCodeandCorporation’s expectations in thisregard. The CorporationhasalsoputinplaceanEthics Telephone engagement policy, ananti-fraudpolicy, policyandasocialmediapolicy. ananti-corruption The Corporationimplementedan onlinetrainingprogram for a policyonthetreatmentofcomplaints, apolicyoninsidertrading, apolicyonharassmentintheworkplace, amajorityvoting policy, ashareholder The Corporationhasdeveloped andimplemented, andtheBoardhasapproved, various corporatepoliciesincludingapolicyondisclosureofInformation, Describe any otherstepstheBoardtakes toencourage andpromoteacultureofethicalbusiness conduct. Director willvote inadiscussiononmatterrespectofwhich norparticipate suchDirectorhasamaterialinterest. The Corporate Governance and Nominating Committee and the Board monitor the disclosure of conflicts interest by Directorsand ensure that no of whichaDirectororexecutiveofficerhasmaterialinterest. Describe any stepstheBoardtakes toensureDirectorsexercise independentjudgmentinconsideringtransactions andagreements inrespect In 2018, theBoardhasnotgranted any waiver totheCodeinfavour ofaDirectororExecutive Officer. Accordingly, nomaterialchange hasbeenfiled. report treatment andfollow-up ofsame. the number of complaints received through the Corporation’s Ethics Telephone Line and secured web-based service, the nature of the complaints, the encourages acultureofethicalbusinessconduct. Management provides the Committeewith,Audit andFinance on ifapplicable, report aquarterly website atwww.cascades.com. The Boardandthe monitorcompliancewiththeCodeandensurethatmanagement Committeeregularly Audit andFinance suppliers, partners, andthecommunitieswhere theCorporationoperatesitsactivities. The Codeisavailable onwww.sedar.com andontheCorporation’s is meanttoprovide Directors, officersandemployees with general guidelinesforacceptablebehaviour inallrelationshipswitheachother, customers, The Corporation first adopted a Code of Ethics and Business Conduct (the “Code”) in 2004, which was revised in 2009 and again in 2017. The Code (iii) (ii) (i) Disclose whetherornottheBoardhasadoptedawrittencodeforDirectors, officers, andemployees. IftheBoardhasadoptedawrittencode: that the Board can fulfill its duties effectively and efficiently and can exercise independent judgment in carrying outitsresponsibilities.that theBoardcanfulfillitsdutieseffectively andefficientlycanexerciseindependentjudgmentincarrying TheCommittee developed positiondescriptionsfortheExecutive Chair, LeadDirectorandCEOtoprovide acleardelineationofdutiesandresponsibilitiestoensure mandate andwork plan:successionplanningandcompositionfortheBoardhasbeenakey focusoftheCommitteeinrecentyears. The Committee past few years, several theCommitteeundertook initiatives ofitscommitmenttobestpracticesincorporategovernance aspart inaccordancewithits NOMINATION OF DIRECTORS OF NOMINATION ETHICAL BUSINESS CONDUCT BUSINESS ETHICAL executive officer that constitutes a departure fromthecode. executive officerthatconstitutesadeparture provide a cross-reference to any to material change filed duringthe lastfinancialyearthatpertains any conductof a Director, report or Board satisfiesitselfregarding compliancewithitscode;and disclose how the Board monitors compliance with its code, or if the Boarddoes not monitorcompliance, explainwhetherand how the disclose howapersonorcompany may obtainacopy ofthecode; camera session camera . Over the the strategy anddirectionoftheCorporation. the strategy and theBoardaresatisfiedthatiscomposedofDirectors who possessamixofexpertise, skillsandattributesthatcanbestadvance and oversee they may have withtheExecutive inthisregard ChairoftheBoard. inthecourseofindividualinterviews The CorporateGovernance andNominatingCommittee Although theself-evaluation addressthequestionofpeerevaluation, questionnairedoesnotformally theDirectorsareencouraged to provide any comments The highlightsoftheresultsarediscussedindetailby allmembersoftheBoardataseparatemeetingforthat purpose. the CorporateGovernance andNominatingCommitteeaswell astotheExecutive ChairoftheBoardandLead DirectorandsubsequentlytothefullBoard. as well oftheChiefExecutive astheperformance Officer andExecutive ChairoftheBoard. isprovided Theresultsare assembled andareport totheChairof deals withtheresponsibilities, andfunctionsoftheBoard, structure oftheBoard, theperformance oftheDirectors, oftheCommitteesandtheirrespective Chairs Lead Director, theExecutive ChairandthePresidentChiefExecutive Officer, withthe Executive ChairoftheBoard. andindividualinterviews The questionnaire measured throughbothaself-evaluation questionnairethatisrevised on anannualbasisandsentinNovember ofeachyear toalloftheDirectors, includingthe The assessmentoftheeffectiveness oftheBoardanditsCommitteesisamatterforCorporateGovernance andNominatingCommittee. The effectiveness is the BoardsatisfiesitselfthatBoard, itscommittees, effectively. anditsindividualDirectorsareperforming If assessmentsareregularly conducted, describetheprocessusedforassessments. Ifassessmentsarenot regularly conducted, describehow Disclose whetherornottheBoard, itscommittees, andindividualDirectorsareregularly assessedwithrespecttotheireffectivenessandcontribution. 9. and, ifrequiredmakes recommendationstothe CorporateGovernance andNominatingCommittee totheBoard. occupational healthandsafety. 2018.The Committeemetthree(3)timesduringFiscal The Committeeassessesonceayear, theadequacyofitscharter, toboththeenvironmental andstandardsimposedby and legislationandregulationspertaining norms concerns accordance withapplicableindustry occupational health and safety, environment, sustainabledevelopment andclimatechange. The CommitteemonitorstheCorporation’s in performance totheBoardrelatingpolicies,making recommendationsandreports standards, practicesandprograms oftheCorporationonmattersrelatingto The BoardhasestablishedaHealthandSafety, Environment andSustainableDevelopment Committee(the “Committee”), responsibleforreviewing and describe theirfunction. If theBoardhasstandingcommitteesotherthanauditandfinance, compensation andnominatingcommittees, identifythecommitteesand 8. c) b) a) 7. COMPENSATION ASSESSMENTS compensation remainscompetitive andappropriate. Committee conductsperiodicreviews withtheassistance ofanoutsideconsultantspecializedincompensationtoensurethatBoardandCommittees type ofcompensationfortheDirectorsinordertoattractandretainhighlyqualifiedwithasufficientmixskills, andexperience. expertise The collaboration withtheCorporateGovernance andNominatingCommitteetheLeadDirector, itconsidersandrecommendsifrequired, theappropriate the Corporation’s Stock Option Plan, Share Unit Plan for PerformanceExecutives Share Unit Plan and Deferred and Key Employees. In addition, and in granting andconditionsofexercisestockoptions, shareunitstopersonseligibleinaccordancewith andterms shareunitsanddeferred performance to the Board on the appointment of the Chief Executive Officer and other senior executives. It reviews and makes recommendations to the Boardonthe professional development plans. The ChairoftheCommitteeprovides updatestotheBoardinthisregard. The Committeealsosubmitsitsrecommendations Specialty ProductsGroupand Group.Tissue Throughout theyear, theCommitteereceives regularupdatesfrommanagement onsuccessionplanningand management teamoftheIssueraswell asmembersoftheseniormanagement teamsofitsthreedivisions, namelyContainerboardPackaging Group, practices putinplaceby theCorporation relatingtorecruitment, training, professionaldevelopment andsuccessionplanning formembersofthesenior submits totheCommitteehisassessmentandrecommendationoncompensationforPresidentChiefExecutive Officer. TheCommitteereviews and Chief Executive Officer’s recommendations, all in accordance with the Corporation’s compensation policy. Furthermore, the Executive Chair of the Board recommendations totheBoardwithrespectannualcompensationpayable tomembersofseniormanagement, takingintoaccountthePresident duties andscopeofauthority. andwork BoththeCharter planarereviewed periodicallytoensuretheiradequacy. The Committeereviews andmakes to the Board on its activities. and reports The Committee meets at least once each quarter The Committee’s and work Charter plan sets out its mandate, If theBoardhasacompensationcommittee, describetheresponsibilities, powers, andoperation ofthecompensationcommittee. itsmandate. in compensationtoassistitperforming The HumanResourcesCommitteeiscomposedoffour(4)independentDirectors. ofoutsideconsultants,The Committeemay specialized retaintheservices suchcompensation. determining compensation committeecomposedentirelyofindependentDirectors, describewhatstepstheBoardtakes toensureanobjectiveprocessfor Disclose whetherornottheBoardhasacompensationcommitteecomposedentirelyofindependentDirectors. IftheBoarddoesnothave a of compensationforseniorexecutives oftheCorporation. The BoardhasestablishedaHumanResourcesCommitteewhose responsibilityincludesreviewing andmakingrecommendationstotheBoardinrespect Describe theprocessby thecompensationforissuer’s whichtheBoarddetermines officers. OTHER BOARD COMMITTEES BOARD OTHER 39 39 CASCADES MANAGEMENT PROXY CIRCULAR 40 40 CASCADES MANAGEMENT PROXY CIRCULAR See responseprovided inparagraph 11a)above. in identifyingandnominatingcandidatesforelectionorre-election totheboard, disclosetheissuer’s reasonsfornot doingso. and nominatingcandidatesforelectionorre-electiontotheboard. Iftheissuerdoesnotconsiderlevelofrepresentationwomenon board Disclose whetherornotand, ifso, howtheboardornominatingcommitteeconsiderslevelofrepresentationwomenoninidentifying 12. b) a) 11. their responsibilities, priortorecommendingDirectorsforre-electionanotherterm. Executive ChairapplyBoardnominee selectioncriteria, includingDirectors’ pastcontributionstotheBoardandavailability todevote sufficienttimetofulfill whether as a member of the Board or of a Board Committee.to determine it is appropriate for such Director to continue to serve The Committee and the to provide theExecutive astoallboardsofDirectorsthatthey Chairwithinformation sitonorthatthey have beenasked tojoinsoasallow theBoard todecidetheappropriatenessofsuchDirector’sopportunity continuanceasamemberoftheBoardorcommittee. Directorsarealsoexpected theExecutiveFurthermore, Chairofany Directorsareexpectedtoinform majorchange intheirprincipaloccupationsothattheBoardwould have the secure apropertransition, which recommendationwasapproved by theBoard. May 7, 2015. The CommitteehasexerciseditsdiscretionandrecommendedthatMr. limitbeextendedforoneyear Georges term Kobrynsky’s inorderto of new perspectives. Consequently, theBoardseekstomaintainabalanceoflong-tenuredDirectorswithnewer additions. This policycameintoeffecton Director’s forsuchperiodastheCommittee deemsappropriate. term andexperiencewiththeCorporationaswellThe Boardvalues asintroduction history forDirectorselectedonMaymaximum term 7, 2015will be25years. The CommitteehascompletediscretiontorecommendthattheBoardextenda annual meetingofshareholdersfollowing hisorherseventy-second birthday oraftertwenty ontheBoard, (20)years ofservice provided however thatthe (save for Alain Lemaire) whereby aDirectorwould not, by unless otherwise determined the Board, inits discretion, benominated for re-electionatthe Board level 2015. inFiscal Uponrecommendationby theCommitteein2014,retirementage forDirectors theBoardadoptedapolicyonmandatory The CorporateGovernance andNominating Committee(the “Committee”) consideredadditionalinitiatives enhancesuccessionplanningatthe tofurther of boardrenewal, disclosewhy ithasnotdoneso. limitsorothermechanismsofboardrenewal.description ofthosedirectorterm limitsorothermechanisms Iftheissuerhasnotadopteddirectorterm limitsforthedirectorsonitsboardorothermechanismsofrenewalDisclose whetherornottheissuerhasadoptedterm and, ifso, includea 10. The Corporationhasnotadoptedawrittenpolicyrelatingtoidentificationandnominationof women Directors. (iv) (iii) (ii) (i) toin(a),If anissuerhasadoptedapolicyreferred disclosethefollowinginrespect ofthepolicy: Board isfullycommittedtoensuringthatwomen arewell representedontheBoardinkeeping withtheaforementionedcriteria. and relevant experience. It is to be noted that four (4) of the twelve nominees are women (12) current representing 33% of the seats on the Board. The account diversity considerationssuchasgender, age andethnicity, withaview toensuringthattheBoardbenefitsfromabroaderrange ofperspectives on merit, basedonabalanceofskills, background, experienceandknowledge. In identifyingthehighestqualitycandidates, theCommitteetakes into Governance and Nominating Committee (the “Committee”) whose responsibility is to nominate Director nominees to the Board considers candidates Fiscal 2018,Although theBoarddidnotadoptawrittenpolicyrelatingtoidentificationandnominationof women ontheBoardin theCorporate adopted suchapolicy, disclosewhy ithasnotdoneso. Disclose whether the issuer has adopted a written policy relating to the identification and nomination of women directors. If the issuer has not POLICIES REGARDING THE REPRESENTATION OF WOMEN ON BOARD THE REPRESENTATION THE REGARDING POLICIES RENEWAL OF MECHANISMS BOARD AND OTHER LIMITS TERM DIRECTOR CONSIDERATION OF THE REPRESENTATION OF WOMEN IN THE DIRECTOR IDENTIFICATION IDENTIFICATION OF WOMEN IN DIRECTOR THE OF REPRESENTATION THE CONSIDERATION AND PROCESS SELECTION whether and, ifso, howtheboardoritsnominating committeemeasurestheeffectivenessofpolicy. annual andcumulativeprogress by theissuerinachievingobjectivesofpolicy, and the measurestaken toensurethatthepolicyhasbeeneffectivelyimplemented, ofitsobjectivesandkey provisions, summary a short
b) a) 15. c) b) a) issuer’s boardorinexecutiveofficerpositionsoftheissuer by aspecificdate. For purposesofthisItem, a “target” meansanumberorpercentage, orarange ofnumbersorpercentages, adoptedby theissuerofwomenon 14. of itsworkforce. resources management processesallowed the Corporation to conclude thatnosystemicbiasesexisted could adversely affect the diversification Corporation’s cultureandvalues. In2018, reviews theperformance andsuccessionplanningexercisesundertaken, aswell astherevision ofourhuman aligned with the Corporation’s strategic priorities and values and a third for the development of all managers to insure the sustainability of the team andC-suite, aprogram for whoVice-Presidents have beenidentifiedashigh-potentialcandidateshaving leadershipandmanagement capabilities specializedinthedesignanddevelopmentfirm ofeducationprograms. Three(3)programs have beendeveloped, namelyfortheCorporation’s Executive In 2017, theCorporationdeveloped anextensive leadershipprogram witharecognized Canadian-basedBusinessSchoolandanexperiencedconsulting Resources Committeehasapracticeofpaying closeattentiontoissuesrelatingdiversity. very it a source of added value, enrichment and pride. In its review of executive and senior management succession planning and opportunities, the Human The Corporationoffersequaldevelopment toallandhasmadeacommitmentcontinueintegrate opportunities andprioritizediversity andtomake officer appointments, disclosetheissuer’s reasonsfornotdoingso. officer appointments. Iftheissuerdoesnotconsiderlevelofrepresentationwomeninexecutiveofficerpositionswhenmaking Disclose whetherornotand, ifso, howtheissuerconsiderslevelofrepresentationwomeninexecutiveofficer positionswhenmakingexecutive 13. Under applicablecriteriaanddefinition, 8.3%orone(1)oftwelve (12)executive officers are women. who arewomen. (inpercentageDisclose thenumberandproportion ofexecutiveofficerstheissuer, terms) includingallmajorsubsidiariesoftheissuer, proposed by theCorporationareelected, thesameratioofboardmemberswillbewomen. 33% or four (4) of twelve on the Board in 2018 were women.(12) board members that served If following the Meeting on May 9, 2019, the nominees (inpercentageDisclose thenumberandproportion ofdirectorsontheissuer’s terms) boardwhoarewomen. No target hasbeenidentified. (ii) (i) If theissuerhasadoptedatarget toineither(a)or(b), referred disclose: No target hasbeenidentified. Seeresponseprovided inparagraph 13above. target, disclosewhy ithasnotdoneso. Disclose whethertheissuerhasadoptedatarget regarding womeninexecutiveofficerpositionsoftheissuer. Iftheissuerhasnot adopteda No target hasbeenidentified. Seeresponseprovided inparagraph 11a)above. it hasnotdoneso. Disclose whethertheissuerhasadoptedatarget regarding womenontheissuer’s board. Iftheissuerhasnotadopted atarget, disclosewhy NUMBER OF WOMEN ON THE BOARD AND IN EXECUTIVE OFFICER POSITIONS OFFICER NUMBER AND IN OF WOMENEXECUTIVE ON BOARD THE POSITIONS OFFICER AND IN EXECUTIVE THE OF WOMEN ON BOARD THE REPRESENTATION THE REGARDING TARGETS ISSUER’S APPOINTMENTS OFFICER OF WOMEN IN EXECUTIVE REPRESENTATION THE TO GIVEN CONSIDERATION the annualandcumulativeprogress oftheissuerinachievingtarget. the target, and
41 41 CASCADES MANAGEMENT PROXY CIRCULAR 42 42 CASCADES MANAGEMENT PROXY CIRCULAR 2. Secretary will be secretary forallmeetingsoftheCommittee andwillkeep minutesoftheCommittee’s willbesecretary deliberations.Secretary or of the Corporation or the person designated as and the Secretary AssistantThe Committee Secretary will appoint one of its members as Chairman management expertise, by asdetermined theBoard. Each Committeemembermustbefinanciallyliterateinaccordancewithapplicablelaws andatleastonemembermusthave accountingorrelatedfinancial Corporation, theapplicablestockexchanges onwhich authorities. theCorporation’s securitiesarelistedandapplicableregulatory shareholders meeting. EachmemberoftheCommitteeshallsatisfyapplicableindependenceandexperiencerequirementslaws governing the The Committee shall be composed of a minimum of three independent Directors, as appointed by the Board at its first meeting following the annual and management oftheCorporation. theirduties,In performing themembersofCommittee musthave openandfreediscussionswiththeBoard, theindependentauditor, auditor theinternal andotherauditingprocedures. financial reporting out auditsoftheCorporation’s annualfinancialstatementsandannuallyauditingmanagement’s assessmentofthe effectivenesscontrol ofinternal over that provide for compliance with accounting standards and applicable laws and regulations. The independent auditor is responsible for planning and carrying Management principles and policies as controls and procedures is responsible for maintaining appropriate accounting and financial reporting well as internal the preparation, the presentation and the integrity oftheCorporation’s financial statements and fortheeffectiveness control of internal over financial reporting. totheBoard. processonbehalfoftheBoardas itsactivitiesregularly financial reporting well astoreport Management oftheCorporationisresponsiblefor outthedutiesofCommitteedescribedinthischarter,In carrying themembersofCommitteerecognizethatitsfunctionistooversee theCorporation’s • • • • • • • • following issues: by theBoardofDirectors(“theBoard”). The maindutyoftheCommitteeistoassistBoardinfulfillingits oversight responsibilitieswithrespecttothe istodescribetheroleof The purposeofthischarter Committee(the Audit andFinance “Committee”) aswell asitsdutiesandresponsibilitiesdelegated CHARTER OFTHEAUDITANDFINANCECOMMITTEE schedule C schedule C 3. 1. PURPOSE fulfill any otherresponsibilitiesassignedtoitfromtime by theBoard. the Corporation’s requirementsrelatingtotheCorporation’s compliancewithlegal financialstatements; andregulatory auditfunctionandprocess; internal independent auditor’s qualifications, independenceandperformance; accountingandfinancialcontrols; systems ofinternal process; accounting andfinancialreporting the enterpriseriskmanagement process; the qualityandintegrity oftheCorporation’s financialstatements;
COMPOSITION AND COMPOSITION DIVISION OF DIVISION RESPONSIBILITIES ORGANIZATION • • • • • • • • • 5.1 In additionto, theabove-mentioned responsibilities, theCommitteeshalladdressfollowing questions: and itssubsidiaries. outitsdutiesandtomeetresponsibilities, theCommitteeshallexaminebooksandrelevantIn carrying accountsoftheCorporation, itsdivisions consultantsandtosetpayand otherexternal theirremuneration, Boardapproval. withoutfurther outitsduties,The Committeeshallhave includingtheauthoritytoretain, theresourcesandauthorityappropriatetocarry asitdeemsnecessary, counsel onspecificquestions.explanations orinformation The Committeeshallatalltimeshave freeandopenaccesstomanagement, auditorandtothe independentauditorinordertoseek to the internal orappropriate. allmattersdeemednecessary concerning andwhen requiredtotheBoardonCommittee’s quarterly oftheCommitteeshallreport activitiesandshallmakeThe Chairman recommendations to themeetings. auditor.and theinternal The agenda documentationaredistributedtothemembersofCommitteewithinareasonabletimeframeprior andsupporting theagenda oftheCommitteedetermines Officer, foreachmeetinginconsultationwiththe The Chairman andChiefFinancial Vice-President theSecretary prescribedbywith theterms itsrules. shallnotbelessthanamajorityofthemembersCommittee. A quorum The Committee shall establish its own and procedures (subject to any rules specific guidelines from the Board) and shall meet at the place and in accordance auditor,Committee shall also meet separately and in camera for discussions with the internal management and with the independent auditor, as required. The Committeeshallmeetatleastfourtimesayear, ormorefrequentlyifcircumstances sodictate. ofitsmandatetofosteropenrelations, Byvirtue the 4. 5. plan relatedtoany Management Letterissuedby theindependentauditor. reviews audit, theresultsofexternal andany oftheaudit, significantproblemsencounteredintheperformance andmanagement’s responseoraction operating resultsandtheappropriatenessofdisclosurethereofindocuments reviewed by theCommittee; reviews litigation important or accounting and any initiatives that could have regulatory a material effect on the Corporation’s financial situation or verifies withapplicablelegislation; thecomplianceofmanagement offinancialreports certification Standards(«IFRS»)onthefinancialstatements; Reporting Financial withInternational of alternative methodsinconformity issuesandjudgmentsmadeinconnectionwiththe preparationofthefinancialstatements,significant financialreporting includinganalysisoftheeffects reviews financial analysisandotherwrittencommunicationsprepared by management, auditorortheindependentauditor, theinternal settingforth practices, assumptionsandreporting the underlying andany proposedchanges thereto; reviews with the independent auditor and management the quality, appropriatenessand disclosure of the Corporation’s accounting principles and policies, submittedforapprovalunaudited financialinformation by theBoard; reviews containedinprospectuses, thefinancialinformation thatincludeauditedor offeringmemoranda, andother reports form theannualinformation press releasespriortopublicdisclosureandfilingwiththeSecuritiesRegulatory Authorities; reviews theunaudited interimfinancialstatements, includingmanagement’s discussion andanalysisforeachinterimperiodofthefiscal yearandrelated to publicdisclosureandfilingwiththeSecuritiesRegulatory Authorities; in management’s discussionandanalysis, relatedpressreleasesandtheindependentauditor’s ontheannualauditedfinancialstatementsprior report reviews withmanagement andtheindependentauditorannualauditedfinancialstatementsofCorporation, contained includingtheinformation auditor; auditor andtheinternal reviews thequalityandintegrity oftheCorporation’s systemthroughdiscussionswithmanagement, accountingandfinancialreporting theindependent
MEETINGS AND MEETINGS FINANCIAL REPORTING REPORTING FINANCIAL AND DUTIES RESPONSIBILITIES RESOURCES 43 43 CASCADES MANAGEMENT PROXY CIRCULAR 44 44 CASCADES MANAGEMENT PROXY CIRCULAR • Approved by the Board of Directors on March 12, 2014. 12, March on Directors of Board the by Approved • • • • • • • INDEPENDENT AUDITOR 5.4 • • • • 5.3 • • • • • • • • • 5.2 5.5 its mandateand, ifrequired, makes recommendationstotheBoard. prepares andreviews withtheBoard, evaluation anannualperformance oftheCommitteeanditsmembersassessesonce ayear, theadequacyof reviews andapproves policiesfortheCorporation’s andemployees hiringofpartners andemployees partners orformer oftheindependentauditor; services, ortheirobjectivityandindependence; their independence, thatmay andholdingdiscussionswiththeindependentauditorastoany impactthequalityofaudit relationshiporservices reviews atleastonceayear theindependentauditor’s statingallrelationshipstheindependentauditorhaswithCorporationandconfirming report or unresolved differencesofopinionbetween management andtheindependentauditorthatcouldhave animpactonthefinancialstatements; of their use as well as iii) any other material written communications between the Corporation and the independent auditor, including any disagreement accounting policies and practices used; ii) any that have alternative treatments of financial information been discussed with management, the ramification discusses withtheindependentauditorqualityandnotjustacceptabilityofCorporation’s accountingprinciples, including:i)allcritical requirements; with applicablelegal andregulatory providedapproves by andapproves theindependentauditor anddetermines allauditservices inadvance, provided, non-auditservices incompliance ensures thatasrepresentatives oftheshareholders, totheCommitteeand totheBoard; theindependentauditorreports evaluates andcompensatesthemassessestheirqualifications, andindependence; performance recommends totheBoard, theappointmentofindependentauditorand, ifappropriate, theirremoval (inbothcases, subjecttoshareholderapproval), the degree ofinteractionwiththeindependentauditor, andany unresolved differencesofopinionordisputes. auditindependence, privateundertakes auditortoestablishinternal discussionswiththeinternal thelevel ofco-operationreceived frommanagement, annually reviews andapproves auditplan; theinternal auditfunction’s assessestheinternal regularly performance, itsresponsibilities, itsstaffing, budget andthecompensationofitsmembers; auditor; internal reviews withmanagement, auditstaffqualificationsandexperience and, theinternal ifrequired, recommendstheappointmentorreplacementof antifraud program andpractices. periodically reviews withtheBoard, auditorsandtheindependentauditorofCorporation andseniormanagement, theinternal theCorporation’s regarding accounting, accountingcontrolsorauditingmatters, internal includingemployee regarding concerns accountingorauditingmatters; while ensuringconfidentialityandanonymity, establishesproceduresforthereceipt, retention andtreatmentofcomplaintsreceived by theCorporation to thefinancialstatements; requirementsrelating outitsresponsibilityforensuringthattheCorporationiscompliantwithapplicablelegal andregulatory assists theBoardincarrying periodically inquiresastothefundingofretirementplanswell astheinvestment management, oftheretirementplans; andperformance thestructure financial ororganizational structure, includingoff-balancesheetitems; reviews significantcapitalcostsandothermajorexpenditures, transactionsandany relatedparty othertransactions which couldaltertheCorporation’s examinestherelevance ofany offinancing; form the demandsofdebtrepayment; oftheCorporationandensuresthatithascapacityflexibilityrequiredtoimplementitsstrategicplanmeet monitors thecapitalstructure evaluates theeffectiveness oftheCorporation’s overall controlsaswell systemofinternal astheprocessofidentifyingandmanagingkey risks; reviews insurancecoverage fortheCorporationannuallyandasmay otherwisebeappropriate; control; systems ofinternal periodically receives management’s assessingtheadequacyandeffectiveness oftheCorporation’s report disclosurecontrolsandprocedures RISK MANAGEMENT AND INTERNAL CONTROL AND MANAGEMENT RISK PERFORMANCE EVALUATION OF THE COMMITTEE OF EVALUATION PERFORMANCE AUDIT FUNCTION INTERNAL 2. the interestsofallitsshareholdersandotherstakeholders. The primeresponsibilityoftheBoardistoCorporation and istooversee andenhanceitsviability, itsmanagement andtopreserve withdueregard for Corporations Act Corporations next annualmeeting. ofofficeeachDirectorshallexpireatthenextannualmeetingCorporation,The term orupontheelectionofasuccessor. The Directorsareelectedindividuallyby annualmeetingexcept where theshareholdersatevery theBoardappointsaDirectortofill vacancy untilthe 2.6 Director, theBoardshallalsoappointaLeadDirectorfromamongindependent Directors. The BoardshallappointitsChairand (ifoneistobeappointed)fromamongtheCorporation’sVice-Chair Directors. ShouldtheChairbeanon-independent 2.5 • • • • • • • Board membersareexpectedtopossessthefollowing characteristicsandtraits: 2.4 A majorityoftheBoardshallbecomposedDirectorswho is definedaccordingtoapplicablesecuritieslaws areindependentassuchterm andregulations. 2.3 establishes thespecificskillsrequiredofcandidates, reviews nominationsandrecommendstheselectedcandidates. The Corporate Governance whether and Nominating Committee determines to change new the size of the candidates Board or recruit for Directors. It 2.2 nomination asDirectors. The Board approves thefinalchoiceofcandidatesfornominationandelection by theshareholders. the expectedskill-setofnew candidates. The CorporateGovernance andNominatingCommitteereviews and recommendstotheBoardcandidatesfor The CorporateGovernance andNominatingCommitteeoftheBoardmaintainsanoverview ofthedesiredsizeBoard, and theneedforrecruitment The numberofDirectorsmustbeestablishedfromtimetoby resolutionoftheBoard, withinthelimitsprovided by oftheCorporation. thearticles 2.1 and affairs of the Corporation pursuant tothe powers vested and by-laws, in its articles and in accordance with the obligations imposed by the The BoardofDirectorsCascadesInc. (the “Corporation”) iselectedby themanagement theCorporation’s ofthebusiness shareholderstosupervise CHARTER OFTHEBOARDDIRECTORS schedule D schedule D 1. review thematerialsprovided by management inadvance oftheBoardandCommitteemeetings. toattendallBoardandCommitteemeetings; make allreasonableefforts raise questionsandissuestofacilitateactive andeffective inthedeliberationofBoardandeachCommittee; participation provide independentjudgmentonabroadrange ofissues; person would exerciseincomparablecircumstances; devote sufficient time to the affairs of the Corporation and exercise care, diligenceprudent and skill in fulfilling their responsibilities that areasonably act honestlyandingood faithwithaview tothebestinterestsofCorporation; possess relevant careerexperiencetoprovide oversight andadvice; COMPOSITION
INDEPENDENCE
STATEMENT OF POLICY STATEMENT TERM OF DIRECTORS BOARD THE OF CHAIRMAN MEMBERSHIP BOARD FOR CRITERIA SELECTION OF MEMBERS DIRECTORS OF NUMBER (Québec)(BCAQ) andotherapplicablelegislation. Seniormanagement isresponsiblefortheday-to-day operationsofthe Corporation. Business Business 45 45 CASCADES MANAGEMENT PROXY CIRCULAR 46 46 CASCADES MANAGEMENT PROXY CIRCULAR d) c) b) a) f) e) d) c) b) a) 4.2 plan by management. which take intoaccount, amongotherthings, andrisksofthebusiness, theopportunities andmonitortheimplementationexecutionofbusiness Adopt astrategicplanningprocess, intheprocessandapprove participate orreview onatleastanannualbasis, abusinessplanandstrategicframework 4.1 ofitsstewardship responsibility,As part theBoardadvises management onsignificantbusinessissuesandhasthefollowing responsibilities: Resources CommitteeandtheCorporateGovernance and NominatingCommittee, inconsultationwiththeLeadDirector. thattheBoardmayThe membersoftheBoardreceive establishfromtimetotime, compensationfortheirservices uponrecommendationfromtheHuman 4.4 acquisition ofshares, themanagement form. proxycircularandtheannualinformation Approve financialprospectuses, themodeandmannerofissuancesecurities, thedeclarationofdividends, thepurchase, redemptionorany of form 4.3 3. 4. COMPENSATION Take stepstoensurethataprocessisinplacefortherecruitment, training, development, retentionandsuccessionofseniormanagement. Officer to evaluate theothermembersofseniormanagement; Evaluate ofthePresidentandChiefExecutive theperformance Officer andensurethatprocessesareputinplace by thePresidentandChiefExecutive to arecommendationby thePresidentandChiefExecutive OfficerthroughtheHumanResourcesCommittee; Approve thecompensationandemployment conditionsofthePresidentandChiefExecutive Officerandothermembersof seniormanagement pursuant Appoint thePresidentandChiefExecutive Officerandothermembersofseniormanagement; Adopt andperiodicallyreview theCorporation’s communicationspolicyrelatedtoinvestors andthepublicingeneral. analysis andpressreleasesrelatedthereto; Approve theCorporation’s andannualfinancialstatementstogether withtheaccompanying quarterly notes, as well asmanagement’s discussionand offinancing; forms Approve annual operating and capital expenditure budgets, as well as any courseof business, significanttransactions outside thenormal including acquisitions ordispositionsofassets(includingtheacceptancedebt); Approve annual operating and capital expenditure budgets, as well as any courseof business, significanttransactions outside thenormal including systems areadequate; In conjunctionwiththe Committee,Audit andFinance obtainreasonableassurancethattheCorporation’s controlsandmanagement internal information risks associatedwiththecommercialactivitiesofCorporation; Committee, towhom theBoardhasdelegated thisresponsibility, theimplementationby management ofappropriatesystemstomanage theprincipal Identify inconjunctionwithmanagement, theprincipalrisksfacingCorporationandoverseeing, directlyorthroughdelegation tothe Audit andFinance
DUTIES AND RESPONSIBILITIES OF BOARD THE AND RESPONSIBILITIES DUTIES FINANCIAL ISSUES, RISK MANAGEMENT AND INTERNAL CONTROLS INTERNAL AND MANAGEMENT RISK ISSUES, FINANCIAL PROCESS STRATEGIC PLANNING SECURITIES ANDSECURITIES DIVIDENDS HUMAN RESOURCES AND SUCCESSION PLANNING AND SUCCESSION RESOURCES HUMAN Amended and approved by the Board of Directors on February 28, 2018. 28, February on Directors of Board the by approved and Amended Corporate Governance andNominatingCommittee. ofindependentcounselorotherexperts,Directors may asitdeemsappropriateattheCorporation’s usetheservices expensewiththeapproval ofthe 8. [email protected]. Shareholders and other stakeholders may communicate with the Board or with individualDirectorsby contacting the Corporate Secretariat or by email at 7. theexecutionofresponsibilitiesithasdelegated toeachcommittee. is responsibleforsupervising Other committees or sub-committees may be established by theBoard to addressspecific topics. Each committeehas its own writtenmandate. TheBoard and NominatingCommittee, theHumanResourcesCommitteeandHealthSafety, Environment andSustainableDevelopment Committee. The Boardhasestablishedthefollowing committeestoassistitindischargingitsresponsibilities:the Committee,Audit andFinance theCorporateGovernance Board committeesaresubjecttoapproval. The Boardmay delegate someofitspowers toitscommittees, by totheextentpermitted thelaws governing theCorporation. The recommendationsofthe 6. The Boardholdsanincamerasessionateachofitsmeetingstheabsencemanagement toallow Directorstoopenlydiscussissues. of eachmeeting. andotherdocumentsdeemedrelevantInformation tothe understanding oftheitemsonagenda arecommunicatedtotheBoardmembersinadvance previous meetings. with theLeadDirectorandappropriatemembersofseniormanagement which istransmitted tothemembersofBoardtogether withtheminutesof andholdsadditionalmeetingsasneededtodiscussspecific issues.The Boardmeetsquarterly TheExecutive Chairestablishestheagenda inconsultation 5. climate change issues. Monitor and review, as appropriate, the Corporation’s policies and practices relating to health and safety, environmental, sustainable development and j) i) h) g) f) e) d) c) b) a) 4.5 4.6 ADVISORS
of eachcommitteeandindividualDirectors. assesstheeffectiveness processtoregularly oftheBoard,Establish andmaintainaformal theExecutive ChairoftheBoard, eachcommittee, thechair of theBoardanditscommittees; Establish theDirectors responsibilities and expectations to which they are subject, including inregard inthemeetings totheirpresence and participation Establish Boardcommitteesanddefinetheirmandatestoassistthein fulfillingitsroleandresponsibilities; Approve thelistofnomineesforelectiontoBoardby theshareholdersandfill vacancies; Monitor thesizeandcompositionofBoardtopromoteeffective decisionmaking; Periodically ofstewardship; review toensurethatitreflectstheresponsibilitiesofboardinterms thisCharter visits tobusinessunits, meetingswithmembersofseniormanagement; andpresentationsontopicsrelatedtobusinessactivitiesinformal reports and orientationensure that theknowledge and understanding of theDirectorsCorporationarecontinuouslyupdatedthrough a program of See totheimplementationofaprogram oforientationandtrainingforBoardmembersinordertoensurethatnew Directorsreceive adequatetraining code ofethicsandbusinessconductby othermeans, areworking topromoteacultureofintegrity andaccountabilitythroughouttheCorporation; Take stepsto ensurethatthePresidentandChiefExecutive Officerandtheothermembersofseniormanagement, throughtheimplementationofa Take stepsto evaluate andprocessesinplacethatenabletheBoardtofunctionindependentlyofmanagement; thestructures including principlesandguidelinesinthisarea; Monitor andreview, asappropriate, throughtheGovernance andNominatingCommittee, theCorporation’s approachtocorporategovernance issues
COMMUNICATION WITH THE BOARD THE COMMUNICATION WITH COMMITTEES BOARD HEALTH AND SAFETY, ENVIRONMENT AND SUSTAINABLE DEVELOPMENT GOVERNANCE BOARD MEETINGS BOARD
47 47 CASCADES MANAGEMENT PROXY CIRCULAR 48 48 CASCADES MANAGEMENT PROXY CIRCULAR The current Chair of the Board referred toastheExecutive ChairoftheBoardreferred ChairoftheBoard,The current alsohasanexecutive dutieswhich rolewithcorresponding may bedescribed andoverseeThe ChairoftheBoard’s theBoardandassistitindischargingitsfunctionsresponsibilities principalresponsibilitiesaretosupervise The BoardofDirectors(the tothesamepersonfunctionsofChairBoardandChiefExecutive “Board”) hasasapolicynottoentrust Officer. Ifthe • • • • • • • • • • • • • • • OF DIRECTORS MANDATE OFTHEEXECUTIVECHAIRBOARD schedule E schedule E Chair oftheBoardisnotindependent, theindependentDirectorsappointaleadDirector. as follows: an effective mannerandindependently ofmanagement. The ChairoftheBoardhasfollowing responsibilities, namely: act asamentortotheCorporation’s seniorexecutive team; assist inrepresentingtheCorporation, asrequired, groups; toexternal act asliaisonbetween theBoardandmanagement; are underthedirectionofChiefExecutive Officer. provide suitabledirectives totheBoardmembersassistthemindischargingtheirresponsibilities;and assessmentandtheimplementationofimprovements;facilitate Boardassessmentandhisperformance right tovote (save forthosecommitteesofwhich heisamember); participates in the decision and implementation of new or different strategic initiativesparticipates and generally contributes to strategicplanninginitiatives which provide advice onhighvalue-at-stake operationalandtechnicalissues; provide totheChiefExecutive support Officerandtheauthorityofhispositionassuch; inthepreparationofagendaparticipate foreachBoardmeeting; preside atmeetingsoftheBoardandannualspecialShareholders; provide leadershiptoenhanceBoard effectiveness; ensure thatrecentlyelectedorappointedDirectorsbenefitfromanorientationandeducation program. ensure thatanappropriatesetofdocumentsisprovided toeachDirectorinatimelymannerpriorthemeeting; oversee theapplicationofgood corporategovernance; supervise theBoardcommittees’supervise work and, inthisregard, theChairofBoardmay allBoardcommitteemeetingswithoutthe attendasaparticipant
The ChiefExecutive Officerhasthefollowing responsibilities: • • • • • • • • • • • MANDATE OFTHECHIEFEXECUTIVEOFFICER schedule F schedule F Reporting totheExecutiveReporting ChairoftheBoardDirectors, theChiefExecutive OfficerisresponsibleforimplementingCascadesInc.’s (the “Corporation”) a) With respect to strategic planning strategic to respect a) With c) With respect to corporate governance matters governance corporate to c) respect With b) With respect to the operations of the Corporation the of operations the to respect b) With Responsibilities strategic andoperationalobjectives andfortheexecution oftheBoard’s decisions. Assume ultimateaccountabilityfortheexecutionofCorporation’s andpoliciesand, strategy ifapplicable, fortheircommunicationtotheCorporation’s With theadviceWith andcounselofseniormanagement, thatwillpromoteshareholdervalue; formulate, strategy andrecommendtotheBoardalong-term Chair oftheBoardandothermembersinordertoensurethatthey onatimelybasisaswell receive alldesiredinformation asaccesstomanagement; Oversee themanagement oftheCorporation’s activitiesaswell asitssubsidiariesanddivisionsinordertoattaintheidentifiedobjectives; Collaborate with the Executive Chair of the Board and the Corporate Secretary inestablishingBoardagendas andensuringthattheExecutiveCollaborate withtheExecutive Chairof ChairoftheBoardandCorporateSecretary Submit totheBoardannualbusinessplansandbudgets theCorporation’s thatsupport and, strategy when approved by theBoard, implementsuch Serve astheCorporation’sServe key spokesperson, asrequired, suchasshareholdersandothersecurityholders, interestedparties toexternal thebusiness the Boardaswell oftheoverall asitsmembersarekept informed businessoperationsoftheCorporationanditssubsidiariesmajorissues Identify andmanage presentedtotheCorporationincourseofitsbusinessactivities; therisksandbusinessopportunities Ensure that the Corporation has an accounting system in place capable of producing financial statements that fairly reflecttheCorporation’sEnsure thattheCorporationhasanaccountingsysteminplacecapableofproducingfinancialstatementsfairly financial Foster acorporateculturebasedontheCorporation’s values andpromoteacultureofethicalconduct; Maintain effective channels of communication with the Executive Chair and the Board as a whole and meet periodically and, as required, with the Executive Monitor thehiring, assessmentofseniormanagement compensationandperformance in consultationwiththeHumanResourcesCommittee. business planswithintheparametersofsuchbudgets. facing them; community, themediaandgovernmental authorities; senior management aswell astotheCorporation’s partners; external situation andenableinvestors tounderstandtheCorporation’s businessandtomake investment decisionsaccordingly. 49 49 CASCADES MANAGEMENT PROXY CIRCULAR 50 50 CASCADES MANAGEMENT PROXY CIRCULAR
assessment of each Committee chair and reports totheBoardonsuchassessment. assessment ofeachCommitteechairandreports The Corporate Governance and Nominating Committee, together with the Executive Chair and the Lead Director, theperformance annually supervises 1.2 • • • • • committee the Managing • • • effectiveness committee enhance to leadership Provide The principalresponsibilitiesofthechairscommitteesincludefollowing: committee. Heorshetakes allreasonablemeasurestoensurethatthecommitteefullyexecutesitsmandate. Environment andSustainable Development committee. The Committeechairisresponsibleforthemanagement andtheeffectiveofhisorher performance Each committeeoftheBoardDirectors(the “Board”) ischairedby anindependentDirector(the “Committee Chair”), save fortheHealthandSafety, 1.1 OF THEBOARDDIRECTORS OF THECHAIRSCOMMITTEES DESCRIPTION OFTHERESPONSIBILITIES schedule G schedule G oversee thecommittee’s fulldischarge ofitsresponsibilities. discussion ofthebusinessunderconsideration; take allreasonablestepstoensurethattheconductofcommitteemeetingsfacilitatesdiscussions andprovides adequatetime forseriousin-depth adopt proceduresallowing thecommitteetoconductitswork effectively andefficiently; or set theagenda foreachcommitteemeetingincooperationwiththeSecretary Assistant Secretary; totheBoardfollowingchair committeemeetingsandreport eachcommitteemeetingonany issuesconsideredby thecommittee; contribution ofeachitsmembers. take allreasonablestepstoensurethataprocessisinplacefortheassessmentonregularbasisof theeffectiveness ofthecommittee andthe its work; take allreasonablestepstoensurethattheresourcesavailable tothecommittee(inparticular, timelyand relevant areadequatetosupport information) take allreasonablestepstoensurethatthecommitteeworks asacohesive group andprovide theleadershipessentialtoachieve this;
PERFORMANCE ASSESSMENT ROLE
The CorporateGovernance andNominatingCommitteeannuallyoversees totheBoard. theassessmentofLeadDirectorandreports Performance Assessment • • • • • • • • • • • is responsiblefor: outitsdutiesinthisregard andproceduresinplacetoenableitfunctionindependently(ii)carries effectively.(i) hasstructures The LeadDirector Securities Act (Québec)andtheregulationsadoptedthereunder. The LeadDirector’s key roleistotake allreasonablemeasurestoensurethattheBoard The Lead Director is appointed by the Board of Directors of the Corporation (the “Board”). The Lead Director must be independent within the meaning of the MANDATE OFTHELEADDIRECTOR schedule H schedule H Performing suchotherfunctionsasmay bereasonablyrequestedby theBoardorChairofBoard. asanexofficiomemberofallotherCommitteestheBoard; Serving asamemberoftheCorporateGovernance andNominatingCommittee; Serving oftheBoard, asChairman attheExecutiveServing Chair’s requestwhen heisunavailable forameetingoftheBoard; self-evaluation oftheDirectorsontheirefficiencyandcontribution; In collaboration with the Chair of theCorporate Governance and Nominating Committee and the Executive Chairofthe Board, inthe annual participates meetings oftheindependentDirectors; Communicating withtheExecutive ChairoftheBoardand/orPresidentandChiefExecutive Officerasappropriate, onthediscussionsheldduring discussed atmeetingsofthefullBoard; asaliaison,Serving when necessary, between theindependentDirectorsandExecutive ChairoftheBoardwithrespecttoissuesnot readily oreasily allow fortheefficientandeffective review anddiscussionoftheissuessubmittedtoindependentDirectors; Taking reasonablemeasurestoensurethatthemeetings of theindependentDirectorsareconductedinsuchamannerastopromotediscussionand Approving theproposedagendas forthemeetingshechairs; agenda inthevote; itemanddonotparticipate Chairing themeetingsofBoardwhere indiscussionsrelatingtoan thenon-independentmembersareinaconflictofinterestordonotparticipate Chairing allthemeetingsofindependentDirectors; 51 51 CASCADES MANAGEMENT PROXY CIRCULAR cascades.com
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