Management Information Circular
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March 8, 2017 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To the shareholders of Gildan Activewear Inc. (the “Company”): NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the “Meeting”) of the Company will be held at the Le Windsor, 100-1170 Peel Street, Montréal, Québec, Canada, on Thursday, May 4, 2017 at 10:00 a.m., local time, for the purposes of: (i) receiving the consolidated financial statements of the Company for the fiscal year ended January 1, 2017, together with the auditors’ report thereon; (ii) electing ten directors for the ensuing year; (iii) considering and, if deemed advisable, adopting a resolution (the full text of which is reproduced as Schedule “C” to the accompanying management information circular) to confirm the adoption of and to ratify the Shareholder Rights Plan adopted by the Board of Directors of the Company on February 22, 2017, the whole as described in the accompanying management information circular; (iv) considering and, if deemed advisable, approving an advisory resolution (the full text of which is reproduced as Schedule “D” to the accompanying management information circular) on the Company’s approach to executive compensation; (v) appointing auditors for the ensuing year; and (vi) transacting such other business as may properly come before the Meeting. Dated at Montréal, Québec, Canada, March 8, 2017. By order of the Board of Directors, Lindsay Matthews Vice-President, General Counsel and Corporate Secretary Shareholders may exercise their rights by attending the Meeting or by completing a form of proxy. If you are unable to attend the Meeting in person, please complete, date and sign the enclosed form of proxy and return it in the envelope provided for that purpose. Proxies must be received by the transfer agent and registrar of the Company (Computershare Investor Services Inc., 100 University Avenue, 8th Floor, North Tower, Toronto, Ontario, Canada M5J 2Y1) no later than 5:00 p.m. on the second business day preceding the day of the Meeting or any adjournment thereof. Your shares will be voted in accordance with your instructions as indicated on the proxy. Les actionnaires qui préféreraient recevoir la circulaire de sollicitation de procurations de la direction en français n’ont qu’à en aviser le secrétaire corporatif de Les Vêtements de Sport Gildan Inc. MANAGEMENT INFORMATION CIRCULAR Except as otherwise indicated, the information contained herein is given as of March 8, 2017. Although Gildan Activewear Inc. has adopted the U.S. dollar as its functional and reporting currency with effect from the beginning of its 2004 fiscal year, most compensation amounts have historically been and are still described herein in Canadian dollars. For this reason, among others, all dollar amounts set forth herein are expressed in Canadian dollars and the symbol “$” refers to the Canadian dollar, unless otherwise indicated. WHAT’S INSIDE INVITATION TO SHAREHOLDERS 1 SUMMARY 2 VOTING AND PROXIES 3 BUSINESS OF THE MEETING 5 Election of Directors 5 Adoption and Ratification of Shareholder Rights Plan 5 Appointment of Auditors 9 Advisory Vote on Executive Compensation 10 ELECTION OF DIRECTORS - NOMINEES 11 COMPENSATION OF DIRECTORS 18 COMPENSATION DISCUSSION AND ANALYSIS 20 Message from the Compensation and Human Resources Committee 20 Determining Compensation 21 Our Executive Compensation Practices 23 Our Named Executive Officers 30 Our Executive Compensation Program 32 Named Executive Officers’ Compensation 41 STATEMENT OF CORPORATE GOVERNANCE PRACTICES 48 NORMAL COURSE ISSUER BID 60 OTHER INFORMATION 61 Indebtedness of Directors and Senior Executives 61 Additional Information 61 Shareholder Proposals for 2017 Annual Meeting 61 Approval of Management Information Circular 61 SCHEDULE “A” MANDATE OF THE BOARD OF DIRECTORS 62 SCHEDULE “B” LONG-TERM INCENTIVE PLAN 65 SCHEDULE “C” RESOLUTION - ADOPTION AND RATIFICATION OF SHAREHOLDER RIGHTS PLAN 68 SCHEDULE “D” ADVISORY VOTE ON EXECUTIVE COMPENSATION 69 INVITATION TO SHAREHOLDERS INVITATION TO SHAREHOLDERS Dear shareholders: On behalf of the Board of Directors and management of the Company, we are pleased to invite you to attend the annual meeting of shareholders that will be held this year at Le Windsor, 100-1170 Peel Street, Montréal, Québec, Canada, on Thursday, May 4, 2017 at 10:00 a.m., local time. The annual meeting is your opportunity to vote on a number of important matters as well as hear first-hand about our financial performance and strategic plans for the future. The enclosed management information circular describes the business to be conducted at the meeting and provides information on the Company’s executive compensation and corporate governance practices. If you attend in person, you will have the opportunity to interact with and to ask questions to members of the Board of Directors and management. If you cannot attend this meeting in person, you can view a live webcast on the Company’s website at www.gildan.com. Your participation in voting at the meeting is important to us. You can vote by attending in person, or alternatively by telephone, via the internet or by completing and returning the enclosed form of proxy or voting instruction form. Please refer to the “Voting and Proxies” section of this management information circular. We look forward to welcoming you at the meeting and thank you for your continued support. Sincerely, William D. Anderson Glenn J. Chamandy Chairman of the Board of Directors President and Chief Executive Officer MANAGEMENT INFORMATION CIRCULAR 1 SUMMARY SUMMARY The following summary highlights some of the important We consider strong and transparent corporate governance information you will find in this management information practices to be an important factor in Gildan’s overall success circular. and we are committed to adopting and adhering to the highest standards in corporate governance. Some of our best practices Shareholder Voting Matters are: BOARD VOTE VOTING MATTER RECOMMENDATION INFORMATION 9 of 10 director nominees are independent Election of ten directors FOR each nominee pages 11 to 17 Independent Chair of the Board Confirm the adoption Guidelines for interlocking board memberships and ratify the FOR page 5 to 9 Shareholder Rights Plan Annual election of directors (no staggered terms) Appointment of KPMG LLP as auditors FOR page 9 Directors elected individually (no slate voting) Advisory vote on executive compensation FOR page 10 Majority voting for directors Our Director Nominees Share ownership guidelines for board members and executives Board tenure and term limits Code of Ethics program Formal annual board performance assessment Annual advisory vote on executive compensation Director orientation and continuing education William D. Donald C. Berg Glenn J. Shirley E. Anderson Director since Chamandy Cunningham Board Diversity Policy Director since 2015 Director since Independent 2006 Independent 1984 Independent Not Independent Shareholder Engagement Policy Highlights of our Executive Compensation Program Our executive compensation program is designed to link executive pay with Gildan performance and align the interests of our management team with those of Gildan’s shareholders. Some of our compensation highlights are: Patrik Frisk Russell Goodman George Heller Anne Martin- Annual incentive awards subject to achievement of pre-established Independent Director since Director since Vachon performance goals tied to financial objectives 2010 2009 Director since Independent Independent 2015 Significant proportion of senior executives’ annual target Independent compensation is “at-risk” Amount that a senior executive can receive under the short-term incentive plan is capped at two times target No minimum guaranteed payout under the short-term incentive plan Long-term incentive plan equity awards are designed to encourage a long-term view of performance No hedging or monetizing of equity awards by executives Sheila O’Brien Gonzalo F. Use of an independent compensation consultant Director since Valdes-Fauli 2005 Director since Independent 2004 No excessive perquisites Independent Use of stress-testing and back-testing to assess alignment between pay and performance Use of representative and relevant peer group MANAGEMENT INFORMATION CIRCULAR 2 VOTING AND PROXIES VOTING AND PROXIES Solicitation of Proxies Exercise of Discretion by Proxies This management information circular (the “Circular”) is sent The persons named in the enclosed form of proxy will, on a in connection with the solicitation by the management of show of hands or any ballot that may be called for, vote (or Gildan Activewear Inc. (the “Company” or “Gildan”) of proxies withhold from voting) the shares in respect of which they are to be used at the annual meeting of shareholders of the appointed as proxies in accordance with the instructions of the Company to be held on Thursday, May 4, 2017 (the “Meeting”), shareholders appointing them. If a shareholder specifies a at the time, place and for the purposes set forth in the Notice choice with respect to any matter to be acted upon, the shares of Annual Meeting of Shareholders (the “Notice of Meeting”), will be voted accordingly. If no instructions are given, the and at any adjournment thereof. The solicitation is being made shares will be voted FOR the election of the nominees of the primarily by mail, but proxies may also be solicited by board of directors of the Company (the “Board of Directors” telephone, facsimile or other personal contact by officers or or the “Board”) as directors,