MANAGEMENT PROXY CIRCULAR LOBLAW COMPANIES LIMITED ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS MAY 3, 2018 THIS DOCUMENT CONTAINS: NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS MANAGEMENT PROXY CIRCULAR March 29, 2018 Dear Fellow Shareholder, On behalf of the Board and management, we are pleased to invite you to our Annual and Special Meeting of Shareholders, which will be held on Thursday, May 3, 2018, at 11:00 a.m. (Toronto time) at the Mattamy Athletic Centre, 50 Carlton Street, Toronto, Ontario, Canada. If you are attending the meeting in person, please visit our Loblaws store at Maple Leaf Gardens* located next to the Mattamy Athletic Centre. The Notice of Annual and Special Meeting of Shareholders and related materials are enclosed. This Management Proxy Circular describes the business to be conducted at the meeting. The Circular contains information on our corporate governance practices and our approach to executive compensation. At the meeting, shareholders will be voting on important matters. We hope that you take the time to review these meeting materials and that you exercise your vote. You may vote either in person at the meeting or by completing and sending in your proxy form. Please read the enclosed materials as they contain relevant information for voting on the business to be conducted at the meeting. We hope you will be able to join us in person or through our live webcast, which will be available at the Investors section of our website at www.loblaw.ca. This meeting is an opportunity to meet, listen to and ask questions of the people who are responsible for the performance of the Company. The webcast of the meeting will be archived on our website following the meeting. We thank you for your continued support of the Company and look forward to seeing you at the meeting. Yours very truly, Galen G. Weston Chairman and Chief Executive Officer *Registered TM Licensed Use MANAGEMENT PROXY CIRCULAR Table of Contents About the Meeting Notice of Annual and Special Meeting of Shareholders 1 Voting Information ............................................................................................................................................................... 1 About this Circular and Related Proxy Materials ............................................................................................................ 1 Notice and Access........................................................................................................................................................... 1 Questions and Answers on the Voting Process............................................................................................................... 1 General Information ....................................................................................................................................................... 4 Share Capital and Principal Shareholder ........................................................................................................................ 4 Business to be Transacted at the Meeting ........................................................................................................................... 5 Receive the Financial Statements ................................................................................................................................... 5 Election of the Board of Directors .................................................................................................................................. 5 Director Compensation .................................................................................................................................................. 14 Appointment of the Auditor ........................................................................................................................................... 16 Amendment of the Articles of Continuance ................................................................................................................... 17 Shareholder Proposals.................................................................................................................................................... 17 Committee Reports Audit Committee Report to Shareholders............................................................................................................................ 18 2 Environmental, Health & Safety Committee Report to Shareholders .................................................................................. 20 Pension Committee Report to Shareholders ........................................................................................................................ 22 Governance Committee Report to Shareholders ................................................................................................................. 23 Statement Of Corporate Governance Practices Statement of Corporate Governance Practices .............................................................................................................. 27 3 Corporate Governance Matters ...................................................................................................................................... 33 Compensation Discussion and Analysis Compensation Discussion and Analysis................................................................................................................................ 35 4 Introduction.................................................................................................................................................................... 36 Executive Compensation Philosophy .............................................................................................................................. 36 Executive Compensation and Risk Management............................................................................................................ 37 Role of Management and Compensation Consultants ................................................................................................... 38 Components of Compensation ....................................................................................................................................... 40 Components of Executive Compensation for 2017 ........................................................................................................ 42 2017 Compensation Decisions Regarding the Named Executive Officers ...................................................................... 54 Termination and Change of Control Benefits.................................................................................................................. 56 Compensation Decisions for 2018 .................................................................................................................................. 59 Performance Graph ........................................................................................................................................................ 60 Summary Compensation Table....................................................................................................................................... 61 Incentive Plan Awards .................................................................................................................................................... 62 Pension Plan and Long Service Executive Arrangements................................................................................................ 63 Indebtedness of Directors, Executive Officers and Employees....................................................................................... 64 Other Information Director and Officer Liability Insurance .......................................................................................................................... 65 Normal Course Issuer Bid ............................................................................................................................................... 65 Non-GAAP Financial Measures ....................................................................................................................................... 65 Additional Information ................................................................................................................................................... 65 Contacting the Board of Directors .................................................................................................................................. 65 Board Approval ............................................................................................................................................................... 65 Schedule A - Mandate of the Board of Directors A-1 Schedule B - Shareholder Proposals B 1 Notice of Annual and Special Meeting of Shareholders The 2018 Annual and Special Meeting of Shareholders of Loblaw Companies Limited will be held on Thursday, May 3, 2018, at 11:00 a.m. (Toronto time) at the Mattamy Athletic Centre, 50 Carlton Street, Toronto, Ontario, Canada, for the following purposes: 1. to receive the consolidated financial statements for the financial year ended December 30, 2017, and the auditor’s report thereon; 2. to elect the directors (see “Election of the Board of Directors” in the Management Proxy Circular (the “Circular”) for additional details); 3. to appoint the auditor and to authorize the directors to fix the auditor’s remuneration (see “Appointment of the Auditor” in the Circular for additional details);