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FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934

For the month of March, 2017

001-14832
(Commission File Number)



CELESTICA INC.
(Translation of registrant's name into English)



844 Don Mills Road
Toronto, Ontario
Canada M3C 1V7
(416) 448-5800
(Address of principal executive offices)

        Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

        Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

        Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

   



Furnished Herewith (and incorporated by reference herein)

Exhibit No.
  Description
99.1   Notice of Meeting and Management Information Circular for the April 20, 2017 Annual Meeting of Shareholders

99.2

 

Form of Proxy (Multiple Voting Shares)

99.3

 

Form of Proxy (Subordinate Voting Shares)

99.4

 

Voting Instruction Form for US beneficial holders

99.5

 

Voting Instruction Form for Canadian beneficial holders

99.6

 

Request card for both US and Canadian registered holders

99.7

 

Chief Executive Officer's Letter to Shareholders

        The information contained in this Form 6-K is not incorporated by reference into any registration statement (or into any prospectus that forms a part thereof) filed by Celestica Inc. with the Securities and Exchange Commission.



SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

        CELESTICA INC.

Date: March 13, 2017

 

By:

 

/s/ ELIZABETH L. DELBIANCO

Elizabeth L. DelBianco
Chief Legal and Administrative Officer


EXHIBIT INDEX

Exhibit No.
  Description
99.1   Notice of Meeting and Management Information Circular for the April 20, 2017 Annual Meeting of Shareholders

99.2

 

Form of Proxy (Multiple Voting Shares)

99.3

 

Form of Proxy (Subordinate Voting Shares)

99.4

 

Voting Instruction Form for US beneficial holders

99.5

 

Voting Instruction Form for Canadian beneficial holders

99.6

 

Request card for both US and Canadian registered holders

99.7

 

Chief Executive Officer's Letter to Shareholders



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Furnished Herewith (and incorporated by reference herein)
SIGNATURES
EXHIBIT INDEX

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Exhibit 99.1

 


GRAPHIC




NOTICE OF MEETING
AND
MANAGEMENT INFORMATION
CIRCULAR



FOR THE ANNUAL MEETING
OF SHAREHOLDERS

 

TO BE HELD ON
APRIL 20, 2017






GRAPHIC

INVITATION TO SHAREHOLDERS

On behalf of the Board of Directors, management and employees of Celestica Inc. (the "Corporation"), it is our pleasure to invite you to join us at the Corporation's Annual Meeting of Shareholders to be held on Thursday, April 20, 2017 at 9:30 a.m. (EDT) at the TMX Broadcast Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario.

The items of business to be considered and voted upon by shareholders at this meeting are described in the Notice of Annual Meeting and the accompanying Management Information Circular.

You can find further information concerning the Corporation on our website: www.celestica.com. We encourage you to visit our website before attending the meeting, as it provides useful information regarding the Corporation.

Your participation at this meeting is important. We encourage you to exercise your right to vote, which can be done by following the instructions provided in the Management Information Circular and accompanying form of proxy.

After the meeting, Robert A. Mionis, President and Chief Executive Officer, and Darren G. Myers, Chief Financial Officer, will provide a report on the Corporation's affairs. You will also have the opportunity to ask questions and to meet the Corporation's Board of Directors and executives.

Yours sincerely,


GRAPHIC

GRAPHIC
William A. Etherington
Chair of the Board
Robert A. Mionis
President and Chief Executive Officer

 


Your Vote Is Important

Registered Shareholders

You are a registered shareholder if your shares are registered directly in your name with our transfer agent, Computershare Investor Services Inc. ("Computershare"). You will have received from Computershare a form of proxy which accompanied your Management Information Circular. Complete, sign, date and mail your form of proxy to Computershare in the envelope provided or follow the instructions provided on the form of proxy to vote by telephone or internet. For instructions regarding how to vote in person at the meeting if you are a registered shareholder, see Questions and Answers on Voting and Proxies — How Do I Exercise My Vote (and by When)?

Non-Registered Shareholders

You are a non-registered shareholder (or beneficial owner) if your shares are held in the name of a nominee (such as a securities broker, trustee or other financial institution). You will have received from your nominee a request for voting instructions which accompanied your Management Information Circular. Alternatively, your nominee may have provided you with a form of proxy. Follow the instructions on your voting instruction form to vote by telephone or internet, or complete, sign, date and mail the voting instruction form in the envelope provided. For instructions regarding how to vote in person at the meeting if you are a non-registered shareholder, see Questions and Answers on Voting and Proxies — How Do I Vote if I am a Non-Registered Shareholder?


TABLE OF CONTENTS

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF CELESTICA INC i
   
MANAGEMENT INFORMATION CIRCULAR 1
   
    Questions and Answers on Voting and Proxies 1
    Principal Holders of Voting Shares 5
        Agreement for the Benefit of Holders of SVS 5
    Information Relating to Our Directors 6
        Election of Directors 6
        Director Compensation 14
        Directors' Fees Earned in 2016 15
        Directors' Ownership of Securities 16
        Attendance of Directors at Board and Committee Meetings 19
    Information about our Auditor 20
    Say-On-Pay 21
    2016 Voting Results 21
    Compensation Committee 22
    Compensation Committee Letter to Shareholders 23
    Compensation Discussion and Analysis 26
        Compensation Objectives 26
        Anti-Hedging and Anti-Pledging Policy 32
        "Clawback" Provisions 33
        Compensation Elements for the Named Executive Officers 33
        2016 Compensation Decisions 36
        CEO Realized and Realizable Compensation 43
    Compensation of Named Executive Officers 44
        Summary Compensation Table 44
        Option-Based and Share-Based Awards 46
        Securities Authorized for Issuance Under Equity Compensation Plans 48
        Equity Compensation Plans 48
        Pension Plans 51
        Termination of Employment and Change in Control Arrangements with Named Executive Officers 52
        Performance Graph 57
    Executive Share Ownership 58
    Indebtedness of Directors and Officers 58
    Directors, Officers and Corporation Liability Insurance 59
    Statement of Corporate Governance Practices 59
    Other Matters 59
    Requests for Documents 60
    Certificate 60
   
    Schedule A — Statement Of Corporate Governance Practices A-1
    Schedule B — Board of Directors Mandate B-1

 


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF CELESTICA INC.

The Annual Meeting of Shareholders (the "Meeting") of CELESTICA INC. (the "Corporation" or "Celestica") will be held at the TMX Broadcast Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario on Thursday the 20th day of April, 2017 at 9:30 a.m. (EDT) for the following purposes:

Shareholders are invited to vote at the Meeting by completing, signing, dating and returning the accompanying form of proxy by mail or by following the instructions for voting by telephone or internet in the accompanying form of proxy, whether or not they are able to attend personally.

Only shareholders of record at the close of business on March 10, 2017 will be entitled to vote at the Meeting.

 

DATED at Toronto, Ontario this 9th day of March, 2017.

By Order of the Board of Directors

GRAPHIC

Elizabeth L. DelBianco
Chief Legal and Administrative Officer
and Corporate Secretary

Note: If you are a new shareholder or a shareholder who did not elect to receive our 2016 Annual Report, you can view that report on our website at www.celestica.com or under our profile at www.sedar.com. If you wish to receive a hard copy of the report, please contact us at clsir@celestica.com.

i

GRAPHIC

CELESTICA INC.
844 Don Mills Road
Toronto, Ontario, Canada M3C 1V7

MANAGEMENT INFORMATION CIRCULAR

In this Management Information Circular (the "Circular"), unless otherwise noted, all information is given as of February 15, 2017 and all dollar amounts are expressed in United States dollars. Unless stated otherwise, all references to "U.S.$" or "$" are to U.S. dollars and all references to "C$" are to Canadian dollars. Unless otherwise indicated, any reference in this Circular to a conversion between U.S.$ and C$ is a conversion at the average of the exchange rates in effect for 2016. During that period, based on the relevant 2016 noon buying rates in New York City for cable transfers in Canadian dollars, as certified for customs purposes by the Board of Governors of the Federal Reserve System, the average exchange rate was $1.00 = C$1.3243.

QUESTIONS AND ANSWERS ON VOTING AND PROXIES
Q.
WHAT DECISIONS WILL I BE ASKED TO MAKE?

A.
Shareholders will be voting on the following matters: the election of each individual director to the Board of Directors of the Corporation (the "Board" or the "Board of Directors") for the ensuing year, the appointment of an auditor for the Corporation for the ensuing year, authorization of the Board to fix the auditor's remuneration, an advisory resolution on the Corporation's approach to executive compensation, and any other matters as may properly be brought before the Meeting.
Q.
WHO IS SOLICITING MY PROXY?

A.
The Corporation's management is soliciting your proxy.    All associated costs of solicitation will be borne by the Corporation. The solicitation will be primarily by mail, but proxies may also be solicited personally by regular employees of the Corporation for which no additional compensation will be paid. The Corporation anticipates that copies of this Circular and accompanying form of proxy will be sent to registered shareholders on or about March 17, 2017.

Q.
WHO IS ENTITLED TO VOTE?

A.
Any holder of Subordinate Voting Shares ("SVS") or Multiple Voting Shares ("MVS") at the close of business on March 10, 2017 or such holder's duly appointed proxyholders or representatives are entitled to vote.
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Q.
HOW DO I EXERCISE MY VOTE (AND BY WHEN)?

A.
If you are a registered shareholder, you may exercise your right to vote by attending and voting your shares in person at the Meeting, by mailing in the attached form of proxy or by voting by telephone or internet.
Q.
WHAT IF I SIGN THE FORM OF PROXY ENCLOSED WITH THIS CIRCULAR?

A.
Signing the form of proxy gives authority to Mr. William A. Etherington or Mr. Robert A. Mionis or their designees (the "Proxy Nominees"), to vote your shares at the Meeting, unless you give authority to another person to vote your shares by providing that person's name on the form of proxy.

Q.
CAN I APPOINT SOMEONE OTHER THAN THE PERSONS NAMED IN THE FORM OF PROXY ENCLOSED WITH THIS CIRCULAR TO VOTE MY SHARES AT THE MEETING?

A.
Yes, you may appoint an individual or company (such individual or authorized representative of such company shall be referred to herein as a "Designee") to represent you at the Meeting other than the persons designated in the form of proxy. Write the name of the Designee of your choice in the blank space provided in the form of proxy. The Designee whom you choose need not be a shareholder.
Q.
HOW WILL MY SHARES BE VOTED AT THE MEETING IF I GIVE MY PROXY?

A.
On any ballot that may be called for, the shares represented by a properly executed proxy given in favour of the Proxy Nominees in the enclosed form of proxy will be voted for or against or withheld from voting in accordance with the instructions given on the ballot. If you specify a choice with respect to any matter to be acted upon, the shares will be voted accordingly.
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Q.
IF I CHANGE MY MIND, CAN I TAKE BACK MY PROXY ONCE I HAVE GIVEN IT?

A.
Yes, you may revoke any proxy that you have given at any time prior to its use at the Meeting for which it was given or any adjournment(s) or postponement(s) thereof. In addition to revocation in any other manner permitted by law, you may revoke the proxy by preparing a written statement, signed by you or your attorney, as authorized, or if the proxy is given on behalf of a corporation, by a duly authorized officer or attorney of such corporation, and deposited with the Chair of the Meeting on the day of the Meeting, or any adjournment(s) or postponement(s) thereof, prior to the proxy being voted, or by transmitting, by telephonic or electronic means, a revocation signed by electronic signature by you or by your attorney, who is authorized in writing, to the registered office of the Corporation at any time up to and including the last business day preceding the day of the Meeting, or any adjournment(s) or postponement(s) thereof, at which the proxy is to be used.
Q.
WHAT IF AMENDMENTS ARE MADE TO THE SCHEDULED MATTERS OR IF OTHER MATTERS ARE BROUGHT BEFORE THE MEETING?

A.
The accompanying form of proxy confers discretionary authority upon the Proxy Nominees in respect of any amendments or variations to matters identified in the Notice of Meeting or other matters that may properly come before the Meeting or any adjournment(s) or postponement(s) thereof.
Q.
HOW DO I VOTE IF I AM A NON-REGISTERED SHAREHOLDER?

A.
A shareholder is a non-registered shareholder (or beneficial owner) if (i) an intermediary (such as a bank, trust company, securities dealer or broker, trustee or administrator of a registered retirement savings plan, registered retirement income fund, deferred profit sharing plan, registered education savings plan, registered disability savings plan or tax-free savings account), or (ii) a clearing agency (such as CDS Clearing and Depository Services Inc. or Depository Trust and Clearing Corporation), of which the intermediary is a participant (in each case, an "Intermediary"), holds the shareholder's shares on behalf of the shareholder.
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Q.
HOW CAN I CONTACT THE INDEPENDENT DIRECTORS AND CHAIR?

A.
You may contact the independent directors, including the Chair of the Corporation, with the assistance of Celestica Investor Relations. Shareholders or other interested persons can send a letter, e-mail or fax c/o Celestica Investor Relations to the following coordinates:
Q.
WHOM SHOULD I CONTACT IF I HAVE QUESTIONS CONCERNING THE CIRCULAR OR FORM OF PROXY?

A.
If you have questions concerning the information contained in this Circular you may contact Celestica Investor Relations (see contact coordinates above). If you require assistance in completing the form of proxy you may contact Computershare (see contact coordinates below).

Q.
HOW CAN I CONTACT THE TRANSFER AGENT?

A.
You may contact the transfer agent by mail:
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PRINCIPAL HOLDERS OF VOTING SHARES

As of February 15, 2017, the only persons or corporations who, to the knowledge of the Corporation, its directors or executive officers, beneficially own, or control or direct, directly or indirectly, voting securities carrying 10% or more of the voting rights attached to any class of the voting securities of the Corporation are as follows:

Table 1: Principal Holders of Voting Shares

 Name
 
Number of
Shares

 
Percentage of
Class

 
Percentage of
All Equity Shares

 
Percentage of
Voting Power

 

 
Onex Corporation(1)


 


18,946,368 MVS


 


100%


 


13.2%


 


79.2%


 
 
 Toronto, Ontario
 Canada
  414,621 SVS   *   *   *  

 
Gerald W. Schwartz(2)


 


18,946,368 MVS


 


100%


 


13.2%


 


79.2%


 
 
 Toronto, Ontario
 Canada
  535,278 SVS   *   *   *  
 Letko, Brosseau & Associates Inc.(3)
 Montréal, Québec
 Canada
  20,910,848 SVS   16.8%   14.6%   3.5%  

*
Less than 1%.
(1)
The number of shares beneficially owned, or controlled or directed, directly or indirectly, by Onex Corporation ("Onex") includes 945,010 MVS held by a wholly-owned subsidiary of Onex. 1,170,208 of such MVS are subject to options granted to certain officers of Onex pursuant to certain management investment plans of Onex, which options may be exercised upon specified dispositions by Onex (directly or indirectly) of Celestica's securities, with respect to which Onex has the right to vote or direct the vote ("MIP Options"), including 688,807 MIP Options granted to Gerald W. Schwartz (each of which MVS will, upon exercise of such options, be automatically converted into an SVS).
(2)
The number of shares beneficially owned, or controlled or directed, directly or indirectly, by Mr. Schwartz consists of 120,657 SVS owned by a company controlled by Mr. Schwartz and all of the 18,946,368 MVS and 414,621 SVS beneficially owned, or controlled or directed, directly or indirectly, by Onex, including the 1,170,208 MVS subject to MIP Options (which include 688,807 MIP Options granted to Mr. Schwartz), all as described in footnote 1 above. Mr. Schwartz was a director of the Corporation until his retirement effective December 31, 2016 in accordance with the Board's retirement policy. Mr. Schwartz remains the Chairman of the Board and Chief Executive Officer of Onex. In addition, he owns multiple voting shares of Onex carrying the right to elect a majority of the Onex board of directors. Accordingly, under applicable securities laws, Mr. Schwartz is deemed to be the beneficial owner of the Celestica shares owned by Onex; Mr. Schwartz has advised the Corporation, however, that he disclaims any rights of such beneficial ownership of the shares held by Onex.
(3)
The number of shares reported as held by Letko, Brosseau & Associates Inc. ("Letko") is based on the Schedule 13G/A it filed with the United States Securities and Exchange Commission on January 18, 2017, reporting ownership as of December 31, 2016.

Agreement for the Benefit of Holders of SVS

Onex, which beneficially owns, controls or directs, directly or indirectly, all of the outstanding MVS, has entered into an agreement with the Corporation and with Computershare Trust Company of Canada (as successor to the Montreal Trust Company of Canada), as trustee for the benefit of the holders of the SVS, for the purpose of ensuring that the holders of the SVS will not be deprived of rights under applicable provincial take-over bid legislation to which they would be otherwise entitled in the event of a take-over bid (as that term is defined in applicable securities legislation) for the MVS if the MVS had been SVS. Subject to certain permitted forms of sale, such as identical or better offers to all holders of SVS, Onex has agreed that it, and any of its affiliates that may hold MVS from time to time, will not sell any MVS, directly or indirectly, pursuant to a take-over bid (as that term is defined under applicable securities legislation) under circumstances in which any applicable

5

securities legislation would have required the same offer or a follow-up offer to be made to holders of SVS if the sale had been a sale of SVS rather than MVS, but otherwise on the same terms.

The articles of the Corporation provide "coat-tail" protection to the holders of the SVS by providing that the MVS will be converted automatically into SVS upon any transfer thereof, except (a) a transfer to Onex or any affiliate of Onex, or (b) a transfer of 100% of the outstanding MVS to a purchaser who also has offered to purchase all of the outstanding SVS for a per share consideration identical to, and otherwise on the same terms as, that offered for the MVS, and the MVS held by such purchaser thereafter shall be subject to the provisions relating to conversion (including with respect to the provisions described in this paragraph) as if all references to Onex were references to such purchaser. In addition, if (a) any holder of any MVS ceases to be an affiliate of Onex, or (b) Onex and its affiliates cease to have the right, in all cases, to exercise the votes attached to, or to direct the voting of, any of the MVS held by Onex and its affiliates, such MVS shall convert automatically into SVS on a one-for-one basis. For these purposes, (a) "Onex" includes any successor corporation resulting from an amalgamation, merger, arrangement, sale of all or substantially all of its assets, or other business combination or reorganization involving Onex, provided that such successor corporation beneficially owns directly or indirectly all MVS beneficially owned directly or indirectly by Onex immediately prior to such transaction and is controlled by the same person or persons as controlled Onex prior to the consummation of such transaction, (b) a corporation shall be deemed to be a subsidiary of another corporation if, but only if (i) it is controlled by that other, or that other and one or more corporations each of which is controlled by that other, or two or more corporations each of which is controlled by that other, or (ii) it is a subsidiary of a corporation that is that other's subsidiary, (c) "affiliate" means a subsidiary of Onex or a corporation controlled by the same person or company that controls Onex, and (d) "control" means beneficial ownership of, or control or direction over, securities carrying more than 50% of the votes that may be cast to elect directors if those votes, if cast, could elect more than 50% of the directors. For these purposes, a person is deemed to beneficially own any security which is beneficially owned by a corporation controlled by such person. In addition, if at any time the number of outstanding MVS shall represent less than 5% of the aggregate number of the outstanding MVS and SVS, all of the outstanding MVS shall be automatically converted at such time into SVS on a one-for-one basis.

INFORMATION RELATING TO OUR DIRECTORS

Election of Directors

The ten individuals listed herein are being recommended for election as directors of the Corporation, as the current term of office for each director expires at the close of the Meeting. If elected, they will hold office until the close of the next annual meeting of shareholders or until their successors are elected or appointed, unless such office is earlier vacated in accordance with the Corporation's by-laws. All of the proposed nominees are currently directors of the Corporation. The articles of the Corporation provide for a minimum of three and a maximum of twenty directors. The Board of Directors has the authority to set the number of directors of the Corporation to be elected at the Meeting and has set that number at ten.

The Board has a retirement policy which provides that, unless the Board authorizes an exception, a director shall not stand for re-election after his or her 75th birthday. During 2016, the Nominating and Corporate Governance Committee reviewed the composition of the Board in anticipation of two Board members, Messrs. Etherington (Chair) and Schwartz, reaching retirement age. On July 21, 2016, Mr. Natale was appointed Vice-Chair of the Board. The Nominating and Corporate Governance Committee began the process of identifying potential new directors and an ad hoc committee comprised of Messrs. Etherington and Natale was created (the "Director Search Committee"). A preferred candidate profile was developed based on the qualifications, experience, diversity and expertise determined to be best suited to fill any gaps and in adherence with the Corporation's policy with respect to the identification and nomination of women directors. Candidates were identified with the assistance of a director search firm and suitable candidates were interviewed by the members of the Director Search Committee. Mr. Gross was identified through this process and was appointed to the Board effective November 1, 2016. He is standing for election by shareholders for the first time at the Meeting. In accordance

6

with the retirement policy, Mr. Schwartz retired from the Board effective December 31, 2016 and Tawfiq Popatia, an officer of Onex, was appointed as his replacement effective January 1, 2017. Mr. Popatia is standing for election by shareholders for the first time at the Meeting. The Nominating and Corporate Governance Committee considered the application of the retirement policy to Mr. Etherington. After consideration of all of the aforementioned changes to the composition of the Board, as well as the fact that Mr. Mionis completed his first full fiscal year as President and Chief Executive Officer ("CEO") during 2016, the Nominating and Corporate Governance Committee recommended, and the Board approved, an exception to its retirement policy for Mr. Etherington to provide an element of continuity during this period of transition. In accordance with the exception, Mr. Etherington is standing for re-election by shareholders as Chair of the Board at the Meeting. See Statement of Corporate Governance Practices — Nomination and Election of Directors and — Retirement Policy and Term Limits in Schedule A to this Circular.

Unless authority to do so is withheld, shares represented by proxies in favour of the Proxy Nominees will be voted in favour of each of the proposed nominees listed below for election as directors. Management of the Corporation does not contemplate that any of the nominees will be unable, or for any reason unwilling, to serve as a director, but if that should occur for any reason prior to their election, the Proxy Nominees may, in their discretion, nominate and vote for another nominee.

Majority Voting Policy

The Board has adopted a policy that requires, in an uncontested election of directors, that shareholders be able to vote in favour of, or to withhold from voting, separately for each director nominee. If, with respect to any particular nominee, other than the controlling shareholder or a representative of the controlling shareholder, the number of shares withheld from voting by shareholders other than the controlling shareholder and its associates exceeds the number of shares that are voted in favour of the nominee, by shareholders other than the controlling shareholder and its associates, then the Board shall determine, and in so doing shall give due weight to the rights of the controlling shareholder, whether to require the nominee to resign from the Board and, if so required, any such nominee shall immediately tender his or her resignation. The Board shall accept such resignation absent exceptional circumstances. Such a determination by the Board shall be made, and announced by press release, within 90 days after the applicable shareholders' meeting. If the Board determines not to accept a resignation, the press release will state the reasons for such decision. Subject to any corporate law restrictions, the Board may leave any resultant vacancy unfilled until the next annual shareholders' meeting or it may fill the vacancy through the appointment of a new director whom the Board considers would merit the confidence of the shareholders, or it may call a special meeting of shareholders at which there shall be presented a nominee or nominees to fill the vacant position or positions. See Statement of Corporate Governance Practices — Nomination and Election of Directors — Election of Directors in Schedule A to this Circular.

Nominees for Election as Director

The following tables set out certain information with respect to the nominees, including their municipalities of residence; their ages; the year from which each has continuously served as a director of the Corporation; all positions and offices held by them with the Corporation or any of its significant affiliates; their present principal occupations, businesses and employments; and other public corporations of which they are directors. There are no contracts, arrangements or understandings between any director or executive officer or any other person pursuant to which any one of the nominees has been nominated.

For a description of the number of shares and deferred share units ("DSUs") beneficially owned, directly or indirectly, or over which control or direction is exercised by the Corporation's directors, and a description of the DSUs, see Information Relating to Our Directors — Directors' Ownership of Securities and Information Relating to Our Directors — Director Compensation. In the case of options, restricted share units ("RSUs") and performance share units ("PSUs") beneficially owned, directly or indirectly, or over which control or direction is exercised by Mr. Mionis, see Compensation Discussion and Analysis and Compensation of Named Executive Officers — Option-Based and Share-Based Awards.

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PHOTO
Daniel P. DiMaggio
Duluth, Georgia
United States

Director Since: 2010
Age: 66
Status: Independent

Top 3 Areas of Expertise:
•   Executive Leadership
•   Global Logistics
•   Industrial Engineering

2016 Annual Meeting(1)
Votes in Favour: 99.99%
Votes Withheld: 0.01%

Mr. DiMaggio is a corporate director. Prior to retiring in 2006, he spent 35 years with United Parcel Services ("UPS") (a public company), most recently as Chief Executive Officer of the UPS Worldwide Logistics Group. Prior to leading UPS' Worldwide Logistics Group, Mr. DiMaggio held a number of positions at UPS with increasing responsibility, including leadership roles for the UPS International Marketing Group, as well as the Industrial Engineering function. In addition to his senior leadership roles at UPS, Mr. DiMaggio was a member of the board of directors of Greatwide Logistics Services, Inc.(2) and CEVA Logistics (a public company). He holds a Bachelor of Science degree from the Lowell Technological Institute (now the University of Massachusetts Lowell).

Mr. DiMaggio sits on the Audit, Compensation, and Nominating and Corporate Governance Committees.

BOARD AND COMMITTEE ATTENDANCE(3)
  ATTENDANCE
TOTAL ATTENDANCE
Board 8 of 8 Board 100%
Audit 7 of 7 Committee 100%
Compensation Committee 6 of 6    
Nominating & Corporate Governance 4 of 4    
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
No other public directorships      
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)
Target Value:   $352,500 Target Met: Yes
Actual Value:   $1,830,896    

 


PHOTO
William A. Etherington
Toronto, Ontario
Canada

Director Since: 2001
Age: 75(5)
Status: Independent

Top 3 Areas of Expertise:
•   Public Company Board/Chair
•   Investment and Business Strategy
•   Corporate Governance

2016 Annual Meeting(1)
Votes in Favour: 99.60%
Votes Withheld: 0.40%

Mr. Etherington is a corporate director. In addition to being the Chair of the Board of Celestica, he is also a director of Onex and SS&C Technologies Holdings, Inc. (each a public company). He is a former director and non-executive Chairman of the board of directors of the Canadian Imperial Bank of Commerce (a public company), and a former director of St. Michael's Hospital. In 2001, Mr. Etherington retired as Senior Vice President and Group Executive, Sales and Distribution, IBM Corporation (a public company), and as Chairman, President and Chief Executive Officer of IBM World Trade Corporation. He holds a Bachelor of Science degree in Electrical Engineering and a Doctor of Laws (Hon.) from Western University.

Mr. Etherington sits on the Audit, Compensation, and Nominating and Corporate Governance (Chair) Committees.

BOARD AND COMMITTEE ATTENDANCE(3)
  ATTENDANCE
TOTAL ATTENDANCE
Board 8 of 8 Board 100%
Audit 7 of 7 Committee 100%
Compensation Committee 6 of 6    
Nominating & Corporate Governance 4 of 4    
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
•   Onex •   SS&C Technologies Holdings, Inc.  
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)
Target Value:   $675,000   Target Met: Yes
Actual Value:   $4,337,373    
8


PHOTO
Thomas S. Gross
Chicago, Illinois
United States

Director Since: 2016
Age: 62
Status: Independent

Top 3 Areas of Expertise:
•   Executive Leadership
•   Energy and Power
•   Finance

2016 Annual Meeting(6)
Votes in Favour: N/A
Votes Withheld: N/A

Mr. Gross is a corporate director. He served as Vice Chairman and Chief Operating Officer of the Electrical Sector of Eaton Corporation, a NYSE-traded power management company, from February 2009 until his retirement in August 2015. Prior to this role, he held senior leadership positions during his 13 year tenure with Eaton. Mr. Gross joined Eaton from Danaher Corporation (a public company), where he served in various executive leadership roles. Previously, Mr. Gross served as President and Chief Executive Officer of Xycom from 1997 to 1999. He worked for Rockwell Automation, a NYSE-traded provider of industrial automation and information products, for 20 years, holding a series of key operating roles. Mr. Gross holds a Bachelor of Science in Electrical and Computer Engineering from the University of Wisconsin and a Master of Business Administration degree from the University of Michigan.

Mr. Gross sits on the Audit, Compensation, and Nominating and Corporate Governance Committees.

BOARD AND COMMITTEE ATTENDANCE(3)(6)
  ATTENDANCE
TOTAL ATTENDANCE
Board 2 of 2 Board 100%
Audit 2 of 2 Committee 100%
Compensation Committee 2 of 2    
Nominating & Corporate Governance 1 of 1    
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
•   WABCO Holdings Inc. •   RPM International  
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)(6)
Target Value:   $352,500 Target Met: N/A
Actual Value:   $31,331    

 


PHOTO
Laurette T. Koellner
Merritt Island, Florida
United States

Director Since: 2009
Age: 62
Status: Independent

Top 3 Areas of Expertise:
•   Public Company Board Expertise
•   Audit and Finance
•   Human Resources

2016 Annual Meeting(1)
Votes in Favour: 99.54%
Votes Withheld: 0.46%

Ms. Koellner is a corporate director. She most recently served as Executive Chairman of International Lease Finance Corporation, an aircraft leasing subsidiary of American International Group, Inc. ("AIG") from 2012 until its sale in 2014. Ms. Koellner retired as President of Boeing International, a division of The Boeing Company, in 2008. While at Boeing, she was a member of the Office of the Chairman and served as the Executive Vice President, Internal Services, Chief Human Resources and Administrative Officer, President of Shared Services and Corporate Controller. Ms. Koellner previously served on the board of directors and was the Chair of the Audit Committee of Hillshire Brands Company (a public company, formerly Sara Lee Corporation and now merged with Tyson Foods, Inc.) and on the board of directors of AIG (a public company). She holds a Bachelor of Science degree in Business Management from the University of Central Florida and a Masters of Business Administration from Stetson University, as well as a Certified Professional Contracts Manager designation from the National Contracts Management Association.

Ms. Koellner sits on the Audit (Chair), Compensation, and Nominating and Corporate Governance Committees.

BOARD AND COMMITTEE ATTENDANCE(3)
  ATTENDANCE
TOTAL ATTENDANCE
Board 8 of 8 Board 100%
Audit 7 of 7 Committee 100%
Compensation Committee 6 of 6    
Nominating & Corporate Governance 4 of 4    
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
•   Papa John's International, Inc. •   The Goodyear Tire & Rubber Company
•   Nucor Corporation    
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)
Target Value:   $352,500 Target Met: Yes
Actual Value:   $2,104,738    
9


PHOTO
Robert A. Mionis
Scottsdale, Arizona
United States

Director Since: 2015
Age: 53
Status: Not Independent

Top 3 Areas of Expertise:
•   President and CEO
•   Engineering and Finance
•   Aerospace, SemiCap and Industrial Technology

2016 Annual Meeting(1)
Votes in Favour: 99.99%
Votes Withheld: 0.01%

Mr. Mionis is President and Chief Executive Officer of the Corporation. From July 2013 until August 2015, he was an Operating Partner at Pamplona Capital Management ("Pamplona"), a global private equity firm focused on companies in the industrial, aerospace, healthcare and automotive segments. Before joining Pamplona, Mr. Mionis spent over six years as the President and CEO of StandardAero, a global aerospace maintenance, repair and overhaul company. Before StandardAero, Mr. Mionis held senior leadership roles at Honeywell, most recently as the head of the Integrated Supply Chain Organization for Honeywell Aerospace. Prior to Honeywell, Mr. Mionis held a variety of progressively senior leadership roles with General Electric (GE) and Axcelis Technologies (each a public company) and AlliedSignal. He holds a Bachelor of Science in Electrical Engineering from the University of Massachusetts.

Mr. Mionis does not sit on any committees of the Board of Directors of the Corporation.

BOARD AND COMMITTEE ATTENDANCE(3)
  ATTENDANCE
TOTAL ATTENDANCE
Board 8 of 8 Board 100%
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
No other public directorships      
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016
N/A — For details of Mr. Mionis' share ownership under the Executive Share Ownership Guidelines
see Executive Share Ownership

 


PHOTO
Joseph M. Natale
Mississauga, Ontario
Canada

Director Since: 2012
Age: 52
Status: Independent

Top 3 Areas of Expertise:
•   Executive Leadership
•   Business and Financial Consultant
•   Engineering, Technology and Telecommunications

2016 Annual Meeting(1)
Votes in Favour: 99.99%
Votes Withheld: 0.01%

Mr. Natale is a corporate director and the Vice-Chair of the Board of Celestica. He served as the President and Chief Executive Officer, and a director, of TELUS Corporation, a public telecommunications services company, between May 2014 and August 2015, having joined the company in 2003. Prior to this role, and since May 2010, Mr. Natale served as Executive Vice President and Chief Commercial Officer of TELUS Corporation. Prior to 2003, Mr. Natale held successive senior leadership roles within KPMG Consulting, which he joined after it acquired the company he co-founded, PNO Management Consultants Inc., in 1997. Mr. Natale served on the board of directors of KPMG Canada in 1998 and 1999. Mr. Natale is a member of the board of directors of Soulpepper Theatre and acted as Technology & Telecommunications Chair for United Way Toronto's 2014 Campaign Cabinet. He is a past recipient of Canada's Top 40 Under 40 Award and holds a Bachelor of Applied Science degree in Electrical Engineering from the University of Waterloo.

Mr. Natale sits on the Audit, Compensation, and Nominating and Corporate Governance Committees.

BOARD AND COMMITTEE ATTENDANCE(3)
  ATTENDANCE
TOTAL ATTENDANCE
Board 8 of 8 Board 100%
Audit 7 of 7 Committee 100%
Compensation Committee 6 of 6    
Nominating & Corporate Governance 4 of 4    
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
•   Gibraltar Growth Corporation      
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)
Target Value:   $352,500 Target Met: Yes
Actual Value:   $1,580,956    
10


PHOTO
Carol S. Perry
Toronto, Ontario
Canada

Director Since: 2013
Age: 66
Status: Independent

Top 3 Areas of Expertise:
•   Securities Regulatory and Corporate Governance
•   Investment Banker and Financial Services
•   ICD.D Designation

2016 Annual Meeting(1)
Votes in Favour: 99.99%
Votes Withheld: 0.01%

Ms. Perry is a corporate director. She is Chair of the Independent Review Committee of the mutual funds managed by 1832 Asset Management L.P., a mutual fund manager and wholly-owned affiliate of The Bank of Nova Scotia. Previously, she was a Commissioner of the Ontario Securities Commission, and has served on adjudicative panels and acted as a director and Chair of its Governance and Nominating Committee. With over 20 years of experience in the investment industry as an investment banker, Ms. Perry held senior positions with leading financial services companies including RBC Capital Markets, Richardson Greenshields of Canada Limited and CIBC World Markets and later founded MaxxCap Corporate Finance Inc., a financial advisory firm. She is a former director of Softchoice Corporation, Atomic Energy of Canada Limited and DALSA Corporation. Ms. Perry has a Bachelor of Engineering Science (Electrical) degree from the University of Western Ontario and a Master of Business Administration degree from the University of Toronto. She also holds the professional designation ICD.D from the Institute of Corporate Directors.

Ms. Perry sits on the Audit, Compensation, and Nominating and Corporate Governance Committees.

BOARD AND COMMITTEE ATTENDANCE(3)
  ATTENDANCE
TOTAL ATTENDANCE
Board 8 of 8 Board 100%
Audit 7 of 7 Committee 100%
Compensation Committee 6 of 6    
Nominating & Corporate Governance 4 of 4    
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
No other public directorships      
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)
Target Value:   $352,500 Actual Value:   $974,449 Target Met: Yes
 
 

 


PHOTO
Tawfiq Popatia
Toronto, Ontario
Canada

Director Since: 2017
Age: 42
Status: Not Independent

Top 3 Areas of Expertise:
•   Finance and Capital Markets
•   Aerospace and Transportation
•   Pensions

2016 Annual Meeting(7)
Votes in Favour: N/A
Votes Withheld: N/A

Mr. Popatia has been a Managing Director of Onex since 2014 and leads its efforts in automation, aerospace and other transportation-focused industries, having joined the firm in 2007. Prior to joining Onex, Mr. Popatia worked at the private equity firm of Hellman & Friedman LLC and in the Investment Banking Division of Morgan Stanley & Co. Mr. Popatia currently serves on the boards of Advanced Integration Technology, an aerospace automation company, and BBAM, a provider of commercial jet aircraft leasing, financing and management. He previously served on the board of Spirit Aerosystems (a public company), and is a former Employer Trustee of the International Association of Machinists National Pension Fund. Mr. Popatia holds a Bachelor of Science degree in Microbiology and a Bachelor of Commerce degree in Finance from the University of British Columbia.

Mr. Popatia does not sit on any committees of the Board of Directors of the Corporation.

BOARD AND COMMITTEE ATTENDANCE(3)(7)
  ATTENDANCE
TOTAL ATTENDANCE
Board 1 of 1 Board 100%
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
No other public directorships      
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)(7)(8)
Target Value:   N/A   Target Met: N/A
Actual Value:   N/A    
11


PHOTO
Eamon J. Ryan
Toronto, Ontario
Canada

Director Since: 2008
Age: 71
Status: Independent

Top 3 Areas of Expertise:
•   Executive Leadership
•   Finance and Treasury
•   International Office Products and Printing Solutions

2016 Annual Meeting(1)
Votes in Favour: 99.95%
Votes Withheld: 0.05%

Mr. Ryan is a corporate director. He is the former Vice President and General Manager, Europe, Middle East and Africa for Lexmark International Inc. (a public company). Prior to that, he was the Vice President and General Manager, Printing Services and Solutions Manager, Europe, Middle East and Africa. Mr. Ryan joined Lexmark International Inc. in 1991 as the President of Lexmark Canada. Prior to that, he spent 22 years at IBM Canada, where he held a number of sales and marketing roles in its Office Products and Large Systems divisions. Mr. Ryan's last role at IBM Canada was Director of Operations for its Public Sector, a role he held from 1986 to 1990. He holds a Bachelor of Arts degree from the University of Western Ontario.

Mr. Ryan sits on the Audit, Compensation (Chair), and Nominating and Corporate Governance Committees.

BOARD AND COMMITTEE ATTENDANCE(3)
  ATTENDANCE
TOTAL ATTENDANCE
Board 8 of 8 Board 100%
Audit 7 of 7 Committee 100%
Compensation Committee 6 of 6    
Nominating & Corporate Governance 4 of 4    
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
No other public directorships      
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)
Target Value:   $352,500 Target Met: Yes
Actual Value:   $2,721,708    

 


PHOTO
Michael M. Wilson
Bragg Creek, Alberta
Canada

Director Since: 2011
Age: 65
Status: Independent

Top 3 Areas of Expertise:
•   Executive Leadership
•   Agriculture, Energy, Chemicals and Plastics
•   Corporate Governance

2016 Annual Meeting(1)
Votes in Favour: 99.98%
Votes Withheld: 0.02%

Mr. Wilson is a corporate director. Until his retirement in December 2013, he was the President and Chief Executive Officer, and a director, of Agrium Inc. (a public agricultural crop inputs company), and has over 30 years of international and executive management experience. Prior to joining Agrium Inc., Mr. Wilson served as President of Methanex Corporation (a public company) and held various senior positions in North America and Asia during his 18 years with The Dow Chemical Company (a public company). Mr. Wilson was also the past Chair of the Calgary Prostate Cancer Centre. He holds a degree in Chemical Engineering from the University of Waterloo.

Mr. Wilson sits on the Audit, Compensation, and Nominating and Corporate Governance Committees.

BOARD AND COMMITTEE ATTENDANCE(3)
  ATTENDANCE
TOTAL ATTENDANCE
Board 8 of 8 Board 100%
Audit 7 of 7 Committee 100%
Compensation Committee 6 of 6    
Nominating & Corporate Governance 4 of 4    
       
OTHER CURRENT PUBLIC BOARD DIRECTORSHIPS
•   Air Canada •   Suncor Energy Inc.  
•   Finning International Inc.      
       
SHARE AND DSU OWNERSHIP AS OF DECEMBER 31, 2016(4)
Target Value:   $352,500 Target Met: Yes
Actual Value:   $1,739,319    

 


12

(1)
See 2016 Voting Results.
(2)
Mr. DiMaggio was serving as a director of Greatwide Logistics Services, Inc., a privately held company, when that entity filed for bankruptcy in 2008.
(3)
See Table 7: Directors' Attendance at Board and Committee Meetings for a full description of board and standing committee meeting attendance.
(4)
See — Directors' Ownership of Securities — Director Share Ownership Guidelines for a detailed description of the shareholding requirements for applicable directors. New directors have five years from the time of their appointment to the Board to comply with the Director Share Ownership Guidelines.
(5)
The Board approved an exception to its retirement policy for Mr. Etherington. See Election of Directors for a description of the retirement policy.
(6)
Mr. Gross was appointed to the Board of Directors effective November 1, 2016.
(7)
Mr. Popatia was appointed to the Board of Directors effective January 1, 2017.
(8)
Mr. Popatia, as an officer of Onex, is not subject to the Director Share Ownership Guidelines.

Interlocking Directorships

None of the current directors of the Corporation serve together as directors of other corporations.

13

Director Compensation

Director compensation is set by the Board on the recommendation of the Compensation Committee and in accordance with director compensation guidelines and principles established by the Nominating and Corporate Governance Committee. Under these guidelines and principles, the Board seeks to maintain director compensation at a level that is competitive with director compensation at comparable companies, and requires a substantial portion of such compensation to be taken in the form of DSUs. As part of the Compensation Committee's 2015 competitive review of director compensation, the Compensation Committee engaged Willis Towers Watson (the "Compensation Consultant") to provide competitive market information on director compensation policies and practices (see Compensation Discussion and Analysis — Compensation Objectives — Independent Advice for a discussion regarding the role of the Compensation Consultant). As a result of this review, certain amendments to director compensation and the Directors' Share Compensation Plan were approved, effective January 1, 2016 by the Compensation Committee and the Board. Significant changes to the fee structure were then made in order to align director compensation with competitive market practices, including the elimination of an on-hire DSU grant for directors and the combination of the annual board retainer, annual DSU grant and separate per day board and committee fees to create an inclusive annual retainer. The director fee structure for 2016 is set forth in Table 2 below.

Table 2: Directors' Fees(1)

 Element   Director Fee Structure for 2016(2)  
 Annual Board Retainer(3)(4)   $360,000 — Board Chair
$235,000 — Directors
 
 Travel Fees(5)   $2,500  
 Annual Retainer for the Audit Committee Chair   $20,000  
 Annual Retainer for the Compensation Committee Chair   $15,000  
 Annual Retainer for the Nominating and Governance Committee Chair(6)    
 DSU Election(7)   Directors must elect to be paid either 100% or 75% of their aggregate annual retainers (including committee Chair retainers) and travel fees in the form of DSUs  

(1)
Does not include Mr. Mionis, President and CEO of the Corporation, whose compensation is set out in Table 16 of this Circular. Does not include fees payable to Onex for the service of Mr. Schwartz (until December 31, 2016) or Mr. Popatia (commencing January 1, 2017) as a director, which is described in footnote 10 to Table 3 of this Circular.
(2)
Directors may also receive further retainers and meeting fees for participation on ad hoc committees. No fees were paid for participation on the Director Search Committee during 2016. The Board has the discretion to grant supplemental equity awards to individual directors as deemed appropriate (no such discretion was exercised in 2016).
(3)
Paid on a quarterly basis.
(4)
Mr. Natale was appointed Vice-Chair of the Board effective July 21, 2016. He does not receive an additional retainer in his capacity as Vice-Chair.
(5)
The travel fee is available only to directors who travel outside of their home state or province to attend a Board or Committee meeting.
(6)
The Chair of the Board also served as the Chair of the Nominating and Corporate Governance Committee in 2016, for which no additional fee was paid.
(7)
Credited on a quarterly basis. The number of DSUs granted are calculated by dividing the notional cash amount for the quarter by the closing price of SVS on the NYSE on the last business day of such quarter. If no election is made, 100% of a director's aggregate annual retainer and travel fees will be paid in DSUs.

Subject to the terms of the Directors' Share Compensation Plan, each DSU represents the right to receive one SVS or an equivalent value in cash (at the Corporation's discretion) when the director (a) ceases to be a director of the Corporation and (b) is not an employee of the Corporation or a director or employee of any corporation that does not deal at arm's-length with the Corporation (collectively, "Retires"). The date used in valuing the

14

DSUs for settlement is the date that is 45 days following the date on which the director Retires, or as soon as practicable thereafter. DSUs are redeemed and payable on or prior to the 90th day following the date on which the director Retires. The number of DSUs granted is calculated by dividing the fee that would otherwise be payable by the closing price of SVS on the New York Stock Exchange (the "NYSE") on the last business day of the quarter.

Directors' Fees Earned in 2016

All compensation paid in 2016 by the Corporation to its directors is set out in Table 3, except for Mr. Mionis, President and CEO of the Corporation, whose compensation is set out in Table 16 of this Circular. In 2016, the Board (excluding Mr. Schwartz — see footnote 10 to Table 3) earned total annual board retainer fees, committee chair retainer fees and travel fees (collectively, "Annual Fees") in the amount of $1,876,774, including total grants of DSUs in the amount of $1,676,330.

Table 3: Director Fees Earned in Respect of 2016

    Annual Fees Earned   Allocation of
Annual Fees(1)
 
  Name   Annual
Board
Retainer
  Annual
Committee
Chair
Retainer
  Travel Fees   Total Fees   DSUs(2)

  Cash(3)

 
 Daniel P. DiMaggio   $235,000         $10,000   $245,000 $183,750 $61,250
 William A. Etherington       $360,000(4)   (4)(5)     $360,000 $360,000

 Thomas S. Gross(6)   $39,274         $2,500   $41,774 $31,330 $10,444
 Laurette T. Koellner   $235,000       $20,000(7)   $10,000   $265,000 $198,750 $66,250
 Joseph M. Natale   $235,000(8)   (5)         $235,000 $235,000

 Carol S. Perry   $235,000           $235,000 $235,000

 Eamon J. Ryan   $235,000       $15,000(9)     $250,000 $187,500 $62,500
 Gerald W. Schwartz(10)            



 Michael M. Wilson   $235,000         $10,000   $245,000 $245,000

(1)
Directors must elect to receive either 75% or 100% of their Annual Fees (set forth in the "Total Fees" column above) in DSUs (i.e., at least 75% of such fees are payable in DSUs). If a director does not make such election, 100% of such director's Annual Fees will be paid in DSUs. The Annual Fees received by directors in DSUs for 2016 were credited quarterly, and the number of DSUs granted in respect of the amounts credited quarterly was determined using the closing price of the SVS on the NYSE on the last business day of each quarter, which was $10.98 on March 31, 2016, $9.30 on June 30, 2016, $10.83 on September 30, 2016 and $11.85 on December 30, 2016.
(2)
Amounts in this column for each of Messrs. DiMaggio, Gross and Ryan and Ms. Koellner (who elected to receive 75% of their Annual Fees in DSUs), represent the grant date fair value of DSUs issued in respect of 75% of their Annual Fees. Amounts in this column for each of Messrs. Etherington, Natale and Wilson and Ms. Perry (who elected to receive 100% of their Annual Fees paid in DSUs), represent the grant date fair value of DSUs issued in respect of 100% of their Annual Fees. The grant date fair value of the grants is the same as their accounting value.
(3)
Amounts in this column for Messrs. DiMaggio, Gross, Ryan and Ms. Koellner represent the portion of their Annual Fees (25%), which they elected to have paid in cash.
(4)
During 2016, Mr. Etherington was the Chair of the Board and the Chair of the Nominating and Corporate Governance Committee. Mr. Etherington received an annual Board Chair retainer fee in the amount of $360,000. He did not receive a committee chair annual retainer in his capacity as Chair of the Nominating and Corporate Governance Committee.
(5)
No fees were paid for participation on the Director Search Committee during 2016.
(6)
Mr. Gross was appointed to the Board of Directors effective November 1, 2016.
(7)
Represents annual retainer for the Chair of the Audit Committee.
(8)
Mr. Natale was appointed Vice-Chair of the Board effective July 21, 2016. He did not receive an additional retainer in his capacity as Vice-Chair.
15

(9)
Represents annual retainer for the Chair of the Compensation Committee.
(10)
Mr. Schwartz, an officer of Onex, retired from the Board effective December 31, 2016 in accordance with the Board's retirement policy. During 2016, Mr. Schwartz did not receive any compensation in his capacity as a director of the Corporation; however, Onex did receive compensation for providing the services of Mr. Schwartz as a director in 2016 pursuant to a Services Agreement between the Corporation and Onex entered into on January 1, 2009 (the "Services Agreement"). The initial term of the Services Agreement was one year and the agreement automatically renews for successive one year terms unless the Corporation or Onex provide notice of intent not to renew. Following Mr. Schwartz's retirement, Mr. Popatia, also an officer of Onex, was appointed to the Board effective January 1, 2017. In connection therewith, the Services Agreement was amended as of such date to replace all references to Mr. Schwartz therein with references to Mr. Popatia and to increase the annual fee payable to Onex for the services of Mr. Popatia to $235,000 (to be consistent with the current annual Board retainer fees paid to directors) payable in DSUs in equal quarterly installments in arrears. The number of DSUs is determined using the closing price of the SVS on the NYSE on the last day of the fiscal quarter in respect of which the instalment is to be credited. The Services Agreement terminates automatically and the rights of Onex to receive compensation (other than accrued and unpaid compensation) will terminate (a) 30 days after the first day on which Onex ceases to hold at least one MVS of Celestica or any successor company or (b) the date Mr. Popatia ceases to be a director of Celestica, for any reason.

Directors' Ownership of Securities

Outstanding Share-Based Awards

Information concerning all outstanding share-based awards as of December 31, 2016 made by the Corporation to each director proposed for election at the Meeting (other than Mr. Mionis, whose information is set out in Table 17 of this Circular), including awards granted prior to 2016, is set out in Table 4. DSUs that were granted prior to January 1, 2007 may be settled in the form of SVS issued from treasury, SVS purchased in the open market, or an equivalent value in cash (at the discretion of the Corporation). DSUs granted after January 1, 2007 may only be settled in SVS purchased in the open market or an equivalent value in cash. In 2005, the Corporation amended its Long-Term Incentive Plan ("LTIP") to prohibit the granting to directors of options to acquire SVS. There are no options granted to directors (or former directors) prior to the foregoing amendment which remain outstanding.

Table 4: Outstanding Share-Based Awards

 Name
 
Number of
Outstanding DSUs(1)
(#)

 
Market Value of
Outstanding DSUs(2)
($)

 
 Daniel P. DiMaggio   154,506   $1,830,896  
 William A. Etherington    356,023   $4,218,873  
 Thomas S. Gross(3)   2,644   $31,331  
 Laurette T. Koellner   177,615   $2,104,738  
 Joseph M. Natale   133,414   $1,580,956  
 Carol S. Perry   82,232   $974,449  
 Tawfiq Popatia(4)      
 Eamon J. Ryan   229,680   $2,721,708  
 Michael M. Wilson   146,778   $1,739,319  

(1)
Represents all outstanding DSUs, including the regular quarterly grant of DSUs issued on January 1, 2017 in respect of the fourth quarter of 2016.
(2)
The market value of such share-based awards was determined using a share price of $11.85, which was the closing price of the SVS on the NYSE on December 30, 2016.
(3)
Mr. Gross was appointed to the Board of Directors effective November 1, 2016.
(4)
Mr. Popatia was appointed to the Board of Directors effective January 1, 2017 and as a result, no share-based awards were issued by the Corporation to him or Onex for his services as of December 31, 2016. 177,669 DSUs have been issued to Onex (and are outstanding) under the Services Agreement for the services of Mr. Schwartz during his tenure as a director (from 1998 through December 31, 2016). DSUs will be issued to Onex pursuant to the Services Agreement for the services of Mr. Popatia as a director of the Corporation. For further information see footnote 10 to Table 3.
16

Changes in Directors' Equity Interest

The following table sets out, for each director proposed for election at the Meeting (other than Mr. Mionis, whose information is set out in Table 17 of this Circular), such director's direct or indirect beneficial ownership of, or control or direction over, shares and share-based awards in the Corporation as of February 15, 2017, and any changes therein since February 10, 2016 (being the date of disclosure in last year's management information circular).

Table 5: Changes in Directors' Equity Interest(1)

 Name
 
Date
 
SVS
(#)

 
Share-Based Awards
(#)

 
Total
(#)

 
 Daniel P. DiMaggio   Feb. 10, 2016     137,264   137,264  
    Feb. 15, 2017     154,506   154,506  
    Change     17,242   17,242  
 William A. Etherington(2)    Feb. 10, 2016   10,000   322,244   332,244  
    Feb. 15, 2017   10,000   356,023   366,023  
    Change   Nil   33,779   33,779  
 Thomas S. Gross(3)   Feb. 10, 2016        
    Feb. 15, 2017     2,644   2,644  
    Change     2,644   2,644  
 Laurette T. Koellner   Feb. 10, 2016     158,966   158,966  
    Feb. 15, 2017     177,615   177,615  
    Change     18,649   18,649  
 Joseph M. Natale   Feb. 10, 2016     111,364   111,364  
    Feb. 15, 2017     133,414   133,414  
    Change     22,050   22,050  
 Carol S. Perry   Feb. 10, 2016     60,181   60,181  
    Feb. 15, 2017     82,232   82,232  
    Change     22,051   22,051  
 Tawfiq Popatia(2)(4)   Feb. 10, 2016        
    Feb. 15, 2017        
    Change        
 Eamon J. Ryan   Feb. 10, 2016     212,086   212,086  
    Feb. 15, 2017     229,680   229,680  
    Change     17,594   17,594  
 Michael M. Wilson   Feb. 10, 2016     123,789   123,789  
    Feb. 15, 2017     146,778   146,778  
    Change     22,989   22,989  

(1)
Information as to SVS beneficially owned, or controlled or directed, directly or indirectly, is not within the Corporation's knowledge and therefore has been provided by each nominee.
(2)
As of February 15, 2017, Mr. Etherington also owned 10,000 subordinate voting shares of Onex and Mr. Popatia owned 699 subordinate voting shares of Onex. Other than Messrs. Etherington, Popatia and Schwartz, no director of the Corporation during 2016 owned, and no current director nominee owns, shares of Onex.
(3)
Mr. Gross was appointed to the Board of Directors effective November 1, 2016.
(4)
Mr. Popatia was appointed to the Board of Directors effective January 1, 2017. 17,208 and 18,766 DSUs were issued to Onex for the services of Mr. Schwartz as a director in 2015 and 2016 respectively. Onex's beneficial ownership of securities of the Corporation is set forth in footnote 1 to Table 1.
17

Director Share Ownership Guidelines

The Corporation has minimum shareholding requirements for directors who are not employees or officers of the Corporation or Onex (the "Director Share Ownership Guidelines") (see Executive Share Ownership for share ownership guidelines applicable to Mr. Mionis in his role as President and Chief Executive Officer of the Corporation). In order to reflect the change from a retainer plus meeting fee structure to a fixed compensation arrangement for directors (see Information Relating to Our Directors — Director Compensation), the Director Share Ownership Guidelines were modified effective January 1, 2016. The Director Share Ownership Guidelines currently require that a director hold SVS and/or DSUs with an aggregate value equal to 150% of the annual retainer and that the chair of the Board hold SVS and/or DSUs with an aggregate value equal to 187.5% of the annual retainer. Prior to this change, directors who had served on the Board for five years were required to hold five times the previous base retainer. Current and new directors have five years from January 1, 2016 or from the time of their appointment to the Board, as applicable, to comply with the Director Share Ownership Guidelines.

It is the Corporation's policy that directors with five years or more service on the Board shall continue to receive a minimum of 75% of their Annual Fees in securities of the Corporation.

Although directors will not be deemed to have breached the Director Share Ownership Guidelines by reason of a decrease in the market value of the Corporation's securities, the directors are required to purchase further securities within a reasonable period of time after such occurrence to comply with the Director Share Ownership Guidelines. Each director's holdings of securities, which for the purposes of the Director Share Ownership Guidelines include all SVS and DSUs, are reviewed annually as of December 31. The following table sets out, for each applicable director proposed for election at the Meeting, whether such director was in compliance with the Director Share Ownership Guidelines as of December 31, 2016.

Table 6: Shareholding Requirements

    Shareholding Requirements  
 
 Director(1)
 
Target Value as of
December 31, 2016

 
Value as of
December 31, 2016(2)

 
Met Target as of
December 31, 2016

 
 Daniel P. DiMaggio   $352,500   $1,830,896   Yes  
 William A. Etherington    $675,000   $4,337,373   Yes  
 Thomas S. Gross(3)   $352,500   $31,331   Not Yet Applicable  
 Laurette T. Koellner   $352,500   $2,104,738   Yes  
 Joseph M. Natale   $352,500   $1,580,956   Yes  
 Carol S. Perry   $352,500   $974,449   Yes  
 Eamon J. Ryan   $352,500   $2,721,708   Yes  
 Michael M. Wilson   $352,500   $1,739,319   Yes  

(1)
As President and CEO of the Corporation, Mr. Mionis is subject to the Executive Share Ownership Guidelines. Mr. Popatia was appointed to the Board of Directors effective January 1, 2017 and, as an officer of Onex, is not subject to the Director Share Ownership Guidelines.
(2)
The value of the aggregate number of SVS and DSUs held by each director is determined using a share price of $11.85, which was the closing price of the SVS on the NYSE on December 30, 2016.
(3)
Mr. Gross was appointed to the Board of Directors effective November 1, 2016 and he is required to comply with the Director Share Ownership Guidelines within five years of his appointment.
18

Attendance of Directors at Board and Committee Meetings

The following table sets forth the attendance of directors at Board meetings and at meetings of those standing committees of which they are members, from January 1, 2016 to February 15, 2017. All then-members of the Board attended the Corporation's last annual meeting of shareholders.

Table 7: Directors' Attendance at Board and Committee Meetings

                Nominating and
Corporate
  Meetings Attended %  
 
 Director
 
Board
 
Audit
 
Compensation
 
Governance
 
Board
 
Committee
 
 Daniel P. DiMaggio   8 of 8   7 of 7   6 of 6   4 of 4   100%   100%  
 William A. Etherington   8 of 8   7 of 7   6 of 6   4 of 4   100%   100%  
 Thomas S. Gross(1)   2 of 2   2 of 2   2 of 2   1 of 1   100%   100%  
 Laurette T. Koellner   8 of 8   7 of 7   6 of 6   4 of 4   100%   100%  
 Robert A. Mionis   8 of 8         100%    
 Joseph M. Natale   8 of 8   7 of 7   6 of 6   4 of 4   100%   100%  
 Carol S. Perry   8 of 8   7 of 7   6 of 6   4 of 4   100%   100%  
 Tawfiq Popatia(2)   1 of 1         100%    
 Eamon J. Ryan   8 of 8   7 of 7   6 of 6   4 of 4   100%   100%  
 Gerald W. Schwartz(3)   6 of 7         86%    
 Michael M. Wilson   8 of 8   7 of 7   6 of 6   4 of 4   100%   100%  

(1)
Mr. Gross was appointed to the Board of Directors effective November 1, 2016.
(2)
Mr. Popatia was appointed to the Board of Directors effective January 1, 2017.
(3)
Mr. Schwartz retired from the Board of Directors effective December 31, 2016 in accordance with the Board's retirement policy.
19

INFORMATION ABOUT OUR AUDITOR

Appointment of Auditor

It is proposed that KPMG LLP ("KPMG") be appointed as the auditor of the Corporation to hold office until the close of the next annual meeting of shareholders. KPMG is the current auditor of the Corporation and was first appointed as auditor of the Corporation on October 14, 1997.

It is intended that, on any ballot relating to the appointment of the auditor, the shares represented by proxies in favour of the Proxy Nominees will be voted in favour of the appointment of KPMG as auditor of the Corporation to hold office until the next annual meeting of shareholders, unless authority to do so is withheld.

Fees Paid to KPMG

The Audit Committee of the Board of Directors negotiates with the auditor of the Corporation on an arm's-length basis in determining the fees to be paid to the auditor. Such fees have been based upon the complexity of the matters dealt with and the time expended by the auditor in providing services to the Corporation.

Table 8: Fees Paid to KPMG

 
 
Year Ended December 31
(in millions)

 
 
 
 
2016
 
2015
 
 Audit Services   $2.5   $2.9  
 Audit Related Services   $0.1   $0.0  
 Tax Services   $0.1   $0.1  
 Other   $0.0   $0.2  
 Total   $2.7   $3.2  

It is intended that, on any ballot relating to the remuneration of the auditor, the shares represented by proxies in favour of the Proxy Nominees will be voted in favour of the authorization of the Board of Directors to fix the remuneration to be paid to the auditor, unless authority to do so is withheld.

20

SAY-ON-PAY

Say-on-Pay Policy

The Corporation has held an advisory vote on executive compensation annually since 2012. While this vote is non-binding, it gives shareholders an opportunity to provide important input to the Board. Shareholders will be asked at the Meeting to consider, and, if deemed advisable, adopt the following resolution:

Resolved, on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in the Corporation's management information circular delivered in advance of the 2017 annual meeting of shareholders.

It is intended that, on any ballot relating to the advisory vote on executive compensation, the shares represented by proxies in favour of the Proxy Nominees will be voted in favour of the resolution, unless a vote "against" is indicated.

The Board of Directors will take the results of the vote into account, as it deems appropriate, when considering future compensation policies, procedures and decisions and in determining whether to significantly increase engagement with shareholders on compensation and related matters. The Corporation will disclose the results of the shareholder advisory vote as part of its report of voting results for the Meeting.

2016 VOTING RESULTS

2016 Voting Results

The voting results of the Meeting will be filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov following the Meeting. The voting results from the Corporation's annual meeting of shareholders held on April 21, 2016 were as follows:

Table 9: 2016 Voting Results

  Brief Description of Voting Matters Outcome of the Vote
    Approved For
  In respect of the election of the following proposed nominees as members of the Board of Directors of the Corporation    
          Daniel P. DiMaggio ü 99.99%
          William A. Etherington ü 99.60%
          Laurette T. Koellner ü 99.54%
          Robert A. Mionis ü 99.99%
          Joseph M. Natale ü 99.99%
          Carol S. Perry ü 99.99%
          Eamon J. Ryan ü 99.95%
          Gerald W. Schwartz ü 98.26%
          Michael M. Wilson ü 99.98%
       
  In respect of the appointment of KPMG as the auditor of the Corporation for the ensuing year and authorization of the Board of Directors of the Corporation to fix the remuneration of the auditors ü Carried by a show of hands
       
  In respect of the advisory resolution on the Corporation's approach to executive compensation ü 96.26%

 

21

COMPENSATION COMMITTEE

The Corporation's Compensation Committee is currently comprised entirely of independent directors (pursuant to applicable Canadian, SEC and NYSE rules for U.S. domestic companies) and consists of: Eamon J. Ryan (Chair), Daniel P. DiMaggio, William A. Etherington, Thomas S. Gross, Laurette T. Koellner, Joseph M. Natale, Carol S. Perry and Michael M. Wilson. The Compensation Committee's purpose is to discharge the Board's responsibilities for executive compensation matters, including:

The Compensation Committee is also responsible for, among other matters:

All members of the Compensation Committee have direct experience that is relevant to their responsibilities relative to executive compensation and have skills and experience that contribute to the ability of the Compensation Committee to make decisions on the suitability of the Corporation's compensation policies and practices. Each member of the Compensation Committee possesses significant knowledge in executive compensation matters gained from his or her experience as an executive in one or more major public corporations, as outlined in the biographies in Information Relating to Our Directors — Election of Directors — Nominees for Election as Director. This experience varies from director to director, but collectively includes having responsibility for the creation and implementation of executive compensation plans; participating in briefings from outside consultants retained by compensation committees with respect to executive compensation design, administration and governance; having responsibility for executive compensation decisions; and past service on the compensation committees of several other major public corporations. In addition, Mr. Etherington currently serves on the compensation and management resources committee of Onex; Ms. Koellner previously served on the compensation committee of AIG; and Ms. Perry previously served on the management resources and compensation committee of Softchoice Corporation (while it was a public company listed on the Toronto Stock Exchange ("TSX")). Accordingly, the Corporation believes that its Compensation Committee is appropriately qualified to make decisions on the suitability of the Corporation's compensation policies and practices.

22

COMPENSATION COMMITTEE LETTER TO SHAREHOLDERS

Dear Shareholders,

On behalf of the Compensation Committee, I welcome this opportunity to share with you our approach to executive compensation, including the framework we used to make our compensation decisions for the CEO and certain other executive officers for 2016.

Our Approach to Executive Compensation

Celestica's executive compensation program is designed to pay for performance, adhere to the risk profile of the Corporation, align the interests of executives and shareholders, incentivize executives to work as a team to achieve corporate results and ensure direct accountability for annual operating results and the Corporation's long-term financial performance. Total compensation for each executive varies with the Corporation's achievement of financial and non-financial objectives, as well as individual performance. The Compensation Committee believes that the Corporation's executive compensation program for 2016 demonstrates an appropriate pay-for-performance relationship and as such, establishes strong alignment between the interests of the Corporation's executives and its shareholders. Further, the Compensation Committee has endeavoured to ensure the executive compensation program is aligned with appropriate governance, risk management and regulatory principles.

In 2016, the Compensation Committee reviewed the Corporation's executive pay-for-performance alignment in consultation with the Compensation Consultant and concluded Celestica's programs are well aligned with its performance

Celestica's Performance in 2016

2016 was the first full year under Mr. Mionis' leadership as CEO during which he continued to transform Celestica with a view to long-term value creation for its shareholders. Accomplishments for the year included:

In addition to financial results, Mr. Mionis led the Corporation in transitioning to a customer and market focused operating model. The Corporation made substantial progress on implementing its Global Business Services ("GBS") initiative, which focuses on integrating, standardizing and optimizing end-to-end business processes, and began implementation of an Organizational Design initiative, to redesign its organizational structure with the goal of increasing our overall effectiveness.

23

Organizational Developments in 2016

During 2016, the Compensation Committee approved organizational changes in support of the Corporation's business strategy and operational model under Mr. Mionis' leadership. The Compensation Committee approved a new organizational structure for the Executive Leadership Team reporting to the CEO to align more closely with the planned reorganization of our end market categories in 2017 to better reflect the markets and customers we serve. Further, the Compensation Committee approved the appointment of a Chief Human Resources Officer to lead the Corporation's efforts to attract develop and retain key talent. Our commitment to the Corporation's strategic transformation was also reflected with the appointment of a Chief Strategy Officer during 2016.

Checklist of Compensation Practices

We remain committed to developing executive compensation policies designed to serve the long-term interests of our shareholders.

 What We Do   What We Don't Do  
 
 Pay for performance   ü   No repricing of options   X  
 Focus on long-term compensation using a balanced mix of compensation elements   ü   No hedging or pledging of equity securities   X  
 Compensation mix that recognizes that while long-term success is critical, annual performance and adequate fixed compensation are also essential   ü   No steep payout cliffs at certain performance levels that may encourage short-term business decisions to meet payout thresholds   X  
 Competitive payment practices   ü   No multi-year guarantees   X  
 Mitigate undue risk in compensation programs   ü   No uncapped incentive plans   X  
 Independent advisor   ü          
 Stress test compensation plan designs   ü          
 Apply stringent share ownership policies   ü          
 Clawback on incentive-based compensation   ü          
 Equity plans provide for change of control treatment for outstanding equity based on a "double trigger" requirement   ü          
 Shareholder "say on pay" advisory vote   ü          
24

Conclusion

Last year, our annual "say on pay" advisory vote received overwhelming support with 96.26% of the votes cast in favour of our executive compensation program. We believe this support reflects shareholder endorsement that our compensation philosophy aligns the interests of our executives with our shareholders.

You are invited to review the following Compensation Discussion and Analysis section of this Circular, which provides a more detailed view of our executive compensation program.

Yours sincerely,

LOGO

Eamon Ryan
Chair of the Compensation Committee
(on behalf of the Compensation Committee)

   


(1)
Non-IFRS adjusted EPS is calculated by dividing non-IFRS adjusted net earnings (defined as IFRS net earnings, as adjusted to exclude the impact of employee stock-based compensation expense, amortization of intangible assets (excluding computer software), net restructuring, impairment and other charges, and the tax effects of the foregoing exclusions) by the weighted average number of subordinate and multiple voting shares outstanding during the period.
(2)
See "Non-IFRS measures" in Management's Discussion and Analysis for the Corporation's most recently completed financial year (available at www.sedar.com) for a discussion of this non-IFRS financial measure, as well as a reconciliation of such non-IFRS financial measure to the most comparable IFRS financial measure. This non-IFRS measures does not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies.
(3)
Non-IFRS adjusted EPS for the 2016 calendar year was favourably impacted by an aggregate of $0.22 per share net benefit related to income taxes, comprised of a $0.34 per share income tax recovery attributable to the resolution in the second half of 2016 of certain previously disputed tax matters in Canada (including related refund interest income), offset in part by an aggregate $0.07 per share negative impact from current and deferred withholding taxes, as well as a $0.05 per share income tax expense related to taxable foreign exchange. Non-IFRS adjusted EPS for the 2015 calendar year included an $0.08 per share income tax expense related to taxable foreign exchange arising in the third quarter of 2015.
25

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis sets out the policies of the Corporation for determining compensation paid to the Corporation's CEO, its Chief Financial Officer ("CFO"), and the three other most highly compensated executive officers (collectively, the "Named Executive Officers" or "NEOs"). The NEOs who are the subject of this Compensation Discussion and Analysis are:

A description and explanation of the significant elements of compensation awarded to the foregoing NEOs during 2016 is set out in the section Compensation Discussion and Analysis — 2016 Compensation Decisions.

Compensation Objectives

The Corporation's executive compensation philosophies and practices are designed to attract, motivate and retain the leaders who will drive the success of the Corporation. The Compensation Committee reviews compensation policies and practices regularly, considers related risks, and makes any adjustments it deems necessary to ensure the compensation policies are not reasonably likely to have a material adverse effect on the Corporation.

A substantial portion of the compensation of our executives is linked to the Corporation's performance. A comparator group of Celestica's competitors, major suppliers, customers, and other major international technology companies that generally fall in the range of 50% to 200% of Celestica's revenue (such group, as selected by the Compensation Committee, the "Comparator Group") is set out in Table 11. The Corporation establishes target compensation with reference to the median compensation of the Comparator Group, however, neither each element of compensation nor total compensation is expected to match such median exactly. NEOs have the opportunity for higher compensation for performance that exceeds target performance goals, and will receive lower compensation for performance that is below target performance goals.

The compensation package is designed to:

26

Independent Advice

The Compensation Committee, which has the sole authority to retain and terminate an executive compensation consultant, has engaged the Compensation Consultant since October 2006 as its independent compensation consultant to assist in identifying appropriate comparator companies against which to evaluate the Corporation's compensation levels, to provide data about those companies, and to provide observations and recommendations with respect to the Corporation's compensation practices versus those of the Comparator Group and the market in general.

The Compensation Consultant also provides advice (upon request) to the Compensation Committee on the policy recommendations prepared by management and keeps the Compensation Committee apprised of market trends in executive compensation. The Compensation Consultant attended portions of all Compensation Committee meetings held in 2016, in person or by telephone, as requested by the Chair of the Compensation Committee. At each of its meetings, the Compensation Committee held an in camera session with the Compensation Consultant without any member of management being present. Decisions made by the Compensation Committee, however, are the responsibility of the Compensation Committee and may reflect factors and considerations supplementary to the information and recommendations provided by the Compensation Consultant.

Each year, the Compensation Committee reviews the scope of activities of the Compensation Consultant and, if it deems appropriate, approves the corresponding budget. During such review, the Compensation Committee also considers the independence factors required to be considered by the NYSE prior to the selection or receipt of advice from a compensation consultant. After consideration of such independence factors, the Compensation Committee determined that the Compensation Consultant was independent prior to its engagement in 2016. The Compensation Consultant meets with the Chair of the Compensation Committee and management at least annually to identify any initiatives requiring external support and agenda items for each Compensation Committee meeting throughout the year. The Compensation Consultant reports directly to the chair of the Compensation Committee and is not engaged by management. The Compensation Consultant may, with the approval of the Compensation Committee, assist management in reviewing and, where appropriate, developing and recommending compensation programs to align the Corporation's practices with competitive practices. Any such service in excess of $25,000 provided by the Compensation Consultant relating to executive compensation must be pre-approved by the Chair of the Compensation Committee. In addition, any non-executive compensation consulting service in excess of $25,000 must be submitted by management to the Compensation Committee for pre-approval, and any services that will cause total non-executive compensation consulting fees to exceed $25,000 in aggregate in a calendar year must also be pre-approved by the Compensation Committee.

The following table sets out the fees paid by the Corporation to the Compensation Consultant in each of the past two years:

Table 10: Fees of the Compensation Consultant

    Year Ended
December 31
 
 
 
 
2016
 
2015
 
 Executive Compensation-Related Fees(1)   C$262,612   C$357,910  
 All Other Fees(2)   C$4,495   C$54,914  

(1)
Services for 2016 and 2015 included support on executive compensation matters that are part of its annual agenda (e.g., executive compensation competitive market analysis, review of trends in executive compensation, peer group review, pay-for-performance analysis and assistance with executive compensation-related disclosure), annual valuation of PSUs for accounting purposes, attendance at all Compensation Committee meetings, and support with ad-hoc executive compensation issues that arose throughout the year. Services for 2016 also included incentive plan design review and business strategy review. Services for 2015 also included assistance with the CEO transition activities and a director compensation review.
(2)
Services for 2016 consisted of a review of competitive levels of compensation for our non-NEO executives. Services for 2015 consisted of a non-executive employment engagement survey.
27

Compensation Process

Executive compensation is determined as part of an annual process followed by the Compensation Committee, as supported by the Compensation Consultant, as follows:

  Before and at Commencement
of the Performance Period


  During the
Performance Period


  Following the
Performance Period
 


Review and approve comparator group

Review of Comparator Group compensation and pay positioning

Establish target compensation levels

Review trends in executive compensation for potential program changes

Establish performance objectives

Conduct risk assessment of compensation
programs

 

Evaluate interim performance relative to objectives

Approve appointments to designated positions and any related compensation changes

Re-evaluate comparator group and update for the next performance period, as necessary

Review management succession plans including retention value of unvested equity awards

 


Evaluate individual performance relative to objectives

Determine achievement of performance criteria for annual and long term incentives

The Compensation Committee reviews and approves compensation for the CEO and the other NEOs, including base salaries, annual incentive awards and equity-based incentive grants. The Compensation Committee evaluates the performance of the CEO relative to financial and business goals and objectives approved by the Board from time to time for such purpose. The Compensation Committee reviews competitive data for the Comparator Group and consults with the Compensation Consultant before exercising its independent judgment to determine appropriate compensation levels. The CEO reviews the performance evaluations of the other NEOs with the Compensation Committee and provides compensation recommendations. The Compensation Committee considers these recommendations, reviews market compensation information, consults with the Compensation Consultant, and then exercises its independent judgment to determine if any adjustments are required prior to approval of the compensation of such other NEOs.

The Compensation Committee generally meets five times a year, in January, April, July, October and December. At the July meeting, the Compensation Committee, based on recommendations from the Compensation Consultant, approves the comparator group that will be used for the compensation review. At the October meeting, the Compensation Consultant presents a competitive analysis of the total compensation for each of the NEOs, including the CEO, based on the established comparator group. Using this analysis, the CEO develops base salary and equity-based incentive recommendations for the NEOs which are then reviewed with the Compensation Consultant. The CEO's compensation is determined by the Compensation Committee in consultation with the Compensation Consultant with input from the Corporation's chief human resources executive. At the December meeting, preliminary compensation proposals for the CEO and the NEOs for the following year are reviewed, including base salary recommendations and the value and mix of their equity-based incentives. By reviewing the compensation proposals in advance, the Compensation Committee is afforded sufficient time to discuss and provide input regarding proposed compensation changes prior to the January meeting at which time the Compensation Committee approves the compensation proposals, revised as necessary or appropriate, based on input provided at the December meeting. Previous grants of equity-based awards and their current retention value are reviewed and may be taken into consideration when making decisions related to equity-based compensation. The Compensation Committee also considers the potential value of the total compensation package for the CEO, which is stress-tested at different levels of performance and different stock prices to ensure that there is an appropriate link between pay and performance, taking into consideration the range of potential total compensation. The CEO and the NEOs are not present at the Compensation Committee meetings when their respective compensation is discussed.

28

Based on a management plan approved by the Board, the annual incentive-plan targets are approved by the Compensation Committee at the beginning of the year. The Compensation Committee reviews the Corporation's performance relative to these targets and the projected payment at the October and December meetings. At the January meeting of the following year, final payments under the annual incentive plan, as well as the vesting percentages for any previously granted equity-based incentives that have performance vesting criteria, are calculated and approved by the Compensation Committee based on the Corporation's year-end results as approved by the Audit Committee. The amounts related to the annual incentive plan are then paid in February.

The Compensation Committee may exercise its discretion to either award compensation absent attainment of a relevant performance goal or similar condition, or to reduce or increase the size of any award or payout to any NEO. The Compensation Committee did not exercise such discretion for 2016 compensation with respect to any particular NEO.

The Compensation Committee, in performing its duties and exercising its powers under its mandate, considers the implications of the risks associated with the Corporation's compensation policies and practices. This includes: identifying any such policies or practices that encourage executive officers to take inappropriate or excessive risks, identifying risks arising from such policies and practices that are reasonably likely to have a material adverse effect on the Corporation; and considering the risk implications of the Corporation's compensation policies and practices and any proposed changes to them.

The Corporation's compensation programs are designed with a balanced approach aligned with its business strategy and risk profile. A number of compensation practices have been implemented to mitigate potential compensation policy risk. It is the Compensation Committee's view that the Corporation's 2016 compensation policies and practices do not promote excessive risk-taking that would be reasonably likely to have a material adverse effect on the Corporation, and that appropriate risk mitigation features are in place within the Corporation's compensation program. In reaching their opinion, the Compensation Committee reviewed key risk-mitigating features in the Corporation's compensation governance processes and compensation structure including the following:

  Governance
  Compensation Decision-Making Process  

The Corporation has formalized compensation objectives to help guide compensation decisions and incentive design and to effectively support its pay-for-performance policy (see Compensation Discussion and Analysis — Compensation Objectives).