Board Committee Charters

Purpose and Composition

The purpose of the Audit Committee (the “Committee”) of Power Financial Corporation (the “Corporation”) is to assist the Board of Directors in reviewing:

1. the Corporation’s financial disclosure;

2. the qualifications and independence of the Corporation’s external auditor; and

3. the performance of the external auditor.

The Committee of the Corporation shall be composed of not less than three directors of the Corporation, all of whom shall be independent and financially literate within the meaning of the Canadian Securities Administrators National Instrument 52-110.

Procedural Matters

In connection with the discharge of its duties and responsibilities, the Committee shall observe the following procedures:

1. Meetings > The Committee shall meet at least four times every year, and more often if necessary, to discharge its duties and responsibilities hereunder.

2. Advisors > The Committee shall have the authority to engage independent counsel and other advisors as it determines necessary to carry out its duties and to set and pay, at the Corporation’s expense, the compensation of such advisors.

3. Quorum > A quorum at any meeting of the Committee shall be a majority of the Committee members.

4. Secretary > The Chair, or any person appointed by the Chair, shall act as secretary of meetings of the Committee.

5. Calling of Meetings > A meeting of the Committee may be called by the Chair of the Committee, by the Chair of the Board, by the external auditor of the Corporation, or by any member of the Committee.  When a meeting of the Committee is called by anyone other than the Chair of the Board, the Chair of the Committee shall so inform the Chair of the Board forthwith.

Duties and Responsibilities

3.1 Financial Disclosure

The Committee shall:

1. unless otherwise determined by the Board, approve the Corporation’s:

[a] interim management’s discussions and analyses (pursuant to delegation of authority by the Board).

2. review the Corporation’s:

[a] interim and annual financial statements;

[b] annual management’s discussions and analyses;

[c] interim and annual earnings press releases; and

[d] other documents containing audited or unaudited financial information, at its discretion;

and report thereon to the Board of Directors (the “Board”) before such documents are approved by the Board and disclosed to the public;

3. be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, other than the disclosure provided by the financial statements, management’s discussions and analyses and earnings press releases, and shall periodically assess the adequacy of those procedures.

3.2 Chief Executive Officers’ Expense Reports

The Chair of the Committee shall review, at least annually, the expense reports of the Chief Executive Officer. Following this review, the Chair shall report to the Committee.

3.3 External Audit 

The Committee shall:

1. recommend to the Board the external auditor to be appointed for purposes of preparing or issuing an auditor’s report or performing other audit, review or attest services;

2. review the terms of the external auditor’s engagement, the appropriateness and reasonableness of proposed audit fees, and any issues relating to the payment of audit fees, and make a recommendation to the Board with respect to the compensation of the external auditor;

3. review the independence of the external auditor, including an annual report prepared by the external auditor regarding its independence;

4. meet with the external auditor and with management to review the audit plan, audit findings, and any restrictions on the scope of the external auditor’s work;

5. review with the external auditor and management any changes in Generally Accepted Accounting Principles that may be material to the Corporation’s financial reporting;

6. have the authority to communicate directly with the external auditor;

7. require the external auditor to report directly to the Committee;

8. directly oversee the work of the external auditor that is related to the preparation or issue of an auditor’s report or other audit, review or attest services for the Corporation, including the resolution of disagreements between management and the external auditor regarding financial reporting;

9. meet with the external auditor to discuss the annual financial statements (including the report of the external auditor thereon) and the interim financial statements (including the review engagement report of the external auditor thereon);

10. review any management letter containing the recommendations of the external auditor, and the response and follow-up by management in relation to any such recommendations;

11. review any evaluation of the Corporation’s internal control over financial reporting conducted by the external auditor, together with management’s response;

12. pre-approve (or delegate such pre-approval to one or more of its independent members) in accordance with a pre-approval policy, all engagements for non-audit services to be provided to the Corporation or its subsidiary entities by the external auditor, together with all non-audit services fees, and consider the impact of such engagements and fees on the independence of the external auditor;

13. review and approve the Corporation’s hiring policy regarding partners, employees and former partners and employees of the present and former external auditor;

14. in the event of a change of auditor, review and approve the Corporation’s disclosure relating thereto. 

3.4 Risk Oversight

In performing its duties and exercising its powers, the Committee shall consider and address:

1. the risks related to the establishment, maintenance and implementation of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR) in relation to disclosure by the Corporation in accordance with applicable law; and

2. the risks related to cybersecurity that would reasonably be expected to have a material effect on the Corporation’s ongoing business, affairs and/or reputation.

3.5 Financial Complaints Handling Procedures

The Committee shall establish procedures for:

1. the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters; and

2. the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.

3.6 Global Anti-Bribery Policy

The Committee shall be responsible for monitoring the implementation of, and compliance with, the Corporation’s Global Anti-Bribery Policy.

3.7 In Camera Sessions

The Committee shall periodically meet in camera alone, and meet separately with each of the external auditor and management, as the Committee deems appropriate.

3.8 Subsidiaries

1. With respect to any Material Operating Subsidiary in the corporate ownership chain between the Corporation and any Direct Subsidiary, the Committee shall review the financial statements of that Material Operating Subsidiary.

2. With respect to any Direct Subsidiary:

[a] the Committee shall rely on the review and approval of the financial statements of the Direct Subsidiary by the audit committee and the board of directors of the Direct Subsidiary, and on reports or opinions of the external auditor on those financial statements;

[b] the Committee shall receive a copy of the charter of the Direct Subsidiary’s audit committee, together with a memorandum summarizing its meeting processes and structure (“Process Memorandum”); and

[c] at each meeting of the Committee, the secretary of the Committee shall table a report from the secretary of the Direct Subsidiary’s audit committee confirming that the processes mandated by its charter and Process Memorandum have been followed.  

3. For these purposes:

[a] “Material Operating Subsidiary” means an operating subsidiary whose net income represents 10% or more of the net income of the Corporation; and

[b] “Direct Subsidiary” means the first Material Operating Subsidiary entity below the Corporation in a corporate ownership chain that has an audit committee which is comprised of a majority of independent directors.

Auditor's Attendance at Meetings

The external auditor shall be entitled to receive notice of every meeting of the Committee and, at the expense of the Corporation, to attend and be heard at any meeting of the Committee. If so requested by a member of the Committee, the external auditor shall attend every meeting of the Committee held during the term of office of the external auditor.

Access to Information

The Committee shall have access to any information, documents and records that are necessary in the performance of its duties and the discharge of its responsibilities under this Charter.

Review of Charter

The Committee shall periodically review this Charter and recommend any changes to the Board as it may deem appropriate.

Reporting

The Chairn of the Committee shall report to the Board, at such times and in such manner, as the Board may from time to time require and shall promptly inform the Chair of the Board of any significant issues raised during the performance of the functions as set out herein, by the external auditor or any Committee member, and shall provide the Chair of the Board copies of any written reports or letters provided by the external auditor to the Committee.

As adopted by the Audit Committee on November 9, 2004 and by the Board of Directors on November 11, 2004, amended by the Audit Committee on November 11, 2009 and adopted by the Board of Directors on March 11, 2010; amended by the Audit Committee on May 14, 2013, and adopted by the Board of Directors on May 14, 2013; amended by the Audit Committee on November 13, 2013, and adopted by the Board of Directors on November 14, 2013; amended by the Audit Committee on March 22, 2016 and adopted by the Board of Directors on March 23, 2016; amended by the Audit Committee on August 4, 2016 and adopted by the Board of Directors on August 5, 2016.
Audit Committee Charter

1. Membership

The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) shall consist of not less than three Directors. None of the members of the Committee may be officers or employees of Power Financial Corporation (the “Corporation”) or a subsidiary of the Corporation. Members of the Committee shall be appointed by the Board and shall serve as members at the pleasure of the Board. The Board shall also appoint the Chair of the Committee.

2. Procedural Matters

In connection with the discharge of its duties and responsibilities, the Committee shall observe the following procedures:

1. Meetings > The Committee shall meet as often as may be necessary to discharge its duties and responsibilities hereunder. The Committee may meet at any place within or outside of Canada.

2. Advisers > The Committee may, at the Corporation’s expense, engage such compensation consultants and other outside advisers as it determines necessary or advisable to permit it to carry out its duties and responsibilities.

3. Quorum > A quorum at any meeting of the Committee shall be a majority of the Committee members.

4. Secretary > The Chair (or, in the absence of the Chair, the acting Chair) of the Committee shall appoint a person to act as secretary of meetings of the Committee.

5. Calling of Meetings > A meeting of the Committee may be called by the Chair of the Committee, by the Chair of the Board, or by a majority of the Committee members, on not less than 48 hours notice to the members of the Committee specifying the place, date and time of the meeting. Meetings may be held at any time without notice if all members of the Committee waive notice. If a meeting of the Committee is called by anyone other than the Chair of the Board, the person(s) calling such meeting shall so inform the Chair of the Board and the Chair of the Committee.

3. Duties and Responsibilities

In addition to any other duties and responsibilities assigned to it from time to time by the Board, the Committee shall have the following duties and responsibilities:

1. Compensation of Employees > The Committee shall annually:

[a] review and recommend for approval by the Board the criteria relevant to the compensation of the Chair, if appropriate, and the President and Chief Executive Officer, evaluate their performance having regard to such criteria, and recommend for approval by the Board the salary, bonus, equity compensation and, if applicable, other compensation arrangements for them; and

[b] review the recommendations of the President and Chief Executive Officer with respect to the compensation of employees of the Corporation holding the title of Senior Vice-President or higher, other than those whose compensation is set by the Compensation Committee of the Board of Power Corporation of Canada (the “Designated Employees”) and approve the salary, bonus, and, if applicable, other compensation arrangements, for each of the Designated Employees (other than for the Chair and the President and Chief Executive Officer) and approve the amount and terms of all grants under equity compensation plans for all employees and report to the Board thereon.

2. Compensation Plans, Policies and Guidelines.

[a] The Committee shall periodically review management’s recommendations with respect to the compensation policies and guidelines applicable to employees of the Corporation and shall approve such compensation policies and guidelines as it deems appropriate.

[b] The Committee shall recommend for approval by the Board such incentive compensation plans, equity compensation plans, registered pension plans, supplemental pension plans and other compensation plans for employees of the Corporation as it deems appropriate, and shall determine the officers and employees of the Corporation and/or its affiliates to be covered by such plans.

[c] In performing its duties and exercising its powers, the Committee shall consider the implications of the risks associated with the Corporation’s compensation policies and practices.

3. Loans to Designated Employees > The Committee shall approve any loan program that is generally applicable to employees of the Corporation and shall review and, if appropriate, approve, any proposed loans to Designated Employees that do not fall within the scope of any such program.

4. Director Compensation > The Committee shall recommend to the Board for approval compensation arrangements for the Directors, for the Chair of the Board, and for the Chairs and members of Board committees.

5. Executive Compensation Disclosure > The Committee shall review any reports or other documentation containing information on executive compensation before any such information is publicly disclosed.

6. Succession Planning > The Committee shall periodically review succession plans for the Designated Employees.

7. Director Share Holdings > The Committee shall from time to time review the Corporation’s policy on Director share holdings and monitor its implementation.

4. Access to Information

The Committee shall have access to all information, documents and records of the Corporation that it determines necessary or advisable to permit it to carry out its duties and responsibilities.

5. Review of Charter

The Committee shall periodically review this Charter and recommend any changes to the Board that it deems appropriate.

6. Reporting

The Chair of the Committee shall report to the Board at its next regularly scheduled meeting on matters reviewed or considered by the Committee since the Chair’s last report to the Board.


Adopted by the Board of Directors on March 29, 2006, as amended August 7, 2009; amended by the Compensation Committee on March 13, 2012 and adopted by the Board of Directors on March 14, 2012.

Compensation Committee Charter

 

1. Membership

The Governance and Nominating Committee (the “Committee”) of the Board of Directors (the “Board”) of Power Financial Corporation (the “Corporation”) shall consist of not less than three Directors. Members of the Committee shall be appointed by the Board and shall serve as members at the pleasure of the Board. The Board shall also appoint the Chairman of the Committee.

2. Procedural Matters

In connection with the discharge of its duties and responsibilities, the Committee shall observe the following procedures:

1. Meetings > The Committee shall meet as often as may be necessary to discharge its duties and responsibilities hereunder. The Committee may meet at any place within or outside of Canada.

2. Advisors > The Committee may, at the Corporation’s expense, engage such outside advisors as it determines necessary or advisable to permit it to carry out its duties and responsibilities.

3. Quorum > A quorum at any meeting of the Committee shall be a majority of the Committee members.

4. Secretary > The Chairman (or, in the absence of the Chairman, the acting Chairman) of the Committee shall appoint a person to act as secretary of meetings of the Committee.

5. Calling of Meetings > A meeting of the Committee may be called by the Chairman of the Committee, by the Chairman of the Board, or by a majority of the Committee members, on not less than 48 hours notice to the members of the Committee specifying the place, date and time of the meeting. Meetings may be held at any time without notice if all members of the Committee waive notice. If a meeting of the Committee is called by anyone other than the Chairman of the Board, the person(s) calling such meeting shall so inform the Chairman of the Board and the Chairman of the Committee.

3. Duties and Responsibilities

In addition to any other duties and responsibilities assigned to it from time to time by the Board, the Committee shall have the following duties and responsibilities:

1. Director Qualifications > The Committee shall recommend to the Board candidates for Directors that possess the qualifications, competencies, skills, experience, and level of commitment required of a Director in order to fulfill Board responsibilities and the personal qualities that should be sought in candidates for Board membership.

2. Board Candidates > The Committee shall, after considering:

[a] the competencies and skills that the Board considers to be appropriate for the Board as a whole to possess;

[b] the competencies and skills that the Board considers each existing Director to possess and that each new nominee will bring to the Board; and

[c] the appropriate level of representation on the Board by Directors who are independent of management and who are neither officers nor employees of any of the Corporation’s affiliates;

identify candidates qualified for Board membership, and recommend to the Board nominees to be placed before the shareholders at the next annual general meeting.

3. Committee Membership > The Committee shall recommend to the Board individuals for appointment to the committees of the Board after considering the mandates of the respective committees, the skills that each Director possesses, and the appropriate level of representation on the committees by Directors who are independent of management and who are neither officers nor employees of any of the Corporation’s affiliates.

4. Director Orientation and Education > The Committee shall ensure that all newly appointed Directors are provided with an orientation as to the nature and operation of the business and affairs of the Corporation, the role of, and expectations as to the contributions to be made, by the Board and its committees, and that existing Directors are periodically updated in respect of the foregoing.

5. Board, Committee and Director Assessment > The Committee shall assess, on a regular basis, the structure, composition, effectiveness and contribution of the Board, of all committees of the Board, and of the Directors.

6. Corporate Governance > The Committee shall review the Corporation’s approach to corporate governance including, without limitation:

[a] recommending to the Board for approval charters for the Board and Board committees, and position descriptions for the Chairman of the Board and for the Chairman of each Board committee;

[b] recommending to the Board appropriate sizes for the Board and for committees of the Board;

[c] working with the Chairman of the Board and the President and Chief Executive Officer and other members of management to ensure that the Corporation has a strong corporate governance culture and strong governance processes; and

[d] monitoring developments in the area of corporate governance and undertaking other initiatives that may be desirable to maintain high standards of corporate governance.

7. Corporate Social Responsibility > The Committee shall be responsible for monitoring the implementation of the Corporation’s policy and strategy with respect to corporate social responsibility.

8. Risk Oversight > In performing its duties and exercising its powers, the Committee shall oversee the Corporation’s approach to appropriately addressing potential risks related to governance matters.

4. Access to Information

The Committee shall have access to all information, documents and records of the Corporation that it determines necessary or advisable to permit it to carry out its duties and responsibilities.

5. Review of Charter

The Committee shall periodically review this Charter and recommend any changes to the Board that it deems appropriate.

6. Reporting

The Chairman of the Committee shall report to the Board on matters reviewed or considered by the Committee since the Chairman’s last report to the Board.


Adopted by the Board of Directors on March 29, 2006, as amended August 7, 2009, on March 10, 2011, on March 13, 2013 and on March 19, 2014.

Governance and Nominating Committee Charter

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