e6vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of August 2008
Commission File Number 001-33161
NORTH AMERICAN ENERGY PARTNERS INC.
Zone 3 Acheson Industrial Area
2-53016 Highway 60
Acheson, Alberta
Canada T7X 5A7
(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 if 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 if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7): o
Indicate by check mark whether by furnishing the information contained in this Form, the
registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
If Yes is marked, indicate below the file number assigned to the registrant in connection
with Rule 12g3-2(b):
Documents Included as Part of this Report
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Notice of Annual Meeting and Management Information Circular |
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Form of Proxy |
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.
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NORTH AMERICAN ENERGY PARTNERS INC.
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By: |
/s/ Peter Dodd
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Name: |
Peter Dodd |
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Title: |
Chief Financial Officer |
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Date: August 19, 2008
NORTH AMERICAN ENERGY PARTNERS INC.
NOTICE OF ANNUAL MEETING
AND MANAGEMENT INFORMATION CIRCULAR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON
SEPTEMBER 17, 2008
AUGUST 11, 2008
NORTH
AMERICAN ENERGY PARTNERS INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
SEPTEMBER 17, 2008
NOTICE IS HEREBY GIVEN that the annual meeting of holders of common shares (the NAEP
Shareholders) of North American Energy Partners Inc. (the Corporation) will be held at the
Calgary Petroleum Club, 319 5th Avenue SW, Calgary, Alberta T2P 0L5 on the
17th day of September, 2008, at 4:00 p.m. (Mountain Time) (the Meeting), for the
following purposes:
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to receive the financial statements of the Corporation for the year ended March 31, 2008 and
the auditors report thereon; |
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to elect the directors of the Corporation for the ensuing year; |
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to re-appoint the auditors of the Corporation for the ensuing year and to authorize the
directors to fix the remuneration of the auditors as such; and |
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to transact such other business as may properly come before the Meeting or any adjournments
thereof. |
The specific details of the foregoing matters to be put before the Meeting are set forth in the
management information circular (the Information Circular). Capitalized terms used in this
notice of annual meeting and not otherwise defined herein shall have the meanings ascribed to such
terms in the Information Circular.
A copy of the 2008 Annual Report of the Corporation, the Information Circular and a form of proxy
accompany this notice.
NAEP Shareholders who are unable to attend the Meeting are requested to complete, sign, date and
return the enclosed form of proxy in accordance with the instructions set out in the form of proxy
and in the Information Circular accompanying this notice. A proxy will not be valid unless it is
deposited with CIBC Mellon Trust Company at Proxy Dept., CIBC Mellon Trust Company, P.O. Box 721,
Agincourt, Ontario M1S 0A1 (facsimile no. (416) 368-2502 or toll free in North America only at no.
1-866-781-3111) no later than 6:30 p.m. (Eastern Time) on September 15, 2008 and if the Meeting is
adjourned, no later than 24 hours (excluding Saturdays and holidays) prior to the commencement of
any adjournment thereof.
DATED at Acheson, Alberta, this 11th day of August, 2008.
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BY ORDER OF THE BOARD OF DIRECTORS OF
NORTH AMERICAN ENERGY PARTNERS INC.
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(signed) Peter Dodd
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Chief Financial Officer |
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NORTH AMERICAN ENERGY PARTNERS INC.
MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES
This management information circular (the Information Circular) and accompanying form of
proxy (the Proxy) are furnished in connection with the solicitation of proxies by or on behalf of
management of North American Energy Partners Inc. (the Corporation or NAEP) for use at the
annual meeting (the Meeting) of holders of common shares of the Corporation (the NAEP
Shareholders) to be held at the Calgary Petroleum Club, 319 5th Avenue SW, Calgary,
Alberta T2P 0L5 on the 17th day of September, 2008, at 4:00 p.m. (Mountain Time), and
at any adjournments thereof, for the purposes set forth in the accompanying notice of meeting dated
August 11, 2008 (the Notice of Meeting).
It is expected that the solicitation will be primarily by mail. Proxies may also be solicited
personally by officers of the Corporation at nominal cost. The cost of this solicitation will be
borne by the Corporation. The Corporation may pay the reasonable costs incurred by persons who are
the registered but not beneficial owners of voting shares of the Corporation (such as brokers,
dealers, other registrants under applicable securities laws, nominees and/or custodians) in sending
or delivering copies of this Information Circular, the Notice of Meeting and Proxy to the
beneficial owners of such shares. The Corporation will provide, without cost to such persons, upon
request to the Secretary of the Corporation, additional copies of the foregoing documents required
for this purpose. The Notice of Meeting, Proxy and this Information Circular will be mailed to
NAEP Shareholders commencing on or about August 22, 2008. In this Information Circular, except
where otherwise indicated, all dollar amounts are expressed in Canadian currency.
No person has been authorized by the Corporation to give any information or make any
representations in connection with the matters contained herein other than those contained in this
Information Circular and, if given or made, any such information or representation must not be
relied upon as having been authorized by the Corporation.
This Information Circular does not constitute an offer or a solicitation to any person in any
jurisdiction in which such offer or solicitation is unlawful.
STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This Information Circular may contain forward-looking information that is based on expectations and
estimates as of the date of this Information Circular. Our forward-looking information is
information that is subject to known and unknown risks and other factors that may cause future
actions, conditions or events to differ materially from the anticipated actions, conditions or
events expressed or implied by such forward-looking information. Forward-looking information is
information that does not relate strictly to historical or current facts, and can be identified by
the use of the future tense or other forward-looking words such as believe, expect,
anticipate, intend, plan, estimate, should, may, could, would, should, target,
objective, projection, forecast, continue, strategy, intend, position or the negative
of those terms or other variations of them or comparable terminology.
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While we anticipate that subsequent events and developments may cause our views to change, we
do not have an intention to update any forward-looking information, except as required by
applicable securities laws. There can be no assurance that forward-looking information will prove
to be accurate, as actual results and future events could differ materially from those expected or
estimated in such statements. Accordingly, readers should not place undue reliance on
forward-looking information. See risk factors highlighted in materials filed with the securities
regulatory authorities filed in the United States and Canada from time to time, including, but not
limited to, our most recent annual managements discussion and analysis.
RECORD DATE
The record date (the Record Date) for determining which NAEP Shareholders shall be entitled
to receive notice of and to vote at the Meeting is August 11, 2008. Only NAEP Shareholders of
record as of the Record Date are entitled to receive notice of and to vote at the Meeting, unless
after the Record Date such shareholder of record transfers its shares and the transferee (the
Transferee), upon establishing that the Transferee owns such shares, requests in writing at least
10 days prior to the Meeting or any adjournments thereof that the Transferee may have his or her
name included on the list of NAEP Shareholders entitled to vote at the Meeting, in which case the
Transferee is entitled to vote such shares at the Meeting. Such written request by the Transferee
shall be filed with CIBC Mellon Trust Company at Proxy Dept., CIBC Mellon Trust Company, P.O. Box
721, Agincourt, Ontario M1S 0A1, together with a copy to the Secretary of the Corporation at North
American Energy Partners Inc., - Zone 3, Acheson Industrial Area, 2-53016 Highway 60, Acheson,
Alberta T7X 5A7.
Under normal conditions, confidentiality of voting is maintained by virtue of the fact that
the Corporations transfer agent tabulates proxies and votes. However, such confidentiality may be
lost as to any proxy or ballot if a question arises as to its validity or revocation or any other
like matter. Loss of confidentiality may also occur if the Board of Directors decides that
disclosure is in the interest of the Corporation or its shareholders.
APPOINTMENT OF PROXYHOLDERS
The persons named in the accompanying Proxy as proxyholders are representatives of management
of NAEP. A NAEP Shareholder desiring to appoint some other person (who need not be a shareholder
of NAEP) to represent him or her at the Meeting, may do so either by striking out the printed names
and inserting the desired persons name in the blank space provided in the Proxy or by completing
another proper proxy and, in either case, delivering the completed proxy to CIBC Mellon Trust
Company at Proxy Dept., CIBC Mellon Trust Company, P.O. Box 721, Agincourt, Ontario M1S 0A1
(facsimile no. (416) 368-2502 or toll free in North America only at no. 1-866-781-3111) no later
than 6:30 p.m. (Eastern Time) on September 15, 2008 and if the Meeting is adjourned, no later than
24 hours (excluding Saturdays and holidays) prior to the commencement of any adjournment thereof.
A Proxy should be executed by a NAEP Shareholder or its attorney duly authorized in writing or, if
a NAEP Shareholder is a corporation, by an officer or attorney thereof duly authorized in writing.
If a proxy is given by joint shareholders, it must be executed by all such joint shareholders.
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VOTING OF PROXIES
If a Proxy is completed, signed and delivered to the Corporation in the manner specified
above, the persons named as proxyholders therein shall vote or withhold from voting the shares in
respect of which they are appointed as proxyholders at the Meeting, in accordance with the
instructions of the NAEP Shareholder appointing them, on any show of hands or any ballot that may
be called for and, if the NAEP Shareholder specifies a choice with respect to any matter to be
acted upon at the Meeting, the persons appointed as proxyholders shall vote in accordance with the
specification so made. In the absence of such specification, or if the specification is not
certain, the shares represented by such Proxy will be voted in favour of the matters to be acted
upon as specified in the Notice of Meeting.
A Proxy confers discretionary authority upon the persons named therein with respect to all
other matters which may properly come before the Meeting or any adjournments thereof. As of the
date of this Information Circular, the Board of Directors of the Corporation knows of no such
amendments, variations or other matters to come before the Meeting, other than matters referred to
in the Notice of Meeting. However, if other matters should properly come before the Meeting, the
Proxy will be voted on such matters in accordance with the best judgment of the person or persons
voting such Proxy.
REVOCABILITY OF PROXY
Any NAEP Shareholder returning an enclosed Proxy may revoke the same at any time insofar as it
has not been exercised. In addition to revocation in any other manner permitted by law, a Proxy
may be revoked by instrument in writing executed by the NAEP Shareholder or by his or her attorney
authorized in writing or, if the NAEP Shareholder is a corporation, by an officer or attorney
thereof duly authorized, and deposited at the registered office of the Corporation to the attention
of Kevin Rowand, at any time up to and including the last business day preceding the day of the
Meeting, or any adjournment thereof, or with the chairperson of the Meeting, prior to the
commencement of the Meeting. A NAEP Shareholder attending the Meeting has the right to vote in
person and, if he or she does so, his or her proxy is nullified with respect to the matters such
person votes upon and any subsequent matters thereafter to be voted upon at the Meeting or any
adjournment thereof.
ADVICE TO BENEFICIAL HOLDERS OF COMMON SHARES
The information set forth in this section is of significant importance to many NAEP
Shareholders, as a substantial number of NAEP Shareholders do not hold common shares of the
Corporation (NAEP Common Shares) in their own name, and thus are considered non-registered
shareholders. NAEP Shareholders who do not hold their NAEP Common Shares in their own name
(Beneficial Shareholders) should note that only Proxies deposited by NAEP Shareholders whose
names appear on the records of the Corporation as the registered holders of NAEP Common Shares can
be recognized and acted upon at the Meeting. If NAEP Common Shares are listed in an account
statement provided to a NAEP Shareholder by a broker, then, in almost all cases, those NAEP Common
Shares will not be registered in the NAEP Shareholders name on the records of the Corporation.
Such NAEP Common Shares will more likely be registered under the name of the NAEP Shareholders
broker or an agent of that broker
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or another similar entity (called an Intermediary). NAEP Common Shares held by an
Intermediary can only be voted by the Intermediary (for, withheld or against resolutions) upon the
instructions of the Beneficial Shareholder. Without specific instructions, Intermediaries are
prohibited from voting NAEP Common Shares.
Beneficial Shareholders should ensure that instructions respecting the voting of their NAEP
Common Shares are communicated in a timely manner and in accordance with the instructions provided
by their Intermediary. Applicable regulatory rules require Intermediaries to seek voting
instructions from Beneficial Shareholders in advance of shareholders meetings. Every Intermediary
has its own mailing procedures and provides its own return instructions to clients, which should be
carefully followed by Beneficial Shareholders in order to ensure that their NAEP Common Shares are
voted at the Meeting.
Although a Beneficial Shareholder may not be recognized directly at the Meeting for the
purposes of voting NAEP Common Shares registered in the name of their Intermediary, a Beneficial
Shareholder may attend at the Meeting as proxyholder for the Intermediary and vote the NAEP Common
Shares in that capacity. Beneficial Shareholders who wish to attend the Meeting and indirectly
vote their NAEP Common Shares as a proxyholder, should enter their own names in the blank space on
the form of proxy provided to them by their Intermediary and timely return the same to their
Intermediary in accordance with the instructions provided by their Intermediary, well in advance of
the Meeting.
NOTICE TO UNITED STATES SHAREHOLDERS
The solicitation of proxies by the Corporation is not subject to the requirements of Section
14(a) of the United States (US) Securities Exchange Act of 1934, as amended (the US Exchange
Act), by virtue of an exemption applicable to proxy solicitations by foreign private issuers as
defined in Rule 3b-4 under the US Exchange Act. Accordingly, this Information Circular has been
prepared in accordance with the applicable disclosure requirements in Canada. Residents of the
United States should be aware that such requirements may be different than those of the United
States applicable to proxy statements under the US Exchange Act.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
The Corporations authorized capital consists of an unlimited number of NAEP Common Shares,
and an unlimited number of non-voting NAEP Common Shares. As at August 11, 2008, there were a
total of 36,038,476 NAEP Common Shares outstanding. Each NAEP Common Share entitles the holder
thereof to one vote in respect of each of the matters to be voted upon at the Meeting. For a list
of persons or corporations who beneficially owns or controls or directs, directly or indirectly,
securities carrying more than 10% of the voting rights attached to the NAEP Common Shares, please
see the table included under the Section captioned Business to be Transacted at The Meeting -
Election of Directors.
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QUORUM
A quorum for the transaction of business at the Meeting shall consist of at least two persons
holding or representing by proxy not less than twenty (20%) percent of the outstanding shares of
the Corporation entitled to vote at the meeting.
If a quorum is not present at the opening the Meeting, the NAEP Shareholders present may
adjourn the meeting to a fixed time and place but may not transact any other business. If a meeting
of shareholders is adjourned by one or more adjournments for an aggregate of less than 30 days it
is not necessary to give notice of the adjourned meeting other than by announcement at the time of
an adjournment. If a meeting of NAEP Shareholders is adjourned by one or more adjournments for an
aggregate of more than 29 days and not more than 90 days, notice of the adjourned meeting shall be
given as for an original meeting but the management of the Corporation shall not be required to
send a form of proxy in the form prescribed by applicable law to each NAEP Shareholder who is
entitled to receive notice of the meeting. Those shareholders present at any duly adjourned meeting
shall constitute a quorum.
The Corporations list of NAEP Shareholders as of the Record Date has been used to deliver to
NAEP Shareholders the Notice of Meeting and this Information Circular as well as to determine the
NAEP Shareholders who are eligible to vote.
PRESENTATION OF FINANCIAL STATEMENTS
The audited comparative consolidated financial statements of the Corporation for the financial
year ended March 31, 2008, together with the report of the auditors thereon, copies of which are
contained in the Corporations annual report, will be presented to the NAEP Shareholders at the
Meeting. Receipt in the Meeting of the auditors report and the Corporations financial statements
for its last completed fiscal period will not constitute approval or disapproval of any matters
referred to therein.
BUSINESS TO BE TRANSACTED AT THE MEETING
The Board of Directors of the Corporation presently consists of 9 directors to be elected
annually. All of the nominees are now directors of the Corporation and have been directors since
the dates indicated below. Unless a NAEP Shareholder directs that his or her NAEP Common Shares be
otherwise voted or withheld from voting in connection with the election of directors, the persons
named in the enclosed form of proxy will vote for the election of the nine nominees whose names are
set forth below. Management does not contemplate that any of the following nominees will be unable
or unwilling to serve as a director but if that should occur for any reason prior to the Meeting,
the persons named in the enclosed Proxy will have the right to vote for another nominee in their
discretion. Each director elected at the Meeting will hold office until the next annual meeting or
until his or her successor is duly elected or appointed.
For each nominee, the following table and the notes thereto state, as of August 11, 2008, the:
(i) name, municipality and country of residence, and age; (ii) date of first becoming a director;
(iii) current position(s) with the Corporation; (iv) number of NAEP Common Shares
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and options beneficially owned, or controlled or directed, directly or indirectly; and (v)
present principal occupation.
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Number of |
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Common |
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Shares and |
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Options |
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Beneficially |
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Position(s) |
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Owned, |
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Name, Present Principal Occupation, |
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with the |
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or Controlled or |
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Municipality and Country of Residence |
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Corporation, |
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Directed, Directly |
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and Age |
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Director Since |
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if any |
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or Indirectly (1) |
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Principal Occupation |
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George R. Brokaw (2)(5)
New York, N.Y., U.S.A., 40
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June 28, 2006
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Director
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27,760 (6)
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Managing Director,
Perry Capital,
L.L.C., an
affiliate of Perry
Corp., a private
investment firm;
Managing Director
(Mergers &
Acquisitions) of
Lazard Frères & Co.
LLC from January
2003 to May 2005. |
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John A. Brussa (3)(4)
Calgary, Alberta, Canada, 51
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November 26, 2003
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Director
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140,160 (6)
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Senior partner and
head of the Tax
Department at the
law firm of Burnet,
Duckworth & Palmer
LLP; Chairman of
Penn West Energy
Trust, Crew Energy
Inc. and Divestco
Inc.; currently a
director of a
number of natural
resource and energy
companies and
mutual fund trusts. |
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John D. Hawkins (2)(4)
Houston, Texas, U.S.A., 44
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October 17, 2003
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Director
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27,760 (7)
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Partner with The
Sterling Group,
L.P., a private
equity investment
firm, since 1999. |
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Ronald A. McIntosh (2)(4)(5)
Calgary, Alberta, Canada, 66
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May 20, 2004
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Chairman of the
Board
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126,200 (8)
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Chairman of NAV
Energy Trust, a
Calgary-based oil
and natural gas
investment fund,
from January 2004
to August 2006;
President and Chief
Executive Officer
of Navigo Energy
Inc. from October
2002 and January
2004; Senior Vice
President and Chief
Operating Officer
of Gulf Canada
Resources Limited
from December 2001
to July 2002. |
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William C. Oehmig (3)(5)
Houston, Texas, U.S.A., 59
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May 20, 2004
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Director
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205,460 (9)
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Formerly Chairman
of the
Corporations Board
of Directors from
November 26, 2003
to May 20, 2004;
Partner with The
Sterling Group,
L.P., a private
equity investment
firm; Mr. Oehmig
currently serves on
the boards of
Propex Fabrics
Inc., Panolam
Industries
International
Incorporated and
Universal Fiber
Systems; previously
served as Chairman
of Royster-Clark,
Purina Mills, and
as a Director of
Exopack and
Sterling Diagnostic
Imaging, and has
served on the board
of several
portfolio companies
since joining The
Sterling Group L.P. |
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Rodney J. Ruston
Edmonton, Alberta, Canada, 57
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May 9, 2005
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Director, President
and Chief Executive
Officer
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588,600 (10)
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Previously,
Managing Director
and Chief Executive
Officer of Ticor
Limited; previously
a Principal with
Ruston Consulting
Services Pty. Ltd.;
Formerly held
management
positions with
Pasminco Limited,
Savage Resources
Limited, Wambo
Mining Corporation,
Oakbridge Limited,
and Kembla Coal &
Coke Pty. Limited;
Chairman of the
Australian Minerals
Tertiary Education
Council from July
2003 until May 2005 |
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Number of |
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Common |
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Shares and |
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Options |
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Beneficially |
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Position(s) |
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Owned, |
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Name, Present Principal Occupation, |
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with the |
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or Controlled or |
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Municipality and Country of Residence |
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Corporation, |
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Directed, Directly |
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and Age |
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Director Since |
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if any |
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or Indirectly (1) |
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Principal Occupation |
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Allen R. Sello (2)(3)
West Vancouver, British Columbia,
Canada, 69
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January 26, 2006
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Director
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55,860 (11)
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From 1999 until
September 2004 Mr.
Sello held the
position of Senior
Vice President and
Chief Financial
Officer for UMA
Group Limited;
currently Chair of
the Vancouver Board
of Trade Government
Budget and Finance
Committee; trustee
of Sterling Shoes
Income Fund. |
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Peter W. Tomsett (3)(4)(5)
West Vancouver, British Columbia,
Canada, 50
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September 19, 2006
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Director
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27,760 (12)
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Company Director.
From September 2004
to January 2006,
President and CEO
of Placer Dome Inc,
prior thereto,
Executive Vice
President of Placer
Dome Inc.;
currently Chairman
of Silver Standard
Resources Inc., and
Chairman of Equinox
Minerals Limited. |
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K. Rick Turner (2)(4)
Houston, Texas, U.S.A., 50
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November 26, 2003
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Director
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52,406 (7)(13)
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Employed by
Stephens family
entities since
1983; currently
Senior Managing
Director of The
Stephens Group,
LLC., private
equity investment
firm; currently
serves on the board
of two other
publicly-held
companies: Energy
Transfer Partners
and Energy Transfer
Equity; serves on
numerous private
company boards. |
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The information as to NAEP Common Shares beneficially owned or over which control is
exercised, not being within the knowledge of the Corporation, has been furnished by the
respective nominees individually, effective as of August 11, 2008. |
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(2) |
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Member of the Audit Committee. (See 2008 Annual Information Form under the heading
The Board and the Board Committees for further disclosure on information on the Audit
Committee). (Mr. McIntosh was in the last financial year and is currently a member of the
Audit Committee. Mr. McIntoshs name was inadvertently omitted from the relevant section of
the 2008 Annual Information Form as a member of the Audit Committee). |
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(3) |
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Member of the Compensation Committee. |
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(4) |
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Member of the Governance Committee. |
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(5) |
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Member of the Health, Safety, Environment and Business Risk Committee. |
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(6) |
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Includes currently exercisable options to purchase 22,208 NAEP Common Shares and
currently unvested options to purchase 5,552 NAEP Common Shares. |
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(7) |
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Includes currently unvested options to purchase 5,552 NAEP Common Shares. |
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(8) |
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Includes currently exercisable options to purchase 56,000 NAEP Common Shares and
currently unvested options to purchase 14,000 NAEP Common Shares. |
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(9) |
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Includes 22,870 shares that have been donated by Mr. Oehmig but over which Mr.
Oehmig retains sole voting power. |
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(10) |
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Includes currently exercisable options to purchase 220,000 shares and currently
unvested options to purchase 351,900 NAEP Common Shares. |
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(11) |
|
Includes currently exercisable options to purchase 11,104 NAEP Common Shares and
currently unvested options to purchase 16,656 NAEP Common Shares. |
|
(12) |
|
Includes currently exercisable options to purchase 5,552 NAEP Common Shares and
currently unvested options to purchase 22,208 NAEP Common Shares. |
|
(13) |
|
Includes 13,484 shares held in an individual retirement account, 27,818 shares held
in a joint brokerage account. |
8
The following persons or entities beneficially own, or control or direct, directly or indirectly,
securities carrying more than 10% of the voting rights attached to the NAEP Common Shares based on
information available on August 6, 2008.
|
|
|
|
|
Name of Beneficial Owner |
|
Number of NAEP Common Shares |
|
% of Outstanding NAEP Common Shares |
|
|
|
|
|
|
|
|
|
|
|
Sterling Group Partners I, L.P. (a)
|
|
4,626,265
|
|
12.9 |
|
|
|
|
|
Richard Perry (b)
|
|
4,598,466
|
|
12.8 |
|
|
|
|
|
Massachusetts Financial Services Company
(c)
|
|
4,474,650
|
|
12.4 |
|
|
|
|
|
FMR Corp.(d)
|
|
3,716,400
|
|
10.3 |
(a) Sterling Group Partners I GP, L.P. is the sole general partner of Sterling Group Partners
I, L.P. Sterling Group Partners I GP, L.P. has five general partners, each of which is wholly-owned
by one of Frank J. Hevrdejs, William C. Oehmig, T. Hunter Nelson, John D. Hawkins and C. Kevin
Garland. Each of these individuals disclaims beneficial ownership of the shares owned by Sterling
Group Partners I, L.P. Sterling Group Partners I, L.P. is an affiliate of The Sterling Group, L.P.
(b) Perry Partners, L.P. directly holds 2,161,361 NAEP Common Shares. Perry Luxco S.A.R.L. directly
holds 1,718,443 NAEP Common Shares. Perry Partners International, Inc. directly holds 718,662 NAEP
Common Shares. Richard Perry is the President and sole shareholder of Perry Corp., which is the
investment manager of Perry Partners International, Inc. and the managing general partner of Perry
Partners, L.P. Perry Partners International, Inc. is the indirect sole shareholder of the class of
securities owned by Perry Luxco S.A.R.L. As such, Mr. Perry may be deemed to have beneficial
ownership over the respective NAEP Common Shares owned by Perry Luxco S.A.R.L., Perry Partners,
L.P. and Perry Partners International, Inc.; however, Mr. Perry disclaims such beneficial
ownership, except to the extent of his pecuniary interest, if any, therein. Perry Corp. is an
affiliate of Perry Strategic Capital Inc.
(c) Massachusetts Financial Services Company is doing business as MFS Investment Management
(MFS). Sun Life Financial, Inc. is a majority shareholder of MFS.
(d) FMR Corp. is now known as FMR LLC. Fidelity Management & Research Company, Pyramis Global
Advisors, LLC and Pyramis Global Advisors Trust Company are wholly-owned subsidiaries of FMR LLC.
Unless a NAEP Shareholder otherwise directs, or directs that his or her NAEP Common Shares are
to be withheld from voting in connection with the election of the directors as specified above, the
persons named in the enclosed form of Proxy intend to vote for the election of the directors as
specified above, such directors to hold office until the next annual meeting or until his or her
successor is appointed.
2. |
|
Re-appointment of Independent Auditors and Authorization of Directors to fix their
Remuneration |
At the Meeting, NAEP Shareholders will be requested to vote on the re-appointment of KPMG LLP
(KPMG) as the independent auditors of the Corporation to hold office until the next annual
meeting of shareholders or until a successor is appointed, and to authorize the Board of Directors
to fix the auditors remuneration. KPMG have been the auditors of the Corporation, or its
predecessor NACG Holdings Inc., since October 31, 2003.
Recommendation of the Board of Directors
The Board of Directors recommends a vote for the re-appointment of KPMG as independent
auditors of the Corporation for the fiscal year ending March 31, 2009 and authorizing the Board of
Directors to fix the auditors remuneration.
9
Unless a NAEP Shareholder otherwise directs, or directs that his or her NAEP Common Shares are
to be withheld from voting in connection with the appointment of auditors, the persons named in the
enclosed form of Proxy intend to vote for the reappointment of KPMG as auditors of the Corporation
until the next annual meeting of shareholders and to authorize the directors to fix their
remuneration.
Management of the Corporation know of no matters to come before the Meeting other than as set
forth in the Notice of Meeting. However, if other matters which are not currently known to
management should properly come before the Meeting, the accompanying proxy will be voted on such
matters in accordance with the best judgment of the persons voting the proxy.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth all compensation earned during the fiscal years ended March 31,
2008, March 31, 2007 and March 31, 2006 by Rodney J. Ruston, Peter Dodd, Miles W. Safranovich, Bob
Harris, Kevin Mather and Christopher J. Hayman, (collectively, the Named Executive Officers).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term |
|
All Other |
|
|
Annual Compensation |
|
Compensation |
|
Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Annual |
|
Underlying |
|
Shares Subject to Resale |
|
|
Name and Principal Position |
|
Year |
|
Salary (a) |
|
Bonus (b) |
|
Compensation |
|
Options (c) |
|
Restrictions (d) |
|
|
Rodney J. Ruston
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,938 PSUs valued at
|
|
|
President and Chief Executive
|
|
|
2008 |
|
|
$ |
518,750 |
|
|
$ |
562,170 |
|
|
(e)
|
|
|
21,900 |
|
|
$ |
171,945 |
|
|
|
Officer
|
|
|
2007 |
|
|
$ |
500,000 |
|
|
$ |
386,615 |
|
|
(e)
|
|
|
|
|
|
|
|
|
|
Nil |
(Hired May 2005)
|
|
|
2006 |
|
|
$ |
536,539 |
|
|
$ |
300,000 |
|
|
(e)
|
|
|
550,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter Dodd
|
|
|
2008 |
|
|
$ |
280,000 |
|
|
|
$70,483 |
|
|
(e)
|
|
|
109,400 |
|
|
4,667 PSUs valued at
|
|
|
Chief Financial Officer
|
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$73,365 |
|
|
|
(Hired February 2008)
|
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miles W. Safranovich
|
|
|
2008 |
|
|
$ |
239,960 |
|
|
$ |
252,289 |
|
|
(e)
|
|
|
8,700 |
|
|
3,780 PSUs valued at
|
|
|
Vice President, Operations
|
|
|
2007 |
|
|
$ |
218,000 |
|
|
$ |
164,355 |
|
|
(e)
|
|
|
|
|
|
|
$59,422 |
|
|
Nil |
(Hired November 2004)
|
|
|
2006 |
|
|
$ |
195,808 |
|
|
$ |
210,384 |
|
|
(e)
|
|
|
40,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bob Harris |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President, Human |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resources, Health, Safety &
|
|
|
2008 |
|
|
$ |
222,600 |
|
|
$ |
234,921 |
|
|
(e)
|
|
|
7,600 |
|
|
3,667 PSUs valued at
|
|
|
Environment
|
|
|
2007 |
|
|
$ |
166,250 |
|
|
$ |
150,897 |
|
|
(e)
|
|
|
100,000 |
|
|
|
$57,645 |
|
|
Nil |
(Hired June 2006)
|
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Mather
|
|
|
2008 |
|
|
$ |
190,749 |
|
|
$ |
201,853 |
|
|
(e)
|
|
|
47,400 |
|
|
4,333 PSUs valued at
|
|
|
Vice President, Supply Chain
|
|
|
2007 |
(f) |
|
$ |
171,250 |
|
|
|
$89,027 |
|
|
(e)
|
|
|
|
|
|
|
$68,115 |
|
|
Nil |
(Hired April 1997)
|
|
|
2006 |
|
|
$ |
160,000 |
|
|
$ |
111,320 |
|
|
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Hayman (g) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Vice President, Supply
|
|
|
2008 |
|
|
$ |
227,164 |
|
|
|
$0 |
|
|
(e)
|
|
|
|
|
|
|
|
|
Chain
|
|
|
2007 |
|
|
$ |
207,100 |
|
|
$ |
150,313 |
|
|
(e)
|
|
|
|
|
|
|
|
|
|
Nil |
(Hired January 2005)
|
|
|
2006 |
|
|
$ |
183,641 |
|
|
$ |
186,910 |
|
|
(e)
|
|
|
40,000 |
|
|
|
|
|
(a) |
|
Annual salaries are typically adjusted in July of each year. |
10
(b) |
|
Bonus pursuant to the Corporations Annual Incentive Plan. Bonuses relating to performance
in a particular fiscal year are paid in July of the following fiscal year. |
|
(c) |
|
Consists of options to purchase NAEP Common Shares. |
|
(d) |
|
PSUs refer to Performance
Share Units (see Executive Compensation PSU Plan). Reflects
the value of the PSUs (rounded to nearest dollar) granted on April 1, 2008 using the closing
market price on the Toronto Stock Exchange on the grant date, which was $15.72. The number
PSUs, by their terms, are adjusted to take into account any dividends paid on NAEP Common
Shares. |
|
(e) |
|
The amount of other annual compensation does not exceed the lesser of $50,000 and 10% of the
salary and bonus for the fiscal year. |
|
(f) |
|
Mr. Mather became an executive officer on December 1, 2007. Prior to that he was a general
manager of the Heavy Construction and Mining segment. |
|
(g) |
|
Mr. Hayman resigned from the Corporation effective March 31, 2008. |
The Corporation does not have a pension plan. For the fiscal year ended March 31, 2008, the total
amount the Corporation set aside for pension, retirement and similar benefits for the executive
officers and directors was $50,015, consisting of employer matching contributions to the executive
officers Registered Retirement Savings Plans.
Share Option Plan
The Board of Directors has approved the Corporations Amended and Restated 2004 Share Option
Plan (the Share Option Plan). The Share Option Plan is part of the Corporations Long Term
Incentive Plan. The Share Option Plan was approved by the Corporations shareholders on November
3, 2006 and became effective on November 28, 2006. The Share Option Plan is administered by the
Compensation Committee. Option grants under the Share Option Plan may be made to the Corporations
directors, officers, employees and consultants selected by the Compensation Committee. The Share
Option Plan provides for the discretionary grant of options to purchase NAEP Common Shares. Options
granted under the Share Option Plan are evidenced by an agreement, specifying the vesting, exercise
price and expiration of such options, which terms are determined for each optionee by the
Compensation Committee. Options to be granted under the Share Option Plan will have an exercise
price of not less than the volume weighted average trading price of the NAEP Common Shares on the
Toronto Stock Exchange or the New York Stock Exchange at the time of grant. The Share Option Plan
provides that up to 10% of the Corporations issued and outstanding NAEP Common Shares from time to
time may be reserved for issuance or issued from treasury and also provides that the maximum number
of NAEP Common Shares issuable to insiders under the Share Option Plan (and any other security
based compensation arrangements of the Corporation) is 10% of the Corporations issued and
outstanding NAEP Common Shares. In the event of certain change of control events as defined in the
Share Option Plan, all outstanding options will become immediately vested and exercisable.
The Share Option Plan provides that each option includes a cashless exercise alternative which
provides a holder of an option with the right to elect to receive cash in lieu of purchasing the
number of shares under the option. Notwithstanding such right, the Share Option Plan provides that
the Corporation may elect, at its sole discretion, to net settle the option with stock. As of
March 31, 2008 there were 2,036,364 NAEP Common Shares issuable upon the exercise of outstanding
options, of which 804,192 of such options were vested.
The Share Option Plan provides that, in the event of the termination (with or without cause)
or retirement of an optionee, the options held by an optionee cease to be exercisable 30 days after
the termination or retirement date, subject to adjustment by the Compensation
11
Committee. The Corporation does not provide financial assistance to participants under the
Share Option Plan to facilitate the purchase of securities under the Share Option Plan. Options
granted under the Share Option Plan are not transferable by an optionee, except by an optionees
will or by the laws of descent and distribution. During the lifetime of an optionee, the options
are exercisable by only him or her (or, in the case of the optionees disability, by his or her
legal representative(s), if applicable). If an optionee dies, the options held by such optionee
may be exercised by the legal representative of the deceased optionee. Such options cease to be
exercisable on such date that is the earlier of: (a) 365 days after the optionees death, and (b)
the expiry date set out in the deceased optionees option agreement. Notwithstanding the
foregoing, the Share Option Plan allows the expiry date to be extended by determination of the
Compensation Committee or as permitted under the option agreement. If the expiry date falls within
or immediately after a blackout period or a lock-up period, the expiry date would be automatically
extended for five business days after the blackout period or lock-up period.
Amendments to the Share Option Plan
The Share Option Plan provides that subject to receipt of shareholder and regulatory approval,
the Board of Directors may make certain specified amendments to the Share Option Plan, including
(i) any amendment to the number of securities issuable under the Share Option Plan, (ii) any
changes in the participants in the plan that have the potential of broadening or increasing insider
participation, (iii) the introduction of, or amendments to, any form of financial assistance and
(iv) any other amendments that may lead to significant or unreasonable dilution in the
Corporations outstanding securities or may provide additional benefits to eligible participants,
especially to participants who are insiders. The Share Option Plan authorizes the Board of
Directors to make other amendments to the plan, subject only to regulatory approval (i.e. without
shareholder approval, unless specifically required by applicable law), including (i) amendments of
a housekeeping nature (i.e. amendments for the purpose of curing any ambiguity, error or omission
in the Share Option Plan, or to comply with applicable law or the requirements of any stock
exchange on which the NAEP Common Shares are listed), (ii) changes any change to the vesting
provisions, (iii) any changes in the termination provisions of an option or of the Share Option
Plan which does which does not entail an extension beyond the original expiry date, (iv) a
discontinuance of the Share Option Plan and (v) the addition of provisions relating to phantom
share units, such as restricted share units and deferred share units, which result in participants
receiving cash payments, and the terms governing such features.
12
Option Grants to Named Executive Officers in Fiscal 2008
The following table summarizes individual grants of options to purchase or acquire securities of
the Corporation
during fiscal 2008 to each named executive officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value of |
|
|
|
|
|
|
Percentage |
|
|
|
Securities |
|
|
|
|
Number of |
|
of Total |
|
|
|
Underlying Options |
|
|
|
|
Securities |
|
Options Granted |
|
Exercise |
|
on the Date of |
|
|
|
|
Underlying |
|
to Employees in |
|
Price ($/Security) |
|
Grant ($/Security) |
|
Expiration |
Name |
|
Options Granted |
|
Fiscal Year |
|
(a) |
|
(b) |
|
Date |
|
|
|
|
|
|
|
|
|
|
|
Rodney J. Ruston |
|
21,900 |
|
4.6% |
|
13.50 |
|
279,882 |
|
27-November-17 |
|
|
|
|
|
|
|
|
|
|
|
Peter Dodd |
|
109,400 |
|
22.7% |
|
13.50 |
|
1,398,132 |
|
27-November-17 |
|
|
|
|
|
|
|
|
|
|
|
Miles W. Safranovich |
|
8,700 |
|
1.81% |
|
13.50 |
|
111,186 |
|
27-November-17 |
|
|
|
|
|
|
|
|
|
|
|
Bob Harris |
|
7,600 |
|
1.58% |
|
13.50 |
|
97,128 |
|
27-November-17 |
|
|
|
|
|
|
|
|
|
|
|
Kevin Mather |
|
40,000 |
|
|
|
15.37 |
|
601,200 |
|
18-March-18 |
|
|
7,400 |
|
9.85% |
|
13.50 |
|
94,572 |
|
27-November-17 |
|
|
|
|
|
|
|
|
|
|
|
Chris Hayman (c) |
|
0 |
|
0% |
|
0 |
|
|
|
|
|
|
|
(a) |
|
With respect to each grant of options, 20% of such grant vests each anniversary date of the
grant |
|
(b) |
|
Value is based on the closing price of the underlying NAEP Common Shares on the Toronto
Stock Exchange on the date of the grant. |
|
(c) |
|
Mr. Hayman resigned from the Corporation effective March 31, 2008. |
Aggregated Option Exercises in Fiscal 2008 and Fiscal Year End Option Values
The following table summarizes each exercise of options during fiscal 2008 by each named executive
officer and the
financial year-end value of unexercised options, on
an aggregated basis
|
|
|
|
|
|
|
|
|
Name |
|
Securities |
|
Aggregate |
|
Unexercised Options at |
|
Value of Unexercised |
|
|
Acquired on |
|
Value |
|
March 31, 2008 |
|
in-the-Money Options at |
|
|
Exercise (#) |
|
Realized ($) |
|
Exercisable/Unexercisable |
|
March 31, 2008) |
|
|
|
|
|
|
(#) |
|
Exercisable/ |
|
|
|
|
|
|
|
|
Unexercisable (a) |
|
|
|
|
|
|
|
|
($) |
Rodney J. Ruston
|
|
|
|
|
|
220,000/351,900
|
|
3,531,000/5,647,995 |
Peter Dodd
|
|
|
|
|
|
0/109,400
|
|
0/1,755,870 |
Miles W. Safranovich
|
|
|
|
|
|
52,000/56,700
|
|
834,600/910,035 |
Bob Harris
|
|
|
|
|
|
20,000/87,600
|
|
321,000/1,405,980 |
Kevin Mather
|
|
|
|
|
|
44,000/63,400
|
|
706,200/1,017,570 |
Chris Hayman (b)
|
|
|
|
|
|
52,000/48,000
|
|
834,600/770,400 |
|
|
|
(a) |
|
March 31, 2008 option values are determined using the Friday, March 28, 2008 closing price on
the Toronto Stock Exchange. |
|
(b) |
|
Mr. Hayman resigned from the Corporation effective March 31, 2008. |
PSU Plan
The Board of Directors has approved the Corporations Performance Share Unit Plan (the PSU
Plan). The PSU Plan is part of the Corporations Long Term Incentive Plan. Each year the Chief
Executive Officer and the Compensation Committee recommends, to the Board of
13
Directors for
approval, employees (the Participants) for participation in the Corporations PSU Plan. Under
the PSU Plan the Corporation credits a Performance Share Unit (a PSU), being a right granted to a
Participant to receive a cash payment equivalent to the fair market value of a NAEP Common Share,
or at the discretion of the Corporation, in a number of NAEP Common Shares purchased on the open
market. After the third fiscal year-end following the date of the grant of the PSUs (the Maturity
Date), the Compensation Committee will assess the Participant against the performance criteria
established as part of the grant and determine the number of such PSUs that have vested. The cash
payment or delivery of NAEP Common Shares is then based on these vested PSUs.
If any dividends are paid on the NAEP Common Shares, additional PSUs will be credited to the
Participant to reflect such dividends. The PSU Plan provides that, in the event of the termination
(with or without cause), all PSUs that are not vested are immediately forfeited. In the event of
retirement or disability of a Participant, all vested PSUs will be redeemed within 30 days of the
Maturity Date. Any PSUs which have not completed their prescribed term shall continue to be
eligible to become vested PSUs, subject to the performance criteria, as if the Participant was
still employed by the Corporation. On the death of a Participant, all granted PSUs will vest and
will be redeemed within 90 days of the date of the Participants death. Rights respecting PSUs are
not transferable or assignable other than by will or the laws of descent and distribution. The
Compensation Committee, on recommendation to and approval of the Board of Directors, may amend,
suspend or terminate the PSU Plan or any portion thereof at any time. However, no amendment,
suspension or termination may materially adversely affect any PSUs, or any rights pursuant thereto,
granted previously to any Participant without the consent of that Participant.
Performance Share Units (PSUs)
The table below outlines the number of PSUs granted to each named executive officer with respect to
fiscal 2008
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Performance or |
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Estimated Future Payouts Under Non-Securities Price Based Plans (a) |
|
|
Securities, Units, |
|
Other Period Until |
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or Other Rights |
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Maturation or |
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Name |
|
(#) |
|
Payout |
|
Minimum (#) |
|
Target (#) |
|
Maximum (#) |
Rodney J.
Ruston |
|
10,938 |
|
Performance |
|
nil |
|
(b) |
|
10,938 |
Peter Dodd |
|
4,667 |
|
Performance |
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nil |
|
(b) |
|
4,667 |
Miles W. Safranovich |
|
3,780 |
|
Performance |
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nil |
|
(b) |
|
3,780 |
Bob Harris |
|
3,667 |
|
Performance |
|
nil |
|
(b) |
|
3,667 |
Kevin Mather |
|
4,333 |
|
Performance |
|
nil |
|
(b) |
|
4,333 |
Chris Hayman |
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0 |
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|
|
(a) |
|
The total value of PSUs granted on April 1, 2008, is shown in the Summary Compensation Table.
The number of PSUs, by their terms, are adjusted to take into account any dividends paid on
NAEP Common Shares. |
|
(b) |
|
Depending on actual performance against the performance measures, the number of vested PSUs
(including accumulated dividend equivalent units) may be reduced to zero or may be 100% of the
number granted. For a description of the three-year performance measures and the vesting
schedule based on various performance targets, refer to the PSU Plan section in the Report on
Executive Compensation. |
Termination of Employment and Employment Contracts
The Corporation has an employment agreement with Rodney Ruston, its President and Chief
Executive Officer. The initial term of Mr. Rustons employment is five years, beginning
14
May 2005, unless earlier terminated. If his employment is terminated by the Corporation without cause or if
his employment is not renewed at the end of the initial five year term, Mr. Ruston will receive a
severance payment equal to his then-annual salary plus the amount of his bonus payment in the year
preceding the termination date. The arrangement provided for a $500,000 annual salary, to be
reviewed annually by the Board of Directors, plus an initial grant of options to purchase 550,000
NAEP Common Shares, with an exercise price of $5 per share and subject to vesting at the rate of
20% per year. During the term of the agreement, Mr. Ruston is eligible for an annual cash bonus
targeted at 100% of his annual salary upon achievement of performance targets approved by the
board, receives a monthly vehicle allowance of $800, receives reimbursement of the annual fee for
membership in one health or sports club and receives an annual travel allowance of $25,000 to cover
the costs of traveling to and from his home country of Australia.
The Corporation also has an employment agreement with each of Peter Dodd, Chief Financial
Officer, Miles Safranovich, Vice President, Operations, Bob Harris, Vice President, Human
Resources, Health, Safety & Environment, Finance and Kevin Mather, Vice President, Supply Chain.
In each case, the executive officers employment will continue until terminated by him or by
the Corporation in accordance with the provisions of his respective agreement. In the cases of
Messr. Safranovich and Mather, if his employment is terminated by the Corporation without cause, he
will receive a payment equal to one year annual base salary if terminated on or prior to his fifth
anniversary of employment with the Corporation or one of its predecessors, a payment equal to one
and a quarter times his annual base salary if terminated after his fifth anniversary but on or
before his tenth anniversary or a payment of one and a half times his annual base salary if
terminated after the tenth anniversary of employment with the Corporation or one of its
predecessors plus a payment equal to 90% of the amount of his target bonus payment for the current
fiscal year pro rated to the date of termination. In the case of Mr. Dodd, if his employment is
terminated by the Corporation without cause, he will receive a payment equal to one and a quarter
year annual base salary if terminated on or prior to his tenth anniversary of employment with the
Corporation or one of its predecessors, a payment equal to one and a half times his annual base
salary if terminated after his tenth anniversary plus a payment equal to 90% of the amount of his
target bonus payment for the current fiscal year pro rated to the date of termination.
These agreements provided for an annual salary of $280,000 for Mr. Dodd, $226,800 for Mr.
Harris, $245,280 for Mr. Safranovich and $220,000 for Mr. Mather, each to be reviewed annually by
the Compensation Committee, plus the initial grant of options to purchase 109,400 NAEP Common
Shares with an exercise price of $13.50 per share for Mr. Dodd, options to purchase 100,000 NAEP
Common Shares with an exercise price of $5.00 per share for Mr. Harris and options to purchase
100,000 NAEP Common Shares with an exercise price of $5.00 per share for Mr. Safranovich. Mr.
Mathers agreement entered into in connection with his recent promotions, confirms his previously
granted options to purchase 60,000 NAEP Common Shares with an exercise price of $5.00 per share, options to purchase 7,400 NAEP Common Shares
with an exercise price of $13.50 per share and options to purchase 40,000 NAEP Common Shares with
an exercise price of $15.37 per share. All of these options expire 10 years from the date of
grant.
15
During the term of the agreement, each executive officer is eligible for an annual cash bonus
of up to 100% of his annual salary upon achievement of performance targets approved by the Board of
Directors, receives a monthly vehicle allowance of $800 and receives reimbursement of the annual
fee for membership in one club or an allowance for similar expenditures.
Each executive officer has agreed that, for a period of two years after the termination of his
respective employment, regardless of the reason for the cessation of such employment, he will not
interfere with the employment of or attempt to hire any of the Corporations employees or
consultants.
The Corporation had an employment agreement with Christopher Hayman; however, Mr. Hayman
resigned from the Corporation effective March 31, 2008. Mr. Haymans employment agreement provided
for an annual salary of $231,952 and contained terms and provisions similar to those in the
employment contracts with Mr. Mather described above. As of the date of Mr. Haymans resignation,
he was entitled to exercise options to purchase 52,000 NAEP Common Shares with an exercise price of
$5.00 per share and subsequent to his resignation, he exercised all options in full.
Composition of the Compensation Committee
The Compensation Committee is currently composed of Messrs. Brussa, Oehmig, Sello and Tomsett,
with Mr. Tomsett serving as Chairman, replacing Mr. Paterson, the previous Chairman of the
Compensation Committee during fiscal 2008. None of the members of the Compensation Committee is or
has been an officer or employee of the Corporation, and none of the executive officers of the
Corporation served during fiscal 2008 on a board of directors of another entity which has employed
any of the members of the Compensation Committee.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for reviewing and recommending to the Board of
Directors for approval, the Corporations philosophy, policies and guidelines on Board of
Directors and executive compensation. The Compensation Committee reviews and recommends to the
Board of Directors for approval: (i) the recruitment, evaluation and succession plans for the
President and Chief Executive Officer, (ii) the compensation package for the chairs of the
committees of the Board of Directors and other directors of the Corporation, and (iii) the
structure of, implementation of, participation in, amendments to or termination of all long-term
incentive programs including, but not limited to, the Share Option Plan, the DSU Plan (see
Compensation of Directors Directors Deferred Share Unit Plan) and the PSU Plan. The
Compensation Committee also reviews and approves: (i) the recruitment, evaluation and succession
plans for all individuals reporting directly to the Chief Executive Officer (the executive
management), and (ii) the compensation package, including base salaries, annual incentive
compensation, all retirement, health and welfare benefits and perquisites for executive management,
and with respect to the Chief Executive Officer, the Compensation Committee recommends such matters
to the Board of Directors for approval. The Compensation Committee may review any and all aspects
of total compensation at its discretion, however a formal review is undertaken annually with base
salary adjustments and short-term bonus payments processed in
16
July of each year. Short-term bonuses awarded and paid out in July 2008 were for the
achievement of results in fiscal 2008.
Compensation Principles
The Compensation Committees executive compensation philosophy is premised upon three
objectives:
|
(i) |
|
recruitment and retention of the best available executive leadership; |
|
|
(ii) |
|
performance and accountability of executives; and |
|
|
(iii) |
|
alignment of shareholder and executive interests. |
Recruitment & Retention
The Compensation Committee recognizes the highly competitive market for talented executives in
Alberta as a result of the continued economic prosperity and growth of the Alberta economy,
particularly in the energy sector. Accordingly, the Compensation Committee has recommended a
market competitive total executive compensation package consisting of base salary with annual
increases based on performance, short-term bonus with a target payout of 100% of base salary based
on actual results compared to the Corporations planned Consolidated EBITDA (as defined in the
credit agreement)¨ performance and specific divisional and individual metrics,
long-term incentives consisting of stock option grants and performance share units (PSUs) and a
perquisite program providing a vehicle allowance and club membership or equivalent consideration.
The Compensation Committee is committed to ensuring that the Corporations compensation plans are
market competitive and, as such, commissioned a review by independent specialized compensation
consultants, Hewitt Associates and Wynford Group, to evaluate the Corporations total compensation
against that of leading corporations within Alberta in the industries in which the Corporation
operates (the Comparator Group). With respect to long-term incentive plans for executives
(namely, the Share Option Plan and the PSU Plan) and compensation for directors (including the DSU
Plan), the Committee also utilizes specialized compensation consulting services provided by Hewitt
Associates to assist with the structure and design of these plans.
Performance & Accountability
The Compensation Committee believes that executive compensation should be correlated to
performance, as the financial vitality of the business is dependent upon the results achieved by
the executives, the key decision-makers of the Corporation. Thus, the annual Management Incentive
Plan (the MIP), which is discussed further below, was introduced in 2006 with the key underlying
principle of ensuring that executives are held accountable to stakeholders by measuring the
performance of the Corporation against the Corporations Consolidated EBITDA (as defined in the
credit agreement)¨ forecast in the approved annual budget.
|
|
|
¨ Consolidated EBITDA (as defined in the credit
agreement) is not a recognized measure under generally accepted accounting
principles. For a definition of Consolidated EBITDA (as defined in the credit
agreement) see our managements discussion and analysis for the year ended
March 31, 2008, which can be found at www.sedar.com and www.sec.gov. |
17
Alignment of Executive and Shareholder Interests
It is in the Corporations best interests to meet shareholder expectations and ensure
continued access to capital on favourable terms. Accordingly the MIP was designed to ensure that
the continued profitability of the Corporation results in increased financial reward for
shareholders and executives alike. Executives are rewarded through the MIP based on three
criteria: (i) organizational performance; (ii) divisional performance; and (iii) individual
performance. The Chief Executive Officer is rewarded through the MIP based on two criteria: (i)
organizational performance and (ii) individual performance. This approach ensures that the role of
the individual within the team is appropriately recognized. The MIP is a key mechanism utilized in
realizing the compensation principles, particularly the latter two. The target MIP remuneration
structure for fiscal 2008 is set out below and remains unchanged for fiscal 2009 (based on the
actual performance of the Corporation, the percentage attributable to the Corporations performance
may be higher and consequently the actual proportion of salary paid may be higher than 100%):
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|
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|
|
|
|
|
|
Management Level |
|
|
Company |
|
|
Business Unit or |
|
|
Individual |
|
|
Proportion of Salary |
|
|
|
|
|
Performance |
|
|
Divisional |
|
|
Performance |
|
|
Payable at Target |
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Performance
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President and Chief
Executive Officer
|
|
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70%
|
|
|
|
-
|
|
|
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30
|
%
|
|
|
|
100
|
%
|
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|
Vice Presidents
|
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50%
|
|
|
|
30
|
%
|
|
|
|
20
|
%
|
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|
|
100
|
%
|
|
|
The Corporations Key Performance Indicator (KPI) is based on the Corporations total
Consolidated EBITDA (as defined in the credit
agreement)¨, while business unit and
divisional KPIs are selected measures specific to a division based on key business drivers of that
division examples of which include production efficiencies, equipment utilization and safety.
Individual KPIs are related to the development of the team and development of key individuals
within the division.
Compensation Structure
The compensation of executives, excluding the Chief Executive Officer, is based on three key
components:
Base Salary
The Compensation Committee will review and recommend to the Board of Directors on the adequacy
and form of base salaries for executive management.
Base salaries for executive management were reviewed and approved by the Compensation
Committee. The Chief Executive Officer provided his recommendations to the Compensation Committee
for base salary adjustments for each executive, excluding himself, within a specified range, based
on the performance of each executive. The base salary ranges
|
|
|
¨ Consolidated EBITDA (as defined in the credit
agreement) is not a recognized measure under generally accepted accounting
principles. For a definition of Consolidated EBITDA (as defined in the credit
agreement) see our managements discussion and analysis for the year ended
March 31, 2008, which can be found at www.sedar.com and www.sec.gov. |
18
were determined by salary data from a market study conducted by specialized compensation
consultants, the Wynford Group. The Wynford Group conducted market research comparing the
Corporations base salaries within the total compensation framework to that of a selected
comparator group of corporations.
Base salary was adjusted effective July 1, 2007 for Mr. Harris from $210,000 to $226,800, for
Mr. Safranovich from $224,000 to $245,280, for Mr. Mather from $175,000 to $196,000 and for Mr.
Hayman from $212,800 to $231,952. As a result of promotion to new executive roles, Mr.
Safranovichs fiscal 2008 base salary was further adjusted effective September 1, 2007 from
$245,280 to $260,000 and Mr. Mathers base salary was further adjusted effective August 1, 2007
from $196,000 to $220,000.
Short-Term Incentives (STI)
The Compensation Committee reviews and approves the adequacy and form of STIs for executive
management.
The framework for STI for executive management, also known as the MIP, is described above in
Alignment of Executive and Shareholder Interests and is intended to deliver annual compensation
targeted at 100% of base salary based on the achievement of performance metrics as approved by the
Board of Directors. The Compensation Committee approved MIP payments in July 2008 upon the
recommendations made by the Chief Executive Officer based on corporate, divisional and individual
results achieved by the following executives in fiscal 2008. MIP payments were made in the amount
of $70,483 for Mr. Dodd, $234,921 for Mr. Harris, $252,289 for Mr. Safranovich and $201,853 for Mr.
Mather.
Long-Term Incentive Plan (LTIP)
The Compensation Committee reviews and recommends to the Board of Directors on the adequacy
and the form of LTIP for executive management. The LTIP for executive management is designed to
deliver annual compensation equivalent to 40% of base salary to executive management through the
use of two vehicles, those being grants of stock options and grants of PSUs. Fifty percent of the
LTIP compensation is delivered in November of each year through grants of stock options recommended
by the Chief Executive Officer and the Compensation Committee for approval by the Board of
Directors in accordance with the Corporations Share Option Plan. The other 50% of the LTIP
compensation is delivered in April of each year through grants of PSUs recommended by the Chief
Executive Officer and the Compensation Committee for approval by the Board of Directors in
accordance with the Corporations PSU Plan.
Share Option Plan
For
a detailed discussion of the Share Option Plan, see above in Executive Compensation
Share Option Plan. In the past fiscal year, a total of 173,100 stock options were granted to the
named executive officers, other than the Chief Executive Officer, and approved by the Board of
Directors. Of these grants, 33,100 options, which were granted in November 2007, represented
approximately 50% of the LTIP compensation grants to such individuals. The remaining 50% granted
under the LTIP program was delivered by way of PSU grants. Of the remaining 140,000 stock option
grants, 100,000 was granted to Mr. Dodd in
19
November 2007 as a sign-on grant and 40,000 was granted to Mr. Mather in March 2008 to reflect
Mr. Mathers promotion in December 2007.
PSU Plan
For
a detailed discussion of the PSU Plan, see above in Executive Compensation PSU Plan.
On April 1, 2008, as part of the remaining 50% of the grants under the LTIP program, a total of
16,447 PSUs were granted to the named executive officers, other than the Chief Executive Officer.
The PSUs were granted under the terms of the PSU Plan with three (3) year cliff vesting. The
business performance measure incorporated into the PSU Plan to determine the number of PSU that
will vest at the end of the three (3) year period is Return on Invested Capital (ROIC). The target
set for full vesting of the April 1, 2008 PSU grant is a cumulative three-year average ROIC of 22%.
Partial vesting will occur if certain levels of ROIC are achieved according to the following
table.
|
|
|
|
|
|
|
|
Cumulative
ROIC 3 years |
|
|
PSUs Vesting |
|
|
22%
|
|
|
100% |
|
|
20%
|
|
|
75% |
|
|
18%
|
|
|
50% |
|
|
16%
|
|
|
25% |
|
|
14%
|
|
|
10% |
|
|
<14%
|
|
|
Nil |
|
|
Chief Executive Officer Compensation
The Compensation Committee reviews and provides recommendations to the Board of Directors on
the Chief Executive Officers position description and the positions annual goals and objectives.
The discussion above with respect to the Compensation Principles is applicable to the Chief
Executive Officer.
The Chief Executive Officers base compensation and short-term bonus are evaluated annually by
the Compensation Committee based on an assessment of performance against the Corporations
performance, namely the Corporations Consolidated EBITDA (as defined in the credit
agreement)¨ and performance against individual objectives previously agreed upon
by the Board of Directors and the Chief Executive Officer. The Compensation Committee also had for
reference the market research conducted by specialized compensation consultants, the Wynford Group
as described above. This report provided comments and recommendations regarding trends in base
salary and variable short and long term compensation for the Chief Executive Officer. The
Compensation Committee considered the report by the Wynford Group, the performance of the
Corporation, performance of the Chief Executive Officer against individual objectives and factors
related to the Alberta labour market in general in making the
|
|
|
¨ Consolidated EBITDA (as defined in the credit
agreement) is not a recognized measure under generally accepted accounting
principles. For a definition of Consolidated EBITDA (as defined in the credit
agreement) see our managements discussion and analysis for the year ended
March 31, 2008, which can be found at www.sedar.com and www.sec.gov. |
20
determination of the base salary increase for fiscal 2008 and the amount of fiscal 2008 short
term bonus paid under the MIP. Base salary was adjusted effective July 1, 2007 for Mr. Ruston from
$500,000 to $525,000. A short-term bonus payment for fiscal 2008, recommended by the Compensation
Committee and approved by the Board of Directors, for the Chief Executive Officer was processed on
July 25, 2008 in the amount of $562,170.
The LTIP for the Chief Executive Officer is designed to deliver annual compensation equivalent
to 50% of base salary through the use of two vehicles, those being grants of stock options and
grants of PSUs. The Chief Executive Officer was granted 21,900 stock options in November 2007 and
10,938 PSUs on April 1, 2008. The performance metrics for the PSUs are the same as those detailed
above for the other named executive officers.
Report Presented by the Compensation Committee:
John Brussa
William Oehmig
Allen Sello
Peter Tomsett (Chairman)
PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative NAEP Shareholder return
for $100 invested in NAEP Common Shares at the closing price of $18.59 on the first day of trading
in connection with the IPO for each NAEP Common Share with the total cumulative return of the
S&P/TSX Composite Index for the period from November 22, 2006 to March 31, 2008. On March 31,
2008, the NAEP Common Shares closed at $16.05 per NAEP Common Share on the TSX.
21
The following table shows the value of $100 invested in NAEP Common Shares at the closing
price on November 22, 2006 compared to $100 invested in the S&P/TSX Composite Index*:
|
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|
For the Financial Years Ended: |
|
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November 22, 2006 |
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March 31, 2007 |
|
|
March 31, 2008 |
|
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|
North American Energy Partners Inc.
|
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|
$100.00
|
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|
$129.10
|
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|
$86.34 |
|
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|
S&P/TSX Composite Index
|
|
|
$100.00
|
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|
$105.85
|
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|
$110.09 |
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|
*Assuming reinvestment of dividends/distributions.
COMPENSATION OF DIRECTORS
The Corporations directors, other than Messrs. McIntosh and Ruston, each receive an annual
aggregate retainer of $32,500 and a fee of $1,500 for each meeting of the Board of Directors or any
committee of the Board that they attend, and are reimbursed for reasonable out-of-pocket expenses
incurred in connection with their services pursuant to the Corporations policies. Effective
January 1, 2008, the annual aggregate retainer of $32,500 was increased to $110,000 of which at
least 50% of the retainer must be taken in the form of Deferred Share Units (DSUs) in accordance
with the DSU Plan. The Chair of the Corporations Audit Committee receives an additional annual
retainer of $12,000. The Chair of the Corporations Compensation Committee receives an additional
annual retainer of $9,000 and the Chair of the Corporations Governance Committee and Health,
Safety, Environment and Business Risk Committee receives an additional annual retainer of $5,000.
The Chair of each Committee must take 50% of their additional annual retainer for serving as Chair
in DSUs. Mr. McIntosh, the Chairman of the Board received a retainer from April 1, 2007 to
December 31, 2007 paid at a rate of $157,500 per annum. From January 1, 2008 to March 31, 2008,
Mr. McIntosh received a retainer paid at a rate of $220,000 per annum. In addition, Mr. McIntosh
received a bonus of $31,200 in fiscal 2007. The Board of Directors approved on November 27, 2007
upon recommendation by the Compensation Committee that the Chairman would no longer be eligible to
receive bonuses in fiscal 2008 and that at least 50% of his annual retainer would be paid in DSUs.
Mr. Ruston doesnt receive director compensation.
In addition, the Corporations directors have received grants of stock options under the 2004
Share Option Plan. Effective November 2003, each director, excluding Messrs. Brokaw, Tomsett,
McIntosh, Sello and Ruston, received options to purchase 27,760 NAEP Common Shares. Mr. McIntosh
received options to acquire 70,000 NAEP Common Shares in May 2004, Mr. Sello received options to
purchase 27,760 NAEP Common Shares in February 2006 and Mr. Brokaw received options to purchase
27,760 NAEP Common Shares in June 2006. All the options have an exercise price of $5 per share,
vest at the rate of 20% per year over five years and expire ten years after their grant date. The
vesting of the options granted to Mr. Brokaw has been accelerated as if they had been issued
effective November 2003. Mr. Tomsett was granted options to acquire 27,760 NAEP Common Shares in
September 2006. These options have an exercise price of $16.75 per share, vest at the rate of 20%
per year over five years and expire ten years after their grant date. On June 29, 2006, NACG
Holdings Inc., the predecessor to the Corporation, offered each director holding stock options,
excluding Messrs. McIntosh and Ruston, the option to have all of his options become immediately
exercisable on the condition
22
that he exercise all such options by September 30, 2006. One director, Mr. Oehmig, accepted
this option. In fiscal 2008, each of Mr. Hawkins and Mr. Turner exercised 22,208 options.
In November 2007, Mr. Ruston also received options to purchase 21,900 NAEP Common Shares.
These options have an exercise price of $13.50 per share, vest at the rate of 20% per year over
five years and expire ten years after their grant date.
Directors and Officers Insurance
The Corporation maintains directors and officers insurance for an aggregate amount of
$25,000,000. The policy provides primary coverage of $10,000,000 for the one-year period from June
1, 2008 to June 1, 2009 at a premium of $133,000 and a deductible of $500,000. An excess layer of
coverage for $10,000,000 has also been purchased at a premium of $85,500 for the one-year period
from June 1, 2008 to June 1, 2009. The excess layer does not have a deductible. There is also a
second excess layer of coverage for $5,000,000, which has been purchased at a premium of $32,000
for the one-year period from June 1, 2008 to June 1, 2009, and for which there is no deductible.
Indemnification
The Corporation has entered into indemnity agreements with its directors and officers, whereby
it has agreed to indemnify its directors, officers and certain other employees from all
liabilities, obligations, charges and expenses, reasonably incurred by such director, officer or
other employee in respect of any civil, criminal, investigative, administrative action or other
proceeding in which such individual is involved by reason of being or having been a director,
officer or employee of the Corporation (or a direct or indirect affiliate) of the Corporation,
provided that (i) he or she acted honestly and in good faith with a view to the best interests of
the Corporation, or (ii) in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, he or she had reasonable grounds for believing that his conduct was
lawful, and (iii) in the case of an action by or on behalf of the Corporation or other entity to
procure a judgment in its favour, the Corporation obtains any approval required under the Canada
Business Corporations Act in respect of such indemnification.
Directors Deferred Share Unit Plan
The Corporations Directors Deferred Share Unit Plan was approved on November 27, 2007 by the
Corporations Board of Directors and became effective on January 1, 2008 (the DSU Plan). The DSU
Plan is administered by the Compensation Committee. Under the DSU Plan, the Corporation grants
annual equity compensation in the form of DSUs, replacing the previous practice of granting
options. DSUs under the DSU Plan may be granted to each member of the board of directors of the
Corporation (the Participant) who is not an employee or officer of the Corporation and its
affiliated entities. The DSU Plan provides that the Participant receives 50% of his or her fixed
remuneration payable in respect of the services in his or her capacity as a board or committee
member in a calendar year (Participants Annual Fixed Remuneration) in the form of DSUs and may
elect to receive all or a part of the Participants Annual Fixed Remuneration in excess of 50% in
the form of DSUs. In addition, directors may elect any amount of their variable compensation (i.e.
per meeting fees) (Annual Variable
23
Remuneration) to be paid in DSUs. This election must be made by December 31st each
calendar year for effect the following year. The DSUs may be redeemed in cash or, at the
discretion of the Corporation, in a number of NAEP Common Shares which may be shares purchased on
the open market. Payment is based on the number of DSUs held, plus dividend equivalents (if any)
multiplied by the NAEP Common Share price at the time of maturity. When dividends are paid on NAEP
Common Shares, additional DSUs (Dividend Equivalents) will be credited to the Participants to
reflect such dividends. DSUs, vest immediately upon grant. The DSU Plan provides that, in the
event of termination (with or without cause), including retirement, all DSUs and Dividend
Equivalents will be redeemed by the Corporation within 21 days following: (a) in the case of
directors that are U.S. taxpayers, the date of such termination; and (b) in the case of all other
directors, by December 1 of the calendar year immediately following the year by which such
termination takes place (unless an earlier date is elected by the director after termination). The
DSU Plan provides that, in the event of termination (with or without cause), including retirement,
all DSUs and Dividend Equivalents will be redeemed by the Corporation. A Participant has no
further rights respecting any DSU or Dividend Equivalent which has been redeemed.
Deferred Share Units (DSUs)
The table below summarizes the DSUs grants to the directors based on their elections with respect to fiscal 2008
|
|
|
|
|
|
|
|
|
% of Annual Fixed |
|
|
|
|
|
|
Remuneration paid in |
|
% of Annual Variable |
|
# of DSUs/dollar value based |
Name |
|
DSUs |
|
Remuneration paid in DSUs |
|
on $16.01 (a) |
George R. Brokaw |
|
100 |
|
0 |
|
1,718/$27,574 |
John A. Brussa |
|
50 |
|
50 |
|
953/$15,296 |
John D. Hawkins |
|
50 |
|
0 |
|
898/$14,413 |
Ronald A. McIntosh |
|
50 |
|
0 |
|
1,946/$31,233 |
William C. Oehmig |
|
100 |
|
100 |
|
2,170/$34,829 |
Allen R. Sello |
|
50 |
|
0 |
|
953/$15,296 |
Peter W. Tomsett |
|
100 |
|
100 |
|
2,327/$37,348 |
K. Rick Turner |
|
50 |
|
0 |
|
859/$13,787 |
|
|
|
(a) |
|
Reflects the value of the DSUs granted on March 31, 2008 using the closing market price on
the Toronto Stock Exchange which was $16.05. The number of DSUs, by their terms, are adjusted
to take into account any dividends paid on NAEP Common Shares. |
Share Ownership Guidelines
The Board of Directors adopted and approved, on November 27, 2007, for implementation
effective January 1, 2008 guidelines for the ownership by the directors of the Corporation of
equity in the Corporation (the Share Ownership Guidelines). The Share Ownership Guidelines
require the Chair of the Board of Directors to own $400,000 of equity in the Corporation and the
remaining directors to own $250,000 of equity in the Corporation, in each case represented by NAEP
Common Shares and DSUs. Such ownership level must be achieved within five years of the later of
the implementation of the Share Ownership Guidelines and the initial appointment or election as a
director. The achievement of the share ownership threshold is facilitated by the requirement for
the directors to receive 50% of their Annual Fixed Remuneration in the form of DSUs. Once the
share ownership threshold is achieved, the number of NAEP Common Shares and DSUs representing the
compliance level must be held for at least 30 days to qualify. Thereafter that number of NAEP
Common Shares or DSUs must be
24
maintained in order to remain compliant, regardless of a subsequent decrease in NAEP Common Share
price.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS
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Number of securities |
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remaining available |
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for future issuance |
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under equity |
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Number of securities |
|
|
Figure in column (a) |
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compensation plans |
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|
Figure in column (d) |
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to be issued upon |
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as a percentage of |
|
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Weighted-average |
|
|
(excluding |
|
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as a percentage of |
|
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|
|
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exercise of |
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issued and |
|
|
exercise price of |
|
|
securities |
|
|
issued and |
|
|
|
|
|
outstanding options, |
|
|
outstanding NAEP |
|
|
outstanding options, |
|
|
reflected in column |
|
|
outstanding NAEP |
|
|
|
|
|
warrants and rights |
|
|
Common Shares |
|
|
warrants and rights |
|
|
(a))(A) |
|
|
Common Shares |
|
|
Plan Category |
|
|
(a) |
|
|
(b) |
|
|
(c) |
|
|
(d) |
|
|
(e) |
|
|
Equity compensation
plans approved by
securityholders
|
|
|
|
1,826,364 |
|
|
|
|
5.07 |
% |
|
|
$ |
7.44 |
|
|
|
|
1,777,483 |
|
|
|
|
4.93 |
|
|
|
Equity compensation
plans not approved
by securityholders
|
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N/A |
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N/A |
|
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N/A |
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N/A |
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N/A |
|
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Total
|
|
|
|
1,826,364 |
|
|
|
|
5.07 |
% |
|
|
$ |
7.44 |
|
|
|
|
1,777,483 |
|
|
|
|
4.93 |
|
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|
(A) The Share Option Plan states that the Compensation Committee may issue options, provided that
the aggregate number of NAEP Common Shares that may be issued from treasury under the plan may not
exceed 10% of the number of issued and outstanding NAEP Common Shares on a non-diluted basis
immediately prior to the proposed option issuance.
INDEBTEDNESS OF DIRECTORS AND OFFICERS
None of the directors or officers of the Corporation had any outstanding indebtedness to the
Corporation or any of its subsidiaries during fiscal 2008 or as at the date hereof.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
No director or executive officer of the Corporation at any time since the beginning of the
Corporations last completed financial year, no proposed nominee for election as a director nor any
associate or any affiliate of any such director, officer or nominee, has any material interest,
direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be
acted upon at the Meeting, except as disclosed below. Furthermore, no informed person (as such
term is defined under applicable securities laws), proposed nominee for election as a director of
the Corporation or any associate or affiliate of any informed person or proposed nominee has or had
a material interest, direct or indirect, in any transaction since the beginning of the
Corporations last financial year or in any proposed transaction which has materially affected or
would materially affect the Corporation or any of its subsidiaries or affiliates, except as
disclosed below.
Certain Selling Shareholders
Certain of the Corporations shareholders sold shares in the secondary offering of NAEP Common
Shares in August, 2007 (the 2007 Offering), as more particularly described in the
25
Corporations short form prospectus dated July 31, 2007 (the 2007 Prospectus) in connection
with such offering. The shareholders of the Corporation who sold NAEP Common Shares in the 2007
Offering sold, as a group, an aggregate of 8,358,604 NAEP Common Shares in the 2007 Offering
(including the over-allotment option in connection therewith). Certain of the Corporations
directors are affiliated with the Selling Shareholders, as more particularly described in the 2007
Prospectus, copies of which can be accessed at www.sedar.com and www.sec.gov.
REPORT ON CORPORATE GOVERNANCE PRACTICES
Board of Directors
The
National Policy 58-201 Corporate Governance Guidelines of the Canadian Securities
Administrators recommends that boards of directors of reporting issuers be composed of a majority
of independent directors. With eight of the nine directors proposed to be nominated considered
independent, the Board of Directors is composed of a majority of independent directors. The
Chairman of the Board, Mr. McIntosh, is an independent director. Rod Ruston is considered to have
a material relation with the Corporation by virtue of his executive officer position with the
Corporation and is therefore not independent. Although Messrs Brokaw, Hawkins, Oehmig and Turner
have relationships with shareholders of the Corporation and such shareholders provide consulting
services to the Corporation, the shareholders do not receive any payments in relation to such
consulting services but have an interest in providing such services since they have an investment
in the Corporation. Messrs Brokaw, Hawkins, Oehmig and Turner do not in their individual
capacities provide any consulting services to the Corporation, for a fee or otherwise. In
addition, in the facts and circumstances applicable to these individuals, none of them are
affiliated entities of the Corporation. The Board of Directors has determined that each of the
directors, other than Rod Ruston, is an independent director within the meaning of the rules of the
New York Stock Exchange applicable to U.S. domestic listed companies and applicable Canadian
securities laws.
In order to facilitate open and candid discussion among the Corporations independent
directors, the board holds in-camera sessions which exclude the non-independent director, Rod
Ruston. In-camera meetings are held whenever necessary as part of the regularly scheduled board
meetings. In fiscal 2008 five of the nine board meetings included such in-camera sessions, and
except for the in-camera sessions, there were no separate meetings of independent board members
that took place.
26
Directorships with Other Issuers
Currently, the following directors serve on the boards or act as trustees of other public
companies, as listed below:
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Name |
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Name of Reporting Issuer |
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Exchange |
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From |
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Ronald A. McIntosh |
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Advantage Oil & Gas Ltd. (a) |
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TSX |
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September 1998 |
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John A. Brussa |
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Penn West Energy Trust, |
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NYSE |
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April 1995 |
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Crew Energy Inc. |
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TSX |
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July 2003 |
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Divestco Inc. |
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TSX |
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September 2003 |
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Baytex Energy Ltd. (a wholly owned subsidiary of Baytex Energy Trust) |
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TSX |
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July 2003 |
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BlackWatch Energy Services Ltd. (a wholly owned subsidiary of BlackWatch Energy
Services Trust) |
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TSX |
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June 2006 |
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Cirrus Energy Corporation |
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TSXV |
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April 2005 |
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Enseco Energy Services Corp. |
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TSX |
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March 2006 |
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Galleon Energy Inc. |
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TSX |
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March 2003 |
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Harvest Operations Corp. (a wholly owned subsidiary of Harvest Energy Trust) |
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TSX |
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October 2002 |
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Highpine Oil & Gas Limited |
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TSX |
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February 2000 |
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Ontario Energy Savings Corp. (a wholly-owned subsidiary of Energy Savings Income Fund) |
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TSXV |
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February 2001 |
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Orleans Energy Ltd. |
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TSX |
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June 2005 |
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Progress Energy Ltd. (a wholly owned subsidiary of Progress Energy Trust) |
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TSX |
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November 2000 |
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Storm Exploration Inc. |
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TSX |
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June 2004 |
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Strategic Energy Fund |
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TSX |
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February 2002 |
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Trafalgar Energy Ltd. |
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TSX |
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June 2006 |
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Yoho Resources Inc. |
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TSXV |
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March 2008 |
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William C. Oehmig |
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Propex Inc. |
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N/A (b) |
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November 2004 |
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Panolam Industries International Incorporated |
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N/A (b) |
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September 2005 |
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Allen R. Sello |
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Sterling Shoes Income Fund (c) |
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TSX |
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May 2005 |
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Peter W. Tomsett |
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Silver Standard Resources Inc. |
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TSX |
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November 2006 |
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Equinox Minerals Ltd. |
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TSX |
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July 2007 |
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K. Rick Turner |
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Energy Transfer Partners L.P. |
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NYSE |
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February 2004 |
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Energy Transfer Equity, L.P. |
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NYSE |
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February 2006 |
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(a) Advantage Oil & Gas Ltd. is a wholly-owned subsidiary of Advantage Energy Income Fund, an
open-ended, unincorporated investment trust established under the laws of the Province of Alberta
and created pursuant to a Trust Indenture on April 17, 2001.
(b) These companies have issued bonds to the public in the United States which are registered with
the Securities and Exchange Commission.
(c) Mr. Sello is a trustee of Sterling Shoes Income Fund and also serves as a director of the
general partner of the underlying partnership (Sterling Shoes GP Inc.).
27
Board and Committee Attendance of Directors
With respect to fiscal 2008, the Board of Directors met nine times, the Audit Committee
formally met ten times, the Compensation Committee met eight times the Governance Committee met
once, and the Health, Safety, Environment and Business Risk Committee met six times. Attendance
records of the members of the Board of Directors and committee members with respect to fiscal 2008
were as follows:
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Name |
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Board Meetings |
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Audit Committee |
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Compensation |
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Governance |
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Health, Safety, |
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Attended / |
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Meetings Attended |
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Committee |
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Committee |
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Environment and |
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Scheduled |
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/ Scheduled |
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Meetings Attended / |
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Meetings Attended / |
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Business Risk |
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Scheduled |
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Scheduled |
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Committee |
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Meetings Attended / |
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Scheduled |
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George R. Brokaw |
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8/9 |
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10/10 |
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6/6 |
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John A. Brussa |
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9/9 |
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8/8 |
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1/1 |
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John D. Hawkins |
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8/9 |
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10/10 |
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1/1 |
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Ronald A. McIntosh (a) |
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9/9 |
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10/10 |
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-/- |
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6/6 |
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William C. Oehmig |
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8/9 |
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7/8 |
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5/6 |
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Rodney J. Ruston |
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9/9 |
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Allen R. Sello |
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9/9 |
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10/10 |
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8/8 |
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Peter W. Tomsett (b) |
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9/9 |
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2/2 |
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1/1 |
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6/6 |
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K. Rick Turner |
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9/9 |
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10/10 |
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1/1 |
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(a) |
|
Mr. McIntosh did not become a member of the Governance Committee until after September 19, 2007 |
|
(b) |
|
Mr. Tomsett did not become a member of the Compensation Committee until after September 19, 2007 |
Mandate of the Board of Directors
The Board of Directors supervises the management of the Corporations business as provided by
Canadian law and complies with the listing requirements of the New York Stock Exchange applicable
to U.S. domestic listed companies, which require that the Board of Directors be composed of a
majority of independent directors. The Corporation has adopted a Corporate Governance Policy which
sets the framework for how the Board of Directors approaches its mandate and addresses such things
as (i) the responsibility of the Board of Directors to monitor the operation of the business,
provide oversight of risk management, internal control and corporate communications, and approve
the strategic and ethical directions of the Corporation, (ii) committees of the Board of Directors
(which include an Audit Committee, Compensation Committee, Governance Committee and a Health,
Safety, Environment and Business Risk Committee), (iii) qualifications, responsibilities,
orientation and education of the directors, and (iv) succession planning. The Corporate Governance
Policy for the Corporation can be found on the Corporations website at www.nacg.ca.
Position Descriptions for the Chairman of the Board of Directors and Committee Chairs
The Chairman of the Board of Directors (the Board Chair) reports to the Board of Directors
and shareholders and provides leadership to the Board of Directors relating to the
28
effective execution of all Board responsibilities. The Board Chair is a non-management
director and the Board Chairs performance will be measured against the effectiveness with which
the Board functions, including satisfaction of Board members regarding the functioning of the
Board.
Specifically, the Board Chair has the responsibility to, amongst other things:
|
(a) |
|
provide leadership in ensuring that the Board works harmoniously as a cohesive
team; |
|
|
(b) |
|
facilitate the Board functioning independently of management by ensuring that
the Board meets regularly without management and by engaging outside advisors as
required; |
|
|
(c) |
|
provide guidance to the Board and management to ensure that the
responsibilities of the Board are well understood by both the Board and management and
that the boundaries between Board and management responsibilities are clearly
understood and respected; |
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(d) |
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attend committee meetings and communicate with directors between meetings as
required; |
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(e) |
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establish procedures to govern the function of the Board; |
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(f) |
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assist the Governance Committee in implementing the Board assessment; |
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(g) |
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lead in continuous improvement of Board processes; |
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(h) |
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upon the recommendation of the Governance Committee, approach new candidates to
serve on the Board; |
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(i) |
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represent shareholders and the Board to management and represent management to
the Board and shareholders; |
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(j) |
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work with the Board and the Chief Executive Officer to ensure that the
Corporation is building a healthy governance culture, assist in effective communication
between the Board and management, maintain regular contact with the Chief Executive
Officer, and serve as advisor to the Chief Executive Officer and other senior officers; |
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(k) |
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act as the Chair for annual and special meetings of the shareholders; and |
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(l) |
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receive concerns addressed to the Board from stakeholders about the
Corporations corporate governance, business conduct and ethics or financial practices. |
The Chair of each of the Audit Committee, Compensation Committee, Governance Committee and
Health, Safety, Environment and Business Risk Committee each has the
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responsibility to (i) provide leadership to the committee and to ensure that each of his or
her respective Committees works harmoniously as a cohesive team, (ii) facilitate the committee
functioning independently of management by meeting regularly without management and engaging
outside advisors as required, (iii) communicate with Committee members between meetings as
required, (iv) facilitate information sharing with other Committees as required, (v) lead in
continuous improvement of committee processes, and (vi) assist in effective communication between
the Committee and management. The Chair of each Committee determines the time, place and
procedures for the Committee meetings, subject to requirements of the Committees charter.
Position Description for the Chief Executive Officer
The Corporation has developed a written position description for the Chief Executive Officer.
This description is included in the Compensation Committee Charter as Appendix A. The description
provides that Chief Executive Officer is responsible for the successful management of the business
and affairs of the Corporation and has the responsibility to:
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(a) |
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report to and work with the Board of Directors so that it may fulfill its
oversight role; |
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(b) |
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advise the Board of Directors in a timely manner of major issues and risks that
may affect the Corporation; |
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(c) |
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recommend to the Board the strategic direction of the Corporation and implement
approved operational and business plans; |
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(d) |
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provide the overall leadership, direction and management of the business
operations to achieve the Corporations goals and objectives; |
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(e) |
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allocate financial and human capital for the successful management and
financial performance of the Corporation; |
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(f) |
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foster a culture of integrity and set the ethical tone for the Corporation; |
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(g) |
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establish the policies and procedures to effectively operate the Corporation in
an efficient and controlled manner; |
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(h) |
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monitor and manage the risks of the Corporation; |
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(i) |
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recommend to the Board any acquisition, merger, divestiture and the entry or
exit of any business unit of the Corporation; |
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(j) |
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establish the corporate structure and major accountabilities; |
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(k) |
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oversee the relationship between the Corporation and the public; |
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(l) |
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develop, supervise and evaluate the executive officers and recommend to the
Compensation Committee the selection and compensation of executive officers; and |
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(m) |
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identify potential successors for the positions of Chief Executive Officer and
develop a succession plan for executive management. |
Orientation and Continuing Education
Management encourages the directors to attend relevant education and development opportunities
to improve their skills and abilities to carry out the role as a director at the Corporation.
Expenses associated with attendance at seminars, conferences and education sessions and/or
membership to the Institute of Corporate Directors are reimbursed by the Corporation.
Management has provided two sources of training and industry seminars which have been placed
on the director extranet site and are updated regularly:
1. |
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Industry Conferences Management updates this list as conferences are scheduled. |
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2. |
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Access to the Institute of
Corporate Directors website This website offers current
information for directors and a variety of development opportunities. |
Code of Conduct and Ethics Policy
In order to ensure that directors exercise independent judgment and to encourage and promote
ethical standards and behaviour, the Board of Directors has a written Code of Conduct and Ethics
Policy (the Code) setting out general statements of conduct and ethical standards to be followed
by all of the Corporations personnel. A copy of the Code may be obtained at the Corporations
website at www.nacg.ca.
In order to ensure compliance with the Code, the Board of Directors and the Corporation have
implemented an ethics reporting policy (the Reporting Policy), a copy of which may be obtained at
the Corporations website at www.nacg.ca. The objectives of the Reporting Policy are to (i)
provide a means of reporting non-compliance with the Code and (ii) to comply with the Sarbanes
Oxley Act and securities regulations. Under the Reporting Policy, the Corporations personnel are
required to report any conduct which they believe, in good faith, to be a violation or apparent
violation of the Code. The Corporation keeps the identity of the person making the report for
every reported violation confidential, except as otherwise required by law, and a copy of all
reported violations are confidential until action is taken to correct the violation, at which time
the violation may become known (but not the identity of the individual filing the report). The
Policy further provides that there is not to be any retaliation against the reporter.
The Corporation has the option to report violations of the Code either internally or
externally in the following ways:
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(a) |
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internal reporting is through a supervisor, the Corporations executive or its Board of Directors and its Committees; |
31
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(b) |
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effective anonymous reporting is through an independent ethics reporting firm; or |
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(c) |
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directly to the Chairman of the Board or Audit Committee Chair. |
In all cases there are two reviewers for each reported violation, which ensures an effective
independent review and a control over segregation of reviewing responsibility to ensure that
reported violations are investigated appropriately and thoroughly. For serious violations of the
Code, the Audit Committee Chair or the Board Chair will be advised immediately of the reported
violation. All reported violations are summarized and provided to the Audit Committee at least
quarterly. The Audit Committee Chair and the Board Chair will have access, at all times, to the
status and content of Reported Violations.
The Code provides additional safeguards to ensure that directors exercise independent judgment
in considering transactions and agreements in respect of which a director or executive officer has
a material interest by requiring that all personnel avoid any activity which creates or gives the
appearance of a conflict of interest between an individuals personal interests and the
Corporations interests. Specifically, the Code provides that, unless a waiver is granted, no
personnel shall (i) seek or accept any personal loan or guarantee of any obligation or services
from any outside business, (ii) act as a consultant or employee of or otherwise operate an outside
business if the demands of the outside business would interfere with the employees
responsibilities to the Corporation, (iii) conduct business on behalf of the Corporation with a
close personal friend or immediate family member, (iv) take for themselves opportunities that arise
through the use of the Corporations property or information or through their position within the
Corporation.
Nomination of Directors
Please see section captioned Governance Committee below.
Compensation Determination
Please see section captioned Compensation Committee below.
Committee and Director Assessments
The Corporation conducted a survey to assist in the evaluation of Committee and Board of
Director effectiveness assessments. The Governance Committee will hold a strategic retreat in
fiscal 2009 to address the results of the survey.
BOARD COMMITTEES
Audit Committee
The Audit Committee recommends independent public accountants to the Board of Directors,
reviews the quarterly and annual financial statements and related MD&A, press releases and auditor
reports, and reviews the fees paid to our auditors. The Audit Committee approves quarterly
financial statements and recommends annual financial statements for approval to the board. In
accordance with Rule 10A 3 under the Securities Exchange Act of
32
1934, as amended, and the listing requirements of the New York Stock Exchange and the
requirements of the Canadian Securities regulatory authorities the Board of Directors has
affirmatively determined that our Audit Committee is composed solely of independent directors. The
Board of Directors has determined that Mr. Allen R. Sello is the audit committee financial expert,
as defined by Item 407(d)(5) of the SECs Regulation S K. The Audit Committee is currently
composed of Messrs. Brokaw, Hawkins, Sello and Turner, with Mr. Sello serving as Chairman. Based on
their experience, each of the members of the Audit Committee is financially literate. The members
of the audit committee have significant exposure to the complexities of financial reporting
associated with the Corporation and are able to address with due oversight, and provide the
necessary governance over, our financial reporting.
Further information with respect to the Audit Committee can be found in the Corporations 2008
Annual Information Form under the heading The Board and the Board Committees.
The Corporations auditors are KPMG LLP. The Audit Committee pre-approved the engagement of
KPMG to perform the audit of our financial statements for the fiscal year ended March 31, 2008.
The fees we have paid to KPMG for services rendered by them include:
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(i) |
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Audit Fees |
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KPMG billed us $3,037,500 in 2008, $2,375,000 in 2007 and $2,617,000 in 2006
for audit services. Audit fees were incurred for the audit of our annual
financial statements, the audit of internal controls over financial
reporting, related audit work in connection with registration statements and
other filings with various regulatory authorities, and quarterly interim
reviews of the consolidated financial statements. |
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(ii) |
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Audit Related Fees |
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KPMG billed us $55,000 in 2008, $52,000 in 2007 and $62,000 in 2006 for
planning and scoping work and advice relating to compliance and internal
controls over financial reporting. |
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(iii) |
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Tax Fees |
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KPMG billed us $33,000 in 2008, $16,640 in 2007 and $15,000 in 2006 for tax
compliance services. |
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(iv) |
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All Other Fees |
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KPMG did not perform any other services for us. |
33
Compensation Committee
The Corporation has engaged the services of specialized compensation consultants Hewitt
Associates and Wynford Group for both fiscal years 2007 and 2008 to assist in developing the
appropriate total compensation philosophy and structure and to assist management in the development
of the various programs within our Compensation framework. The Corporation engaged the services of
these consultants to perform studies of the market comparator group of corporations to evaluate the
NAEP total compensation and to make recommendations. The Corporation also engaged the services of
Hewitt Associates to assist NAEP in developing a new long-term incentive plan for fiscal 2009 and
to assist with director compensation. The Compensation Committee is responsible for supervising
executive compensation policies for the Corporation and its subsidiaries, administering the
employee incentive plans, reviewing officers salaries, approving significant changes in executive
employee benefits and recommending to the Board such other forms of remuneration as it deems
appropriate (see Report on Executive Compensation). In accordance with the listing requirements
of the New York Stock Exchange applicable to U.S. domestic listed corporations and applicable
Canadian securities laws, the Board of Directors has affirmatively determined that Compensation
Committee is composed solely of independent directors. The Corporations Board of Directors has
adopted a written charter for the Compensation Committee that is available on the Corporations
website (www.nacg.ca). The Compensation Committee is currently composed of Messrs. Brussa, Oehmig,
Sello and Tomsett, with Mr. Tomsett serving as Chairman.
Governance Committee
The Governance Committee is responsible for recommending to the Board of Directors proposed
nominees for election to the Board of Directors by the shareholders at annual meetings, including
an annual review as to the renominations of incumbents and proposed nominees for election by the
Board of Directors to fill vacancies that occur between shareholder meetings, and making
recommendations to the Board of Directors regarding corporate governance matters and practices. In
accordance with the listing requirements of the New York Stock Exchange applicable to domestic
listed corporations and applicable Canadian securities laws, the Board of Directors has
affirmatively determined that the Governance Committee is composed solely of independent directors.
The Corporations Board of Directors has adopted a written charter for the Governance Committee
that is available on the Corporations website. The Governance Committee is currently composed of
Messrs. Brussa, Hawkins, McIntosh, Tomsett and Turner, with Mr. Hawkins serving as Chairman.
Health, Safety, Environment and Business Risk Committee
The Health, Safety, Environment and Business Risk Committee (the HS&E Risk Committee) is
responsible for overseeing all of the Corporations health, safety and environmental risk,
reviewing the Corporations safety policies, procedures and practices. The HS&E Risk Committee is
also responsible for non-financial risks, approving the Corporations risk management policies and
reviewing the risks and related risk mitigation plans within the Corporations strategic plan. The
HS&E Risk Committee was formerly known as the Risk Committee and in June 2008 its name was changed
and its scope was expanded to include health,
34
safety and environmental matters. The HS&E Risk Committee is currently composed of Messrs.
Brokaw, McIntosh, Oehmig and Tomsett, with Mr. Oehmig serving as Chairman.
The Board may also establish other committees.
ADDITIONAL INFORMATION
Copies of the following documents are available upon written request to the Secretary of the
Corporation at North American Energy Partners Inc., Zone 3, Acheson Industrial Area, 2-53016
Highway 60, Acheson, Alberta T7X 5A7:
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(i) |
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the 2008 Annual Report to Shareholders containing the audited consolidated financial statements for the year ended March 31, 2008 together with
the accompanying Auditors Report and the Annual MD&A; |
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(ii) |
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this Information Circular; and |
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(iii) |
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the 2008 Annual Information Form. |
Additional information relating to the Corporation can be found on the Canadian Securities
Administrators System for Electronic Document Analysis and Retrieval (SEDAR) database at
www.sedar.com and the website of the Securities and Exchange Commission at
www.sec.gov. Financial information of the Corporation is provided in the Corporations
comparative financial statements and Annual MD&A for the Corporations most recently completed
financial year.
GENERAL
All matters referred to herein for approval by NAEP Shareholders require a simple majority of
the NAEP Shareholders voting at the Meeting, whether in person or by proxy. Except where otherwise
indicated, information contained herein is given as of the date hereof.
APPROVAL OF PROXY CIRCULAR
The undersigned hereby certifies that the contents and the distribution of this Information
Circular have been approved by the Board of Directors of the Corporation.
DATED at Acheson, Alberta, this 11th day of August, 2008.
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(signed) Peter Dodd
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Chief Financial Officer |
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NORTH AMERICAN ENERGY PARTNERS INC.
PROXY
THIS PROXY IS TO BE USED IN CONNECTION WITH THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OR ABOUT SEPTEMBER 17, 2008
THIS PROXY IS SOLICITED BY AND ON BEHALF OF MANAGEMENT
The undersigned holder of common shares in the capital of North American Energy Partners Inc. (the
"Corporation) specified below hereby appoints Peter Dodd, or failing that person, Rodney Ruston,
or instead of either of them ___, as proxy, with power of substitution, to
attend, vote all such shares held by the undersigned and otherwise act for and on behalf of the
undersigned at the annual meeting of shareholders of the Corporation (the Meeting) to be held at
The Calgary Petroleum Club, 319 5th Avenue SW, Calgary, Alberta, T2P 0L5 on or about September 17,
2008 commencing at 4:00 p.m. (Mountain Time) and at any adjournment thereof, to the same extent and
with the same power as if the undersigned were personally present at the Meeting or such
adjournment or adjournments thereof and, without limiting the generality of the power hereby
conferred, the person(s) named above is specifically directed as indicated below with respect to
those shares registered in the name of the undersigned.
Without limiting the general powers hereby conferred, the undersigned hereby directs the said
proxyholder to vote the shares represented by this instrument of proxy in the following manner:
1. FOR o or WITHHOLD FROM VOTING FOR o the election of directors as specified in the management
information circular of the Corporation dated August 11, 2008 (the Information Circular) in
connection with the Meeting;
2. FOR o or WITHHOLD FROM VOTING FOR o the appointment of KPMG LLP, Chartered Accountants, as
auditors of the Corporation for the ensuing year and the authorization of the directors to fix
their remuneration as such; and
3. at the discretion of the said proxyholders, upon any amendment or variation of the above matters
or any other matter that may be properly brought before the Meeting or any adjournment thereof in
such manner as such proxy, in such proxyholders sole judgment, may determine.
This Proxy is solicited on behalf of the Management of the Corporation. The shares represented by
this Proxy will be voted and, where the shareholder has specified a choice with respect to the
above matters, will be voted as directed above or, if no direction is given, will be voted FOR each
of the above matters.
To be effective, a Proxy must be received by CIBC Mellon Trust Company at Proxy Dept., CIBC Mellon
Trust Company, P.O. Box 721, Agincourt, Ontario M1S 0A1 (facsimile no. (416) 368-2502 or toll free
in North America only 1-866-781-3111) no later than 6:30 p.m. (Eastern Time) on September 15, 2008
and if the Meeting is adjourned, no later than 24 hours (excluding Saturdays and holidays) prior to
the commencement of any adjournment thereof.
This Proxy supersedes and revokes any proxy previously given in respect of the Meeting.
DATED this ___day of , 2008.
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Number and Class of Shares
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Signature of Shareholder or officer of
Shareholder |
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Name of Shareholder (please print) |
* * *
NOTES
1. |
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Every shareholder has the right to appoint some other person or company of their choice, who
need not be a shareholder, to attend and act on their behalf at the Meeting. If you wish to
appoint a person or company other than the persons whose names are printed herein, please
insert the name of your chosen proxyholder in the space provided (see reverse). |
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2. |
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This Proxy must be signed by the shareholder or the shareholders attorney authorized in
writing. If the shareholder is a corporation, this Proxy must be signed by the duly
authorized officer, attorney or other authorized signatory of the shareholder. A person
signing on behalf of a shareholder must provide, with this Proxy, satisfactory proof of such
persons authority and must indicate the capacity in which such person is signing. |
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3. |
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If the securities are registered in the name of more than one owner (for example, joint
ownership, trustees, executors, etc.), then all those registered should sign this Proxy. |
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4. |
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This Proxy should be signed in the exact manner as the name appears on the Proxy. |
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5. |
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If this Proxy is not dated, it will be deemed to bear the date on which it is mailed by
Management to the shareholder. |
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6. |
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The securities represented by this Proxy will be voted or withheld from voting, in accordance
with the instructions of the shareholder, on any ballot that may be called for and, if the
shareholder has specified a choice with respect to any matter to be acted on, the securities
will be voted accordingly; however, if such a direction is not made in respect of any matter,
this Proxy will be voted for each of the matters referred to in the Proxy. |
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7. |
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If any amendments or variations to the matters above referred to or to any other matters
identified in the Notice of Meeting are proposed at the Meeting or any adjournment thereof or
if any other matters which are not now known to Management should properly come before the
Meeting or any adjournment thereof, this Proxy confers discretionary authority on the person
voting the Proxy to vote on such amendments or variations or such other matters in accordance
with the best judgment of such person. |
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8. |
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This Proxy should be read in conjunction with the accompanying documentation provided by
Management, including the Information Circular. |
2