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Metro Inc. – ‘F-8’ on 10/30/17 – ‘EX-3.12’

On:  Monday, 10/30/17, at 2:28pm ET   ·   Effective:  10/30/17   ·   Accession #:  1193125-17-324666   ·   File #:  333-221208

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

10/30/17  Metro Inc.                        F-8        10/30/17   20:8.3M                                   Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: F-8         Registration Statement by a Foreign Private Issuer  HTML   1.62M 
                          for Securities Offered Pursuant to a                   
                          Transaction                                            
 2: EX-1.4      Underwriting Agreement                              HTML     30K 
 3: EX-1.5      Underwriting Agreement                              HTML    146K 
 4: EX-1.6      Underwriting Agreement                              HTML    170K 
 5: EX-3.1      Articles of Incorporation/Organization or By-Laws   HTML    252K 
14: EX-3.10     Articles of Incorporation/Organization or By-Laws   HTML    272K 
15: EX-3.12     Articles of Incorporation/Organization or By-Laws   HTML    603K 
 6: EX-3.2      Articles of Incorporation/Organization or By-Laws   HTML     35K 
 7: EX-3.3      Articles of Incorporation/Organization or By-Laws   HTML     14K 
 8: EX-3.4      Articles of Incorporation/Organization or By-Laws   HTML    549K 
 9: EX-3.5      Articles of Incorporation/Organization or By-Laws   HTML    171K 
10: EX-3.6      Articles of Incorporation/Organization or By-Laws   HTML    596K 
11: EX-3.7      Articles of Incorporation/Organization or By-Laws   HTML    178K 
12: EX-3.8      Articles of Incorporation/Organization or By-Laws   HTML    520K 
13: EX-3.9      Articles of Incorporation/Organization or By-Laws   HTML    182K 
16: EX-4.1      Instrument Defining the Rights of Security Holders  HTML     11K 
17: EX-4.2      Instrument Defining the Rights of Security Holders  HTML     10K 
18: EX-4.3      Instrument Defining the Rights of Security Holders  HTML     11K 
19: EX-4.4      Instrument Defining the Rights of Security Holders  HTML     11K 
20: EX-4.5      Instrument Defining the Rights of Security Holders  HTML     10K 

Exhibit 3.12

Notice of 2017

Annual General

Meeting of

Shareholders

and

Management

Proxy

Circular

Our Annual General Meeting of Shareholders will be held at 10:00 a.m. (Eastern Standard Time) on Tuesday, January 24, 2017 at the Centre Mont-Royal located at 2200 Mansfield Street, Montréal, Québec.

As a shareholder of METRO INC., you may exercise the voting rights attached to your shares by proxy or in person at the meeting.

Your vote is important.

This document sets forth who is entitled to vote, the matters upon which you will be asked to vote and how to exercise your shareholder voting rights. Please read it carefully.

Table of contents

Notice of Annual General Meeting of Shareholders

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders (the “Meeting”) of METRO INC. (the “Corporation”) will be held at the Centre Mont-Royal located at 2200 Mansfield Street, Montréal, Québec, on January 24, 2017 at 10:00 a.m. (Eastern Standard Time), for the following purposes:

The holders of Common Shares of record at the close of business on December 9, 2016, are entitled to receive notice of, to attend and to vote at this Meeting.

The Corporation has elected to use the Notice and Access rules adopted by the Canadian Securities Administrators to reduce the volume of paper with respect to materials distributed for the purpose of the Meeting. Instead of receiving the Circular, shareholders will receive a Notice of Meeting with instructions on how to access the remaining Meeting materials online together with the form of proxy or voting instruction form, as the case may be. The Circular and other relevant materials are available on the Internet at http://corpo.metro.ca/en/investor-relations/annual-general-meeting.html or on the Canadian Securities Administrators’ website at www.sedar.com. Shareholders are advised to review the Meeting materials prior to voting. Any shareholder who wishes to receive a paper copy of the Meeting materials may, at no cost, request such printed copies by calling our proxy solicitation agent D.F. King Canada toll-free at 1 800 246-2916, if you are in North America, or at 1 201 806-7301, if you are outside North America, or by email at inquiries@dfking.com.

Paper copies of the Meeting materials must be requested as soon as possible, but no later than January 10, 2017, in order to allow shareholders sufficient time to receive and review said Meeting materials and return the form of proxy or voting instruction form in the prescribed time.

Montréal, December 9, 2016

By order of the Board of Directors

Simon Rivet

Corporate Secretary

Note:

The holders of Common Shares who are unable to attend the Meeting in person are requested to proceed according to the instructions provided in the Circular, and to return the proxy or voting instruction form at their earliest convenience, but before 10:00 a.m. (Eastern standard time), on January 23, 2017.

Management Proxy Circular

This Management Proxy Circular (the “Circular”) is provided in connection with the solicitation of proxies for the Annual General Meeting of Shareholders (the “Meeting”) of METRO INC. (the “Corporation”) to be held on Tuesday, January 24, 2017, at the place and time and for the purposes set forth in the enclosed notice of said Meeting (the “Notice of Meeting”), and all adjournments thereof.

SOLICITATION OF PROXIES

The enclosed proxy is being solicited by the management of the Corporation. The solicitation will be made primarily by mail, but the directors, officers and employees of the Corporation may also solicit proxies by telephone, by fax, by Internet, through advertisements or in person. The Corporation will also retain the services of other parties to solicit proxies, in particular D.F. King Canada. The solicitation costs will be at the expense of the Corporation, including any costs in connection with the services provided by D.F. King Canada which are estimated at approximately $33,500.

In addition, the Corporation will, upon request, reimburse brokers and nominees for expenses reasonably incurred for forwarding voting instruction forms and accompanying material to beneficial owners of Common Shares of the Corporation.

INFORMATION REGARDING VOTING

REGISTERED SHAREHOLDERS

A registered shareholder is a shareholder whose shares are directly registered in his or her name in the Corporation’s register of shareholders. Holders of shares of record at the close of business in Montréal, Québec, on December 9, 2016 (the “Record Date”) will be entitled to attend the Meeting and any adjournment thereof, and exercise the voting rights attached to their shares. Shareholders entitled to exercise their voting rights may appoint another person (a “Proxyholder”) to attend the Meeting and exercise such voting rights.

VOTING RIGHTS EXERCISED BY PROXY The person named as Proxyholder in the enclosed proxy form will exercise the voting rights attached to the Common Shares which are subject to said proxy, in accordance with the instructions set forth by the shareholder. Unless contrary instructions are indicated on the proxy form, the voting rights attached to such shares will be voted “FOR” the approval of matters referred to in items two (2), three (3) and four (4) of the Notice of Meeting, and “AGAINST” the matter referred to in item five (5) of the Notice of Meeting.

The enclosed proxy confers discretionary authority upon the Proxyholder with respect to all amendments to matters set forth in the Notice of Meeting and any other matter which may properly be brought before the Meeting. As at the date of this Circular, the management of the Corporation is unaware of any such amendments or other matters to be brought at the Meeting.

APPOINTMENT OF A PROXYHOLDER A shareholder has the right to appoint a Proxyholder to represent him at the Meeting other than the persons whose names already appear as Proxyholders in the enclosed proxy form, by inserting the name of the Proxyholder of his or her choice in the blank space provided for that purpose in the proxy form. The Proxyholder need not be a shareholder of the Corporation. If the shareholder is a corporation, the proxy form must be executed by a duly authorized officer or attorney thereof.

You may enter your voting instructions by following the instructions indicated on the front and back of the proxy form.

REVOCATION OF A PROXY A shareholder who executes and returns the enclosed proxy form may revoke same in any manner permitted by law, including by way of written notice duly executed by the shareholder, by his or her attorney who has written authorization to act on his or her behalf or, if the shareholder is a corporation, by a duly authorized officer or attorney thereof, and submit said revocation to the transfer agent of the Corporation, CST Trust Company, before the proxy is acted upon at the Meeting or any adjournment thereof.

If you have any questions with respect to the foregoing, wish to receive an additional copy of this Circular or need help to vote, we invite you to contact D.F. King Canada by calling toll-free 1 800 246-2916, if you are in North America, or 1 201 806-7301, if you are outside North America, or by emailing your request at inquiries@dfking.com.

NON-REGISTERED SHAREHOLDERS

A non-registered shareholder is a shareholder whose shares are registered in the name of a representative, such as an investment dealer or another intermediary, rather than in the shareholder’s name.

Applicable securities laws and regulations require that the representative of a non-registered shareholder seeks the latter’s voting instructions prior to the Meeting. The non-registered shareholder will receive a voting instruction form from his or her representative with respect to the number of shares held on his or her behalf. The voting instruction form sent by the representative will contain instructions pertaining to the execution and transmission of the document, which instructions should be carefully read and followed by the non-registered shareholder to ensure that his or her voting rights are exercised accordingly at the Meeting.

A non-registered shareholder who is unable to attend the Meeting but wishes that his or her voting rights be exercised on his behalf by a Proxyholder must therefore follow the voting instructions provided by his or her representative.

A non-registered shareholder who wishes to exercise his or her voting rights in person at the Meeting must indicate his or her own name in the space provided for such purpose on the voting instruction form in order to appoint himself or herself as Proxyholder, and follow the instructions provided by his or her representative with respect to the execution and transmission of the document.

If you have any questions with respect to the foregoing, wish to receive an additional copy of this Circular or need help to vote, we invite you to contact D.F. King Canada by calling toll-free 1 800 246-2916, if you are in North America, or 1 201 806-7301, if you are outside North America, or by emailing your request at inquiries@dfking.com.

ELECTRONIC VOTING AT THE ANNUAL MEETING

In keeping with our commitment to reduce our impact on the environment and in order to facilitate the voting at the Meeting, voting on all items of business shall be carried out by electronic ballot rather than on paper. The transfer agent will provide each shareholder with a handheld device together with information regarding its use at the Meeting.

NOTICE AND ACCESS RULES

The Corporation has elected to use the Notice and Access rules adopted by the Canadian Securities Administrators to reduce the volume of paper with respect to materials distributed for the purpose of the Meeting. Instead of receiving this Circular, shareholders will receive a Notice of Meeting with the proxy or voting instruction form, as the case may be, along with instructions on how to access the Meeting materials online. The Corporation will send the Notice of Meeting and proxy form directly to registered shareholders. The Corporation will pay for intermediaries to deliver the Notice of Meeting, voting instruction form and other Meeting materials requested by non-registered shareholders.

This Circular and other relevant materials are available on the Internet at http://corpo.metro.ca/en/investor-relations/annual-general-meeting.html or on the Canadian Securities Administrators’ website www.sedar.com.

If you would like to receive a printed copy of the Meeting materials by mail, at no cost, you must request same D.F. King Canada by calling toll-free 1 800 246-2916, if you are in North America, or 1 201 806-7301, if you are outside North America, or by emailing your request at inquiries@dfking.com.

To ensure that you receive the materials in advance of the voting deadline and the Meeting, all requests must be received no later than January 10, 2017 to ensure timely receipt. If you request a paper copy of the materials, please take note that no additional proxy form or voting instruction form shall be sent to you. Therefore, please make sure that you retain the form that you received with the Notice of Meeting for voting purposes.

To obtain a printed copy of the materials following the Meeting, please contact D.F. King Canada by calling toll-free at 1 800 246-2916, if you are in North America, or 1 201 806-7301, if you are outside North America, or by emailing your request at inquiries@dfking.com.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The Common Shares (the “Share(s)”) constitute the only class of shares of the Corporation carrying voting rights at a general meeting of shareholders. Each Share entitles its holder to one (1) vote. Each holder of Shares is entitled, at a meeting or any adjournment thereof, to one (1) vote for each Share registered in such holder’s name at the close of business on the Record Date.

As at December 2, 2016, there were 231,402,966 Shares of the Corporation issued and outstanding, representing in the aggregate 100% of the votes attached to all Shares of the Corporation.

To the knowledge of the directors and officers of the Corporation, the only person who, as at December 2, 2016, exercised or claimed to exercise beneficial ownership, control or direction over 10% of the Corporation’s Shares was:

FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Corporation for the financial year ended September 24, 2016, and the report of the independent auditors thereon will be submitted at the Meeting. These Consolidated Financial Statements appear in the Corporation’s 2016 Annual Report (the “Annual Report”) that was mailed to shareholders who requested it together with the Notice of Meeting. The Annual Report is available on SEDAR (www.sedar.com) as well as on the Corporation’s corporate Internet Website (http://corpo.metro.ca/en/investor-relations/annual-general-meeting.html).

ELECTION OF DIRECTORS

The Articles of the Corporation provide for a minimum of seven (7) and a maximum of 19 directors, which number is to be determined from time to time by resolution of the Board of Directors of the Corporation (the “Board of Directors” or the “Board”). The Board of Directors has set at 13 the number of directors for the upcoming year. The Corporation’s By-laws provide that each director is elected for a one-year term beginning on the date of the annual meeting of shareholders during which he or she is elected and ending at the following annual meeting of shareholders or upon the election of his or her successor, unless the director resigns or his or her seat becomes vacant as a result of death, removal or any other reason.

According to a policy of the Corporation, any person who was a director of the Corporation on January 30, 2012 may subsequently stand for election as a director, provided that at the time of such director’s election he or she is under the age of 72. Any other person may stand for election as a director of the Corporation provided that at the time of such director’s election, he or she is under the age of 72 and has been a director of the Corporation for less than 15 years.

MAJORITY VOTING POLICY The Board of Directors has adopted a policy providing that a nominee for the position of director who receives a greater number of votes “WITHHELD” than votes “FOR” during the election of directors by shareholders at a meeting of shareholders, will offer promptly his or her resignation to the Chair of the Board following said meeting of shareholders. The Corporate Governance and Nominating Committee will consider such offer to resign and make a recommendation to the Board to accept it unless exceptional circumstances justify otherwise. The Board will accept the resignation, unless exceptional circumstances justify otherwise, and issue a press release to that effect within 90 days following the meeting of shareholders. The director who offered his or her resignation shall not take part in any of the Corporate Governance Committee’s or the Board’s deliberations pertaining to his or her offer to resign. This policy only applies in circumstances involving an uncontested election of directors. An “uncontested election of directors” means that the number of nominees for the position of director is equal to the number of directors to be elected to the Board, and that no proxy material is circulated in support of one (1) or more nominees other than those presented by the Board. Subject to any restriction imposed by law, in the event that the Board accepts the resignation offer of a director, the Board may leave the resulting vacancy unfilled until the next annual meeting of shareholders. It may also opt to fill the vacancy by appointing a new director whom the Board considers to merit the trust of the shareholders. It may further decide to call a meeting of shareholders in order to introduce a new candidate to fill the vacant position.

POLICY ON EXTERNAL BOARDS The Board of Directors has adopted this year a policy limiting the number of directorships of its directors to a maximum of four (4) public companies, including the Corporation. As well, no more than two (2) directors of the Corporation shall hold a director seat at the same board of another public company at the same time. Therefore, the Corporate Governance and Nominating Committee of the Corporation shall take into consideration the directorships of potential nominees and shall not propose a slate of directors for election by shareholders if the election of those directors would result in more than two (2) directors holding a director seat at the same time at the same board of another public company. A director of the Corporation shall obtain the prior approval of the Corporate Governance and Nominating Committee before submitting his or her candidacy as director of another public company.

NOMINEES Nominees for the position of director are the current directors of the Corporation, except for Mr. Serge Ferland who will not stand for re-election this year.

Unless contrary instructions are indicated, the persons named as Proxyholder in the enclosed proxy form or voting instruction form intend to vote “FOR” the election, as directors of the Corporation, of the 13 nominees whose names are set forth below.

Management of the Corporation does not expect that any such nominee will be unable or, for any reason, become unwilling to serve as a director, but if the foregoing should occur for any reason prior to the election, the Proxyholders in the enclosed proxy form or voting instruction form may vote for another nominee of their choice.

The following tables describe the nominees for the position of director of the Corporation. Each nominee for the position of director of the Corporation holds the principal occupation indicated opposite his or her name. The nominees’ experience as well as their previous functions, as applicable, are hereinafter summarized. The other boards of public corporations on which nominees currently serve as well as information relating to their equity holdings in the Corporation are also mentioned. None of the nominees serve together on the same board of another public company.

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

INFORMATION ON EQUITY HOLDINGS

DIRECTORS’ NOMINEES’ SKILLS AND EXPERIENCE MATRIX The following is a matrix outlining the directors’ nominees’ skills and experience.

Additional information on the nominees for the position of director who have held or hold positions in other corporations can be found in the “Directors and Officers” section of the Corporation’s 2016 Annual Information Form (the “Annual Information Form”). The Annual Information Form is available on SEDAR (www.sedar.com) as well as on the Corporation’s Corporate Internet Website (www.corpo.metro.ca).

APPOINTMENT OF AUDITORS

Ernst & Young LLP, Chartered Professional Accountants, (the “Auditors”) were first appointed as auditors of the Corporation on January 27, 1998, and have been acting in that capacity ever since. The Audit Committee has examined the quality of the work performed by the Auditors and has declared itself satisfied therewith. The Corporation recommends the appointment of Ernst & Young LLP as auditors of the Corporation. Unless contrary instructions are indicated, the Proxyholder in the enclosed proxy form or voting instruction form intend to vote “FOR” their appointment as auditors of the Corporation at the Meeting.

AUDITORS’ INDEPENDENCE

For the 2016 financial year, the Corporation’s Audit Committee obtained written confirmation from the Auditors of their independence and objectivity with respect to the Corporation, pursuant to the Code of Ethics of the Québec Order of Chartered Professional Accountants.

FEES FOR THE SERVICES OF THE AUDITORS

For each of the financial years ended September 24, 2016 and September 26, 2015, the following fees were billed by the Auditors for audit services, audit-related services, tax services and other services provided by the Auditors:

Audit-related fees consist primarily of fees invoiced for consultations concerning financial accounting or the presentation of financial information which are not categorized as “audit services”, fees invoiced for the audits of financial statements of pension plans and fees invoiced for the execution of computerized tests on internal controls for management.

Tax fees consist primarily of fees invoiced for assistance with regulatory tax matters concerning federal and provincial income tax returns and sales tax and excise tax reporting, fees invoiced for consultations concerning the income tax, customs duty or sales tax impact of certain transactions, as well as fees invoiced for assistance with federal and provincial government audits involving income tax, sales tax, customs duties or deductions at source.

ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Board of Directors approved a say-on-pay advisory vote policy with respect to executive officers. The purpose of the say-on-pay advisory vote is to give shareholders the opportunity to vote at each annual shareholders meeting on the Corporation’s approach to executive compensation, as further described in the “Executive Compensation” section on pages 23 to 44 of this Circular. At the 2016 annual general meeting of shareholders, the Corporation’s approach to executive compensation was approved by 97.35% of the votes.

At the Meeting, shareholders will be asked to vote on the following advisory resolution:

“RESOLVED, on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in the Corporation’s Management Proxy Circular delivered in advance of the 2017 annual meeting of shareholders of the Corporation.”

Given that the vote is held on an advisory basis, it will not be binding upon the Board of Directors. However, the Board of Directors will consider the outcome of the vote when reviewing and approving executive compensation policies and decisions.

Additional information on executive compensation can be found in the “Executive Compensation” section on pages 23 to 44 of this Circular.

The Board of Directors and management are recommending that shareholders vote “FOR” the approval of said resolution.

Unless contrary instructions are indicated, the Proxyholders in the enclosed proxy form or voting instruction form intend to vote “FOR” the advisory resolution on executive compensation. It should be noted that to be adopted, this resolution requires a favorable vote of a simple majority of the votes cast.

SHAREHOLDER PROPOSAL

Exhibit A to this Circular sets forth one (1) proposal received from a shareholder which will be submitted for consideration at the Meeting, along with the Corporation’s reasons for opposing said proposal.

The Board of Directors and management recommend that shareholders vote “AGAINST” this proposal for the reasons stated in Exhibit A to this Circular.

If this proposal is submitted for consideration at the Meeting, unless otherwise indicated, the Proxyholders named in the proxy form or voting instruction form intend to vote “AGAINST” this proposal. It should be noted that to be adopted, this proposal requires a favorable vote of a simple majority of the votes cast.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

MANDATE OF THE BOARD OF DIRECTORS The Board of Directors has adopted a mandate in which it describes its role. The text of the Board of Directors’ mandate is included in Exhibit B to this Circular.

DESCRIPTION OF THE COMMITTEES OF THE BOARD OF DIRECTORS AND THEIR MANDATES There are currently three (3) existing standing committees of the Board of directors, namely the Human Resources Committee, the Audit Committee and the Corporate Governance and Nominating Committee.

The Human Resources Committee has five (5) members, all of whom are independent directors. This Committee met four (4) times during the 2016 financial year. The text of the Human Resources Committee’s mandate is included in Exhibit C to this Circular. The composition of this Committee is described in the “Composition of the Human Resources Committee, Competencies and Experience of its members” section on page 23 of this Circular.

The Audit Committee has five (5) members, all of whom are independent directors. The Committee met five (5) times during the 2016 financial year. The text of the mandate of the Audit Committee is included in Exhibit D to this Circular. The composition of this Committee is described in the “Information on the Audit Committee” section on page 17 of this Circular.

The Corporate Governance and Nominating Committee (the “Corporate Governance Committee”) has five (5) members, all of whom are independent directors. This Committee met five (5) times during the 2016 financial year. The text of the Corporate Governance Committee’s mandate is included in Exhibit E to this Circular.

ATTENDANCE AT BOARD AND COMMITTEE MEETINGS The following table sets forth the number of meetings held by the Board of Directors and its standing committees during the financial year ended September 24, 2016, and the attendance rate of the directors at these meetings. It also indicates which committee each director is a member of and, as the case may be, any special position held on such committee.

BOARD AND COMMITTEE MEETINGS

INFORMATION ON THE AUDIT COMMITTEE

MANDATE OF THE AUDIT COMMITTEE The mandate of the Audit Committee, which was approved by the Board of Directors, is set forth in Exhibit D to this Circular.

COMPOSITION OF THE AUDIT COMMITTEE, TRAINING AND EXPERIENCE OF ITS MEMBERS At the end of the 2016 financial year, the Audit Committee was composed of the following independent directors: Stephanie Coyles, Christine Magee, Line Rivard, Russell Goodman and Michel Labonté (Chair).

Each of the current member has training and experience that is relevant to the performance of his or her duties. First at Hydro-Québec and then at National Bank of Canada, Mr. Labonté has served as Chief Financial Officer, for a period of 15 years. Mr. Labonté is also Chair of the Audit Committee of Otéra Capital Inc., a subsidiary of Caisse de dépôt et placement du Québec, and was a member and Chair of the Audit Committee of Manac Inc. Mrs. Coyles acquired her experience while she acted as Senior Vice-President and Chief Strategic Officer of LoyaltyOne Co. which reported its results in accordance with the International Financial Reporting Standards (“IFRS”). Mrs. Magee has co-founded and acted as president of Sleep Country Canada Holdings Inc. during more than ten (10) years. She is a director and Chair of the Audit Committee of Sirius XM Canada Holdings Inc. She was also a member of the Audit Committees of Cott Corporation and of McDonald’s Restaurants of Canada Limited. For over a period of 20 years, Mrs. Rivard has held various positions at BMO Capital Markets, including Vice-president and Managing Director, Corporate Investment Banking - Montréal. She also serves on the Board of Directors of Ivanhoe Cambridge Inc. for which she is also Chair of the Investment Committee as well as a member of its Audit Committee. She was also Special Advisor to the Governor of the Bank of Canada. Mr. Goodman is a Chartered Professional Accountant who acquired his experience by serving as a partner at PricewaterhouseCoopers LLP and Price Waterhouse LLP for a period of 24 years. Mr. Goodman is also a director and Chair of the Audit Committee of Gildan Activewear Inc. and of Northland Power Inc. He was also a director and Chair of the Audit Committee of Whistler Blackcomb Holdings Inc.

PRE-APPROVAL POLICIES AND PROCEDURES The Audit Committee approved the “Policy concerning the pre-approval of audit services and non-audit services” which main components are described below.

The Auditors are appointed to audit the annual Consolidated Financial Statements of the Corporation. The Auditors may also be called upon to provide audit-related services, tax services and non-audit services, as long as these services do not interfere with their independence.

The Audit Committee, which reviews, among other things, the quality of the work of the Auditors, must pre-approve all services that the Auditors of the Corporation may render to the Corporation and its subsidiaries. On an annual basis, the Audit Committee examines and pre-approves the details of the services which may be provided by the Auditors and the fee levels in connection therewith. Any type of service that has not already been approved by the Audit Committee must specifically be pre-approved by the Audit Committee if it is to be provided by the Auditors. Same applies if the service offered exceeds the pre-approved fee levels. The Audit Committee has delegated to its Chair the authority to pre-approve services that have not already been specifically approved. However, the Chair of the Audit Committee must communicate all such decisions at the following committee meeting.

On a quarterly basis, the Audit Committee examines the pre-approval status of any services other than audit services that the Auditors were asked to provide or could be asked to provide during the following quarter.

POLICY CONCERNING COMPLAINTS WITH RESPECT TO ACCOUNTING, CONTROLS OR AUDITING MATTERS The Audit Committee approved a policy allowing anyone, including the employees of the Corporation, to submit an anonymous complaint regarding accounting, accounting controls or auditing matters of the Corporation. All complaints received pursuant to such policy are sent directly to the Senior Director, Internal Audit, who is responsible for analyzing such complaints and, if need be, making due inquiry. At each meeting, the Audit Committee is either informed of all complaints received together with the results of the inquiry and, if applicable, any corrective measures to be implemented, or is otherwise informed of the fact that no complaints have been filed.

The full text of the Corporation’s complaint policy can be found on the Corporation’s Corporate Internet Website (www.corpo.metro.ca).

POLICY CONCERNING THE HIRING OF PARTNERS OR EMPLOYEES OF THE AUDITORS The Audit Committee has approved a policy governing the Corporation’s hiring of certain candidates to key positions. This policy applies to any partner, employee or former partner or employee of the current or former external auditors of the Corporation who applies for a position which entitles the candidate to exercise decision-making authority or significantly influence decision-making regarding the presentation of financial information or auditing matters. More specifically, the candidate must not have been involved in the auditing of the Corporation’s financial statements within the 12 months preceding the hiring date. Moreover, the eventual hiring of such candidate must not compromise the independence of the Auditors.

REVIEW OF THE QUALITY OF THE WORK OF THE AUDITORS The Audit Committee has examined the qualifications, performance and independence of the Auditors and has ensured that the Auditors are registered with the Canadian Public Accountability Board as compliant participants. The Audit Committee examines every year the quality of the work performed by the Auditors in order to make an informed recommendation concerning the appointment of the audit firm which will act as external auditors of the Corporation.

RISK MANAGEMENT

Management identifies the main risks to which the Corporation is exposed and also determines adequate measures to manage these risks in a proactive way. The Internal Audit Department has the mandate of auditing all business risks in accordance with a three (3) year plan. Accordingly, every three (3) years, each sector is subject to an audit to ensure that control measures have been put in place to address the business risks associated to its sector of activity.

Most of the identified risks fall into the following categories: operational risks, legal risks, financial risks, reputational risks, technological risks and security risks.

One of the objectives of the Audit Committee is to review all material risks identified by management and to examine the effectiveness of the measures put in place to manage these risks. In order to do so, the Audit Committee regularly receives from the Internal Audit Department risk assessments with respect to various business units of the Corporation. These assessments contain a description of the material risks that could affect any given business unit, and the measures put in place to manage such risks. In addition, the Audit Committee receives, at least once a year, a report from the crisis prevention and management committee. The Audit Committee regularly reports back to the Board of Directors regarding risk management. The Board of Directors also receives reports from management on material risks that could affect the Corporation. Periodically, the Audit Committee receives a presentation of all material risks affecting the Corporation and the measures put in place to manage such risks. A similar presentation is made to the Board at least once a year.

The Board of Directors and the Human Resources Committee also review the identification and management of risks arising from the Corporation’s compensation policies and practices and the disclosure related thereto. More information about risks arising from the Corporation’s compensation policies and practices may be found under the “Risks Arising from the Corporation’s Compensation Policies and Practices” section, on pages 24 and 25 of this Circular.

Additional information on risk management can be found in the “Risk Management” section of the Management Discussion and Analysis, forming part of the Annual Report. The Annual Report is available on SEDAR (www.sedar.com) as well as on the Corporation’s Corporate Internet Website (www.corpo.metro.ca).

STRATEGIC PLANNING

In conformity with the mandate of the Board of Directors, which can be found in Exhibit B of this Circular, the Board of Directors adopts annually a strategic planning process for the Corporation and its subsidiaries. The President and Chief Executive Officer, as well as senior management of the Corporation prepare and annually submit to the Board of Directors, for discussion and approval, a strategic plan. The strategic planning process includes, among other things, the following elements: designing a strategic plan for a specific timeframe, setting corporate financial objectives, developing annual business plans and reviewing performance and progress towards achieving the strategic plan.

Senior management promptly reports back to the Board of Directors on any new development which may have a significant strategic impact. This allows the Board of Directors to ensure general oversight of the evolution of the strategic plan and to approve any new strategic measure proposed by senior management.

DIRECTOR COMPENSATION

Only directors who are not employees of the Corporation receive compensation for acting as members of the Board of Directors and any of its committees.

The Board of Directors’ policy is to offer its directors competitive compensation. In that respect, the Board of Directors compares on a yearly basis the compensation of the Corporation’s directors with that of the directors of Canadian public companies included in the same reference group as the one used by the Corporation to determine executive compensation. For more information about said reference group, including the criteria upon which the Corporation based its choice of the companies included in the group, please refer to the section entitled “Reference Group” on page 25 of this Circular.

Directors’ compensation consists of the following elements:

As Chair of the Board, Mr. Raymond received an annual retainer of $250,000.

This year, the Corporate Governance Committee has reviewed once again the compensation of directors in order to determine if it was still appropriate. The Corporate Governance Committee recommended that no changes be made to the compensation of directors, save for an increase of the base annual retainer for directors as mentioned above, in order to ensure a director’s compensation that is substantially equivalent to the median compensation for the reference group. The Board of Directors has approved said increase, which came into effect on September 25, 2016.

In order to better align the interests of the directors with those of the shareholders, the Corporation has elaborated guidelines regarding non-employee directors’ compensation and the number of securities of the Corporation that they are minimally required to hold. Until each director holds three (3) times his or her base annual retainer in deferred share units (“DSU”) and/or in Shares, which constitutes the minimum shareholding requirement, each director must receive his or her base annual retainer or, at such director’s option, his or her total annual compensation in DSUs. Each director has three (3) years to comply with the minimum shareholding requirement, following which each director will continue to receive at least 25% of his or her total compensation in DSUs.

The main terms of the Deferred Share Unit Plan (the “DSU Plan”) are the following:

DIRECTOR COMPENSATION TABLE The following table shows all components of the compensation paid to the directors during the last financial year of the Corporation.

Directors who are not employees or former employees of the Corporation are not eligible to receive pension plan benefits under the terms of any of the Corporation’s Pension Plans and are not entitled to any Option grants under the Corporation’s Option Plan (as hereinafter defined).

DIRECTOR COMPENSATION PAYMENT TABLE The following table illustrates how the fees earned by the directors during the 2016 financial year have been paid.

INCENTIVE PLAN AWARDS

OUTSTANDING SHARE-BASED AWARDS The following table shows, with respect to each director, as at September 24, 2016, the share-based awards under the DSU Plan, which have vested but have not yet been paid.

There are no option-based awards for directors.

DIVERSITY

The Corporate Governance Committee reviews the competence, experience and skills of each of the nominees for the position of director and recommends the nominees who best meet the required profile. To this effect, an evergreen list of candidates is maintained at all times identifying men and women candidates meeting the required profile. The Corporate Governance Committee makes its recommendations to the Board of Directors which then chooses a nominee while taking into account, among other things, the list of competencies and expectations of directors that can be found in Exhibit F to this Circular and the availability of the candidates. The Board of Directors also takes into consideration the profiles of each director already serving on the Board of Directors, as it aims to foster diversity, particularly in terms of competence, experience, skills, geographical representation and personal attributes, including the representation of men and women.

The Corporation acknowledges the value of diversity in terms of experience, background and gender on the Board of Directors. To this effect, the Corporation adopted in 2015 a written policy on diversity at the Board level in conformity with its signature of the Catalyst⁽¹⁾ Accord in 2012. In light of the recent recommendations of various governance organizations, including Catalyst, the Board has decided in 2016 to increase its minimum target of each gender representation on the Board of Directors from 25% to 30%. As such, the Corporation wishes to maintain Board composition in which each gender comprises at least 30% of the Directors.

This year, the Corporation proposes five (5) women among the group of 13 nominees for the position of director. The Board of Directors considers that the composition of the group of nominees for the position of director that it proposes, as well as the number of individuals that said group comprises, will allow the Corporation to perform efficiently and act in the best interest of the Corporation and its stakeholders. Throughout the course of the year, the Corporation pursued its efforts towards determining and setting forth a list of potential nominees. Said list may be used in the event that a vacancy occurs on the Board of Directors.

With the composition of the Board of Directors proposed in this Circular, the Corporation will have continued to surpass its target of 30% of representation of each gender since the annual meeting of January 2015 as indicated in the table below. The Corporation will continue to measure the effectiveness of its policy in relation to its target.

The Corporation also adopted in 2015 a written policy on diversity among its employees, including its executive management. This policy provides that the Corporation reviews the competence, experience and skills of each of the candidates for each management position and aims to foster diversity among its employees by taking into account personal attributes, including the representation of men and women. To insure to have women as candidates to management positions, the policy on diversity provides, among other things, that, whenever possible, at least one woman candidate shall be among the group of identified candidates for each such position. Instead of establishing a target for the representation of women among its management and its executive management, the Corporation has established targets within the recruitment process and the succession planning management, which the Corporation considers to be more efficient to favour the representation of women. The Corporation shall review every two (2) years the effectiveness of its diversity policy applicable to its employees.

The table below measures the progress in the representation of women on the Board of directors, at the executive management level as well as at the management level.

EXECUTIVE COMPENSATION

This section is intended to give shareholders of the Corporation a description of the policies, programs and decisions regarding compensation of the NEOs (as hereinafter defined) for the Corporation’s financial year ended September 24, 2016. In this Circular, the term “NEO(s)” individually and collectively refers to the President and Chief Executive Officer, the Executive Vice-President, Chief Financial Officer and Treasurer and the Corporation’s three (3) most highly paid executive officers, namely the Executive Vice-President and Ontario Division Head, the Executive Vice-President and Québec Division Head and the Senior Vice-President, National Procurement and Corporate Brands. Although this section essentially aims to describe the compensation policies and programs for NEOs, these programs also apply to the other management members of the Corporation. Unless otherwise indicated, the information disclosed in this section is up to date as at September 24, 2016.

COMPENSATION DISCUSSION AND ANALYSIS

ROLE AND MANDATE OF THE HUMAN RESOURCES COMMITTEE The Board of Directors has given the Human Resources Committee the mandate to, among other things, review and recommend senior executive compensation components and policies, so as to ensure that they are consistent with best practices while also taking into account new compensation trends. The text of the mandate of the Human Resources Committee can be found in Exhibit C to this Circular.

COMPOSITION OF THE HUMAN RESOURCES COMMITTEE, COMPETENCIES AND EXPERIENCE OF ITS MEMBERS The Human Resources Committee is currently comprised of the following independent directors:, Marie-José Nadeau, Marc DeSerres, Claude Dussault (Chair), Christian W.E. Haub and Michel Labonté.

Each Human Resources Committee member has the relevant experience and competencies to perform his or her duties. Mrs. Nadeau has served for over 20 years as Secretary of the Human Resources Committee and of the Board of directors of Hydro-Québec, and as Chair of the World Energy Council from 2013 to 2016 as well as a member of its Compensation Committee. Mr. DeSerres acquired his experience in human resources by serving as President of Omer DeSerres Inc. for over 35 years. Mr. Dussault acquired his human resources experience while acting as President and Chief Executive Officer of ING Canada Inc. (now Intact Financial Corporation). Mr. Haub acquired his experience while acting as President and Chief Executive Officer of The Great Atlantic and Pacific Tea Company, Inc., formerly a large American food retail chain, and as Co-Chief Executive Officer of The Tengelmann Group, a large German Corporation operating in the retail business. As Chief Financial Officer of the National Bank of Canada from 1993 to 2005, Mr. Labonté was involved in many aspects of the decision making process regarding compensation and benefits.

CONFLICTS OF INTEREST None of the members of the Human Resources Committee is or has been indebted towards the Corporation or any of its subsidiaries or has or has had an interest in any material transaction involving the Corporation in the course of the 2016 financial year. None of the members of the Human Resources Committee is or has been an officer, employee or executive of the Corporation.

SUCCESSION PLANNING The Corporation considers executive succession planning to be a fundamental part of the sound management of the Corporation. Succession plans for the President and Chief Executive Officer and for management are reviewed in detail on an annual basis by the Human Resources Committee, which ensures to make follow-ups during the course of the year and appropriate recommendations to the Board of Directors. Succession plans for senior management, including the President and Chief Executive Officer, are presented annually to the Board of Directors.

To ensure the long-term development of the leadership and talent within the Corporation, succession plans include, in particular: emergency plan in the event of an unforeseen event, identifying potential candidates and their readiness level to assume different types of positions and functions, succession planning on a continuous and integrated basis for the short term, middle term and long term, adjustments to succession plans when necessary, implementing and updating individual and organizational development programs, and regular reviews of the processes relating to succession planning and talent management. The process for succession planning and talent management also applies to all management and professional positions of the Corporation.

COMPENSATION OBJECTIVES AND COMPONENTS The Corporation’s main objective with respect to compensation is to offer global compensation that is competitive with prevailing market conditions in order to recruit, retain and motivate qualified senior executives who are devoted to improving the Corporation’s performance and creating value for its shareholders. The compensation programs are designed to adequately compensate the Corporation’s officers for services rendered, and encourage them to implement strategies to improve the Corporation’s performance, thereby increasing its long-term economic value. Accordingly, a significant portion of executives’ compensation is based on performance as same is directly related to the Corporation’s results.

The NEOs’ compensation is comprised of the following elements:

Base salary;

Annual incentive plan (“AIP”);

Long-term incentive plan (“LTIP”);

Pension plan; and

Benefits.

DECISION-MAKING PROCESS Each year, the President and Chief Executive Officer makes his recommendations to the Human Resources Committee regarding all compensation components for each of the executive officers other than himself and, in particular, regarding the targets to be met under the AIP and the LTIP. The Chair of the Board of Directors makes his recommendations to the Human Resources Committee regarding compensation and the targets to be met by the President and Chief Executive Officer under the AIP and the LTIP. The Human Resources Committee reviews and approves such targets under the AIP and the LTIP, as well as the compensation components of the NEOs. The Human Resources Committee evaluates the performance of the President and Chief Executive Officer and the Executive Vice-President, Chief Financial Officer and Treasurer, and recommends their compensation to the Board of Directors. The Board of Directors of the Corporation approves all grants of stock options (“Option(s)”) and performance share units (“PSU(s)”) under the LTIP upon recommendation of the Human Resources Committee. The Board of Directors also approves the compensation of the President and Chief Executive Officer and the Executive Vice-President, Chief Financial Officer and Treasurer.

EXTERNAL COMPENSATION CONSULTANT Since 2009, the Human Resources Committee has been retaining the services of PCI- Perrault Conseil Inc. (“PCI”), an external compensation consultant, to obtain information and independent advice regarding NEO compensation programs. PCI reviews the recommendations of the Corporation and its consultants with respect to executive compensation trends, companies which need to be part of the reference group, information relating to said companies and, generally, NEOs compensation. PCI is hired directly by the Human Resources Committee and does not receive other mandates from the Corporation unless said committee gives its prior consent. During the 2016 financial year, PCI did not receive any mandates from management. For the 2015 and 2016 financial years, the Corporation paid PCI the following fees:

INFORMATION SOURCES In addition to the information provided by the external compensation consultant, the Human Resources Committee also takes into account compensation data publicly disclosed by various specialized organizations and by Canadian public companies included in the reference group described below. The Corporation regularly commissions compensation surveys from other consulting firms which are then submitted to the Human Resources Committee which takes such surveys into consideration when making decisions relating to compensation.

RISKS ARISING FROM THE CORPORATION’S COMPENSATION POLICIES AND PRACTICES The Corporation’s Human Resources Committee reviews identification and management of risks arising from the Corporation’s compensation policies and practices and their disclosure.

The Corporation’s compensation policies and practices encourage and promote the alignment of senior management’s interests with those of the shareholders. Many components of the Corporation’s compensation policies and practices limit risk-taking by senior management in a number of ways, including the following:

The Human Resources Committee has retained the services of its external compensation consultant, PCI, to review the risks arising from the Corporation’s compensation policies and practices. After conducting an in-depth review of the risks associated with compensation, the Corporation concluded that there were no risks that could have a material adverse effect on the Corporation.

REFERENCE GROUP The reference group used by the Corporation to determine all aspects of NEO’s compensation and to review its policies in such regard is comprised of the following Canadian public companies:

The above mentioned companies were selected on the basis of the following criteria:

The following table shows how the Corporation compares to the median of the reference group with respect to various financial measures:

PERFORMANCE-BASED COMPENSATION The compensation policies for executives are intended to adequately compensate their services while establishing a correlation between their compensation and the Corporation’s financial performance. The NEOs’ total compensation percentage under the AIP is shown in the column entitled “AIP” of the following table. The NEOs’ total compensation percentage under the LTIP is shown in the column entitled “LTIP” of said table. The base salary of the NEOs is fixed whereas the portion of the compensation attributed under the AIP and the LTIP varies in accordance with the performance of the Corporation and the results obtained. A significant part of the NEOs’ compensation is therefore based on performance and includes a risk-based component, as further indicated in the following table. It should also be noted that the amount of at-risk compensation increases as the level of responsibility associated with a given position increases.

DESCRIPTION OF NEO COMPENSATION COMPONENTS

BASE SALARY Competitive salaries allow the Corporation to hire and retain competent individuals who will help improve the Corporation’s performance and create value for its shareholders.

The median of the reference group and compensation surveys conducted by the Corporation or by consulting firm are used to establish the base salary of each NEO, which base salary is then adjusted to take into account specific circumstances such as an individual’s level of responsibility and experience.

The base salary is reviewed annually according to the individual’s performance, the Corporation’s performance, market data for the reference group and the annual compensation surveys performed by external consulting firms.

ANNUAL INCENTIVE PLAN (AIP) The AIP is intended to compensate the achievement and overachievement of performance goals for a given financial year. The AIP consists of a percentage of the Corporation’s executives’ base salary payable annually as a cash bonus in consideration for his and the Corporation’s achievement or overachievement of certain annual goals. No bonus is payable if the goals are not achieved. The President and Chief Executive Officer may also, under specific circumstances justifying same, grant executive officers (excluding himself) part of their compensation under the AIP despite their failure to achieve certain performance goals. All such adjustments made by the President and Chief Executive Officer are subject to the Human Resources Committee’s prior approval, and in the case of the Executive Vice-President, Chief Financial Officer and Treasurer, the Board’s approval. The Board can also adjust in like manner the President and Chief Executive Officer’s compensation under the AIP. All such adjustments are limited to an aggregate amount equal to five percent (5%) of all executive officers’ base salaries.

The goals to be met under the AIP are threefold: (i) corporate goals based on the budgeted annual net earnings excluding the Corporation’s share of earnings in Alimentation Couche-Tard Inc.; (ii) divisional goals based on a target of the budgeted sales and contribution of the main divisions of the Corporation; and (iii) sector-based financial, strategic or business goals relating to the specific sector for which the NEO is responsible. Each goal provides for a bonus corresponding to a percentage of the annual base salary. The same rules apply to all management employees participating to the AIP.

The following table shows the maximum bonus in percentage of the base salary that each NEO can earn for the achievement of all goals in each category as well as the maximum total bonus.

Each year, new performance goals (corporate, divisional and sector-based) are established under the AIP at a high but attainable level. The goals are reviewed and approved on an annual basis by the Human Resources Committee. The Corporation believes that the AIP performance goals are established at a sufficiently high level to encourage NEOs to exceed expectations, which, in the opinion of the Corporation, has a positive impact on its performance.

More information on bonuses paid under the AIP is available in the “Annual Incentive Plan for the 2016 Financial Year” section on pages 31 to 33 of this Circular.

LONG-TERM INCENTIVE PLAN (LTIP) The LTIP is comprised of the Option Plan and the PSU Plan. The main goal of the LTIP is to motivate the Corporation’s executives to create long-term economic value for the Corporation and its shareholders by associating a significant portion of their compensation to such creation of value. The LTIP is a factor that contributes to the retention of senior executives.

The Option and PSU grant policy for executives provides for annual grants. Any holder of Options awarded under the Option Plan must wait for a period of two (2) years from the grant, after which time the Options are exercisable in cumulative increments of 20% each year. The Options granted to date have a total term of seven (7) years. The PSUs granted thus far vest three (3) years following their grant date, conditional upon the achievement of applicable performance levels.

Prior grants are not taken into account in the determination of the number of Shares covered by any Options and PSUs to be granted, except in the case of special grants as hereinafter described. The Board of Directors may, in its sole discretion, grant additional Options and PSUs to executives under specific circumstances, such as appointments, promotions or change of duties.

As part of its ongoing review of its compensation policies and practices, the Human Resources Committee has recommended to the Board of Directors an update of the salary classes of participants to the LTIP, including the NEOs, to reflect salary growth.

Option Plan The number of Shares underlying each Option grant is calculated according to a multiple of the salary class of the NEO, or the base salary in the case of the President and Chief Executive Officer, divided by the closing price of the Shares on the day preceding the Option grant. This method of calculation does not apply to the annual grant of 2014 to the President and Chief Executive Officer nor to the special initial grant of 2014 to the Executive Vice-President and Ontario Division Head, for whom the number of Shares underlying each Option was provided in their employment contract (see the “Employment Contracts” section on page 30 of this Circular).

The grant of Options to NEOs is determined as follows:

To determine the estimated fair value of all standard Option grants for compensation purposes, the Corporation uses an average historical factor of 20% of the amount obtained by multiplying the number of underlying Shares of the granted Options by the exercise price (which is equal to the closing price of the Shares on the day preceding the Option grant). This 20% factor represents an average established according to the results obtained using the Black-Scholes model over the previous years. As a result, the value obtained using the 20% factor represents a historical value for comparison purposes with the reference group and therefore does not correspond to the Black-Scholes value declared in note 21 of the 2016 Consolidated Financial Statements of the Corporation. The Corporation considers that this valuation method for Options reflects adequately the evolution in NEO compensation and makes it easier to compare with the reference group.

PSU Plan PSUs entitle their holder to receive Shares or, at the discretion of the Corporation, a cash equivalent, in whole or in part, on the vesting date. Each grant includes three (3) levels of PSUs, in accordance with the achievement of certain financial performance goals determined annually by the Human Resources Committee and approved by the Board of Directors.

There are currently five (5) annual performance goals used to determine the PSU level reached. They are based on the Corporation’s return on shareholders’ equity (“ROE”) in comparison to three (3) preset target levels, and on the Corporation’s earnings per share growth (“EPSG”) in comparison to a reference group comprised of its two (2) main competitors, namely: Loblaw Companies Limited and Empire Company Limited.

The ROE and the EPSG are determined in accordance with the IFRS. The PSU level reached is determined three (3) years after PSUs are granted on the basis of the above-mentioned five (5) annual performance criteria (i.e. based on a total of 15 performance criteria for their three-year term), and is calculated as follows at the end of the third year for PSUs granted starting in 2016: i) Level 1 = achievement of at least four (4) of the 15 performance criteria; ii) Level 2 = achievement of at least eight (8) of the 15 performance criteria; and iii) Level 3 = achievement of at least 12 of the 15 performance criteria.

With respect to PSUs granted in 2014 and 2015, the levels of performance required were as follows: i) Level 2 = achievement of at least eight (8) of the 15 performance criteria; and ii) Level 3 = achievement of at least 12 of the 15 performance criteria. If Level 2 is not reached, the holder will be entitled to the number of PSUs for Level 1.

The Human Resources Committee reviews the goals and criteria of the PSU Plan on an annual basis to ensure that the highest level of performance is established while also being achievable. In 2016, the Board of Directors of the Corporation, upon recommendation of the Human Resources Committee, increased the ROE target levels from their 2015 levels as the Corporation believed that the ROE would increase to a higher level than in 2015. The Corporation also believes that the PSU Plan performance goals, even if they are established at a higher level, are reachable and encourage executives to exceed expectations, which, in the opinion of the Corporation, has a positive impact on the Corporation’s performance.

In 2016, the PSU goals were measured according to the following five (5) criteria:

In previous years, the PSU goals were measured according to the same EPSG criteria whereas the ROE criteria were as follows:

The number of PSU granted is calculated by dividing a percentage of the NEO’s salary class by the closing price of the Share on the day preceding the PSU grant, except for Mr. La Flèche, for whom the number of PSU is calculated according to a percentage of his salary as determined in his employment contract, and for Mr. Fortino’s special initial grant in 2014 which was a fixed number of PSUs for each level as set out in his employment contract (for more details on Messrs. La Flèche’s and Fortino’s employment contracts, please refer to the “Employment Contracts” section on page 30 of this Circular).

To determine the fair value of all PSU standard grants for compensation purposes, the Corporation is using for the first time this year Level 2 of PSUs granted instead of Level 1 as in previous years. The Corporation has made this decision given that, starting this year, all PSU levels require the achievement of performance criteria and that Level 2 constitutes the target level to be reached. The Corporation considers that using the target level reflects more adequately the value of PSUs.

Other Information The other terms and conditions of the Option Plan and the PSU Plan are more fully described in the “Stock Option Plan” section on pages 40 and 41 of this Circular and in the “Performance Share Unit Plan” section on pages 41 and 42 of this Circular. More information on Option and PSU grants in 2016 is available in the “Long-Term Incentive Plan For The 2016 Financial Year” section on pages 33 and 34 of this Circular.

PENSION PLANS The Corporation’s pension plans are designed to offer executives a reasonable pension and compensate them for their years of service. Executives began contributing to the defined benefit base plan in the 2015 financial year.

The pension benefits of Mr. La Flèche, Mr. Thibault, Mr. Bourbonnière and Mr. Boulanger are provided under a base plan and a supplemental plan, both of a defined benefit type; the base plan is contributory whereas the supplemental plan is non-contributory. Both plans combined provide a pension equal to two percent (2%) of the final average salary multiplied by the number of years of credited service; the final average salary consists of the annual average base salary received by the participant during the 36 consecutive months that were the most highly compensated. The pension benefits are paid in addition to government pension benefits and the normal form of pension is a lifetime pension with a guarantee of 120 monthly payments. These NEOs may elect early retirement as of the age of 55, subject however to a reduction of 0.5% for each month between the date of retirement and age 60.

The pension benefits of Mr. Carmine Fortino are provided under a base plan as well as a supplemental plan, both of a defined benefit type. The base plan is contributory whereas the supplemental plan is non-contributory. Both plans combined provide pension benefits equal to 1.6% of the final average salary less 1.5% of the pension benefit from the Canada Pension Plan, multiplied by the number of years of service credited, the final average salary consisting of the average annual base salary received by the participant during the 60 consecutive months that were the most highly compensated. The pension benefits are paid in addition to government pension benefits and the normal form of pension is a lifetime pension with a guarantee of 120 monthly payments. However, in the case of the supplemental plan, the pension benefits are paid in five (5) annual payments of an equivalent value to the lifetime pension. This NEO may elect early retirement from the age of 55 and receive an adjusted reduced pension having an actuarial value equivalent to the normal pension.

BENEFITS AND PERQUISITES NEOs are also entitled to benefits comparable to those offered to executives of a similar level including health care and dental coverage, short and long-term disability and life insurance. The costs of these benefits are at the expense of the Corporation, except for long-term disability and optional plan costs, which are at the expense of each NEO. The Corporation provides the NEOs with a company car, at the Corporation’s costs.

EMPLOYMENT CONTRACTS The President and Chief Executive Officer, Mr. Eric R. La Flèche, and the Executive Vice-President and Ontario Division Head, Mr. Carmine Fortino, are the only NEOs who have a written employment contract with the Corporation. Mr. La Flèche’s contract, which came into effect on April 15, 2008, has an indefinite term, and sets out the terms and conditions of his compensation as President and Chief Executive Officer. Mr. Fortino’s contract, which came into effect on September 2, 2014, also has an indefinite term and sets out the terms and conditions of his compensation as Executive Vice-President and Ontario Division Head.

Mr. La Flèche’s base salary is adjusted annually by the Board of Directors upon the recommendation of the Corporation’s Human Resources Committee in the same manner, and according to the same criteria as those used for the other NEOs and the other executives of the Corporation. According to his employment contract, Mr. La Flèche is eligible to the AIP. The President and Chief Executive Officer also benefits from a greater participation in the Corporation’s Option Plan and PSU Plan. The performance criteria for the PSUs granted to Mr. La Flèche are the same as those described in the “Long-Term Incentive Plan” section on pages 27 to 29 of this Circular.

The employment contract of Mr. La Flèche was amended in 2013 to revise the number of Options and PSUs which Mr. La Flèche was entitled to in 2013 and subsequent years. The Corporation granted to Mr. La Flèche, for each of the 2013 and 2014 years, an Option to purchase 180,000 Shares. Since 2015, the Corporation is granting to Mr. La Flèche a number of underlying Shares calculated according to a multiple of his base salary divided by the closing price of the Shares on the day preceding the Option grant. This change has not been reflected in a written agreement.

In the above mentioned 2013 amendment, the Corporation also undertook for the years 2013 to 2017 inclusively to grant annually to Mr. La Flèche a number of PSUs having a value equal to: 60% of his base annual salary at Level 1; 90% of his base annual salary at Level 2; and 120% of his base annual salary at Level 3. All of the other terms and conditions of Mr. La Flèche’s employment contract remain the same.

The employment contract of Mr. Fortino provided for a special initial grant upon his hiring in 2014 of 37,500 Options and 45,000 PSUs at Level 1 as well as 60,000 PSUs at Level 2 and 3. Since 2015, Option and PSU grants to Mr. Fortino follow the standard grant policy of the Corporation.

The conditions of exercise of Mr. La Flèche and Mr. Fortino’s Options and PSUs are the same as those of Options and PSUs granted pursuant to the Plans. For other specific conditions applicable to Mr. La Flèche and Mr. Fortino, please refer to the “Termination of Employment or Change of Control Benefits” section on pages 42 and 43 of this Circular.

MINIMUM HOLDING OF SHARES AND PSUs BY NEOs NEOs and other executives are required to hold a certain number of Shares and PSUs. The President and Chief Executive Officer is required to hold Shares and PSUs of a value equal to at least three (3) times his annual base salary. The other NEOs are required to hold Shares and PSUs of a value equal to at least one and one-half (1 ¹⁄₂) times their annual base salary and the other executives are required to hold Shares and PSUs of a value at least equal to one (1) time their annual base salary. The minimum holding requirement must be met within five (5) years of the date upon which each may exercise an Option under the Option Plan for the first time or within three (3) years of the appointment of the NEO if said NEO previously held a management position within the Corporation. All PSU and Option holders must keep a portion of the Shares they receive on the vesting or exercise date, as the case may be, if they have not yet met this minimum holding requirement. The President and Chief Executive Officer is required to continuously hold Shares and PSUs in accordance with the minimum holding requirement herein above-mentioned for one (1) year following retirement or resignation. The other NEOs are required to comply with the minimum holding requirement for six (6) months following retirement or resignation.

The following table indicates, with respect to each NEO, the value of the Shares and PSUs held as well as a confirmation of compliance with the minimum holding requirement. In accordance with its policy, the Corporation considers the following two (2) elements in determining compliance with this requirement: i) Shares of the Corporation held by each NEO; and ii) half of the PSUs granted but not yet vested according to the level corresponding to the goals estimated to be achieved when such determination is made.

The dollar value of each NEO’s equity-based holdings, based on the closing price of the Shares on September 23, 2016 ($44.09), are set forth in the following table.

More information on Options and PSUs held by NEOs is available in the “Outstanding Share-Based Awards And Option-Based Awards” section on page 37 of this Circular.

COMPENSATION DECISIONS FOR THE 2016 FINANCIAL YEAR

HIGHLIGHTS OF THE 2016 FINANCIAL YEAR In a very competitive environment, the Corporation achieved excellent financial and operational results in 2016, with strong growth of total sales, same store sales, operating income and earnings per share.

Sales for the 2016 financial year reached $12,787.9 million versus $12,223.8 million for the 2015 financial year, representing an increase of 4.6%, while the sales of comparable stores increased by 3.7% during this period. This increase in sales is attributable to the Corporation’s merchandising strategies, its investments in the retail network and a solid execution by its teams.

Net earnings for the 2016 financial year reached $586.2 million, up 12.9%, whereas fully diluted net earnings per share for the 2016 financial year were $2.39, up 18.9%.

BASE SALARY FOR THE 2016 FINANCIAL YEAR The base salary of each NEO was determined according to the factors referred to in the “Base Salary” section on page 26 of this Circular. The Human Resources Committee is satisfied that the base salaries are adequate compared to the reference group.

ANNUAL INCENTIVE PLAN FOR THE 2016 FINANCIAL YEAR The goals to be met under the AIP for the 2016 financial year were as follows:

Corporate Goals The following table shows the percentage of the base salary representing the bonus that each NEO would earn according to the levels of corporate goal reached with respect to the annual net earnings as well as the results achieved for the 2016 financial year.

Divisional Goals The Table below indicates the percentage of base salary making up the bonus that each NEO would receive according to the achievement of certain thresholds of the divisional goals as well as the results achieved for the 2016 financial year. For confidentiality reasons more fully described at the end of this section, the Corporation will not disclose the amount of those targets.

Sector-based Goals The NEOs may receive a bonus of up to a maximum of 20% to 25% of their base salary for achieving all of their sector-based goals. There are no target levels for sectorial goals.

Adjustments The Human Resources Committee, upon recommendation of the President and Chief Executive Officer, and the Board of Directors, with respect to the President and Chief Executive Officer and the Executive Vice-President, Chief Financial Officer and Treasurer, granted NEOs minor compensation adjustments amounting to $127,371 under the AIP with respect to certain sector-based and divisional goals given that it has been determined that these goals had been substantially reached.

Bonus earned The following table shows the target bonus, maximum bonus and bonus earned by each NEO for the 2016 financial year.