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 November, 2024.
Commission
File Number 001-41976
Solarbank
Corporation
(Translation of registrant’s name into English)
505
Consumers Rd., Suite 803
Toronto, Ontario, M2J 4Z2 Canada
(Address of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
INCORPORATION
BY REFERENCE
Exhibit
99.5 to this report on Form 6-K furnished to the SEC is expressly incorporated by reference into the Registration Statement on Form F-10
of SOLARBANK CORPORATION (File No. 333-279027), as amended and supplemented.
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.
| Date November 5, 2024 |
SOLARBANK CORPORATION |
| |
|
|
| |
By: |
/s/ Sam Sun |
| |
|
Sam Sun |
| |
|
Chief Financial Officer & Corporate Secretary |
Exhibit
Index
Exhibit
99.1
SolarBank
Corporation
Security
Class: Common Shares
[name]
[address]
[city]
[prov] [postal code]
[country]
FORM
OF PROXY
Annual
General and Special Meeting to be held on Thursday, December 12, 2024
This
Form of Proxy is solicited by and on behalf of Management.
Notes
to proxy
Every
holder has the right to appoint some other person or company of their choice, who need not be a holder, to attend and act on their behalf
at the meeting or any adjournment or postponement thereof. 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.
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. If you are voting on behalf of a corporation or another individual you must sign this proxy
with signing capacity stated, and you may be required to provide documentation evidencing your power to sign this proxy.
This
proxy should be signed in the exact manner as the name(s) appear(s) on the proxy.
If
this proxy is not dated, it will be deemed to bear the date on which it is mailed by Management to the holder.
If
you appoint the Management Nominees to vote your securities, they will vote in accordance with your instructions or, if no instructions
are given, in accordance with the Management Voting Recommendations highlighted for each Resolution overleaf. If you appoint someone
else to vote your securities, they will also vote in accordance with your instructions or, if no instructions are given, as they in their
discretion choose.
This
proxy confers discretionary authority in respect of amendments or variations to matters identified in the Notice of Meeting or other
matters that may properly come before the meeting or any adjournment or postponement thereof.
This
proxy should be read in conjunction with the accompanying documentation provided by Management.
Proxies
submitted must be received by 10:00 a.m., Eastern Time, on Tuesday, December 10, 2024 or in the case of any adjournment or postponement
of the Meeting not less than 48 hours (Saturdays, Sundays and holidays excepted) before the time of the adjourned or postponed meeting.
| VOTING
METHODS |
| MAIL
or HAND DELIVERY |
Endeavor
Trust Corporation
702 – 777 Hornby Street
Vancouver, BC V6Z 1S4 |
| FACSIMILE
– 24 Hours a Day |
604-559-8908 |
| EMAIL |
proxy@endeavortrust.com |
| ONLINE |
As
listed on Form of Proxy or Voter Information Card |
If you vote by FAX, EMAIL or On-Line, DO NOT mail back this proxy.
Voting
by mail, fax or by email are the only methods by which a holder may appoint a person as proxyholder other than the Management nominees
named on the reverse of this proxy.
Login information for online voting
www.eproxy.ca
Control Number:
Password:
Appointment
of Proxyholder
| I/We,
being holder(s) of SolarBank Corporation hereby appoint: Dr. Richard Lu, Chief Executive Officer, or, failing this
person, Sam Sun, Chief Financial Officer (the “Management Nominees”). |
|
OR |
|
Print
the name of the person you are appointing if this person is someone other than the Management Nominee listed herein. |
|
 |
as
my/our proxyholder with full power of substitution and to attend, act and to vote for and on behalf of the shareholder in accordance
with the following direction (or if no directions have been given, as the proxyholder sees fit) and all other matters that may properly
come before the Annual General and Special Meeting of shareholders of SolarBank Corporation to be held at 803 - 505 Consumers Rd.
Toronto, ON M2J 4Z2 on Thursday, December 12, 2024 at 10:00 a.m., Eastern Time, and at any adjournment or postponement thereof.
VOTING
RECOMMENDATIONS ARE INDICATED BY HIGHLIGHTED TEXT OVER THE BOXES.
| 1.
Number of Directors |
For |
Against |
| The
number of Directors shall be set to 5 (five); |
☐ |
☐ |
| |
|
|
| 2.
Election of Directors |
For |
Withhold |
| i)
Dr. Richard Lu |
☐ |
☐ |
| ii)
Matthew Wayrynen |
☐ |
☐ |
| iii)
Paul Pasalic |
☐ |
☐ |
| iv)
Paul Sparkes |
☐ |
☐ |
| v)
Chelsea Nickles |
☐ |
☐ |
| |
|
|
| 3.
Appointment of Auditor |
For |
Withhold |
| To
appoint ZH CPA, LLC. as auditor of the Company for the ensuing year and to authorize the directors to fix their remuneration; |
☐ |
☐ |
| |
|
|
| 4.
Share Compensation Plan |
For |
Against |
| To
approve the Company’s Share Compensation Plan and all unallocated entitlements under the Share Compensation Plan; |
☐ |
☐ |
| |
|
|
| 5.
Number of Directors Resolution |
For |
Against |
| To
consider and, if thought advisable, to pass, with or without amendment, a special resolution, the full text of which is set forth
in the Information Circular, to authorize the board of directors of the Company to set the number of directors from time to time
within the minimum and maximum number of directors set forth in the articles of the Company, in accordance with Section 125(3) of
the Business Corporations Act (Ontario). |
☐ |
☐ |
Authorized
Signature(s) – This section must be completed for your instructions to be executed.
I/We
authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect
to the Meeting.
If
no voting instructions are indicated above, this Proxy will be voted as recommended by Management. |
|
Signature(s)
Print
Name(s) & Signing Capacity(ies), if applicable
__________________________________
Date
(MM-DD-YY)
THIS
PROXY MUST BE DATED |
Financial
Statements Request
In
accordance with securities regulations, shareholders may elect annually to receive financial statements, or a notice advising how to
access financial statements, if they so request. If you wish to receive such mailings, please mark your selection.
Interim
Financial Reports – Mark the box to the right if you would like to RECEIVE Interim Financial Statements and
accompanying Management’s Discussion & Analysis
by mail.
|
|
☐ |
|
Annual
Financial Report – Mark the box to the right if you would like to RECEIVE Annual Financial Statements and accompanying
Management’s Discussion and Analysis by mail. |
☐ |
To
request the receipt of future documents via email, you may contact Endeavor Trust Corporation at proxy@endeavortrust.com.
Exhibit
99.2
SOLARBANK
CORPORATION
| |
INTERIM FINANCIAL STATEMENTS |
|
|
ANNUAL FINANCIAL STATEMENTS |
| |
|
|
|
|
| ☐ |
Mark this box if you would like to receive |
|
☐ |
Mark this box if you would like to receive |
| |
Interim Financial Statements by mail. |
|
|
Annual Financial Statements by mail. |
Financial
Statements Request Form
Under
securities regulations, a reporting issuer must send annually a form to holders to request the Interim Financial Statements and MD&A
and/or the Annual Financial Statements and MD&A. If you would like to receive the report(s) by mail, please make your selection and
return to:
505
Consumers Rd., Suite 803,
Toronto,
Ontario, M2J 4Z2
Alternatively,
you may choose to access the report(s) online at www.sedarplus.ca.
SolarBank
Corporation will use information collected solely for the mailing of such financial statements.
If
you wish to receive the financial statements by email, please provide your email address below.
Email
Address
-
OR -
Please
place my name on your financial statement mailing list.
Name
| Apt. |
Street Number |
Street Name |
|
City
| Prov. / State |
|
Postal / Zip Code |
Exhibit
99.3
SOLARBANK
CORPORATION
NOTICE
AND ACCESS NOTIFICATION TO SHAREHOLDERS
ANNUAL
GENERAL AND SPECIAL MEETING OF SHAREHOLDERS
TO
BE HELD ON THURSDAY, DECEMBER 12, 2024
You
are receiving this notification because SolarBank Corporation (the “Corporation”) has opted to use the “notice
and access” model for the delivery of its management information circular (the “Information Circular”) to the
holders (the “Shareholders”) of common shares in the capital of the Corporation in respect of its annual general and
special meeting of Shareholders to be held on Thursday, December 12, 2024 (the “Meeting”).
Under
“notice and access” instead of receiving paper copies of the Information Circular, Shareholders are receiving this notice
with information on how to access the Information Circular electronically. Shareholders will also be receiving a proxy or voting instruction
form, as applicable, together with this notification to use to vote at the Meeting.
The
use of this alternative means of delivery is more environmentally friendly and more economical. It reduces the Corporation’s paper
use and it also reduces the Corporation’s printing and mailing costs.
MEETING
DATE AND LOCATION
| WHEN: |
Thursday,
December
12, 2024
10:00
A.M Eastern Time |
WHERE: |
803
- 505 Consumers Rd. Toronto, ON M2J 4Z2 |
SHAREHOLDERS
WILL BE ASKED TO CONSIDER AND VOTE ON THE FOLLOWING MATTERS AT THE MEETING:
| ● | FINANCIAL
STATEMENTS: to receive and consider the consolidated audited financial statements of
the Corporation for the year ended June 30, 2024 together with the auditor’s report
thereon. See the section entitled “Financial Statements” in the Information Circular. |
| | | |
| ● | APPOINTMENT
AND REMUNERATION OF AUDITORS: to appoint ZH CPA, LLC, as auditor of the Corporation for
the ensuing year and to authorize the directors to fix their remuneration. See the section
entitled “Appointment and Remuneration of Auditors” in the Information Circular. |
| | | |
| ● | FIX
THE NUMBER OF DIRECTORS: to set the number of directors of the Corporation at five (5).
See the section entitled “Number of Directors and Election of Directors” in the
Information Circular. |
| | | |
| ● | ELECTION
OF DIRECTORS: to elect five (5) directors of the Corporation for the ensuing year. See
the section entitled “Number of Directors and Election of Directors” in the Information
Circular. |
| | | |
| ● | APPROVAL
OF SHARE COMPENSATION PLAN: to pass an ordinary resolution providing the approval of
the Corporation’s Share Compensation Plan and all unallocated entitlements under the
Share Compensation Plan. See the section entitled “Particulars of Other Matters to
be Acted Upon – Approval and Ratification of Share Compensation Plan” in the
Information Circular. |
| | | |
| ● | APPROVAL
AUTHORIZING BOARD TO FIX NUMBER OF DIRECTORS: to pass a special resolution to authorize
the board of directors of the Company to set the number of directors from time to time within
the minimum and maximum number of directors set forth in the articles of the Company, in
accordance with Section 125(3) of the Business Corporations Act (Ontario). See the
section entitled “Particulars of Other Matters to be Acted Upon – Approval Authorizing
Board to Fix Number of Directors” in the Information Circular. |
| | | |
| ● | OTHER
BUSINESS: to transact such further or other business as may properly come before the
Meeting or any adjournment or postponement thereof. |
SHAREHOLDERS
ARE REMINDED TO REVIEW THE INFORMATION CIRCULAR PRIOR TO VOTING.
SOLARBANK
CORPORATION
WEBSITES
WHERE THE INFORMATION CIRCULAR IS POSTED:
The
Information Circular can be viewed online under the Corporations profile at www.sedarplus.ca or on the Corporation’s website
at https://www.eproxy.ca/SolarBank/2024AGM/
The
Financial Statement Request Card will be mailed to Shareholders together with the proxy or voting instruction form, as applicable, and
this notification to use to vote at the Meeting.
HOW
TO OBTAIN PAPER COPIES OF THE INFORMATION CIRCULAR
Shareholders
may request paper copies of the Information Circular and other meeting materials, including the audited consolidated financial statements
of the Corporation for the year ended June 30, 2024 and the report of the auditors thereon and related Management’s Discussion
and Analysis, by first class mail, courier or the equivalent at no cost to the shareholder. Requests must be made by email to proxy@endeavortrust.com
or by calling toll-free at 1-888-787-0888. Requests may be made up to one year from the date the Information Circular was filed on
SEDAR.
For
Shareholders who wish to receive paper copies of the Information Circular in advance of the voting deadline, requests must be received
no later than December 3, 2024. The Information Circular will be sent to such Shareholders within three business days of their
request if such requests are made before the Meeting. Following the Meeting, the Information Circular will be sent to such Shareholders
within ten days of their request.
Requests
must be made by email to proxy@endeavortrust.com or by calling toll-free at 1-888-787-0888.
VOTING
YOU
CANNOT VOTE BY RETURNING THIS NOTICE. To vote your securities, you must vote using the method set out in the enclosed voting
instruction form or proxy.
Registered
Holders are asked to return their proxies using the following methods by the proxy deposit date noted on the proxy, which is by 10:00
a.m. Eastern Time on Tuesday, December 10, 2024:
| |
ONLINE: |
Go
to www.eproxy.ca and follow the instructions. |
| |
EMAIL: |
Send
to proxy@endeavortrust.com |
| |
FACSIMILE: |
Fax
to Endeavor Trust Corporation. at 604-559-8908. |
| |
MAIL: |
Complete
the form of proxy or any other proper form of proxy, sign it and mail it to: |
Endeavor
Trust Corporation
Suite
702, 777 Hornby Street,
Vancouver,
BC V6Z 1S4
Beneficial
Holders are asked to return their voting instructions using the following methods at least one business day in advance of the proxy
deposit date noted on your voting instruction form:
| |
INTERNET: |
Go
to proxyvote.com and follow the instructions. |
| |
MAIL: |
Complete
the voting instruction form, sign it and mail it in the envelope provided. |
Shareholders
with questions about notice and access can call toll free at 1-888-787-0888.
Exhibit 99.4
Exhibit
99.5
505
Consumers Road, Suite 803
Toronto,
Ontario, Canada M2J 4V8
Tel:
416.494.9559
NOTICE
OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE
IS HEREBY GIVEN that the Annual General and Special Meeting (the “Meeting”) of the Shareholders of SolarBank Corporation
(the “Company”) will be held at the offices of the Company located at 505 Consumers Road, Suite 803, Toronto, Ontario,
Canada M2J 4V8, Canada, on Thursday, December 12, 2024, at 10:00 a.m. (Eastern Time) for the following purposes:
| 1. | To
receive and consider the audited consolidated financial statements of the Company for the
year ending June 30, 2024 and the report of the auditors thereon. |
| | |
| 2. | To
set the number of directors of the Company at five. |
| | |
| 3. | To
elect Dr. Richard Lu, Paul Pasalic, Paul Sparkes, Chelsea Nickles and Matthew Wayrynen as
directors of the Company on the basis set forth in the accompanying information circular
of the Company dated October 28, 2024 (the “Information Circular”). |
| | |
| 4. | To
appoint ZH CPA, LLC, Certified Public Accountants, as auditors of the Company for the ensuing
year and to authorize the directors to fix the auditor’s remuneration. |
| | |
| 5. | To
approve the Company’s Share Compensation Plan and all unallocated entitlements under
the Share Compensation Plan. |
| | |
| 6. | To
consider and, if thought advisable, to pass, with or without amendment, a special resolution,
the full text of which is set forth in the Information Circular, to authorize the board of
directors of the Company to set the number of directors from time to time within the minimum
and maximum number of directors set forth in the articles of the Company, in accordance with
Section 125(3) of the Business Corporations Act (Ontario). |
| | |
| 7. | To
transact such other business as may properly come before the Meeting or any adjournment or
adjournments thereof. |
NOTICE-AND-ACCESS
Notice
is also hereby given that the Company has decided to use the notice-and-access method of delivery of its proxy-related materials. The
notice-and-access method allows for the Company to deliver Meeting materials via the internet in accordance with the applicable rules
set forth in National Instrument 54-101 Communications with Beneficial Owners of Securities of a Reporting Issuer. Under the notice-and-access
system, beneficial shareholders who have requested to receive proxy-related materials and who do not have existing instructions on their
account to receive paper materials will receive a notification containing information on how to obtain electronic and paper copies of
the Information Circular or the annual audited financial statements of the Company for its fiscal year ended June 30, 2024 and related
management discussion and analysis in advance of the Meeting. All other beneficial shareholders who have requested to receive Meeting
materials or the annual audited financial statements of the Company for its fiscal year ended June 30, 2024and related management discussion
and analysis and registered shareholders who have not consented to electronic delivery will receive a paper copy of the Information Circular
or the annual audited financial statements of the Company for its fiscal year ended June 30, 2024 and related management discussion and
analysis. Registered shareholders who have consented to electronic delivery will receive the Information Circular or the annual audited
financial statements of the Company for its fiscal year ended June 30, 2024 and related management discussion and analysis electronically.
The
use of this alternative method of delivery is more environmentally friendly as it will help reduce paper use and will also reduce the
cost of printing and mailing the Information Circular or the annual audited financial statements of the Company for its fiscal year ended
June 30, 2024 and related management discussion and analysis to Shareholders.
Accessing
Meeting Materials Online
Shareholders
may access these proxy-related materials on the Company’s website at www.solarbankcorp.com, or under Company’s profile on
SEDAR+ at www.sedarplus.ca or at https://www.eproxy.ca/SolarBank/2024AGM/. Shareholders may also access the annual audited financial
statements of the Company for its fiscal year ended June 30, 2024 and related management discussion and analysis on SEDAR+ or at https://www.eproxy.ca/SolarBank/2024AGM/.
Requesting
Printed Meeting Materials
Shareholders
may request paper copies of the Information Circular or the annual audited financial statements of the Company for its fiscal year ended
June 30, 2024 and related management discussion and analysis be sent to them by postal delivery at no cost to them. In order to receive
a paper copy of the Information Circular or the annual audited financial statements of the Company for its fiscal year ended June 30,
2024 and related management discussion and analysis, please call toll free within North America 1-888-787-0888 or outside North America,
call 604-559-8880. Requests for paper copies of the Information Circular or the annual audited financial statements of the Company for
its fiscal year ended June 30, 2024 and related management discussion and analysis should be received by December 3, 2024. For a copy
of the Information Circular or the annual audited financial statements of the Company for its fiscal year ended June 30, 2024 and related
management discussion and analysis after the date of the Meeting, please contact info@solarbankcorp.com.
To
obtain additional information about the Notice-and-Access process, a shareholder may contact the Company’s transfer agent toll
free at 1-888-787-0888.
If
you hold your Shares in a brokerage account, you are a non-registered shareholder (“Beneficial Shareholder”). Beneficial
Shareholders who hold their Shares through a bank, broker or other financial intermediary should carefully follow the instructions found
on the form of Proxy or VIF provided to them by their intermediary, in order to cast their vote, or in order to notify the Company if
they plan to attend the Meeting.
The
directors of the Company have fixed the close of business on October 28, 2024 as the record date, being the date for the determination
of the registered holders entitled to notice and to vote at the meeting and any adjournment(s) thereof.
DATED
at Toronto, Ontario, as of October 28, 2024
BY
ORDER OF THE BOARD OF DIRECTORS
| “Dr.
Richard Lu” |
|
| Dr.
Richard Lu |
|
| Chief
Executive Officer |
|
505
Consumers Road, Suite 803
Toronto,
Ontario, Canada M2J 4V8
Tel:
416.494.9559
INFORMATION
CIRCULAR
As
at October 28, 2024 unless otherwise noted
FOR
THE ANNUAL GENERAL AND SPECIAL MEETING
OF
THE SHAREHOLDERS
TO
BE HELD ON DECEMBER 12, 2024
SOLICITATION
OF PROXIES
This
information circular is furnished in connection with the solicitation of proxies by the management of SolarBank Corporation (the “Company”
or “SolarBank”) for use at the Annual General and Special Meeting (the “Meeting”) of the Shareholders
of the Company to be held at the time and place and for the purposes set forth in the Notice of Meeting and at any adjournment thereof.
PERSONS
OR COMPANIES MAKING THE SOLICITATION
The
enclosed Instrument of Proxy is solicited by management of the Company (“Management”). Solicitations will be made by
mail and possibly supplemented by telephone or other personal contact to be made without special compensation by regular officers and
employees of the Company. The Company does not reimburse Shareholders’ nominees or agents (including brokers holding shares on
behalf of clients) for the cost incurred in obtaining from their principals, authorization to execute the Instrument of Proxy. No solicitation
will be made by specifically engaged employees or soliciting agents. The cost of solicitation will be borne by the Company. None of the
directors of the Company have advised that they intend to oppose any action intended to be taken by Management as set forth in this Information
Circular.
NOTICE-AND-ACCESS
PROCESS
In
accordance with the notice-and-access rules under National Instrument 54-101 Communications with Beneficial Owners of Securities of
a Reporting Issuer, the Company has sent its proxy-related materials to registered holders and non-objecting beneficial owners using
notice-and-access and made its annual financials available to Shareholders. Therefore, although Shareholders still receive a proxy or
voting instruction form (as applicable) in paper copy, this Information Circular is not physically delivered. Instead, Shareholders may
access this Information Circular on the Company’s website at www.solarbankcorp.com, or on the Company’s profile on
SEDAR+ at www.sedarplus.ca or at https://www.eproxy.ca/SolarBank/2024AGM/. Shareholders may also access the annual audited financial
statements of the Company for its fiscal year ended June 30, 2024 and related management discussion and analysis on the Company’s
profile on SEDAR+ or at https://www.eproxy.ca/SolarBank/2024AGM/.
Shareholders
may request paper copies of the Information Circular or the annual audited financial statements of the Company for its fiscal year ended
June 30, 2024 and related management discussion and analysis be sent to them by postal delivery at no cost to them. In order to receive
a paper copy of the Information Circular or the annual audited financial statements of the Company for its fiscal year ended June 30,
2024 and related management discussion and analysis, please call toll free within North America 1-888-787-0888 or outside North America,
call 604-559-8880. Requests for paper copies of the Information Circular or the annual audited financial statements of the Company for
its fiscal year ended June 30, 2024 and related management discussion and analysis should be received by December 3, 2024. For a copy
of the Information Circular or the annual audited financial statements of the Company for its fiscal year ended June 30, 2024 and related
management discussion and analysis after the date of the Meeting, please contact info@solarbankcorp.com.
To
obtain additional information about the Notice-and-Access process, a shareholder may contact the Company’s transfer agent toll
free at 1-888-787-0888.
APPOINTMENT
AND REVOCATION OF PROXIES
The
persons named in the accompanying Instrument of Proxy are directors or officers of the Company and are nominees of Management. A Shareholder
has the right to appoint a person to attend and act for him/her on his/her behalf at the Meeting other than the persons named in the
enclosed Instrument of Proxy. To exercise this right, a Shareholder should strike out the names of the persons named in the Instrument
of Proxy and insert the name of his/her nominee in the blank space provided, or complete another proper form of Instrument of Proxy.
The completed Instrument of Proxy should be deposited with the Company’s Registrar and Transfer Agent, Endeavor Trust Corporation
(the “Transfer Agent”), located at Suite 702 - 777 Hornby Street, Vancouver, BC, V6Z 1S4, or by email: proxy@endeavortrust.com,
in either case at least 48 hours before the time of the Meeting or any adjournment thereof, excluding Saturdays, Sundays and holidays.
The
Instrument of Proxy must be dated and be signed by the Shareholder or by his/her attorney in writing, or, if the Shareholder is a Company,
it must either be under its common seal or signed by a duly authorized officer.
In
addition to revocation in any other manner permitted by law, a Shareholder may revoke a Proxy either by (a) signing a Proxy bearing a
later date and depositing it at the place and within the time aforesaid, or (b) signing and dating a written notice of revocation (in
the same manner as the Instrument of Proxy is required to be executed as set out in the notes to the Instrument of Proxy) and either
depositing it at the place and within the time aforesaid or with the Chair of the Meeting on the day of the Meeting or on the day of
any adjournment thereof, or (c) registering with the Scrutineer at the Meeting as a Shareholder present in person, whereupon such Proxy
shall be deemed to have been revoked.
NON-REGISTERED
HOLDERS OF COMPANY’S SHARES
Only
Shareholders whose names appear in the Company’s Shareholder’s Register (the “Registered Shareholders”) or duly
appointed proxyholders are permitted to vote at the Meeting. Shareholders who do not hold their common shares (“Common Shares”)
in their own name (“Beneficial Shareholders”) are advised that only proxies from Shareholders of record can be recognized
and voted at the Meeting. Beneficial Shareholders who complete and return an Instrument of Proxy must indicate thereon the person
(usually a brokerage house) who holds their Common Shares as registered Shareholder. Every intermediary (broker) has its own mailing
procedure, and provides its own return instructions, which should be carefully followed. The form of proxy supplied to Beneficial Shareholders
is similar to that provided to Registered Shareholders. However, its purpose is limited to instructing the registered Shareholder how
to vote on behalf of the Beneficial Shareholder. Management of the Company does not intend to pay for intermediaries to forward to objecting
beneficial owners under National Instrument 54-101 the proxy-related materials and Form 54-101F7 – Request for Voting Instructions
Made by Intermediary, and in case of an objecting beneficial owner, the objecting beneficial owner will not receive the materials
unless the objecting beneficial owner’s intermediary assumes the cost of delivery.
If
Common Shares are listed in an account statement provided to a Shareholder by a broker, then in almost all cases those Common Shares
will not be registered in such Shareholder’s name on the records of the Company. Such Common Shares will more likely be registered
under the name of the Shareholder’s broker or agent of that broker. In Canada, the vast majority of such Common Shares are registered
under the name of CDS & Co. (the registration for the Canadian Depository for Securities, which company acts as nominee for many
Canadian brokerage firms). Common shares held by brokers or their nominees can only be voted (for or against resolutions) upon the instructions
of the Beneficial Shareholder. Without specific instructions, brokers/nominees are prohibited from voting shares for their clients. The
directors and officers of the Company do not know for whose benefit the Common Shares registered in the name of CDS & Co. are held.
In
accordance with National Instrument 54-101 of the Canadian Securities Administrators, the Company has distributed copies of the Notice
of Meeting, this Information Circular and the Instrument of Proxy to the clearing agencies and intermediaries for onward distribution.
Applicable regulatory policy requires intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of Shareholders’
meetings unless the Beneficial Shareholders have waived the right to receive meeting materials. Every intermediary/broker has its own
mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Shareholders in order to
ensure that their Common Shares are voted at the Meeting. Often the form of proxy supplied to a Beneficial Shareholder by its broker
is identical to the Instrument of Proxy provided by the Company to the Registered Shareholders. However, its purpose is limited to instructing
the Registered Shareholder how to vote on behalf of the Beneficial Shareholder. Should a Beneficial Shareholder receive such a form and
wish to vote at the Meeting, the Beneficial Shareholder should strike out the Management proxyholder’s name in the form and insert
the Beneficial Shareholder’s name in the blank provided. The majority of brokers now delegate the responsibility for obtaining
instructions from clients to Broadridge Financial Solutions, Inc. (“Broadridge”). Broadridge typically applies a special
sticker to the proxy forms, mails those forms to the Beneficial Shareholders and requests Beneficial Shareholders to return the proxy
forms to Broadridge. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting
the voting of Common Shares to be represented at the Meeting. A Beneficial Shareholder receiving a proxy with a Broadridge sticker
on it cannot use that proxy to vote Common Shares directly at the Meeting – the proxy must be returned to Broadridge well in advance
of the Meeting in order to have the Common Shares voted. All references to Shareholders in this Information Circular and the accompanying
Instrument of Proxy and Notice of Meeting are to Shareholders of record unless specifically stated otherwise.
VOTING
OF SHARES AND EXERCISE OF DISCRETION OF PROXIES
On
any poll, the persons named in the enclosed Instrument of Proxy will vote the shares in respect of which they are appointed and, where
directions are given by the Shareholder in respect of voting for or against any resolution, will do so in accordance with such direction.
If
no choice is specified on the proxy with respect to a matter to be acted upon, the proxy confers discretionary authority with respect
to the matter upon the proxyholder named on the Instrument of Proxy. In the absence of any direction in the Instrument of Proxy, it is
intended that the proxyholder named by Management in the Instrument of Proxy will vote the shares represented by the proxy in favour
of the motions proposed to be made at the Meeting as stated under the headings in this Information Circular. The Instrument of Proxy
enclosed, when properly signed, confers discretionary authority with respect to amendments or variations to any matters which may properly
be brought before the Meeting.
At
the time of printing of this Information Circular, the Management of the Company is not aware that any such amendments, variations or
other matters are to be presented for action at the Meeting. However, if any other matters which are not now known to the Management
should properly come before the Meeting, the Proxies hereby solicited will be exercised on such matters in accordance with the best judgement
of the nominee.
FINANCIAL
STATEMENTS
The
audited financial statements of the Company for the year ended June 30, 2024 will be presented to the Shareholders at the Meeting.
VOTING
SHARES AND PRINCIPAL HOLDERS THEREOF
At
October 28, 2024 the Company had 30,907,291 Common Shares without par value issued and outstanding. All Common Shares in the capital
of the Company are of the same class and each carries the right to one vote. The quorum for a meeting of Shareholders is shareholders
present in person or represented by proxy holding at least five percent (5%) of the Common Shares entitled to vote at a meeting of shareholders
(unless a greater number of shareholders and/or a greater number of shares are required to be represented by the Business Corporations
Act (Ontario) (the “OBCA”) or the articles or any other by-law).
October
28, 2024 has been determined as the record date as of which Shareholders are entitled to receive notice of and attend and vote at the
Meeting. Shareholders desiring to be represented by proxy at the Meeting must deposit their proxies at the place and within the time
set forth in the notes to the Instrument of Proxy in order to entitle the person duly appointed by the proxy to attend and vote thereat.
To
the knowledge of the directors and senior officers of the Company, as at October 28, 2024, no Shareholder beneficially owns or controls,
directly or indirectly, voting securities carrying more than 10% of the voting rights attached to the Common Shares of the Company.
NUMBER
OF DIRECTORS AND ELECTION OF DIRECTORS
Election
of Directors
The
persons named in the enclosed Instrument of Proxy intend to vote in favour of the special resolution fixing the number of directors on
the board of directors of the Company (the “Board of Directors”) at five (5). Each director of the Company is elected
annually and holds office until the next Annual General Meeting unless that person ceases to be a director before then. Management of
the Company proposes to nominate the persons herein listed for election as directors of the Company to serve until their successors are
elected or appointed. In the absence of instructions to the contrary, the Common Shares represented by proxy will, on a poll, be voted
for the nominees herein listed. MANAGEMENT OF THE COMPANY DOES NOT CONTEMPLATE THAT ANY OF THE NOMINEES WILL BE UNABLE TO SERVE AS A
DIRECTOR. IN THE EVENT THAT PRIOR TO THE MEETING ANY VACANCIES OCCUR IN THE SLATE OF NOMINEES HEREIN LISTED, IT IS INTENDED THAT DISCRETIONARY
AUTHORITY SHALL BE EXERCISED BY MANAGEMENT TO VOTE THE PROXY ON ANY POLL FOR THE ELECTION OF ANY PERSON OR PERSONS AS DIRECTOR UNLESS
THE SHAREHOLDER HAS SPECIFIED OTHERWISE IN THE PROXY. UNLESS AUTHORITY TO DO SO IS WITHHELD, THE PERSONS NAMED IN THE ACCOMPANYING
INSTRUMENT OF PROXY INTEND TO VOTE FOR THE ELECTION OF ALL OF THE NOMINEES.
The
Board of Directors of the Company has adopted a policy (“Majority Voting Policy”) stipulating that if the Common Shares
voted in favour of the election of a director nominee at a meeting of the Company’s shareholders represent less than a majority
of the total Common Shares voted for and voted as withheld at the meeting, the director nominee will submit his resignation promptly
after such meeting to the Compensation, Corporate Governance and Nominating Committee’s consideration. After reviewing the matter,
the Compensation, Corporate Governance and Nominating Committee will make a recommendation to the Board, and the Board’s subsequent
decision to accept or reject the resignation offer will be publicly disclosed.
With
the exception of exceptional circumstances that would warrant the continued service of the subject director on the Board of Directors,
the Compensation, Corporate Governance and Nominating Committee shall be expected to accept and recommend acceptance of the resignation
by the Board of Directors. Within 90 days following the applicable meeting of the Company’s shareholders, the Board of Directors
shall make its decision, on the Compensation, Corporate Governance and Nominating Committee’s recommendation and in making its
decision the Board of Directors shall be required to accept the resignation of the Subject Director, absent exceptional circumstances.
The director nominee will not participate in any Compensation, Corporate Governance and Nominating Committee or Board deliberations regarding
the resignation offer. The Majority Voting Policy does not apply in circumstances involving contested director elections.
The
following table sets out the names of the persons to be nominated for election as directors, the positions and offices which they presently
hold with the Company, their respective principal occupations or employment during the past five years if such nominee is not presently
an elected director and the number of Common Shares of the Company which each beneficially owns, directly or indirectly, or over which
control or direction is exercised as of the date of this Information Circular:
Name,
Province or State and Country
of Ordinary Residence of Nominee(5) and Present Positions with
the Company | |
Principal
Occupation and, if not a Presently Elected Director, Occupation during the last Five Years(5) | |
Period
from which Nominee has been a Director | |
Number
of Common Shares Held(1)(2) |
Dr.
Richard Lu
Ontario, Canada
Director, President & Chief Executive Officer | |
President
and Chief Executive Officer of the Company since 2014 | |
August
1, 2014 | |
803,146(6) |
Paul
Pasalic(3)(4) London,
UK Director | |
Managing
Director, Head of Legal (Europe) – Private Equity Transactions, with Hudson Advisors since 2019; Associate lawyer with Shearman
& Sterling LLP from 2012 to 2019. | |
November
3, 2022 | |
53,000 |
Paul
Sparkes(3)(4) Ontario,
Canada Director | |
Corporate
director and President of Otterbury Holdings Inc., a corporation advising growth entities in private and public markets. | |
November
3, 2022 | |
Nil |
Chelsea
Nickles(3)(4) London,
UK Director | |
Head
of Market Development (UK & Ireland) of Orsted Power UK since January 2023; Head of Strategic Joint Ventures of Orsted Power
UK from November 2019 to January 2023; Senior Legal Counsel of Orsted Power UK from February 2017 to November 2019. | |
February
26, 2024 | |
Nil |
Matthew
Wayrynen(3) British
Columbia, Canada Director | |
Executive
Chair of the Company since July, 2024; Chief Executive Officer of the Solar Flow-Through Funds from 2012 to July 2024. | |
July
8, 2024 | |
133,082 |
| (1) | Common
shares beneficially owned, directly and indirectly, or over which control or direction is
exercised, at the date hereof, based upon the information furnished to the Company by individual
directors and officers. Unless otherwise indicated, such Common Shares are held directly.
These figures do not include Common Shares that may be acquired on the exercise of any share
purchase warrants or stock options held by the respective directors or officers. |
| (2) | The
directors, and nominees, as a group beneficially own, directly or indirectly, 989,228 Common
Shares of the Company representing 3.20% of the total issued and outstanding Common Shares
of the Company. |
| (3) |
Current
Member of the Audit Committee of the Company. |
| (4) |
Current
Member of the Compensation, Corporate Governance and Nominating Committee of the Company. |
| (5) | The
information as to country of residence and principal occupation, not being within the knowledge
of the Company, has been furnished by the respective directors individually. |
| (6) | 773,200
Common Shares are held by 2384449 Ontario Inc., a corporation controlled by Dr. Richard Lu. |
Pursuant
to the applicable securities legislation, the Company is required to have an audit committee. The general function of the audit committee
is to review the overall audit plan and the Company’s system of internal controls, to review the results of the external audit,
and to resolve any potential dispute with the Company’s auditors.
The
audit committee of the Company currently consists of Paul Pasalic, Paul Sparkes and Chelsea Nickles. The members of the audit committee
of the Company will be determined following the Meeting at the discretion of the Board of Directors and in accordance with applicable
corporate and securities law. Aside from the audit committee, there is only one other standing committee of the Board of Directors which
is the Compensation, Corporate Governance and Nominating Committee.
PENALTIES
AND SANCTIONS
Except
as disclosed below, no proposed director of the Company is, or within the 10 years prior to the date of this Information Circular, has
been, a director, chief executive officer or chief financial officer of any company that while that person was acting in that capacity:
| (a) | was
subject to a cease trade or similar order or an order that denied the relevant company access
to any exemption under securities legislation, for a period of more than 30 consecutive days;
or |
| (b) | was
the subject of a cease trade order or an order that denied the relevant company access to
any exemption under securities legislation for a period of more than 30 days, that was issued
after the proposed director ceased to be a director, chief executive officer or chief financial
officer, that resulted from an event that occurred while that person was acting in such capacity. |
No
proposed director of the Company is, or within the 10 years prior to the date of this Information Circular, has been, a director or executive
officer of any company that while that person was acting in that capacity or within a year of that person ceasing to act in that capacity,
became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings,
arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.
No
proposed director has individually, within the 10 years prior to this Information Circular, become bankrupt, made a proposal under any
legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with
creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, officer or Shareholder.
No
proposed director of the Company has been subject to: (a) any penalties or sanctions imposed by a court relating to securities legislation
or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (b) any
other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder
in deciding whether to vote for a proposed director.
On
February 5, 2016, the British Columbia Securities Commission issued a cease trade order against Ziplocal Inc. for failure to file its
annual audited financial statements and MD&A. The required documents were filed and the order was subsequently revoked on March 11,
2016. Mr. Paul Sparkes was a director of Ziplocal Inc. during this period.
Berkley
Renewables Inc. (“Berkley”) is subject to a failure-to-file cease trade order (“FFCTO”) issued by the British
Columbia Securities Commission on May 6, 2019. The FFCTO was issued due to Berkley’s failure to file its (i) annual audited financial
statements for the year ended December 31, 2018; (ii) annual management’s discussion and analysis for the year ended December 31,
2018; and (iii) certification of the annual filings for the year ended December 31, 2018 (collectively, the “2018 Annual Filings”).
Berkley was unable to file the 2018 Annual Filings as it did not have sufficient funds to pay its auditor and consequently, the auditor
could not complete the statements. The audit process is still underway and the FFCTO remains in effect. Mr. Wayrynen is director and
the Chief Executive Officer of Berkley.
APPOINTMENT
AND REMUNERATION OF AUDITOR
Effective
April 25, 2024, MSLL CPA LLP, Chartered Accountants (the “Former Auditor”) resigned as auditors of the Company, and
ZH CPA, LLC, Certified Public Accountants, of Denver, Colorado (the “Successor Auditor”), agreed to fill the vacancy.
The Successor Auditors of the Company were appointed on April 25, 2024, and are the current Auditors of the Company. There were no reportable
events in relation to the change of auditors.
Pursuant
to Section 4.11 of the National Instrument 51-102 Continuous Disclosure Obligations, a reporting package consisting of the following
is attached as Schedule “C” to this Information Circular.
| (i) | Notice
of Change of Auditors; |
| (ii) | Letter
from the Former Auditor; and |
| (iii) | Letter
from the Successor Auditor. |
The
persons named in the enclosed Instrument of Proxy will vote for the appointment of ZH CPA, LLC, Certified Public Accountants, of Denver,
Colorado, as Auditors of the Company, to hold office until the next Annual General Meeting of the Shareholders at remuneration to be
fixed by the directors.
PARTICULARS
OF OTHER MATTERS TO BE ACTED UPON
Approval
and Ratification of Share Compensation Plan
At
the Meeting, Shareholders will be asked to consider, and if thought advisable, approve the Company’s Share Compensation Plan (the
“Plan”). The Company has no other incentive plans other than its Share Compensation Plan. The Plan is a 20% “rolling”
plan pursuant to which the total number of Common Shares reserved and available for grant and issuance pursuant to the exercise
of Company options (“Options”) and settlement of Company restricted share units (“RSUs”),
each under the Plan, shall not exceed 20% (in the aggregate) of the issued and outstanding Common Shares from time to time.
A detailed description of the Plan is set out in “Schedule “B” Form 51-102F6 – Statement of Executive Compensation
– Incentive Plan Awards.”
The
Plan is an evergreen plan which provides that if any option has been exercised or RSU has been vested and redeemed, then the number of
Common Shares into which such option or RSU was exercised shall become available to be issued upon the exercise of options subsequently
granted under the Plan.
As
at the date of this Information Circular, the Company has 2,639,000 options outstanding representing approximately 8.51% of the current
number of issued and outstanding Common Shares and 265,000 RSUs representing approximately 0.86% of the current number of issued and
outstanding Common Shares. Assuming the approval of the Plan, 3,176,319 Common Shares will be available to be granted under the Plan,
representing approximately 10.25% of the current number of issued and outstanding Common Shares.
The
rules of the Cboe Canada Exchange Inc. (“Cboe”) require that, if a listed issuer has a security based compensation
arrangement that does not have a fixed maximum aggregate number of securities issuable under such plan (an evergreen plan), the shareholders
of the listed issuer must approve and re-affirm the unallocated options under the plan every three years. Shareholders will be asked
to consider and, if thought advisable, pass an ordinary resolution approving the Plan and all unallocated options and RSUs under such
plan (the “Plan Resolution”). The Plan Resolution requires the approval of a simple majority of the votes cast by
Shareholders voting in person or by proxy at the Meeting.
If
the Plan Resolution is passed, this approval will be effective until December 12, 2027. If approval is not obtained at the Meeting, options
and RSUs which have not been allocated as of December 12, 2024 will not be available for grant. Previously allocated options and RSUs
will be unaffected, but will not be available to be reallocated.
At
the Meeting Shareholders will be asked to consider and approve the following Plan Resolution, with or without modification:
“RESOLVED,
as an Ordinary Resolution, that:
| 1. | The
Plan and all unallocated options and restricted share units issuable pursuant to the Plan
be and are hereby approved and authorized until December 12, 2027, being the date that is
three years from Shareholder approval of the Plan; |
| 2. | The
Company be and is hereby authorized to grant stock options and restricted share units pursuant
to and subject to the terms and conditions of the Plan entitling the option holders to purchase
Common Shares of the Company; |
| 3. | The
Company be and is hereby authorized to abandon or terminate all or any part of the adoption
of the Plan, if the Board of Directors of the Company deems it appropriate and in the best
interest of the Company to do so; and |
| 4. | Any
one director or officer of the Company be and is hereby authorized and directed to do all
such acts and things and to execute and deliver, under the corporate seal of the Company
or otherwise, all such deeds, documents, instruments and assurances as in his or her opinion
may be necessary or desirable to give effect to the foregoing resolutions.” |
The
foregoing resolution must be approved by a simple majority of Shareholders, excluding Shareholders that would receive, or would be eligible
to receive, a material benefit resulting from the Plan.
The
full text of the Plan will be available for review at the Meeting and may be obtained at the offices of the Company located at 505 Consumers
Road, Suite 803, Toronto, Ontario, Canada M2J 4V8, or by contacting the Company by telephone at 416.494.9559, at any time before the
Meeting.
Management
recommends that Shareholders vote in favour of the resolution to approve the Plan. In the absence of contrary instruction, the persons
named in the enclosed Instrument of Proxy intend to vote for the approval of the Plan Resolution at the Meeting.
Approval
Authorizing Board to Fix Number of Directors
Management
of the Company is of the opinion that from a corporate governance perspective, and with a desire to maximize the effectiveness and efficiency
of the Board of Directors, the directors of the Company should have the discretion to set the size of the Board of Directors within the
minimum and maximum number provided for in the Company’s articles, subject to the limits described in the OBCA. From time to time,
the Board of Directors may identify an individual who could make a valuable contribution to the Company as a director. It will be beneficial
for the Company if the Board of Directors possesses the ability to appoint such an individual as a director between meetings of Company
Shareholders without a vacant position needing to first arise. This will provide the Board of Directors with the appropriate expediency
with which to enhance its composition if the opportunity arises.
Section
125(3) of the OBCA allows the directors of a corporation to, if authorized by special resolution, determine the number of directors on
the board of directors if the articles provide for a minimum and maximum number. Once the special resolution in Section 125(3) of the
OBCA is adopted by shareholders, pursuant to Section 124(2) of the OBCA, a board of directors of a corporation will have the ability
to appoint one or more additional directors between annual meetings of shareholders, who will hold office for a term expiring not later
than the close of the next annual meeting of shareholders. Section 124(2) of the OBCA further stipulates that the total number of directors
that may be appointed between annual meetings of shareholders may not exceed one-third of the number of directors elected at the previous
annual meeting of shareholders.
At
the Meeting Shareholders will be asked to consider and, if thought advisable, to pass, with or without variation, a special resolution
to empower the directors to fix the number of directors to be elected within the minimum and maximum number of directors provided for
in the articles of the Company following the Meeting (the “Number of Directors Resolution”) as set forth below:
“RESOLVED
THAT:
| 1. | In
accordance with section 125(3) of the Business Corporations Act (Ontario), the directors
of the Company shall be empowered and authorized to determine the number of directors of
the Company to be elected at annual meetings of shareholders of the Company within the minimum
and maximum numbers provided for in the Articles of the Company, provided that the number
of directors so set between meetings of shareholders of the Company may not exceed one and
one-third of the number of directors elected at the previous annual meeting of shareholders
of the Company. |
| 2. | Any
one director or officer of the Company be and is hereby authorized and directed to do all
such acts and things and to execute and deliver, under the corporate seal of the Company
or otherwise, all such deeds, documents, instruments and assurances as in his or her opinion
may be necessary or desirable to give effect to the foregoing resolutions.” |
In
order to become effective, the Number of Directors Resolution must be approved by at least two-thirds (662/3%) of the votes cast at the
Meeting by Shareholders present or represented by proxy at the Meeting and entitled to vote thereat on the Number of Directors Resolution.
Management
recommends that Shareholders vote in favour of the resolution to approve the Number of Directors Resolution. In the absence of contrary
instruction, the persons named in the enclosed Instrument of Proxy intend to vote for the approval of the Number of Directors Resolution
at the Meeting.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Other
than as disclosed elsewhere in this Information Circular, none of the directors or executive officers of the Company, no proposed nominee
for election as a director of the Company, none of the persons who have been directors or executive officers of the Company since the
commencement of the Company’s last completed financial year and no associate or affiliate of any of the foregoing persons 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.
INTEREST
OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Other
than as disclosed below and transactions carried out in the ordinary course of business of the Company or its subsidiary, none of the
directors or executive officers of the Company, any shareholder directly or indirectly beneficially owning, or exercising control or
direction over, more than 10% of the outstanding Common Shares, nor an associate or affiliate of any of the foregoing persons has had,
during the most recently completed financial year of the Company or during the current financial year, any material interest, direct
or indirect, in any transactions that materially affected or would materially affect the Company or its subsidiary.
The
Company has entered into share purchase agreements (the “SPAs”) dated October 23, 2023 to acquire control of two corporations
that hold solar projects located in Ontario with a combined capacity of 2.5 MW (the “Projects”) for consideration
of 278,875 common shares (the “Consideration Shares”) of the Company at a deemed price of $7.70 per share for total
consideration of $2,147,337.50 (the “OFIT Transaction”). The corporations OFIT GM Inc. and OFIT RT Inc. (the “Purchased
Entities”) have been operating the Projects since 2017. The acquisition of the Purchased Entities closed on November 1, 2023.
The shares of the Purchased Entities were acquired from N. Fine Investments Limited and Linden Power Inc. (the “Vendors”)
Pursuant to the terms of the SPAs, the Company acquired 49.9% ownership of OFIT RT Inc. where Whitesand First Nation owns the remaining
shares of OFIT RT Inc. The Company also acquired 49.9% ownership of OFIT GM Inc. where the Town of Kapuskasing owns the remaining shares
of OFIT GM Inc. Dr. Richard Lu, the President & Chief Executive Officer and a director of the Company (Address: 505 Consumers Road,
Suite 803, Toronto, Ontario, Canada M2J 4V8), is a shareholder of the Vendors and as result indirectly received one-third of the Consideration
Shares.
STATEMENT
OF EXECUTIVE COMPENSATION
A
copy of the Statement of Executive Compensation is attached as Schedule “B” to this Information Circular.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table sets out particulars of the compensation plans and individual compensation arrangements under which equity securities
of the Company are authorized for issuance as of June 30, 2024.
| Plan
Category | |
Number
of securities to be issued upon exercise of outstanding options, warrants and rights(1) | |
Weighted-average
exercise price of outstanding options, warrants and rights | |
Number
of securities remaining available for future issuance under equity compensation plans |
| Equity
compensation plans approved by securityholders(1) | |
3,024,000 | |
$0.75 | |
2,414,215 |
| Equity
compensation plans not approved by securityholders | |
Nil | |
Nil | |
Nil |
| Total | |
3,024,000 | |
$0.75 | |
2,414,215 |
| (1) | As
of June 30, 2024 the Company had a “rolling” share compensation plan that reserves
20% of the Company’s outstanding Common Shares from time to time for issuance as stock
options or restricted share units. |
INDEBTEDNESS
OF DIRECTORS AND EXECUTIVE OFFICERS
Other
than routine indebtedness, no current or former director, executive officer or senior officer of the Company, employee or any proposed
nominee for election as a director of the Company, or any associate or affiliate of any such director, executive officer or senior officer,
employee or proposed nominee, is or has been indebted to the Company or any of its subsidiaries, or to any other entity that was provided
a guarantee or similar arrangement by the Company or any of its subsidiaries in connection with the indebtedness, at any time since the
beginning of the most recently completed financial year of the Company.
MANAGEMENT
CONTRACTS
The
management functions of the Company are not to any substantial degree performed by any person other than the executive officers and Directors
of the Company. The Company has not entered into any contracts, agreements or arrangements with parties other than its Directors and
executive officers for the provision of such management functions.
AUDIT
COMMITTEE
For
information regarding the Audit Committee, see the Company’s annual information form (the “AIF”) for the year
ended June 30, 2024 under the heading, “Audit Committee”. The AIF is available under the Company’s profile at
www.sedarplus.ca.
STATEMENT
OF CORPORATE GOVERNANCE PRACTICES
The
Canadian Securities Administrators have introduced in final form National Instrument 58-101 – Disclosure of Corporate Governance
Practices (“NI 58-101”) and National Policy 58-201 – Corporate Governance Guidelines (“NP 58-201”).
The Company has reviewed its own corporate governance practices in light of the NP 58-201 guidelines. In certain cases, the Company’s
practices comply with NP 58-201, however, the Board of Directors considers that some of the guidelines are not suitable for the Company
at its current stage of development and therefore certain guidelines have not been adopted.
Set
out in Schedule “A” to this Information Circular is a description of certain corporate governance practices of the Company,
as required by NI 58-101.
OTHER
MATTERS
It
is not known if any other matters will come before the Meeting other than set forth above and in the Notice of Meeting, but if such should
occur, the persons named in the accompanying Proxy intend to vote on any poll, on such matters in accordance with their best judgment,
exercising discretionary authority with respect to amendments or variations of matters identified in the Notice of Meeting and other
matters which may properly come before the Meeting or any adjournment thereof.
ADDITIONAL
INFORMATION
Additional
information regarding the Company is available on SEDAR+ at www.sedarplus.ca. Shareholders can obtain copies of the Company’s
financial statements and management discussion and analysis of financial results by sending a request in writing to the Company at 505
Consumers Road, Suite 803, Toronto, Ontario, Canada M2J 4V8. Financial information regarding the Company is provided in the Company’s
audited comparative financial statements for the years ended June 30, 2024 and 2023 and in the accompanying management discussion and
analysis, both of which are available on SEDAR+ at www.sedarplus.ca.
DATED
at Toronto, Ontario, as of October 28, 2024.
| “Dr.
Richard Lu” |
|
| Dr.
Richard Lu |
|
| Chief
Executive Officer |
|
SCHEDULE
“A”
to
the Information Circular as at October 28, 2024 of
SolarBank
Corporation
STATEMENT
OF CORPORATE GOVERNANCE PRACTICES
NEW
DISCLOSURE RULES AND POLICIES (FORM 58-101F1)
| (a) | Disclose
the identity of directors who are independent. |
NP
58-201 recommends that boards of directors of reporting issuers be composed of a majority of independent directors. NI 52-110 sets out
the standard for director independence under applicable Canadian securities laws. Under NI 52-110, a director is independent if he or
she has no direct or indirect material relationship with the Company. A material relationship is a relationship which could, in the view
of the Board of Directors, be reasonably expected to interfere with the exercise of a director’s independent judgment.
The
current Board of Directors consists of five directors, with three of the five directors considered independent: Paul Pasalic, Paul Sparkes
and Chelsea Nickles are independent directors under applicable Canadian securities laws. The slate of directors proposed for the Meeting
has five directors, with three of the five directors considered independent
| (b) | Disclose
the identity of directors who are not independent, and describe the basis for that determination. |
Dr.
Richard Lu is the President & CEO of the Company and therefore is not considered independent. Matthew Wayrynen is the Executive Chair
of the Company and therefore is not considered independent.
| (c) | Disclose
whether or not a majority of directors are independent. If a majority of directors are not
independent, describe what the board of directors (the board) does to facilitate its exercise
of independent judgement in carrying out its responsibilities. |
Three
of five current directors are independent. As a result, the majority of directors are independent. The slate of directors proposed for
the Meeting has five directors, with three of the five directors considered independent. If the slate of directors proposed for the Meeting
is elected, the majority of directors will be independent.
| (d) | If
a director is presently a director of any other issuer that is a reporting issuer (or the
equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the
other issuer. |
Currently,
the following existing directors or proposed directors serve on the following boards of directors of other public companies:
| Director |
|
Reporting
Issuer Board Membership |
| Dr.
Richard Lu |
|
None |
| Paul
Pasalic |
|
Evoca
SpA |
| Paul
Sparkes |
|
The
Good Flour Corp.
Antler
Gold Inc.
Denarius
Silver Corp.
Vortex
Energy Corp. |
| Chelsea
Nickles |
|
None |
| Matthew
Wayrynen |
|
Berkley
Renewables Inc.
WestKam
Gold Corp.
First
Tellurium Corp. |
| (e) | Disclose
whether or not the independent directors hold regularly scheduled meetings at which non-independent
directors and members of management are not in attendance. If the independent directors hold
such meetings, disclose the number of meetings held since the beginning of the issuer’s
most recently completed financial year. If the independent directors do not hold such meetings,
describe what the board does to facilitate open and candid discussion among its independent
directors. |
The
independent directors do not hold regularly scheduled meetings at which non-independent directors are not in attendance. However, during
the course of a directors’ meeting, if a matter is more effectively dealt with without the presence of directors who are also members
of Management, the non-management directors ask members of Management to leave the meeting, and the independent directors are able to
discuss matters in camera. In addition, during meetings of the Audit Committee and Compensation, Corporate Governance and Nominating
Committee, executives, officers and other guests attending these meetings may be asked to withdraw from these meetings for a certain
period at the end of each meeting to allow the three independent directors on the Audit Committee and Compensation, Corporate Governance
and Nominating Committee to discuss issues freely among themselves in camera.
| (f) | Disclose
whether or not the chair of the board is an independent director. If the board has a chair
or lead director who is an independent director, disclose the identity of the independent
chair or lead director, and describe his or her role and responsibilities. If the board has
neither a chair that is independent nor a lead director that is independent, describe what
the board does to provide leadership for its independent directors. |
The
Chair of the Board of Directors is not an independent director and the Company does not have a lead director. The Board is of the view
that appropriate structures and procedures are in place to allow the Board to function independently of management while continuing to
provide the Company with the benefit of having a Chair of the Board with extensive experience and knowledge of the Company’s business.
The Compensation, Nominating and Corporate Governance Committee, which is constituted of a majority of independent directors, is responsible
for identifying whether the Board is effective.
To
facilitate the Board operating independently of management, the following processes are in place:
| ● | the
Board holds in-camera meetings with the non-management directors; |
| ● | at
Board meetings, members of management, including the Chair, President & Chief Executive
Officer and Chief Financial Officer, are not present for the discussion and determination
of certain matters; |
| ● | under
the Company’s By-Laws any two directors may call a Board meeting; and |
| ● | in
addition to the standing committees of the Board, independent committees are appointed from
time to time, when appropriate. |
| (g) | Disclose
the attendance record of each director for all board meetings held since the beginning of
the issuer’s most recently completed financial year. |
SolarBank’s
Board meets when it is necessary and desirable to transact business of the Company. Each committee of SolarBank’s Board meets at
least once each year or more frequently as deemed necessary by the applicable committee. The frequency of the meetings and the nature
of the meeting agendas are dependent upon the nature of the business and affairs which SolarBank faces from time to time. During the
financial year ended June 30, 2024, SolarBank’s Board met five times, the Audit Committee met one time, the Compensation Committee
met two times, and the Compensation, Corporate Governance and Nominating Committee did not meet. The following table provides details
regarding director attendance at Board and committee meetings held during each director’s tenure on SolarBank’s Board and
his respective committees during the financial year ended June 30, 2024.
| Director | |
Board | |
Audit
Committee | |
Compensation,
Corporate Governance and Nominating Committee |
| Dr.
Richard Lu | |
5
of 5 | |
N/A | |
N/A |
| Paul
Pasalic | |
5
of 5 | |
1
of 1 | |
N/A |
| Olen
Aasen(1) | |
5
of 5 | |
1
of 1 | |
N/A |
| Paul
Sparkes | |
5
of 5 | |
1
of 1 | |
N/A |
| Chelsea
Nickles | |
3
of 3 | |
N/A | |
N/A |
| 1. | Olen
Aasen resigned as a director on July 8, 2024. |
Disclose
the text of the board’s written mandate. If the board does not have a written mandate, describe how the board delineates its role
and responsibilities.
The
SolarBank Board does not have a written mandate. The duties and responsibilities of SolarBank’s Board are to supervise the management
of the business and affairs of SolarBank and to act with a view towards the best interests of SolarBank. SolarBank’s Board delegates
day-to-day management of SolarBank to executive officers, relying on them to keep it apprised of all significant developments affecting
SolarBank. In discharging its mandate, SolarBank’s Board is responsible for the oversight and review of the development of, among
other things, the following matters: the strategic planning process of SolarBank; identifying the principal risks of SolarBank ‘s
business and ensuring the implementation of appropriate systems to manage these risks; succession planning, including appointing, training
and monitoring senior management; a communications policy for SolarBank to facilitate communications with investors and other interested
parties; and the integrity of SolarBank’s internal control and management information systems.
SolarBank’s
Board also has the mandate to assess the effectiveness of SolarBank’s Board as a whole, its committees and the contribution of
individual directors. SolarBank’s Board discharges its responsibilities directly and through its committees, currently consisting
of the Audit Committee and the Compensation, Corporate Governance and Nominating Committee.
| (a) | Disclose
whether or not the board has developed written position descriptions for the chair and the
chair of each board committee. If the board has not developed written position descriptions
for the chair and/or the chair of each board committee, briefly describe how the board delineates
the role and responsibilities of each such position. |
The
Board has not developed a written position description for the Chair. It is expected the Board will develop a written position description
for the Chair in fiscal 2025. The role and responsibilities of the Chair have been established through common corporate governance practices
and are described further above. The Chair of each Board committee acts within the parameters set by their respective committee charters.
| (b) | Disclose
whether or not the board and CEO have developed a written position description for the CEO.
If the board and CEO have not developed such a position description, briefly describe how
the board delineates the role and responsibilities of the CEO. |
The
Board has not developed a written position description for the Chief Executive Officer. While the Board has not developed a written position
description for the Chief Executive Officer, the Chief Executive Officer’s role and responsibilities are delineated within his
consulting agreement, and he acts under the supervision and direction of the Board. It is expected the Board will develop a written position
description for the Chief Executive Officer in fiscal 2025.
| 4. |
Orientation
and Continuing Education |
| (a) | Briefly
describe what measures the board takes to orient new directors regarding |
(i)
the role of the board, its committees and its directors, and
(ii)
the nature and operation of the issuer’s business.
The
Company provides an orientation program to new directors. This program consists of:
| ● | A
detailed briefing with the Chair. |
| ● | A
detailed briefing with the President and Chief Executive Officer. |
| ● | The
Company’s General Counsel providing education regarding directors’ responsibilities,
corporate governance issues and recent and developing issues related to corporate governance
and regulatory reporting. |
| ● | Provision
of the Company’s committee charters and corporate governance policy booklet to the
new director. |
| ● | Access
to the Company’s independent directors, as required, for the new director to discuss
the operation of the Company and the Board. |
| (b) | Briefly
describe what measures, if any, the board takes to provide continuing education for its directors.
If the board does not provide continuing education, describe how the board ensures that its
directors maintain the skill and knowledge necessary to meet their obligations as directors. |
The
Company encourages senior management to participate in professional development programs and courses and supports Management’s
commitment to training and developing employees. The Board of Directors provides comprehensive information regarding the Company to new
directors and continuing education for directors on an ad hoc basis in respect of issues that are necessary for them to understand to
meet their obligations as directors.
As
required, directors are briefed on strategic issues affecting the Company, and these briefings include reviews of the competitive environment,
the Company’s progress and performance relative to its peers, and any other developments that could materially affect the Company’s
business. The briefings are conducted by the Chair and Chief Executive Officer, Chief Financial Officer and other members of the executive
management team. Furthermore, the Nominating and Corporate Governance Committee is responsible for reviewing, monitoring and making recommendations
regarding new director orientation and ongoing development of existing directors.
| 5. |
Ethical
Business Conduct |
| (a) | Disclose
whether or not the board has adopted a written code for the directors, officers and employees.
If the board has adopted a written code: |
(i)
disclose how a person or company may obtain a copy of the code;
The
Board of Directors expects Management to operate the business of the Company in a manner that enhances shareholder value and is consistent
with the highest level of integrity. Management is expected to execute the Company’s business plan and to meet performance goals
and objectives. The Board of Directors has adopted a formal written Code of Business Conduct and Ethics (the “Code”)
which is available on SEDAR+ at www.sedarplus.ca.
(ii)
describe how the board monitors compliance with its code, or if the board does not monitor compliance, explain whether and how
the board satisfies itself regarding compliance with its code; and
Compliance
with the Code is based first and foremost on the cooperation and vigilance of all persons subject to the Code. Each director, officer
and employee and consultant is provided with a copy of the Code and is required to acknowledge in their employment or consulting contract,
as applicable, that they have read, understood and agree to comply with the Code. The Compensation, Corporate Governance and Nominating
Committee is responsible for monitoring compliance with the Code by ensuring that all directors, officers, consultants and employees
receive and become thoroughly familiar with the Code and acknowledge their support and understanding of the Code. Any non-compliance
with the Code is to be reported to the Chair of the Board, Chief Executive Officer, Chief Financial Officer, General Counsel or other
appropriate person. The Board sets the tone for ethical conduct throughout the Company by considering and discussing ethical considerations
when reviewing the corporate transactions of the Company.
The
Code requires all employees, officers, directors and consultants of the Company to perform the responsibilities of their positions on
the basis of what is in the best interests of the Company and free from the influence of personal considerations and relationships. No
material change report has ever been filed that pertains to any conduct of a director or executive officer that constitutes a departure
from the Code.
The
Company has also adopted a Whistleblower Policy to address SolarBank’s commitment to integrity, ethical behavior, and compliance
with the Code by its personnel. The Company’s Whistleblower Policy sets out procedures for directors, officers, consultants and
employees of the Company to make good faith complaints concerning a suspicion of unethical behaviour of the Company or any of its personnel.
The Board believes that providing a procedure for employees and officers to raise concerns about ethical conduct on an anonymous and
confidential basis fosters a culture of ethical conduct within the Company.
(iii)
provide a cross-reference to any material change report filed since the beginning of the issuer’s most recently completed financial
year that pertains to any conduct of a director or executive officer that constitutes a departure from the code.
No
material change report was filed by the Company since July 1, 2023 regarding departures from the Code by directors or executive officers.
| (b) | Describe
any steps the board takes to ensure directors exercise independent judgement in considering
transactions and agreements in respect of which a director or executive officer has a material
interest. |
See
response to 5(c).
| (c) | Describe
any other steps the board takes to encourage and promote a culture of ethical business conduct. |
The
Board endeavors to ensure that directors, officers and employees exercise independent judgement in considering transactions and agreements
in respect of which a director, officer or employee of the Company has a material interest, which include ensuring that directors, officers
and employees are thoroughly familiar with the Code and, in particular, the rules concerning reporting conflicts of interest and obtaining
direction from the Compensation, Nominating and Corporate Governance Committee regarding any potential conflicts of interest.
In
accordance with the Business Corporations Act (Ontario) (the “Act”), if a director is a director or officer
of, or has a material interest in, any person who is a party to a transaction or proposed transaction with the Company, that director
is not entitled to vote on any directors’ resolutions in respect of such transaction, in most circumstances. The Compensation,
Nominating and Corporate Governance Committee monitors the disclosure of conflicts of interest to the Board by directors and ensures
that no director will vote or participate in a discussion on a matter in respect of which such director has a material interest. Committee
Chairs perform the same function with respect to meetings of each Board committee.
| 6. |
Nomination
of Directors |
| (a) | Describe
the process by which the board identifies new candidates for board nomination. |
The
Compensation, Corporate Governance and Nominating Committee is responsible for recommending to the Board, on an annual basis, nominees
for election as directors for the next annual meeting of Shareholders and analyzing the needs of the Board and recommending nominees
who meet such needs, when vacancies arise on the Board.
| (b) | Disclose
whether or not the board has a nominating committee composed entirely of independent directors.
If the board does not have a nominating committee composed
entirely of independent directors, describe what steps the board takes to encourage an objective
nomination process. |
The
Compensation, Corporate Governance and Nominating Committee is composed entirely of independent directors.
| (c) | If
the board has a nominating committee, describe the responsibilities, powers and operation
of the nominating committee. |
To
encourage an objective nominating process, when considering potential Board nominees the Compensation, Corporate Governance and Nominating
Committee takes into account a number of factors, which may include the current composition of the Board, the ability of the individual
candidate to contribute on an overall basis, the ability of the individual to contribute sufficient time and resources to the Board,
the current and future needs of the Company, the individual’s direct experience with public companies in general and renewable
energy companies in particular as well as the individual’s skills and knowledge and the skills and knowledge of existing members
of the Board.
The
overall purpose of the Compensation, Corporate Governance and Nominating Committee is to:
| ● | assist
the Company in its corporate governance responsibilities under applicable law; |
| ● | establish
criteria for Board and committee membership; |
| ● | recommend
composition of the Board and its committees; and |
| ● | as
circumstances arise, assess directors’ performance. |
The
Compensation, Corporate Governance and Nominating Committee uses the following process to identify and nominate highly qualified and
dedicated director candidates for election to the Board:
| ● | the
Chair of the Board, the Chair of the Compensation, Corporate Governance and Nominating Committee
or other members of the Board identify the need to add new Board members, with careful consideration
of the mix of qualifications, skills and experience represented on the Board; |
| ● | the
Compensation, Corporate Governance and Nominating Committee coordinates the search for qualified
candidates with input from management and other Board members; |
| ● | the
Compensation, Corporate Governance and Nominating Committee may engage a candidate search
firm to assist in identifying potential nominees, if it deems such engagement necessary and
appropriate; |
| ● | selected
members of Management and the Board will interview prospective candidates; |
| ● | the
Compensation, Corporate Governance and Nominating Committee will recommend a nominee and
seek full Board endorsement of the selected candidate, based on its judgment as to which
candidate will best serve the interests of the Shareholders; |
| ● | the
Compensation, Corporate Governance and Nominating Committee may, to the extent it deems appropriate,
consult with significant Shareholders of the Company or other Shareholders as part of the
process of nominating new directors; and |
| ● | the
Compensation, Corporate Governance and Nominating Committee will consider any candidates
submitted by Shareholders on the same basis as any other candidate. |
| (a) | Describe
the process by which the board determines the compensation for the issuer’s
directors and officers. |
Reference
should be made to the “Statement of Executive Compensation” attached to this Information Circular as Schedule “B”
for details regarding the Company’s process for determining compensation.
| (b) | Disclose
whether or not the board has a compensation committee composed entirely of independent directors.
If the board does not have a compensation committee
composed entirely of independent directors, describe what steps the board takes to ensure
an objective process for determining such compensation. |
Reference
should be made to the “Statement of Executive Compensation” attached to this Information Circular as Schedule “B”
for details regarding the Company’s Compensation, Committee.
| (c) | If
the board has a compensation committee, describe the responsibilities, powers and operation
of the compensation committee. |
Reference
should be made to the “Statement of Executive Compensation” attached to this Information Circular as Schedule “B”
for details regarding the Company’s Compensation, Corporate Governance and Nominating Committee.
| 8. |
Other
Board Committees |
If
the board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe
their function.
The
only committees of the Board that the Company has are the Audit Committee, and the Compensation, Corporate Governance and Nominating
Committee.
Disclose
whether or not the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution.
If assessments are regularly conducted, describe the process used for the assessments. If assessments are not regularly conducted, describe
how the board satisfies itself that the board, its committees, and its individual directors are performing effectively.
The
Board, its Committees and individual directors are currently not regularly assessed with respect to their effectiveness and contribution.
However, the Chair meets with directors individually which facilitates a discussion of his or her contribution and that of other directors.
When needed, time is set aside at a meeting of the Board for a discussion regarding the effectiveness of the Board and its committees.
If appropriate, the Board then considers procedural or substantive changes to increase the effectiveness of the Board and its committees.
On an informal basis, the Chair and the Compensation, Corporate Governance and Nominating Committee are responsible for reporting to
the Board on areas where improvements can be made. Any agreed upon improvements required to be made are implemented and overseen by the
Compensation, Corporate Governance and Nominating Committee. A more formal assessment process will be instituted as, if, and when the
Board considers it to be necessary.
Disclose
whether or not the issuer has adopted term limits for the directors on its board or other mechanism of board renewal and, if so, include
a description of those director term limits or other mechanism of board renewal. If the issuer has not adopted director term limits or
other mechanisms of board renewal, disclose why it has not done so.
The
Company has not adopted term limits for directors because the risk profile of the Company makes it more difficult for the Company to
attract and to retain highly qualified board members than other companies. The Company seeks to avoid losing the services of a qualified
director with knowledge of its business through the imposition of an arbitrary term limit.
| 11. |
POLICIES
REGARDING THE REPRESENATION OF WOMEN ON THE BOARD |
| (a) | Disclose
whether the issuer has adopted a written policy relating to the identification and nomination
of women directors. If the issuer has not adopted such a policy, disclose why it has not
done so. |
The
Company has not adopted a written policy relating to the identification and nomination of women directors. The Compensation, Corporate
Governance and Nominating Committee generally identifies, evaluates and recommends candidates to become members of the Board with the
goal of creating a Board that, as a whole, consists of individuals with various and relevant career experience, industry knowledge and
experience, and financial and other specialized expertise. The composition of the Board of Directors is primarily a question of experience
and expertise brought by each nominee to the Board of Directors. The Compensation, Corporate Governance and Nominating Committee, when
searching for nominees to the Board of Directors, also takes diversity, including gender diversity, into account. Primarily, the Board
of Directors needs directors who have the expertise and the skills necessary for a renewable energy company. Although the committee does
not have a formal diversity policy concerning membership of the Board, it considers diversity in its broadest sense when evaluating candidates,
including persons diverse in gender, ethnicity, experience, and background.
| (b) | If
the issuer has adopted a policy referred to in (a), disclose the following in respect of
the policy: (i) a short summary of its objectives and key provisions; (ii) the measures taken
to ensure that the policy has been effectively implemented; (iii) annual and cumulative progress
by the issuer in achieving the objectives of the policy; and (iv) whether and, if so, how
the board or its nominating committee measures the effectiveness of the policy. |
The
Company does not have a written policy relating to the identification and nomination of women directors.
| 12. | CONSIDERATION
OF THE REPRESENATION OF WOMEN IN THE DIRECTOR IDENTIFICATION AND SELECTION PROCESS. |
Disclose
whether and, if so, how the board or nominating committee considers the level of representation of women on the board in identifying
and nominating candidates for election or re-election to the board. If the issuer does not consider the level of representation of women
on the board in identifying and nominating candidates for election or re-election to the board, disclose the issuer’s reasons for
not doing so.
The
Compensation, Corporate Governance and Nominating Committee considers all factors it deems relevant in the process of identifying and
nominating candidates for election or re-election to the Board. As noted above, gender diversity is taken into account but its primary
focus to identify directors who have the expertise and the skills necessary for a renewable energy company.
| 13. | CONSIDERATON
GIVEN TO THE REPRESENTATION OF WOMEN IN EXECUTIVE OFFICER APPOINTMENTS |
Disclose
whether and, if so, how the issuer considers the level of representation of women in executive officer positions when making executive
officer appointments. If the issuer does not consider the level of representation of women in executive officer positions when making
executive officer appointments, disclose the issuer’s reason for not doing so.
The
Company identifies, evaluates and recommends persons to become executive officers with the goal of creating a senior management team
that, as a whole, consists of individuals with various and relevant career experience and industry knowledge and experience. The composition
of the senior management team is primarily a question of the experience and expertise brought by officer. Primarily, the Company needs
executive officers who have the expertise and the skills necessary for a renewable energy company.
| 14. | ISSUER’S
TARGETS REGARDING THE REPRESENTATION OF WOMEN ON THE BOARD AND IN EXECUTIVE OFFICER POSITIONS |
For
purposes of this item, a “target” means a number or percentage, or a range of numbers or percentages, adopted by the issuer
of women on the issuer’s board or in executive officer positions of the issuer by a specific date. Disclose whether the issuer
has adopted a target regarding women on the issuer’s board. If the issuer has not adopted a target, disclose why it has not done
so. Disclose whether the issuer has adopted a target regarding women in executive officer positions of the issuer. If the issuer has
not adopted a target, disclose why it has not done so. If the issuer has adopted a target of either type, disclose the target and the
annual and cumulative progress of the issuer in achieving the target.
The
Company has not adopted a target regarding women on the Board because the Compensation, Corporate Governance and Nominating Committee
generally identifies, evaluates and recommends candidates to become members of our Board with the goal of creating a Board that, as a
whole, consists of individuals with various and relevant career experience, industry knowledge and experience, and financial and other
specialized experience, while taking diversity, including gender diversity, into account. The Company has not adopted a target regarding
women in executive officer positions because the Company’s focus is identifying the most qualified person for the role.
| 15. |
NUMBER
OF WOMEN ON THE BOARD AND IN EXECUTIVE OFFICER POSITIONS |
| (a) | Disclose
the number and proportion (in percentage terms) of directors on the issuer’s board
who are women. |
Currently
one member of the Company’s Board is a woman, representing 20% of the directors.
| (b) | Disclose
the number and proportion (in percentage terms) of executive officers of the issuer, including
all major subsidiaries of the issuer, who are women. |
Currently
one of the Company’s executive officers is a woman, representing 25% of the executive officers of the Company.
SCHEDULE
“B”
to the Information Circular as at October 28, 2024 of
SolarBank Corporation
FORM
51-102F6
STATEMENT
OF EXECUTIVE COMPENSATION
SOLARBANK
CORPORATION
(the “Company”)
(for
the year ended June 30, 2024)
DATED
October 28, 2024
Definitions
For
the purpose of this Information Circular:
“Chief
Executive Officer” or “CEO” of the Company means an individual who served as chief executive officer of
the Company or acted in a similar capacity during the most recently completed financial year;
“Chief
Financial Officer” or “CFO” of the Company means an individual who served as chief financial officer of
the Company or acted in a similar capacity during the most recently completed financial year;
“Executive
officer” of the Company for the financial year, means an individual who at any time during the year was:
| (a) |
a
chair of the Company; |
| |
|
| (b) |
a
vice-chair of the Company; |
| |
|
| (c) |
the
president of the Company; |
| |
|
| (d) | a
vice-president of the Company in charge of a principal business unit, division or function,
including sales, finance or production; or |
| | |
| (e) | performing
a policy-making function in respect of the Company. |
“NEO”
or “named executive officer” means each of the following individuals:
| (a) | a
CEO; |
| | |
| (b) | a
CFO; |
| | |
| (c) | each
of the three most highly compensated executive officers, or the three most highly compensated
individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most
recently completed financial year whose total compensation was, individually, more than $150,000,
as determined in accordance with subsection 1.3(6) of Form 51-102F6, for that financial year;
and |
| | |
| (d) | each
individual who would be an NEO under paragraph (c) but for the fact that the individual was
neither an executive officer of the company, nor acting in a similar capacity, at the end
of that financial year; |
“equity
incentive plan” means an incentive plan, or portion of an incentive plan, under which awards are granted and that falls within
the scope of IFRS 2 Share-based Payment;
“incentive
plan” means any plan providing compensation that depends on achieving certain performance goals or similar conditions within
a specified period;
“incentive
plan award” means compensation awarded, earned, paid, or payable under an incentive plan;
“non-equity
incentive plan” means an incentive plan or portion of an incentive plan that is not an equity incentive plan;
“option-based
award” means an award under an equity incentive plan of options, including, for greater certainty, share options, share appreciation
rights, and similar instruments that have option-like features;
“plan”
includes any plan, contract, authorization, or arrangement, whether or not set out in any formal document, where cash, securities,
similar instruments or any other property may be received, whether for one or more persons;
“share-based
award” means an award under an equity incentive plan of equity-based instruments that do not have option-like features, including,
for greater certainty, common shares, restricted shares, restricted share units, deferred share units, phantom shares, phantom share
units, common share equivalent units, and stock.
Compensation
discussion and analysis
The
Company has a Compensation, Corporate Governance and Nominating Committee (the “Compensation Committee”) that is responsible
for recommending to the Board of Directors all forms of compensation to be granted to the Named Executive Officers and the directors,
and for reviewing the President and CEO’s recommendations respecting compensation of the other officers of the Company. The Company’s
Named Executive Officers are compensated through consulting agreements or employment agreements.
The
Company’s executive officers have significant influence over the Company’s corporate performance and creating value for the
Company’s shareholders. Over the past decade, the demand for renewable executives with requisite experience and skills has significantly
increased, due in part to a significant global push to reduce carbon emissions and achieve “net-zero” goals. As a result,
the Company operates in a highly competitive market for key executives and the attraction and retention of experienced and talented executives
is one of the key objectives of the Company’s executive compensation program.
In
order to retain a competent, strong and effective management group focused on the Company’s growth strategy, corporate performance,
risk management and the creation of shareholder value, in a very tight and competitive market, it is important that the Company’s
executive compensation program provides executives with the proper incentives and is competitive with compensation paid to executives
having comparable responsibilities and experience at other companies engaged in the same or similar lines of business as the Company.
The objectives of the Company’s executive compensation program are to recognize the need to attract and retain high caliber executives
by providing reasonably competitive salaries; reward performance in achieving pre-determined objectives by providing bonus awards; and
motivate executives to remain with the Company and enhance shareholder value through long-term incentives in the form of stock options
and restricted share units (“RSUs”). In keeping with this philosophy, the main objectives of the executive compensation
programs are to:
| ● | Pay
for performance by rewarding the attainment of goals and objectives; |
| | | |
| ● | Attract
and retain motivated and quality executive officers to drive long term shareholder value; |
| | | |
| ● | Develop
a sense of proprietorship; |
| ● | Build
flexibility in programs to accommodate the dynamic nature of the renewable energy industry;
and |
| | | |
| ● | Align
programs to business needs, structure and culture. |
To
this end, the executive compensation program formulated by the Compensation Committee comprises three components: base salary, annual
cash bonus and long-term incentives in the form of stock options or RSUs. The cash bonus program is directly related to the overall project
development success of the Company measured based on total megawatts that achieve notice to proceed, are placed into operations or are
added to assets under management. In 2024, the Compensation Committee reviewed and set the executive compensation levels based on a report
entitled “Executive Market Compensation Review” (the “CGP Executive Report”) prepared by Compensation
Governance Partners (“CGP”). CGP is an independent advisor on compensation and governance matters. The results of
the CGP Executive Report were used by the Compensation Committee in reviewing the compensation of the Named Executive Officers in connection
with the 2024 fiscal year and the performance of the Company and the Named Executive Officers for the 2024 fiscal year.
Base
Salary
Base
salary or fees are a fixed element of compensation that is payable to each Named Executive Officer for performing his or her position’s
specific duties. While base salary or fees are intended to fit into the Company’s overall compensation objectives by serving to
attract and retain talented executive officers, the size of the Company and the nature and stage of its business also impacts the level
of base salary or fees. In determining the base salary or fees of an executive officer, the Compensation Committee and the Board consider
the following factors: the recommendation of the President & Chief Executive Officer of the Company (other than with respect to the
compensation of the President & Chief Executive Officer); the particular responsibilities related to the position; the experience
level of the executive officer; the difficulties in recruiting new talent; competitiveness with base salaries paid for similar positions
in the renewable energy industry; his or her overall performance; and the results of the CGP Executive Report.
There
is no mandatory framework that determines which of the above-referenced factors may be more or less important and the emphasis placed
on any of these factors is at the discretion of the Board and may vary among the executive officers. Commencing for the 2024 fiscal year,
in respect of the base salary or fees paid to the Named Executive Officers, the Board also considered salaries or consulting fees paid
to other executive officers in the renewable energy industry based on the CGP Executive Report, the NEO’s contribution toward the
Company’s achievement of business goals and objectives for the previous financial year.
The
CGP Executive Report was prepared based on a benchmark group of companies which are as follows: Polaris Renewable Energy Inc., Beam Global,
Ascent Solar Technologies, Inc., Greenlane Renewables Inc., Ideal Power Inc., Gevo, Inc., Advent Technologies Holdings, Inc., UGE International
Ltd. and Exro Technologies Inc.
Details
of the base salaries paid to the Named Executive officers during the years ended June 30, 2024, 2023 and 2022 are listed in the “Summary
Compensation Table” below. During fiscal 2024, based on a review of the CGP Executive Report, the Compensation Committee recommended,
and the Board of Directors approved, the following based salaries for the Company’s Named Executive Officers for the fiscal year
ending June 30, 2024.
| Named
Executive Officer | |
2024
Base Salary/Fees ($) | | |
Increase
from 2023 Base Salary | |
| President
& Chief Executive Officer | |
| 414,000 | | |
| 0 | % |
| Chief
Financial Officer | |
| 120,000 | | |
| 0 | % |
| Chief
Operating Officer | |
| 350,000 | | |
| 0 | % |
| Chief
Administrative Officer | |
| 188,400 | | |
| 0 | % |
Subsequent
to year-end, the Board of Directors approved, the following based salaries for the Company’s Named Executive Officers for the fiscal
year ending June 30, 2025.
| Named
Executive Officer | |
2025
Base Salary/Fees ($) | | |
Increase
from 2024 Base Salary | |
| President
& Chief Executive Officer | |
| 450,000 | | |
| 9 | % |
| Chief
Financial Officer | |
| 220,000 | | |
| 83 | % |
| Chief
Operating Officer | |
| 361,500 | | |
| 3 | % |
| Chief
Administrative Officer | |
| 250,000 | | |
| 33 | % |
Bonus
Payments
Executive
officers are eligible for annual cash bonuses at the discretion of the Board of Directors, based on bonus program that has been reviewed
by the Compensation Committee and approved by the Board of Directors. The bonus program is as follows
| 1. | A
target payment (the “NTP Payment”) for every ten (10) megawatt direct
current (“MWdc”) accumulative solar or wind power plants or every ten (10) megawatt
(“MW”) accumulative Battery Energy Storage System (“BESS”)
that is built by the Company or its affiliated entities achieving Notice to Proceed. |
| | | |
| 2. | A
target payment (the “PTO Payment”) for every ten (10) MWdc accumulative
solar or wind power plants or every ten (10) MW accumulative BESS that is built by the Company
or its affiliated entities achieving Placed To Operation. |
| | | |
| 3. | A
target payment (the “AUM Payment”) for every ten (10) MWdc accumulative
solar or wind power plants or every ten (10) MW accumulative BESS that is built or acquired
by the Company or its affiliated entities being added to the Company’s Asset under
Management. |
| | | |
| 4. | The
payments, if any: |
| i. | shall
be paid 50% in cash and 50% in RSUs within four (4) weeks after reaching the specified milestones.
The days that the Company is in its Blackout Period will be excluded from the four (4) weeks
described above; |
| | | |
| ii. | shall
be adjusted if a Solar or Wind power plant or BESS is not delivered within the budget and
schedule established by the Company or by other adjustors established by the Company; and |
| | | |
| iii. | is
not earned or accrued until and unless the Employee is “Actively Employed”
(as defined in the employee’s applicable employment or consulting agreement) on the
day where the payment is payable. |
The
table below provides NTP Payment, PTO Payment and AUM Payment target amounts for each ten (10) MWdc or ten (10) MW, as applicable, for
each of the Named Executive Officers.
| Named
Executive Officer | |
NTP
Payment
($) | | |
PTO
Payment
($) | | |
AUM
Payment
($) | |
| President
& Chief Executive Officer | |
| - | | |
| 100,000 | | |
| - | |
| Chief
Financial Officer | |
| - | | |
| 20,000 | | |
| - | |
| Chief
Operating Officer | |
| 20,000 | | |
| 90,000 | | |
| - | |
| Chief
Administrative Officer | |
| - | | |
| 20,000 | | |
| - | |
The
table below provides the actual total NTP Payment, PTO Payment and AUM Payment that was paid to each of the Named Executive Officers
during the year ended June 30, 2024.
| Named
Executive Officer | |
NTP
Payment
($) | | |
PTO
Payment
($) | | |
AUM
Payment
($) | |
Total
Payment
($) | |
| President
& Chief Executive Officer | |
| Nil | | |
| Nil | | |
Nil | |
| Nil | |
| Chief
Financial Officer | |
| Nil | | |
| Nil | | |
Nil | |
| Nil | |
| Chief
Operating Officer | |
| 20,000 | | |
| 90,000 | | |
Nil | |
| 110,000 | |
| Chief
Administrative Officer | |
| Nil | | |
| Nil | | |
Nil | |
| Nil | |
Long-Term
Incentives
The
Company believes that granting stock options and RSUs to key personnel encourages retention and more closely aligns the interests of
executive management with the intent of Shareholders. The inclusion of options and RSUs in compensation packages allows the Company to
compensate employees while not drawing on cash resources. Further, the Company believes that the option and RSU component serves to further
align the interests of management with the interests of the Company’s Shareholders. The amount of options or RSUs to be granted
is based on the relative contribution and involvement of the individual in question, as well as taking into consideration previous option
or RSU grants. Historically, there have been no other specific quantitative or qualitative measures associated with option or RSU grants
and no specific weights are assigned to any criteria individually, rather, the performance of the Company is broadly considered as a
whole when determining the number of stock based compensation (if any) to be granted and the Company does not focus on any particular
performance metric. During the financial year ended June 30, 2024, the Company granted no stock options and no restricted share units
to its Named Executive Officers.
Hedging
Restrictions
The
Company does not have any policies that restrict a NEO or director from purchasing financial instruments, including, for greater certainty,
prepaid variable forward contracts, equity swaps, collars, or units of exchange funds, that are designed to hedge or offset a decrease
in market value of equity securities granted as compensation or held, directly or indirectly, by the NEO or director except that NEOs
and directors are prohibited from undertaking any of the following activities under the Company’s Insider Trading Policy:
| ● | any
hedging activities, including the practice of selling “short” securities of the
Company at any time, are not permitted; and |
| ● | the
practice of buying or selling financial instruments, including a “call” or “put”
or any other prepaid forward contracts, equity swaps, collars, units of exchange funds
or derivative security in respect of any securities of the Company is not permitted. |
Risk
Management and Assessment
With
respect to the management of risk, the Board takes a conservative approach to executive compensation, rewarding individuals with additional
performance-based compensation dependent upon the success of the Company and when such success can be demonstrated. The Compensation
Committee is responsible for reviewing the Company’s compensation program to ensure that risks are identified and mitigated to
the extent possible. Care is taken in measuring this success, while ensuring it is achieved within normal operating procedures and standards,
including those related to the environment, health, safety and sustainable development.
The
nature of the business and the competitive environment in which the Company operates requires some level of risk-taking to achieve growth
and desired results in the best interest of stakeholders. The Company’s executive compensation program seeks to encourage behaviours
directed towards increasing long-term value, while limiting incentives that promote excessive risk taking.
The
Company has assessed the risks associated with its approach to bonuses and equity-based compensation grants. In order to manage risks,
the executive team has been directed to give an overriding priority to safety, while at the same time working to bring as many projects
as possible into operation according to the Board approved plan.
The
Company views stock options and RSUs as a valuable tool for aligning the interest of management and Shareholders in the long term growth
and success of the Company. The Company is aware that stock option and RSU grants that vest immediately may create an incentive for management
to maximize short term gains at the expense of the long term success of the Company. In order to mitigate this risk, option and RSU grants
are generally subject to time or performance based vesting conditions.
Performance
Graph
The
following graph depicts the Company’s cumulative total Shareholder returns to June 30, 2024, assuming a $100 investment in Common
Shares on March 1, 2023 (the day the Common Shares commenced trading publicly on a stock exchange), compared to an equal investment in
the S&P/TSX Composite Index. The Company does not currently issue dividends. As the Common Shares were not trading on a stock exchange
prior to commencing trading on the Canadian Securities Exchange until March 1, 2024, the Common Share performance as set out in the graph
reflects the volatility of a growth company and does not necessarily indicate future price performance.
As
described above, the Compensation Committee considers various factors in determining the compensation of the Named Executive Officers
and Common Share performance is one performance measure that is reviewed and taken into consideration with respect to executive compensation.
The Common Share price is also affected factors beyond the Company’s control, including general and industry-specific economic
and market conditions.
There
is not a correlation between the trend of SolarBank’s stock price and SolarBank’s executive compensation. Due to a variety
of factors, the Company’s executive compensation increased from 2023 to 2024 as the Company has increased the number of projects
it is developing or has completed.
Compensation
Governance
Compensation
Committee
Members
and Independence
The
Compensation Committee is comprised of Paul Sparkes, Paul Pasalic and Chelsea Nickles each of whom is considered an independent director
for purpose of application securities laws.
Skills
and Experience
The
Board believes that each current member of the Compensation Committee possesses skills and experience relevant to the mandate of the
Compensation Committee. In addition, the members of the Compensation Committee each have skills and experience that enable them to make
decisions on the suitability of the Company’s compensation policies and practices.
| Committee
Member |
|
Relevant
Skills and Experience |
| Paul
Sparkes |
|
Mr.
Sparkes is an entrepreneur with over 25 years of experience in media, finance, capital markets
and Canada’s political arena. He spent a decade in the broadcast and media industry
as CTVglobemedia’s Executive Vice President, Corporate Affairs. He also held senior
positions in public service, including with the Government of Canada as Director of Operations
to Prime Minister Jean Chretien, and as a senior aide to two Premiers of Newfoundland and
Labrador. Paul was a co-founder and executive vice chairman at Difference Capital Financial
and serves on a number of private and public boards. He is currently President and founder
of Otterbury Holdings Inc., Global Alternatives Advisory, and is an advisor and deal maker
for growth companies in the private and public markets.
|
| |
|
|
| Paul
Pasalic |
|
Mr.
Pasalic is a private equity professional and a corporate lawyer with more than 15 years of
experience in corporate, securities and regulatory matters. Mr. Pasalic has advised on a
diverse array of complex multi-jurisdictional transactions across various industries and
across the capital structure. Mr. Pasalic holds a bachelors of business administration (finance)
from Simon Fraser University, and obtained a juris doctor from the University of Calgary
in 2007. Mr. Pasalic is a qualified attorney in Canada (Ontario; Alberta), New York State
as well as in England and Wales. Mr. Pasalic is also a CFA charterholder.
|
| |
|
|
| Chelsea
Nickles |
|
Ms.
Nickles is a renewable energy professional with more than 20 years of experience contributing to a net zero world. For nearly the
past decade, Ms. Nickles has been focusing on developing offshore wind projects in multiple jurisdictions with Ørsted, the
global leader in offshore wind. Ms. Nickles currently holds the title of Director with Ørsted and also serves as a director
for several offshore wind companies where she helps to steer their success. Prior to joining Ørsted, Ms. Nickles worked as
a lawyer in the Projects, Energy, Natural Resources and Infrastructure group with Allen & Overy LLP in London, England. Ms. Nickles
holds a Bachelors of Arts (honours) from Acadia University and obtained a juris doctor from the University of Calgary in 2009. |
Responsibilities,
Powers and Operation
The
Compensation Committee’s primary function to assist the Board of Directors in fulfilling its oversight responsibilities by:
| ● | Reviewing
and approving and then recommending to the Board of Directors salary or consulting fees,
bonuses, and other benefits, direct or indirect, and any change-of-control packages of the
Company’s executive officers; |
| | | |
| ● | Reviewing
compensation of the Board of Directors; |
| | | |
| ● | Administration
of the Company’s compensation plans, including share compensation plan, outside directors’
compensation plans, and such other compensation plans or structures as are adopted by the
Company from time to time; |
| | | |
| ● | Research
and identification of trends in employment benefits; and |
| | | |
| ● | Establishment
and periodic review of the Company’s policies in the area of management benefits and
perquisites based on comparable benefits and perquisites in the mining industry. |
Meetings
of the Compensation Committee are held from time to time as the Compensation Committee or the Chair of the Compensation Committee shall
determine. The Compensation Committee may ask members of Management or others to attend meetings or to provide information as necessary.
The Compensation Committee is permitted to retain and terminate the services of outside compensation specialists and other advisors to
the extent required, and has the sole authority to approve their fees and other retention terms.
Compensation
Advisor
Identity
and Mandate of Compensation Consultant
During
the third quarter of the financial year ended June 30, 2024, the Company retained CGP to undertake a review of the Company’s director
and executive compensation program. The Committee’s mandate was for CGP to provide recommendations regarding director and executive
compensation for the fiscal year ended June 30, 2024 and thereafter. In developing compensation recommendations for the fiscal year ended
June 30, 2024, CGP provided the following support to the Compensation Committee:
| ● | Review
and discuss director and executive compensation related matters and market trends. |
| | | |
| ● | Review
director compensation recommendations. |
| | | |
| ● | Review
the competitiveness and appropriateness of executive compensation practices and peer groups. |
| | | |
| ● | Review
executive compensation recommendations. |
The
Company does not have a requirement that the Compensation Committee or Board of Directors pre-approve the services that a compensation
consultant provides to the Company at the request of Management.
Fees
Paid to Compensation Consultant
During
the two most recently completed financial years, following fees have been billed by CGP to the Company:
| Financial
Year | |
2024 | | |
2023 | |
| Executive
compensation-related fees | |
$ | 16,200 | | |
| Nil | |
| All
other fees | |
| Nil | | |
| Nil | |
| Total
fees | |
$ | 16,200 | | |
| Nil | |
Summary
Compensation Table
The
following table contains information about the compensation paid to, or earned by, those who were during the fiscal year ended June 30,
2024 the Company’s Named Executive Officers. The Company had five Named Executive Officers during the fiscal year ended June 30,
2024 as set forth in the table below.
| Name
and principal position) | |
Year | | |
Salary ($) | | |
Share-based
awards ($) | |
Option-based
awards ($) | | |
Non-equity
incentive plan compensation ($)
| |
Pension
value ($) | | |
All
other compensation ($) | |
Total
compensation
($) | |
| |
| | |
| | |
| |
| | |
Annual
incentive plans | | |
Long-term
incentive plans | |
| | |
| |
| |
| Dr.
Richard Lu(1) | |
| 2024 | | |
| 414,000 | | |
Nil | |
| Nil | | |
| Nil | | |
Nil | |
| Nil | | |
Nil | |
| 414,000 | |
| President
& CEO | |
| 2023 | | |
| 414,000 | | |
Nil | |
| 350,582 | (5) | |
| 206,830 | | |
Nil | |
| Nil | | |
Nil | |
| 971,412 | |
| | |
| 2022 | | |
| 469,731 | | |
Nil | |
| Nil | | |
| 100,000 | | |
Nil | |
| Nil | | |
Nil | |
| 569,731 | |
| Sam
Sun(2) | |
| 2024 | | |
| 120,000 | | |
Nil | |
| Nil | | |
| Nil
| | |
Nil | |
| Nil
| | |
Nil | |
| 120,000 | |
| Chief
Financial | |
| 2023 | | |
| 115,378 | | |
Nil | |
| 94,976 | (5) | |
| 24,615 | | |
Nil | |
| Nil | | |
Nil | |
| 234,969 | |
| Officer | |
| 2022 | | |
| Nil | | |
Nil | |
| Nil | | |
| Nil | | |
Nil | |
| Nil | | |
Nil | |
| Nil | |
| Andrew
van | |
| 2024 | | |
| 350,000 | | |
Nil | |
| Nil | | |
| 110,000 | | |
Nil | |
| Nil | | |
Nil | |
| 460,000 | |
| Doorn(3) | |
| 2023 | | |
| 327,230 | | |
Nil | |
| 191,227 | (5) | |
| Nil | | |
Nil | |
| Nil | | |
Nil | |
| 518,457 | |
| Chief
Operating Officer | |
| 2022 | | |
| 249,995 | | |
Nil | |
| Nil | ) | |
| Nil | | |
Nil | |
| Nil | | |
Nil | |
| 249,995 | |
| Tracy
Zheng(4) | |
| 2024 | | |
| 188,400 | | |
Nil | |
| Nil | | |
| Nil | | |
Nil | |
| Nil | | |
Nil | |
| 188,400 | |
| Chief | |
| 2023 | | |
| 188,400 | | |
Nil | |
| 191,227 | (5) | |
| 120,000 | | |
Nil | |
| Nil | | |
Nil | |
| 499,627 | |
| Administrative
Officer | |
| 2022 | | |
| 188,400 | | |
Nil | |
| Nil | ) | |
| Nil | | |
Nil | |
| Nil | | |
Nil | |
| 188,400 | |
| |
(1) | Effective
September 1, 2022, as amended July 2, 2024, Light Voltaic Corporation (“LVC”)
entered into a consulting agreement (the “Lu Consulting Agreement”) with the
Company to provide the services of Dr. Lu to the Company to act as Chief Executive Officer.
LVC is paid annual consulting fees of $544,700 for the services of Dr. Lu. LVC is also eligible
to receive a bonus on the terms described above under “Compensation discussion and
analysis – Bonus Payments”. Dr. Lu receives no compensation for his services
as a director. The Company may terminate Dr. Lu’s consulting agreement by providing
six months prior written notice. In the event that within one year of a “Change of
Control” the consulting agreement is terminated by LVC for “Good Reason”
or by the Company, then LVC is entitled to a payment equal to two years of consulting fees.
See “Termination and Change of Control Benefits” for further details. |
| |
(2) | Effective
June 10, 2022, as amended July 1, 2024, Mr. Sun entered into an employment agreement with
the Company with an effective start date of July 4, 2022. Mr. Sun is paid an annual salary
of $220,000 for his services as CFO. Mr. Sun is also eligible to receive a bonus on the terms
described above under “Compensation discussion and analysis – Bonus Payments”.
The Company may terminate the employment agreement by providing the notice or pay in lieu
of notice required under the Employment Standards Act, 2000 (Ontario) which as of
June 30, 2024 was two weeks notice or pay in lieu of notice. |
| |
(3) | Effective
October 25, 2022, Mr. van Doorn entered into an employment agreement with the Company. Mr.
van Doorn is paid an annual salary of $361,500 for his services as COO. Mr. van Doorn is
also eligible to receive a bonus on the terms described above under “Compensation discussion
and analysis – Bonus Payments”. The Company may terminate the employment agreement
by providing twelve month’s notice or pay in lieu of notice plus a continuation of
employee group benefits for the notice period. |
| |
(4) | Effective
February 1, 2021 Ms. Zheng, as amended July 2, 2024, through her personal company The Phoenix
Trendz Inc. (“PTI”), entered into a consulting agreement with the Company. PTI
is paid annual consulting fees of $250,000 (plus applicable taxes) for the services of Ms.
Zheng as Chief Administrative Officer. PTI is also eligible to receive a bonus on the terms
described above under “Compensation discussion and analysis – Bonus Payments”.
The Company may terminate PTI’s consulting agreement by providing one month’s
prior written notice. |
| |
(5) | The
value of the option-based awards reflects the fair value of options granted on the date of
grant, which was November 4, 2022. The fair value was computed using the Black Scholes option
pricing model with the following assumptions: a) average risk-free interest rate of 3.80%
(b) expected life of five years; c) the price of the stock on the grant date; d) expected
volatility of 124% and e) no expected dividend payments. The Black Scholes model was used
to compute option fair values because it is the most commonly used option pricing model and
is considered to produce a reasonable estimate of fair value. |
Option-based
Awards
The
Board of Directors has adopted the Share Compensation Plan under which RSUs and stock options (“Options”) may be granted
to the Company’s directors, officers, employees and consultants. The Share Compensation Plan provides participants (each, a “Participant”),
who may include participants who are citizens or residents of the United States (each, a “US Participant”), with the
opportunity, through RSUs and Options, to acquire an ownership interest in the Company. The RSUs will rise and fall in value based on
the value of the Common Shares. Unlike the Options, the RSUs will not require the payment of any monetary consideration to the Company.
Instead, each RSU represents a right to receive one Common Share following the attainment of vesting criteria determined at the time
of the award. See “Restricted Share Units – Vesting Provisions” below. The Options, on the other hand, are rights
to acquire Common Shares upon payment of monetary consideration (i.e., the exercise price), subject also to vesting criteria determined
at the time of the grant. See “Options – Vesting Provisions” below.
Purpose
of the Share Compensation Plan
The
stated purpose of the Share Compensation Plan is to advance the interests of the Company and its subsidiaries, and its shareholders by:
(a) ensuring that the interests of Participants are aligned with the success of the Company and its subsidiaries; (b) encouraging stock
ownership by such persons; and (c) providing compensation opportunities to attract, retain and motivate such persons.
The
following people are eligible to participate in the Share Compensation Plan: any officer or employee of the Company or any officer or
employee of any subsidiary of the Company and, solely for purposes of the grant of Options, any director of the Company or any director
of any subsidiary of the Company, and any Consultant (defined under the Share Compensation Plan as an individual (other than an employee
or a director of the Company) or a corporation that is not a U.S. Person that: (A) is engaged to provide on an ongoing bona fide basis,
consulting, technical, management or other services to the Company or to an affiliate of the Company, other than services provided in
relation to an offer or sale of securities of the Company in a capital raising transaction, or services that promote or maintain a market
for the Company securities; (B) provides the services under a written contract between the Company or the affiliate and the individual
or the Company, as the case may be; (C) in the reasonable opinion of the Company, spends or will spend a significant amount of time and
attention on the affairs and business of the Company or an affiliate of the Company; and (D) has a relationship with the Company or an
affiliate of the Company that enables the individual to be knowledgeable about the business and affairs of the Company).
Administration
of the Share Compensation Plan
The
Share Compensation Plan is administered by the Board or such other persons as may be designated by the Board (the “Administrators”)
based on the recommendation of the Board or the compensation committee of the Board, if applicable. The Administrators determine the
eligibility of persons to participate in the Share Compensation Plan, when RSUs and Options will be awarded or granted, the number of
RSUs and Options to be awarded or granted, the vesting criteria for each award of RSUs and grant of Options and all other terms and conditions
of each award and grant, in each case in accordance with applicable securities laws and the requirements of the CSE.
Restrictions
on the Award of RSUs and Grant of Options
The
awards of RSUs and grants of Options under the Share Compensation Plan is subject to a number of restrictions:
| (a) | the
total number of Common Shares reserved and available for grant and issuance pursuant
to the exercise of Options and settlement of RSUs, each under the Share Compensation
Plan, shall not exceed 20% (in the aggregate) of the issued and outstanding Common Shares
from time to time; and |
| | | |
| (b) | the
number of Common Shares issuable pursuant to the exercise of Options under the Share Compensation
Plan within a 12 month period to all eligible persons retained to provide investor relations
activities (together with those Common Shares that are issued pursuant to any other
Share Compensation Arrangement) shall not, at any time, exceed 1% of the issued and
outstanding Common Shares. |
In
the event of any declaration by the Company of any stock dividend payable in securities (other than a dividend which may be paid in cash
or in securities at the option of the holder of Common Shares), or any subdivision or consolidation of the Common Shares, reclassification
or conversion of the Common Shares, or any combination or exchange of securities, merger, consolidation, recapitalization, amalgamation,
plan of arrangement, reorganization, spin off involving the Company, distribution (other than normal course cash dividends) of the Company
assets to holders of Common Shares, or any other corporate transaction or event involving the Company or the Common Shares, the Administrators
may in their sole discretion make such changes or adjustments, if any, as the Administrators consider fair or equitable to reflect such
change or event including, without limitation, adjusting the number of Options and RSUs outstanding under the Share Compensation Plan,
the type and number of securities or other property to be received upon exercise or redemption thereof, and the exercise price of Options
outstanding under the Share Compensation Plan, provided that the value of any Option or RSU immediately after such an adjustment shall
not exceed the value of such Option or RSU prior thereto, as determined by the Administrators.
Mechanics
for RSUs
RSUs
awarded to Participants under the Share Compensation Plan are credited to an account that is established on their behalf and maintained
in accordance with the Share Compensation Plan. After the relevant date of vesting of any RSUs awarded under the Share Compensation Plan,
a Participant shall be entitled to receive and the Company shall issue or pay (at its discretion): (i) a lump sum payment in cash equal
to the number of vested RSUs recorded in the Participant’s account multiplied by the volume weighted average price of the Common
Shares traded on the CSE for the five consecutive trading days prior to the payout date; (ii) the number of Common Shares required to
be issued to a Participant upon the vesting of such Participant’s RSUs in the Participant’s account will be, duly issued
as fully paid and non assessable shares and such Participant shall be registered on the books of the Company as the holder of the appropriate
number of Common Shares; or (iii) any combination of thereof.
Vesting
Provisions for RSUs
The
Share Compensation Plan provides that: (i) at the time of the award of RSUs, the Administrators will determine the vesting criteria applicable
to the awarded RSUs; (ii) vesting of RSUs may include criteria such as performance vesting; (iii) each RSU shall be subject to vesting
in accordance with the terms set out in an agreement evidencing the award of the RSU attached as Exhibit A to the Share Compensation
Plan (or in such form as the Administrators may approve from time to time) (each an “RSU Agreement”); and (iv) all
vesting and issuances or payments in respect of a RSU shall be completed no later than December 15 of the third calendar year commencing
after the award date for such RSU.
It
is the current intention that RSUs may be awarded with both time based vesting provisions as a component of the Company’s annual
incentive compensation program, and performance based vesting provisions as a component of the Company’s long term incentive compensation
program.
Under
the Share Compensation Plan, should the date of vesting of an RSU fall within a blackout period or within nine business days following
the expiration of a blackout period, the date of vesting will be automatically extended to the tenth business day after the end of the
blackout period.
Termination,
Retirement and Other Cessation of Employment in connection with RSUs
A
person participating in the Share Compensation Plan will cease to be eligible to participate in the following circumstances: (i) receipt
of any notice of termination of employment or service (whether voluntary or involuntary and whether with or without cause); (ii) retirement;
and (iii) any cessation of employment or service for any reason whatsoever, including disability and death (an “Event of Termination”).
In such circumstances, any vested RSUs will be issued (and with respect to each RSU of a US Participant, such RSU will be settled and
shares issued as soon as practicable following the date of vesting of such RSU as set forth in the applicable RSU Agreement, but in all
cases within 60 days following such date of vesting) and unless otherwise determined by the Administrators in their discretion, any unvested
RSUs will be automatically forfeited and cancelled (and with respect to any RSU of a US Participant, if the Administrators determine,
in their discretion, to waive vesting conditions applicable to an RSU that is unvested at the time of an Event of Termination, such RSU
shall not be forfeited or cancelled, but instead will be deemed to be vested and settled and shares delivered following the date of vesting
date of such RSU as set forth in the applicable RSU Agreement). Notwithstanding the above, if a person retires in accordance with the
Company’s retirement policy at such time, the pro rata portion of any unvested performance based RSUs will not be forfeited or
cancelled and instead shall be eligible to become vested in accordance with the vesting conditions set forth in the applicable RSU Agreement
after such retirement (as if retirement had not occurred), but only if the performance vesting criteria, if any, have been met on the
applicable date. For greater certainty, if a person is terminated for just cause, all unvested RSUs will be forfeited and cancelled.
Mechanics
for Options
Each
Option granted pursuant to the Share Compensation Plan will entitle the holder thereof to the issuance of one Common Share upon achievement
of the vesting criteria and payment of the applicable exercise price. Options granted under the Share Compensation Plan will be exercisable
for Common Shares issued from treasury once the vesting criteria established by the Administrators at the time of the grant have been
satisfied. However, the Company will continue to retain the flexibility through the amendment provisions in the Share Compensation Plan
to satisfy its obligation to issue Common Shares by making a lump sum cash payment of equivalent value (i.e., pursuant to a cashless
exercise), provided there is a full deduction of the number of underlying Common Shares from the Share Compensation Plan’s reserve.
Vesting
Provisions for Options
The
Share Compensation Plan provides that the Administrators may determine, in accordance with minimum vesting requirements of the CSE, the
vesting criteria applicable to any Options, when any Option will become exercisable and may determine that Options shall be exercisable
in instalments or pursuant to a vesting schedule. The Option agreement will disclose any vesting conditions prescribed by the Administrators.
Termination,
Retirement and Other Cessation of Employment in connection with Options
A
person participating in the Share Compensation Plan will cease to be eligible to participate where there is an Event of Termination.
In such circumstances, unless otherwise determined by the Administrators in their discretion, any unvested Options will be automatically
cancelled, terminated and not available for exercise and any vested Options may be exercised only before the earlier of: (i) the expiry
of the Option; and (ii) six months after the date of the Event of Termination. If a person is terminated for just cause, all Options
(whether or not then exercisable) will be automatically cancelled.
Other
Terms
The
Administrators will determine the exercise price and term/expiration date of each Option, provided that the exercise price in respect
of that Option shall not be less than the Market Price on the date of grant. “Market Price” is defined in the Share
Compensation Plan, as of any date, the price of the Common Shares determined as follows: (A) if the Common Shares are listed on
any exchange, the Market Price will be the closing price of the Common Shares on such exchange for the last market trading
day prior to the date of grant of the Option. Notwithstanding the foregoing, in the event that the Common Shares are listed on the
CSE, for the purposes of establishing the exercise price of any Options, the Market Price shall not be lower than the greater
of the closing market price of the Subordinate Voting Shares on the CSE on (i) the trading day prior to the date of grant of
the Options, and (ii) the date of grant of the Options; or (B) in the absence of an established market for the Common Shares, the
Market Price shall be determined in good faith by the Administrators.
No
Option shall be exercisable after ten years from the date the Option is granted. Under the Share Compensation Plan, should the term of
an Option expire on a date that falls within a blackout period or within nine business days following the expiration of a blackout period,
such expiration date will be automatically extended to the tenth business day after the end of the blackout period.
Unless
otherwise determined by the Board, in the event of a change of control, any surviving or acquiring corporation shall assume any Option
outstanding under the Share Compensation Plan on substantially the same economic terms and conditions or substitute or replace similar
options for those Options outstanding under the Share Compensation Plan on substantially the same economic terms and conditions.
Transferability
RSUs
awarded and Options granted under the Share Compensation Plan or any rights of a Participant cannot be transferred, assigned, charged,
pledged or hypothecated, or otherwise alienated, whether by operation of law or otherwise.
Reorganization
and Change of Control Adjustments
In
the event of any declaration by the Company of any stock dividend payable in securities (other than a dividend which may be paid in cash
or in securities at the option of the holder of Common Shares), or any subdivision or consolidation of Common Shares, reclassification
or conversion of the Common Shares, or any combination or exchange of securities, merger, consolidation, recapitalization, amalgamation,
plan of arrangement, reorganization, spin off involving the Company, distribution (other than normal course cash dividends) of the Company
assets to holders of Common Shares, or any other corporate transaction or event involving the Company or the Common Shares, the Administrators
may make such changes or adjustments, if any, as they consider fair or equitable, to reflect such change or event including adjusting
the number of Options and RSUs outstanding under the Share Compensation Plan, the type and number of securities or other property to
be received upon exercise or redemption thereof, and the exercise price of Options outstanding under the Share Compensation Plan, provided
that the value of any Option or RSU immediately after such an adjustment shall not exceed the value of such Option or RSU prior thereto.
Amendment
Provisions in the Share Compensation Plan
The
Board may amend the Share Compensation Plan or any RSU or Option at any time without the consent of any Participant provided that such
amendment shall: (i) not adversely alter or impair any RSU previously awarded or any Option previously granted, except as permitted by
the adjustment provisions of the Share Compensation Plan and with respect to RSUs and Options of US Participants, such amendment will
not result in the imposition of taxes under Section 409A of the U.S. Internal Revenue Code of 1986; (ii) be subject to any regulatory
approvals including, where required, the approval of the CSE; and (iii) be subject to shareholder approval, where required, by the requirements
of the CSE, provided that shareholder approval shall not be required for the following amendments:
| (a) | amendments
of a “housekeeping nature”, including any amendment to the Share Compensation
Plan or a RSU or Option that is necessary to comply with applicable laws, tax or accounting
provisions or the requirements of any regulatory authority, stock exchange or quotation system
and any amendment to the Share Compensation Plan or a RSU or Option to correct or rectify
any ambiguity, defective provision, error or omission therein, including any amendment to
any definitions therein; |
| | | |
| (b) | amendments
that are necessary or desirable for RSUs or Options to qualify for favourable treatment under
any applicable tax law; |
| | | |
| (c) | amendments
to the vesting provisions of any RSU or any Option (including any alteration, extension or
acceleration thereof), providing such amendments do not adversely alter or impair such RSU
or Option; |
| | | |
| (d) | amendments
to the termination provisions of any Option (e.g., relating to termination of employment,
resignation, retirement or death) that does not entail an extension beyond the original expiration
date (as such date may be extended by virtue of a blackout period) providing such amendments
do not adversely alter or impair such Option; |
| | | |
| (e) | amendments
to the Share Compensation Plan that would permit the Company to retain a broker and make
payments for the benefit of Participants to such broker who would purchase Common Shares
for such persons, instead of issuing Common Shares from treasury upon the vesting of the
RSUs; |
| (f) | amendments
to the Share Compensation Plan that would permit the Company to make lump sum cash payments
to Participants, instead of issuing Common Shares from treasury upon the vesting of the RSUs;
and |
| | | |
| (g) | the
amendment of the cashless exercise feature set out in the Share Compensation Plan. |
For
greater certainty, shareholder approval will be required in circumstances where an amendment to the Share Compensation Plan would: (i)
increase the fixed maximum percentage of issued and outstanding Common Shares issuable under the Share Compensation Plan, other than
by virtue of the adjustment provisions in the Share Compensation Plan, or change from a fixed maximum percentage of issued and outstanding
Common Shares to a fixed maximum number of Common Shares; (ii) increase the limits referred to above under “Restrictions on
the Award of RSUs and Grant of Options”; (iii) reduce the exercise price of any Option (including any cancellation of an option
for the purpose of reissuance of a new option at a lower exercise price to the same person); (iv) extend the term of any Option beyond
the original term (except if such period is being extend by virtue of a blackout period); or (v) amend the amendment provisions of the
Share Compensation Plan.
Outstanding
share-based awards and option-based awards
The
following table provides details with respect to outstanding option-based awards and share-based awards, granted to the Named Executive
Officers as at the year ended June 30, 2024
| |
Option-based
Awards | | |
Share-based
Awards |
Name | |
Number
of securities underlying unexercised options (#) | | |
Option
exercise price ($) | | |
Option
expiration date | |
Value
of unexercised in-the-money options ($)(1) | | |
Number
of shares or units of shares that have not vested (#) | |
Market
or payout value of share-based awards that have not vested ($)(1) | |
Market
or payout value of vested share-based awards not paid out or distributed ($) |
| Dr.
Richard Lu President & CEO | |
| 550,000 | (2) | |
$ | 0.75 | | |
2027-11-04 | |
$ | 4,064,500 | | |
Nil | |
Nil | |
Nil |
| Sam
Sun Chief Financial Officer | |
| 149,000 | (2) | |
$ | 0.75 | | |
2027-11-04 | |
$ | 1,101,110 | | |
Nil | |
Nil | |
Nil |
| Andrew
van Doorn Chief Operating Officer | |
| 300,000 | (2) | |
$ | 0.75 | | |
2027-11-04 | |
$ | 2,217,000 | | |
Nil | |
Nil | |
Nil |
| Tracy
Zheng Chief Administrative Officer | |
| 300,000 | (2) | |
$ | 0.75 | | |
2027-11-04 | |
$ | 2,217,000 | | |
Nil | |
Nil | |
Nil |
| (1) | Based
on the closing price of the Common Shares on the Exchange on June 28, 2024 being $8.14. |
| | |
| (2) | Options
are granted for a period of five years and vest over a period of two years such that 50%
become available for exercise on each of the twelve and twenty-four month anniversaries of
the date of grant. |
Incentive
plan awards – value vested or earned during the financial year ended June 30, 2024
The
following table provides information regarding value vested or earned through incentive plan awards by the Named Executive Officers during
the year ended June 30, 2024:
| Name | |
Option-based
awards – Value vested during the year ($)(1) | | |
Share-based
awards – Value vested during the year ($)(2) | |
Non-equity
incentive plan compensation – Value earned during the year ($) |
| Dr.
Richard Lu President & CEO | |
| 1,677,500 | (2) | |
Nil | |
Nil |
| Sam
Sun Chief Financial Officer | |
| 454,450 | (3) | |
Nil | |
Nil |
| Andrew
van Doorn Chief Operating Officer | |
| 915,000 | (4) | |
Nil | |
Nil |
| Tracy
Zheng Chief Administrative Officer | |
| 915,000 | (5) | |
Nil | |
Nil |
| (1) | This
amount is calculated based on the dollar value that would have been realized by determining
the difference between the closing market price of the Common Shares and the exercise price
of the options on the vesting date. |
| | | |
| (2) | 275,000
options exercisable at $0.75 per share vested on November 4, 2023. The closing price of the
Common Shares on the Canadian Securities Exchange on November 3, 2023 was $6.85 |
| | | |
| (3) | 74,500
options exercisable at $0.75 per share vested on November 4, 2023. The closing price of the
Common Shares on the Canadian Securities Exchange on November 3, 2023 was $6.85 |
| | | |
| (4) | 150,000
options exercisable at $0.75 per share vested on November 4, 2023. The closing price of the
Common Shares on the Canadian Securities Exchange on November 3, 2023 was $6.85 |
| | | |
| (5) | 150,000
options exercisable at $0.75 per share vested on November 4, 2023. The closing price of the
Common Shares on the Canadian Securities Exchange on November 3, 2023 was $6.85 |
Pension
Plan Benefits
The
Company does not have any pension or retirement plans or arrangements for its Named Executive Officers.
Termination
and Change of Control Benefits
The
following describes the respective employment or consulting agreements currently in effect for the Named Executive Officers:
Dr.
Richard Lu
Effective
September 1, 2022, as amended July 2, 2024, Light Voltaic Corporation (“LVC”) entered into a consulting agreement
(the “Lu Consulting Agreement”) with the Company to provide the services of Dr. Lu to the Company to act as Chief
Executive Officer. LVC is paid annual consulting fees of $544,700 for the services of Dr. Lu. LVC is also eligible to receive a bonus
on the terms described above under “Compensation discussion and analysis – Bonus Payments”. The Company may terminate
the Lu Consulting Agreement by providing six months prior written notice. In the event that within one year of a “Change of Control”
the consulting agreement is terminated by LVC for “Good Reason” or by the Company, then LVC is entitled to a payment equal
to two years of consulting fees.
Sam
Sun
Effective
June 10, 2022, as amended July 1, 2024, Mr. Sun entered into an employment agreement with the Company with an effective start date of
July 4, 2022. Mr. Sun is paid an annual salary of $220,000 for his services as CFO. Mr. Sun is also eligible to receive a bonus on the
terms described above under “Compensation discussion and analysis – Bonus Payments”. The Company may terminate the
employment agreement by providing the notice or pay in lieu of notice required under the Employment Standards Act, 2000 (Ontario) which
as of June 30, 2024 was two weeks notice or pay in lieu of notice. In the event that within one year of a “Change of Control”
the employment agreement is terminated by Mr. Sun for “Good Reason” or by the Company, then Mr. Sun is entitled to a payment
equal to two years of base salary.
Andrew
van Doorn
Effective
October 25, 2022, Mr. van Doorn entered into an employment agreement with the Company. Mr. van Doorn is paid an annual salary of $361,500
for his services as COO. Mr. van Doorn is also eligible to receive a bonus on the terms described above under “Compensation discussion
and analysis – Bonus Payments”. The Company may terminate the employment agreement by providing twelve month’s notice
or pay in lieu of notice plus a continuation of employee group benefits for the notice period.
Tracy
Zheng
Effective
February 1, 2021 Ms. Zheng, as amended July 2, 2024, through her personal company The Phoenix Trendz Inc. (“PTI”),
entered into a consulting agreement with the Company. PTI is paid annual consulting fees of $250,000 (plus applicable taxes) for the
services of Ms. Zheng as Chief Administrative Officer. PTI is also eligible to receive a bonus on the terms described above under “Compensation
discussion and analysis – Bonus Payments”. The Company may terminate PTI’s consulting agreement by providing one month’s
prior written notice. In the event that within one year of a “Change of Control” the consulting agreement is terminated by
PTI for “Good Reason” or by the Company, then PTI is entitled to a payment equal to two years of consulting fees.
Definitions
“Change
of Control” will be deemed to have occurred if a transaction results in:
(i)
the acceptance of an Offer (defined below) by a sufficient number of holders of voting shares in the capital of the Company to constitute
the offeror, together with persons acting jointly or in concert with the offeror, a shareholder of the Company being entitled to exercise
more than 50% of the voting rights attaching to the outstanding voting shares in the capital of the Company (provided that prior to the
Offer, the offeror was not entitled to exercise more than 50% of the voting rights attaching to the outstanding voting shares in the
capital of the Company);
(ii)
the completion of a consolidation, merger or amalgamation of the Company with or into any other corporation whereby the voting shareholders
of the Company immediately prior to the consolidation, merger or amalgamation receive less than 50% of the voting rights attaching to
the outstanding voting shares of the consolidated, merged or amalgamated corporation or any parent entity; or
(iii)
the completion of a sale whereby all or substantially all of the Company’s undertakings and assets become the property of any other
entity and the voting shareholders of the Company immediately prior to that sale hold less than 50% of the voting rights attaching to
the outstanding voting securities of that other entity immediately following that sale.
“Good
Reason” shall be defined as, without the employee or consultant’s written consent, the occurrence of any of the following
circumstances:
(i)
reduction by the Company of the Monthly Fees;
(ii)
the employee or consultant no longer holds the position title specified in their agreement;
(iii)
a material diminution in the employee or consultant’ duties or the assignment to the employee or consultant of any duties inconsistent
with the position title specified in their agreement;
(iv)
a change in the employee or consultant’s reporting relationship such that the employee or consultant no longer reports directly
to the position; or
(v)
relocation of place of work more than 50 kilometers from the Company’s head office at the relevant time.
“Offer”
means a bona fide arm’s length offer made to all holders of voting shares in the capital of the Company to purchase, directly or
indirectly, voting shares in the capital of the Company.
Termination
Payments
The
following table shows estimated incremental payments triggered pursuant to termination of employment of a Named Executive Officer in
the event of a Change of Control in accordance with the termination provisions applicable as of June 30, 2024:
| Name(1) | |
Dr.
Richard Lu | | |
Sam
Sun | | |
Andrew
van Doorn | | |
Tracy
Zheng | |
| Severance
Period | |
| 24
months | | |
| 24
months | | |
| 12
months | | |
| 24
months | |
| Severance
Payment | |
| 828,000 | | |
| 240,000 | | |
| 350,000 | | |
| 376,800 | |
| Unvested
Stock Options(2) | |
| 2,032,250 | | |
| 550,555 | | |
| 1,108,500 | | |
| 1,108,500 | |
| Benefits(3) | |
| Nil | | |
| Nil | | |
| Nil | | |
| Nil | |
| TOTALS | |
| 2,860,250 | | |
| 790,555 | | |
| 2,158,500 | | |
| 1,485,300 | |
| (1) | The
termination value assumes that the triggering event took place on the last business day of
the Company’s financial year-end (June 30, 2024). |
| (2) | Subject
to a resolution of the Board of Directors, if there is a Change of Control, all stock options
and RSUs vest immediately prior to such Change of Control. This calculation is based on the
closing price of the Common Shares on the Cboe Canada Stock Exchange on June 28, 2024, being
$8.14 per share. |
| (3) | This
amount includes health and medical plan premiums. |
The
following table shows estimated incremental payments triggered pursuant to termination of employment of a Named Executive Officer without
cause in accordance with the termination provisions applicable as of June 30, 2024:
| Name(1) | |
Dr.
Richard Lu | | |
Sam
Sun | | |
Andrew
van Doorn | | |
Tracy
Zheng | |
| Severance
Period | |
| 6
months | | |
| 2
weeks | | |
| 12
months | | |
| 1
month | |
| Severance
Payment | |
| 207,000 | | |
| 4,615 | | |
| 350,000 | | |
| 15,700 | |
| Unvested
Stock Options | |
| Nil | | |
| Nil | | |
| Nil | | |
| Nil | |
| Benefits(2) | |
| 7,478 | | |
| 312 | | |
| 8,109 | | |
| 603 | |
| TOTALS | |
| 214,478 | | |
| 4,927 | | |
| 358,109 | | |
| 16,303 | |
| (1) | The
termination value assumes that the triggering event took place on the last business day of
the Company’s financial year-end (June 30, 2024). |
| (2) | This
amount includes health and medical plan premiums. |
Director
Compensation
From
April 1, 2024, under the Company’s director compensation program, non-executive Directors of the Company receive the following
director compensation, paid quarterly:
| ● | Independent
Lead Director Annual Retainer: $94,500 |
| ● | Independent
Director Annual Retainer: $81,000 |
| ● | Audit
Committee Chair Annual Retainer: $13,900 |
| ● | Compensation,
Corporate Governance and Nominating Committee Chair Annual Retainer: $13,900 |
The
following table contains information about the compensation paid to, or earned by Directors of the Company who were not Named Executive
Officers. During the financial year ended June 30, 2024, the Company had four Directors who were not Named Executive Officers, being
Paul Sparkes, Paul Pasalic, Olen Aasen and Chelsea Nickles.
| Name | |
Fees
earned ($) | | |
Share-based
awards ($) | |
Option-based
awards ($) | |
Non-equity
incentive plan compensation ($) | |
Pension
value ($) | | |
All
other compen-sation ($) | |
Total ($) | |
| Paul
Sparkes Director | |
$ | 23,625 | | |
Nil | |
Nil | |
Nil | |
| Nil | | |
Nil | |
$ | 23,625 | |
| Paul
Pasalic Director | |
$ | 23,725 | | |
Nil | |
Nil | |
Nil | |
| Nil | | |
Nil | |
$ | 23,725 | |
| Olen
Aasen(1) Director | |
$ | 20,250 | | |
Nil | |
Nil | |
Nil | |
| Nil | | |
Nil | |
$ | 20,250 | |
| Chelsea
Nickles Director | |
$ | 23,725 | | |
Nil | |
Nil | |
Nil | |
| Nil | | |
Nil | |
$ | 23,725 | |
| (1) | Olen
Aasen resigned as a Director effective July 8, 2024. |
Incentive
plan awards - Outstanding share-based awards and option-based awards granted to Directors
The
following table provides details with respect to outstanding option-based awards and share-based awards, granted to the Directors of
the Company who were not Named Executive Officers as at the year ended June 30, 2024.
| |
Option-based
Awards | | |
Share-based
Awards |
Name | |
Number
of securities underlying unexercised options (#) | | |
Option
exercise price ($) | | |
Option
expiration date | |
Value
of unexercised in-the-money options ($)(1) | | |
Number
of shares or units of shares that have not vested (#) | |
Market
or payout value of share-based awards that have not vested ($)(1) | |
Market
or payout value of vested share-based awards not paid out or distributed ($) |
| Paul
Sparkes Director | |
| 150,000 | (2) | |
$ | 0.75 | | |
2027-11-04 | |
| 1,108,500 | | |
Nil | |
Nil | |
Nil |
| Paul
Pasalic Director | |
| 150,000 | (2) | |
$ | 0.75 | | |
2027-11-04 | |
| 1,108,500 | | |
Nil | |
Nil | |
Nil |
| Olen
Aasen Director | |
| 200,000 | (2) | |
$ | 0.75 | | |
2027-11-04 | |
| 1,478,000 | | |
Nil | |
Nil | |
Nil |
| Chelsea
Nickles Director | |
| Nil | | |
| Nil | | |
Nil | |
| Nil | | |
Nil | |
Nil | |
Nil |
| |
(1) | Based
on the closing price of the Common Shares on the Cboe Canada Exchange Inc. on June 28, 2024,
being $8.20. |
| |
(2) | Options
are exercisable for a period of five years and vest over a period of two years such that
50% become available for exercise on each of the twelve and twenty-four month anniversaries
of the date of grant. |
Incentive
plan awards – value vested or earned during the financial year ended June 30, 2024
The
following table provides information regarding value vested or earned through incentive plan awards by the Directors of the Company who
were not Named Executive Officers during the year ended June 30, 2024:
| Name | |
Option-based
awards – Value vested during the year ($)(1) | | |
Share-based
awards – Value vested during the year ($)(2) | |
Non-equity
incentive plan compensation – Value earned during the year ($) |
| Paul
Sparkes Director | |
| 457,500 | (2) | |
Nil | |
Nil |
| Paul
Pasalic Director | |
| 457,500 | (2) | |
Nil | |
Nil |
| Olen
Aasen Director | |
| 610,000 | (3) | |
Nil | |
Nil |
| Chelsea
Nickles Director | |
| Nil | | |
Nil | |
Nil |
| |
(1) | This
amount is calculated based on the dollar value that would have been realized by determining
the difference between the closing market price of the Common Shares and the exercise price
of the options on the vesting date. |
| |
(2) | 75,000
options exercisable at $0.75 per share vested on November 4, 2023. The closing price of the
Common Shares on the Canadian Securities Exchange on November 3, 2023 was $6.85. |
| |
(3) | 100,000
options exercisable at $0.75 per share vested on November 4, 2023. The closing price of the
Common Shares on the Canadian Securities Exchange on November 3, 2023 was $6.85. |
SCHEDULE
“C”
to the Information Circular as at October 28, 2024 of
SolarBank Corporation
REPORTING
PACKAGE
See
attached.
SolarBank (NASDAQ:SUUN)
Historical Stock Chart
From Oct 2024 to Nov 2024
SolarBank (NASDAQ:SUUN)
Historical Stock Chart
From Nov 2023 to Nov 2024
