CARIBBEAN UTILITIES COMPANY, LTD. NOTICE OF … · Board Orientation and ... CARIBBEAN UTILITIES COMPANY, LTD. NOTICE OF ANNUAL ... A Management Information Circular prepared with

15MAR201018380823

CARIBBEAN UTILITIES COMPANY, LTD.

NOTICE OF

2017 ANNUAL GENERAL MEETING

OF SHAREHOLDERS

AND

MANAGEMENT

INFORMATION CIRCULAR

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TABLE OF CONTENTS

Notice of Annual General Meeting of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Management Information Circular . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Deposit and Revocation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Manner of Voting Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Voting Shares and Principal Holders Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Matters for Consideration of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Presentation of Audited Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Appointment of Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Nominees For Election as Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Majority Voting Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Overall Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Directors’ Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Corporate Governance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Board of Directors Code of Ethics and Whistle-Blower Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Nominating and Corporate Governance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Board Renewal & Term Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Board Composition & Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Board Orientation and Continuing Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Compensation Review Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Compensation Risk Assessment and Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Elements of Total Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Share Performance Graph (2012-2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Exchange Rate for Conversion of United States to Canadian Dollars (2012-2016) . . . . . . . . . . . . . . . . . . . 28Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Equity Compensation Plan Information as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Incentive Plan Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Outstanding Option-Based Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Performance Share Unit (‘‘PSU’’) Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Options Granted or Vested During the One-Year Period Ended December 31, 2016 . . . . . . . . . . . . . . . . . 31Defined Contribution Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Termination and Change of Control Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Share Incentive Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Employee Share Purchase Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Employee Long Service Bonus Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Executive Stock Option Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Indebtedness of Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Approval of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Schedule A — Mandate of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Schedule B — Change of Auditor Reporting Package . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

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19MAR201222124205


NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders (the ‘‘Meeting’’) ofCaribbean Utilities Company, Ltd. (the ‘‘Company’’) will be held at the Marriott Beach Resort, West Bay Road,Grand Cayman, Cayman Islands, on Thursday, May 11, 2017 at the hour of 12:00 p.m., Cayman Islands time, forthe following purposes:

1. to receive and consider the Annual Report, including audited consolidated financial statements of theCompany for the one-year period ended December 31, 2016 and the Report of the Auditors thereon;

2. to elect the directors of the Company;

3. to appoint Deloitte LLP as auditors of the Company and to authorize the directors to fix the auditors’remuneration;

4. to transact such other business as may properly come before the Meeting or any adjournment thereof.

A Management Information Circular prepared with respect to the Meeting and a form of proxy accompanythis Notice. Only the holders of record of the Class A Ordinary Shares as at March 13, 2017 will be entitled tovote at the Meeting, while the holders of the Company’s 9% Class B Cumulative Participating Preference Sharesare entitled to receive notice of and be present at the Meeting. If you are a registered holder of Class AOrdinary Shares and are unable to attend the Meeting in person, please date and sign the enclosed form ofproxy and, in the case of shareholders resident in the Cayman Islands, return it to the attention of the CompanySecretary, Caribbean Utilities Company, Ltd., P.O. Box 38, Grand Cayman, Cayman Islands KY1-1101(fax 345-949-4621), and, in the case of shareholders not resident in the Cayman Islands, return it to CST TrustCompany, Attention: Proxy Department, P.O. Box 721, Agincourt, Ontario, Canada, M1S 0A1(fax 416-368-2502), to arrive not later than 48 hours (excluding Saturdays, Sundays and holidays) before the timeset for the Meeting or any adjournment or postponement thereof or with the Chairman of the Meeting prior tothe commencement of the Meeting or adjournment or postponement thereof.

Non-registered shareholders who receive these materials through their broker or other intermediary shouldcomplete and send a form of proxy or voting instruction form, as appropriate, provided by their broker or otherintermediary in accordance with their instructions.

DATED at George Town, Grand Cayman, Cayman Islands, the 13th day of March, 2017.

By Order of the Board of Directors

Letitia T. LawrenceCompany Secretary

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MANAGEMENT INFORMATION CIRCULAR

This Management Information Circular is furnished in connection with the solicitation of proxies bymanagement of Caribbean Utilities Company, Ltd. (the ‘‘Company’’ or ‘‘CUC’’) for use at the Annual GeneralMeeting of Shareholders of the Company to be held on Thursday, May 11, 2017, at the time and place and forthe purposes set out in the accompanying Notice or at any adjournment(s) or postponement(s) thereof(the ‘‘Meeting’’). This solicitation is made by management of the Company. Proxies will primarily be solicited bymail, but proxies may also be solicited personally, by telephone, e-mail, Internet or facsimile by directors,officers and employees of the Company and the cost of such solicitation by management will be borne by theCompany. The Company will be sending proxy-related materials directly to non-objecting beneficial ownerspursuant to the requirements of Canadian securities laws.

The information contained in this Information Circular is given as of March 13, 2017 unless otherwiseindicated. All dollar amounts in this Information Circular are in United States dollars, and references to ‘‘$’’,‘‘US$’’ or ‘‘US dollars’’ are to United States dollars unless otherwise indicated. References to ‘‘Cdn. $’’ are toCanadian dollars, and references to ‘‘CI$’’ are to Cayman Islands dollars. The closing rate of exchange, asreported by the Bank of Canada, for conversion of US dollars into Canadian dollars was Cdn. $1.3427 perUS$1.00 on December 31, 2016. The official fixed exchange rate for conversion of CI$ into US$, as determinedby the Cayman Islands Monetary Authority, has been fixed since April 1974 at US$1.20 per CI$1.00. Thus, therate of exchange for conversion of Cayman Islands dollars into Canadian dollars was Cdn. $1.6112 per CI$1.00on December 31, 2016. References to The Companies Law are references to the Cayman Islands CompaniesLaw (2013 Revision).

SOLICITATION OF PROXIES

Deposit and Revocation of Proxies

Only registered holders of the Company’s Class A Ordinary Shares as at March 13, 2017, or their dulyappointed proxyholders, are entitled to vote at the Meeting. Registered holders of the Class A Ordinary Sharesare asked to sign, date and return the enclosed form of proxy if it is not their intention to be present in person atthe Meeting. The form of proxy must be signed by the shareholder or his or her duly authorized attorneyauthorized in writing or, if the shareholder is a corporation, by a duly authorized officer or attorney thereof.Proxies to be exercised at the Meeting must be deposited with one of the Company’s two transfer agents: in thecase of non-Cayman Islands residents, with CST Trust Company, Attention: Proxy Department, P.O. Box 721,Agincourt, Ontario, Canada, M1S 0A1 (fax 416-368-2502); or in the case of Cayman Islands residents, withCaribbean Utilities Company, Ltd., Attn: Company Secretary, P.O. Box 38, Grand Cayman KY1-1101, CaymanIslands (fax 345-949-4621), to arrive not later than 48 hours (excluding Saturdays, Sundays and holidays) beforethe time set for the Meeting or any adjournment or postponement thereof or with the Chairman of the Meetingprior to the commencement of the Meeting or adjournment or postponement thereof.

Non-registered shareholders are those whose shares are held in the name of an intermediary, such as abank, trust company or securities broker. Non-registered holders of the Class A Ordinary Shares may receive avoting instruction form or other form of proxy when meeting materials are forwarded to them by anintermediary. The purpose of such forms is to permit non-registered holders to direct the voting of the Class AOrdinary Shares that they beneficially own, notwithstanding the fact that they are not the registered owner ofsuch shares. Non-registered holders of Class A Ordinary Shares should follow the procedures and submit theirproxies or voting instruction forms as instructed by their broker or other intermediary. Non-registered holders ofClass A Ordinary Shares who wish to vote at the meeting in person should strike out the names of the personsdesignated in the form of proxy and insert the non-registered holder’s name in the blank space provided.

A registered shareholder who has given a proxy may revoke it as to any matter on which a vote has notalready been cast pursuant to its authority by instrument in writing executed by the shareholder or by his or herattorney authorized in writing or, if the shareholder is a corporation, by an officer or attorney thereof, dulyendorsed, and deposited at the office of the transfer agents referred to above not later than 48 hours (excluding

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Saturdays, Sundays and holidays) before the time set for the Meeting at which the proxy is to be used or with theChairman of such Meeting on the day of, and prior to the commencement of, such Meeting.

Manner of Voting Proxies

The persons named in the enclosed form of proxy are directors or officers of the Company. Registeredshareholders may appoint a person or company to represent them and vote on their behalf at the Meeting otherthan the directors or officers designated by the Company on the form of proxy. To do so, registered shareholdersmay either write the name of the person they wish to appoint in the space provided on their form of proxy orsubstitute it with another form of proxy. In either case, completed forms of proxy must be deposited with theappropriate transfer agent (as referred to above) not later than: (i) 48 hours (excluding Saturdays, Sundays andholidays) before the time set for the Meeting or any adjournment or postponement thereof, or (ii) with theChairman of the Meeting prior to the commencement of the Meeting or adjournment or postponement thereof.

The shares represented by completed forms of proxy will be voted or withheld from voting in accordancewith the instructions of the holder on any ballot that may be called for and, if the holder specifies a choice withrespect to any matter to be acted upon, the shares will be voted accordingly at the Meeting.

Voting Shares and Principal Holders Thereof

The authorized share capital of the Company is CI$3,562,520 divided into 60,000,000 Class A OrdinaryShares of nominal or par value of CI$0.05 each, 32,683,678 of which were issued and outstanding as of March 13,2017 and each of which is entitled as such to one vote on each matter coming before the Meeting; 250,000 9%Class B Cumulative Participating Preference Shares (the ‘‘Class B Preference Shares’’) of a nominal or par valueof $1.00 (CI$0.84) each, all of which are issued and outstanding but which do not carry the right to vote except(i) in the event the Company becomes in arrears in the payment of dividends, or (ii) as otherwise prescribed bythe Articles; 419,666 Class C Preference Shares of a nominal or par value of $1.00 (CI$0.84) each, all of whichhave been issued and subsequently redeemed but still form part of the authorized capital of the Company; andone unissued non-voting Class D Cumulative Participating Preference Share of a nominal or par value ofCI$0.56. Only holders of the Class A Ordinary Shares will be entitled to vote at the Meeting, while the holders ofthe Company’s Class B Preference Shares are entitled to receive notice of and to be present at the Meeting.

The directors have fixed March 13, 2017 as the record date for determining shareholders entitled to receivenotice of the Meeting.

To the knowledge of the Company’s directors and executive officers, no person or company other thanFortis Energy (Bermuda) Ltd. (‘‘FEBL’’) owns, beneficially or of record, or controls or directs, directly orindirectly voting securities carrying 10 per cent or more of the voting rights attached to the shares of theCompany. FEBL currently holds 19,460,326 Class A Ordinary Shares, representing approximately 59.61% of theClass A Ordinary Shares currently issued and outstanding. FEBL is a wholly-owned subsidiary of Fortis Inc. ofSt. John’s, Newfoundland and Labrador, Canada. Its registered office is located at Clarendon House, 2 ChurchStreet, Hamilton, Bermuda HM 11, and its mailing address is the same.

The directors and officers of the Company collectively own, beneficially or of record, or control directly orindirectly 184,278 Class A Ordinary Shares, representing 0.56% of all Class A Ordinary Shares of the Companyoutstanding as of March 13, 2017.

The form of proxy provides a method for the Class A Ordinary Shareholders to specify that the Class AOrdinary Shares registered in the shareholder’s name shall be voted or withheld from voting by the proxyholderfor the nominees for election as directors and for the appointment of Deloitte LLP as auditors. Wherespecification is made, the Class A Ordinary Shares represented by proxy will be voted, or be withheld fromvoting, in accordance with the specifications so made. It is intended that such Class A Ordinary Shares, in theabsence of such specifications, will be voted in favour of the election of directors nominated by management andthe appointment of Deloitte LLP as auditors at a remuneration to be fixed by the directors.

The accompanying form of proxy confers discretionary authority upon the persons named therein withrespect to amendments to, and variations in, matters identified in the accompanying Notice and with respect toother business that may properly come before the Meeting.

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MATTERS FOR CONSIDERATION OF SHAREHOLDERS

1. Presentation of Audited Consolidated Financial Statements

The consolidated financial statements of the Company for the one-year period ended December 31, 2016,together with the report of the auditors thereon, will be presented at the Meeting to the shareholders for theirconsideration. A copy of the Report to Shareholders for the one-year period ended December 31, 2016,including audited consolidated financial statements, is enclosed herewith for shareholders who respondedaffirmatively to the Company’s interim and annual consolidated financial statement mail card distributed withthe proxy materials for the 2016 annual meeting of shareholders. These documents are also available on theCompany’s website (www.cuc-cayman.com) and on the System for Electronic Document Analysis and Retrieval(‘‘SEDAR’’) website (www.sedar.com).

Except as otherwise indicated, period-end information in this report reflects that of the one-year periodended December 31, 2016.

2. Election of Directors

The Articles of Association of the Company (the ‘‘Articles’’) provide that the Board of Directors(the ‘‘Board’’) shall consist of a minimum of seven and a maximum of thirteen members. The number ofdirectors within such range is determined by the vote of the holders of more than 50 percent of the Class AOrdinary Shares in a general meeting called for that purpose.

The Board has proposed that eleven directors be elected at the Meeting and that the number of directors beset at eleven. If any proposed nominee is elected as director, the office will be held until the next AnnualGeneral Meeting of Shareholders or until a successor is duly elected or appointed, unless the office is earliervacated in accordance with the provisions of The Companies Law or the Articles.

The Board currently consists of 10 members. The Company’s Articles provide for a mandatory retirementage of 70 years for directors of the Company. Directors are required to vacate the office of director and anyofficer’s position at the first general meeting after reaching such age. All of the nominated directors listed beloware below age 70.

Additional details pertaining to each of the nominees can be found on pages 10 through 19 of this Circular.The proposed 11 nominees for election as directors are as follows:

J. Bryan Bothwell Jennifer P. DilbertSheree L. Ebanks Woodrow S. FosterJ. F. Richard Hew Earl A. LudlowEddinton Powell David E. RitchGary J. Smith Peter A. ThomsonLynn R. Young

Although management does not contemplate that any of the nominees named above will be unavailable tostand for election or would decline to serve if elected, in the event of any vacancy among the nominees, the Class AOrdinary Shares represented by the enclosed form of proxy will be voted in favour of the remaining nominees andfor such other substitute nominees as the Board may designate in such event.

Management and the Board recommend that shareholders vote FOR the election of these proposed nominees. Thepersons named in the enclosed form of proxy intend to vote FOR the election of each of these nominees unless theshareholder specifies that authority to do so be withheld.

3. Appointment of Auditors

The Board of Directors resolved in February 2017 to propose the appointment of Deloitte LLP(‘‘Deloitte’’) as auditors of the Company at the Meeting as recommended by the Audit Committee. Deloitte, ifappointed, would succeed Ernst & Young Ltd. (‘‘E&Y’’) as auditors of the Company for the fiscal year endingDecember 31, 2017.

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In accordance with National Instrument 51-102 — Continuous Disclosure Obligations (‘‘NI 51-102’’) theCompany filed a Reporting Package with the Canadian Securities Administrators on March 6, 2017 pertaining tothe proposed change in auditors from E&Y to Deloitte. This Reporting Package is appended to this InformationCircular as Schedule B and may be accessed through SEDAR at www.sedar.com. The Reporting Packagecontains the following materials: (i) Notice of Change of Auditor dated February 23, 2017 (the ‘‘Notice’’); (ii) aresponse letter from E&Y dated February 24, 2017; and (iii) a response letter from Deloitte dated February 28,2017. The Notice confirms that no ‘‘reportable events’’, as defined in NI 51-102 have occurred and E&Y did notexpress a modified opinion in its reports for the audits of CUC for the two most recently completed fiscal yearsand any subsequent period.

The external auditors of the Company for the one year period ended December 31, 2016 were E&Y. TheCompany has been advised that the partners and senior management of E&Y, together with each employee orconsultant of E&Y who participated in and who was in a position to directly influence the preparation of E&Y’saudit report on the audited consolidated financial statements of the Company for the year ended December 31,2016, hold no interest in the securities of CUC and that E&Y is independent with respect to the Company inaccordance with the independence requirements of The International Federation of Accountants.

Fees paid by CUC to E&Y and Ernst & Young LLP in Fiscal 2016 and Fiscal 2015 for audit, audit-relatedand non-audit services were as follows:

December 31, 2016 December 31, 2015($) ($)

CUC Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277,500 272,000DataLink Special Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 8,500

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287,500 280,500

Management and the Board, upon advice from the Audit Committee, recommend that shareholders vote FOR theappointment of Deloitte LLP as the auditors of the Company and the authorization of the Board to fix the remuneration ofthe auditors. The persons named in the enclosed form of proxy intend to vote FOR this appointment and the authorizationof the Board to fix the remuneration of the auditors unless the shareholder specifies that authority to do so be withheld.

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23MAR201709331363

NOMINEES FOR ELECTION AS DIRECTORS

This section provides information on each of the 11 nominees for election as director at the AnnualGeneral Meeting, including the background, experience, meeting attendance, other public board membershipsand the number of CUC shares held. The nominees presented for election as directors are all independent inaccordance with the definition set out in Canadian Securities Administrators National Instrument 58-101 —Disclosure of Corporate Governance Practices (‘‘NI 58-101’’) with the exception of Mr. Hew, who is the Presidentand Chief Executive Officer of the Company, and Mr. Ludlow, who is the Executive Vice-President of EasternCanadian and Caribbean Operations at Fortis Inc., whose wholly-owned subsidiary, FEBL, is the controllingshareholder of the Company and accordingly is deemed under NI 58-101 to be non-independent. The term ofoffice for each incumbent director nominee will expire on May 11, 2017 unless re-elected. The term of office foreach director nominee elected at the Annual General Meeting shall expire on the date of the next annualgeneral meeting to be held in the following year.

None of the independent director nominees, in the opinion of the Board, has a material direct or indirectrelationship with the Company that could reasonably be expected to interfere with that individual’s exercise ofindependent judgment as a director of the Company. As such, more than a majority of the nominees presentedfor election as directors are independent within the meaning of NI 58-101. The independent directors includeMr. David E. Ritch, OBE, JP, who is the Chairman of the Board. The Chairman provides independent, effectiveleadership to the Board in the governance of the Company. The Chairman sets the ‘‘tone’’ for the Board and itsmembers by fostering ethical and responsible decision-making, appropriate oversight of management and strongcorporate governance.

J. Bryan Bothwell, MBE

Mr. Bothwell is the retired Chief Executive Officer (Managing Director) ofAnsbacher (Cayman) Limited and was employed in the banking and trustindustry in the Cayman Islands for 35 years prior to retirement. He is anAssociate of the Chartered Institute of Bankers.

Mr. Bothwell also currently serves as Chairman for the Cayman IslandsNational Pensions Board.

Grand Cayman, 2016 Annual General Meeting — Votes in favour: 99.91%Cayman Islands

Independent Other Public Company Directorships: NoneDirector Since: 2004Age: 67

Board/Committee Membership Meeting Attendance (%)Board of Directors 4 of 4 (100%)Audit Committee (Chairman) 5 of 5 (100%)

Securities Held: Class A Ordinary Shares Market Value(1)

March 16, 2016 12,208 $132,578.88March 13, 2017 12,729 $166,877.19

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23MAR201709330794

23MAR201709335463

Jennifer P. Dilbert, MBE, JP

Mrs. Dilbert was appointed the Cayman Islands first Information Commissionerin January 2009 and served until December 2013 when she retired from thecivil service. Prior to this, she served as the Cayman Islands GovernmentRepresentative in the United Kingdom and as head of the Cayman IslandsMonetary Authority.

Mrs. Dilbert serves on the Board and is Treasurer of the National Gallery ofthe Cayman Islands and is a Board member of the Fidelity Bank and Trustgroup of companies.Grand Cayman,

Cayman Islands Mrs. Dilbert previously served as Executive Director of Deutsche BankIndependent (Cayman) Ltd. and as Inspector of Financial Services for the Cayman Islands

Government.Director Since: N/AAge: 59 She has also served on the Board of the Cayman Islands Monetary Authority;

the Council of the Cayman Islands Stock Exchange; Vice President of theCayman Islands Bankers’ Association; and the Board of Directors of Aall Bankand Trust Company

2016 Annual General Meeting — N/A

Other Public Company Directorships: None

Board/Committee Membership Meeting Attendance (%)N/A N/A


March 16, 2016 65 $705.90March 13, 2017 65 $852.15

Sheree L. Ebanks

Mrs. Ebanks is the Chief Executive Officer of the Cayman Islands Institute ofProfessional Accountants, a non-profit professional society and regulatory body.She holds an MBA from Liverpool University and previously served as Directorand Head of Wealth Management and Fiduciary Services at Butterfield Bank(Cayman) Limited.

2016 Annual General Meeting — Votes in favour: 99.94%

Other Public Company Directorships: NoneGrand Cayman,Cayman Islands

Independent

Director Since: 2014Age: 60

Board/Committee Membership Meeting Attendance (%)Board of Directors 4 of 4 (100%)Audit Committee 5 of 5 (100%)

Securities Held: Class A Ordinary Shares Market Value USD(1)

March 16, 2016 1,385 $ 15,041.10March 13, 2017 13,426 $176,014.00

12

23MAR201709340002

23MAR201709334978

Woodrow S. Foster

Mr. Foster is the Managing Director of Fosters Food Fair IGA and a directorof the Foster Group of Companies.

Mr. Foster also serves as the Chairman for LIFE (Literacy is ForEveryone) Ltd, a non-profit charity organization in the Cayman Islands. Inaddition, he is the Co-Chair of the Ready2WorkKY Committee, a CaymanIslands Government initiative and is a member of the Education Council forthe Cayman Islands Government Ministry of Education.

Grand Cayman,Cayman Islands 2016 Annual General Meeting — Votes in favour: 99.94%Independent

Other Public Company Directorships: NoneDirector Since: 2014Age: 48

Board/Committee Membership Meeting Attendance (%)Board of Directors 4 of 4 (100%)Nominating & Corporate Governance 3 of 3 (100%)Committee


March 16, 2016 Nil NilMarch 13, 2017 Nil Nil

J. F. Richard Hew

Mr. Hew is the President & Chief Executive Officer of Caribbean UtilitiesCompany, Ltd., where he has been employed since 1988. Mr. Hew holds aBachelor of Science degree in Electrical Engineering from the University ofFlorida and a Master of Business Administration from Wilfred LaurierUniversity, Ontario, Canada. He is a registered Professional Engineer in theState of Florida.

Mr. Hew serves as Director on the Board of FortisTCI Limited and previouslyGrand Cayman, served as Director on the Board of Newfoundland Power Inc. in St. John’s,Cayman Islands Canada.Not Independent

2016 Annual General Meeting — Votes in favour: 99.83%Director Since: 2003Age: 52


Board/Committee Membership Meeting Attendance (%)Board of Directors 4 of 4 (100%)


March 16, 2016 24,465 $265,689.90March 13, 2017 25,509 $334,422.99

13

23MAR201709332357

23MAR201709332806

Earl A. Ludlow

Mr. Ludlow is Executive Vice President, Eastern Canadian and CaribbeanOperations of Fortis Inc., effective August 1, 2014. Mr. Ludlow has a careerwith the Fortis Group that spans more than 36 years. He was appointedPresident and CEO of Newfoundland Power Inc. in 2007. Prior to then, heserved as President and CEO of Fortis Properties from 2005 through 2007, andas Senior Vice President, FortisBC and VP, Operations of FortisAlberta from2004 through 2005. Mr. Ludlow holds a Bachelor of Engineering (Electrical)and Master of Business Administration from Memorial University of

Newfoundland and Newfoundland. He is a member of the Professional Engineers and GeoscientistsLabrador, of Newfoundland and Labrador.Canada

Mr. Ludlow also serves as a Director on the Boards of NewfoundlandNot Independent Power Inc., Maritime Electric Company Ltd., FortisOntario Inc., (Chair) andDirector Since: 2011 Commissionaires of Newfoundland and Labrador. He is a fellow of theAge: 60 Canadian Academy of Engineers and a member of the Order of Newfoundland

and Labrador.


Other Public Company Directorships: Newfoundland Power Inc.

Board/Committee Membership Meeting Attendance (%)Board of Directors 4 of 4 (100%)Nominating & Corporate Governance 3 of 3 (100%)Committee



Eddinton M. Powell

Mr. Powell is the President and Chief Executive Officer of FortisTCI Limited(FTCI) and Turks and Caicos Utilities Limited (a wholly owned subsidiary ofFTCI). He holds a Bachelor of Science Degree in Accounting from theInternational College, Cayman Islands and a Master’s Degree in Accountingfrom the Friedt School of Business and Entrepreneur, Nova SoutheasternUniversity.

Mr. Powell previously served as Senior Vice President and Chief FinancialOfficer of Caribbean Utilities Company, Ltd. until 2007, on the Board ofProvidenciales,Directors of Belize Electricity Limited and as Chairman of Cayman IslandsTurks and CaicosDevelopment Bank.Islands

Independent 2016 Annual General Meeting — Votes in favour: 99.30%Director Since: 2007 Other Public Company Directorships: NoneAge: 58

Board/Committee Membership Meeting Attendance (%)Board of Directors 4 of 4 (100%)Audit Committee 5 of 5 (100%)


March 16, 2016 714 $7,754.04March 13, 2017 745 $9,766.95

14

23MAR201709331872

23MAR201709333404

David E. Ritch, OBE, JP

Mr. Ritch is the senior partner of Ritch & Conolly, a Cayman Islands law firmpractising, inter alia, banking, general corporate and insolvency law. He holdsan LL.B Degree with Honours from the University of the West Indies andattended the Inns of Court School of Law in London, England, where hecompleted the Bar Final exams as an Honours student. He was called to theBar of England and Wales by the Honourable Society of the Inner Temple andis also admitted as an Attorney-at-Law in the Cayman Islands.

Mr. Ritch currently serves as non-executive Chairman on the Board ofGrand Cayman,Directors of FirstCaribbean International Bank Limited and on the Board ofCayman IslandsDirectors of FirstCaribbean International Bank (Cayman) Limited. He is also a

Independent member of the Audit and Governance Committee, the Finance, Risk andDirector Since: 1988 Conduct Review Committee and the Change, Operations, Technology andAge: 65 Human Resources Committee of FirstCaribbean International Bank.


Other Public Company Directorships: FirstCaribbean International Bank Limited

Board/Committee Membership Meeting Attendance (%)Board of Directors (Non-Executive Chairman) 4 of 4 (100%)Audit Committee 5 of 5 (100%)Nominating & Corporate Governance 3 of 3 (100%)Committee (Chairman)


March 16, 2016 52,648 $571,757.28March 13, 2017 56,017 $734,382.87

Gary J. Smith

Mr. Smith has had a career with the Fortis Group for over 32 years. InAugust 2014, he was appointed as the President and Chief Executive Officer ofNewfoundland Power Inc. Prior to that, and beginning in 2008, he served asVice President of Customer Operations and Engineering for NewfoundlandPower Inc. Mr. Smith holds a Bachelor of Engineering (Electrical) fromMemorial University of Newfoundland and is a graduate of Memorial’sExecutive Development Program. He has completed the Finance for seniorexecutives program at the Harvard Business School.

Newfoundland andMr. Smith is a member of the Association of Professional Engineers andLabrador,Geoscientists of Newfoundland, a member of the Steering Committee on PowerCanadaEngineering for the Canadian Standards Association, and a member of the

Independent Board of Directors of the Canadian Electricity Association.Director Since: N/A

2016 Annual General Meeting — Votes in favour: 99.33%Age: 55


Board/Committee Membership Meeting Attendance (%)N/A N/A



15

23MAR201709334571

23MAR201709333875

Peter A. Thomson

Mr. Thomson retired as Chief Executive Officer for Caribbean UtilitiesCompany, Ltd. in August 2005.

Mr. Thomson also serves on a number of Cayman Island resident fundmanagement companies as independent director and investment advisor.


Grand Cayman, Other Public Company Directorships: NoneCayman Islands

Independent

Director Since: 1986Age: 65



March 16, 2016 50,965 $553,479.90March 13, 2017 54,723 $717,418.53

Lynn R. Young

Mr. Young is the President and CEO at Belize Electric Company Limited(BECOL), an electricity generating company. He holds a Bachelor of Science,Mechanical Engineering from the University of the West Indies, Trinidad &Tobago and a Master of Business Administration from the University ofWestern Ontario, London, Ontario.

Mr. Young also serves as director on the boards of FortisTCI Limited, BelizeElectric Company Limited, the University of Belize, and is Chairman of the

Ladyville, Kolbe Foundation, a non-profit agency based in Belize.Belize

Independent 2016 Annual General Meeting — Votes in favour: 99.94%Director Since: 2011

Other Public Company Directorships: NoneAge: 59




(1) Market Value is calculated using the closing price as of March 16, 2016 and March 13, 2017 respectively.

All of the above directors, with the exception of Jennifer Dilbert, were elected at the Annual GeneralMeeting of Shareholders held May 12, 2016.

The following individuals proposed for election to the Board serve on the boards of other reporting issuersor equivalents, as follows, as submitted by each nominee:Name Reporting Issuers

David E. Ritch, OBE, JP . . . . . . . . . . . . . . . . . . . . . . . . . . . . FirstCaribbean International Bank LimitedEarl A. Ludlow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Newfoundland Power Inc.

16

Majority Voting Policy

The current process for the election of the Board of the Company is compliant with Cayman Islandscompany and Canadian securities laws, including the requirements of the Toronto Stock Exchange (‘‘TSX’’).Under the TSX requirements, a listed issuer must adopt a majority voting policy unless it qualifies under anexemption from doing so. CUC is exempt from adopting a majority voting policy as it is majority controlled. TheBoard has not adopted a majority voting policy for the election of Directors. As the Company is a controlledcompany with a controlling shareholder, it is the Board’s view that a majority voting policy for the election of theBoard would not serve a useful purpose for shareholders of the Company since the controlling shareholderwould necessarily cast a majority of the votes to be cast in an election of the Company’s directors. Under policiesadopted by the Board, shareholders have the ability to vote for, or withhold from voting for, each individualdirector proposed for election to the Board of the Company.

Overall Attendance

The Board and each committee have established a policy reserving time immediately prior to the end ofeach Board and committee meeting when the Board or committee meets without management present.Independent directors also meet without management present from time to time as circumstances warrant. Nosuch meetings of independent directors, other than at regularly scheduled Board or committee meetings, wereheld in 2016.

The Board held four meetings; the Audit Committee held five meetings; and the Nominating andCorporate Governance Committee (‘‘NCG Committee’’) held three meetings during the one-year period endedDecember 31, 2016. Overall meeting attendance by the directors during the one-year period endedDecember 31, 2016 was as follows:

Meeting Attendance for the One-Year Period Ended December 31, 2016

Board of Audit NCG AttendanceName Directors Committee Committee %

J. Bryan Bothwell, MBE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 5 of 5 N/A 100Sheree L. Ebanks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 5 of 5 N/A 100Woodrow Foster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 N/A 3 of 3 100J.F. Richard Hew(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 N/A N/A 100Joseph A. Imparato(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 of 2 N/A N/A 50Earl A. Ludlow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 N/A 3 of 3 100Frederick O’Brien(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 of 1 N/A N/A 0Eddinton M. Powell, JP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 5 of 5 N/A 100David E. Ritch, OBE, JP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 5 of 5 3 of 3 100Peter A. Thomson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 N/A N/A 100Lynn R. Young . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 of 4 N/A N/A 100Gary Smith(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 of 2 N/A N/A 100

Notes:

(1) Mr. Hew is not a member of any committees but attends all committee meetings in his capacity as President and Chief ExecutiveOfficer.

(2) In 2016, Mr. Joseph Imparato reached the mandatory retirement age for Directors as stipulated in the Company’s Articles and retiredfollowing the May 2016 Annual General Meeting.

(3) Mr. Frederick O’Brien tendered his resignation as director as of March 31, 2016 and did not attend a meeting for the year endedDecember 31, 2016.

(4) Mr. Smith attended all Board of Directors meetings following his election as a director at the Annual General Meeting in May 2016.

17

Directors’ Compensation

The following table summarizes individual director compensation for the one-year period endedDecember 31, 2016:

Total Fees All Other TotalRetainer Meeting Fees Earned Compensation Compensation

Director(1) ($) ($) ($) ($)(2) ($)

J. Bryan Bothwell, MBE . . . . . . . . . . . . . . . . . 18,000 13,500 31,500 31,500Sheree L. Ebanks . . . . . . . . . . . . . . . . . . . . . . 15,000 13,500 28,500 28,500Woodrow Foster . . . . . . . . . . . . . . . . . . . . . . . 15,000 10,500 25,500 25,500Joseph A. Imparato(3) . . . . . . . . . . . . . . . . . . . 6,000 1,500 7,500 25,134 32,634Earl Ludlow . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 10,500 25,500 25,500Frederick O’Brien(4) . . . . . . . . . . . . . . . . . . . . 3,000 3,000 3,000Eddinton M. Powell, JP . . . . . . . . . . . . . . . . . 15,000 13,500 28,500 28,500David E. Ritch, OBE, JP . . . . . . . . . . . . . . . . 75,000 18,000 93,000 93,000Gary Smith(5) . . . . . . . . . . . . . . . . . . . . . . . . . 7,644 3,000 10,644 10,644Peter A. Thomson . . . . . . . . . . . . . . . . . . . . . 12,000 6,000 18,000 248,192 266,192Lynn Young . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 6,000 18,000 18,000

Notes:

(1) For compensation information relating to Mr. Hew, refer to the Summary Compensation Table on page 29.

(2) Includes cost of: (i) medical benefits; and (ii) consultancy payments in the aggregate of $232,980 in the case of Mr. Thomson.

(3) In 2016, Mr. Joseph Imparato reached the mandatory retirement age for Directors as stipulated in the Company’s Articles and retiredfollowing the May 2016 Annual General Meeting.

(4) Mr. Frederick O’Brien tendered his resignation as director effective March 31, 2016.

(5) Mr. Gary Smith was elected as director at the Annual General Meeting on May 12, 2016 and the annual Board retainer fee waspro-rated for the remainder of the year.

Each Director is entitled to remuneration for attendance at meetings of the Board, whether in person or byconference call as set out in the summary tables below. In addition, each Director is reimbursed for reasonabletravel and other expenses associated with attendance at meetings of the Board.

Board of Directors Retainer and Meeting Fees

Retainer Per Annum Meeting FeePosition ($) ($)

Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 1,500Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 1,500

Committee Retainer and Meeting Fees

Retainer Per Annum Meeting FeePosition ($) ($)

Chairman, Audit Committee, Nominating and Corporate GovernanceCommittee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 1,500

Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 1,500

Notes:

(1) Mr. Richard Hew is ineligible for retainer fees or meeting fees for serving on the Board as he is an executive officer of the Company.

(2) Mr. Ritch is ineligible for retainer fees in respect of both of the Nominating and Corporate Governance Committee and the AuditCommittee as he receives a retainer fee as Chairman.

18

In February 2005, the Board approved a consultancy agreement between the Company and Mr. Peter A.Thomson, who retired as President and Chief Executive Officer of the Company on August 25, 2005. Theagreement commenced immediately following Mr. Thomson’s retirement, was subsequently amended, and willexpire on December 31, 2017. The Board also approved the creation of a defined benefit pension plan consistingof revised compensation arrangements reflecting Mr. Thomson’s long association with the Company andcontinuing contributions to the Company. These arrangements are included in the consultancy agreement andwill continue in their entirety following the expiration of that agreement indefinitely. During the one-year periodended December 31, 2016, Mr. Thomson received consultancy fees in the amount of $232,980 as well as medicalinsurance benefits valued at $18,212.

The compensation arrangements for Mr. Thomson are as follows: (i) a lifetime pension commencing onDecember 31, 2017, equal to the annual consulting fee paid to Mr. Thomson during the final twelve months ofthe consulting period, adjusted from time to time to reflect changes in the cost of living up to a maximum of 4%per annum (with retirement income continuing on Mr. Thomson’s death to his surviving spouse, reduced by 40%of the then-current value of such income); (ii) continuation of Mr. Thomson’s medical benefits commensurate tothose provided to the Chief Executive Officer of the Company until the earlier of the expiration of theconsultancy agreement or the date that Mr. Thomson ceases to be a director of the Company after which heshall receive medical benefits commensurate with those provided under the Company’s medical plan for retireesso long as such benefits are reasonably available to the Company; and (iii) the use of a company car whenneeded until the later of the expiration of the consultancy agreement or the date that Mr. Thomson ceases to bea director of the Company.

In August 2003, the Board approved benefits for Mr. Joseph A. Imparato, who retired as Chairman of theBoard on October 24, 2003, as follows: (i) a lifetime pension equal to 50% of Mr. Imparato’s last salary of$157,765 to be adjusted from time to time to reflect changes in the cost of living up to a maximum of 3% perannum (with retirement income continuing on Mr. Imparato’s death to his surviving spouse, reduced by 40% ofthe then-current value of such income), (ii) continuation of Mr. Imparato’s medical benefits commensurate withthose provided under the Company’s medical plan for retirees so long as such benefits are reasonably availableto the Company; and (iii) the use of a company car of not more than four years old until the later ofMr. Imparato reaching the age of 65 or ceasing to be a Director During the one year period ended December 31,2016, Mr. Imparato received medical insurance benefits valued at $18,696 and benefits in the form of use of aCompany vehicle valued at $6,438 until his retirement following the Annual General Meeting in May 2016.

The pension cost of the defined benefit pension plan for Mr. Thomson and Mr. Imparato have has beenactuarially determined using the projected benefits method. A defined benefit pension expense of $0.2 millionhas been recorded for the one-year period ended December 31, 2016, equal to the expense of $0.2 millionrecorded for the one-year period ended December 31, 2015.

CORPORATE GOVERNANCE REPORT

The Board and Management acknowledge the critical importance of good corporate governance practicesin the proper conduct of the affairs of the Company. The Company’s governance framework is routinelyreviewed and examined against evolving best practices and to ensure that the Board continues to effectivelyoversee the management and business affairs of the Company. The Company’s corporate governance practicescomply with the corporate governance guidelines promulgated in Canadian Securities Administrators’ NationalPolicy 58-201 — Corporate Governance Guidelines.

Board of Directors Code of Ethics and Whistle-Blower Policy

The Board adopted a Board of Directors Code of Ethics in January 2004 and updated that policy in 2016,reflecting corporate governance requirements and best practices among Canadian publicly listed companies. TheCode of Ethics is posted in its entirety on the Company website (www.cuc-cayman.com) and also on SEDAR(www.sedar.com).

The Company has a separate Code of Business Conduct and Ethics for officers and employees. TheCompany has a business ethics enforcement policy (‘‘the Whistle-Blower Policy’’) intended to ensure compliancewith the ethics code. The Board initially adopted a Whistle-Blower Policy in July 2004 and updated that policy in

19

2016, reflecting corporate governance requirements and best practices among Canadian publicly listedcompanies. The Whistle-Blower Policy outlines procedures for directors, officers and employees of the Companyto report suspected violations of the Code of Ethics and Business Conduct applicable to officers and employeesand the Board of Directors Code of Ethics to the Audit Committee Chairman and other designated individuals.Reports can be made through a third party managed website for confidential and anonymous reporting. TheWhistle-Blower Policy is posted in its entirety on the Company website (www.cuc-cayman.com). The Board ofDirectors receives reports on compliance with the code through the Audit Committee.

The Board of Directors encourages a culture of ethical conduct by appointing officers of high integrity andmonitoring their performance so as to set an example for all employees. Review and acknowledgement of all keypolicies, including the Code of Business Conduct and Ethics and the Whistle-Blower Policy, is mandated for allemployees annually.

The Board does not nominate for election any candidate who has a material interest in any businessconducted with the Company and requires directors to disclose any potential conflict of interest that maydevelop. Under the Company’s Articles of Association, a director may not vote in respect of any contract orproposed contract or arrangement in which he or she is interested, and if he or she does so, his or her vote shallnot be counted. In addition, the Board has adopted a practice that if a director is interested in any contract orproposed contract arrangement, the director recuses himself or herself from a discussion of the matter by theBoard. The Company has entered a consultancy agreement with Mr. Peter A. Thomson, the details of which aredisclosed on page 18.

Board of Directors

The Board has adopted a mandate for the Board, the full text of this mandate is disclosed in Schedule B ofthis Information Circular.

The Board annually appoints two standing committees from among its members: the Audit Committee andthe Nominating and Corporate Governance Committee. The Company does not have an executive committee ofthe Board. Each committee has a written mandate that sets out the activities or areas of the Company’s businessto which the committee is required to devote its attention and the chair of each Committee is responsible forcompliance with these mandates.

The Board has implemented a written position description for the Chairman of the Board to be reviewed onan annual basis. There are no specific position descriptions for the chair of each Committee. The Board hasdeveloped a written position description for the CEO.

The Board annually, or more frequently if required by internal or external developments, reviews thestrategic plan of the Company through review and discussion of the outcomes of management’s annual strategicplanning exercise. This strategic review includes an integrated assessment of corporate risk, supported by theanalysis and outcomes of the company’s enterprise-wide risk management program including risk managementstrategies. The Board and the Audit Committee also consider the appropriateness of risk management strategiesin conjunction with the review of interim and annual financial results and in view of changes in the businessenvironment.

Audit Committee

The Audit Committee assists the Board by overseeing the external audit of the Company’s annual financialstatements, reviewing the annual audited financial statements and quarterly financial statements withmanagement and the external auditors before the Company discloses the information, and reviewing theCompany’s systems of internal control over financial reporting and compliance with legal, regulatory and otherfinancial management requirements and policies with a view to the reporting systems providing the informationrequired to enable the Board to effectively discharge its responsibilities with respect to public disclosure.

Reference is made to the Company’s most recent Annual Information Form in respect of the informationrequired to be disclosed therein under Form 52-110F1 — Audit Committee Information required in an AIF, andincluding further information regarding the Audit Committee and its mandate. The Company’s most recent

20

Annual Information Form is available on the Company’s website (www.cuc-cayman.com) and the SEDARwebsite (www.sedar.com).

The Audit Committee is currently composed of Messrs. Bothwell (Chairman), Ritch and Mrs. Ebanks, all ofwhom are independent, and Mr. Eddinton Powell, who, although not independent on account of his role as anexecutive officer of an affiliate company, is exempt from the requirement to be independent under NationalInstrument 52-110 — Audit Committees (‘‘NI 52-110’’) pursuant to Section 3.3(2) of that instrument. TheCompany has relied on this exemption in order that Mr. Powell may be a member of the Audit Committee inaccordance with NI 52-110. The Board has determined in its reasonable judgment that Mr. Powell is able toexercise the impartial judgment necessary to fulfill his responsibilities as an Audit Committee member and thathis appointment is required in the best interests of the Company and its shareholders.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee considers and proposes nominees for election tothe Board and reviews and makes recommendations with respect to the compensation of Directors. TheCommittee is responsible for the development and enforcement of Board and Committee mandates, keypolicies, and guidelines relating Company compliance with all corporate governance requirements includingBoard renewal and composition. The Nominating and Corporate Governance Committee also has responsibilityfor the development and administration of the compensation policy covering the Company’s senior officers andsuccession planning within the ranks of senior management.

The Nominating and Corporate Governance Committee is responsible for regular assessment of theeffectiveness and contribution of the Board, its committees and individual directors. It carries out thisresponsibility through an annual confidential survey of each director regarding his or her views on theeffectiveness of the Board and the committees, the results of which are summarized and reported to thecommittee and to the Chairman of the Board.

The Nominating and Corporate Governance Committee is currently composed of Messrs. Foster and Ritch(Chairman), both of whom are independent, and Mr. Ludlow, who is not considered an independent director, asdiscussed on p. 10. Notwithstanding that Mr. Ludlow is not considered an independent director under NI 52-110,as the sole reason for his deemed non-independence under NI 52-110 is his affiliation with CUC’s controllingshareholder FEBL, and as Mr. Ludlow is not a member of management of the Company and has no relationshipwith management that can reasonably be expected to interfere with his exercise of independent judgment as adirector, the Board believes that Mr. Ludlow is in fact independent for this purpose.

Board Renewal & Term Limits

The Company’s Articles of Association and governance guidelines provide that Directors of the Companyare to be elected for a term of one year and will only be eligible for re-election until the Annual GeneralMeeting of Shareholders next following the date on which they achieve the mandatory retirement age of70 years. Further, the Board governance guidelines require that directors elected on or after May 2014 aresubject to a maximum term of ten years of continuous service.

The Nominating and Corporate Governance Committee annually reviews the term of service andretirement dates of directors. In this review, the Committee considers the size and composition of the Board andaddresses the succession planning needs associated with both the loss of skills and experience created by retiringdirectors and the need for continuity on the Board.

Board Composition & Diversity

The Board looks for potential directors whose backgrounds fit the Company’s strategic objectives andbusiness challenges. Diversity is an important consideration taken in to account by the Nomination andCorporate Governance Committee when determining Board composition and when determining executiveleadership for the Company. The Nominating and Corporate Governance Committee considers gender, ethnicbackground, geographic representation and other personal characteristics that contribute to diversity among

21

22MAR201723402011

Board members. CUC has adopted a Diversity Policy that describes the principles underlying the Company’sapproach to diversity among its leadership at the Board and executive levels.

The Company believes that a Board made up of highly qualified individuals from diverse backgroundspromotes better corporate governance. Board performance and effective decision-making. The Nominating andCorporate Governance Committee’s diversity objectives are supported by the age and term limit provisions setforth in the Company’s Articles of Association and governance guidelines, which encourage ongoing Boardrenewal and the regular consideration of diversity by the Nominating and Corporate Governance Committee.Diversity is also an important consideration for the Company in determining executive leadership.

The Board considers the level of representation of women on the Board and in executive leadershippositions. As part of this consideration, management and the Nominating and Corporate GovernanceCommittee have built and have committed to maintain a list of potential qualified women nominees forconsideration as future Board appointments. In considering potential executive management candidates, theCompany identifies talent based on a number of competencies as well as diversity, including gender. TheCompany keeps a list of the identified group of top talent candidates, which includes women, for furthermentorship and executive management development.

The Diversity Policy does not establish fixed targets for gender representation on the Board or in executiveofficer positions. The Board believes that the identification of new directors is a strategic activity with long-termimplications for the effectiveness of the Board. As such, the search must be driven by considerations of theresources the Board will need among its members as a whole in order to best serve the organization on anongoing basis. The Board believes that the establishment of fixed targets for gender representation will notnecessarily result in the identification or selection of the best candidates. However, there is a firm commitmentto increase female representation on the Board and in the executive management of the Company.

In assessing the relative effectiveness of the Board and its non-executive members, and identifying andselecting new nominees for the Board, the Company utilizes a skills and attributes matrix that outlines thedifferent criteria including diversity, background, experience and expertise that have been identified as beingimportant to achieving the objectives of the Company.

Bryan Bothwell

Jennifer Dilbert

Sheree Ebanks

Woody Foster

Earl Ludlow

Eddinton Powell

David Ritch

Gary Smith

Peter Thomson

Lynn Young

IndustryExperience

OtherBoards

RegulatoryExperience HR Marketing

/ PR

AGE

40-49 50-59 60-70

Areas of ExpertiseMember Business

DevelopmentGovernance

/ LegalFinancialExpertise

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

The Company believes that the current nominees include an appropriately diverse group of strongcandidates with the required breadth and depth of skills and experience, which includes 2 women who represent18% of the Board.

In considering the executive management and potential candidates for executive appointments, theCompany identifies talent throughout the Company and the core competencies and characteristics that aredesired for promotion to higher levels within the organization. The Board does not set specific genderrepresentation targets when identifying and considering candidates for executive positions, although diversity,including gender, is considered in identifying the group of top talent candidates. Currently, one of the fournamed executive officers is female (representing 25% of the NEOs).

22

Board Orientation and Continuing Education

The Board regularly receives education and training sessions on the specific business of the Company andits subsidiary in addition to occasional presentations on matters of general importance and applicationto Directors.

Each new director receives a detailed orientation whereby he or she meets with management and isprovided with current and historical data pertaining to the operation of the Board, its committees and theCompany, governance trends and disclosure requirements, as well as an assessment of current strategicopportunities and issues facing the Company.

External counsel present to the Board on the legal governance and disclosure developments impacting uponthe Company approximately once per year. Management regularly delivers presentations to the Board asrequired on developments in the business and regulatory environment impacting upon the Company. Meetingsare regularly conducted with senior officers of the Company. Board and committee meetings are held atCompany headquarters, enabling directors to observe operations and meet managers and employees. Eachdirector is also subscribed to an online service designed to provide continual access to educational tools, trainingand resources for corporate directors.

23

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Compensation Review Framework

The Company monitors, reviews, and evaluates its executive compensation program annually to ensure thatit provides reasonable compensation ranges at appropriate levels and remains competitive and effective.

Management takes into account the corporate performance against pre-determined objectives and togetherwith the CEO recommends a set of new performance objectives for the following year. Individual performancereviews, incentive award payouts, and compensation adjustments, if any, are also determined at this stage. TheCEO does not make recommendations to the Nominating and Corporate Governance Committee with respectto his own compensation.

In the final step, the Nominating and Corporate Governance Committee reviews the recommendations putforward by management regarding current year’s compensation payouts and next year’s performance objectives.The Nominating and Corporate Governance Committee and the Board may exercise discretion when makingcompensation decisions in appropriate circumstances and make deviations from the prescribed incentive awardformulas, when determined to be necessary.

The Company recognizes the importance of having knowledgeable and experienced individuals appointedto the Nominating and Corporate Governance Committee. All Committee members have the necessarybackground and skills to provide effective oversight of executive compensation and ensure that sound riskmanagement principles are being adhered to in order to align corporate and shareholder interests. Morespecifically, Mr. Woodrow S. Foster has significant senior leadership experience from his position as managingdirector of Fosters Food Fair IGA. The Nominating and Corporate Governance Committee benefits fromMr. Earl A. Ludlow’s significant directorship experiences with other utilities companies and many years ofexecutive leadership. Mr. David E. Ritch’s, experience as chairman of the board of directors of FirstCaribbeanInternational Bank Limited brings significant risk management experience to the Nominating and CorporateGovernance Committee.

It is the responsibility of the Nominating and Corporate Governance Committee to review, recommend andadminister the compensation policies for the Company’s executive officers, including the CEO, CFO and theother two executive officers of CUC (‘‘Named Executive Officers’’ or ‘‘NEOs’’). The Nominating and CorporateGovernance Committee’s review of compensation policies seeks to address organizational and market changesthat may affect the competitiveness of the existing pay programs, identify and mitigate risks inherent in thecurrent pay structure, as well as oversee ongoing compliance with disclosure and corporate governancerequirements. The Nominating and Corporate Governance Committee held three meetings during the one-yearperiod ended December 31, 2016.

Compensation Risk Assessment and Mitigation

As the Company’s electric operations are regulated, the Company’s activities are governed by extensivereporting and approval mechanisms. The Company’s ongoing compliance with emerging best practices ensuresthat risks associated with the Company’s compensation program are being continually monitored and controlled.

The Nominating and Corporate Governance Committee reviews the Compensation Program annuallyagainst a compensation risk assessment checklist with the aim of ensuring that CUC’s executive compensationprogram does not encourage management to take inappropriate or excessive risks. The Compensation Programseeks to mitigate risk by incorporating performance targets that encourage both achievements of specificindividual targets as well as satisfaction of CUC’s corporate goals.

The executive compensation program includes mechanisms to ensure risk-taking behavior is minimized.Examples include:

• A balanced mix of compensation between fixed salary and variable awards, and between short and longterm incentives.

• A cap on short-term incentive awards.

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• Using four-year vesting periods for longer term option awards.

• NEOs are not permitted to hedge against declines in the market value of equity securities received ascompensation.

Based on its most recent review, the Nominating and Corporate Governance Committee has concluded thatthere does not appear to be any risks arising from the Compensation Program that are reasonably likely to havea material adverse effect on CUC.

Elements of Total Compensation

The following chart sets out the various elements of CUC’s compensation, the objectives of each element ofcompensation, including what the element of compensation is meant to reward, and how CUC determines theamount for each element of compensation.Elements Objective Amount Determination

Annual Base Salary . . Market-competitive, fixed level of Reviewed and set annually.compensation.Reflects the skills, competencies,experience, and performance appraisalsof the NEOs.

Short-term Incentive Short-term incentive intended to attract • Corporate and individualPlan . . . . . . . . . . . . and retain highly qualified executives performance targets set annually.

and to promote consistent and • Individual targets based on specificcontinuous effort in reaching CUC’s individual objectives.strategic goals. • Corporate targets based on earnings

per share and controllable operatingexpenses.

Performance Share Mid-term incentive intended to promote • Corporate performance target setUnit Plan (PSU) . . . a greater alignment of interests between annually.

participating employees of the Company • Targets based on company shareand shareholders of the Company and performance relative to an index ofto motivate participants to achieve utility companies over a specified‘‘over and above’’ performance in the period.future to enhance Company profitabilityand value.

Stock Option Plan . . . Long-term incentive intended to • Grants based on personalencourage increased share ownership by performance, employee salary levelkey employees as incentive to increase and years of service.share value, aligning executive andshareholder interests.

Retirement Benefits . . Intended to provide for competitive and • Provided in accordance with termsappropriate replacement income upon of defined contribution pensionretirement based on years of service to plans.the Company.

Group Benefits . . . . . Intended to provide competitive and • Provided in accordance with termsadequate protection in case of sickness, of group benefit plans.disability or death.

Executive Perquisites . Intended to provide a competitive • Limited perquisites offered.compensation in context of totalcompensation.

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The Company’s executive compensation policies are designed to provide competitive and effective levels ofcompensation. In addition to base salary, a significant portion of executive compensation is dependent uponindividual performance, corporate performance and increasing shareholder value. The Committee recognizesthe need to provide a total compensation package that will attract and retain qualified and experiencedexecutive officers. Although no specific group of comparator companies exists for the Company to reference, theCommittee reviews data collected, internally and by independent compensation consultants, from across theFortis group of companies, from utility companies in similar geographical regions and from other companies inthe Cayman Islands, in addition to other relevant information, in the discharge of its duties.

The principal elements of the Company’s compensation program are base salary and the short-termincentive (the ‘‘STI Plan’’) plan. Performance Share Units (‘‘PSU’s’’) and stock options are also grantedperiodically as part of the Company’s compensation program as mid to long-term incentives, but play a lesssignificant role in the overall compensation package.

Base Salary is determined using the Hay system, a methodology used in respect of job evaluations thatassists corporations with mapping and aligning organizational roles and jobs, and taking into account theparticular executives experience, responsibility, seniority, abilities and the data from the reference groupsoutlined above.

The NEOs of the Company participate in the STI Plan, a strategic management tool intended to ensureconsistent and continuous effort in reaching the Company’s strategic goals. The STI Plan is intended to providecash bonuses to management, including the NEOs, based on their degree of success in attaining corporate andindividual objective and measurable performance targets that are set annually as part of the corporate strategicbusiness plan. Financial targets such as earnings per share and controllable operating expenses are included inthe corporate targets measured under the STI Plan. Additional targets are also established annually relating tocustomer service, system reliability, safety, environment, and employee development/training. Performance ismonitored and measured through the use of key performance indicators. The amount of each bonus isdetermined under the STI Plan by way of an annual assessment of corporate and personal performance andawarded as a percentage relative to each executive’s salary. The total amount distributed under the STI plan isbased upon corporate performance as determined annually by the Nominating and Corporate GovernanceCommittee of the Board.

The STI Plan performance indicators and the weighting each has on the short-term incentive payout, theSTI Plan target and maximum payouts as a percentage of salary vary by position. The weightings for 2015 for theNEOs were as follows:

Corporate Targets Individual Targets Total Targets

CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75% 25% 100%Other NEOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60% 40% 100%

Shareholders of CUC approved the Executive Stock Option Plan (the ‘‘Option Plan’’) in 1991. The OptionPlan provides for the grant of options to purchase Class A Ordinary Shares of the Company to employees andofficers in accordance with the terms of the Option Plan. The purpose of the Option Plan is to encourageincreased share ownership by key employees as an incentive to increase share value. Options are exercisable for10 years from the date of the option. CUC does not make loans available to executives for the purchase of suchshares. Grants of options are dependent upon personal performance as measured against targets relating to theindividual’s performance, and the number of shares made available under each option is determined using alock-step grid which determines the number of shares available based on the employee’s salary level and years ofservice. Previous grants are taken into account when considering new grants to NEOs. No stock option grantswere made to NEOs in 2016.

The Board of CUC established a Performance Share Unit Plan (‘‘PSUP’’) in September 2013 to provide amedium-term alternative incentive plan for NEOs and key employees. The PSUP is administered by theNominating and Corporate Governance Committee. Each PSU granted represents a unit with an underlyingvalue equivalent to the value of a Class A Ordinary Share as at January 1 in the year of the grant. The PSUs veston December 31 upon the completion of the three year performance period and a cash payment is made to the

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22MAR201723100172

participants in the PSUP after evaluation by the Nomination and Corporate Governance Committee of theachievement against predetermined corporate objectives and total return performance. The PSUs provide anadditional incentive to achieve objective mid- to long-term corporate performance goals. Cash payment is madethree years after the grant in an amount equal to the value of a Class A Ordinary Share at on the vesting datemultiplied by 0-120% of the number of PSUs granted, as determined appropriate by the Nominating andCorporate Governance Committee upon measurement of CUC’s performance over such three-year period.

Share Performance Graph (financial years completed December 31, 2012-2016)

The following graph compares the five-year cumulative total shareholder return on the Company’s Class AOrdinary Shares, in both Canadian and US dollars, with the cumulative total return of the S&P/TSX CompositeIndex and S&P/TSX Utilities Index considering a Cdn. $100 investment and assuming reinvestment of dividends.Periods 2012 through 2016 reflect the index value as at December 31. The closing price of the Class A OrdinaryShares on the TSX as of December 31, 2016 was $12.98 per share. The return on CUC’s Class A OrdinaryShares has been converted to Canadian dollars at the rate of exchange at the fiscal year-end as reported by theBank of Canada.

Total Return Comparison for CUC in US$ and CAN$, S&P TSX Composite Indexand S&P Composite Utilities Index

CUC INDEX (CAN$)

S&P/TSX Composite Index

S&P/TSX Composite Index – Utilities (Sector)

CUC INDEX (US$)

250.00

200.00

150.00

100.00

50.00

0.00

2012

100.00 132.62 149.59 199.39 236.65

100.00 124.06 128.29 143.33 175.35

100.00 112.99 124.92 114.53 138.67

100.00 95.86 111.28 107.39 126.39

2013 2014 2015 2016

As stated above under the subheading ‘‘Elements of Total Compensation’’, the Company’s executivecompensation policies are designed to provide competitive levels of compensation and, except to the extent thatthe structure of such compensation is directly dependent on fluctuations in the price of the Company’s Class A

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Ordinary Shares, as provided for under the Option Plan and the PSUP, the Company does not generally expectcompensation changes to closely follow such share price fluctuations.

The above table incorporates US to Canadian dollar exchange rates as set out in the table below.

Exchange Rate for Conversion of United States to Canadian Dollars (2012-2016)

2012 2013 2014 2015 2016(Dec 31) (Dec 31) (Dec 31) (Dec 31) (Dec 31)

US:Canadian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1:0.9949 1:1.0636 1:1.1601 1:1.3840 1:1.3427

Summary Compensation Table

The following table sets forth the annual and long-term compensation earned for services rendered duringthe one-year periods ended December 31, 2016, December 31, 2015 and December 31, 2014 by the NEOsdisclosed in accordance with National Instrument 51-102 — Continuous Disclosure Obligations. There were noother NEOs of the Company during these periods.

Share Option- AnnualBased based Incentive Pension All Other Total

Name and Salary Awards Awards Plan Value Compensation CompensationPrincipal Position Year ($) ($)(1) ($) ($)(2) ($)(3) ($)(4) ($)

J.F. Richard Hew . . . . . . . . . . . 2016 288,095 54,000 — 89,286 37,143 50,413 518,937President & Chief Executive 2015 284,524 53,500 — 89,286 35,455 33,109 495,874Officer 2014 263,393 56,650 — 59,524 27,092 35,584 442,243

Letitia T. Lawrence . . . . . . . . . . 2016 202,500 27,000 — 50,000 12,543 16,425 308,468Vice-President, Finance 2015 185,268 26,750 — 47,619 11,272 9,318 280,227& Chief Financial Officer 2014 178,571 28,325 — 35,714 9,174 11,317 263,101

Sacha N. Tibbetts . . . . . . . . . . . 2016 157,855 16,200 — 35,714 9,452 14,689 233,910Vice President, Customer 2015 N/A N/A — N/A N/A N/A N/AService & Technology(5) 2014 N/A N/A — N/A N/A N/A N/A

David C. Watler . . . . . . . . . . . . 2016 202,500 27,000 — 50,000 12,543 35,417 327,460Vice President, Operations 2015 185,268 26,750 47,619 11,272 25,513 296,422

2014 178,571 28,325 35,714 9,174 24,970 276,754

Notes:

(1) Share Based Awards are PSUs that were awarded during the respective financial year on March 17, 2014, March 6, 2015 and March 16,2016. The awards were valued at $11.33, $10.70 and $10.80 per unit respectively at the date of the grant using the intrinsic value on thefirst trading day of the year and the assumption of a 100% payout amount.

(2) Annual incentive plan consists of STI Plan bonus payments as approved by the Nominating and Corporate Governance Committee ofthe Board and which relate to personal and Company performance for the 12-month periods ended December 31, 2016, 2015 and 2014.See ‘‘Compensation Discussion and Analysis’’ starting on page 23 of the Information Circular.

(3) Includes Company contributions to the Silver Thatch Pension Plan.

(4) These amounts include (i) the benefit associated with the automobile supplied to NEOs by the Company, (ii) incremental value ofgroup health premiums above those paid to other employees, and (iii) life insurance premiums paid by the Company.

(5) Mr. Sacha N. Tibbetts was appointed as Vice President, Customer Service & Technology and became an NEO for the Company onJune 1, 2016.

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Equity Compensation Plan Information as of December 31, 2016

Options for the purchase of Class A Ordinary Shares may be granted to employees and officers pursuant tothe Option Plan. Consideration is given to the individual’s present and potential contribution to the success ofthe Company in determining the number of Class A Ordinary Shares to be subject to each option.

The exercise price per Class A Ordinary Share in respect of an option is equal to the fair market value onthe date of grant without any discount. Each option is for a term not exceeding 10 years and becomes exercisableon a cumulative basis at the end of each year following the date of grant. The number of Class A OrdinaryShares under the option shall be fixed and approved by the shareholders of the Company.

Options granted under the Option Plan are personal to the grantee and are not assignable. Unless theCompany otherwise agrees in writing, a participant’s option shall terminate and may not be exercised after theearliest of (i) three months after the participant’s termination of employment with the Company by reason of hisor her disability (as determined by the Company in its sole discretion) or his or her retirement or earlyretirement, provided that the participant has not died prior to the expiration of such three-month period;(ii) 12 months after the participant’s death; (iii) the date of the participant’s termination of employment with theCompany, unless such termination occurs by reason of the participant’s death, disability, retirement or earlyretirement as contemplated in (i) or (ii) above; and (iv) the original expiration date of the participant’s option.

The number of Class A Ordinary Shares reserved for issuance under the Option Plan is 1,220,100, of which224,897 or 0.69% of the total issued and outstanding Class A Ordinary Shares, have been issued. The number ofClass A Ordinary Shares subject to outstanding options is 193,500 and the number of Class A Ordinary Sharesremaining available for future issuance under the Option Plan is 801,703 exclusive of outstanding options,representing 2.46% of the total issued and outstanding Class A Ordinary Shares.

Subject to amendments requiring shareholder approval as set out below, the Board may amend ordiscontinue the Option Plan at any time without shareholder approval subject to TSX regulations, provided,however, that any amendment that may materially and adversely affect any option rights previously granted to aparticipant under the Option Plan must be consented to in writing by the Participant. Under TSX requirements,Class A Ordinary shareholder approval is required to amend the Option Plan:

a) to increase the number of Class A Ordinary Shares reserved for issuance under the Option Plan;

b) for any change in the maximum term of an option benefiting an insider of the Company; and

c) for a reduction in the exercise price of an option granted to an insider of the Company.

Examples of the types of amendments to the Option Plan that the Board would be entitled to make include,without limitation: (a) amendments of a ‘‘housekeeping’’ nature; (b) a change to the vesting provisions of anoption or the Option Plan; and (c) a change to the termination provisions of an option or the Option Plan thatdoes not entail an extension beyond the original expiration date.

Options to purchase an aggregate of 83,970 Class A Ordinary Shares were exercised with an aggregaterealized value of $198,304.80 during the one-year period ended December 31, 2016. A summary of theoutstanding options and the number of securities remaining available for further issuance under shareholderapproved equity compensation plans appears below:

Number of SecuritiesNumber of Securities Weighted-Average Remaining Available for

to Be Issued Upon Exercise Price of Future Issuance UnderExercise of Outstanding Equity Compensation Plans

Outstanding Options (Excluding Options IssuedPlan Category Options ($) and Outstanding)

Equity compensation plans previously approvedby shareholders:Executive Stock Option Plan . . . . . . . . . . . . 193,500 10.92 801,703Employee Share Purchase Plan . . . . . . . . . . nil N/A 115,290Employee Long Service Bonus Plan . . . . . . . nil N/A 4,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193,500 10.92 920,993

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There are no equity compensation plans that have not been approved by shareholders.

Incentive Plan Awards — Value Vested or Earned During the Year.

1. Outstanding Option-Based Awards

Stock option grants were awarded on March 9, 2012, February 27, 2009 and April 11, 2008 at an exerciseprice of $9.66, $8.76 and $12.22, respectively, under the Option Plan. There were no options granted in 2016.

The following table sets forth all outstanding options for each of the NEOs as at December 31, 2016.

Value ofNumber of UnexercisedSecurities in-the-Money

Underlying Option Options atUnexercised Exercise Price Year-End

Name Options ($) Grant Date Option Expiry Date(1) ($)(2)

J.F. Richard Hew . . . . . . . . 39,000 12.22 April 11, 2008 April 11, 2018 29,6400 8.76 February 27, 2009 February 27, 2019 0

50,000 9.66 March 9, 2012 March 9, 2022 166,000Letitia T. Lawrence . . . . . . 14,000 12.22 April 11, 2008 April 11, 2018 10,640

0 8.76 February 27, 2009 February 27, 2019 00 9.66 March 9, 2012 March 9, 2022 0

Sacha N. Tibbetts . . . . . . . . 4,500 12.22 April 11, 2008 April 11, 2018 3,4200 8.76 February 27, 2009 February 27, 2019 00 9.66 March 9, 2012 March 9, 2022 0

David C. Watler . . . . . . . . . 14,000 12.22 April 11, 2008 April 11, 2018 10,64014,000 8.76 February 27, 2009 February 27, 2019 59,08016,000 9.66 March 9, 2012 March 9, 2022 53,120

Notes:

(1) All options vest on the basis of one quarter of the grant on each of the first through fourth anniversaries of the date of the grant andhave a term of 10 years from the date of the grant.

(2) The closing price of the Class A Ordinary Shares on the TSX on December 31, 2016 was $12.98.

2. Performance Share Unit (‘‘PSU’’) Plan

In September 2013, the Nominating and Corporate Governance Committee and the Board approved21,500 PSU grants under the PSU plan to NEOs and key employees. The Nominating and CorporateGovernance Committee and the Board approved additional PSU grants to NEOs and key employees on thedates or in the amounts as follows: 26,000 PSUs in March 2014; 27,500 in March 2015; and 25,000 inMarch 2016.

Each PSU represents a unit with an underlying value which is based on the value of one common share onJanuary 1 of the grant year relative to the S&P/TSX Utilities Index. PSUs vest on December 31st, uponcompletion of the three year performance period and are paid out upon evaluation by the Nomination andCorporate Governance Committee of the achievement of predetermined corporate objectives and total returnperformance.

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The following table sets out the total number of units not vested for the NEOs as at December 31, 2016:

Share-based Awards

Market orpayout of

Market or payout vested share-Number of value of share-based based awards

units that have awards that have not not paid out ornot vested vested distributed

Name (#) ($) ($)

J.F. Richard Hew . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 74,015 64,900Letitia T. Lawrence . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 37,008 32,450Sacha N. Tibbetts . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 22,205 19,470David C. Watler . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 37,008 32,450

3. Options Granted or Vested During the One-Year Period Ended December 31, 2016

No options were granted to NEOs during the one-year period ended December 31, 2016. During theone-year period ended December 31, 2016, NEO options granted in 2012 at an exercise price of $9.66 vested asto one quarter of the original grant. As at December 31, 2016, 151,500 of the options granted and outstanding toNEOs were in-the-money.

The following table sets forth the value of options and share based awards vested during the year for each ofthe NEOS:

Option-basedawards — Share-based

Value vested awards —during the year Value vested

Name ($)(1) during the year(2)

J.F. Richard Hew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,500 64,900Letitia T. Lawrence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,280 32,450Sacha N. Tibbetts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,980 19,470David C. Watler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,280 32,450

Notes:

(1) The options vesting during the year ended December 31 2016 were granted on March 9, 2012. In respect of J.F. Richard Hew, 12,500 ofthe options granted vested on March 9, 2016. In respect of Letitia T. Lawrence, 4,000 of the options granted vested on March 9, 2016. Inrespect of Sacha N. Tibbetts, 1,500 of the options granted vested on March 9, 2016. In respect of David C. Watler, 4,000 of the optionsgranted vested on March 9, 2016. The value of the vested options was determined by calculating the spread between the market priceper share as at December 31, 2016 and the price per share of the grant multiplied by the options granted.

(2) The PSUs granted on March 17, 2014 vested on December 31, 2016 and paid out in March 2017 based on the evaluation by theNomination and Corporate Governance Committee of the achievement of the predetermined corporate objectives and total returnperformance. The value of the vested PSUs was determined based on the maintenance of successful average returns on CUC Class AOrdinary Shares, relative to the reported S&P/TSX utilities index over a three year period.

Defined Contribution Pension Plan

Accumulated Value Accumulated Valueat Start of Period Compensatory at End of Period

Name ($) ($) ($)

J.F. Richard Hew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449,081 52,012 509,371Letitia T. Lawrence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,297 22,739 276,702Sacha N. Tibbetts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203,278 17,135 224,967David C. Watler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302,247 22,708 330,743

As at December 31, 2016, each NEO was a member of a defined contribution pension plan (the ‘‘PensionPlan’’) which the Company has subscribed to for the benefit of employees of the Company and which complieswith the provisions of the Cayman Islands National Pensions Law. As a term of employment, the Company

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contributes 7.5% of wages or salary in respect of employees who have completed 15 years of continuous serviceand have attained the age of 55 years and 5% of wages or salary for all other employees. Mr. Hew receives anadditional Company contribution of 5% pursuant to the terms of his employment contract.

As at December 31, 2016, normal retirement age under the Pension Plan was age 65 and early retirementmay be taken at age 60. Upon reaching normal or early retirement age, individuals can elect to defer theirpension, receive annual lump sum payments or request approval to receive monthly pension payments. Retireeswere eligible to participate in the Company’s employee health care benefits provided they have a minimum offive years of service. The Company subsidized the monthly premium to a fixed contribution towards thedesignated Standard Health Insurance plan.

Termination and Change of Control Benefits

CUC has entered into employment contracts with each of the NEOs, which contracts set out thecircumstances under which payments and other benefits would be paid in connection with a termination ofemployment as summarised below.

The employment of each of the NEOs may be terminated without cause (‘‘Involuntary Termination’’) by theCompany at its sole discretion. Each of the NEOs is entitled upon Involuntary Termination to notice in writing(‘‘Notice’’) as specified in the table below. In addition to Notice, Mr. Hew is entitled upon InvoluntaryTermination to a payment or payments equal to 24 months of salary. Following Involuntary Termination, allNEOs are entitled to the continued provision of benefits, perquisites and retirement plan contributions(the ‘‘Benefits Payments’’) or, at the Company’s sole discretion, a payment or payments in lieu of the BenefitsPayments for the periods specified below.

Each of the NEOs except Mr. Hew is entitled to two week’s salary for every year of continuous employmentwith the Company following Involuntary Termination (‘‘Continuous Employment Payment’’).

Involuntary Termination may also be deemed to have occurred if, without the consent of the NEO, theCompany imposes specified adverse changes in the terms of the NEO’s employment, including responsibilities,duties and functions incompatible with the position, material reduction in salary, inhibition in incentive oropportunity or reduced benefits, perquisites, retirement arrangements or working facilities or materiallydiminishes the title or status of the position, provided that the NEO gives written notice to the Company of thechange within 90 days of its occurrence and the Company fails to rectify the change within 14 days (‘‘UnrectifiedInvoluntary Termination’’), in which case the Company shall pay the NEO’s salary in lieu of notice, BenefitsPayments and, if applicable, Continuous Employment Payment, for the period of Notice.

Upon Involuntary Termination, unless otherwise agreed in writing by the Company, stock options grantedpursuant to the Option Plan, and performance share units granted under the PSUP, as described above hereinshall immediately terminate. The Company had no such written agreements with any NEO as atDecember 31, 2016.

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Upon Involuntary Termination, pension contributions accumulated under the Company’s definedcontribution benefit plan would continue to be held on deposit pending either retirement eligibility by age ortransfer to another pension plan or withdrawal in accordance with Cayman Islands pension law.

Benefits Continuous SalaryPayments Employment Amount

Payable upon Payment for Payable uponInvoluntary or Involuntary or Unrectified

Unrectified Unrectified InvoluntaryInvoluntary Involuntary Termination inTermination Termination Lieu of Notice

Period of Assuming a Assuming a Assuming aBenefits Termination Termination Termination

Notice of Payments Date of Date of Date ofTermination Following December 31, December 31, December 31,

for Involuntary Involuntary 2016 2016 2016Name Termination Termination ($)(1) ($)(2) ($)

J.F. Richard Hew . . . . . . . . . . . . . . . 1 month 24 months 151,553 580,800 24,200Letitia T. Lawrence . . . . . . . . . . . . . . 6 months 12 months 31,191 131,850 102,060Sacha N. Tibbetts . . . . . . . . . . . . . . . 6 months 12 months 29,418 122,918 87,000David C. Watler . . . . . . . . . . . . . . . . 6 months 12 months 46,595 214,659 102,060

Notes:

(1) Includes (i) the estimated benefit associated with the automobile supplied by the Company based on costs incurred during the one-yearperiod ended December 31, 2016, (ii) incremental value of group health premiums above those paid to other employees, (iii) PensionPlan contributions, and (iv) life insurance premiums.

(2) In addition to one month Notice of Involuntary Termination, Mr. Hew would be entitled to payment equivalent to 24 months of salaryupon Involuntary Termination.

Share Incentive Arrangements

The Company has the following employee share incentive arrangements that allow participants to acquireClass A Ordinary Shares of the Company: Employee Share Purchase Plan, Employee Long Service Bonus Planand Executive Stock Option Plan. All of the Company’s share incentive arrangements have been approved bythe TSX.

Employee Share Purchase Plan

CUC has an Employee Share Purchase Plan (the ‘‘Purchase Plan’’) to encourage participation andlong-term investment by its employees. The Company provides interest-free advances to employees to purchaseClass A Ordinary Shares, with such advances recovered through payroll deductions over the next year. Dividendson Class A Ordinary Shares purchased on behalf of employees under the Purchase Plan are paid in full toparticipating employees. The minimum semi-annual participation in the Purchase Plan is 50 Class A OrdinaryShares per employee, and the maximum semi-annual participation is 1,000 Class A Ordinary Shares. Employeesare not eligible to participate in the Plan following termination of their employment with the Company. Unlessan employee whose employment has been terminated makes arrangements satisfactory to CUC for therepayment of the unpaid balance of the advance, CUC is entitled to withhold from such employee’scompensation the unpaid balance of such advance without limiting any other recourse or remedy the Companymay have under applicable law with respect to being repaid the balance of the advance.

The Class A Ordinary Shares required to satisfy the requirements of the Purchase Plan may be issued fromtreasury at the 20-day average market price, which is equal to the simple average of the closing market prices ofthe 20 consecutive trading days immediately preceding the issuance of such shares, or from purchases in theopen market at the discretion of the Company as approved by the TSX.

The number of Class A Ordinary Shares reserved under the Purchase Plan for issuance from treasury iscurrently 115,290.

Under the Purchase Plan, together with any other security-based compensation arrangements of theCompany, the Shares reserved for issuance to insiders cannot exceed 10% of the outstanding number of Class A

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Ordinary Shares, and the number of Class A Ordinary Shares issued to insiders within a one-year period cannotexceed 10% of the outstanding Shares. In addition, the number of Shares issued under the Purchase Plan andany other security-based compensation arrangement to any one insider, during a one-year period, cannot exceedmore than 5% of the outstanding issue of all Class A Ordinary Shares.

The Purchase Plan can be amended by the Board at any time, without the approval of the Shareholders,provided that an amendment to (a) increase the number of Class A Ordinary Shares reserved for issuance underthe Purchase Plan, (b) add non-employee members of the Board as participants under the Purchase Plan,(c) eliminate or decrease the limitations on insider participation set forth above, and (d) amend the amendmentprovision of the Purchase Plan to eliminate a matter listed as requiring shareholder approval, will requireapproval of the Class A Ordinary Shareholders.

A total of 17,100 Class A Ordinary Shares were acquired by participants under the Purchase Plan during theone-year period ended December 31, 2016 (all issued from treasury), representing 0.05% of the current totalissued and outstanding Class A Ordinary Shares of the Company.

Employee Long Service Bonus Plan

The Company also has an Employee Long Service Bonus Plan (the ‘‘Bonus Plan’’) whereby long-serviceemployees and non-executive directors (i.e., those with more than 10 years of employment with the Company)are awarded 10 Class A Ordinary Shares for each year of service, with such awards presented on the 10th, 15th,20th, 25th, 30th, 35th and 40th anniversaries of employment. Employees are not eligible to participate in thePlan following termination of their employment with the Company.

The Class A Ordinary Shares required to satisfy the requirements of the Bonus Plan may be issued fromtreasury at the 20-day average market price, which is equal to the simple average of the closing market prices ofthe 20 consecutive trading days immediately preceding the issuance of such shares, or from purchases in theopen market at the discretion of the Company as approved by the TSX.

Following the awarding of Class A Ordinary Shares to eligible employees under the Bonus Plan in 2010, theCompany suspended further awards under the Bonus Plan.

Executive Stock Option Plan

See ‘‘Equity Compensation Plan Information as of December 31, 2016’’ on page 29 of the InformationCircular for a description of the Executive Stock Option Plan (the ‘‘Option Plan’’) and the number of Class AOrdinary Shares currently reserved for issuance under the Option Plan.

INDEBTEDNESS OF DIRECTORS AND OFFICERS

None of the Company’s directors, officers or their affiliates was indebted to the Company for an amountexceeding Cdn. $50,000 per person at any time during the Company’s most recently completed financial year.

OTHER BUSINESS

Management is not aware of any matters to come before the Meeting other than the foregoing. It is theintention of the persons named in the accompanying form of proxy to vote on other matters in accordance withtheir best judgment should such matters come before the Meeting.

ADDITIONAL INFORMATION

The Company shall provide to any person or company, upon request to the Company Secretary of theCompany, at any time, the documents referred to below, provided the Company may require the payment of areasonable charge from such a person or company who is not a holder of securities of the Company (thesedocuments, as well as additional information regarding the Company, are available free of charge on theCompany website at www.cuc-cayman.com and on SEDAR at www.sedar.com):

(i) one copy of the Company’s most recent Annual Information Form together with one copy of anydocument, or the pertinent pages of any document, incorporated therein by reference;

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(ii) one copy of the Management’s Discussion and Analysis (‘‘MD&A’’) and/or the comparative financialstatements of the Company for the most recently completed financial year in respect of which suchMD&A and/or financial statements have been issued, together with the report thereon of theCompany’s auditors and one copy of any interim financial statements of the Company subsequentthereto; and

(iii) one copy of the Notice of Meeting and Information Circular of the Company in respect of the mostrecent annual meeting of the shareholders of the Company that involved the election of directors.

Contact details for the Company Secretary are as follows:

Caribbean Utilities Company, Ltd.P.O. Box 38Grand Cayman KY1-1101Cayman Islands345-949-5200 (phone)345-949-4621 (fax)

APPROVAL OF DIRECTORS

The contents of this Information Circular and the sending of it to the shareholders have been approved bythe Board of the Company.

Dated the 13th day of March, 2017.

Letitia T. LawrenceCompany Secretary

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SCHEDULE A

MANDATE OF THE BOARD OF DIRECTORS

The Board of Directors (the ‘‘Board’’) of Caribbean Utilities Company, Ltd. (the ‘‘Company’’) isresponsible for the stewardship of the Company. The Board will provide independent, effective leadership tosupervise the management of the business and affairs of the Company to grow value in a profitable andsustainable manner.

1. Composition

The Board will be comprised of between seven and 13 directors, as determined by the Board and asrequired under the Articles of Association of the Company (‘‘the Articles’’). Board members will be elected atthe annual meeting of shareholders each year and will serve until their successors are duly elected except as setout under the Articles.

2. Duties and Responsibilities

Members of the Board are expected to attend meetings of the Board and any Board committees of whichthe directors are members, and to review related meeting materials in advance.

The Board will:

A. Strategic Planning and Risk Management

1. Adopt a strategic planning process and approve, on an annual basis, a strategic business plan for theCompany that considers, among other things, the strategic opportunities and risks of the business;

2. Monitor the implementation and effectiveness of the approved strategic business plan;

3. Assist the President and Chief Executive Officer (‘‘the CEO’’) in identifying the principal risks of theCompany’s business and the implementation of appropriate systems to manage such risks;

B. Human Resources Management

1. Select, appoint and evaluate the CEO and determine the terms of the CEO’s employment withthe Company;

2. Appoint all officers of the Company in consultation with the CEO and determine their terms ofemployment, training, development and succession planning (including the processes for appointing,training and evaluating senior management), with the authority to approve and amend, as necessary, theemployment contracts of all officers;

3. Satisfy itself, to the extent feasible, as to the integrity of the CEO and other officers and the creation of aculture of integrity throughout the Company;

C. Finances, Controls and Internal Systems

1. Review and approve all material transactions including acquisitions, divestitures, dividends, capitalallocations, expenditures and other transactions that exceed threshold amounts set by the Board;

2. Evaluate the Company’s internal controls relating to financial and management information systems inconjunction with the Audit Committee and the Company’s internal audit function;

D. Communications

1. Adopt a disclosure policy that seeks to ensure that effective communications, including statutorycommunication and disclosure, are established and maintained with employees, shareholders, financialcommunity, media, customers, the general public and other stakeholders of the Company;

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E. Governance

1. Develop the Company’s approach to corporate governance issues, principles, practices and disclosure;

2. Establish appropriate procedures to evaluate director independence standards and allow the Board tofunction independently of management;

3. Appoint from among the directors an Audit Committee, the Nominating and Corporate GovernanceCommittee and such other committees of the Board as deemed appropriate and delegate responsibilitiesthereto in accordance with their mandates;

4. Develop and monitor compliance with the Company’s code of ethics and, through the Audit Committee, itsWhistle-Blower Policy;

5. Evaluate and review the performance of the Board, each of its committees and its members.

F. Board Meetings

1. Meet at least four times annually and as many additional times as needed to carry out its duties effectively.The Board may, on occasion and in appropriate circumstances, hold a meeting by telephoneconference call.

2. Meet in separate, non-management, in camera sessions at each regularly scheduled meeting.

3. Meet in separate, non-management, closed sessions with any internal personnel or outside advisors, asneeded or appropriate.

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SCHEDULE B

CHANGE OF AUDITOR REPORTING PACKAGE

In accordance with National Instrument 51-102 — Continuous Disclosure Obligations, the followingReporting Package was filed on SEDAR with the Canadian Securities Administrators on March 6, 2017 as itrelates to the Company’s proposed change in external auditors from Ernst & Young Ltd. to Deloitte LLP asdescribed in the 2017 Notice of Annual General Meeting and Information Circular. This Reporting Packageconsists of the following materials:

1. Notice of Change of Auditor dated February 23, 2017;

2. Response letter from Ernst & Young Ltd. (former auditor) dated February 24, 2017; and

3. Response letter from Deloitte LLP (successor auditor) dated February 28, 2017.

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Documents

CARIBBEAN UTILITIES COMPANY, LTD. NOTICE OF … · Board Orientation and ... CARIBBEAN UTILITIES COMPANY, LTD. NOTICE OF ANNUAL ... A Management Information Circular prepared with