Transcription of ANNUAL INFORMATION FORM Year Ended …
1 SNC-LAVALIN GROUP INC. ANNUAL INFORMATION FORM Year Ended December 31, 2017 February 21, 20182 TABLE OF CONTENTS 1. CORPORATE STRUCTURE .. 3 INCORPORATION OF THE COMPANY .. 3 SUBSIDIARIES, JOINT ARRANGEMENTS AND ASSOCIATES .. 3 2. GENERAL DEVELOPMENT OF THE BUSINESS .. 5 3. DESCRIPTION OF THE BUSINESS .. 12 GENERAL .. 12 REVENUE BACKLOG .. 14 RISK FACTORS .. 14 HUMAN RESOURCES .. 15 THE VALUES THAT GUIDE US .. 15 4. DIVIDENDS .. 17 5. CAPITAL STRUCTURE .. 18 6. MARKET FOR SECURITIES .. 21 7. DIRECTORS AND OFFICERS .. 22 8. LEGAL PROCEEDINGS .. 27 9. AMENDED AND RESTATED SHAREHOLDER RIGHTS PLAN AGREEMENT .. 32 10. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS .. 32 11. TRANSFER AGENT AND REGISTRAR .. 33 12. MATERIAL CONTRACTS .. 33 13. EXPERTS .. 35 14. AUDIT COMMITTEE .. 35 15.
2 CAUTION REGARDING FORWARD-LOOKING STATEMENTS .. 37 16. ADDITIONAL INFORMATION .. 39 SCHEDULE A MANDATE OF THE AUDIT COMMITTEE .. 40 OTHER RESPONSIBILITIES AND ISSUES .. 43 3 1. CORPORATE STRUCTURE INCORPORATION OF THE COMPANY SNC-Lavalin Group Inc. (the Company ) was incorporated under the laws of Canada on May 18, 1967 and was continued under the Canada Business Corporations Act ( CBCA ) on March 24, 1980. The articles of the Company were amended on several occasions, including for the following purposes: the split (in 1996) of its outstanding shares on a three-for-one basis, the change of its name, the creation of new classes of shares and the reorganization of its outstanding share capital, the modification of the maximum number of directors, the addition of a requirement that at least of the directors must not be employees of the Company or its affiliates and the re-designation of its class A subordinate voting shares as common shares, and to permit the appointment by the Board of Directors of one or more additional directors to hold office until the close of the next ANNUAL meeting of shareholders, subject to the total number of directors so appointed not exceeding of the number of directors elected at the previous ANNUAL meeting of shareholders.
3 The Company s head and registered office is located at 455 Ren -L vesque Boulevard West, Montreal, Quebec, Canada H2Z 1Z3. Reference in this ANNUAL INFORMATION Form to SNC-Lavalin means, as the context may require, the Company and all or some of its subsidiaries, joint arrangements or associates, or the Company or one or more of its subsidiaries, joint arrangements or associates. Unless otherwise stated, currency amounts in this ANNUAL INFORMATION Form are presented in Canadian dollars, or $ or CA$ . SUBSIDIARIES, JOINT ARRANGEMENTS AND ASSOCIATES The chart appearing on the next page lists the main subsidiaries, joint arrangements and associates of SNC-Lavalin, as well as the principal capital investments in which the Company participates, their jurisdiction of incorporation (Canada or any of the provinces or territories, unless otherwise indicated) and the percentage of voting shares beneficially owned, or controlled, or directed, directly or indirectly by SNC-Lavalin.
4 4 Percentage of voting securities held Percentage of voting securities held Subsidiaries, Joint Arrangements and Associates Subsidiaries, Joint Arrangements and Associates (continued) 407 East Construction General Partnership (Ontario) 50% SNC-Lavalin Romania (Romania) 100% Atkins Limited (United Kingdom) 100% SNC-Lavalin (Pty) Limited (South Africa) 100% Candu Energy Inc. (Canada) 100% SNC-Lavalin Stavibel Inc. (Canada) 100% Crosslinx Transit Solutions Constructors (Alberta) 25% SNC-Lavalin UK Limited (United Kingdom) 100% Faithful + Gould Limited (United Kingdom) 100% The Atkins North America Holdings Corporation (Florida) 100% Evergreen Rapid Transit Holdings Inc. (Alberta) 100% The SNC-Lavalin Corporation (Delaware) 100% Infrastructure Famille Sant Inc.
5 (Canada) 100% UGL Kentz Joint Venture (Australia) 50% SNC-Lavalin Rail & Transit Limited (United Kingdom) 100% Valerus Field Solutions Holdings LLC (Delaware) 100% SNC-Lavalin Colombia (Colombia) 100% WS Atkins Limited (United Kingdom) 100% Kentz Corporation Limited (Channel Islands) 100% Kentz Pty Ltd. (Australia) 100% SNC-Lavalin TPS (Indonesia) 95% Capital Investments SNC-Lavalin (Belgium) 100% 407 East Development Group General Partnership (Ontario) 50% Saudi Arabian Kentz Co. Ltd. (Saudi Arabia) 75% 407 International Inc. (Ontario) Signature on the Saint Lawrence Construction (Quebec) 45% Astoria Project Partners II LLC (New York) SLN-Aecon JV (Canada) 50% Crosslinx Transit Solutions General Partnership (Alberta) 25% SNC-Dragados-Pennecon (Canada) 40% Groupe infrastructure sant McGill, (Quebec) 50% SNC-Lavalin (Malaysia) Sdn.
6 Bhd. (Malaysia) 100% InPower BC General Partnership (British Columbia) 100% SNC-Lavalin Alg rie EURL (Algeria) 100% Myah Tipaza (Algeria) 51% SNC-Lavalin Arabia LLC (Saudi Arabia) 100% Rideau Transit Group General Partnership (Canada) 40% SNC-Lavalin ATP Inc. (Canada) 100% Shariket Kahraba Hadjret En Nouss (Algeria) 51% SNC-Lavalin Australia Pty. Ltd. (Australia) 100% SNC-Lavalin Highway Holdings Inc. (Canada) 100% SNC-Lavalin Capital Inc. (Canada) 100% SNC-Lavalin Infrastructure Partners LP (Canada) 20% SNC-Lavalin Chile (Chile) 100% Signature on the Saint-Laurent Group (Quebec) 45% SNC-Lavalin Construction (Atlantic) Inc. (Canada) 100% TC D me (France) 51% SNC-Lavalin Construction Inc. (Canada) 100% SNC-Lavalin Construction (Ontario) Inc. (Canada) 100% SNC-Lavalin Constructors Inc.
7 (Delaware) 100% SNC-Lavalin Constructors International Inc. (Canada) 100% SNC-Lavalin Constructors (Pacific) Inc. (Canada) 100% SNC-Lavalin Defence Programs Inc. (Canada) 100% SNC-Lavalin Engineering India Private Limited (India) 100% SNC-Lavalin Engineers & Constructors Inc. (Texas) 100% SNC-Lavalin Europe (Netherlands) 100% SNC-Lavalin Europe (France) 100% SNC-Lavalin (GB) Holdings Limited (United Kingdom) 100% SNC-Lavalin (GB) Limited (United Kingdom) 100% SNC-Lavalin GEM Ontario Inc. (Ontario) 100% SNC-Lavalin GEM Qu bec Inc. (Quebec) 100% SNC-Lavalin International Inc. (Canada) 100% SNC-Lavalin International Inc. and Zuhair Fayez Engineering Consultancies Company (Saudi Arabia) 50% SNC-Lavalin International (France) 100% SNC-Lavalin Major Projects Inc. (Canada) 100% SNC-Lavalin Nuclear Inc.
8 (Canada) 100% SNC-Lavalin Operations & Maintenance Inc. (Canada) 100% SNC-Lavalin Per (Peru) 100% SNC-Lavalin Polska Sp. (Poland) 100% SNC-Lavalin Projetos Industriais Ltda (Brazil) 100% Subsidiary Associate Capital investment entity Joint Arrangement 5 2. GENERAL DEVELOPMENT OF THE BUSINESS The highlights relating to the development of the Company s business over the past three (3) years are described below. 2017 Changes to the Board of Directors and appointment of Chairman On May 4, 2017, three new directors were appointed to the Board: Benita M. Warmbold, Isabelle Courville and the Honourable Kevin G. Lynch. Ms. Warmbold is the former Senior Managing Director and CFO of the Canada Pension Plan Investment Board ( CPPIB ), a position she held from 2013 until July 2017. Ms.
9 Warmbold brings more than 30 years of experience in the finance industry. Prior to that, she was Senior Vice-President and Chief Operations Officer from 2008 to 2013. Before joining CPPIB, she served as Managing Director and CFO for Northwater Capital Management Inc. from 1997 to 2008. Ms. Courville is a Corporate Director and is Chair of the Board of Directors of the Laurentian Bank of Canada. She is an engineer and attorney by training and has more than 25 years of experience in the telecommunications, IT and energy sectors. Ms. Courville was President of Hydro-Qu bec Distribution from 2011 to 2013 and Hydro-Qu bec Trans nergie from 2007 to 2011. Dr. Lynch has been Vice-Chairman of BMO Financial Group since 2010. Prior to that, Dr. Lynch built a distinguished 33-year career in the Government of Canada until his retirement in 2009, serving as Clerk of the Privy Council, Secretary to the Cabinet and Head of the Public Service of Canada.
10 He also served as Deputy Minister of Industry from 1995 to 2000 and Deputy Minister of Finance from 2000 to 2004. Following the retirement of Mr. Lawrence N. Stevenson in December 2017, the Board appointed the Honourable Kevin G. Lynch as Chairman of the Board of Directors, effective January 1, 2018. Sale-Leaseback of Montreal Headquarters On June 22, 2017, SNC-Lavalin announced that it completed the sale of its Montreal head office building and the adjacent empty lot of land located on Ren -L vesque Boulevard West for $ million to GWL Realty Advisors on behalf of institutional clients. The decision to sell the property was made as part of SNC-Lavalin s Operational Excellence program where the Company conducted a review of its owned real estate portfolio, which was announced in 2016. Concurrently, SNC-Lavalin entered into a 20-year lease for the building. Acquisition of WS Atkins PLC On July 3, 2017, SNC-Lavalin completed the acquisition of WS Atkins plc ( Atkins ), one of the world s most respected consultancies in design, engineering and project management, with a leadership position across the infrastructure, transportation and energy sectors (the Atkins Acquisition ).