MANAGEMENT PROXY CIRCULAR - Jean Coutu
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MANAGEMENT PROXY CIRCULAR
Notice of 2015 Annual Meeting of the Shareholders
to be held on July 7, 2015
This document tells you who can vote, what you will be voting on, and how to exercise
the voting rights attached to your shares.
Please read it carefully.Table of Contents
NOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS ........ 3 INTEREST OF INFORMED PERSONS AND OTHER
PERSONS IN MATERIAL TRANSACTIONS ............................. 45
MANAGEMENT PROXY CIRCULAR......................................... 5
ADDITIONAL INFORMATION............................................... 45
Solicitation of Proxies .....................................................................5
Appointment of Proxyholders ........................................................5 APPROVAL BY DIRECTORS .................................................. 45
Revocation of Proxies .....................................................................5
Exercise of Voting Rights Attached to the Shares Represented SCHEDULE “A”: MAJORITY VOTING POLICY FOR THE
by Proxy in Favour of Management ................................................5 ELECTION OF DIRECTORS .................................................... 46
Notice to Non-Registered Holders ..................................................5
SCHEDULE “B”: CORPORATE GOVERNANCE DISCLOSURE ... 47
Voting Shares and Principal Holders Thereof ..................................6
Rights Attached to Subordinate Voting Shares ...............................7 Board of Directors ........................................................................47
Notice and Access Rules .................................................................7 Mandate of the Board of Directors ............................................... 48
Information about Nominees for Election as Directors ...................8 Position Description .....................................................................48
Orientation and Continuous Education ......................................... 48
BOARD OF DIRECTORS RELATIONSHIPS .............................. 15 Corporate Ethics ...........................................................................48
CORPORATE GOVERNANCE ................................................ 15 Nomination of Directors ............................................................... 49
Compensation ..............................................................................49
AUDIT COMMITTEE INFORMATION .................................... 16 Board Standing Committees ......................................................... 50
Evaluation ....................................................................................50
Audit Committee Report .............................................................. 16
Term of office and other processes for the renewal of the
Financial Literacy of the Members of the Audit Committee .......... 16
Board of Directors ........................................................................50
Policy Regarding Approval of Services Rendered by
Representation of women on the Board of Directors.................... 50
Independent Auditors .................................................................. 17
Representation of women among the Executive Officers.............. 51
Appointment and Compensation of Independent Auditors .......... 18
SCHEDULE “C”: MANDATE OF THE BOARD OF
REPORT OF THE HUMAN RESOURCES AND
DIRECTORS ......................................................................... 52
COMPENSATION COMMITTEE ............................................ 18
Stewardship Responsibility .......................................................... 52
Composition of Committee .......................................................... 18
Responsibilities ............................................................................52
Compensation Literacy of Committee........................................... 18
Expectations Regarding Directors ................................................. 52
Functioning and Achievements of the Committee in the 2015
Method of Operation ................................................................... 53
Fiscal Year ....................................................................................19
SCHEDULE “D”: CHARTER OF THE AUDIT COMMITTEE ........ 54
COMPENSATION GOVERNANCE ......................................... 19
Terms of Reference to Determine Executive Compensation ......... 19
SCHEDULE “E”: CHARTER OF THE HUMAN RESOURCES
Executive Compensation of the Significant Shareholder Family AND COMPENSATION COMMITTEE .................................... 58
Members......................................................................................19 SCHEDULE “F”: MANDATE OF THE CHAIR OF THE BOARD
Executive Compensation Review Procedures................................ 20
OF DIRECTORS AND THE CHAIR OF A COMMITTEE ............. 60
Compensation of Directors ........................................................... 20
Compensation Adviser ................................................................. 20 Mandate of the chair of the board of directors ............................. 60
Mandate of the chair of each committee...................................... 60
COMPENSATION DISCUSSION AND ANALYSIS .................... 21
SCHEDULE “G”: SHAREHOLDER PROPOSALS SUBMITTED
Compensation Objective .............................................................. 21
Compensation and equity ............................................................ 22
BY MÉDAC .......................................................................... 62
Analysis of Executive Compensation............................................. 22 Information on directors’ competencies ....................................... 62
Compensation Risk Management ................................................. 23 Compensation and equity ............................................................ 62
Components of Executive Compensation...................................... 24 Directors’ competencies in social responsibility and
Share Ownership Guidelines for Executive Officers ...................... 33 environment ................................................................................63
Compensation of NEOs ................................................................. 35
Other Post-Employment and Change of Control Benefits.............. 37
Rules of Conduct with Respect to the Trading of Corporation’s
Securities by Insiders .................................................................... 38
Performance Based Compensation Analysis ................................. 38
Compensation of Directors ........................................................... 40
INDEBTEDNESS OF DIRECTORS AND OFFICERS.................... 44
INSURANCE OF DIRECTORS AND OFFICERS ......................... 44
2 | The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy CircularNOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders (the “Meeting”) of THE JEAN COUTU GROUP
(PJC) INC. (the “Corporation”) will be held at the offices of the Corporation at 551 Bériault Street, Longueuil, Province
of Québec, Canada, on Tuesday, July 7, 2015 at 9:30 a.m. for the following purposes:
1. to receive the consolidated financial statements of the Corporation for the year ended February 28, 2015 and
the auditors’ report thereon;
2. to elect the directors;
3. to appoint the independent auditors and authorize the directors to fix their remuneration;
4. to review and, if deemed appropriate, adopt the shareholder proposals attached as Schedule “G” to this
Circular; and
5. to conduct such other business as may duly be brought forth during the Meeting.
You have the right to receive notice of and to vote at the Meeting if you were a shareholder of the Corporation on
May 11, 2015 at the close of business, Eastern Daylight Time.
The following pages provide additional information relating to the matters to be dealt with at the Meeting.
The Corporation has elected to use the Notice and Access rules adopted by the Canadian Securities Administrators to
reduce the volume of paper in the Meeting materials distributed for the Annual Meeting of Shareholders. Instead of
receiving this Management Proxy Circular with the form of proxy or voting instruction form, shareholders will receive
a Notice of Meeting with instructions on how to access the remaining Meeting materials online. The Management
Proxy Circular attached hereto and other relevant materials are available on the Internet at
www.jeancoutu.com/en/corpo/investor-relations/financial-information/documents-relating-to-annual-meetings/ or
on the Canadian Securities Administrators’ website at www.sedar.com. Shareholders are advised to review the
Meeting materials prior to voting.
Registered holders who wish to receive a paper copy of the Meeting materials may, at no cost, request printed copies
by calling the toll-free number 1-866-962-0498, if they are in North America, or by calling 514-982-8716, if they are
outside North America, and entering the control number indicated on their voting instruction form or proxy.
Registered holders may also use the toll-free number to obtain additional information on how the notice and access
rules work.
Beneficial holders who wish to receive a paper copy of the Meeting materials may, at no cost, request printed copies
by calling the toll-free number 1-877-907-7643 and entering the control number indicated on their voting instruction
form. Beneficial holders may also use the toll-free number 1-855-887-2244 to obtain additional information on how
the notice and access rules work.
Paper copies of Meeting materials must be requested as soon as possible, but no later than June 23, 2015, in order to
allow shareholders sufficient time to receive and review the Meeting documents and return the form of proxy in the
prescribed time.
The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular | 3Any shareholder who expects to be unable to attend the Meeting is urged to complete and sign the enclosed form of proxy and return it in the enclosed envelope provided for that purpose or by fax. In order to be valid, proxies must be received at the Montréal offices of Computershare Trust Company of Canada, located at 1500 Robert-Bourassa Blvd., Suite 700, Montréal, Québec, H3A 3S8, fax number: 1-866-249-7775, no later than July 3, 2015 or at the close of business on the last business day prior to the date of any adjournment thereof. Longueuil, Province of Québec, April 28, 2015 BY ORDER OF THE BOARD OF DIRECTORS, The Chairman of the Board of Directors Jean Coutu 4 | The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular
MANAGEMENT PROXY CIRCULAR Revocation of Proxies
A shareholder who signs a form of proxy may revoke the
Solicitation of Proxies proxy at any time before it is used, in any manner
authorized by law, including by way of a written
This Management Proxy Circular (the “Circular”) is instrument executed by him or by his representative duly
furnished in connection with the solicitation of proxies by authorized in writing or, if the shareholder is a
the Management of The Jean Coutu Group (PJC) Inc. (the corporation, by an officer or a proxy of such corporation
“Corporation”) for use at the annual meeting of the duly authorized by it. Any such instrument must be
shareholders of the Corporation (the “Meeting”) to be deposited either with the Corporate Secretary of the
held at the offices of the Corporation located at Corporation at any time but no later than 48 hours prior to
551 Bériault Street in Longueuil, Province of Québec, the time of the Meeting, or with the Chairman of the
Canada, on July 7, 2015 at 9:30 a.m., for the purposes set Meeting on the day of the Meeting or any adjournment
forth in the accompanying notice of meeting (the thereof.
“Notice”). Unless otherwise indicated, the information
contained herein is given as at April 28, 2015 and any and Exercise of Voting Rights Attached to the Shares
all dollar amounts set forth herein are expressed in Represented by Proxy in Favour of
Canadian dollars.
Management
The solicitation is made primarily by mail, but officers and
employees of the Corporation may nonetheless solicit The enclosed form of proxy, if duly executed and
proxies directly by telephone or through other personal transmitted, appoints the persons named therein or any
solicitations but without additional compensation. The other person named in the manner provided for above, to
Corporation may also reimburse brokers and other represent the shareholder with respect to the shares
persons who hold Class “A” Subordinate Voting Shares or represented by the said proxy at the Meeting and the
Class “B” Shares on their behalf, or on behalf of nominees, persons designated therein will vote or withhold from
to cover their expenses for the mailing of proxy voting as specified by the shareholder.
documents to principals and to obtain their proxy. The
Management undertakes that all voting rights will be
cost of solicitation will be borne by the Corporation and is
voted in accordance with the instructions given by the
expected to be nominal.
shareholder on any ballot that may be called for. Unless
otherwise indicated, the voting rights attached to the
Appointment of Proxyholders
shares represented by such proxy will be voted IN
FAVOUR of all matters described herein, except with
The persons named in the enclosed form of proxy are
respect to the shareholder proposals, for which the
directors of the Corporation. A shareholder has the right
to designate, as his representative, a person other than voting rights will be voted AGAINST.
one of the persons named by Management whose names Management is not aware of any new matters or any
are listed for such purpose in the attached form of proxy,
amendment or variation of matters scheduled to be
to allow that person to attend and act on his behalf at submitted at the Meeting, nor does it foresee that such
the Meeting. possibilities might occur. If, however, any such matters
should properly come before the Meeting, the persons
To exercise this right, the shareholder must write the
designated in the enclosed form of proxy will vote
name of the person selected by the shareholder in the
thereon in accordance with their judgment pursuant to
blank space provided for such purpose on the form of
the discretionary authority conferred by the proxy with
proxy. It is not necessary that the person selected be a
respect to such matters.
shareholder of the Corporation.
To ensure that they are valid, completed proxies must be Notice to Non-Registered Holders
received at the Montréal office of Computershare Trust
Company of Canada, located at 1500 Robert-Bourassa Shareholders who do not hold their shares in their own
Blvd., Suite 700, Montréal, Québec, H3A 3S8 no later than name, also known as non-registered holders or as
July 3, 2015 or at the close of business on the last business beneficial holders (“Beneficial Holders”), should pay close
day prior to the date of any adjournment thereof, or they attention to the information set forth in this section.
may be delivered to the Chairman of the Meeting on the Beneficial Holders should note that only proxies
day of the Meeting or any adjournment thereof. deposited by registered holders whose names appear on
the records kept by the registrar and transfer agent of
The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular | 5the Corporation as registered holders of Class “A” Voting Shares and Principal Holders Thereof
Subordinate Voting Shares or Class “B” Shares (the
“Shares”) can be recognized and acted upon at the The authorized share capital of the Corporation consists of
Meeting. an unlimited number of Class “A” Subordinate Voting
Shares without par value (the “Subordinate Voting
If the Shares appear in an account statement sent to a Shares”), an unlimited number of Class “B” Shares without
shareholder by a broker, the said Shares are most par value and an unlimited number of Class “C” Shares
probably not registered in the name of the shareholder, without par value.
but in the name of his broker or a representative of that
broker. As a result, each Beneficial Holder must ensure Each Subordinate Voting Share confers upon its holder the
that his voting instructions are communicated to the right to one vote and the holders of Subordinate Voting
appropriate person well before the Meeting. Shares will be entitled to one vote per share at the
Meeting. Each Class “B” Share confers upon its holder the
Under Regulation 54-101 respecting Communication with right to ten votes and the holders of Class “B” Shares will
Beneficial Owners of Securities of a Reporting Issuer, be entitled to ten votes per share at the Meeting. As at
brokers and other intermediaries are required to request April 28, 2015, 83,402,539 Subordinate Voting Shares (this
voting instructions from Beneficial Holders prior to number does not include the 163,232 shares held in trust
shareholder meetings. Brokers and other intermediaries by the Corporation for the Performance-based Share Plan
have their own procedures for sending materials and their described at page 31 of this Circular), 103,500,000
own guidelines for the return of documents; these Class “B” Shares and no Class “C” Shares in the capital
instructions are to be followed to the letter by the stock of the Corporation were outstanding. As a result, as
Beneficial Holders if the voting rights attaching to their at such date, the Subordinate Voting Shares represent
Shares are to be cast at the Meeting. 7.47% of the total voting rights attached to all issued and
outstanding shares of the Corporation. The shareholders
In Canada, most brokers delegate the responsibility of
may vote in person or by proxy.
obtaining their clients’ instructions to Broadridge Financial
Solutions, Inc. (“Broadridge”). Beneficial Holders who The holders of Subordinate Voting Shares and Class “B”
receive a voting instruction form from Broadridge may not Shares registered on the list of shareholders drawn up at
use the said form to vote directly at the Meeting. the close of business, Montréal time, on May 11, 2015 (the
“Record Date”), will be entitled to vote at the Meeting and
If you have questions on how to exercise voting rights
at any adjournment thereof, if present or represented by
attached to Shares held through a broker or other
proxy thereat. The transferee of Subordinate Voting
intermediary, please contact the broker or intermediary
Shares acquired after the Record Date is entitled to
directly.
exercise at the Meeting or at any adjournment thereof the
Although a Beneficial Holder will not be recognized at the voting rights attached to such shares by tendering duly
Meeting for the purposes of directly exercising voting endorsed share certificates representing them or by
rights attached to the Shares registered in the name of his otherwise establishing that he owns the shares, and by
broker (or a representative thereof), he may attend the requiring, at least ten days before the Meeting, the
Meeting as proxy of the registered holder and, as such, registration of his name on the list of shareholders entitled
exercise the voting rights attached to such Shares. to receive the Notice, this list having been drawn up at the
Record Date.
Unless otherwise indicated, in this Management Proxy
Circular, in the Form of Proxy and in the Notice of As at April 28, 2015, to the best knowledge of the
Meeting attached hereto, shareholders shall mean Corporation’s directors and officers based on
registered holders. shareholders’ public filings, the only persons who
beneficially own, or directly or indirectly control or direct,
shares carrying more than 10% of the voting rights
attached to any class of outstanding shares of the
Corporation are the following:
6 | The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy CircularShareholder Number of Percentage of Number of Class Percentage of Total percentage
name Subordinate voting rights “B” Shares voting rights of voting rights
Voting Shares attached to attached to all attached to all
all Subordinate Class “B” Shares voting shares
Voting Shares
(1) (2)
Jean Coutu 3,584,010 4.29% 103,500,000 100% 92.85%
(1) 80,800 of these shares are held by 3958230 Canada Inc. and 157,700 of these shares are held by 4527011 Canada Inc., two corporations controlled by
Mr. Jean Coutu. 3,345,510 of these shares are held by Fondation Marcelle et Jean Coutu, a trust controlled by Mr. Jean Coutu and his family. Mr. Jean
Coutu, Mrs. Marie-Josée and Mrs. Sylvie Coutu, as trustees of Fondation Marcelle et Jean Coutu, effectively share direction over the securities held by
the Foundation of the Corporation’s capital stock with another trustee.
(2) 96,500,000 of these shares are held by 3958230 Canada Inc. and 7,000,000 of these shares are held by 4527011 Canada Inc., two corporations
controlled by Mr. Jean Coutu.
Rights Attached to Subordinate Voting Shares Shares shall be entitled to divide equally all of the assets of
the Corporation available for payment or distribution, on a
In addition to conferring the right to one vote per share, share for share basis, based upon the number of shares
the Subordinate Voting Shares, along with the Class “B” they hold respectively, without preference or distinction.
Shares, entitle the holder, on a pari passu basis, to receive
any dividends, declared, paid or set aside by the Notice and Access Rules
Corporation. In accordance with the articles of the
Corporation, if an “Offer” (as defined below) is made with The Corporation has elected to use the Notice and Access
respect to the Class “B” Shares to the holders of Class “B” rules adopted by the Canadian Securities Administrators to
Shares without being concurrently made upon the same reduce the volume of paper in the Meeting materials
terms to the holders of Subordinate Voting Shares, each distributed for the Annual Meeting of Shareholders.
Subordinate Voting Share will become exchangeable into Instead of receiving this Management Proxy Circular with
1 Class “B” Share at the holder’s option in order to permit the form of proxy or voting instruction form, shareholders
such holder to accept the offer, subject however to the will receive a Notice of Meeting with instructions on how
acceptance of such offer by the holders of a number of to access the remaining Meeting materials online. The
Class ”B” Shares which entitles them, at such date, to Corporation sent the Notice of Meeting and proxy form
more than 50% of the voting rights attached to all shares directly to registered holders. The Corporation intends to
of the share capital of the Corporation carrying voting pay for intermediaries to deliver the Notice of Meeting,
rights. voting instruction form and other Meeting materials to the
Beneficial Holders.
“Offer” as defined in the articles of the Corporation means
a take-over bid, a take-over bid by way of an exchange of The Management Proxy Circular attached hereto and other
securities or an issuer bid (as defined in the Securities Act relevant materials are available on the Internet at
(Québec), as currently in force or as it may be amended or www.jeancoutu.com/en/corpo/investor-relations/financial-
re-enacted thereafter) in order to purchase Class “B” information/documents-relating-to-annual-meetings/ or on
Shares; however, an offer does not include (i) an offer the Canadian Securities Administrators’ website at
made at the same time, price and conditions to all holders www.sedar.com.
of Class “B” Shares and all holders of Subordinate Voting
Shares, (ii) an offer for all or any part of the Class “B” If you would like to receive a printed copy of the Meeting
Shares issued and outstanding at the time of the offer, documents by mail at no cost, you must request one.
where the purchase price for each Class “B” Share does
not exceed 115% of the average market price obtained by Registered holders who wish to receive a paper copy of
averaging the closing prices of the Subordinate Voting the Meeting materials may, at no cost, request printed
Shares during the twenty days of market activity preceding copies by calling the toll-free number 1-866-962-0498, if
the date of the offer, or (iii) an offer made by one or more they are in North America, or by calling 514-982-8716, if
members of the Coutu family to one or more members of they are outside North America, and entering the control
the Coutu family. number indicated on their voting instruction form or
proxy.
In case of liquidation or dissolution of the Corporation or
any other distribution of its assets among the shareholders Beneficial Holders who wish to receive a paper copy of the
for the purposes of winding-up its affairs, the holders of Meeting materials may, at no cost, request printed copies
Subordinate Voting Shares and the holders of Class “B” by calling the toll-free number 1-877-907-7643 and
The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular | 7entering the control number indicated on their voting The following table presents the names of the nominees
instruction form. as directors, place of residence, position within the
Corporation, current principal occupation, term of office
To ensure you receive the materials in advance of the as director and the committees of the Board of the
voting deadline and Meeting date, all requests must be Corporation on which they serve. The table also indicates
received no later than June 23, 2015 to ensure timely whether the nominees are independent, the number and
receipt. If you do request the materials, another Voting class of voting shares of the share capital of the
Instruction Form or Proxy Form will not be sent to you, so Corporation beneficially owned, directly or indirectly, or
please retain the one received with the Notice of Meeting over which control or direction is exercised by each of
for voting purposes. them, the number of share units held under the Deferred
Share Unit (“DSU”) Plan (see the section “Compensation of
To obtain a printed copy of the documents after the Directors” of this Circular) as well as the total market value
Meeting date, please call 1-866-906-9611 if you are a of the securities held by them.
registered holder or 1-877-907-7643 if you are a Beneficial
Holder. The nominees have themselves provided the Corporation
with the information as at April 28, 2015, with the
Information about Nominees for Election as
exception of the information regarding attendance at the
Directors Board meetings or committee meetings, which is provided
for the period ended February 28, 2015.
Management of the Corporation is proposing the election
of fourteen directors for the current year. The directors The Board of Directors of the Corporation has adopted a
are elected each year and the term of office of each of majority voting policy, according to which a nominee of
these directors expires upon the election of his successor the Corporation who receives more “abstentions” than
unless he should resign or his office should become vacant votes “in favour” during an election of directors by the
because of death, removal or any other reason. shareholders is supposed to resign from the Board
immediately following the shareholder meeting at which
All of the individuals nominated for election as directors he was elected. This policy is reproduced in Schedule “A”
are currently members of the Board and each was elected of this Circular.
at the Corporation’s annual shareholder meeting held on
July 8, 2014, by at least a majority of the votes cast. Furthermore, as indicated on the attached proxy form or
voting instruction form, shareholders can vote for each
Management of the Corporation does not anticipate that director individually.
any of the nominees mentioned below will be unable, or
reluctant, for any reason whatsoever, to fulfill his duties as Unless otherwise indicated by the shareholder, the
a director. Should this occur for any reason whatsoever, voting rights attached to the shares represented by any
before the election, the persons named in the enclosed duly executed proxy will be exercised IN FAVOUR of the
proxy form reserve the right to vote for another nominee individual election of each of the nominees mentioned
of their choice unless the shareholder on the proxy form hereafter.
has indicated his intent to abstain from voting during the
election of the directors.
8 | The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy CircularLise Bastarache Corporate Director and Economist
Mrs. Lise Bastarache is an economist and a corporate director. She is a member of the Board of Directors
of Laurentian Bank and Chartwell Seniors Housing (real estate investment trust). She holds a Bachelor’s, a
Candiac (Québec) Canada Master’s degree and has completed the course requirements of a Ph.D. in Economics. She has been a
Director since March 2003 lecturer in Economics, a consultant for the Secor Group, as well as an economist and a senior manager for
RBC Financial Group.
Independent
(1) (2)
Securities held Market value of securities held
15,129 DSUs $380,948
Board/committees Meeting Attendance:
Board of Directors 6/6
Audit Committee 4/4
Human Resources and Compensation Committee 7/7
Governance and Nominating Committee 4/4
François J. Coutu President and Chief Executive Officer
Mr. François J. Coutu, a pharmacist by profession, holds a Bachelor’s degree in Business Administration
from McGill University as well as a Bachelor’s degree in Pharmacy from Samford University in the
Île-des-Sœurs (Québec) Canada United States. He is a member of the boards of directors of Varad HTM Inc. and the School of Pharmacy
Director since December 1985 of Samford University. He has been Chairman of the Board of the Canadian Association of Chain Drug
Stores (CACDS) and has also sat on the Board of Rite Aid Corporation. President and Chief Executive
Non-independent Officer of the Corporation since October 2007, Mr. Coutu previously held the position of Vice-Chairman
of the Board and President of Canadian Operations from 2005 to 2007, President and Chief Executive
Officer from 2002 to 2005 and President and Chief Operating Officer of the Corporation from 1992 to
2002.
(1)
Securities held
(3)
None
Board/committees Meeting Attendance:
Board of Directors 6/6
The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular | 9Jean Coutu, O.C., O.Q. Chairman of the Board
Mr. Jean Coutu, a pharmacist by profession, has been a director and the Chairman of the Board of the
Corporation since its foundation in 1969. He has also served as President and Chief Executive Officer
Montréal (Québec) Canada from 1969 to 1992 and thereafter continued as Chief Executive Officer from 1992 to 2002. From
Founder November 2005 to October 2007, Mr. Coutu served as President and Chief Executive Officer. Mr. Coutu
is also the founder of the Québec Association of pharmacists-owners and the Fondation Marcelle et Jean
Director since June 1969 Coutu whose mission is to support various initiatives to help fight poverty and enhance the wellness and
Non-independent education of people.
(1)
Securities held
See “Voting Shares and Principal Holders Thereof”
on page 7 of this Circular.
Board/committees Meeting Attendance:
Board of Directors 6/6
Marie-Josée Coutu President of Fondation Marcelle et Jean Coutu
A graduate of the University of Montréal and HEC Montréal, Mrs. Marie-Josée Coutu has been the
President since 1990 of Fondation Marcelle et Jean Coutu (FMJC), whose mission consists in providing
Outremont (Québec) Canada financial support to social projects destined for underprivileged persons, mistreated women and children
Director since September 1997 and the fight against drug use in Québec and Canada. The FMJC is also present in several developing
countries. Mrs. Coutu has also been a member of the Board of the Institute for Research in Immunology
Non-independent and Cancer (IRIC) since 2008.
(1)
Securities held
(3)
None
Board/committees Meeting Attendance:
Board of Directors 6/6
Governance and Nominating Committee 4/4
10 | The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy CircularMichel Coutu President of MMC Consulting Inc.
Mr. Michel Coutu has been President of MMC Consulting Inc. since 2010. He previously acted as
President of the US Operations of the Corporation and as President and Chief Executive Officer of The
Montréal (Québec) Canada Jean Coutu Group (PJC) USA, Inc. since 1986. Mr. Coutu holds a degree in Finance, a Licentiate in Law
Director since December 1985 from Sherbrooke University and a master in business administration (MBA) from the Simons School of
Business (University of Rochester). He obtained, in 2005, a Degree Honoris Causa from the
Non-independent Massachusetts College of Pharmacy and Health Sciences. Mr. Coutu was also a member of the Boards of
Directors of the United States National Association of Chain Drug Stores and Rite Aid Corporation. He is
a Governor of the faculty of commerce of Sherbrooke University.
(1)
Securities held
(3)
None
Board/committees Meeting Attendance:
Board of Directors 6/ 6
Governance and Nominating Committee 3/4
Sylvie Coutu President of Sylvie Coutu Design
Mrs. Sylvie Coutu obtained her Diploma in Interior Design in 1987. She has been the President of Sylvie
Coutu Design since its foundation in 1992. From 1987 to 1992, she was involved in the planning and
Outremont (Québec) Canada modernization of the Royal Bank of Canada’s network of branches and executive centers. She then
Director since September 1997 actively participated in the development of the new design concepts of the Corporation, particularly in
the design of the “Passion Beauté” boutiques and the new pharmacy departments. Mrs. Coutu is also
Non-independent actively involved in the Fondation Marcelle et Jean Coutu, as a volunteer and a Trustee. She is also a
member of the Board of Directors of the Miriam Foundation.
(1)
Securities held
(3)
None
Board/committees Meeting Attendance:
Board of Directors 6/6
The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular | 11L. Denis Desautels, Corporate Director
O.C., F.C.A. Mr. L. Denis Desautels was Auditor General of Canada from 1991 to 2001. At the time of his appointment
as Auditor General, he was a senior partner in the Montréal office of Ernst & Young. In his 27 years with
Ernst & Young, he served the firm in various capacities and in a number of offices, namely Montréal,
Ottawa (Ontario) Canada Ottawa and Québec City. He was Chairman of the Accounting Standards Oversight Council of the
Canadian Institute of Chartered Accountants. He is director and Chair of the Audit Committee of
Director since January 2003 Bombardier Inc. He also sits on the Board of Directors of the Oblate Fund of Saint-Paul University as well
Independent as on the Board of Governors of the University of Ottawa. He was an Executive-in-residence at the Telfer
School of Management of the University of Ottawa from 2001 to 2008.
(1) (2)
Securities held Market value of securities held
12,500 Subordinate Voting Shares $314,750
Board/committees Meeting Attendance:
Board of Directors 6/6
Audit Committee (Chair) 4/4
Human Resources and Compensation Committee 7 /7
Marcel E. Dutil Chairman of the Board of Canam Group Inc.
Mr. Dutil is the founder of Canam Group Inc., an industrial company that mainly designs and
manufactures frames, joists and steel decks. Mr. Dutil currently serves on the Board of Canam Group Inc.
Saint-Georges-de-Beauce and he also served on the Board of National Bank of Canada.
(Québec) Canada
Director since September 1995
Independent
(1) (2)
Securities held Market value of securities held
(4)
20,000 Subordinate Voting Shares
$2,060,202
61,819 DSUs
Board/committees Meeting Attendance:
Board of Directors 5/6
Audit Committee 3/4
12 | The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy CircularNicolle Forget Corporate Director
B.Sc.Com., LL.L., Q.C.
A graduate of the University of Québec at Montréal, HEC Montréal and the University of Montréal,
Mrs. Forget has been a member of the Quebec Bar. She has also been a member of a number of
administrative tribunals and boards of directors, including the boards of Hydro-Québec, the Economic
Longueuil (Québec) Canada Council of Canada and Gaz Métro. She is currently a member of the board of directors of Valener Inc. and
its subsidiaries and sits on the board of the Collège des administrateurs de sociétés.
Director since September 1993
Vice President of the Board of
Directors
(1) (2)
Independent Securities held Market value of securities held
8,500 Subordinate Voting Shares
$287,354
2,912 DSUs
Board/committees Meeting Attendance:
Board of Directors 6/6
Human Resources and Compensation Committee
7/7
(Chair)
Governance and Nominating Committee 4/4
Dr. Robert Lacroix Professor Emeritus at the University of Montréal
Ph.D., C.M. O.Q.
Dr. Lacroix holds a Ph.D. in Economics from the Université de Louvain and is a Professor Emeritus at the
University of Montréal where he has held several administrative positions, including that of Rector from
1998 to 2005. He was Chairman of the Board of the Association of Universities and Colleges of Canada
Montréal (Québec) Canada and also Chairman of the Board of the Quebec University Rectors and Principals. Dr. Lacroix is also a
director of Pomerleau Inc. and served as a director of Industrial Alliance from 2004 to 2011 and of CAE
Director since September 2006
from 2006 to 2013.
Independent
(1) (2)
Securities held Market value of securities held
3,450 Subordinate Voting Shares
$932,616
33,588 DSUs
Board/committees Meeting Attendance:
Board of Directors 6/6
Audit Committee 4/4
(5)
Governance and Nominating Committee 2/2
(5)
Human Resources and Compensation Committee 5/5
The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular | 13Andrew T. Molson Chairman of the Board of RES PUBLICA Consulting Group
Mr. Molson is Chairman of the Board of RES PUBLICA Consulting Group Inc., a Montréal-based holding
and management company for professional services firms, including NATIONAL Public Relations Inc. and
Westmount (Québec) Canada Cohn & Wolfe|Canada.
Director since July 2014 Mr. Molson is vice-chairman of the board of directors of Molson Coors Brewing Company. He is also a
Independent member of the board of directors of Groupe Deschênes Inc. and the Montreal Canadiens Hockey
Club Inc. and serves on several not-for-profit organizations’ boards.
Mr. Molson was called to the Quebec Bar in 1995 after studying law at Université Laval. He also has a
bachelor of arts degree from Princeton University and a master’s degree in corporate governance and
business ethics from the University of London (Birkbeck College).
(1) (2)
Securities held Market value of securities held
2,000 Subordinate Voting Shares
$67,080
664 DSUs
Board/committees Meeting Attendance:
(6)
Board of Directors 2/2
(6)
Governance and Nominating Committee 2/2
Cora Mussely Director of the Cora group of companies
Tsouflidou Mrs. Cora Mussely Tsouflidou, who graduated in classical studies in 1967 from Ste-Croix College
(Montreal), is founder, owner and director of the Cora group of companies, working in the restaurant
industry as the franchisor of the Cora Concept. Mrs. Tsouflidou also directs the Cora Foundation, whose
Prévost (Québec) Canada mission is to provide breakfasts to schoolchildren in underprivileged neighborhoods across Canada. She
is a graduate of the Collège des administrateurs de sociétés. Mrs. Tsouflidou also sits on the board of
Director since July 2012 directors of Femmessor.
Independent
(1) (2)
Securities held Market value of securities held
3,029 DSUs $76,270
Board/committees Meeting Attendance:
Board of Directors 6/6
(7)
Human Resources and Compensation Committee 2/2
(7)
Governance and Nominating Committee 2/2
14 | The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy CircularAnnie Thabet Partner, Celtis Capital
A chartered professional accountant, Mrs. Thabet holds a Bachelor in Commerce from Sherbrooke
University and a Master’s degree in Business Administration (MBA) from Concordia University and is a
Ile-des-Sœurs (Québec) Canada director accredited by the Institute of Corporate Directors. Mrs. Thabet is a partner with Celtis Capital, a
Director since July 2010 firm specialized in transactional services in relation to mergers and acquisitions, divestitures and
corporate finance, and asset management that she co-founded in 2003. Her prior experience includes
Independent investment management at Société générale de financement du Québec and consulting at Price
Waterhouse. Mrs. Thabet is Governor of Réseau Capital, the Québec venture capital and private equity
association, and Governor and director of the Fondation de recherche en administration of Sherbrooke
University. She also is a director of Manac Inc., FIER Côte-Nord, the Institute of Corporate Directors –
Québec and Sommet Capital 2000.
(1) (2)
Securities held Market value of securities held
7,570 Subordinate Voting Shares
$330,940
5,573 DSUs
Board/committees Meeting Attendance:
Board of Directors 6/6
Human Resources and Compensation Committee 7/7
(8)
Audit Committee 2/2
(1) Securities held: Approximate number of shares of each class of voting shares of the Corporation beneficially owned, directly or indirectly, or over which
control or direction is exercised, and number of DSUs held as at April 28, 2015.
(2) According to the closing price of the Subordinate Voting Shares on the TSX on April 28, 2015 ($25.18).
(3) Messrs. François J. and Michel Coutu as well as Mrs. Marie-Josée and Mrs. Sylvie Coutu are children of Mr. Jean Coutu.
(4) These shares are held by Placement CMI inc., a company controlled by Mr. Marcel E. Dutil.
(5) Mr. Robert Lacroix has been a member of the Human Resources and Compensation Committee since July 8, 2014. He has not been a member of the
Governance and Nominating Committee since that date.
(6) Mr. Andrew Molson has been a member of the board of directors and the Governance and Nominating Committee since July 8, 2014.
(7) Mrs. Cora Mussely Tsouflidou has been a member of the Governance and Nominating Committee since July 8, 2014. She has not been a member of the
Human Resources and Compensation Committee since that date.
(8) Mrs. Annie Thabet has been a member of the Audit Committee since July 8, 2014.
To the best knowledge of the Corporation, no director of governance practices in light of the changing requirements
the Corporation is, as at April 28, 2015, or has been, within in this respect. Further to the recommendations of that
ten years before the date hereof, a director or executive committee, the Board constantly reviews its structure,
officer of any corporation that, while the person was practices and composition, and periodically initiates the
acting in such capacity or within a year of that person changes that it considers necessary and relevant for its
ceasing to act in such capacity, became bankrupt, made a effectiveness.
proposal under any legislation relating to bankruptcy or
insolvency or was subject to or instituted any proceedings, The corporate governance of the Corporation takes into
arrangement or compromise with creditors or had a consideration the control held by its significant
receiver, receiver manager or trustee appointed to hold its shareholder while favouring the efficient administration of
assets. the Corporation by its Management. The Board of
Directors considers that the corporate governance
practices adopted by the Corporation suit its current
BOARD OF DIRECTORS RELATIONSHIPS situation and are efficient, and that the structures and
processes necessary to ensure its independence from
None of the directors of the Corporation serve together on Management are in place.
the board of directors of other public companies.
In accordance with Policy Statement 58-201,
CORPORATE GOVERNANCE Regulation 58-101 and Regulation 52-110 of the Canadian
Securities Administrators, the Corporation must disclose
its corporate governance practices. This information is
The Board of Directors of the Corporation has delegated to presented in Schedule “B” of this Circular and in the
the Governance and Nominating Committee the section “Audit Committee Information” below.
responsibility of periodically reviewing its corporate
The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular | 15AUDIT COMMITTEE INFORMATION During the 2015 fiscal year, the Audit Committee of the
Corporation obtained a written confirmation from
Deloitte LLP, Chartered Professional Accountants,
Audit Committee Report confirming their independence according to the Code of
Ethics of the Ordre des comptables professionnels agréés
The Audit Committee of the Board of Directors of the du Québec. The Audit Committee also examined and
Corporation is composed exclusively of “independent” approved the fees paid for auditing services and other
directors as defined in Regulation 52-110 respecting Audit related services.
Committees, including a financial expert, Mr. L. Denis
Desautels. The Audit Committee has reviewed the qualifications and
performance of the independent auditors and
The Audit Committee assumes the responsibilities recommended that the Board of Directors renew the
delegated to it in writing by the Corporation’s Board of mandate of Deloitte LLP, Chartered Professional
Directors, as reproduced in Schedule “D” of this Circular. Accountants.
As per its mandate, the Audit Committee was created to
monitor, on a continuous basis, the process through which The current report is dated April 28, 2015, and was
the Corporation’s financial information and internal submitted by L. Denis Desautels, Chair of the Committee,
controls are disclosed. Indeed, the preparation and Lise Bastarache, Marcel E. Dutil, Robert Lacroix and Annie
presentation of the Corporation’s financial statements, Thabet.
their integrity, as well as the efficiency of the internal
audits are the responsibility of Management. Management Financial Literacy of the Members of the Audit
is also responsible for maintaining adequate internal Committee
controls and procedures, as well as for the use of
appropriate principles and standards regarding accounting The following section indicates, for each member of the
and presentation of financial statements. Audit Committee, their name, as well as their relevant
education and experience regarding the execution of their
The independent auditors are responsible for auditing the responsibilities as a member of the said committee.
Corporation’s annual financial statements, as per
professional standards. These auditors consult with the L. Denis Desautels. Mr. Desautels has chaired the Audit
Audit Committee and report their written disclosures in Committee since 2003. He has been a chartered
regard to (i) their independence from the Corporation; accountant since 1966. Mr. Desautels has practised as a
(ii) critical accounting policies and practices used in the certified public accountant, auditor and one of the senior
audit; (iii) the acceptability and quality of the partners of the firm Ernst & Young LLP (formerly Clarkson
Corporation’s accounts and (iv) the matters required to be Gordon) from 1964 to 1991. In 1991, Mr. Desautels was
communicated under generally accepted auditing appointed Auditor General of Canada, a position that he
standards. held until 2001. In this capacity, he was notably
responsible for the auditing of financial statements of the
Without the presence of Management, the Audit
Government of Canada, the governments of the
Committee meets regularly with representatives of the
Territories and several crown corporations. He is presently
independent auditors and the Senior Director, Internal
a member of audit committees of two listed companies
Audit, in order to review the results of their audits, their
and one non-profit organizations, which provides him with
assessment of internal controls, the quality of accounting,
a first-hand opportunity to appreciate the role and the
financial reporting and other appropriate matters.
functioning of an audit committee.
The Audit Committee examined the Corporation’s audited
Over the course of his career, Mr. Desautels has acquired
financial statements and Management’s Discussion and
competence in the audit of major public and private
Analysis for the fiscal year ended February 28, 2015 and
companies and he is consequently quite familiar with
consulted with senior Management and representatives of
generally accepted accounting principles. He is capable of
the independent auditors. Satisfied with the information
understanding financial statements and accounting
provided by Management and the independent auditors in
problems of a degree of complexity that is comparable to
regard to the integrity of the financial statements, the
those that could be found in the financial statements of
Audit Committee recommended that the Board of
the Corporation. In addition, his experience as
Directors approve the audited consolidated financial
independent auditor during 37 years has allowed him to
statements for filing with securities authorities to which
acquire a solid understanding of internal controls and of
the Corporation is subject.
the process leading to the preparation of financial
statements.
16 | The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy CircularLise Bastarache. Mrs. Bastarache was, until January Mr. Lacroix was a member of the audit committee of the
2005, Regional Vice President, Private Banking Québec for University of Montréal during his mandate as Rector and
RBC Financial Group. She joined the Economics in this capacity he had to analyze financial statements
Department of RBC Financial Group in 1996, where she presenting accounting problems generally comparable to
acted as Deputy Chief Economist before joining the those that could reasonably be expected to be found in
Commercial Markets Group as Analyst in 2000. the financial statements of the Corporation. He is a former
Mrs. Bastarache holds a Bachelor’s degree and a Master’s member of the audit committee of Industrial Alliance and
degree in Economics from the University of Québec at a member of the audit committees of Pomerleau Inc. and
Montréal and completed the course requirements of a of the Corporation.
Ph.D. in Economics from McGill University. As a
Commercial Markets Analyst for RBC, Mrs. Bastarache has Annie Thabet. Mrs. Thabet has been a chartered
analyzed the financial statements of many large professional accountant (CPA, CA) since 1982. She started
corporations that presented accounting problems her career as an auditor and financial management
generally comparable in scope and complexity to those consultant at the firm Price Waterhouse (now PwC) and
found in the financial statements of the Corporation. subsequently joined Société générale de financement
where she was involved as an investment manager in the
In addition, as Vice President of RBC Private Banking, structuring, analysis and due diligence of many large
Mrs. Bastarache was ultimately responsible for the investment projects. As a partner in Celtis Capital,
internal controls and for the preparation of the income Mrs. Thabet continues to be involved in business analysis
statements of her division. Since January 2005, and valuations for transactional purposes. Throughout her
Mrs. Bastarache continues to act as member of various career, Mrs. Thabet has developed competency in
boards of directors and committees. She is a member of analyzing financial statements and identifying issues that
the audit committee of two publicly traded companies. could arise from complex situations or transactions. For
over twenty years, Mrs. Thabet has been a member of
Marcel E. Dutil. Mr. Dutil is Chairman of the Board of various audit, finance and investment committees. She
Directors and was President and Chief Executive Officer of currently chairs the audit committee of Manac Inc., also a
the Canam Group Inc., a company that he created in 1973 public company. Mrs. Thabet holds a bachelor’s degree in
following the acquisition of Les Aciers Canam Inc. As business administration from Sherbrooke University, a
Chairman of the Board of Directors and Chief Executive master’s degree in business administration (MBA) from
Officer of the Canam Group Inc. and as director of several Concordia University and is accredited by the Institute of
public companies since 1974, such as Border Trust, Corporate Directors.
National Bank of Canada, Transcontinental inc., Québec
Telephone and others, Mr. Dutil has acquired a good Policy Regarding Approval of Services Rendered
understanding of generally accepted accounting principles by Independent Auditors
in Canada and has regularly been called upon to analyze
and evaluate financial statements presenting accounting Upon the recommendation of the Audit Committee, the
problems generally comparable in scope and complexity to Corporation has adopted a policy concerning the scope of
those that could reasonably be expected to be found in the services rendered by the independent auditors. The
the financial statements of the Corporation. He has acted content of the policy is reviewed annually by the Audit
as a member of several audit committees for more than Committee. The policy requires the Audit Committee to
20 years, including Québec Telephone, Maax Inc. and pre-approve all audit and non-audit services. This policy
National Bank of Canada. forbids the Corporation from engaging auditors to provide
certain non-audit services to the Corporation and its
Robert Lacroix. Mr. Lacroix holds a Ph.D. in Economics subsidiaries, including bookkeeping or other services
from the Université de Louvain and was a professor in the related to accounting records or financial statements,
Department of Economics of the University of Montréal financial information systems design and implementation,
from 1970 to 2006. He is now Professor Emeritus. From appraisal or valuation services, actuary services, internal
1998 to 2005, Mr. Lacroix was also Rector of the University audit services, investment banking services, management
of Montréal and in this quality, he also served on the functions or human resources functions and legal services.
budget and the finance committees. As such, he managed The policy allows, under particular circumstances, the
an operating and research budget surpassing one billion Corporation to engage the services of auditors to provide
dollars. As Rector and member of these committees, he non-audit services, other than the prohibited services,
acquired a solid comprehension of internal controls and when the Audit Committee specifically approves these
the establishment process of financial statements. services.
The Jean Coutu Group (PJC) Inc. | 2015 Management Proxy Circular | 17All audit and non-audit services provided by the The Corporation’s management and the Audit Committee
Corporation’s independent auditors for the fiscal year concluded that these services offered by Deloitte were not
ended February 28, 2015 were pre-approved by the prohibited services and have implemented oversight
Corporation’s Audit Committee. measures to ensure that Deloitte maintains its
independence and integrity. The fees paid for these
A copy of the policy concerning the scope of the services services are non-recurring since the projects will be
rendered by independent auditors may be obtained free completed during the 2017 fiscal year.
of charge upon request to the Corporate Secretary of the
Corporation, at its head office located at 530 Bériault The Board of Directors and Management of the
Street, Longueuil, Québec, J4G 1S8. Corporation, upon the recommendation of the Audit
Committee, propose that Deloitte LLP, Chartered
Appointment and Compensation of Professional Accountants, be appointed independent
Independent Auditors auditors of the Corporation and that the directors of the
Corporation be authorized to fix their remuneration.
The following table presents, by category, the fees billed
by the independent auditors of the firm Deloitte LLP for Unless indicated otherwise by the shareholder, the
the fiscal years ended February 28, 2015 and March 1, voting rights attached to the shares represented by any
2014. proxy duly signed will be exercised IN FAVOUR of the
appointment of Deloitte LLP as independent auditors and
Category of Fees 2015 2014 the authorization of the Board of Directors to fix their
($) ($) remuneration. Deloitte LLP have been the auditors of the
Audit Fees 591,550 572,315 Corporation for more than five years.
Audit Related Fees 33,750 43,860
Tax Fees - -
Other Fees 1,314,658 697,671
REPORT OF THE HUMAN RESOURCES
Total 1,939,958 1,313,846 AND COMPENSATION COMMITTEE
In the table above, the terms in the column “Category of
Fees” have the following meanings: “Audit Fees” include This report, dated April 28, 2015, has been submitted by
the aggregate fees billed by Deloitte LLP for the audit of all of the members of the Human Resources and
annual consolidated financial statements, the review of Compensation Committee of the Corporation (the
the interim financial statements and other audits and “Committee”).
regulatory filings; “Audit-Related Fees” include the
aggregate fees billed by Deloitte LLP for assurance and Composition of Committee
other related services reasonably associated with the
performance of the audit or review of the financial At the end of the fiscal year ended February 28, 2015, the
statements and are not reported under Audit Fees, Committee was composed of five directors, none of whom
including the audit of the retirement plans and the were part of Management, namely: Nicolle Forget, Chair of
consultation relative to the accounting and financial the Committee, Lise Bastarache, L. Denis Desautels, Robert
disclosure standards; and “Tax Fees” include the Lacroix and Annie Thabet.
aggregate fees billed by Deloitte LLP for professional
All members of the Committee are deemed independent
services rendered for tax compliance, tax advice as well as
as that term is defined by applicable securities legislation.
tax planning services related, among other things, to the
preparation of income tax returns of the Corporation, to
Compensation Literacy of Committee
capital tax and sales tax.
All members of the Committee are experienced in the field
For the 2014 and 2015 years, “Other Fees” relate primarily
of executive compensation and the Board of Directors is of
to assistance services provided by Deloitte in connection
the view that members of the Committee collectively
with the establishment of the new Varennes distribution
possess the knowledge, experience and profile necessary
centre and the implementation of the new warehouse
to fulfil the mandate of the Committee.
management system.
The Committee understands the long-term impacts of the
Deloitte’s services were retained by the Corporation
executive compensation policies and programs and the
because Deloitte’s breadth and depth of experience and
related constraints. The Committee is also aware of the
resources dedicated to providing such services for similar
issues related to executive employment contracts and
projects of the same magnitude in Canada differentiated it
their implications. Please see the section entitled
from other firms.
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