Exhibit 99.1

 

 

Pembina Pipeline Corporation

 

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Notice of 2019 annual and special meeting of common shareholders

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Notice of 2019 special meeting of Class A preferred shareholders

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Management information circular

March 15, 2019

 

WHAT’S INSIDE
Letter to shareholders			inside front cover
Notice of meetings			1
Management information circular			3
1. About voting			4
2. Business of the meetings			7
3. About the nominated directors			14
4. Governance			26
5. Compensation discussion & analysis			47
6. Other information			93

Letter to shareholders

Dear fellow shareholders,

The world we live in is undergoing change at an unprecedented rate. The energy industry is less predictable than it has ever been, and companies need a clear and unwavering purpose, supported by a strategy that is adaptable to changing conditions, if they are to succeed in the face of this volatility. I believe that Pembina Pipeline Corporation ( Pembina or the Company ) has the purpose and strategy to benefit not just you the shareholders, but all of our stakeholders.

For Pembina, 2018 was a year of growth and accomplishment against a backdrop of uncertainty in the domestic and international oil and gas industry. The Company’s operational and financial record-breaking performance, business development activities, and capital project execution are continuing to transform Pembina into a leading North American energy infrastructure company. The work done over the past few years to position Pembina to withstand volatile markets, has paid off.

The Board of Directors at Pembina ( the Board ) recognizes the importance of having a long-term vision. This means a Board which understands that a deep commitment to our values, our stakeholder groups - investors, customers, employees and communities - and to responsible growth will ultimately provide you, as shareholders, with the best value for your investment. We realize that for shareholders to benefit from the Company’s decisions, all other stakeholders must benefit too, and vice-versa. There can be no win-lose scenarios.

The management team at Pembina has developed a variety of key performance indicators that the Board reviews regularly to ensure the strategy continues to deliver its anticipated results. While we have two formal strategy review meetings each year, strategy is discussed informally at every Board meeting. During these sessions, the Board seeks input from third-party advisors about industry and other trends and developments that may benefit, or pose a risk to, the Company. The Board approves an annual strategic plan and monitors performance against the plan throughout the year. All of this is designed with accountability in mind as we work to deliver the absolute best results for you as owners of Pembina.

In late 2017, the Board approved an evolution in Pembina’s strategy - one that incorporates a focus on enhanced diversification and accessing global markets. This evolution was ushered in by Pembina’s growth and diversification over the past several years and the acknowledgement that the Company is, more so than ever, one capable of meaningfully impacting the development of the broader industry in western Canada. The Board spent a great deal of time analyzing the impact our strategy would have on the performance of the Company including how it is positioned to compete on a global scale. At the conclusion of this strategy session, the Board affirmed a strategy focused on creating and capturing advantages for our stakeholders with an emphasis on the following priorities:

 

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Preserve Value by providing safe, environmentally conscious, cost-effective and reliable services;

 

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Diversify by providing integrated solutions which enhance profitability and customer service;

 

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Implement Growth by pursuing projects or assets that are expected to generate cash flow per share accretion and capture long-life, economic hydrocarbon reserves; and

 

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Secure Global Markets by understanding what the world needs, where they need it, and delivering it.

Also of importance during 2018, was the completion of a Company-wide update of our policies and governance structures. This update was designed to align our policies and governance structures with Pembina’s refined strategy and purpose, to comply with new legal and governance requirements, and to be consistent with industry best practices.

Not only do we involve outside experts in our strategy sessions, we also retain independent consultants to conduct evaluations of the effectiveness of the Board and management on a frequent basis. One such evaluation occurred

in 2018. Through this thorough assessment process, we aimed to ensure that the Board, committees and individual directors are equipped to deliver on the priorities of our updated strategy.

Sustainability issues are becoming part of everyday conversations and not just for our industry, but for organizations of all kinds. Recognizing this, and in service of our purpose and being a good corporate citizen, your Board formalized its commitment to Corporate Social Responsibility ( CSR ) by expanding the mandate and name of the Board’s Governance and Nominating Committee to include the development and monitoring of CSR initiatives. This committee will review, approve and make recommendations to the Board in respect of CSR and sustainability matters, provide oversight of Pembina’s CSR performance, in addition to monitoring the impacts of proposed legislation and other emerging issues. With this committee in place, we were proud this past year to release Pembina’s first Sustainability Report. We believe this will bring greater transparency to Pembina’s social and environmental performance, identifying the positive impact made by our ongoing initiatives, as well as where and how we plan to improve.

It is an honour to work with a Board and a management team with a deep and unwavering commitment to values and ethics, and in service of a Company with a long-standing reputation as a reliable and responsible energy services provider. Our reputation and culture of integrity and ethical conduct go hand-in-hand, and we reinforce these concepts that are so integral to the Company through our annual sign-off process. All executives and employees sign an acknowledgement every year that they have read and understand our corporate policies including: Code of Ethics; Health, Safety & Environment; Alcohol & Drug; Respectful Workplace; Whistleblower; and many others.

Amidst rapid change at Pembina, your Board continues to maintain the highest standards of corporate governance and stewardship in all facets of our business - standards which you have come to expect from us. We also continue to recognize the importance of Board independence as all of the eleven directors, except the CEO, are independent. Further, all of the Board’s committees are comprised entirely of independent directors.

I would like to thank my fellow directors for their ongoing stewardship of the organization; Pembina’s senior leadership for their commitment to executing the strategy and fulfilling the Company’s purpose; and the outstanding and dedicated team of employees for working tirelessly to help deliver record financial and operating results. Together, your Board and management, with the support of our many stakeholders, are committed to ‘Building Something Extraordinary’. On behalf of your Board, I would also like to thank you, the shareholders, for your ongoing support. The Board remains committed to working on your behalf and we look forward to serving you in 2019 and beyond.

This circular tells you about your voting rights as a shareholder and the items we’ll be discussing at our annual and special meeting of common shareholders and our special meeting of Class A preferred shareholders on May 3, 2019. It also includes important information about how the Company is governed and how executives are paid. In addition to the usual items covered at our annual meeting, this year’s meeting gives you the opportunity to vote on some special matters:

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for common shareholders: confirming our shareholder rights plan to protect you, our shareholders; and

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for common shareholders and Class A preferred shareholders amending our articles to increase the limit on the number of Class A preferred shares the Company is authorized to issue to give us flexibility to finance future growth.

The board and management invite you to our annual and special meeting of common shareholders and our special meeting of Class A preferred shareholders on May 3, 2019 to have your say.

Sincerely,

 

 

Randall (Randy) Findlay,

Chair of the Board

 

 

If you have any questions or need assistance completing your proxy or voting  instruction form,

please call Kingsdale Advisors at 1-877-657-5859 or email contactus@kingsdale.com.

 

Pembina Pipeline Corporation · Management information circular		1

 

If you have any questions or need assistance completing your proxy or voting instruction form,

please call Kingsdale Advisors at 1-877-657-5859 or email contactus@kingsdale.com.

 

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1. About voting

 

Who can vote You can vote at our annual and special meeting of common shareholders if you held our common shares at the close of business on March 15, 2019, even if you sold your common shares after this date.   You can vote at our special meeting of Class A preferred shareholders if you held our Class A preferred shares at the close of business on March 15, 2019, even if you sold your Class A preferred shares after this date.   You are not allowed to vote at either meeting if you acquired your shares after the record date, unless you ask us to include your name in the list of voting shareholders at least two days before the meeting (or later if the chair of the meeting allows it), and provide adequate evidence that you own the shares.   About Pembina shares Common shares We are authorized to issue an unlimited number of common shares. At March 15, 2019, we had 509,701,701 common shares issued and outstanding. Our common shares are listed and trade on the Toronto Stock Exchange (TSX) (TSX: PPL) and the New York Stock Exchange (NYSE) (NYSE: PBA).   Class A preferred shares At March 15, 2019, we were also authorized to issue up to 101,940,340 Class A preferred shares (equal to twenty percent of the number of common shares that were issued and outstanding on that date). At March 15, 2019, there were 99.8 million Class A preferred shares issued and outstanding, as shown in the table below. All of our Class A preferred shares are listed and trade on the TSX.				Quorum According to our articles and by-laws: ·   At least two persons holding or representing at least 25 percent of our outstanding common shares must be present for the annual and special meeting to take place, or the meeting will be adjourned to a set time and place and no business will be transacted until the adjourned meeting. ·   At least two persons holding or representing at least 50 percent of our outstanding Class A preferred shares must be present for the special meeting to take place, or the meeting will be adjourned to a set time and place and no business will be transacted until the adjourned meeting. ·   If quorum has been met for either meeting, the meeting will continue even if there is not quorum for the other meeting.   About voting results We will post the voting results on our website (www.pembina.com) and file them on SEDAR (www.sedar.com) and EDGAR (www.sec.gov) as soon as possible following the meeting.

 

 

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Proxy solicitation

Management is soliciting your proxy for the meeting. Management may use the service of external proxy solicitors and you may be contacted by Pembina employees or Kingsdale Advisors, our proxy solicitation agent, by mail, by telephone or by personal interview. This year, Kingsdale Advisors is providing governance, strategic shareholder advisory and proxy solicitation services. We have paid them approximately $36,000 for this work and we will also pay them customary fees for contacting shareholders in connection with voting at the meetings. Pembina will pay all costs related to producing and mailing this circular and other meeting materials, and for soliciting your proxy. If you have any questions or need assistance completing your proxy or voting instruction form, please call Kingsdale Advisors at 1-877-657-5859 or email contactus@kingsdaleshareholde.com.

 

How to vote You can vote your shares by proxy (by appointing someone – a proxyholder – to represent you), or by attending the meeting and voting in person. The rules for voting depend on whether you are a registered shareholder or a beneficial shareholder.   Registered shareholders You are a registered shareholder if you have shares registered in your name. Registered holders can vote their shares in person at the meeting or by proxy.				Where to go with questions If you have any questions about the meeting or need help voting your shares, please contact our investor relations group at: ●   1-855-880-7404 ●   investor-relations@pembina.com

Registered shareholders can vote by proxy in one of three ways:

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Call 1-866-732-VOTE (8683) toll-free and follow the instructions. You will need to enter your 15-digit control number (located on the bottom left corner of the first page of the form of proxy) to identify yourself as a shareholder on the telephone voting system;

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Go to www.investorvote.com . You will need to enter your 15-digit control number (located on the bottom left corner of the first page of the form of proxy) to identify yourself as a shareholder on the voting website; or

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Complete the enclosed proxy form, sign and date it and return it in the enclosed envelope.

Computershare Trust Company of Canada ( Computershare ) is our transfer agent. Computershare must receive your completed proxy form at least 48 hours before the meeting (not including Saturdays, Sundays or holidays). The chair of the meeting can waive or extend the time limit for receiving proxy forms without notice, at his or her discretion.

Beneficial shareholders

You are a beneficial shareholder if your shares are registered in the name of a nominee, such as a bank, trust company, securities broker, trustee or other institution. The majority of our shares are held by beneficial shareholders.

If you are a beneficial shareholder, you must send your voting instructions to your nominee who will vote for you. You will receive a request for voting instructions for the number of shares held for your benefit. Follow the instructions on the voting instruction form and send your voting instructions to your nominee. If you are a beneficial shareholder, you will likely have an earlier deadline for the return of your voting instruction form, so be sure to send the form early, to allow enough time for your nominee to receive your voting instructions and then send them to Pembina before the proxy cut-off.

Most nominees delegate responsibility for obtaining voting instructions from their clients to Broadridge Financial Solutions Inc. ( Broadridge ). Broadridge usually mails a scannable voting instruction form that is to be completed and returned to them by mail or fax. You can also call a toll-free phone number or access Broadridge’s dedicated voting website to submit your voting instructions. Broadridge tabulates the results of all the instructions it receives and presents this information at the meeting.

If you received voting materials from a company other than Broadridge, you need to complete and return the form following the instructions they have provided.

 

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We use Broadridge to send proxy-related materials to non-objecting beneficial owners of our shares. We intend to pay for intermediaries to deliver proxy-related materials to objecting beneficial owners of our shares.

If you want to attend the meeting and vote your shares in person, print your own name as the proxyholder on the proxy or voting instruction form and return it in the envelope provided or as otherwise instructed on any voting instruction form. Do not complete the rest of the form or mark your voting instructions on the form, because your vote will be taken at the meeting.

Kingsdale Advisors may contact beneficial Pembina shareholders to assist them with conveniently voting their shares directly over the phone, using the Broadridge QuickVote™ service if available.

About your proxyholder

The officers named on the proxy form have agreed to serve as your proxyholder and will vote your shares according to your instructions. If you do not specify your voting instructions, they will vote your shares for each item of business at the meeting.

You have the right to appoint someone else to be your proxyholder and act on your behalf at the meeting. The person you appoint does not have to be a Pembina shareholder. Simply print his or her name in the blank space provided on the enclosed proxy form, or use the internet (www.investorvote.com).

Your proxyholder must vote (or withhold from voting) your shares according to your instructions. If you appoint someone else to be your proxyholder and do not give them specific voting instructions, they can vote as they see fit using their best judgment.

If there are changes to the items of business or other matters that are properly brought before the meeting, your proxyholder can use their discretion and vote as they see fit. As of the date of this circular, we do not anticipate any changes or other matters to be brought before the meeting.

Changing your vote

If you are a registered shareholder, you can revoke a proxy form you previously submitted by sending us a revocation notice in writing from you, or an attorney you have given written authorization to. If the shareholder is a corporation, the change must be made under the corporation’s corporate seal or by an authorized officer or attorney. The written notice must be delivered to our head office before 4:30 p.m. (Mountain time) on the last business day before the meeting , or to the chair of the meeting before the start of the meeting. You can also revoke your proxy in any other way the law allows.

If you are a beneficial shareholder, you may revoke voting instructions you previously submitted. If you wish to revoke your voting instructions, contact your nominee to revoke your voting instructions.

 

Shareholder proposals
If you want to present a shareholder proposal at our 2020 annual meeting, you must submit it by February 2, 2020 to be considered for inclusion in next year’s management information circular.
Send your shareholder proposal to:
Corporate Secretary
Pembina Pipeline Corporation 4000, 585 – 8th Avenue S.W.
Calgary, Alberta
T2P 1G1

 

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2. Business of the meetings

Our 2019 annual and special meeting of common shareholders will cover the seven items of business listed below.

The 2019 special meeting of Class A preferred shareholders will cover only two items of business (items 5 and 7).

 

1.	Receive our 2018 audited consolidated financial statements and auditors’ report

You have received our audited consolidated financial statements for the year ended December 31, 2018 and the auditors’ report, which are included in our 2018 annual report, if you requested a copy. Copies will be available at the meeting and on our website (www.pembina.com), SEDAR (www.sedar.com) and EDGAR (www.sec.gov), or you can request a copy from our Investor Relations department.

 

2. Elect the directors
Our articles state that the board must have between five and 13 directors. This year, 11 directors are nominated for election to the board.						Our policy on majority voting Each director must receive a majority of the votes cast for their election, or they must resign immediately following the meeting.   The governance, nominating and corporate social responsibility committee will consider the resignation and recommend to the board the action to be taken. The director does not participate in these discussions.
●  Randall J. Findlay (chair) ●  Anne-Marie N. Ainsworth ●  Michael H. Dilger ●  Maureen E. Howe ●  Gordon J. Kerr ●  David M.B. LeGresley		●  Robert B. Michaleski ●  Leslie A. O’Donoghue ●  Bruce D. Rubin ●  Jeffrey T. Smith ●  Henry W. Sykes
All of the nominated directors currently serve on our board. The director profiles starting on page 15 give you detailed information about their skills and experience, their 2018 attendance record and votes received at our 2018 annual meeting, share ownership and other public company directorships.   Directors will serve until the next annual meeting of common shareholders, or until their successors are elected or appointed.   The proxy form allows common shareholders to vote for all of the nominated directors, vote for some of them and withhold their vote for others, or withhold their vote for all of them. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for all of our nominated directors.						The board will consider the committee’s recommendation and, within 90 days of the meeting, will accept the resignation unless there are exceptional circumstances. The board will announce its decision in a news release.   If the board accepts the resignation, it can appoint a new director, call a meeting of shareholders to vote for other candidates or leave the position vacant until the next annual meeting.   Our majority voting policy does not apply if a director election is contested.

 

3.	Appoint our auditors

Common shareholders will vote on appointing our external auditors. The audit committee and the board propose that KPMG LLP ( KPMG ), Chartered Professional Accountants be appointed as auditors and serve until the next annual meeting of common shareholders. The audit committee will recommend KPMG’s compensation to the board for its review and approval.

KPMG have been Pembina’s auditors since September 1997. The following table shows the fees billed by KPMG for the fiscal years ended December 31, 2017 and 2018.

 

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		2017 ($)				2018   ($)
Audit fees			2,739,500				2,292,000
Fees for auditing our annual financial statements, reviewing our quarterly financial statements, and services related to statutory and regulatory filings. 2018 fees included additional expenses for pricing supplements in relation to the issue and sale of Medium Term Notes, Series 10 and 11. 2017 fees include additional expenses for our base shelf prospectuses, pricing supplements relating to the issue and sale of Medium Term Notes, Series 8 and 9, prospectus supplement relating to the offering of Class A preferred shares, Series 21, the management information circular for the special meeting of Veresen Inc. shareholders and Pembina’s business acquisition report relating to the Veresen Inc. acquisition.
Audit-related fees			114,900				159,250
Fees for assurance and related services that are not related to the audit or review of our financial statements, including French translations for statutory and regulatory filings for 2018 and 2017, and not reported under “ Audit fees ” above. Both years also included fees of $30,000 for the pension plan audit and 2018 included fees of $20,000 for the Younger Plant pension plan audit. Included in 2018 were fees relating to other audit related services of $37,250.
Tax fees			437,250				845,331
Fees for tax compliance of $323,000 (2017: $74,350) and tax advice and tax planning of $522,331 (2017: $362,900) provided by the auditors’ tax division. These fees were for non-audit tax services. In addition to the 2018 fees stated above, KPMG billed $19,100 in 2019 prior to the date hereof. 2018 and 2017 fees included tax consultation and compliance fees incurred for preparing and filing tax returns for our subsidiaries.
All other fees			-				-
Fees for other products and services provided by the auditors not described above.
Total fees			3,291,650				3,296,581

The board recommends common shareholders vote for appointing KPMG as our auditors until the close of our next annual meeting of shareholders. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for the appointment of KPMG LLP as our auditors.

4. Approve our shareholder rights plan

You will vote on continuing our shareholder rights plan agreement.

As described in more detail below, our rights plan is designed to make sure shareholders are treated fairly if there is an acquisition of a controlling position by a shareholder or a group of shareholders acting together. Among other things, it ensures every shareholder has an equal opportunity to participate in the bid.

You can find a summary of our rights plan in Appendix A and the full text on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

Background

Effective October 1, 2010, we adopted a rights plan in the form of a shareholder rights plan agreement with Computershare as rights agent. Our rights plan must be approved by shareholders every three years. Shareholders last approved it on May 12, 2016, which means the rights plan will expire at the end of this year’s meeting unless shareholders ratify its continuance.

On February 21, 2019, the board unanimously determined that it was appropriate and in the best interests of shareholders that the rights plan be approved to continue for another three years.

At the meeting, common shareholders will vote on ratifying the continuance of the rights plan for another three-year period.

 

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Why we have a shareholder rights plan

Takeover bids can be discriminatory. Exemptions to takeover bid legislation can allow a shareholder (or shareholders) to gain control of a company without making a formal takeover bid to all of the shareholders (for example, through transactions outside Canada, by making private agreements with a small group of shareholders or by slowly accumulating shares over time through stock exchange trading). This could result in a shareholder or group of shareholders acquiring control without paying fair value to all shareholders (this is sometimes called a creeping bid ).

Our rights plan is designed to discourage this kind of takeover bid. When there is a takeover bid that is not a permitted bid (as described below), our rights plan gives shareholders contingent rights to acquire common shares at a significant discount to the prevailing market price. In certain circumstances, these rights become exercisable by all shareholders except the offeror in a takeover bid (and its associates, affiliates and joint actors), with the potential to significantly dilute the value of the offeror’s shares.

The rights plan addresses the concerns noted above by requiring offerors to:

 

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make permitted bids under the rights plan, which give shareholders an opportunity to participate in the transaction – a permitted bid meets specific conditions, including that it must be made to all shareholders and remain open for acceptance for at least 105 days or, if less than 105 days, the minimum period that a formal take-over bid is required to remain open for in the relevant circumstances under Canadian law; or

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negotiate an offer directly with the board, giving the board the opportunity to bargain for terms it believes will be in the best interests of shareholders.

If the offeror does not take either of these approaches, they could trigger the dilution provisions in our rights plan, which are described above.

Management has reviewed the terms of our rights plan and confirmed that they continue to comply with current Canadian securities laws and to conform in all material respects to the shareholder rights plans of other public corporations in Canada.

We may amend the rights plan before shareholders approve it based on comments we may receive from regulatory authorities, or as any of our executive officers or directors consider necessary.

Resolution

Common shareholders will be asked to consider and, if deemed advisable, approve the following binding resolution:

RESOLVED , as an ordinary resolution, that:

 

1.

the shareholder rights plan of Pembina Pipeline Corporation ( Pembina ) be continued and the amended and restated shareholder rights plan agreement made as of May 12, 2016 between Pembina and Computershare Trust Company of Canada, as rights agent, which amended and restated the shareholder rights plan agreement dated effective October 1, 2010, as amended and restated May 10, 2013, and continued the rights issued thereunder, be and is hereby ratified, confirmed and approved; and

 

2.

any two directors or officers of Pembina are hereby authorized to execute and deliver, whether under corporate seal or otherwise, the agreement referred to above and any other agreements, instruments, notices, consents, acknowledgements, certificates and other documents (including any documents required under applicable laws or regulatory policies) and to perform and do all such other acts and things, as such directors and/or officers may consider to be necessary or advisable from time to time in order to give effect to this resolution.

 

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To be approved, this resolution must be passed by at least 50 percent plus one of the votes cast by:

 

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the independent shareholders (as defined in the rights plan, but generally meaning any shareholder other than an acquiring person as defined in the rights plan, or a person making a takeover bid for Pembina and their associates and affiliates); and

 

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all common shareholders present in person or by proxy at the meeting.

This resolution is not in response to, or in anticipation of, any pending, threatened or proposed acquisition or takeover bid, and is not intended as a means to prevent a takeover of Pembina, as a strategy to retain management or the board, or to deter fair offers for Pembina shares.

We are not aware of any shareholder whose votes would not be eligible to be counted for this resolution, or of any shareholders who would not qualify as independent shareholders.

The board recommends common shareholders vote for this ordinary resolution. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for the ordinary resolution authorizing the continuation of our shareholder rights plan.

 

5.	Approve an increase in the number of Class A preferred shares we can issue

Shareholders will vote on a special resolution to amend Pembina’s articles to increase the limit on the number of Class A preferred shares we are authorized to issue.

The table below shows our authorized and outstanding share capital as of March 15, 2019. See Appendix B for a summary of the rights, privileges, restrictions and conditions attaching to the common shares, the Class A preferred shares and the Class B preferred shares.

 

		Current authorized capital		Outstanding as of March 15, 2019
Common shares		Unlimited		509.7 million
Class A preferred shares		No more than 20% of common shares issued and outstanding		99.8 million   (19.58% of common shares   issued and outstanding)
Series 1				10 million
Series 3				6 million
Series 5				10 million
Series 7				10 million
Series 9				9 million
Series 11				6.8 million
Series 13				10 million
Series 15				8 million
Series 17				6 million
Series 19				8 million
Series 21				16 million
Class B preferred shares		Unlimited (1)		nil

¹ The Class B preferred shares can only be issued to affiliates of Pembina are not intended to, and will not be used by Pembina for anti-takeover purposes.

Management and the board believe it is in Pembina’s best interest to increase the number of Class A preferred shares we are authorized to issue from 20% of common shares issued and outstanding to 254,850,850 (50% of the common shares issued and outstanding as of the record date), as we currently have 99.8 million Class A preferred share outstanding, representing 19.58% of the number of common shares issued and outstanding as of the date hereof, which limits our ability to issue Class A preferred shares in the future.

This change will give us greater flexibility in our capital structure and in raising future capital. It will allow us to issue additional Class A preferred shares for financing transactions, issuances in public or private sales to access

 

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additional capital for use in our business and operations or in connection with acquisitions of other businesses or properties, or for any other appropriate corporate purpose. Pembina and the board will continue to be able to negotiate the rights and preferences associated with each series of Class A preferred shares, within the limitations ascribed to the Class A preferred shares as a class, Pembina issues with potential investors, to respond to market conditions and specific financing opportunities. We do not currently have any arrangements, agreements or understandings related to issuing new Class A preferred shares.

Certain restrictions included in the terms of the Class A preferred shares limit their use for take-over bid defense purposes. Specifically, as the Class A preferred shares are non-voting, except in certain limited circumstances, that they are not convertible into common shares, and that there is a limit on the maximum number of Class A preferred shares that can be issued, makes them unlike unconstrained “blank cheque” preferred shares available to other issuers. We have constrained the terms of the Class A preferred shares to give us reasonable financing flexibility, while also providing our shareholders comfort that the Class A preferred shares will not be used for take-over bid defense purposes.

Increasing the availability of undesignated Class A preferred shares could have a negative effect on the rights associated with our common shares and other Class A preferred shares. The actual effect will depend on the rights associated with each series of Class A preferred shares issued. Our articles include terms and restrictions for Class A preferred shares, including dividends, liquidation, redemption, conversion, voting rights and limitations on each new series of Class A preferred shares. These will indicate the possible effects of issuing Class A preferred shares, including, for example, reducing the amount common shareholders receive if Pembina is liquidated, dissolved or wound-up, or reducing the funds available to pay dividends on the common shares. However, when deciding to issue Class A preferred shares, we evaluate the impact compared to issuing a combination of common shares and senior debt which would be required to replicate the equivalent capital treatment of Class A preferred shares by our credit rating agencies. By issuing Class A preferred shares, we avoid issuing common shares and senior debt to meet the same funding requirements, which ultimately benefits holders of both common shares and Class A preferred shares, as senior debt ranks in priority to the Class A preferred shares and common shares in our capital structure.

According to the requirements of the Business Corporations Act (Alberta) (the ABCA), holders of common shares and Class A preferred shares must approve this special resolution by separate class votes. Holders of each series of Class A preferred shares are not entitled to vote separately on the special resolution.

Holders of common shares will be asked to consider and, if deemed advisable, approve the special resolution outlined below at the annual and special meeting of common shareholders. Holders of Class A preferred shares will be asked to consider and, if deemed advisable, approve the special resolution outlined below at the special meeting of Class A preferred shareholders.

RESOLVED , as a special resolution, that:

 

1.	Pursuant to subsection 173(1)(c) of the Business Corporations Act (Alberta) (the ABCA), the share capital of Pembina Pipeline Corporation ( Pembina ) is hereby amended by increasing the number of Class A preferred shares Pembina is authorized to issue, to 254,850,850;

 

2.	Upon articles of amendment having become effective in accordance with the provisions of the ABCA, the articles of Pembina shall be amended accordingly;

 

3.	The directors of Pembina may revoke this special resolution before it is acted upon without any further approval of the shareholders of Pembina; and

 

4.

Any two directors and/or officers of Pembina are hereby authorized to execute and deliver, whether under corporate seal or otherwise, the agreement referred to above and any other agreements, instruments, notices, consents, acknowledgements, certificates and other documents (including any documents required under applicable laws or regulatory policies) and to perform and do all such other acts and things, as such directors

 

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and/or officers may consider to be necessary or advisable from time to time in order to give effect to this resolution.

This special resolution must be approved by at least two-thirds of the votes cast by holders of each class of shares in person or by proxy at each meeting. The amendment to our articles will become effective upon the filing of articles of amendment reflecting the amendment pursuant to the ABCA.

The board recommends shareholders vote for this special resolution. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for the special resolution authorizing the amendment to our articles to increase the limit on the number of authorized Class A preferred shares.

The board can revoke this special resolution before it is acted on, even if it is passed by shareholders, in its sole discretion and without further notice to or approval of shareholders.

 

Rights of dissenting common shareholders Section 191 of the ABCA gives holders of our common shares a right to dissent with respect to the amendment to our articles for which this special resolution relates. Holders of Class A preferred shares are not entitled to a right to dissent.   You can exercise your right to dissent by sending a written objection to 4000, 585 - 8th Avenue S.W., Calgary, Alberta, T2P 1G1, Attention: Corporate Secretary at or before the time fixed for the meeting at which the special resolution is to be voted on (namely, 2:00 p.m. on May 3, 2019), or by providing the written objection at the meeting. You must dissent with respect to all of your common shares.   If the special resolution is approved and the amendment to our articles becomes effective, every shareholder who properly dissents ( dissenting shareholders ) will be entitled to be paid the fair value of the common shares they exercised dissent rights in respect of, in accordance with Section 191 of the ABCA.				Your right to dissent The statutory provisions covering the right to dissent for common shareholders are technical and complex.   You can lose your right to dissent if you do not strictly follow the requirements in Section 191 of the ABCA.   Appendix C of this circular includes a summary of what you need to do to exercise your right to dissent, and the full text of Section 191 of the ABCA.

Only registered common shareholders have the right to dissent. Beneficial owners of common shares that are registered in the name of a broker, dealer, bank, trust company or other nominee cannot dissent. If you are a beneficial owner and want to dissent your shares, you must either arrange to have the common shares registered in your name before sending us your written objection, or make arrangements for the registered holder of your common shares to dissent on your behalf.

 

Pembina Pipeline Corporation · Management information circular		12

6.	Vote on our approach to executive compensation

Common shareholders will vote on our approach to executive compensation.

 

A key principle underlying executive compensation at Pembina is ‘pay for performance’. We believe that linking compensation to strategy and corporate performance helps us attract and retain excellent people and motivates them to focus on our success. You will find a detailed discussion of our executive compensation program beginning on page 58 of this circular.				Say on pay votes In 2018, our executive compensation approach was supported by 94.62% of our shareholders votes on our say on pay resolution.
The board gives common shareholders the opportunity every year to vote for or against our
approach to executive compensation (to have a say on pay ). This is an advisory vote, so the results will not be binding on the board. The board will, however, consider the outcome of the vote as part of its ongoing review of executive compensation.

You will be asked to consider and, if deemed advisable, approve the following non-binding resolution:

RESOLVED , on an advisory basis and not to diminish the role and responsibilities of the board of directors of Pembina Pipeline Corporation ( Pembina ), that the common shareholders of Pembina ( shareholders ) accept the approach to executive compensation disclosed in Pembina’s management information circular delivered in advance of the 2019 annual and special meeting of common shareholders.

This resolution conforms to the language of the resolution recommended by the Canadian Coalition for Good Governance. The board recommends common shareholders vote for this resolution. Unless instructed otherwise, the Pembina officers named in the proxy form will vote for our approach to executive compensation as described in this circular.

 

7.	Other business

Shareholders (or their proxyholder) will vote on any other items of business that may be properly brought before the applicable meeting. As of the date of this circular, we are not aware of any other matters to be brought before either meeting.

 

Pembina Pipeline Corporation · Management information circular		13

3. About the nominated directors

To ensure strong stewardship, the board needs to operate independently, have a prudent mix of relevant skills and experience, including industry knowledge and experience, a mix of age ranges and tenure, sufficiently diverse opinions to support balanced discussion and debate, and a manageable board size to facilitate productive discussion and decision-making.

We believe this year’s group of 11 nominated directors meets all of these requirements.

The profiles on the following pages tell you about each nominated director’s background and experience, independence, meeting attendance, share ownership, other public company boards they serve on, and voting results from our 2018 annual meeting. All director information is provided as of March 15, 2019, unless indicated otherwise. Each of the nominated directors is willing and able to serve on the board until the next annual meeting of common shareholders.

All of the nominated directors are independent except Mr. Dilger, who is our President and Chief Executive Officer. The board has reviewed the independence and qualifications of the non-management directors and has recommended their nomination.

An overview of the nominated directors

 

 

Pembina Pipeline Corporation · Management information circular		14

Randall J. Findlay (68) | Independent 2018 voting results: 98.55% for , 1.45% withheld   Mr. Findlay was the President of Provident Energy Trust from 2001 until his retirement in 2006. He was a director of Provident from 2001 to 2012. Before that he held various executive positions in the oil and gas industry over 30 years, including senior positions at NOVA Corporation and TransCanada Pipelines Limited.   Mr. Findlay sits on the board of a public company and several private companies. He is also past chair of the Alberta Children’s Hospital Foundation.   Mr. Findlay is a professional engineer and has a Bachelor of Applied Science in chemical engineering from the University of British Columbia. He is a graduate of the Institute of Corporate Directors Education Program and holds the ICD.D designation.

Chair Director since March 2007   Calgary, Alberta Canada   Experience Engineering/operational Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Investment banking Financial Risk Corporate governance U.S./International business experience   Mergers and acquisitions

Board and committee membership and attendance

Board of directors (chair)

6 of 6 meetings                         100%

Governance, nominating and corporate social responsibility committee

5 of 5 meetings                         100%

Other public company boards and committee memberships 1,2

Superior Plus Corp. | TSX

Governance and nominating, audit

1  Mr. Findlay was a director of Wellpoint Systems Inc. (a TSX Venture Exchange listed company) from June 2008 until January 31, 2011. Wellpoint Systems Inc., which supplied software to the energy industry in Canada, the U.S. and internationally, was placed into receivership by two of its lenders on January 31, 2011.   2  Mr. Findlay was a director of Spyglass Resources Corp. (a TSX listed company) from March 2013 until May 13, 2015. Spyglass Resources Corp., an intermediate oil and gas exploration and production company, was placed into receivership by a syndicate of its lenders on November 26, 2015.

Securities held as of December 31, 2018

Common shares

Deferred share units

Total value 3

Meets share ownership guidelines         (including 50% common shares)

139,375

15,843

$6,287,881

yes

Class A preferred shares

Series 1

5,000

3  Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information).

 

Pembina Pipeline Corporation · Management information circular		15

Anne - Marie N. Ainsworth (62) | Independent 2018 voting results: 98.70% for , 1.30% withheld   Ms. Ainsworth served as President and Chief Executive Officer of Oiltanking Partners, L.P. and Oiltanking Holding Americas, Inc. from November 2012 to March 2014. She is currently on the boards of Kirby Corporation, HollyFrontier Corporation and Archrock, Inc. Ms. Ainsworth has extensive experience in the oil industry and has held several senior management positions throughout her career.   Ms. Ainsworth was Senior Vice President of Refining at Sunoco Inc. (2009 to 2012) and previously was the General Manager of the Motiva Enterprises, LLC (Motiva) refinery in Norco, Louisiana (2006 to 2009). Before she joined Motiva, Ms. Ainsworth was director of process safety management systems and business improvement leader at Shell Oil Products U.S. (2003 to 2006) and Vice President of Technical Assurance at Shell Deer Park Refining Company (2000 to 2003).

Director since October 2014   Houston, Texas U.S.   Experience Engineering/operational Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Financial Risk Corporate governance U.S./International business experience   Information technology Mergers and acquisitions

Ms. Ainsworth graduated from the University of Toledo with a Bachelor of Science in chemical engineering. She holds a Master of Business Administration from Rice University, where she served as an adjunct professor (2000 to 2009). She is a graduate of the Institute of Corporate Directors Education Program and holds the ICD.D designation.

Board and committee membership and attendance

Board of directors

6 of 6 meetings                                 100%

Audit committee 1

2 of 2 meetings                                 100%

Safety and environment committee (chair)

4 of 4 meetings                                 100%

1  On May 4, 2018, Ms. Ainsworth stepped down from the audit committee. She attended all meetings of the audit committee from January 1, 2018 to May 4, 2018.

Other public company boards and committee memberships

Archrock, Inc. | NYSE

Governance and nominating (chair), audit

HollyFrontier Corporation | NYSE

Health, safety and environment, finance

Kirby Corporation | NYSE

Audit

Securities held as of December 31, 2018

Common shares

Deferred share units

Total value 2

Meets share ownership guidelines     (including 50% common shares)

20,464

9,957

$1,231,655

yes

2  Based on US$29.67, the closing price of our common shares on the NYSE on December 31, 2018 and an exchange rate of 1.3642 as at December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information) and their value is based on $40.51, the closing price of our common shares on the TSX on December 31, 2018.

 

Pembina Pipeline Corporation · Management information circular		16

Michael (Mick) H. Dilger (56) | Non-independent 2018 voting results: 99.66% for, 0.34% withheld   Mr. Dilger was appointed Chief Executive Officer (CEO) of Pembina in January 2014. Before that, he was Pembina’s President and Chief Operating Officer (February 2012 to December 2013), Chief Operating Officer (November 2008 to February 2012) and Vice President, Business Development (2005 to 2008).   Before joining Pembina, Mr. Dilger worked as a senior executive in various finance and business development positions in oil and gas and infrastructure companies, ranging from companies in the initial capitalization phase to subsidiaries of multi-national corporations, including NOVA Corporation and TransCanada PipeLines Limited. His expertise includes corporate and strategic development, acquisitions and divestitures, and finance and business development. Mr. Dilger was co-chair of the 2016 United Way of Calgary campaign.

Director since January 2014   Calgary, Alberta Canada   Experience Engineering/operational Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Investment banking Financial Risk Corporate governance Information technology Mergers and acquisitions

Mr. Dilger has been a Chartered Professional Accountant since 1989 and holds a Bachelor of Commerce degree from the University of Calgary. He is a member of the Institute of Corporate Directors.

Board and committee membership and attendance 1

Board of directors

6 of 6 meetings                     100%

1  Mr. Dilger attended all board meetings in 2018 as a director and CEO and all committee meetings in 2018 in his capacity as CEO.

Other public company boards and committee memberships

None

Securities held as of December 31, 2018

Common shares

Restricted and performance share units

Total value 2

Meets share ownership guidelines (including 50% common shares)

240,000

88,716

$13,316,285

yes

Options

1,147,265

2  Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Mr. Dilger is not entitled to deferred share units issued under our deferred share unit plan. Restricted and performance share units include units issued under our share unit plan and units accrued as dividend equivalents (see Executive compensation on page 58 for more information).

 

Pembina Pipeline Corporation · Management information circular		17

Maureen E. Howe (61) | Independent 2018 voting results: 99.73% for, 0.27% withheld   Ms. Howe was a Research Analyst and Managing Director at RBC Capital Markets in equity research from 1996 until 2008. She specialized in the area of energy infrastructure, which included power generation, transmission and distribution, oil and gas transmission and distribution, gas processing, and alternative energy. Prior to joining RBC Capital Markets, Ms. Howe held various positions in the area of capital markets, including investment banking, portfolio management, and corporate finance.   Ms. Howe is a director of Methanex Corporation and a director and Chair of the Audit Committee at TimberWest Forest Corp., a private timber company, and is the Chairperson of the University of British Columbia Phillips, Hager & North Centre for Financial Research.

Director since October 2017   Vancouver, British Columbia Canada   Experience Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Investment banking Financial Risk Corporate governance U.S./International business experience Mergers and acquisitions

Ms. Howe has a Bachelor of Commerce (Honours) from the University of Manitoba and a Ph.D. in Finance from the University of British Columbia. She is a member of the Institute of Corporate Directors.

Board and committee membership and attendance

Board of directors

6 of 6 meetings                     100%

Audit committee

4 of 4 meetings                     100%

Governance, nominating and corporate social responsibility committee 1

3 of 3 meetings                     100%

1  Ms. Howe was appointed to the governance, nominating and corporate social responsibility committee on May 4, 2018 and attended all meetings after her appointment.

Other public company boards and committee memberships

Methanex Corporation | TSX, NASDAQ

Corporate governance, human resources and public policy

Securities held as of December 31, 2018

Common shares

Deferred share units

Total value 2

Meets share ownership guidelines (including 50% common shares)

12,588

4,554

$694,422

yes

2  Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information).

 

Pembina Pipeline Corporation · Management information circular		18

Gordon J. Kerr (65) | Independent 2018 voting results: 95.58% for, 4.42% withheld   Mr. Kerr was President and Chief Executive Officer and director of Enerplus Corporation (a TSX and NYSE-listed company) from May 2001 until July 2013. He is a past Chairman of the Canadian Association of Petroleum Producers, a former director of Deer Creek Energy Limited and Laricina Energy Ltd., and a past member of the Canadian Council of Chief Executives.   He has gained extensive management experience in leadership positions at various oil and gas companies since launching his career in 1979. He started his employment with Enerplus Corporation and its predecessor firms in 1996, and held positions of increasing responsibility, including the positions of Chief Financial Officer and Executive Vice President.

Director since January 2015   Calgary, Alberta Canada   Experience Engineering/operational Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Investment banking Financial Risk Corporate governance U.S./International business experience   Mergers and acquisitions

Mr. Kerr is a member of the Management Advisory Council of the Haskayne School of Business at the University of Calgary.   He has a Bachelor of Commerce from the University of Calgary. Mr. Kerr received his Chartered Accountant designation in 1979 and is a fellow of the Institute of Chartered Accountants of Alberta. Mr. Kerr is a graduate of the Institute of Corporate Directors Education Program and holds the ICD.D designation.

Board and committee membership and attendance

Board of directors

6 of 6 meetings                     100%

Audit committee (chair)

4 of 4 meetings                     100%

Human resources, health and compensation committee

4 of 4 meetings                     100%

Other public company boards and committee memberships 1

None

1  Mr. Kerr was a director of Laricina Energy Ltd., a private company, until February 5, 2016. Laricina Energy Ltd. was subject to proceedings under the Companies Creditors Arrangement Act (Canada) in 2015. On February 1, 2016, the proceedings were conditionally discharged

Securities held as of December 31, 2018

Common shares

Deferred share units

Total value 2

Meets share ownership guidelines (including 50% common shares)

8,400

22,250

$1,241,632

yes

Class A preferred shares

Series 7

6,000

2  Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information).

 

Pembina Pipeline Corporation · Management information circular		19

David M.B. LeGresley (60) | Independent 2018 voting results: 96.37% for , 3.63% withheld   Mr. LeGresley has extensive experience in the financial services industry, including as a senior executive at National Bank Financial for 12 years, in several roles, including Head of Corporate and Investment Banking, and most recently Vice Chair. Before that, he held investment banking positions at Salomon Brothers Canada and CIBC Wood Gundy.   Mr. LeGresley currently chairs the board of directors of Equitable Group Inc. (Equitable Bank, a TSX-listed company).   He received a Bachelor of Applied Science in Engineering from the University of Toronto and a Master of Business Administration from Harvard Business School. Mr. LeGresley is a graduate of the Institute of Corporate Directors Education Program and holds the designation ICD.D.

Director since August 2010   Toronto, Ontario Canada   Experience Engineering/operational Industry knowledge Major capital projects Human resources/compensation Investment banking Financial Risk Corporate governance Information technology Mergers and acquisitions

Board and committee membership and attendance

Board of directors

6 of 6 meetings                     100%

Audit committee

4 of 4 meetings                     100%

Human resources, health and compensation committee (chair)

4 of 4 meetings                     100%

Other public company boards and committee memberships

Equitable Group Inc. | TSX

Board chair

Securities held as of December 31, 2018

Common shares

Deferred share units

Total value 1

Meets share ownership guidelines (including 50% common shares)

57,789

22,632

$3,257,855

yes

1  Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information).

 

Pembina Pipeline Corporation · Management information circular		20

Robert B. Michaleski (66) | Independent 2018 voting results: 99.51% for , 0.49% withheld   Mr. Michaleski was the Chief Executive Officer of Pembina from January 2000 to December 31, 2013. Until February 15, 2012 he also served as President. He is currently a director of two other TSX-listed companies and one private company.   Mr. Michaleski served Pembina in various senior management and executive capacities for over 30 years. He was appointed controller in 1980 and Vice President, Finance in 1992. In connection with Pembina’s initial public offering in October 1997, he was named Vice President, Finance and Chief Financial Officer.   He has a Bachelor of Commerce (Honours) from the University of Manitoba, and received his Chartered Accountant designation in 1978. Mr. Michaleski is a member of the Institute of Corporate Directors.

Director since January 2000   Calgary, Alberta Canada   Experience Engineering/operational Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Investment banking Financial Risk Corporate governance Information technology Mergers and acquisitions

Board and committee membership and  attendance

Board of directors

6 of 6 meetings                     100%

Safety and environment committee

4 of 4 meetings                     100%

Other public company boards and committee  memberships

Essential Energy Services Ltd. | TSX

Audit, compensation and governance (chair)

Vermilion Energy Inc. | TSX

Audit, governance and human resources (chair)

Securities held as of December 31, 2018

Common shares

Deferred share units

Total value 1

Meets share ownership guidelines (including 50% common shares)

455,440

10,410

$18,871,584

yes

1  Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information).

 

Pembina Pipeline Corporation · Management information circular		21

Leslie A. O’Donoghue (56)  | Independent 2018 voting results: 95.89% for , 4.11% withheld   Ms. O’Donoghue has been Executive Vice President & Chief Strategy & Corporate Development Officer at Nutrien Ltd. since January 1, 2018. She was previously Executive Vice President, Corporate Development & Strategy & Chief Risk Officer at Agrium Inc. since October 30, 2012. Before that, she served in a variety of posts covering a wide range of responsibilities at Agrium Inc. Listed on the TSX and NYSE, Nutrien is the result of the merger of Agrium Inc. and Potash Corporation of Saskatchewan Inc. and is the world’s largest provider of crop nutrients, inputs and services.   Before joining Agrium Inc. in 1999, Ms. O’Donoghue was a partner in the national law firm of Blake, Cassels & Graydon LLP.   She has a Bachelor of Economics from the University of Calgary and Bachelor of Laws from Queen’s University. She was admitted to the Alberta Bar in 1989. Ms. O’Donoghue is a member of the Institute of Corporate Directors.

Director since December 2008   Calgary, Alberta Canada   Experience Engineering/operational Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Investment banking Financial Risk Corporate governance U.S./International business experience Mergers and acquisitions

Board and committee membership and  attendance

Board of directors

6 of 6 meetings                     100%

Governance, nominating and corporate social responsibility committee

5 of 5 meetings                     100%

Human resources, health and compensation committee

4 of 4 meetings                     100%

Other public company boards and committee  memberships

None

Securities held as of December 31, 2018

Common shares

Deferred share units

Total value 1

Meets share ownership guidelines (including 50% common shares)

30,288

17,474

$1,934,839

yes

Class A preferred shares

Series 11

3,000

1   Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information).

 

 

Pembina Pipeline Corporation · Management information circular		22

Bruce D. Rubin (62) | Independent 2018 voting results: 99.66% for , 0.34% withheld   Mr. Rubin has over 38 years of experience, including various executive and advisory positions and board memberships in the energy, refining and petrochemical sectors. He was CEO of Sunoco Chemicals Inc. (Sunoco Chemicals) and a Senior Vice President of Sunoco Inc. (2008 to 2010) and held various other executive positions during a 32-year career with that company. Mr. Rubin was the first CEO of Braskem America, Inc. (Braskem America), and he served with Braskem America in an executive capacity from 2010 until 2013. He oversaw the successful transition of Sunoco Chemicals to Braskem America and supported the successful acquisition by Braskem America of the polypropylene business of The Dow Chemical Company. Mr. Rubin was an advisor and director for Braskem America from 2014 to 2017.

Director since May 2017   Swarthmore, Pennsylvania U.S.   Experience Engineering/operational Industry knowledge Major capital projects Safety, health and environment

Mr. Rubin serves on the board of DISA Global Solutions (a Court Square Capital Partners company) and the M. Holland Company. He served on the board of directors of Sylvatex Inc. from 2012 to 2016 and is currently an advisor to the company. He was an Executive Advisor for Court Square Capital Partners (2013 to 2015) and was an Operating Advisor for The Carlyle Group (2015 to 2017).   He has a Master of Business Administration from Widener University and a Bachelor of Science in chemical engineering from the University of Pennsylvania. He is a member of the Institute of Corporate Directors.

Human resources/compensation

Board and committee membership and attendance

Investment banking

Board of directors

6 of 6 meetings

100%

Financial

Audit committee

4 of 4 meetings

100%

Risk

Safety and environment committee 1

3 of 3 meetings

100%

Corporate governance U.S./International business experience

1  On May 4, 2018, Mr. Rubin stepped down from the safety and environment committee. He attended all meetings of the safety and environment committee from January 1, 2018 to May 4, 2018.

Information technology

Other public company boards and committee memberships

Mergers and acquisitions

None

Securities held as of December 31, 2018

Common   shares

Deferred share units

Total value 2

Meets share ownership guidelines (including 50% common shares)

14,000

5,316

$782,013

Yes

2  Based on US$29.67, the closing price of our common shares on the NYSE on December 31, 2018 and an exchange rate of 1.3642 as at December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information) and their value is based on $40.51, the closing price of our common shares on the TSX on December 31, 2018.

 

Pembina Pipeline Corporation · Management information circular		23

Jeffrey T. Smith (71) | Independent 2018 voting results: 98.72% for , 1.28% withheld   Mr. Smith has extensive experience in oil and gas operations, finance, mergers and acquisitions and governance, human resources, compensation, health and safety and environmental matters. He is also a director of NAL Resources Limited, an indirect wholly-owned subsidiary of Manulife Financial Corporation.   He has a Bachelor of Science in geology from the University of Ottawa and is a member of the Association of Professional Engineers and Geoscientists of Alberta. Mr. Smith is a member of the Institute of Corporate Directors.

Board and committee membership and attendance

Board of directors

6 of 6 meetings                                          100%

Director since April 2012   Calgary, Alberta Canada   Experience   Engineering/operational Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Risk Corporate governance Information technology Mergers and acquisitions

Safety and environment committee

4 of 4 meetings                                          100%

Governance, nominating and corporate social responsibility committee (chair)

5 of 5 meetings                                          100%

Other public company boards and committee memberships 1

None

1  Mr. Smith was a director of Spyglass Resources Corp. (a TSX listed company) from March 2013 until August 11, 2015. Spyglass Resources Corp., an intermediate oil and gas exploration and production company, was placed into receivership by a syndicate of its lenders on November 26, 2015.

Securities held as of December 31, 2018

Common shares

Deferred       share units

Total value 2

Meets share ownership guidelines     (including 50% common shares)

11,000

19,923

$1,252,691

yes

Class A preferred shares

Series 5

4,000

2  Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents (see Director compensation on page 55 for more information).

 

Pembina Pipeline Corporation · Management information circular		24

Henry W. Sykes (60) | Independent 2018 voting results: 96.55% for , 3.45% withheld   Mr. Sykes is the former President and director of MGM Energy Corp., a Canadian public energy company focused on the acquisition and development of hydrocarbon resources in Canada’s Northwest Territories and Arctic regions (January 2007 to June 2014). He was President of ConocoPhillips Canada (2001 to 2006) and Executive Vice-President, Business Development of Gulf Canada Resources Ltd. before that.   Mr. Sykes began his career as a lawyer and specialized in mergers and acquisitions, securities and corporate law. He is past Chair and member of the boards of Arts Commons and The Arctic Institute of North America, and a director of several private companies involved in the oil and gas industry.

Director since October 2017   Calgary, Alberta Canada   Experience Industry knowledge Major capital projects Safety, health and environment Human resources/compensation Investment banking Financial Risk   Corporate governance U.S./International business experience   Mergers and acquisitions

He has a Bachelor of Arts in economics from McGill University, a law degree from the University of Toronto and a masters of law degree from the London School of Economics. He is a member of the Institute of Corporate Directors.

Board and committee membership and attendance

Board of directors

6 of 6 meetings                                  100%

Audit committee 1

2 of 2 meetings                                  100%

Human resources, health and compensation committee

4 of 4  meetings                                 100%

1  Mr. Sykes was appointed to the audit committee on May 4, 2018 and attended all meetings after his appointment.

Other public company boards and committee  memberships 2

None

2  Mr. Sykes was a director of Parallel Energy Trust (a TSX listed company) from March 2011 to February 2016. Parallel Energy Trust filed an application in the Court of Queen’s Bench of Alberta for creditor protection under the Companies’ Creditors Arrangement Act (Canada) and voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. In the Chapter 11 proceedings, the Bankruptcy Court approved the sale of the assets of Parallel Energy Trust and the sale closed on January 28, 2016. On March 3, 2016, the Canadian entities of Parallel Energy Trust filed for bankruptcy under the Bankruptcy and Insolvency Act (Canada) and a notice to creditors was sent by the trustee on March 4 , 2016.

Securities held as of December 31 2018

Common shares

Deferred share units

Total value 3

Meets share ownership guidelines (including 50% common shares) 4

11,306

2,249

$549,113

on track

3  Based on $40.51, the closing price of our common shares on the TSX on December 31, 2018. Deferred share units for directors include units issued under our deferred share unit plan and units accrued as dividend equivalents ( see Director compensation on page 55 for more information).   4  Mr. Sykes has five years from the date of his appointment on October 2, 2017 to meet the guidelines.

 

Pembina Pipeline Corporation · Management information circular		25

4. Governance

Strong stewardship and governance are essential to operating our business effectively, and we maintain high standards of governance and ethics throughout our business. We believe good governance is important for our shareholders, our employees, all stakeholders and for Pembina.

Our governance practices meet or exceed legal and stock exchange requirements that apply to us. We also regularly benchmark ourselves against our peers to ensure we are following best practices. Since our move to the TSX 60 in April 2014, we continue to focus on ensuring our practices are aligned with our TSX 60 peer group.

Governance guidelines

Our board and management operate under governance guidelines that outline our emphasis on:

 

●

enhancing and preserving value;

●

protecting dividends;

●

meeting our obligations to all stakeholders; and

●

operating in a safe, reliable and environmentally responsible way.

Our governance guidelines set out our commitment to principles of good governance.

 

Board independence				✓		an independent chair of the board
				✓		audit committee, human resources, health and compensation committee and governance, nominating and corporate social responsibility committee are 100% independent
				✓		majority of the board must be independent
				✓		regular in camera meetings without management and without non-independent directors
Board diversity				✓		commitment to diversity by gender, age, skills and geographic location
Board effectiveness				✓		formal process for nominating directors and succession planning
				✓		ongoing director orientation and director education program
				✓		clearly established and distinct roles of board members and senior management
				✓		commitment to maintaining dialogue between management and directors
				✓		ability of the board and board committees to seek independent advice as appropriate
				✓		formal board assessment and peer review process
Integrity and ethical   conduct				✓		commitment to ensuring the integrity of internal controls and public disclosure
				✓		monitoring of overboarding, board interlocks, and other potential conflicts of interest
				✓		established equity ownership requirements for directors
				✓		formal policy on majority voting
Organizational   effectiveness				✓		requirement of board to oversee corporate strategy and manage organizational risks

 

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The board’s mandate

 

The board of directors is governed by a charter and oversees our business, provides guidance to management, monitors management’s activities and sets corporate policy. The board is also responsible for developing our approach to corporate governance, including policies, standards and practices that ensure we operate ethically and meet or				You can find a copy of the board’s charter on our website (www.pembina.com).
exceed the laws and regulations that apply to us. The board’s mandate sets out specific matters that must be approved by the full board. All significant operational, governance, financial decisions and strategies that could affect our shareholders are reviewed by the board.

The board’s charter includes:

●

ensuring an ethical culture;

●

strategic planning;

●

enterprise and traditional risk management;

●

financial management and reporting;

●

succession planning and diversity; and

●

officer compensation.

The board fulfils its mandated duties directly and by delegating certain responsibilities to its four standing committees (see page 40 for information about the committees).

 

Ensuring an ethical culture
One of our most valuable assets is our reputation as a reliable and responsible energy services provider, with consistent financial performance and long-term financial stability. Fostering and ensuring a culture that promotes integrity and ethical conduct is key to maintaining our reputation.   All executives and employees must sign an acknowledgement every year that they have read and understand our code of ethics, whistleblower policy and other policies, will review all updates, and will comply with them at all times. You can find these and other policies on our website.   Code of ethics All directors, executives and employees of Pembina are governed by a code of ethics (the code) that sets out principles for ethical conduct in the following areas:				Updated policies and governance structures We completed a company-wide update of our policies and governance structures in 2018 to align them with Pembina’s new strategy and purpose (see page 48), comply with new legal and governance requirements, and to be consistent with industry practices.   We also developed a new set of policies for the growing number of Pembina employees in the United States.

●

conflicts of interest;

●

business relationships and fair dealing;

●

compliance with the law;

●

government relations;

●

health, safety and environmental matters;

●

integrity of financial information;

●

disclosure and insider trading;

●

stakeholder and public relations;

●

privacy and confidentiality;

●

protecting our assets and records;

●

entertainment, gifts and other payments;

●

workplace environment and relationships; and

●

reporting responsibilities and procedures.

Compliance is mandatory and everyone has a responsibility to report violations of the code. Violations can result in disciplinary action, including dismissal.

 

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The board is responsible for establishing procedures for monitoring compliance with the code and does so through a combination of periodic reports from management, our annual certification process, as well as through our whistleblower policy (see below). No aspect of the code can be waived unless it is approved by the board and properly disclosed, as required by the laws and regulations that apply to us. The board has not waived any aspect of the code since it was implemented in 2005, and no material change reports related to the conduct of any director or officer have been filed (which would generally be required for conduct that would constitute a material departure from the code).

Whistleblower policy

Pembina has built its reputation over 60 years because of our strong record of safe, reliable and environmentally responsible operations. Our whistleblower policy is designed to help us uphold our reputation and maintain public confidence by encouraging employees, consultants, contractors, agents and other stakeholders to act responsibly and report possible unethical practices without fear of discrimination, retaliation or harassment. The policy includes examples of activities that should be reported, and the process whistleblowers should follow to file a confidential report, including a whistleblower line that allows people to report anonymously by telephone or the internet, at any time. Each whistleblower complaint is treated confidentially and thoroughly investigated.

 

Shareholder engagement We engage with our shareholders through accurate and consistent public reporting, as well as open dialogue about our strategy, performance and business activities. We provide ongoing information to our shareholders in our annual report, management information circular, annual information form, quarterly reports, news releases, sustainability report, website, corporate presentation, earnings calls, annual investor day and at industry conferences and other meetings. We host earnings calls every quarter that are open to all, with a live webcast and question and answer period. Our annual meeting is webcast live and all shareholders can participate.   Our shareholder engagement program is formally set every year, and follows a consistent pattern of investor conferences, management road shows, industry-specific conferences, one-on-one meetings, infrastructure tours and open houses. We also host an investor day every year. Our management team provides public information about our strategy, business and operations during these events.				Disclosure policy Pembina is committed to providing material information to shareholders and the public in a timely, accurate and balanced fashion. We have a disclosure policy that applies to all directors, executives, employees and any other person authorized to speak on our behalf, that sets out our procedures for timely dissemination of material information to the public. We also have a disclosure committee made up of the chief executive officer and senior vice presidents who are responsible for reviewing and approving all material disclosure before it is released publicly. We regularly review our disclosure policy and update it as appropriate.

We also ask investors for feedback at all engagement opportunities, as well as by email and by telephone, and our investor relations group has formal and informal interactions with shareholders about specific questions. Occasionally, members of the board, including the chair, will participate in these activities with management. Management regularly provides the board with feedback from our shareholders, both about our company and about more general themes related to our industry.

Our directors are also available to meet directly with shareholders, as appropriate. Interested parties can contact our board members through the corporate secretary at the address below. Board members also attend our annual shareholders’ meeting and are available to respond to questions and receive feedback from investors.

Chair of the board of directors

c/o Corporate Secretary

Pembina Pipeline Corporation

4000, 585 – 8th Avenue S.W.

Calgary, Alberta T2P 1G1

Shareholders can also contact our investor relations department any time, by letter, email or phone.

 

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Strategic planning oversight

The board oversees the development and execution of our long-term strategic plan and shorter term objectives and initiatives. Pembina is committed to growing shareholder value through strategic project development and acquisitions that support the long-term success of both our company and our customers.

 

In 2018, the board increased the number of dedicated strategy sessions from one to two per year. At these sessions, the board meets with management to review Pembina’s current activities, long-range financial forecast and future growth opportunities, including input from third-party advisors from time to time about industry or other trends and developments that may benefit us or pose a risk. The board approves our annual strategic plan and monitors performance against it throughout the year, based on quarterly updates and reports from management.				New strategy and purpose; new corporate structure The board approved a new strategy in 2018 focused on diversification and entering global markets, and an updated purpose emphasizing Pembina’s four stakeholder groups (customers, investors, employees and communities). See page 48 for details of our new strategy.   Our management and corporate structure was also reorganized effective January 1, 2018 into three divisions that better reflect our growth and the future needs of the company and the industry: pipelines, facilities and marketing and new ventures.
The board assesses the potential impact of significant projects against Pembina’s target financial guardrails: ·  generate 80% of adjusted earnings before interest, taxes, depreciation and amortization ( EBITDA ) (see About non-GAAP measures on page 93) from fee-for-service business;

·

maintain a strong “BBB” credit rating;

 

·

maintain a strong customer base of 75% or greater of investment grade or secured counterparties; and

 

·

target dividend payout of <100% of fee-for-service cash flow.

Risk management oversight

The board is responsible for overseeing risk management at Pembina. The board ensures it understands the principal risks of our business and assesses the balance between risk and potential return for Pembina and our shareholders to ensure our viability over the long-term. To facilitate our risk review we have an enterprise risk committee made up of members of management, which meets at least quarterly to review the performance, appropriateness and the current business environment surrounding our risk management activities.   As part of its responsibility, the board makes sure we have:				Risk management policies Pembina maintains the following policies: ·   Enterprise risk management policy ·   Market risk mitigation policy ·   Counterparty risk management policy ·   Acceptable use of information assets policy ·   Information management policy ·   Corporate security policy ·   Cyber security policy

·

an enterprise risk management ( ERM ) process, designed to identify and assess potential risks that may affect our business, operations or results, and to manage risk factors within our risk appetite;

 

·

a risk management infrastructure to respond to identified risks, and critical risk management policies and procedures, including risk response, controls, monitoring, mitigation and reporting to the board; and

 

·

specific management processes for addressing corporate, regulatory, securities and other compliance requirements.

Management reports periodically to the board of directors about the risks that have been identified through a survey that encompasses the whole company and, at least once a year, presents a report to the board of directors that summarizes the enterprise risk committee’s review of risk identification, management and reporting, and any deficiencies identified. The governance, nominating and corporate social responsibility committee reviews the risk oversight functions of the board and board committees to confirm that identified risk oversight is appropriately allocated.

The ERM process also guides our materiality and disclosure decisions in relation to risks, based on the overriding principle that risks must be disclosed if they would most likely influence an investor’s decision to purchase securities of the company, and weighing both the probability of an outcome as well as the potential financial impact to the

 

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company. You can find a complete listing and explanation of our risk factors under the heading Risk factors in our annual information form ( AIF ) on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

Our 2018 ERM process identified our top 10 risks, potential impacts, mitigation strategies currently in place, emerging risks, and proposed additional mitigation approaches. The top 10 risks are organized into five broad categories and overseen by the board and its committees as follows:

 

Board/ board committee		Risk category it oversees		Specific risks identified
Board		All		Laws and regulations Competition Economic conditions and industry Concentration risk Political risks Breakdown of partnership/joint ventures Accelerated rates of change Commodity price
Audit committee		Financial and technological		Economic conditions and industry Information security/cyber crime
Governance, nominating and   corporate social   responsibility committee		Governance and regulatory		Laws and regulations
Human resources, health and   compensation committee		Human resources		Accelerated rates of change
Safety and environment   committee		Operational Health, safety and environment		Environment

You can read more about the board committees starting on page 40.

 

Environmental, social and governance oversight
Pembina is committed to being a responsible corporate citizen and the board oversees corporate stewardship. The board recognizes the importance of environment, social and governance ( ESG ) factors to Pembina’s long-term success.				First sustainability report Pembina published our first sustainability report in December 2018.
Pembina’s purpose includes a commitment to having a net positive impact on our stakeholders, and this is reflected in our health, safety and environment policy, our security management policy, our aboriginal and tribal relations policy, our integrity program, our investment in communities and our direct engagement with the communities where we operate.				Developed over 2017 and 2018 by management working with the governance, nominating and corporate social responsibility committee, the report is based on feedback from our stakeholders, proxy advisors, regulators and standard-setting organizations.
We also understand that we are exposed to legal and reputational risk if we fail to adapt to changing regulatory regimes, and political and social initiatives in this regard. In particular, we are aware of the increasing need for transparency in ESG reporting.				We framed the contents based on sustainability issues that could be material to Pembina, as identified by multiple internationally recognized sustainability frameworks.
Corporate social responsibility and Pembina’s overall sustainability is the responsibility of the governance, nominating and corporate social responsibility committee. This responsibility was added to the committee’s charter in 2018, and one of the committee’s first tasks was to oversee management’s development of Pembina’s first sustainability report.				You can find a copy of our sustainability report and our ESG policies on our website at www.pembina.com/our-responsibility/ .

 

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The safety and environment committee mandate includes oversight of environmental risks and policies. Our ERM process identified environmental risk as one of Pembina’s top 10 risks. Among other things, we are concerned about the impact of physical risks such as health and safety, property damage and disruptions to operations.				Environmental Risks Pembina’s 2018 ERM process identified emissions and environmental risk as one of the top 10 risks to our company and the industry.
The human resources, health and compensation committee ensures the company focuses on sustainability issues by including safety and environment metrics in incentive plan design and compensation decisions for executives (see page 67).   Financial management and reporting The board is responsible for:   ●  approving our financial statements, accompanying MD&A and earnings press releases;				The safety and environment committee is reviewing the potential impact of changing legislation and regulatory requirements on our industry, and the material risks and opportunities for Pembina. The risk factors listed in our AIF dated February 21, 2019 include references to how we currently think some of these environmental risks could impact us.

 

●

reviewing and overseeing compliance with the audit, accounting and financial reporting requirements that apply to our business;

 

●

approving our annual operating and capital budgets and financing plans and strategies; and

 

●

approving decisions to participate in the capital markets and all significant changes to our accounting policies and practices.

The board also makes sure we have a robust system for tracking internal controls over financial reporting, compliance with the Sarbanes-Oxley Act , internal audit, fraud and auditing matters and responding to complaints, including anonymous complaints we may receive from employees or others. You can read about the audit committee’s role in compliance and internal audit on page 42, and our whistleblower policy on page 28.

Compensation

Director compensation

 

The board is responsible for:				The human resources, health and compensation committee reviews and recommends compensation for directors, the CEO and his direct reports. You will find a full list of that committee’s activities in 2018 starting on page 44.
●  approving director compensation;   ●  making sure director compensation is aligned with shareholder interests and adequately reflects the time commitment, scope of responsibilities, risks involved in being a director and market trends in director compensation;   ●  working with the human resources, health and compensation committee to review from time to time the competitiveness of the compensation of our board members, board chair and committee chairs; and

 

●

working with independent external advisors that review director compensation and provide objective advice.

Executive compensation

All decisions about compensation of the CEO and senior vice presidents must be approved by the board.

The board works with the human resources, health and compensation committee and independent advisors retained by the human resources, health and compensation committee, to determine compensation for our CEO and senior vice presidents, including variable compensation.

You can read more about our approach to compensation governance and how we compensate our directors and executives beginning on page 47 and the role and responsibilities of the human resources, health and compensation committee on page 44.

 

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Succession planning and diversity

Executive succession planning

The board has developed position descriptions for the CEO, Chief Financial Officer (CFO) and other senior vice presidents, outlining the scope and responsibilities of each role.

The board is responsible for evaluating and appointing the CEO and his direct reports, and for approving the management succession process for other executives. It reviews succession plans for the CEO, the senior vice presidents and other executives, taking into consideration recommendations by the human resources, health and compensation committee. There is also a development plan process in place for employees who are potential successors to senior vice presidents and other executives. Assessment of readiness includes a thorough review of each individual’s leadership competencies, technical skill and commercial acumen.

The executive team has formed a talent management committee that periodically reviews succession plans, identifies employees with high potential and ensures employee development is progressing as planned. The CEO meets with the human resources, health and compensation committee at least once a year to discuss the succession plan, review succession candidates for the CEO position, as well as senior management and other strategic positions, and review development plans for possible successors. Emergency successors have also been identified for each executive position and are reviewed every year.

Leadership development

Pembina is developing a community of extraordinary leaders to realize the company’s vision, and our Leadership Competency Framework is an essential part of this process, including succession planning. The framework has three graduated components: leading self, leading others and leading the business, and focuses on Pembina’s 10 core competencies. The program brings employees across the company together to build relationships and share ideas, complementing on-the-job experience with formal and informal learning opportunities.				Pembina’s 10 core competencies ●   demonstrating accountability and commitment ●   acting courageously ●   exhibiting self-awareness ●   communicating effectively ●   working collaboratively ●   empowering and developing others ●   thinking and acting strategically ●   leading positive change ●   driving results ●   applying business acumen

Diversity

The executive team and the board are mindful of the importance of management diversity, and consider diversity of all types, among other factors, in management succession planning. We comply with the requirements of the Employment Equity Act (Canada) for women in management and submit a report annually to the federal government.

Women currently represent approximately 29% of our workforce, which is higher than the Alberta mining and oil and gas extraction industry median for all employees of 21.5% in 2017, the last time this data was published, and the most closely comparable industry group. We currently have three female executives (12 percent of our executive team). We do not have a formal target for women in executive positions, but we continue to identify female candidates for higher level executive positions, and with the increasing number of women in management, we are confident that our succession planning will lead to more women moving into executive positions.

 

Employee engagement We believe an engaged workforce increases company productivity, improves results and ultimately adds value to our shareholders. We began tracking employee engagement scores in 2013, and are updating those results every two or three years.   Our 2018 score was 66% on the employee engagement survey. Our 98% response rate to the 2018 survey was exceptional and demonstrates that our employees are committed to providing feedback and making Pembina a great place to work. Our response rate				Human resources policies Pembina maintains the following policies: ●   Respectful workplace policy ●   Alcohol and drug policy ●   Privacy policy

 

Pembina Pipeline Corporation · Management information circular		32

far exceeds AON’s global average response rate of 80% and our 66% score is consistent with other TSX 60 companies in the survey.

While we are satisfied with the score, our CEO and Senior Vice Presidents have included specific goals for 2019 to address some of the concerns voiced by our employees.

In 2018, Pembina was once again recognized as one of ‘Alberta’s top 70 employers’ by Mediacorp Canada, recognized as one of ‘Canada’s top 100 employers’ by the Globe and Mail, and newly recognized in January of 2019 as one of ‘Canada’s top employers for young people’ by the Globe and Mail. These significant accomplishments were achieved despite transformational change, including the merger with Veresen, an associated company-wide reorganization positioning the company for future growth, and the implementation of Pembina’s new global strategy.

About the board of directors

We expect our directors to demonstrate the highest personal and professional ethics, integrity and values, and to represent the long-term interests of our stakeholders.

Independence

The board assesses the independence of directors annually using independence criteria that meet or exceed the following standards: ●  National Policy 58-201 – Corporate Governance Guidelines ; ●  National Instrument 52-110 – Audit Committees ; ●  U.S. Securities and Exchange Commission rules and regulations; ●   Sarbanes-Oxley Act of 2002; and ●  NYSE rules.   This is described in detail in our Standards for Director Independence , which you can find on our website (www.pembina.com).				Independent board 10 of the 11 nominated directors are independent, meaning they do not have a business or other relationship (direct or indirect) that could, or could reasonably be perceived to, materially interfere with their ability to act in our best interests. Mr. Dilger is not independent because he is Pembina’s President and CEO.

We require all directors who sit on the audit, human resources, health and compensation, and governance, nominating and corporate social responsibility committee, to be independent directors.

In camera sessions

The board meets in camera at each meeting to facilitate regular, open and candid discussion among the independent directors without management present, and also without the non-independent directors (if there are any).

In 2018, our independent directors met separately at every board meeting.

About the chair of the board

The chair of the board is appointed by the directors for a term of one year. Our intent is to have an independent chair unless it is in the best interests of the company to appoint a chair who is not independent. The roles of chair of the board and CEO have been separate since we went public in 1997. Our current chair, Randall J. Findlay, is independent.

The board has developed a position description for the chair of the board and the committee chairs, outlining the scope and responsibilities of those roles. Committee chairs lead their committee and report to the board. The chair reports to the board and our shareholders and works with the CEO to make sure we fulfill our responsibilities to shareholders, employees, partners, governments and the public.

The chair is expected to provide leadership to the board and foster effective, responsible decision-making, including overseeing board direction and administration, board and individual director effectiveness.

 

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The board, in conjunction with the governance, nominating and corporate social responsibility committee, also selects the chair of each committee.

Nomination of new directors

The board reviews its composition annually, considering diversity, specific skills, tenure and the experience required on the board. The board looks at director nomination dynamically, recognizing that the skills the board needs will change over time and as the company and the industry evolve. The goal is a board that is effective, experienced and well-balanced. The governance, nominating and corporate social responsibility committee recommends new director candidates to the board for approval. The board proposes the final list of nominated directors to shareholders. The governance, nominating and corporate social responsibility committee looks to a number of sources to identify new candidates, including outside search firms.

The board looks for directors who are inquisitive and objective, have practical wisdom and mature judgment. It ensures that the process is impartial by taking into consideration any potential conflicts of interest and relationships between new directors and existing directors.

It looks at the competencies and skills of a potential candidate, including their education, communication and interpersonal skills, and relevant business, government and civic experience. It also considers the skills matrix of the current board to balance the qualities of new candidates with the composition and diversity of the board.

Finally, it considers whether the candidate is able to devote enough time to their duties as a director, and reviews and consults with the chair of the board and the CEO to gather their input before proposing a list of nominated directors to shareholders.

Board diversity

The board recognizes the importance of director diversity and, in February 2015, formally adopted a written policy that serves as a framework for promoting diversity, including diversity of gender, age and geographic location. Since that time, we have added one female director to our board for a total of three women, while increasing the board’s geographic, educational, experience, and age diversity.				27% of the nominated directors are women

In accordance with the diversity policy’s objectives, the governance, nominating and corporate social responsibility committee aims to achieve diversity on the board when selecting and recommending nominees for election, while balancing the professional qualifications required of our directors. The governance, nominating and corporate social responsibility committee and board are specifically committed to continuing to increase the number of women on the board. While the diversity policy does not set formal targets for women on the board, we feel that diversity is being addressed on an ongoing basis by the governance, nominating and corporate social responsibility committee and the board without the need for a formal target.

In its annual assessment of board composition and mix of skills, the governance, nominating and corporate social responsibility committee also looks at how effective our diversity policy is at building board diversity, considering the skills required on the board at that time.

 

Age and tenure Directors retire from our board or do not stand for re-election once they have turned 72, unless the board determines otherwise.				62   average age of our directors
We do not have a formal policy imposing term limits. Our priority is to assemble a board that has the right mix of skills and experience as a whole to provide strong stewardship.				6.6 years average tenure of our independent directors

While the board recognizes that a longer serving director can make a growing contribution to the board over time, it balances experience with some turnover to generate fresh ideas and perspectives on various issues and our business in general.

 

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Location

Pembina operates in Canada and the U.S., so it is important to have directors with experience in these markets. Nine of our directors are located in Canada, and two are located in the U.S. Aside from geographical location, we have several directors with relevant experience in both markets as well as internationally.

Skills and experience

The board regularly evaluates the competencies and skills of the directors against what it needs for proper oversight, effective decision-making and fulfilling its mandate.

It is our goal to ensure the board has a prudent mix of relevant skills and experience, sufficiently diverse opinions to support balanced discussion and debate, and a manageable number of directors to facilitate productive discussion and decision-making. The board uses a skills matrix to identify and evaluate the experience and knowledge of the directors, and to identify potential areas to focus on when recruiting new director candidates. The governance, nominating and corporate social responsibility committee maintains the matrix and updates it regularly. In 2017, the governance, nominating and corporate social responsibility committee and the board adopted a numbered skills matrix in order to better illustrate our directors’ self-assessments of skills, and added new skills that will be important to the company as it evolves.

The following tables show the mix of experience and knowledge of our nominated directors.

 

 

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Attendance and active participation

 

We have a very committed group of directors and are proud to report that in 2018, our board had perfect attendance, as our directors attended all board and committee meetings. Directors are expected to attend all board meetings and all of their committee meetings unless there is an unavoidable conflict or other extenuating circumstances. Attendance is monitored by the governance, nominating and corporate social responsibility committee and managed by the chair of the board.				100% meeting attendance in 2018

We expect all board and committee meetings to be conducted in a way that promotes open communication, meaningful participation and timely resolution of issues. Generally, directors can serve on a maximum of three committees so they can fully participate and meet their obligations to the board. All of our independent directors serve on one or two committees.

 

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The table below includes details of director meeting attendance in 2018.

 

Committee meetings

Board meetings

Audit

Governance, nominating and corporate social responsibility

Human resources, health and compensation

Safety and environment

Total committee meetings

R. Findlay 1

6 of 6 (chair)

100%

5 of 5

5 of 5

100%

A. Ainsworth 2

6 of 6

100%

2 of 2

4 of 4 (chair)

6 of 6

100%

D. Arnell

6 of 6

100%

4 of 4

4 of 4

100%

M. Dilger 3

6 of 6

100%

N/A

N/A

M. Howe 4

6 of 6

100%

4 of 4

3 of 3

7 of 7

100%

G. Kerr

6 of 6

100%

4 of 4 (chair)

4 of 4

8 of 8

100%

D. LeGresley

6 of 6

100%

4 of 4

4 of 4 (chair)

8 of 8

100%

R. Michaleski

6 of 6

100%

4 of 4

4 of 4

100%

L. O’Donoghue

6 of 6

100%

5 of 5

4 of 4

9 of 9

100%

B. Rubin 5

6 of 6

100%

4 of 4

3 of 3

7 of 7

100%

J. Smith

6 of 6

100%

5 of 5 (chair)

4 of 4

9 of 9

100%

H. Sykes 6

6 of 6

100%

2 of 2

4 of 4

6 of 6

100%

¹ Mr. Findlay typically attends all committee meetings in his capacity as chair of the board.

² On May 4, 2018, Ms. Ainsworth stepped down from the audit committee. She attended all meetings of the audit committee from January 1, 2018 to May 4, 2018.

³ Mr. Dilger attended all board meetings in 2018 as a director and CEO and all committee meetings in 2018 in his capacity as CEO.

⁴ Ms. Howe was appointed to the governance, nominating and corporate social responsibility committee on May 4, 2018 and attended all meetings after her appointment.

⁵ On May 4, 2018, Mr. Rubin stepped down from the safety and environment committee. He attended all meetings of the safety and environment committee from January 1, 2018 to May 4, 2018.

⁶ Mr. Sykes was appointed to the audit committee on May 4, 2018 and attended all meetings after his appointment.

Orientation and continuing education

The governance, nominating and corporate social responsibility committee is responsible for approving the director orientation process and annual plans for director education and development.

Orientation

Our orientation manual for new directors includes the following items:

●

corporate governance guidelines;

●

board mandate;

●

committee charters;

●

terms of reference for directors;

●

position descriptions for the board chair, committee chairs, CEO and the senior vice presidents;

●

key corporate policies;

●

recent disclosure and investor materials;

●

strategic plan; and

●

other relevant corporate and board information.

New directors attend orientation sessions and one on one meetings with key officers to familiarize them with our business, significant risks and mitigation measures, our expectations, our corporate goals and objectives, and current business issues and opportunities.

 

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Continuing education

Directors have ongoing opportunities to increase their knowledge and understanding of our business. All of our directors are members of the Institute of Corporate Directors and the company pays the cost of this membership. The board also encourages individual directors to attend continuing education sessions and contributes to the cost of attending these courses. We also periodically provide educational sessions about our business, our industry and emerging trends and issues. These are presented at scheduled board and committee meetings, and include: ·  Annual briefings – typically include reviews of the competitive environment, our five-year or ten-year financial outlook, our performance relative to our peers, significant risks and mitigation measures and other developments that could materially affect our business. Briefings may include presentations by third-party consultants, such as financial advisors, pension experts and outside legal counsel as needed; ·  Corporate governance issues and trends – regular briefings on corporate governance developments and emerging best practices; and ·  Industry and other issues and trends – presentations from time to time by external consultants about general industry trends or other topics of interest.				2019 priorities   The board has set the following priorities for continuing education in 2019: Business/industry   ·  petrochemicals; ·  global commodity and financial markets; and ·  LNG. Risk ·  enterprise risk oversight; ·  cyber security; and ·  facility security. Governance ·  shareholder activism and board shareholder engagement; ·  board diversity; and ·  director liability.

The corporate secretary maintains a list of all skill development of, and continuing education taken by, the directors, which the governance, nominating and corporate social responsibility committee reviews when building each year’s director education plan. The table below shows the education sessions our directors attended in 2018:

 

Category		Event		Date		Presenter		Attendees
Financial		Audit Education Session – U.S. Tax Reform		February 21 st		KPMG		A-M.N. Ainsworth R.J. Findlay M.E. Howe G.J. Kerr D.M.B. LeGresley B.D. Rubin
		Top Priorities for Audit Committees		March 27 th		Institute of Corporate Directors		G.J. Kerr
		Audit Education Session – Credit 101		May 2 nd		Pembina Risk Department		All directors except R.B. Michaleski L.A. O’Donoghue H.W. Sykes
		Audit Education Session – Regulatory (non-GAAP measures) and Tariffs (USMCA) Update		October 31 st		KPMG		R.J. Findlay M.E. Howe G.J. Kerr B.D. Rubin H.W. Sykes
		U.S. Tax Reform		November 22 nd		University of Calgary School of Public Policy		G.J. Kerr
Global markets		Market, Economic and Business – Responding to Enhanced Competitiveness		March 14 th		Institute of Corporate Directors		G.J. Kerr
		ICD Conference - Future of Canadian Trade		May 30-31		Institute of Corporate Directors		R.J. Findlay G.J. Kerr
Governance		Director’s Education Program – Module III		February 9-11		Institute of Corporate Directors		A-M.N. Ainsworth
		Director’s Education Program – Module IV		April 13-15		Institute of Corporate Directors		A-M.N. Ainsworth
		Director’s Education Program – Final Exam (Certification Received: ICD.D)		May 17 th		Institute of Corporate Directors		A-M.N. Ainsworth

 

Pembina Pipeline Corporation · Management information circular		38