CONTENTS

BALLARD POWER SYSTEMS INC.

9000 Glenlyon Parkway
Burnaby, British Columbia, Canada V5J 5J8

NOTICE OF ANNUAL MEETING

TO OUR SHAREHOLDERS:

Our 2020 Annual Meeting (the "Meeting") will be held on Wednesday, June 3, 2020 at 1:00 p.m. (Pacific Daylight Time). Given the COVID-19 pandemic, this year's Annual Meeting will be a completely virtual meeting of shareholders. You will be able to attend the Annual Meeting, vote and submit your questions during the Annual Meeting via live webcast by visiting www.virtualshareholdermeeting.com/BLDP2020. The Meeting will be held for the following purposes:

A detailed description of the matters to be dealt with at the Meeting and our 2019 Annual Report are included with this Notice. There will not be a management presentation at this year’s meeting.

To participate in the Meeting, shareholders will need to visit www.virtualshareholdermeeting.com/BLDP2020 and log-in using the 16-digit control number included either on your proxy form or voting instruction form, as applicable. The Meeting platform is fully supported across browsers and devices running the most updated version of applicable software plug-ins. You should ensure you have a strong, preferably high-speed, internet connection wherever you intend to participate in the Meeting. The Meeting will begin promptly at 1:00 p.m. (Pacific Daylight Time) on Wednesday, June 3, 2020. Online check-in will begin starting 15 minutes prior, at 12:45 p.m. (PDT). You should allow ample time for online check-in procedures. The webcast Meeting allows you to attend the Meeting live, submit questions and submit your vote while the Meeting is being held if you have not done so in advance of the Meeting. For any technical difficulties experienced during the check-in process or during the Meeting, please call the number located on the virtual meeting page.

Guests will be able to attend the Meeting through the live webcast only, by joining the webcast as a guest www.virtualshareholdermeeting.com/BLDP2020. They will not be able to submit questions or vote.

DATED at Burnaby, British Columbia, April 6, 2020.

1

Letter from JAMES ROCHE
Chair of the Board

Fellow Shareholders:

Transformation is under way. Decarbonization is a global priority. With mounting public pressure to limit global warming, over 60 countries have announced net-zero emission targets by 2050. There is a growing realization that hydrogen can serve a critical role in a multidimensional strategy to address the climate crisis. There is increased understanding of hydrogen’s ability to decarbonize sectors that are otherwise difficult to abate. Indeed, 18 countries, representing 70% of global GDP, have announced hydrogen roadmaps.

We know this transformation will not occur overnight. We also know this transformation presents high value, long-term opportunities for Ballard. As a result, our focus is resolutely on the long-term. In support of our strategic focus, we made important progress in 2019, executing against our business plan, while delivering financial performance consistent with management expectations.

The board was very active in 2019, including on strategy, performance management, talent management and succession, as well as oversight of key strategic partnerships, manufacturing capacity expansion, product cost reductions and progress with the Weichai-Ballard joint venture in China. The board visited our European facility in Hobro, Denmark to learn more about Ballard’s European platform and exciting opportunities in the European market, including for fuel cell buses, marine applications and critical infrastructure backup power.

In early 2019, Kevin Jiang and Sherman Sun joined our board as Weichai nominees. This strengthened our board with valuable insights into China’s dynamic heavy-duty motive market and the significant opportunities for our Weichai-Ballard joint venture. We also initiated two key governance measures in 2019. First, all material Weichai and Weichai-Ballard JV commercial arrangements require the approval of our Audit Committee. Second, we created a Commercial Committee, comprised of independent directors, to enable confidential and sensitive deliberations relating to strategic customers, suppliers and partners.

We believe increased investor interest in environmental, social and governance (ESG) issues, including the investment risks presented by climate change, will drive a profound global reassessment of risk, asset values and capital allocation. We expect ESG mandates to accelerate corporate behavior toward sustainable businesses and serve as a catalyst for the adoption of hydrogen and fuel cell technologies. This 2019 Annual Report includes expanded ESG disclosure, reflective of the critical importance we place on our own journey for improved ESG performance, disclosure and accountability.

As we start 2020, there are, of course, serious concerns about the overall global economy, compounded by the recent coronavirus. Notwithstanding near-term volatility, our long-term outlook remains positive.

On behalf of the board, I would like to thank all Ballard employees for their integrity, customer focus, innovation and commitment. I draw your attention to a subset of employees identified on page 28, who received special recognition as 2019 Ballard Impact Award winners. We also thank our shareholders for your continued support.

"James Roche"

James Roche
Chair of the Board of Directors

2

Letter from RANDY MACEWEN
President and Chief Executive Officer

Fellow Shareholders,

2019 was a year that saw remarkable momentum across the entire hydrogen and fuel cell industry. At Ballard, we made important progress during 2019 that provides a strong set-up for 2020 and beyond.

In terms of financial performance, we generated revenue of $106.3 million – up 10% and exceeding our full year outlook – and delivered gross margin of 21%, Adjusted EBITDA of ($28.2) million, and ended 2019 with cash reserves of $147.8 million.

We also delivered continued progress in the execution of our strategy. We launched our next-generation LCS^TM fuel cell stack and FCmove^TM power module, offering significantly lower lifecycle cost and enhanced performance. We invested in advanced manufacturing and production capacity expansion in our Vancouver operations. We advanced on our product development, technology transfer and facility construction programs and activities with our Weichai-Ballard joint venture in China. We expect the joint venture facility to be commissioned by mid-year 2020. We announced our membership in the H2Bus Consortium in Europe as well as the creation of a Marine Center of Excellence at our Denmark facility. We ended 2019 with a 12-month order book of $110.3 million for delivery in 2020.

In 2019, we also articulated our e12345 corporate strategy, which is shorthand for:

Our e12345 strategy supports near-term commercialization, revenue and profitability, while also enabling future value based on longer-term market opportunities for the same core PEM fuel cell competencies, technologies, products and intellectual property.

In the context of our e12345 strategy, recent developments in the hydrogen and fuel cell industry have generated remarkable momentum and underpin our high level of conviction that we have entered the Hydrogen Decade. There are six recent important industry developments that I would highlight.

3

First, there are a growing number of government policy initiatives that support decarbonization of energy, mobility and industry using hydrogen and fuel cells. Jim Roche already noted that 18 countries have declared hydrogen roadmaps. The Energy Ministerial also announced its “10-10-10” targets of 10 million fuel cell electric vehicles (FCEVs) and 10,000 hydrogen refueling stations within the next 10 years (by 2030). In addition, the EU set landmark Class 8 truck emission reduction targets of 15% by 2025 and 30% by 2030.

Second, blue chip mobility players announced large investments in fuel cell technologies. These investments suggest a new conviction level by corporations in the opportunity for fuel cells as a zero-emission electrification pathway for mobility. Indeed, since the closing of Ballard’s strategic collaboration with Weichai in late-2018, the industry has seen a domino effect with numerous follow-on strategic tie-ups, investments and announcements, including from Bosch, Cummins, CNH International, Daimler Trucks, Faurecia and Michelin, among others. The Hydrogen Council also grew, now with over 80 members that collectively represent total revenues of more than €18 trillion and about 6 million jobs around the world.

Third, 2019 saw a consolidated industry view that mass commercialization of on-road FCEVs will occur first in medium and heavy-duty motive use cases – including in bus, truck, train and marine – where there are zero-emission requirements for heavy payload, long range and rapid refueling. Many of these use cases also feature return-to-base duty cycles, where vehicles can be quickly refueled at a centralized hydrogen refueling station, consistent with the current user experience with legacy diesel. These use cases disproportionately contribute to emissions today. The consolidated industry view on the relative value proposition for FCEVs in these use cases was punctuated in two recent industry reports, both of which are available for download from the Ballard website (www.ballard.com).

On January 20^th, 2020, the Hydrogen Council published a report prepared by McKinsey entitled “Path to Hydrogen Competitiveness: a cost perspective”. The report studied 35 different hydrogen use cases and forecasted that in 22 of these, the total cost of ownership will reach parity with other low-carbon alternatives, typically battery electric, by 2030 – and earlier in a number of cases. The report also forecasted that in nine of these 35 use cases, hydrogen solutions will be competitive with conventional options, typically internal combustion engine vehicles, by 2030. We believe these nine use cases are a direct bull’s-eye match with Ballard’s e12345 strategy. The report also notes that, with smaller deployments hydrogen infrastructure is more costly, but as deployments scale, hydrogen infrastructure becomes lower cost per vehicle than battery recharging infrastructure. This is another major advantage for FCEVs in large fleets.

The Hydrogen Council report is consistent with a white paper jointly published by Deloitte China and Ballard on January 8^th, 2020 entitled “Fueling the Future of Mobility: Hydrogen and Fuel Cell Solutions for Transportation”. The white paper forecasts that, in less than 10 years, it will become cheaper to run an FCEV than to run a battery electric vehicle (BEV) or internal combustion engine (ICE) vehicle for certain commercial applications.

The fourth important industry development relates to the growing number of deployments of FCEVs in select geographies around the globe. Industry reports indicate current global deployments of 32,000 fuel cell forklifts, 18,000 fuel cell passenger cars and over 6,000 fuel cell buses and commercial trucks. The world’s first fuel cell tram also entered service in China in 2019. In addition to China, we are seeing growth indicators in Europe for fuel cell buses, commercial trucks, train and marine applications. As a result, in 2019, we began construction of Ballard’s Marine Center of Excellence (MCoE) at our facility in Hobro, Denmark to enable a local focus on activities in the emerging European marine segment. We anticipate the MCoE being completed and operational in the first half of 2020.

Globally, including only fuel cell buses and commercial trucks, Ballard fuel cell technology and products have to date powered FCEVs for an industry-leading cumulative total of more than 30 million kilometers, equivalent to traveling around the globe 750 times. So, with technology readiness now proven, market discussions are pivoting to integration, packaging, industrialization, scaling and cost reduction.

The fifth key industry development relates to continuing fuel cell technology advancements and cost reduction. At Ballard, we have improved product performance while also reducing product cost by 65% during the past decade, without the benefit of commercial volumes. In mid-2019, we commercially launched our industry-leading LCS™ fuel cell stack and our 8^th generation fuel cell module, the FCmove™. We expect this next-generation module to deliver a further 35% reduction in total lifecycle cost, while delivering technology advancements that deepen our customer value proposition. Looking forward over the next three years, we anticipate additional product cost reductions at the MEA, stack and module levels, driven by continued design improvements, manufacturing scale, supply chain activities, and advanced manufacturing initiatives. We will provide further details on these plans later this year.

4

The sixth key industry development – the growing ESG movement – was discussed in Jim’s letter.

In the context of these six industry developments, I see tremendous opportunity for Ballard to differentiate, serve our customers, inspire our employees and deliver long-term value for shareholders, all while moving closer to our vision: “We deliver fuel cell power for a sustainable planet”. This vision gets everyone at Ballard fired up each morning to make the company better every day. We thank our valued employees for their talent, passion and dedication. We also thank our customers and partners for their trust, business and collaboration.

We thank our shareholders for your confidence. We intend to continue earning your trust by delivering against our strategy, driving to profitability and increasing shareholder value and we look forward to reporting our progress over the coming year.

On a final note, we wish you and your families’ safety and health during this unprecedented COVID-19 pandemic.

"Randy MacEwen"

Randy MacEwen
President & CEO
Ballard Power Systems Inc.

5

OUR GLOBAL IMPACT

Our Global Impact Globally, Ballard is a powerful force for the environment: fuel cell electric vehicles produce lower lifetime environmental impacts than internal combustion vehicles and battery electric vehicles. When they consume ‘green’ hydrogen (produced from renewable energy) we believe they are the most environmentally sustainable mobile energy source. We are continually working to reduce the total lifecycle emissions of our fuel cell products.
“At Ballard, we recognize the growing investor and stakeholder interest in our environmental, social and corporate governance (ESG) programs and performance, and we are proud to present our first annual ESG Report. This report sets benchmarks for future ESG reports, and marks a public commitment to transparency in reporting.” Randy MacEwen, President and CEO

8 |     Ballard Power Systems

OUR GLOBAL IMPACT

UN Sustainable Development Goals

FCEVs can achieve very low CO₂ emissions if the whole lifecycle is considered¹

Footnote:
1. Includes: tank to wheel, car manufacturing, well to tank
2. Includes: battery manufacturing, car manufacturing, well to tank
3. Includes: fuel cell manufacturing, car manufacturing, well to tank

Ballard Environmental, Social and Governance (ESG) Report 2019     | 9

OUR CORPORATE COMMITMENTS

Learn more by downloading our
brochure: Hydrogen Fuel Cell
Vehicles for a Sustainable Future
https://online.flippingbook.com/
view/165111/12/

10 |     Ballard Power Systems

OUR CORPORATE COMMITMENTS

Ballard Environmental, Social and Governance (ESG) Report 2019     | 11

OUR CORPORATE COMMITMENTS

	1st
In 2019 we conducted our first corporate greenhouse gas (GHG) inventory. Now that we have quantified our corporate emissions, we can address our climate impacts,

Ballard Canada’s 2017 & 2018 GHG Emissions Intensity

	2017 (tCO2 e/ employee)		2018 (tCO2 e/ employee)		Reduction Trends %
Scope 1
Natural Gas	2.82		2.01			29%
Gasoline	0.0015		0.001			28%
Subtotal	2.82		2.01			29%
Scope 2
Electricity	0.56		0.38			32%
Subtotal	0.56		0.38			32%
Scope 3
Air Travel	2.03		2.12			-4%
Employee Commute	1.18		1.15			3%
Paper	0.05		0.04			30%
Water	0.03		0.02			30%
Waste	0.02		0.01			30%
Hydrogen	3.04		2.14			20%
CO2 Purchased	0.025		0.017			20%
Hotels	0.05		0.04			20%
Shipping	1.25		1.34			-7%
Subtotal	7.69		6.87			11%
Total GHG emissions	11.08		9.27			16%

16%

Total greenhouse gas emissions per-employee are down 16% from 2017 to 2018

12 |     Ballard Power Systems

OUR CORPORATE COMMITMENTS

In future ESG reports, we hope to provide year-on-year metrics that include each previous year.

Overall, our carbon footprint increased by 19% from 2017 to 2018—but this should be seen in light of changes in our business mix and growth in our operation. While overall numbers increased, our per-employee emissions fell by 16%.

Moving forward, we intend to report our environmental impacts to the CDP (formerly the Carbon Disclosure Project), an international non-profit organization that has compiled the world’s largest, most comprehensive database of corporate climate impacts, risks and opportunities. The CDP shares its information to encourage corporate transparency and create momentum in tackling the climate crisis, and issues of deforestation and water security.

Ballard 2017 & 2018 GHG Emissions Intensity

Ballard Environmental, Social and Governance (ESG) Report 2019     | 15

OUR CORPORATE COMMITMENTS

Continually Reducing Energy Consumption

Throughout our facilities, we are committed to eliminating wasted energy, without negatively affecting our product development, testing, or manufacturing capacity.

Working with BC Hydro (our provincial electrical utility) and others, we developed a target list of 42 initiatives for reducing our energy use. In 2017 and 2018, we focused on implementing those initiatives that would have the greatest impact. As a result, we reduced our electricity consumption by 2.4MWh—enough electricity to power 225 typical BC homes for an entire year.

In 2019, company growth resulted in a total increase in electric consumption. However our ongoing work on energy-conservation initiatives reduced our per-employee electrical consumption by 19%, compared to 2018.

Power Consumption per Employee in kWh

	42
We developed a target list of 42 initiatives for reducing our energy use.
We reduced our electricity consumption by 2.4MWh—enough electricity to power 225 typical BC homes for an entire year.

16 |     Ballard Power Systems

OUR CORPORATE COMMITMENTS

Shrinking our Carbon Footprint: 2019 Initiatives

Through a series of initiatives we are reducing our carbon footprint across the company:

		●Reduced commuting: we are promoting work-from-home, carpooling, and bike-to-work initiatives to reduce commuting and associated emissions.
		●Promoting zero-emission vehicles among staff: to accelerate the adoption of ZEVs for daily use, we recently installed level 2 electric charging stations in our car park, and collaborated with Toyota to offer Ballard employees the opportunity to purchase Toyota’s hydrogen fuel cell cars. There are now 10 zero emission fuel cell cars among Ballard staff.
		●Saving energy on lighting: in our Burnaby facilities, we support the BC Hydro Lights Off campaign. In Denmark, our facilities have converted from conventional fluorescent lamps to LED lights.
		●Recirculating hydrogen in fuel stack testing: into our fuel cell stack test stations we have begun recirculating the hydrogen used in factory acceptance tests, making our fuel cell testing more sustainable.
		●Reducing electrical use in testing: our fuel cell test stations now use regenerative load banks that feed electricity to our internal microgrid, which reduces our consumption of external electricity.

	Toward a Circular Economy Ballard is a supporter of the circular economy, an economy that builds economic, natural, and social capital by designing out waste and pollution, and keeping products and materials in use. We work to reduce waste in our operations, and to reuse the materials in our products when the products reach end-of-life.

Ballard Environmental, Social and Governance (ESG) Report 2019     | 17

OUR CORPORATE COMMITMENTS

Fuel Cell Refurbishing and Recycling

	REUSE REDUCE RECYCLE
Thanks to the use of carbon bipolar plates in our stack design, we can reuse each plate several times
	95%
Used MEAs are sent to a specialized facility that reclaims 95% of the platinum

18 |     Ballard Power Systems

OUR CORPORATE COMMITMENTS

	20%
In 2019, the non-recycled waste per person dropped by 20%

Ballard Environmental, Social and Governance (ESG) Report 2019     | 19

BALLARD PEOPLE

Ballard People

BALLARD PEOPLE

We employ people in such diverse disciplines as electrochemistry, polymer chemistry, chemical, mechanical, electronic and electrical engineering, manufacturing, marketing, sales, business development, legal, finance, human resources, information technology and business management.

None of our employees in Canada, the United States, Denmark, or China are represented by labour unions. Each employee must agree to confidentiality provisions as part of the terms of his or her employment, and certain employees have also executed non-competition agreements.

Total Number of Employees*
Canada		Europe		United States		China		Total
610		60		18		15		703

*As of December 31, 2019

Workforce by Gender	Leadership by Gender
Employees by Age	Employee by Generation

	703
Globally, Ballard has a total of 703 employees in 4 regions

22 |     Ballard Power Systems

BALLARD PEOPLE

Employee Training and Leadership Development

In 2019 we had 3 LTIs (lost time incidents)

The injury frequency (TRIFR) among R&D and manufacturing technicians was .5

 

24 |     Ballard Power Systems

Our Vision

We deliver fuel cell power for a sustainable planet.

Our Mission

We use our fuel cell expertise to deliver valuable and innovative solutions to our customers globally, create rewarding opportunities for our team, provide extraordinary value to our shareholders and power the hydrogen society.

Our Values

		Listen and Deliver We listen to our customers, understand their business and deliver valuable and innovative solutions for lasting partnerships.
		Quality Always We deliver quality in everything we do.
		Inspire Excellence We live with integrity, passion, urgency, agility and humility.
		Row Together We achieve success through respect, trust and collaboration.
		Own It We step up, take ownership for our results and trust others to do the same.

---

GOVERNANCE AND ETHICS AT BALLARD

Governance and Ethics at Ballard

26 |     Ballard Power Systems

GOVERNANCE AND ETHICS AT BALLARD

Corporate Ownership and Structure

Unless otherwise indicated above, each entity is 100% owned. Ballard Power Systems Inc. holds all of the non-voting, participating shares of BDF IP Holdings LTD. and 34% of the voting, non-participating shares of the BDF IP Holdings Ltd., with each of Mercedes-Benz AG and Ford Motor Company holding 33% of the voting, non-participating shares of BDF IP Holdings Ltd.

References

Ballard Environmental, Social and Governance (ESG) Report 2019     | 27

Safety Award
The Preliminary Hazard Analysis (PHA) Chairs
Alex Barber, Marisa Menard, Harsimran Singh, Erin Rogers, Garth Currier

Innovation Award
MEA Sealing Technology Project
Kailyn Domican

Listen & Deliver Award
Production Leadership Team
Jane Calinisan, Alin Antonescu, Alberto Garcia, Leonardo Tobias, Nico Van Rooi, Leonardo Estrada

Quality Always Award
IT Helpdesk Team
Manolo Naagas, Alex Bunag, Dino De Guzman, Cory Purewal

Inspire Excellence Award
LCS MEA Production Roll Out
Emil Cretu

Row Together Award
HDv8 Prototype Kitting Team
Marc Brull, Norman Chor, Allan Callas, Johney Garcia, Paul Lam, Vahid Modares, Scott Sweeney, Sisimio Lumongsud, Renato Felix, Ellen Lindholm, Alan Li, John Wang, Mandy Tam, Patricia Chong, Marvio Longuinho, Lalaine Massing, Erid Mangmang, Maria Matos, Grace Valle, Zoltan Kollar, Rhealyn Orbon, Joseph Chou, Amy Xie, Gaspar Sanchez, Candice Burgers, Stephen Shen, Kevin Asperin, Eric Xie, Paul Mullin, Andy Chen, Isidio Jose Dos Santos Neto, Kevin Lin, Christian Tuazon, Erika Philco, Vivian Chang, Shoaib Khan, Michael Lou, Edith Hicks

Own It Award
Synergy JV Stack FAT Issue Resolution Team
Jason Chen, Mustafa Zaidi, Garth Currier

Accounts Payable Team
Janet Lee, Tracey Lu

POWER TO CHANGE THE WORLD^®

28

MANAGEMENT PROXY CIRCULAR
dated as of April 6, 2020

MATTERS TO BE VOTED UPON

Registered Shareholders or their duly appointed proxyholders will be voting on:

As of the date of this Circular, we know of no amendment, variation or other matter that may come before the Meeting other than the matters referred to in the Notice of Annual Meeting. If any other matter is properly brought before the Meeting, it is the intention of the persons named in the enclosed proxy to vote the proxy on that matter in accordance with their best judgment.

VOTING INFORMATION

SOLICITATION OF PROXIES

This Circular is furnished in connection with the solicitation of proxies by our management in connection with the Meeting to be held on Wednesday, June 3, 2020 at 1:00 p.m. (Pacific Daylight Time), or the date and place of any adjournment thereof. We are soliciting proxies primarily by mail, but our directors, officers and employees may solicit proxies personally, by telephone, by facsimile transmission or by other means of electronic communication. The cost of the solicitation will be borne by us. The approximate date on which this Circular and the related materials are first being sent to Registered Shareholders is April 26, 2020.

OBTAINING A PAPER COPY OF THE CIRCULAR AND FINANCIAL STATEMENTS

In lieu of mailing the Notice of Meeting, Circular and our audited financial statements and management's discussion and analysis for the year ended December 31, 2019, the Corporation is using notice-and-access to provide an electronic copy of these documents to registered shareholders and beneficial shareholders of the Corporation's Shares by posting them on www.ballard.com and on the Corporation's profile on www.SEDAR.com. For more information regarding notice-and-access, you may call toll free at 1-855-887-2244, from Canada or the United States.

If you wish to obtain a paper copy of these documents, you may call toll free at 1-877-907-7643, from Canada or the United States and enter the 16-digit control number located on your form of proxy or voting instruction form. If you do not have a control number please call toll free at 1-855-887-2243. You must call to request a paper copy by May 19, 2020 in order to receive a paper copy prior to the deadline for submission of your voting instructions or form of proxy. If your request is received on or after the date of the Meeting, then the documents will be sent to you within ten calendar days of your request. Ballard will provide a paper copy of the documents to any registered or beneficial shareholder upon request for a period of one year following the date of the filing of this Circular on www.SEDAR.com.

If you have standing instructions to receive paper copies of these documents and would like to revoke them, please call the individual who services your account.

Distribution of Meeting Materials to Beneficial Shareholders

The Corporation has distributed copies of the notice-and-access notice and VIF to the depositories and intermediaries for onward distribution to Beneficial Shareholders. Beneficial Shareholders who have previously provided standing instructions will receive a paper copy of the Notice of Meeting, Circular, financial statements and related management discussion and analysis. If you are a Beneficial Shareholder and the Corporation or its agent has sent these materials directly to you, your name and address and information about your holdings and securities have been obtained in accordance with securities regulatory requirements from the intermediary holding on your behalf.

29

HOW TO VOTE

Shareholders are encouraged to vote in advance of the Meeting at www.proxyvote.com.

Even if you currently plan to participate in the Meeting, you should consider voting your shares by proxy in advance so that your vote will be counted if you later decide not to attend the Meeting or in the event that you are unable to access the Meeting for any reason.

Vote Options

VOTE BY INTERNET:

To vote by Internet, visit www.proxyvote.com or scan the QR Code to access the website. You will need your 16-digit control number located on the form of proxy/voting instruction form. Vote cut-off is 5:00 p.m. (PDT) on Monday, June 1, 2020.

VOTE BY MAIL:

Return the completed, signed and dated form of proxy/voting instruction form by mail in the business reply envelope to: Data Processing Centre, P.O. Box 3700 STN Industrial Park, Markham, ON L3R 9Z9.

VOTE BY TELEPHONE:

As an alternative, you may enter your vote instruction by telephone at 1-800-474-7493 (English) or 1-800-474-7501 (French). You will need your 16-digit control number located on the form of proxy/voting instruction form.

Appointee Instructions

You are encouraged to appoint yourself or such other person (other than the named proxyholders) online at www.proxyvote.com as this will reduce the risk of any mail disruptions in the current environment and will allow you to share the Appointee Information you have created with any other person you have appointed to represent you at the Meeting more easily. If you do not designate the Appointee Information when completing your form of proxy or voting information form or if you do not provide the exact Appointee Identification Number and Appointee Name to any other person (other than the named proxyholders) who has been appointed to access and vote at the Meeting on your behalf, that other person will not be able to access the Meeting and vote on your behalf.

You must provide your Appointee the exact name and eight character Appointee Identification Number to access the Meeting. Appointees can only be validated at the Meeting using the exact name and eight character Appointee Identification Number you enter.

If you do not create an eight character Appointee Identification Number, your appointee will not be able to access the Meeting.

Proxy Cut-off

You are encouraged to provide your voting instructions or appoint your proxyholder online at www.proxyvote.com in accordance with the instructions on the form of proxy by no later than 5:00 p.m. (PDT) on Monday, June 1, 2020, or if the meeting is adjourned, at least 48 hours (not including Saturdays, Sundays or statutory holidays in B.C.) prior to the reconvened meeting (the proxy cutoff). If you prefer, you may also complete and return your form of proxy to Broadridge at Data Processing Centre, P.O. Box 3700 STN Industrial Park, Markham, ON, L3R 9Z9. Broadridge must receive your completed form of proxy or voting instruction form prior to the proxy deadline.

Providing your voting instructions or voting by proxy cutoff will ensure your vote is counted at the meeting even if you later decide not to attend the meeting or are unable to access it in the event of technical difficulties. If you attend and vote at the meeting during the live webcast, any proxy you have previously given will be revoked.

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Changing your Voting Instructions

If you change your mind about how you want to vote your shares, you can revoke your proxy form or voting instruction form by voting again on the internet or by phone.

Registered shareholders can revoke their instructions by delivering a signed written notice executed by the Registered Shareholder or by his or her attorney authorized in writing or, where the Registered Shareholder is a company, by a duly authorized officer or attorney of that company, and delivered to:

Beneficial owners who are unable to vote on the internet or by phone should consult their intermediary if they wish to revoke their instructions.

A proxy may also be revoked in any other manner provided by law. Any revocation of a proxy will not affect a matter on which a vote is taken before such revocation.

VOTING OF SHARES AND EXERCISE OF DISCRETION BY PROXIES

If you complete and submit your proxy properly, then the proxyholder named in the accompanying form of proxy will vote or withhold from voting the Shares represented by the proxy in accordance with your instructions.

If you do not specify a choice on any given matter to be voted upon, your Shares will be voted in favour of such matter. The proxy grants the proxyholder the discretion to vote on amendments to or variations of matters identified in the Notice of Annual Meeting and with respect to other matters that may properly come before the Meeting.

VOTING SHARES AND PRINCIPAL SHAREHOLDERS

As of the Record Date of April 6, 2020, we had 243,604,121 Shares issued and outstanding, each carrying the right to one vote. On a show of hands, every individual who is present as a Registered Shareholder or as a representative of one or more corporate Registered Shareholders, or who is holding a proxy on behalf of a Registered Shareholder who is not present at the Meeting, will have one vote, and on a poll, every Registered Shareholder present in person or represented by proxy and every person who is a representative of one or more corporate Registered Shareholders, will have one vote for each Share recorded in the Registered Shareholder’s name in the Corporation’s central securities register.

As of the Record Date, Weichai Power Co., Ltd. (“Weichai”) beneficially owns 46,131,712 Shares, representing 18.9% of all issued and outstanding Shares, each carrying the right to one vote. As of the Record Date, to the knowledge of our directors and executive officers, no other person beneficially owns, controls or directs, directly or indirectly, Shares carrying more than 10% of the voting rights attached to all issued and outstanding Shares carrying the right to vote in all circumstances.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

No one who has been a director, director nominee or executive officer of ours at any time since January 1, 2020, or any of his or her associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of Shares or otherwise, in any matter to be acted on at the Meeting other than the election of directors.

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ELECTION OF DIRECTORS

At the Meeting you will be asked to elect nine directors. All of our nominees are currently members of the Board. Each elected director will hold office until the end of our next annual shareholders’ meeting (or if no director is then elected, until a successor is elected) unless the director resigns or is otherwise removed from office earlier. If any nominee for election as a director advises us that she or he is unable to serve as a director, the persons named in the enclosed proxy will vote to elect a substitute director at their discretion.

As part of the strategic transaction with Weichai announced on November 13, 2018, Weichai has the right to nominate two directors to Ballard’s Board so long as Weichai holds at least 15% of Ballard’s outstanding Shares.

The following information pertains to our nominees for election as directors at the Meeting, as of April 6, 2020.

Douglas P. Hayhurst Age: 73 B.C., Canada Director since: 2012 Independent	Mr. Hayhurst’s principal occupation is corporate director. Previously, Mr. Hayhurst was executive Global Industry Leader with IBM Canada Business Consulting Services (consulting services) and with PricewaterhouseCoopers Management Consultants (consulting services). Prior to that, Mr. Hayhurst held various senior executive management roles with Price Waterhouse Canada including National Deputy Managing Partner (Toronto) and Managing Partner for British Columbia (Vancouver). Mr. Hayhurst received a Fellowship (FCA) from the Institutes of Chartered Accountants of British Columbia and of Ontario. He has completed the Directors Education Program of the Institute of Corporate Directors and has received his ICD.D designation.
	Board and Committee Membership	Attendance		Other Public Board Memberships
	Board Audit (Chair) Corporate Governance & Compensation	7 5 6	88% 100% 100%	Current: none Previous: Accend Capital Corporation; Canexus Corporation; Catalyst Paper Corporation(1); Northgate Minerals Corporation
	Securities Held(2)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines
	2020	5,000	208,282	213,282	$2,535,923	Achieved
	2019	5,000	199,801	204,801	$956,421	Achieved

Kui (Kevin) Jiang Age: 56 Shandong, China Director since: 2019 Independent(4) (Weichai nominee)	Mr. Jiang is President of Shandong Heavy Industry Group Co., Ltd. (heavy machinery manufacturing). He is also a non-executive director of Weichai Power Co., Ltd, (diesel engine, powertrain and hydraulic products manufacturing), a non-executive director of Sinotruk (Hong Kong) Limited, (heavy-duty truck manufacturing), a supervisor of KION Group AG (intralogistics, warehouse solutions and industrial trucks), and a director of the Power Solutions International Inc. (cleantech engine and powertrain manufacturing),. Previously, Mr. Jiang was deputy general manager of Shandong Bulldozer General Factory (heavy machinery manufacturing); deputy general manager of Shantui Construction Machinery Import and Export Company (heavy machinery); a director and senior officer of Shantui Engineering Machinery Co., Ltd. (heavy machinery); deputy general manager of Shandong Engineering Machinery Group Co., Ltd. (heavy machinery); executive deputy general manager and vice chairman of Weichai Group Holdings Limited, (diesel engine, powertrain and hydraulic products manufacturing); and chairman of Shanzhong Jianji Co., Ltd. (heavy machinery). He is a senior engineer and holds an MBA degree.
	Board and Committee Membership	Attendance		Other Public Board Memberships
	Board	6	75%	Current: Weichai Power Co., Ltd.; Sinotruk (Hong Kong) Limited; KION Group AG (supervisor); Power Solutions International Inc.; Shantui Engineering Machinery Co., Ltd. Previous: none
	Securities Held(2)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines(5)
	2020	0	0	0	0	N/A
	2019	0	0	0	0	N/A

Duy-Loan Le Age: 57 Texas, USA Director since: 2017 Independent	Ms. Le is President of DLE Management Consulting LLC (management consulting services), a position she has held since 2016. Previously, Ms. Le was an advanced technology ramp manager and a Senior Fellow at Texas Instruments Incorporated (semiconductor design and manufacturing) from 2002 to 2015; Program Manager and Fellow from 1998 to 2002; and Design Engineer and Manager from 1982 to 1998. Ms. Le is an inventor on 24 U.S. patents.
	Board and Committee Membership	Attendance		Other Public Board Memberships
	Board Corporate Governance & Compensation Commercial	8 6 3	100% 100% 100%	Current: National Instruments Inc.; Cree, Inc.; Atomera Incorporated Previous: none
	Securities Held(2)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines
	2020	50,000	32,538	82,538	$981,377	Achieved
	2019	50,000	23,785	73,785	$344,576	Achieved

Randy MacEwen Age: 51 B.C., Canada Director since: 2014 Non-Independent	Mr. MacEwen is President and Chief Executive Officer of Ballard, a position he has held since October 2014. Previously, Mr.MacEwen was the founder and Managing Partner at NextCleanTech LLC (consulting services) from 2010 to 2014; and President & CEO and Executive Vice President, Corporate Development at Solar Integrated Technologies, Inc. (solar) from 2006 to 2009 and 2005 to 2006, respectively. Prior to that, Mr. MacEwen was Executive Vice President, Corporate Development at Stuart Energy Systems Corporation (onsite hydrogen generation systems) from 2001 to 2005; and an associate at Torys LLP (law firm) from 1997 to 2001.
	Board and Committee Membership	Attendance		Other Public Board Memberships
	Board	8	100%	Current: none Previous: Solar Integrated Technologies Inc.
	Securities Held(2, 6)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines(5)
	2020	413,110	148,046	561,156	$6,672,145	N/A
	2019	318,310	148,046	466,356	$2,177,883	N/A

Marty Neese Age: 57 California, USA Director since: 2015 Independent	Mr. Neese’s principal occupation is corporate director. He is also co-founder of Nuvosil AS (silicon recycling). Previously, he was Chief Operating Officer of Velodyne LiDAR, Inc. (autonomous vehicles) from February 2017 to October 2017. Prior to that, Mr. Neese was Chief Operating Officer of SunPower Corporation (solar power equipment and services) from 2008 to 2017; responsible for Global Operations at Flextronics (electronics manufacturing services) from 2007 to 2008 following its acquisition of Solectron Corporation (electronics manufacturing services) where he was Executive Vice President from 2004 to 2007.
	Board and Committee Membership	Attendance		Other Public Board Memberships
	Board Commercial	8 3	100% 100%	Current: none Previous: none
	Securities Held(2)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines
	2020	0	67,013	67,013	$796,785	On track
	2019	0	59,040	59,040	$275,717	On track

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James Roche Age: 57 Ontario, Canada Director since: 2015 Independent	Mr. Roche is founder, President and Chief Executive Officer of Stratford Managers Corporation (management consulting services), a position he has held since 2008. Prior to that, Mr. Roche was co-founder, President and Chief Executive Officer of Tundra Semiconductor (semiconductor component manufacturer) from 1995 to 2006 and founding member and executive at Newbridge Networks Corporation (communications equipment manufacturer) from 1986 to 1995.
	Board and Committee Membership	Attendance		Other Public Board Memberships(1)
	Board (Chair) Audit Corporate Governance & Compensation Commercial	8 5 6 3	100% 100% 100% 100%	Current: none Previous: Wi-LAN Inc.; Tundra Semiconductor Corporation; Aztech Innovations Inc.
	Securities Held(2)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines
	2020	50,000	79,380	129,380	$1,538,328	On track
	2019	50,000	69,202	119,202	$556,673	On track

Shaojun (Sherman) Sun Age: 55 Shandong, China Director since: 2019 Independent(4) (Weichai nominee)	Mr. Sun is an Executive Director and Executive President of Weichai Power Co., Ltd. (diesel engine, powertrain and hydraulic products manufacturing), a director of Weichai Group Holdings Limited and chairman of Power Solutions International Inc. (cleantech engine and powertrain manufacturing). Previously, Mr. Sun was supervisor and chief engineer at Weifang Diesel Engine Factory (diesel engine manufacturing) and director of Torch Automobile Group Co., Ltd. (heavy machinery and automotive manufacturing). He holds doctorate degree in engineering.
	Board and Committee Membership	Attendance		Other Public Board Memberships
	Board Corporate Governance & Compensation	5 5	63% 83%	Current: Weichai Power Co., Ltd.; Power Solutions International Inc. Previous: none
	Securities Held(2)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines(5)
	2020	0	0	0	0	N/A
	2019	0	0	0	0	N/A

Ian Sutcliffe Age: 67 Ontario, Canada Director since: 2013 Independent	Mr. Sutcliffe’s principal occupation is corporate director. Mr. Sutcliffe has been a partner at Sutcliffe & Associates Management Consultants (management consulting services) since 1985. Previously, Mr. Sutcliffe was Executive Chair of PureFacts Financial Solutions (financial software services) from 2013 to 2016. Prior to that, he was co-CEO of PHeMI, Inc. (medical software and IT infrastructure) from 2010 to 2012; CEO, Chairman and independent director of BluePoint Data (IT services) from 2001 to 2011; and Vice Chair and CEO of BCS Global Networks Inc. (video conferencing services) from 2003 to 2004. Mr. Sutcliffe was independent director, IBM Canada Limited (IT service management) from 1998 to 2001. Mr. Sutcliffe was President of Mediconsult.com, Inc. (internet health services) from 1995 to 1999 and President and CEO from 1999 to 2001.
	Board and Committee Membership	Attendance		Other Public Board Memberships
	Board Audit Commercial	8 5 3	100% 100% 100%	Current: none Previous: BluePoint Data Inc.(1); BCS Global Networks Inc.
	Securities Held(2)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines
	2020	10,000	97,959	107,959	$1,283,633	On track
	2019	10,000	90,495	100,495	$469,312	On track

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Janet Woodruff Age: 63 B.C., Canada Director since: 2017 Independent	Ms. Woodruff’s principal occupation is corporate director. Previously, Ms. Woodruff served as acting CEO to the Transportation Investment Corporation (transportation infrastructure management) from 2014 to 2015, advisor to the board (2013-2014) and interim Chief Financial Officer (2012-2013). Prior to that, she was Vice President and Special Advisor to BC Hydro (public utility) from 2010 to 2011; Interim President (2009-2010) and Vice President, Corporate Services and Chief Financial Officer (2007-2008) of BC Transmission Corporation (electricity transmission infrastructure); and Chief Financial Officer and Vice President, Systems Development and Performance of Vancouver Coastal Health from 2003 to 2007.
	Board and Committee Membership	Attendance		Other Public Board Memberships
	Board Audit Corporate Governance & Compensation	7 5 6	88% 100% 100%	Current(7): Keyera Corporation; Altus Group Limited; Capstone Infrastructure Corporation; FortisBC Energy Inc. and FortisBC Inc. Previous: Nordion Inc. (formerly MDS Inc.); Pacific Northern Gas
	Securities Held(2)
	Year	Shares	DSUs	Total of Shares and DSUs	Value of Shares and DSUs (CDN$)(3)	Director Share Ownership Guidelines
	2020	0	31,220	31,220	$371,206	On track
	2019	0	22,739	22,739	$106,191	On track

APPOINTMENT OF AUDITORS

Our Audit Committee has recommended that KPMG LLP, Chartered Accountants, of 777 Dunsmuir Street, Vancouver, British Columbia, be nominated at the Meeting for re-appointment as our external auditors. Our Audit Committee will fix the remuneration of our external auditors if authorized to do so by Shareholders at the Meeting. It is expected that representatives of KPMG LLP will be present at the Meeting. KPMG LLP were appointed as our external auditors in 1999. We comply with the requirement regarding the rotation of our audit engagement partner every five years. A new audit engagement partner will be appointed later in the year.

The following table shows the total fees we incurred with KPMG LLP in 2019 and 2018:

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For a more detailed description of the Audit Committee or to see the Audit Committee’s mandate, a copy of which is posted on our website (www.ballard.com), see the section entitled “Audit Committee Matters” in our Annual Information Form dated March 5, 2020, which section is incorporated by reference into this Circular.

ADVISORY VOTE ON APPROACH TO EXECUTIVE COMPENSATION

The Corporate Governance & Compensation Committee (“CGCC”) monitors developments and trends relating to best practices on corporate governance and executive compensation, including relating to “say-on-pay” in Canada and in the United States. In the United States, the SEC has established “say-on-pay” advisory shareholder vote requirements for certain issuers. Although the Corporation’s shares are traded on NASDAQ, Ballard is a “foreign private issuer” under applicable SEC rules and, accordingly, these requirements do not apply to the Corporation. Although “say-on-pay” shareholder votes have yet to be mandated in Canada, a number of larger issuers in Canada have voluntarily implemented such advisory votes. Ballard has also voluntarily implemented “say on pay” advisory votes. At the request of the Board, our Shareholders have passed resolutions, on an advisory basis, accepting the Corporation’s approach to executive compensation since 2011.

Over the past three years, the CGCC has continued to review and refine our executive compensation philosophy, executive compensation programs and executive compensation disclosure. In 2016, we revised our approach to executive compensation disclosure to make the disclosure clearer, more transparent and more communicative. We believe these efforts, along with improved corporate financial performance, led to an increase in our votes for our Say on Pay resolution, which passed by over 90% in each of 2017, 2018 and 2019, as compared to 72.5% in 2016.

The CGCC recommended to the Board that Ballard Shareholders again be provided the opportunity, on an advisory basis, to vote at the Meeting in respect of the Corporation’s approach to executive compensation. The CGCC also recommended that adoption by the Board of a formal “say-on-pay” policy should continue to be deferred until applicable Canadian securities regulatory authorities have set out the regulatory requirements applicable to the Corporation.

Accordingly, the Shareholders of the Corporation are able to vote at this Meeting, on an advisory and non-binding basis, “FOR” or “AGAINST” the Corporation’s current approach to executive compensation through the following resolution:

“RESOLVED, on an advisory basis and not to diminish the role and responsibilities of the Board of Directors of the Corporation, that the Shareholders accept the approach to executive compensation disclosed in the Corporation’s management proxy circular delivered in advance of the Corporation’s 2020 annual meeting of Shareholders.”

The Board believes that Shareholders should be well informed about and fully understand the objectives, philosophy and principles that it has used to make executive compensation decisions. For information regarding Ballard’s approach to executive compensation, Shareholders should review the section entitled “Executive Compensation – Compensation Discussion and Analysis” appearing below in this Circular.

Approval of the above advisory resolution will require an affirmative vote of a majority of the votes cast on the matter at the Meeting. Abstentions will have no effect and will not be counted as votes cast on the resolution. As the vote on this resolution is advisory, the results will not be binding on the Board or the CGCC. However, the Board and the CGCC will take the results of the advisory vote into account, as appropriate, as part of their ongoing review of the Corporation’s executive compensation objectives, philosophy, principles, policies and programs.

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CORPORATE GOVERNANCE

Our Board and senior management consider good corporate governance to be central to our effective and efficient operation. We monitor corporate governance initiatives as they develop and benchmark industry practices to ensure that we are in compliance with applicable corporate governance rules.

Our corporate governance practices are reflected in our Corporate Governance Policies, which provide for board composition and director qualification standards, tenure and term limits, director responsibilities, the form and amount of director compensation, director orientation and continuing education, management succession planning and performance evaluation of the Board. A copy of our Corporate Governance Policies can be found on our website (http://ballard.com/investors/governance). We have also reviewed our internal control and disclosure procedures, and are satisfied that they are sufficient to enable our Chief Executive Officer and Chief Financial Officer to certify our interim and annual financial reports filed with Canadian securities regulatory authorities, and to certify our annual financial reports filed with the SEC.

In addition, we have set up a process for Shareholders to communicate to the Board, the details of which can be found on our website. A summary of shareholder feedback is provided to the Board through a quarterly report.

We believe that we comply with all applicable Canadian securities administrators (“CSA”) and NASDAQ corporate governance rules and guidelines. The CSA requires that listed corporations subject to National Instrument 58-101 - Disclosure of Corporate Governance Practices (“NI 58-101”) disclose their policies respecting corporate governance. We comply with NI 58-101, which addresses matters such as the constitution and independence of corporate boards, the functions to be performed by boards and their committees, and the effectiveness and education of board members. We are exempt from the NASDAQ corporate governance rule requiring that each NASDAQ quoted company has in place a minimum quorum requirement for shareholder meetings of 33 1/3% of the outstanding shares of the company’s voting common stock. Our by-laws currently provide that a quorum is met if holders of at least 25% of the votes eligible to be cast at a Shareholders’ meeting are present or represented by proxy at the meeting.

BOARD COMPOSITION AND NOMINATION PROCESS

All of our directors are independent except for Randy MacEwen, our President and Chief Executive Officer. “Independence” is judged in accordance with the provisions of the United States Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), and as determined by the CSA and the NASDAQ. Mr. Jiang and Mr. Sun, as Weichai nominees, are not considered independent under NASDAQ rules for the purposes of serving on the Audit Committee. We conduct an annual review of the other corporate boards on which our directors sit, and have determined that currently there are no board interlocks with respect to our directors. The Board has also established a guideline for the maximum number of public company boards on which a director should sit. In 2019, this guideline was set at no more than five public company boards, including the Corporation's Board; and for directors who are CEOs (or hold similar positions), no more than two public company boards in addition to his/her own company’s board. In calculating service on public company boards, service on a board of a company affiliated with the director’s employer is not included. Currently all of our board members comply with this guideline.

The Board believes that its membership should be composed of highly qualified directors with diverse and complementary backgrounds, skills sets and experience bases and who demonstrate integrity and suitability for overseeing management. The CGCC and the Board have determined that the criteria to be considered when selecting directors and recommending their election by the Shareholders include the following:

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The following table identifies some of the current skills and other factors considered as part of the competency matrix developed by the CGCC. Each director was asked to indicate the top three competencies which he/she believes they possess.

In addition to these criteria, we also take into consideration other industry and business factors in determining the composition of our Board.

Our CGCC conducts an annual process under which an assessment is made of the skills, expertise and competencies of the directors and is compared to our needs and the needs of the Board. This process culminates in a recommendation to the Board of individual nominee directors for election at our annual Shareholders’ meeting. To this end, the CGCC will, when identifying candidates to recommend for appointment or election to the Board:

Currently, we have two women serving on our board, a representation of 22%. As part of its approach to Board diversity, the Board has not established specific targets for any diversity criteria at this time. The CGCC will assess the effectiveness of this approach annually and recommend amendments to the Board, including the possible adoption of measurable objectives for achieving Board diversity, as appropriate. The Corporation is a member of the Canadian chapter of the 30% Club, a group whose aspirational goal is for 30% of board seats and C-Suites to be held by women by 2022.

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TENURE AND TERM LIMITS

Directors are elected yearly at our annual Shareholders’ meeting and serve on the Board until the following annual Shareholders’ meeting, at which time they either stand for re-election or leave the Board. If no meeting is held, each director serves until his or her successor is elected or appointed, unless the director resigns earlier.

Independent directors are expected to serve on at least one Committee of the Board. The CGCC and Audit Committee are tasked with ensuring a rotation of Committee members and Chairs to broaden the experience and skills of each member of the Board, and ensure an appropriate mix of experience and expertise in respect of the various roles of the Board and its committees. A director may only serve on the Board for a maximum of 15 consecutive years. These provisions do not apply to the President & Chief Executive Officer in his/her role as a Board member.

DIRECTOR SHARE OWNERSHIP GUIDELINES

We have minimum share ownership guidelines that apply to our directors, other than management directors (Mr. MacEwen, who is subject to similar guidelines for our executive officers) and directors who are shareholder nominees appointed pursuant to agreements with the Corporation (Mr. Jiang and Mr. Sun, who are Weichai nominees).

All other directors are required to hold at least the number of Ballard Shares that has a value equivalent to three times the director’s annual retainer. Directors have six years from the date that they are first elected to the Board to comply with this minimum share ownership guideline. In determining whether a director is in compliance with the minimum share ownership guidelines, any DSUs that a director receives as payment for all or part of their annual retainer will be credited towards calculating achievement of the minimum share ownership requirements.

The value of Shares and DSUs held by directors will be measured on or about December 31^st of each year based on the purchase price actually paid by the director for such Shares, or the value of DSUs or Shares received by the director when issued to him or her by the Corporation, as applicable.

Any director who fails to comply with the minimum share ownership guidelines will not be eligible to stand for re-election. Currently, all of our directors have met or are on track to achieve these guidelines, as applicable.

BOARD MEETINGS

The Board meets on a regularly scheduled basis and directors are kept informed of our business and operations at meetings of the Board and its committees, and through reports by and discussions with management. In 2019, in camera sessions, chaired by the Chair of the Board, were held at each regularly scheduled Board meeting involving all of the independent directors without the presence of management. In addition, regular communications between the directors and management occur apart from regularly scheduled Board and committee meetings. The Board has set a minimum meeting attendance guideline of 75%. Non-compliance with this guideline by a director is one of the factors considered in his or her individual performance evaluation at the end of the year. In 2019, Mr. Sun did not achieve the minimum attendance guideline, partly as a result of his joining the Board in January 2019 with already existing conflicts for the board calendar.

ROLES AND RESPONSIBILITIES

The Board operates under a formal mandate (a copy of which is attached as Appendix “A” and is posted on our website (http://ballard.com/investors/governance)), which sets out its duties and responsibilities, including matters such as corporate strategy, fiscal management and reporting, selection of management, legal and regulatory compliance, risk management, external communications and performance evaluation. The Board has also established terms of reference for the Board Chair and for individual directors (copies of which are also posted on our website), which set out the directors’ individual responsibilities and duties. Terms of reference are also established for the CEO. These terms of reference and our Corporate Governance Policies serve as a code of conduct with which each director is expected to comply, and address matters such as conflicts of interest, the duties and standard of care of directors, the level of availability expected of directors, requirements for maximizing the effectiveness of Board and committee meetings, and considerations that directors are to keep in mind in order to make effective and informed decisions.

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In addition, we have a Board-approved Code of Ethics, which applies to all members of the Board, as well as our officers and employees. A copy of the Code of Ethics can be found on our website (http://ballard.com/investors/governance). This document is reviewed annually and updated or revised as necessary. Annually, all of our regular full/part time and temporary employees of Ballard and our subsidiaries globally, and the board of directors, are required to formally acknowledge they have read, reviewed and comply with the Code of Ethics. A compliance report is then presented to the Audit Committee and Board.

The Chair of the Board is responsible for ensuring the appropriate organization, content and flow of information to the Board and that all concerns of the directors are addressed. The Chair of the Board reviews and sets the agenda for each Board meeting. The Chair of the Board is also responsible for organizing and setting the frequency of Board meetings and ensuring that Board meetings are conducted efficiently. The Chair of the Board is an independent director.

Each year, the Board identifies a list of focus priorities for the Board during the year. The CGCC and the Board regularly monitors the Board’s progress against these priorities throughout the year.

BOARD ORIENTATION AND EDUCATION

We have established a formal director orientation and ongoing education program. Upon joining our Board, each director receives an orientation regarding our business. Such orientation includes site visits to our manufacturing facilities, presentations regarding our business, technology and products, and a manual that contains various reference documents and information. Continuing education is offered by way of ongoing circulation of informative materials aimed at topical subject matters, material industry developments, and management presentations at Board meetings, as well as guest speakers who are invited to speak to our Board on various topics. From time to time we have invited guest speakers to speak to our Board about the fuel cell industry, government regulation, regional markets, capital markets, corporate governance and risk management, and internal management representatives to speak about various issues, including relating to our industry, business, strategy, markets, customers, projects, technology, products, services, operations, employee relations, investor relations and risks. The orientation and ongoing educational presentations that are made by internal management provide an opportunity for Board members to meet and interact with members of our management team.

In May, several directors attended a hydrogen and fuel cell industry conference in Vancouver, Canada. In September 2019, the Board and senior management travelled to Ballard Europe A/S facilities in Denmark for meetings and presentations relating to the Corporation’s strategy in Europe, as well as developments in the European marine and backup power segments. In addition to regular management presentations on business and operations, the Board also received educational presentations from management on hydrogen and fuel cell industry value chain and ecosystem, and technology relating to fuel cell components and manufacturing.

SHAREHOLDER FEEDBACK AND COMMUNICATION

We have an e-mail process for Shareholders to communicate with the Board, through the Chair of the Board. Shareholders who wish to send a message to the Chair of the Board can find the email address on our website (http://ballard.com/contact-us). In addition, a summary of shareholder feedback that is received by us is provided to the Board through a quarterly report.

BOARD AND DIRECTOR PERFORMANCE EVALUATIONS

Each year, the Board conducts an evaluation and review of its performance during the past year. The evaluation is conducted through a process determined from time to time by the CGCC which elicits responses from individual directors on a confidential basis regarding performance of the Board and individual directors. The process may include the completion of a questionnaire by all of the directors as well as individual director self-evaluations and peer evaluations. The CGCC presents the summary results to the full Board, which then determines appropriate actions and changes to improve Board effectiveness.

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COMMITTEES OF THE BOARD

The Board currently has three standing committees: (1) the Audit Committee; (2) the Corporate Governance & Compensation Committee (CGCC); and (3) the Commercial Committee. The Commercial Committee was established in 2019.

Each committee has been delegated certain responsibilities, performs certain advisory functions and either makes certain decisions or makes recommendations to the Board. Each committee chair reports on the activities of the committee to the Board following each committee meeting. The members of these committees are all independent.

The following chart sets out the current members of our standing committees:

After the Meeting, we will reconstitute all of the standing committees to reflect the newly elected Board.

Audit Committee

The Audit Committee is responsible for assisting the Board in fulfilling its oversight responsibilities regarding the integrity of the Corporation’s accounting and financial reporting; the Corporation’s systems of internal controls over financial reporting; the independence and performance of the Corporation’s external and internal auditors; the identification and management of the Corporation’s risks; the Corporation’s whistleblower reporting processes; the Corporation’s financial policies; and the review and approval of related party transactions.

The Audit Committee is responsible for recommending the appointment of our external auditors (for Shareholder approval at our annual general meeting), monitoring the external auditors’ qualifications and independence, and determining the appropriate level of remuneration for the external auditors. The external auditors report directly to the Audit Committee. The Audit Committee also approves in advance, on a case-by-case basis, any services to be provided by the external auditors that are not related to the audit. The Audit Committee is also responsible for the appointment of our internal auditors (or persons responsible for the function), and directing, monitoring and providing guidance to the internal audit function and review the performance of the internal auditor at least annually.

The external auditors report directly to the Audit Committee. The Audit Committee is responsible for evaluating the effectiveness of the external audit and the external auditors and annually conducts a formal audit effectiveness assessment to drive continuous improvement in the external audit. The Audit Committee, in coordination with Management and KPMG, continues to participate in the Canadian Public Accountability Board’s audit quality indicators project. The project is aimed at improving audit quality through the use of quantitative measures to evaluate audit quality. Using the year-end audit quality indicators report, the Audit Committee will evaluate how to best integrate the indicators into its regular processes and into the external audit.

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In addition, the Audit Committee is mandated to review all financial disclosure contained in prospectuses, annual reports, annual information forms, management proxy circulars and other similar documents. The Audit Committee reviews and approves, in advance, related party transactions (including transactions and agreements in respect of which a director or executive officer has a material interest) on a case-by-case basis.

For a more detailed description of the Audit Committee or to see the Audit Committee’s mandate, see the section entitled “Audit Committee Matters” in our Annual Information Form dated March 5, 2020, which section is incorporated by reference into this Circular. The Audit Committee’s mandate is also posted on our website (http://ballard.com/investors/governance).

The Audit Committee met five (5) times during 2019. The Audit Committee is constituted in accordance with SEC rules, applicable Canadian securities laws and applicable NASDAQ rules, and assists the Board in fulfilling its responsibilities by reviewing financial information, the systems of corporate controls and the audit process. The Audit Committee has at least two members, Douglas P. Hayhurst and Janet Woodruff, who qualify as audit committee financial experts under applicable securities regulations. All of the members of the Audit Committee are independent directors in accordance with the applicable Canadian and United States securities laws and exchange requirements and are financially literate.

Corporate Governance & Compensation Committee

The CGCC is responsible for the following:

The CGCC is also responsible for:

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The CGCC has the authority to appoint compensation consultants, determine their level of remuneration, and oversee and terminate their services. Such consultants report directly to the CGCC.

The CGCC does not have a written policy regarding succession planning or recruitment of executive officers. However, the CGCC takes the same approach when identifying candidates for executive officers that it takes in respect of director candidates. The CGCC will, when identifying executive officer candidates:

The CGCC has not established targets for any diversity criteria for executive officers at this time. The CGCC and Board annually review executive succession plans and emerging leadership candidates, including a review of demographic information to ensure the correct focus on diversity. Individual development plans are established by management, including those for female leaders, and the Corporation has sponsored and supported participation in activities including the Minerva “Women in” annual luncheon series and Board-led career discussions. As of the Record Date, the corporation has two women executive officers.

The CGCC’s mandate is posted on our website (http://ballard.com/investors/governance). The mandate is reviewed annually and the CGCC’s performance is assessed annually through a process overseen by the Board.

The CGCC met six (6) times during 2019. Collectively, the CCGC members have extensive compensation-related experience as senior executives (past and present) and members of the board of directors and committees of other public and private corporations. The Board is confident that the CCGC collectively has the knowledge, experience and background to carry out the Committee’s mandate effectively and to make executive compensation decisions in the best interests of the Corporation and its Shareholders.

Commercial Committee

Following the investment by Weichai in the Corporation in late 2018, and the appointment of two Weichai nominees to the Board in early 2019, the Board established the Commercial Committee to oversee the management of the Corporation's business and affairs relating to certain existing or prospective key partners (which may include customers, suppliers, contract manufacturers, joint venture or other strategic partners) and commercially sensitive and/or proprietary information.

Members of the Commercial Committee must not, in the opinion of the Board: (i) have a direct or indirect material relationship with any key partner of the Corporation; or (ii) have a relationship with a key partner that could reasonably be expected to compromise any commercially sensitive and/or proprietary information of any other key partners or of the Corporation.

The Commercial Committee’s mandate is posted on our website (http://ballard.com/investors/governance).

The Commercial Committee met three (3) times in 2019.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This section discusses the elements of compensation earned by our “Named Executive Officers” (or “NEOs”) as of December 31, 2019:

INTRODUCTION

The Corporation puts a considerable amount of effort into the development, and ongoing monitoring and management, of our executive compensation plan. This includes monitoring of industry best-practices, benchmarking against relevant comparators inside and outside the fuel cell industry sector, and the involvement of expert third parties to provide independent advice. We also solicit investor feedback on our executive compensation approach by providing an advisory “say-on-pay” vote.

Executive Compensation Program Highlights

Ballard’s executive compensation program is designed to attract the skillsets and experience needed to lead the development and execution of the Corporation’s strategy, to incent and reward executives appropriately for performance and risk management, to incent retention and to align executive compensation with long-term shareholder value. Our executive compensation program is comprised of the following elements:

With these compensation elements, a significant proportion of compensation is put “at risk” (for NEOs, from 53% to 69% of total compensation) since it depends on successful corporate and individual performance as well as growth in Ballard’s share price – which effectively aligns executive compensation with shareholder interests.

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To further align with the shareholder experience, our executive officers are required to comply with minimum share ownership requirements. Specifically, executive officers (other than the CEO) are required to hold 100% of their individual base salary in Shares or DSUs. The CEO is required to hold 300% of his base salary in Shares or DSUs. All executives have 5 years in which to meet this minimum share ownership requirement.

In setting, monitoring and managing executive compensation, the Corporation ensures careful consideration of the relevant factors impacting each element of the total compensation plan through a rigorous process, with appropriate oversight designed to pay appropriate short- and long-term incentive amounts that are strongly aligned with the creation of long-term value for shareholders.

All executives have entered into a standard executive employment agreement, each of which includes provisions dealing with termination (and, in certain cases, change of control), claw-back provisions and minimum shareholding provisions.

Significant Recent Program Changes

Executive Claw-Back Provisions

Since 2017, all Named Executive Officers have agreed to the following claw-back provision:

Executive Compensation Review

Context of Our Executive Compensation Practices

There are a number of industry and business factors that present challenges to creating and implementing an effective executive compensation program, including the following:

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The CGCC seeks to balance these factors, the expectations of our shareholders and the highest standards of governance. As our business becomes more robust and predictable through the execution of our strategy, the CGCC intends to continue to align compensation more predictably to performance, for example, through the use of performance metrics that demonstrate and measure our performance relative to comparator group companies.

Highlights of our Executive Compensation Philosophy

Our compensation philosophy focuses on creating shareholder value, paying for performance and effective risk management. Our objective is to pay competitively in the markets in which we compete for talent, while also aligning compensation with value created for shareholders.

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We target our compensation at the 50^th percentile of the market, with actual compensation varying above and below based on relative experience and on performance.

The Use of Benchmarking

Our overall compensation objective is to pay executives, on average, around the 50^th percentile of our comparator group for achieving performance goals at the levels targeted by the Board. Over-achievement or under-achievement will result in actual payments for performance-based compensation being over or under the targeted amounts.

Benchmarking for a company of Ballard’s size and stage of business is particularly challenging as our industry is nascent and there are few direct comparables. Many of the direct competitors in our industry are private or smaller fuel cell companies that are publicly traded. By contrast, companies in broader comparator groups, such as industrials and technology companies, are often significantly larger revenue companies that provide similarly inappropriate benchmarks. In determining the appropriate comparator group, the CGCC considers several factors detailed below, including the labor markets in which we compete for executive talent.

In 2019, the CGCC, working with Willis Towers Watson, updated the comparator companies comprising the Corporation’s compensation comparator group to better reflect the Corporation’s current business size, complexity and market focus. A revised list of comparator companies was reviewed and accepted by the CGCC. The selected group of comparators includes a suitable mix of Canadian and United States companies exhibiting a mix of revenues, employee base, asset base, market capitalization, business complexity and market focus. This comparator group provides the primary source of compensation data used to review the competitiveness of our executive compensation. In addition, market survey data is used as a secondary source. The CGCC reviews and updates the composition of the comparator group annually.

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The CGCC compares each executive officer’s annual salary, target annual incentive bonus and long-term incentive compensation value, both separately and in the aggregate, to amounts paid for similar positions at comparator group companies to the extent possible.

Market Analysis

In 2019, Willis Towers Watson assessed the market competitiveness of the compensation arrangements for Ballard’s executive team against the comparator group of companies, considering the market data in nominal dollars (US$ = CDN$) for target total direct compensation (salary + target bonus + long-term incentives). Based on this assessment, no changes were made to the compensation structure for 2019 as outlined below.

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Executive Pay Mix and the Emphasis on “At Risk” Pay

We emphasize performance by linking a significant proportion of our executive officers’ total annual compensation to corporate and individual performance. For 2019, the amount of target annual compensation earned that was “at risk” was 69% for the CEO, and 59% for our other Named Executive Officers, in the form of variable and/or performance-related compensation as shown below (including annual bonus, PSUs and stock options). As such, executives will only receive value from those elements to the extent that the relevant performance conditions are met. With long-term incentive (LTI), values also aligned with share price performance.

Total Target Direct Compensation Mix - CEO		Total Target Direct Compensation Mix - Other Executives

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Pay for Performance and Incentive Awards aligned with Shareholders Interests

The alignment between pay for performance for executive officers and Shareholder interests is clearly demonstrated as follows:

Annual Bonus Plan – Performance measures are substantially and directly linked to the Annual Operating Plan and achievement against those measures determines the size of the annual executive bonus award. When corporate performance is below the minimum level expected by the Board this amount could be zero. Equally, over achievement against the measures may result in payment of bonus greater than the targeted amount, up to a capped amount.

Long Term Incentive Plan –PSUs deliver compensation value to executives by tying the earning of PSUs (i.e. ability to receive value from units) to the extent that performance measures related to key business objectives are met, while the value of each vested unit changes in line with movements in the Corporation’s share price. Stock Options align pay with share price performance as the compensation realised is based solely on share price appreciation.

How Executive Compensation is Determined

The CGCC reviews and approves executive officers’ benefit policies and compensation plans, including our annual bonus plan and our long-term equity-based compensation plans. As part of its mandate, the CGCC:

Annual Salary

The CGCC approves the annual salary of our executive officers. Salary guidelines and adjustments for our executive officers are considered with reference to:

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In 2019, based on the analysis and recommendations from Willis Towers Watson, the following base salaries were approved by the CGCC:

Annual Bonus for Executive Officers

In 2019, the annual target bonus was 100% of base salary for Mr. MacEwen, and 70% of base salary for Mr. Guglielmin and Mr. Campbell, which were unchanged from 2018. The annual target bonus for Dr. Colbow was increased from 55% in 2018 to 70% of base salary for 2019, reflecting the change in Dr. Colbow’s role from Vice President, Technology & Product Development to Vice President and Chief Technology Officer. For Ms. Sidhu, who was appointed Vice President, Operations in December 2018, her annual target bonus was established at 55% of base salary. Annual performance bonus payments for each of the executive officers are determined at the discretion of the CGCC and the Board with reference to (i) actual annual corporate performance against predetermined Corporate Scorecard goals, resulting in a Corporate Scorecard Multiplier, and (ii) actual annual individual executive performance against predetermined annual individual objectives, resulting in an Individual Performance Multiplier.

The Corporate Scorecard typically includes weighted quantitative financial objectives and weighted qualitative strategic objectives. The individual scorecard performance is determined by the achievement of the executive against a weighted individual scorecard with quantitative and qualitative goals that typically support and align with the Corporate Scorecard as well as the individual executive’s performance against the Corporation’s cultural values.

For a full discussion of annual incentive compensation for our President and CEO, see the section entitled “CEO Compensation”.

Methodology for Determining Annual Incentives

For 2019, the actual annual bonus for each executive officer is determined by the CGCC on the basis of the following formula:

Corporate Scorecard Multiplier

The Corporate Scorecard Multiplier is determined on completion of each fiscal year by the CGCC and approved by the Board with reference to achievement against the corporate goals set out in a Corporate Performance Scorecard approved by the CGCC and the Board at the commencement of the year. Each corporate performance goal on the Corporate Performance Scorecard is assigned a relative weighting in terms of importance to the performance of the Corporation. The Corporate Performance Scorecard typically includes a mix of quantitative financial metrics and qualitative goals. The quantitative financial metrics typically include a threshold level of performance below which the contribution of that goal to the overall corporate scorecard multiplier is zero, and a maximum beyond which no further contribution to the corporate scorecard multiplier accrues. The financial metrics typically contain a “stretch” achievement component whereby 100% achievement of the pre-determined financial metrics against the Corporation’s annual operating plan goals equates to 50% payout with respect to such financial goals. This means that in order to achieve 100% payout against the financial targets in the Corporate Performance Scorecard, actual annual performance must exceed the annual operating plan.

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For 2019, the Corporate Performance Scorecard reflected a balance of quantitative annual goals focused on delivery of the 2019 operating plan (50% of the scorecard) and qualitative goals focused on key strategic outcomes to be achieved during 2019 to better position the Corporation for longer term success (50% of the scorecard).

The quantitative annual goals related to annual revenue, gross margin contribution (in dollars) and cash flow from operations. The revenue, gross margin and cash flow from operations goals were weighted at 15%, 15% and 20% (respectively), representing a total of 50% of the 2019 Corporate Scorecard. The range of possible scoring against each of these quantitative goals was between 0% and 150% of achievement, with a 50% rating being achieved at the Corporation’s annual operating plan for 2019.

The two qualitative goals were each weighted at 25% (50% in total). The first qualitative goal was focused on the Corporation’s achievement against key milestones for the development program with Weichai Ballard Hy-Energy Technologies Co., Ltd. (the “Weichai-Ballard JV”). The second qualitative goal was focused on signing an agreement relating to a significant strategic transaction, major customer program or major commercial contract for a market outside of China that supports future scaling and profitability.

Based on the Corporation’s actual performance in 2019, the CGCC and Board assessed the Corporate Performance Scorecard as follows:

The Corporation’s 2019 revenue of $106.3 million exceeded the annual operating plan target, as did the defined metric of cash flow from operations. The 2019 gross margin contribution of $22.6 million did not achieve 100% of the annual operating plan target.

The Corporation met or exceeded the key milestones for the Weichai-Ballard JV development program, with construction of the joint venture facility moving toward commissioning in 2020; and receiving purchase orders for fuel cell products from the Weichai-Ballard JV. The Corporation also signed several strategic agreements in 2019, including for the H2Bus Europe Consortium; a heavy-duty mining truck demonstration in South Africa with Anglo American; and a development agreement with Hydrogene de France for development and integration of multi-MW scale fuel cell system in South America.

Based on its review and assessment, the CGCC and Board determined the Corporate Scorecard Multiplier achievement for 2019 was 107.5%.

Individual Performance Multiplier

The individual performance multiplier is determined with reference to achievement against the individual goals set for each executive officer and demonstration of the Corporation’s cultural values. Individual goals are set for individual executive officers by the CEO and reviewed by the CGCC, and are based on agreed, objective and identifiable measures related to their roles, and aligned to the corporate performance goals. An individual performance multiplier greater than 100% may be awarded for superior performance against these goals, with an individual performance multiplier of less than 100% being awarded for performance that does not achieve the goals.

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In 2019, each Named Executive Officer had an individual multiplier of 125%. Our executive officers received their 2019 bonus in cash.

A summary of the Named Executive Officers’ annual bonus payments for 2019 is as follows:

Long Term Incentives

We provide our executive officers with equity-based long-term incentives through the Consolidated Share Option Plan (“Option Plan”) and the Consolidated Share Distribution Plan (“SDP”). Our equity-based long-term incentives typically take the form of Stock Options or PSUs. These plans are designed to align executive officer remuneration with performance and long-term shareholder value. They serve a vital role in retaining executives as value under the plans is only received over time.

Although PSUs are earned during each of the three years based on performance, they are also subject to a vesting time period. For awards made in 2016 and after, earned PSUs vest three years after the award grant date. For example, for PSUs granted in 2017, one third are earned in each of 2018, 2019 and 2020; all earned PSUs then vest in 2020. Redemption of vested PSUs may be satisfied either with Shares bought under the Market Purchase PSU Plan or by treasury Shares reserved under the SDP.

One-time PSU grants that are subject to time vesting only vest one third of the grant each year over a period of three years and are not subject to the PSU Scorecard.

Stock Options

Stock options are an integral part of each executive’s annual compensation package and are granted annually in respect of approximately 25% of the long-term incentive compensation to be provided to an executive.

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Under our Option Plan:

Vested stock options may normally be exercised for a period of seven years from the grant date (the option “term”).

This element of compensation supports the Corporation’s overall compensation objectives by linking our Shareholders’ interests with those of our executive officers, by providing our executive officers with compensation that is driven by the experience of our Shareholders in terms of our share price performance, and in the case of PSUs is further tied to the achievement of performance measures. In addition, we require our executive officers to comply with minimum share ownership guidelines that further align them with the Shareholders’ experience.

For 2019, the awards to our Named Executive Officers were as follows:

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Units Granted

In 2019, PSUs were issued to the Named Executive Officers, including the President and CEO, using the methodology described above on the following dates and amounts:

March 15, 2019 284,262

Vesting Awards

In 2019, the following PSUs vested and were redeemed into Shares for the Named Executive Officers:

March 8, 2019, 442,358 PSUs vested and after statutory withholdings, 233,525 PSUs were redeemed into Shares, representing the 2016 annual PSU awards granted to Messrs. MacEwen, Guglielmin, Colbow, and Ms. Sidhu, a third of which were earned subject to the 2016, 2017, and 2018 PSU Scorecard achievements, which were 133.11%, 138.7%, and 61%, respectively.

On May 3, 2019, 26,944 PSUs vested and after statutory withholdings, 13,525 PSUs were redeemed into shares, representing one-third of Mr. Campbell’s new hire PSU grant that is subject to time vesting only.

On December 6, 2019, 7,898 PSUs vested and after statutory withholdings, 3,964 PSUs were redeemed into shares, representing one-third of Ms. Sidhu’s promotion PSU grant that is subject to time vesting only.

Earned Awards

In 2019, the performance criteria for the PSU Scorecard were scaled targets for annual revenue and gross margin dollars that were linked to the 2019 Annual Operating Plan but lower than the corresponding Corporate Scorecard targets. Revenue and gross margin performance were weighted equally under the PSU Scorecard.

Based on the Corporation’s performance, the CGCC and Board approved a 2019 PSU Scorecard achievement of 123%. As a result, for outstanding PSU awards granted in 2017, 2018 and 2019 that are subject to it, 123% of the PSUs were earned. As noted above, these awards are subject to a 3-year cliff vesting period.

CEO Compensation

In April 2018, Mr. MacEwen transitioned onto Ballard’s United States payroll system. His compensation was based on CDN $550,000, converted to United States dollars and paid through the Ballard United States payroll system. In February 2019, Mr. MacEwen’s base salary was adjusted to CDN $577,500 (converted to United States dollars).

Mr. MacEwen’s target bonus for 2019 was CDN$577,500, which was 100% of his annual base salary. His actual bonus for 2019 was determined by the CGCC on the basis of corporate financial and operational performance reflected in the Corporate Performance Scorecard rating (70% weighting), plus performance relative to his individual goals for 2019 (30% weighting), as approved by the Board.

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For the CEO, 69% of his target compensation is ‘at-risk’ (via the annual bonus plan and long term incentive awards): 61% of his target compensation is linked directly to performance goals (via annual bonus plan and PSUs); and 37% of his target compensation is linked to the performance of the Ballard common shares (via PSUs and Stock Option grants).

Total Target Direct Compensation		2019 Annual Direct Compensation
Mix - CEO		Elements - CEO

CEO Realized Pay

In 2019, actual CEO realized pay, as defined by the sum of base salary earned, annual bonus achieved plus the value of vested equity during the year equalled CDN$2,576,543 in total.

Perquisites

In addition to cash and equity compensation, the Corporation provides Named Executive Officers with certain personal benefits, consistent with similar benefits coverage within the comparator group. These benefits include a car allowance, medical benefits program, long and short-term disability coverage, life insurance, an annual medical and a financial planning allowance.

Retirement Benefits

Executives are eligible to receive a matching contribution by the Corporation to their RRSP or 401K. Executives paid in Canada receive an RRSP contribution up to 50% of the maximum amount allowable under the Income Tax Act (Canada). Executives paid in the United States receive a 401K contribution up to 50% of the maximum amount allowable under the Internal Revenue Code (United States). Annual contributions are pro-rated for any partial year of employment.

In 2019

Mr. MacEwen received a 401K contribution equal to 50% of the allowable maximum under the Internal Revenue Code (United States), as he made an equivalent personal matching contribution.

Mr. Guglielmin, Dr. Colbow, Mr. Campbell and Ms. Sidhu received an RRSP contribution from the Corporation, equal to 50% of the maximum amount allowable under the Income Tax Act (Canada), as each of them made an equivalent personal matching contribution.

None of the Named Executive Officers participated in any Corporation-sponsored Defined Benefits Plan, Defined Contribution Plan, or Supplemental Executive Retirement Plan, nor did they receive contributions to any such plan on their behalf from the Corporation.

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For the purposes of this section, the “fair market value” is defined as the closing price of our Shares as listed on the TSX on the date that the executive officer acquired the Common Shares, or DSUs were allocated to them. The CEO has met his minimum share ownership requirements: all other executive officers have met or are on track to meet the applicable guidelines. Executives have 5 years in which to meet these requirements.

Executives and directors are not permitted to hedge the market value of the Corporation securities granted to them as compensation or otherwise held, directly or indirectly, by them.

Compensation Risk Considerations

The CGCC and Board believe that the risk associated with our compensation practices is relatively low. Given the increased emphasis placed on ensuring that compensation practices do not encourage behaviours that expose the corporation to greater risk, the CGCC and Board continue to monitor this issue closely.

The CGCC and Board consider the risks associated with the Corporation’s compensation policies and practices are mitigated by:

The CGCC and Board have not identified any risks arising from the compensation policies and practices that are reasonably likely to have a material adverse effect on the Corporation.

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The trend shown by this graph does not reflect the trend in the Corporation’s compensation to its Named Executive Officers.

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2020 Program Changes

The CGCC, with the assistance of Willis Towers Watson, made two changes to our executive compensation program effective for 2020.

Annual Bonus

For 2020, we have changed our approach to setting the Corporate Scorecard whereby achievement of the quantitative financial objectives measured against the Corporation’s annual operation plan goals now equates to 100% bonus payout with respect to such financial objectives. Previously, achievement of the quantitative financial objectives measured against the annual operating plan resulted in a 50% bonus payout. The CGCC determined that this change more closely aligns with the Corporation’s compensation philosophy on competitive compensation tied to performance and the bonus approach typically taken by our comparator companies.

Long-Term Incentive

For 2020, we increased the target value of the CEO’s annual-long term incentive grant from 125% of base salary to 175% of base salary. The CGCC determined that this target value for the CEO’s long-term incentive more closely aligned with market conditions as determined by reviewing CEO long-term incentive grants by our comparator companies.

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