Exhibit
99.7  
 
 **Royal
Group Technologies Limited**
  
   **NOTICE** ***and*** **MANAGEMENT**
 **PROXY
CIRCULAR**
    for
the
 Annual
and Special Meeting of Shareholders
 May
25, 2005
      
 **April
22, 2005**
   
  
  **ROYAL
GROUP TECHNOLOGIES LIMITED**
  **INVITATION
TO SHAREHOLDERS**
 
 
  Dear
Shareholder:
  On
behalf of the board of directors, management and employees, I invite you to
attend our Annual and Special Meeting of Shareholders on Wednesday, May 25,
2005.
  At
this meeting, we will review our business, activities and financial results for
fiscal 2004 as well as our plans for the future. You will also have an
opportunity to ask questions and to meet our directors and executives. The items
of business to be considered at this meeting are described in the Notice and
Management Proxy Circular included in this package. For more information, please
see our 2004 Annual Report, quarterly results and other corporate information
also available at www.royalgrouptech.com in the “Investor Relations” sector.
  Importantly,
at the meeting you will be asked to vote on a special resolution to eliminate
our Multiple Voting Shares and Subordinate Voting Shares and replace them with a
single class of common shares with equal voting rights.
  No
matter how many shares you hold, your participation at this meeting is very
important. We hope you will be able to join us, in person, or through our
webcast, which will be available live at www.royalgrouptech.com in the “Investor
Relations” section. If you are unable to attend the meeting in person, we
encourage you to vote by following the voting instructions included on the
enclosed proxy form.
  A
recorded version of the meeting will be available at www.royalgrouptech.com
until our next annual meeting of shareholders.
  Yours
truly,
 
 -s-
Robert E. Lamoureux
 Robert
E. Lamoureux
 Lead
Director
 April
22, 2005
    
  
 **ROYAL
GROUP TECHNOLOGIES LIMITED**
 
 **Notice
Of Annual And Special Meeting Of Shareholders**
 
  **You
      are invited to our annual and special shareholders’
      meeting.****When**May
      25, 20054:15
      p.m. (local time).**Where**Metro
      Toronto Convention CentreSouth
      BuildingMeeting
      Room 701222
      Bremner Blvd.Toronto,
      Ontario**You
      have the Right to Vote**You
      are entitled to receive notice of and vote at our annual and special
      shareholders’ meeting or any adjournment if you were a holder of Multiple
      Voting Shares or Subordinate Voting Shares on April 19, 2005.**Your
      Vote is Important**It
      is very important that you read this material carefully and then vote your
      shares, either by proxy or in person at the meeting. The Management
      Information Circular sent with this notice tells you more about the
      matters to be considered at the meeting and how to vote your shares.**What
      the Meeting is About**1. Receiving
      our consolidated financial statements for the 15 month period ended
      December 31, 2004, including the auditors’ report.2.
      Electing directors to serve until the end of our next annual shareholder
      meeting.3.
      Appointing auditors to serve until the end of our next annual shareholder
      meeting.
 
 
 4.
      In connection with the holders of our Multiple Voting Shares agreeing,
      subject to certain conditions, to convert such shares into Subordinate
      Voting Shares, considering the special resolution set out in Appendix A to
      the Management Proxy Circular authorizing:•an
      amendment to our Articles to permit an increase in the stated capital of
      only our Multiple Voting Shares;•the
      addition of not more than $10.00 per share to the stated capital account
      we maintain in respect of the Multiple Voting Shares;•an
      amendment to our Articles to (i) remove the Multiple Voting Shares and the
      Subordinate Voting Shares as well as the rights, privileges, restrictions
      and conditions attaching thereto, (ii) replace all references to
      “subordinate voting shares” with “common shares”, and (iii) make such
      consequential amendments as may be necessary to provide for one class of
      voting common shares.5.
      Considering other business that may properly come before the meeting.**By
      order of the board of directors of Royal Group Technologies
      Limited**-s-
      Scott D. Bates
      Scott
      D. BatesVice
      President, General Counseland
      Corporate SecretaryVaughan,
      OntarioApril
      22, 2005
 
 
 
  
 ****
 **TABLE
OF CONTENTS**
 
 PageTHINGS
      YOU SHOULD KNOW BEFORE YOU BEGIN YOUR REVIEW OF THIS
      INFORMATION
    2Information
      for Meeting
    2Meaning
      of Certain Terms Used in this Circular
    2Currency
      Presentation
    2Date
      of Circular Information
    2Where
      You Can Find More Information
    2Documents
      Incorporated by Reference
    2What
      the Meeting will Cover
    3HOW
      TO VOTE YOUR SHARES
    4Your
      Vote is Important
    4How
      to Vote - Registered Shareholders
    5How
      to Vote - Non-Registered Shareholders
    5Completing
      the Proxy Form
    6Changing
      Your Vote
    6How
      the Votes Are Counted
    6Effective
      Date of Share Conversion
    7Share
      Certificates
    7Attendance
      by Non-Shareholders at Meeting
    7PRINCIPAL
      HOLDERS OF VOTING SECURITIES
    8SUBORDINATE
      VOTING SHARE TAKE-OVER PROTECTION
    8MATTERS
      TO BE VOTED ON AT THE MEETING
    9Election
      of Directors
    9Appointment
      and Compensation of Auditors
    14Proposed
      Share Conversion
    15EXECUTIVE
      COMPENSATION
    18Summary
      Compensation
    18Stock-Based
      Compensation Plans
    20Securities
      Authorized for Issuance Under Equity Compensation Plans
    23REPORT
      ON EXECUTIVE COMPENSATION
    24Base
      Salaries
    24Bonus
      Awards
    24Stock
      Options
    25Senior
      Management Incentive Plan
    25Compensation
      of the Chief Executive Officer
    25Interim
      President and Chief Executive Officer and Chief Financial Officer
      Compensation
    25Termination
      of Employment, Change in Responsibilities and Employment
      Agreements
    26Performance
      Graph
    26(1)
      Royal Group has previously compared against the TSX Construction Materials
      Index which is no longer published.Commencing
      fiscal 2004, Royal Group references the TSX Building Products Index in the
      alternative.
    27INDEBTEDNESS
      OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
    27STATEMENT
      OF CORPORATE GOVERNANCE PRACTICES
    27DIRECTORS’
      AND OFFICERS’ LIABILITY INSURANCE AND INDEMNIFICATION
    27INTEREST
      OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
    27RECEIPT
      OF SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
    27DIRECTORS’
      APPROVAL
    28APPENDIX
      A - SPECIAL RESOLUTION
    A-1APPENDIX
      B - CORPORATE GOVERNANCE REPORT
    B-1
 
  1
  
 **THINGS
YOU SHOULD KNOW BEFORE YOU BEGIN YOUR REVIEW OF THIS INFORMATION**
  **Information
for Meeting**
  This
Circular is for our annual and special shareholders’ meeting to be held on May
25, 2005.
  As
a shareholder, you have the right to vote your shares on the matters described
in the notice of the meeting and any other matter that may properly come before
the meeting or any adjournment. To help you make informed decisions, please read
this circular and the other documents referred to under the heading “Documents
Incorporated by Reference”.
  Your
proxy is being solicited by Royal Group management. In addition to solicitation
by mail, our employees or agents may solicit proxies by telephone or other ways
at a nominal cost.
  **Meaning
of Certain Terms Used in this Circular**
  In
this Circular, *you* , *your* and *shareholder* refer
to a holder of Multiple Voting Shares or Subordinate Voting Shares. *We* , *us* , *our* and *Royal
Group* refer
to Royal Group Technologies Limited and, unless the context otherwise suggests,
all of its subsidiaries and affiliates.
  We
refer to the proposal to amend our Articles to remove the Multiple Voting Shares
and Subordinate Voting Shares and change all of outstanding shares to common
shares in this Circular as the proposed *Share
Conversion* .
  **Currency
Presentation**
  All
dollar amounts referred to in this Circular unless otherwise indicated are
expressed in Canadian dollars.
  **Date
of Circular Information**
  The
information in this Circular is at April 22, 2005, unless otherwise indicated.
 **Where
You Can Find More Information**
  Copies
of documents that are incorporated by reference in this circular are available
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov or may be
obtained upon request sent to: Royal Group Technologies Limited, Attention:
Corporate Secretary, 1 Royal Gate Boulevard, Vaughan, Ontario, L4L 8Z7.
  **Documents
Incorporated by Reference**
  The
documents described below have been filed with the securities regulatory
authorities in each province of Canada and furnished, on Form 6-K, to the U.S.
Securities and Exchange Commission ( *SEC* )
are specifically incorporated by reference in this circular.
  •
    Material
      Change Report dated April 1, 2004.•
    The
      agreement among Royal Group, Vic De Zen, De Zen Holdings Limited, 3901602
      Canada Inc., De Zen Investments Canada Limited, Fortunato Bordin and
      Domenic D’Amico dated March 23, 2005.
 
 Any
statement contained in a document incorporated by reference in this Circular is
deemed to be modified or superseded for the purposes of this Circular to the
extent that a statement contained herein, or in any other subsequently filed
document which also is incorporated by reference herein, modifies or supersedes
that statement. Any statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of this Circular.
  2
 **What
the Meeting will Cover**
  Five
items of business will be covered at the meeting.
  As
of the date of this Circular, we are not aware of any changes to these items,
and do not expect any other items to be brought forward at the meeting. If there
are changes or new items, your proxyholder can vote your shares on these items
as he or she sees fit.
  **1.**  **Receiving
our financial statements**
  We
will place before the meeting our consolidated financial statements, including
the auditor’s report thereon, for the 15 month period ended December 31, 2004.
Our financial statements are included in our 2004 Annual Report, which
accompanies this Circular.
  On
December 12, 2003, we announced a change in our fiscal year end from September
30 to December 31. As a result, our financial statements cover the 15 months
ended December 31, 2004 compared to the 12 months ended September 30, 2003.
  **2.**  **Electing
directors**
  You
will be electing a board of directors of 10 members. Please see the more
detailed information under the heading “Nominees for Election of Directors” in
this Circular. Directors appointed at the meeting will serve until the end of
our next annual meeting of shareholders.
  **If
you do not specify how you want your shares voted, the directors named as
proxyholders in the enclosed proxy form intend to cast the votes represented by
proxy at the meeting FOR the election of the director nominees identified in
this Circular.**
  **3.**  **Appointing
auditors**
  You
will be appointing our auditors. Our board, on the advice of the Audit
Committee, recommends that KPMG LLP be reappointed as auditors. KPMG LLP have
been our auditors since 1987. The audit firm appointed at the meeting will serve
until the end of our next annual shareholder meeting.
  **If
you do not specify how you want your shares voted, the directors named as
proxyholders in the enclosed proxy form intend to cast the votes represented by
proxy at the meeting FOR the appointment of KPMG LLP as auditors.**
 
 **4.**  **Share
Conversion**
  You
will be asked to approve the special resolution set out in Appendix A
authorizing:
  •
    an amendment to our Articles to permit an
      increase in the stated capital of only our Multiple Voting Shares;•
    the addition of not more than $10.00 per
      share to the stated capital account we maintain in respect of the Multiple
      Voting Shares;•
    an amendment to our Articles to (i) remove
      the Multiple Voting Shares and Subordinate Voting Shares as well as the
      rights, privileges, restrictions and conditions attaching thereto, (ii)
      replace all references to “subordinate voting shares” with “common
      shares”, and (iii) make such consequential amendments as may be necessary
      to provide for one class of voting common shares.
 
 If
you approve the special resolution, the holders of all outstanding Multiple
Voting Shares have agreed to convert such shares to Subordinate Voting Shares.
As a result, we will no longer have a dual class capital structure and will have
only one class of voting common shares with equal voting rights.
  Detailed
information regarding the proposed Share Conversion is included in this Circular
and the other documents incorporated in this Circular by reference.
  The
board recommends that you vote for the special resolution to amend our Articles
to effect the Share Conversion.
  **If
you do not specify how you want your shares voted, the directors named as
proxyholders in the enclosed proxy form intend to cast the votes represented by
proxy at the meeting FOR the special resolution.**
  **5.**  **Other
Business**
  We
will report on recent events that are significant to our business, report on
other items that are of interest to our shareholders and invite questions and
comments from shareholders.
  3
  **HOW
TO VOTE YOUR SHARES**
  **Your
Vote is Important**
  All
holders of Multiple Voting Shares and Subordinate Voting Shares are entitled to
vote on the matters placed before the meeting.
  It
is very important that you read this information carefully and then vote your
shares, either by proxy or in person at the meeting.
  Voting
by proxy is the easiest way to vote. Voting by proxy means that you are giving
the person or people named on your proxy form ( *proxyholder* )
the authority to vote your shares at the meeting or any adjournment. A proxy
form is included in this package.
  The
directors who are named on the proxy form will vote your shares for you unless
you appoint someone else to be your proxyholder. If you appoint someone else, he
or she must be present at the meeting to vote your shares.
  If
you are voting your shares by proxy, our transfer agent, Computershare, or other
agents we appoint **must
receive your signed proxy form by 5:00 p.m. (Toronto time) on May 23,
2005** .
  A
list of shareholders who are holders of record on April 19, 2005 will be
available for inspection on and after such date, during usual business hours at
Computershare’s principal Toronto office and at the meeting.
 
 **You
are a registered shareholder** if
your name appears on your share certificate. Your proxy form tells you whether
you are a registered shareholder.
  **You
are a non-registered (or beneficial) shareholder** if
your bank, trust company, securities broker or other financial institution holds
your shares for you (your nominee). For most of you, your proxy form tells you
whether you are a non-registered (or beneficial) shareholder.
  **If
you are not sure whether you are a registered or non-registered shareholder,
please contact Computershare.**
  Computershare
Trust Company of Canada
 100
University Avenue
 9th
Floor
 Toronto,
Ontario, Canada M5J 2Y1
  Telephone
 1-800-564-6253
(toll-free in Canada and the U.S.)
 514-982-7555
(outside Canada and the U.S.)
  Fax
 1-888-453-0330
(toll-free in Canada and the U.S.)
 416-263-9394
(outside Canada and the U.S.)
  E-mail
 service@computershare.com
 
 4
 **How
to Vote - Registered Shareholders**
 ****
 **By
proxy**
 
 ***By
mail***
  Sign
and date your proxy form and return it in the envelope we have provided. See
“Completing the Proxy Form” for more information.
  ***By
fax***
  Sign
and date your proxy form and send both pages (in one transmission) by fax to
1-866-249-7775 (toll-free in Canada and the United States) or 416-263-9524
(outside Canada and the United States). See “Completing the Proxy Form” for more
information.
  ***By
appointing another person to go to the meeting and vote your shares for you***
  This
person does not have to be a shareholder.
  Strike
out the two names that are printed on the proxy form and write the name of the
person you are appointing in the space provided. Complete your voting
instructions, date and sign the form.
  Make
sure that the person you appoint is aware that he or she has been appointed and
attends the meeting. At the meeting, he or she should see a representative of
Computershare at the table marked “Alternate attorneys/External proxyholders.”
See “Completing the Proxy Form” for more information.
  **In
person at the meeting**
  You
do not need to complete or return your proxy form.
  Voting
in person at the meeting will automatically cancel any proxy you completed
earlier.
 
 **How
to Vote - Non-Registered Shareholders**
 ****
 **By
proxy**
  Your
nominee is required to ask for your voting instructions before the meeting.
Please contact your nominee if you did not receive a request for voting
instructions or a proxy form in this package.
  In
most cases, non-registered shareholders will receive a voting instruction form
which allows you to provide your voting instructions by mail or by fax.
  Alternatively,
non-registered shareholders may receive a voting instruction form which:
  •  is
to be completed and returned, as directed in the included instructions; and
 •  has
been pre-authorized by your nominee with a notation of the number of shares to
be voted, which is to be completed, dated, signed and returned to Computershare,
by mail or fax.
 
 **In
person at the meeting**
  We
do not have access to the names or holdings of our non-registered shareholders.
That means you can only vote your shares in person at the meeting if you have
instructed your nominee to appoint you as proxyholder.
  To
do this, write your name in the space provided on the voting instruction form
and follow the instructions of your nominee.
  You
do not have to complete the rest of the form - your vote will be taken and
counted at the meeting.
  At
the meeting, you should see a representative of Computershare at the table
marked “Alternate attorneys/External proxyholders.”
 
 5
 **Completing
the Proxy Form**
  When
you sign the proxy form, you authorize Robert Lamoureux or James Sardo, both
directors of Royal Group, to vote your shares for you at the meeting according
to your instructions. **If
you return your proxy form and do not tell us how you want to vote your shares,
your vote will be counted FOR each of the matters to be voted on at the meeting,
including the special resolution to effect the Share Conversion.**
  If
you are appointing someone else to vote your shares for you at the meeting,
strike out the two names of the directors and write the name of the person
voting for you in the space provided. **If
you do not specify how you want your shares voted, your proxyholder will vote
your shares as he or she sees fit on each item and on any other matter that may
properly come before the meeting.**
  If
you are an individual shareholder, you or your authorized attorney must sign the
form. If you are a corporation or other legal entity, an authorized officer or
attorney must sign the form.
  **Changing
Your Vote**
  You
can revoke a vote you made by proxy by:
  • completing
a proxy form that is dated later than the proxy form you are changing and
mailing it to Computershare so that it is received before **5:00
p.m. (Toronto time) on May 24, 2005** ;
 • sending
a notice in writing to our Corporate Secretary so that it is received before **5:00
p.m. (Toronto time) on May 24, 2005** .
The notice can be from you or your authorized attorney; or
 • giving
a notice in writing to the Chairman of the meeting, at the meeting or any
adjournment. The notice can be from you or your authorized attorney.
 
 **How
the Votes Are Counted**
  Our
authorized capital currently consists of an unlimited number of Multiple Voting
Shares, an unlimited number of Subordinate Voting Shares and an unlimited number
of First Preferred Shares and Second Preferred Shares, issuable in series. There
are no First Preferred Shares or Second Preferred Shares outstanding.
  Holders
of Multiple Voting Shares have 20 votes for each such share held. Holders of
Subordinate Voting Shares have one vote for each such share held. At April 19,
2005, there were 15,935,444 Multiple Voting Shares and 77,509,058 Subordinate
Voting Shares outstanding. Outstanding Multiple Voting Shares represent
approximately 80.5% of the votes attaching to all of our outstanding voting
shares.
  Resolutions
to appoint auditors and elect directors will be determined by a majority of the
votes cast at the meeting. Holders of Multiple Voting Shares vote together with
the holders of Subordinate Voting Shares on these matters.
  The
proposed Share Conversion cannot be effected without the approval of (i) at
least two-thirds of the votes cast at the meeting in person or by proxy by the
holders of Multiple Voting Shares, and (ii) at least two-thirds of the votes
cast at the meeting in person or by proxy by the holders of Subordinate Voting
Shares.
  All
holders of Multiple Voting Shares have agreed to vote in favour of the special
resolution to effect the Share Conversion.
  Computershare
counts and tabulates the votes. It does this independently of us to make sure
that the votes of individual shareholders are confidential.
 
 6
 **Effective
Date of Share Conversion**
  If
shareholders approve the Share Conversion, we will file Articles of Amendment in
accordance with the special resolution as soon as practicable after the meeting.
The effective date of the Share Conversion will be determined by our board of
directors and set out in the Articles of Amendment but, in any event, will be at
least one business day after the relevant amount is added to the state capital
account for the Multiple Voting Shares pursuant to the special resolution and
not more than 10 business days after the meeting.
  **Share
Certificates**
  If
the special resolution to effect the Share Conversion is approved by the holders
of Multiple Voting Shares and by the holders of Subordinate Voting Shares,
voting separately by class, the holders of all outstanding Multiple Voting
Shares will convert such shares to Subordinate Voting Shares prior to the filing
of Articles of Amendment. Upon the filing of Articles of Amendment in accordance
with the special resolution, all outstanding Subordinate Voting Shares will be
designated as common shares.
  Share
certificates representing Subordinate Voting Shares will be deemed to represent
common shares from and after the effective date specified in the Articles of
Amendment. Delivery of Subordinate Voting Share certificates will continue to be
good delivery for settlement of trades through the facilities of the Toronto and
New York stock exchanges. There will be no need to exchange your existing share
certificates for new share certificates.
  If
you wish to exchange Subordinate Voting Share certificates for common share
certificates, contact Computershare. See Computershare’s contact details on page
4 of this circular.
 
 **Attendance
by Non-Shareholders at Meeting**
  If
you are not a shareholder, you may be allowed into the meeting after speaking
with a representative of Computershare, our transfer agent, and if the Chairman
of the meeting allows it.
  7
 **PRINCIPAL
HOLDERS OF VOTING SECURITIES**
  As
of April 22, 2005, to the knowledge of our directors and officers, the only
persons who beneficially own, directly or indirectly, or exercise control or
direction over securities carrying more than 10% of the voting rights attached
to any class of our voting securities are set out in the table below:
  **Name**
    **Type
      of Shares**
    **Number
      of shares**
    **%
      of class**
    **%
      of all voting rights**Vic
      De Zen
    Multiple
      Voting Shares Subordinate Voting Shares
    15,935,444
      6,035**(1)**
    100%
      0.01%
    80.5%
      0.01%Brandes
      Investment Partners, L.P.
    Subordinate
      Voting Shares
    8,748,714
    11.30%
    2.2%
 
 (1)
Excludes Subordinate Voting Shares issuable on exercise of stock options.
  **SUBORDINATE
VOTING SHARE TAKE-OVER PROTECTION**
  A
Stock Control Agreement among the holders of the Multiple Voting Shares, Royal
Group and Computershare Trust Company of Canada, as trustee, for the holders
from time to time of the Subordinate Voting Shares, provides certain take-over
bid protections to the holders of the Subordinate Voting Shares and imposes
other restrictions on the transfer of Multiple Voting Shares.
  The
Stock Control Agreement provides that if the trustee becomes aware of the
transfer of any Multiple Voting Shares to a purchaser who has not made an
identical offer in all material respects to purchase all of the Subordinate
Voting Shares and all of the Multiple Voting Shares, then the trustee will cause
the Multiple Voting Shares so transferred to be converted into Subordinate
Voting Shares in accordance with our articles unless such transfer is a *Permitted
Transfer* as described below.
  Permitted
Transfers include a transfer of Multiple Voting Shares to a *Permitted
Holder* .
Permitted Holders are Vic De Zen, one of our directors, members of Mr. De Zen’s
immediate family, entities which are directly or indirectly wholly-owned by Mr.
De Zen or his immediate family, and trusts all the beneficiaries of which are
any of the foregoing. The granting of a security interest over Multiple Voting
Shares to an arm’s length Canadian financial institution in connection with bona
fide obligations of the holder of such shares or of Royal Group is also a
Permitted Transfer, provided however that if the security granted is to be
realized upon, such Multiple Voting Shares will be first converted into an equal
number of Subordinate Voting Shares.
  No
transfer of Multiple Voting Shares may be effected without the transferee of
such shares (including Canadian financial institutions that are Permitted
Holders) agreeing to be bound by the terms of the Stock Control Agreement.
  A
Permitted Holder of Multiple Voting Shares may at any time convert its shares to
Subordinate Voting Shares provided the prior approval of Mr. De Zen or his
family representative is obtained. Such shares so converted to Subordinate
Voting Shares will thereafter no longer be subject to the terms of the Stock
Control Agreement.
  If
at any time the trustee determines that a holder of Multiple Voting Shares has
ceased to be a Permitted Holder (a *Non-Permitted
Holder* ),
such Multiple Voting Shares will either be converted to Subordinate Voting
Shares or the Non-Permitted Holder will be required to sell the Multiple Voting
Shares held by it to a Permitted Holder designated by Mr. De Zen or his family
representative at a price equal to the fair value of such shares on the date the
sale is completed. Under the Stock Control Agreement, the fair value per share
is determined to be the simple average of the closing prices of the Subordinate
Voting Shares on the published market in Canada on which the greatest volume of
trading in such shares occurred over the 20 trading days preceding the date of
the sale or, in circumstances where the Subordinate Voting Shares have not
traded at least 10 days during such period, the simple average of the closing
prices, where applicable, and the closing bid and asked prices for the days on
which no trading occurred.
  8
 The
Stock Control Agreement may be amended without the approval of the holders of
Subordinate Voting Shares only to make corrections or rectifications, to
facilitate the provisions thereof or to comply with law or stock exchange rules,
provided that in each case the trustee is of the opinion that the rights of the
holders of Subordinate Voting Shares are not prejudiced, in any material
respect, by such amendment. Otherwise, the Stock Control Agreement may not be
amended without the approval of at least two-thirds of the votes cast by holders
of the Subordinate Voting Shares at a meeting called to consider the amendment
or the written consent of holders of at least two-thirds of the Subordinate
Voting Shares.
  Holders
of all outstanding Multiple Voting Shares have agreed to convert such shares to
Subordinate Voting Shares in accordance with the Stock Control Agreement and our
Articles if the proposed Share Conversion is approved by shareholders. Upon
completion of such conversion, the Stock Control Agreement will terminate.
  **MATTERS
TO BE VOTED ON AT THE MEETING**
  **Election
of Directors**
  Subject
to our Articles and General By-law, our board of directors must consist of a
number of directors not fewer than three and not more than 25 as the board may
from time to time determine. Our board has determined that the number of
directors to be elected at the meeting will be 10. Currently, we have seven
directors. For most of 2004 fiscal year, we had nine directors.
  ***Board
Committees***
  Our
board has established three standing committees: the Audit Committee, the
Nomination and Corporate Governance Committee and the Human Resources and
Compensation Committee. The current members of each of these committees are
Ralph Brehn, Irvine Hollis and Ronald Slaght. The mandate for each of these
committees can be accessed at www.royalgrouptech.com in the “Investor Relations”
section.
  See
“-- Proposed Share Conversion - Background to the Proposed Share Conversion” for
information regarding a Special Committee established by the board in connection
with certain transactions involving Royal Group and certain of its executive
officers.
  ***Nominees
for Election to the Board***
  The
Nomination and Corporate Governance Committee of the board of directors is
authorized to engage the services of outside consultants to assist it in
identifying qualified candidates to be nominated as directors. Before
recommending a candidate to the board as a nominee, the committee reviews the
consultant’s recommendations, meets with prospective candidates and assesses the
results of internal and external due diligence reviews on candidates. The
committee has paid an external consultant to assist in identifying and
evaluating new director candidates proposed for this meeting. The committee
considers additional factors when identifying directors for re-election,
including but not limited to qualifications under applicable law, material
change in employment, contribution and meeting attendance record.
  The
persons named below have been nominated for election as directors. The term of
office of each director expires at the close of our next annual meeting of
shareholders. Messrs. De Zen, Hollis, Lamoureux, Sardo and Slaght are currently
directors of Royal Group. Messrs. Hacking, Ross, Savage and Sheffield and Ms.
Hansell are standing for election to our board for the first time.
  Mr.
DeZen has agreed to retire as a director following the meeting if the Share
Conversion is approved by shareholders. See “-- Proposed Share Conversion”. The
board expects that upon the appointment of a new President and Chief Executive
Officer, to replace our Interim President and Chief Executive Officer, that such
officer will be appointed to the board to fill the vacancy.
  Unless
otherwise instructed by a shareholder, the persons named in the accompanying
proxy form will vote FOR the election of these nominees. If any of the above
nominees is for any reason unavailable to serve as a director, proxies in favour
of management will be voted for another nominee in their discretion unless you
have specified on your proxy that your shares are to be withheld from voting on
the election of directors. We have no reason to believe that any of these
nominees will be unable to exercise his or her function as a director.
 
 9
  **Name
      of Nominee**
      **Place
      of Residence**
      **Share
      Ownership****(1)**
      **DSU
      Ownership****(2)**
    ****
      Present
      Principal Occupation
      and
      Positions Held in the
      **Last
      Five Years**
    **Board
      and Board Committee**
      **Meeting
      Attendance for**
      **Fiscal
      2004 (15 months)****(3)**Carol
      Hansell
    Ms.
      Hansell is a partner in the law firm Davies, Ward, Phillips & Vineberg
      LLP.
    N/AToronto,
      OntarioAge:
      47Ms.
      Hansell serves on the board of directors of the Public Sector Pension
      Investment Board, a Crown corporation that invests cash flows from the
      pension plans of the federal public service, and on the corporate
      governance commit teeof the board of directors of Toronto East General
      Hospital and of Altruvest Charitable Services as well as on the Advisory
      Board of the Literary Review of Canada.Nil
      SVSNil
      MVSNil
      DSUMs.
      Hansell is a past director and Vice Chair of the Institute of Corporate
      Directors and a past director of the Centre of Ethics and Corporate Policy
      in Canada. She teaches securities law at Osgoode Hall and is a member of
      the faculty of the ICD Director College (Rotman School) and the National
      Association of Corporate Directors, a Washington-based organization
      focusing on board leadership issues. Ms. Hansell has written several
      leading texts on corporate governance.James
      Hacking
    Mr.
      Hacking is the Chief Executive Officer of IMT Corporation, a major
      manufacturer and supplier to the truck-trailer, OEM and defence
      industries. Mr. Hacking is adirector of Armada Group, a private plastic
      injection molder.
    N/AWaterloo,
      OntarioAge:
      48Nil
      SVSNil
      MVS
    From
      2001 to 2002, Mr. Hacking was the Chief Executive Officer of Skyjack Inc.,
      a manufacturer of elevating work platforms.Nil
      DSUIrvine
      Hollis
    Mr.
      Hollis is presently a management consultant with I. Hollis Management
      Consultants Inc., providing strategic planning, organizational structure
      and business plan advisory services to small and medium sized
      companies.
    Board
      (14 of 14):Chatsworth,
      OntarioDirector
      since May 2, 1995
    Nomination
      and CorporateAge:
      66
    Governance
      Committee (Chair)(6
      of 6)1,946
      SVS
    Mr.
      Hollis is currently on an advisory board at Mortile Industries, a small
      supplier of specialty additives to the plastics industry. Mr. Hollis is
      also a volunteer on an advisory board to attract business to the City of
      Owen Sound and is the Past President and Director of Sudden Arrhythmia
      Death (SADS) Canada.Nil
      MVS
    Human
      Resources and3,542
      DSU
    Compensation
      Committee(14
      of 14)Audit
      Committee (1 of 1)Special
      Committee (35 of 36)
   10
  **Name
      of Nominee**
      **Place
      of Residence**
      **Share
      Ownership****(1)**
      **DSU
      Ownership****(2)**
    ****
      Present
      Principal Occupation
      and
      Positions Held in the
      **Last
      Five Years**
    **Board
      and Board Committee**
      **Meeting
      Attendance for**
      **Fiscal
      2004 (15 months)****(3)**
 Robert
      Lamoureux
    Lead
      Director and Interim Chief Financial Officer of Royal
    Board
      (Lead Director) (11 of 11)Toronto,
      Ontario
    Group.Director
      since Nov. 18, 2003
    
    Audit
      Committee (4 of 4)Age:
      58
    Mr.
      Lamoureux was appointed a partner of PricewaterhouseCoopers in 1981.
      During his tenure, Mr. Lamoureux was audit partner of numerous
      corporations, public and private, including certain of Canada’s
      majorcorporations in both the manufacturing and financial services
      industries.
    Nomination
      and CorporateGovernance
      Committee (5 of 5)Nil
      SVS
    Special
      Committee (36 of 36)Nil
      MVS15,311
      DSUMr.
      Lamoureux initiated and led, until he retired from PricewaterhouseCoopers
      in 2004, PricewaterhouseCoopers’ Canadian corporate governance
      practice.In
      2001, Mr. Lamoureux joined the Institute of Corporate Directors, where he
      is currently a director, Chair of the Ontario Chapter and a member of its
      Communications and Membership committees.Mr.
      Lamoureux is currently a director of SR Telecom Inc. which designs,
      manufactures and deploys Broadband Fixed Wireless Access
      solutions.Richard
      Ross
    Mr.
      Ross is the Chairman and Chief Executive Officer and a director of Inmet
      Mining Corporation.
    N/ANobleton,
      OntarioAge:
      47Mr.
      Ross is the Chairman of the board of the Mining Association of Canada. Mr.
      Ross sits on the board of directors of St. Joseph’s Health Centre and the
      Canadian Turkish Business Council. Mr. Ross is a chartered
      accountant.Nil
      SVSNil
      MVSNil
      DSUJames
      Sardo
    Interim
      Chief Executive Officer of Royal Group.
    Board
      (11 of 11)Mississauga,
      Ontario
    
    Nomination
      and CorporateDirector
      Since Nov. 18, 2003
    Mr.
      Sardo has been since 2003 a director of Hydrogenics Corporation, a fuel
      cell technology company, a trustee of Union Waterheater Income Trust, a
      water heater rental company and a trustee of Custom Direct Income Fund. In
      2004, Mr. Sardo became the Chairman of the Board of Trustees of
      Countryside Power Income Fund, a power generation company. Mr. Sardo is
      also a member of the Institute of Corporate Directors.
    Governance
      Committee (5 of 5)Age:
      61
    Human
      Resources andCompensation
      Committee2000
      SVS
    (14
      of 14)Nil
      MVS
    Special
      Committee (36 of 36)25,521
      DSUMr.
      Sardo was President, Canadian Operations of Moore Corporation Limited, a
      business forms and communication company from 1999 to 2001 and President
      and Chief Executive Officer and a director of SMK Speedy International
      Inc., an international automotive repair company, from 1997 to
      1999.
   11
  **Name
      of Nominee**
      **Place
      of Residence**
      **Share
      Ownership****(1)**
      **DSU
      Ownership****(2)**
    Present
      Principal Occupation
      and
      Positions Held in the
      **Last
      Five Years**
    **Board
      and Board Committee**
      **Meeting
      Attendance for**
      **Fiscal
      2004 (15 months)****(3)**Graham
      Savage
    Mr.
      Savage has been a managing director of Callisto Capital LP, a merchant
      banking partnership, since October 2002 and has been chairman since 2003,
      he was a managing director of Savage Walker Capital Inc. from October 1998
      to October 2002 and is a managing partner of Savage Walker Capital
      L.P.
    N/AToronto,
      OntarioAge:
      56Nil
      SVSNil
      MVSNil
      DSUMr.
      Savage was previously Chief Financial Officer and a director of Rogers
      Communications Inc.Mr.
      Savage is also a director of each of Canadian Tire Corp., Hollinger
      International Inc., Leitch Technology Corporation and Vitran Corporation.
      Mr. Savage is a member of the Special Investigative Committee of Hollinger
      International Inc.William
      Sheffield
    Mr.
      Sheffield is a member of the newly reconstituted board of Ontario Power
      Generation (formerly Ontario Hydro) and a director of Velan, Inc., a
      leading producer of industrial steel valves in North America, Europe and
      Asia.
    N/AToronto,
      OntarioAge:
      56Nil
      SVSNil
      MVS
    From
      2001 to 2003, Mr. Sheffield was the Chief Executive Officer of Sappi Fine
      Paper, the world’s leading manufacturer and marketer of coated fine sheet
      paper.Nil
      DSUFrom
      1987 to 2000, Mr. Sheffield was an Executive Vice President of Abitibi
      Consolidated Inc., the world’s largest manufacturer and marketer of
      newsprint.Ronald
      Slaght
    Mr.
      Slaght is a Partner of Lenczner Slaght Royce Smith Griffin
      (Barristers).
    Board
      (13 of 14)Toronto,
      OntarioDirector
      Since Nov. 25, 1994
    
    Human
      Resources andAge:
      61
    Mr.
      Slaght is a Past President of The Advocates’ Society and a member of the
      Civil Rules Committee. He is a Fellow of the American College of Trial
      Lawyers. Mr. Slaght continues to serve on a number of committees and task
      forces concerned with the administration of justice in Ontario. Mr. Slaght
      is former head of the Trial Practice Program at the Faculty of Law at the
      University of Toronto.26,843
      SVS
    Compensation
      Committee (Chair)Nil
      MVS
    (13
      of 14)2,542
      DSUAudit
      Committee (4 of 5)Special
      Committee (26 of 36)Vic
      De Zen
    Mr.
      De Zen owns and operates a real estate development
company.Vaughan,
      OntarioDirector
      since Nov. 25, 1994
    
    Board
      (11 of 14)Age:
      63
    Mr.
      De Zen was Chairman and Chief Executive Officer of Royal Group from
      November 30, 1994 until September 15, 2003. He was the Chairman and
      Co-Chief Executive Officer Royal Group from September 15, 2003 to December
      18, 2003. Mr. De Zen retired as Co-Chief Executive Officer on December 18,
      2003 and remained Chairman of Royal Group until November 26,
      2004.15,935,444
      MVS6,035
      SVSNil
      DSU
 (1)
    *SVS*means
      Subordinated Voting Shares and*MVS*means
      Multiple Voting Shares.(2)
    *DSU*means
      Deferred Stock Units. See “-- Directors Stock Unit Plan”.(3)
    Indicates
      attendance at meetings held during the time that the director was a member
      of the board or a member of a committee, as the case may be. In fiscal
      2004 (15 months), we held 14 board meetings, five Audit Committee
      meetings, 14 Human Resources and Compensation Committee meetings, six
      Nomination and Corporate Governance Committee meetings and 36 Special
      Committee Meetings.
 
  12
  ***Director
Share Ownership Guidelines***
  We
believe that directors can more effectively represent your interests if they
have a significant investment in our shares. Therefore, we adopted in May 2004
minimum share ownership guidelines for our directors. Each director is expected
to own Subordinate Voting Shares or DSU having a value equal to at least five
times the value of their annual cash retainer for sitting on our board by the
later of May, 2009 or five years after the date of their election to the board.
  ***Compensation
of Directors***
 
 Our
directors’ compensation program is designed to:
  •
    Attract
      and retain the most qualified people to serve on our board and its
      committees.•
    Align
      the interests of the directors with your interests as shareholders.•
    Provide
      appropriate compensation relative to the risks and responsibilities of
      being an effective director.
 
 The
table below sets out the fees payable to non-management directors. Generally,
directors who are also officers of Royal Group do not receive fees for sitting
on our board or any board committee. Mr. Sardo and Mr. Lamoureux received no
directors’ fees after their appointment on November 29, 2004 as our Interim
President and Chief Executive Officer and Interim Chief Financial Officer,
respectively, but continue to receive Special Committee fees and, in Mr.
Lamoureux’s case, continue to receive the Lead Director retainer.
  Annual
      Board Member Fee
    $40,000
      cash
      $30,000
      DSU(1)Board
      and Committee Meeting Fees
      •
      Per meeting attended in person
      •
      Per meeting attended by telephone
    $1,500
      $1,000Additional
      Annual Fees•
      Lead Director
    $40,000•
      Audit Committee-
      Chair
    $15,000-
      Member
    $
      7,500•
      Nomination and Corporate Governance Committee-
      Chair
      -
      Member
    $
      6,000$ 3,000•
      Human Resources and Compensation Committee
      -
      Chair
    $10,000-
      Member
    $
      5,000
 
 (1)  $7,500
of DSU (value determined at the time of allocation) are allocated to each
director at the end of each financial quarter. See “Directors Deferred Stock
Unit Plan”.
  In
late 2003, the board established a Special Committee (see “Proposed Share
Conversion - Background to the Proposed Share Conversion”). Each member of such
committee is paid $750 per meeting attended. The Chair of the Special Committee
receives an additional retainer of $5,000 per month.
  For
fiscal 2004 (15 months), we paid our non-management directors (but including our
Interim President and Chief Executive Officer and our Interim Chief Financial
Officer) an aggregate of $579,584 in annual retainer and meeting attendance
fees.
 
 13
 All
directors are reimbursed for travel and other reasonable expenses incurred in
attending board or committee meetings.
  ***Directors
Deferred Stock Unit Plan***
  On
February 2, 2005, we established a Directors Deferred Stock Unit Plan (the *Directors
DSU Plan* )
to provide an equity-based incentive to our non-management directors to further
align their interests with yours as shareholders. The plan is administered by
our Human Resources and Compensation Committee.
  Under
the Directors DSU Plan, directors may elect to defer all or any portion of the
cash fees paid to them. A number of notional deferred stock units ( *DSUs* )
equal to the dollar value of deferred fees divided by the market price of our
Subordinate Voting Shares, determined by reference to the Toronto Stock Exchange
( *TSX* )
trading price of such shares at the allocation time (unless otherwise determined
by the Human Resources and Compensation Committee), is allocated to the
director. Upon ceasing to be a director for any reason, all DSUs allocated to
such director are redeemed by the payment to the director of an amount in cash
equal to the number of such DSUs multiplied by the market value of our
Subordinate Voting Shares, determined by reference to the TSX trading price of
such shares at the redemption time. No shares are issuable by Royal Group under
the Directors DSU Plan.
  As
indicated above, generally directors are allocated $30,000 of DSUs annually.
They may also choose to receive their other fees in any combination of cash
and/or DSUs. See also “Executive Compensation -Interim President and Chief
Executive Officer and Interim Chief financial Officer Compensation”.
  **Appointment
and Compensation of Auditors**
  We
propose that KPMG LLP be appointed as auditors for fiscal 2005 and that their
remuneration therefor be fixed by the directors.
  In
order to be effective, the resolution appointing KPMG LLP as auditors and
authorizing the directors to fix their remuneration, must receive the
affirmative vote of a majority of votes cast by those shareholders in person and
represented by proxy. **Unless
you otherwise instruct, the persons named in the accompanying proxy form will
vote FOR the appointment of KPMG LLP as auditors for fiscal 2005 and that their
remuneration by fixed by the directors for such fiscal year.**
  KPMG
LLP have acted as our auditors since 1987. Representatives of KPMG LLP will be
present at the meeting with an opportunity to make a statement if they so desire
and to respond to appropriate questions.
  **All
services provided by KPMG LLP and their fees in connection with services
provided to us require the approval of the Audit Committee.** Fees
charged to us by KPMG LLP for audit and related services were $1,421,000 in
fiscal 2004 (15 months) and $1,395,000 in fiscal 2003 (12 months). Additional
services provided by KMPG LLP include tax-related compliance and related matters
as well as assignments pertaining to regulatory filings, accounting matters and
the issuance of securities.
  A
summary of fees that we paid to our auditors in fiscal 2004 and fiscal 2003 is
set out below. Our Audit Committee has considered whether the magnitude and
nature of these services is compatible with maintaining the independence of the
external auditors and is satisfied that they are.
  **Fiscal
      2004 (15 months)**
    **Fiscal
      2003 (12 months)**Audit
      Fees(1)
    $1,274,000
    $829,000Audit
      Related Fees(2)
    $29,000
    $93,000Tax
      Fees(3)
    $118,000
    $436,000All
      Other Fees(4)
    Nil
    $37,000**Total**
    $1,421,000
    $1,395,000
 
  14
  (1)  Comprised
of audit fees for year end and quarterly reviews.
 (2)  Comprised
of fees for 401(k) plan audit and workers compensation review.
 (3)  Comprised of
fees for U.S. tax compliance services.
 (4)  Comprised
of fees for transfer pricing study and assistance in response to regulatory
inquiries.
 
 **Proposed
Share Conversion**
  At
the meeting, you will be asked to approve the special resolution set out in
Appendix A to authorize:
  •
    an
      amendment to our Articles to permit an increase in the stated capital of
      our only Multiple Voting Shares;•
    the
      addition of not more than $10.00 per share to the stated capital account
      we maintain in respect of the Multiple Voting Shares; and•
    an
      amendment to our Articles to (i) remove the Multiple Voting Shares and
      Subordinate Voting Shares as well as the rights, privileges, restrictions
      and conditions attaching thereto, (ii) replace all references to
      “subordinate voting shares” with “common shares”, and (iii) make such
      consequential amendments as may be necessary to provide for one class of
      voting common shares.
 
 **Our
board has concluded that the proposed Share Conversion is in the best interests
of Royal Group and its shareholders and recommends that you vote in favour of
the special resolution.**
  **Unless
you give contrary instructions in your proxy form, the persons designated in the
enclosed form of proxy intend to vote FORthe approval of such special
resolution.**
  ***Background
to the Proposed Share Conversion***
  A
Special Committee of our board of directors, comprised of James Sardo, Robert
Lamoureux and Ronald Slaght, each of whom was, at the time such committee was
established, independent of and unrelated to Royal Group, its management and Mr.
De Zen, was formed in late 2003 as a result of Royal Group being advised that
the Ontario Securities Commission ( *OSC* )
was conducting a regulatory investigation of Royal Group. Ralph Brehn and Irvine
Hollis, both of whom are independent and unrelated to Royal Group, joined the
Special Committee on October 21, 2004. Since establishment of the Special
Committee, Mr. Sardo and Mr. Lamoureux have been appointed our Interim Chief
Executive Officer and Interim Chief Financial Officer, respectively. The Special
Committee retained Goodmans LLP as its independent legal counsel and Goodmans
(on behalf of the Special Committee) retained Kroll Lindquist Avey ( *Kroll* ),
independent forensic auditors, to investigation transactions between Royal Group
and the Royal St. Kitts beach resort development (the *St.
Kitts Project* )
which is majority owned by Mr. De Zen, our controlling shareholder and former
Chairman and Chief Executive Officer.
  Kroll
completed its initial investigation in April 2004 and we disclosed the findings
in a Material Change Report dated May 6, 2004, which may be accessed at
www.sedar.com or www.sec.gov.
  In
November 2004, the Special Committee asked Kroll to broaden its forensic work to
include investigations of, among other things, transactions entered into by
Royal Group with related parties. Kroll’s review of related-party transactions
focussed on three main areas: real estate transactions, corporate acquisitions
and divestitures, and other likely areas of overlap between private and public
interests.
  Kroll
completed this second phase of its review in March 2005 and we disclosed Kroll’s
findings in a Material Change Report dated April 1, 2005, which report is
incorporated in its entirety in this Circular by reference. The key concerns
raised by Kroll are summarized below.
 
 15
 •
    Kroll
      identified and brought to the attention of the Special Committee
      information regarding a related-party land transaction completed in 1998
      (the*Vaughan
      West Lands Transaction*),
      involving Vic De Zen (our controlling shareholder and, at the relevant
      time, our Chief Executive Officer), Douglas Dunsmuir (our Executive Vice
      President and General Counsel at the relevant time), and others, and which
      Ron Goegan (our Vice President, Corporate Finance at the relevant time)
      facilitated. The transaction concerned the purchase in Woodbridge, Ontario
      of approximately 185 acres of land by a numbered company owned by Mr. De
      Zen and certain other associates, including Mr. Dunsmuir, for $20.5
      million. Immediately after the closing of that purchase, the property was
      sold to Royal Group for approximately $27 million. The fact that the land
      purchase was a related-party transaction was not brought to the attention
      of the board of directors in 1998. The board also was not informed about
      the profit that the related parties realized on the purchase.•
    Royal
      Group received a warrant for 200,000 shares of another public company,
      Premdor Inc. (now known as Masonite International Corporation)
      (*Masonite*)
      as partial consideration for the sale of a Royal Group subsidiary to
      Premdor in early 2000. In early 2002, Royal Group exercised the warrant
      when Masonite’s shares were trading at approximately $21.75, which was
      $8.50 more than the exercise price (resulting in a gain of approximately
      $1.7 million). Royal Group’s exercise of the warrant was funded by five
      then senior executives of Royal Group (including Messrs. De Zen and
      Dunsmuir) and one other individual who was then an employee of Royal Group
      who deposited a total of $2.65 million which Royal Group paid to Masonite
      to exercise the warrant. The Masonite shares obtained were then
      distributed by Royal Group to the six individuals. It appears that the six
      individuals subsequently sold their shares netting proceeds of
      approximately $1.7 million. The warrant and the transfer of the Masonite
      shares to the individuals were not recorded in the accounting records of
      Royal Group. However, an amount approximating the gain made by the senior
      executives on the Masonite shares was included for each of them in the
      bonus amount shown as paid to such senior executives in our Management
      Proxy Circular dated January 1, 2003.
 
 In
discussions with the Special Committee, Mr. De Zen maintained that following
completion of Kroll’s investigation and the determination of whether any prior
transactions were inappropriate, he would act as necessary with respect to such
transactions to ensure that appropriate arrangements are made with Royal Group
that are in the best interests of our shareholders.
  There
have been ongoing discussions for some time between representatives of the board
of directors and Mr. De Zen with respect to the termination of our existing
two-tiered shareholder system. These discussions have included the means by
which Mr. De Zen will convert his Multiple Voting Shares to single-voting
shares. The Special Committee understands that such conversions are often made
at a premium ratio (i.e., each multiple voting share is exchanged for more than
one common share) and that a premium of approximately 5% would be reasonable in
these circumstances.
  ***Conversion
Agreement***
  Following
delivery of Kroll’s report, discussions continued towards an overall resolution.
As a result of such discussions, pursuant to an agreement (the *Conversion
Agreement* )
dated March 23, 2005 between Vic De Zen, De Zen Holdings Limited, 3901602 Canada
Inc., De Zen Investments Canada Limited, Fortunato Bordin and Domenic D’Amico
(collectively, the *De
Zen Group* )
and Royal Group, subject to shareholder approval of the Share Conversion:
  •
    the
      De Zen Group represents and warrants that collectively they are the
      holders of all outstanding Multiple Voting Shares;•
    the
      full amount of the gain earned by all parties on the Vaughan West Lands
      Transaction ($6.5 million) plus interest (totalling $2.2 million) will be
      repaid to us by Mr. De Zen and, for the purposes thereof, Mr. De Zen will
      convert his Multiple Voting Shares to common shares on a one-for-one basis
      (i.e., without a premium) to satisfy this obligation, which amount is
      within the range that the Special Committee has determined is reasonable
      in the circumstances;
  16
 •
    the
      Multiple Voting Shares will receive an increase in their adjusted cost
      base for tax purposes (at no cost to Royal Group or any of our
      shareholders), which will reduce Mr. De Zen’s gain for tax purposes if he
      disposes of his shares after conversion, the actual amount of such
      increase to be determined by KPMG LLP pursuant to the Conversion
      Agreement;•
    further
      to a previous agreement of Mr. De Zen to repay to us part of his bonus for
      fiscal 2002 out of future bonus entitlements (see footnote 11 to the
      Summary Compensation Table under “Executive Compensation”), Mr. De Zen
      will pay the approximately $1.13 million that he owes in respect of such
      agreement on or before the day that is 14 days after the Multiple Voting
      Shares are converted to Subordinate Voting Shares;•
    the
      De Zen Group will release us from all claims, which they may have against
      Royal Group existing at the date of the Conversion Agreement (subject to
      certain exceptions relating to pre-existing litigation and a pre-existing
      indemnity given by us to all of our directors, including Mr. De Zen);•
    Messrs.
      De Zen, Bordin and D’Amico (each of whom are former executive officers or
      employees of Royal Group) covenant not to compete with Royal Group or
      solicit any employees of Royal Groups, which covenants to extend to
      December 18, 2006, which is three years from the date of Mr. De Zen’s
      resignation as our Chief Executive Officer;•
    Messrs.
      De Zen, Bordin and D’Amico will not disclose any confidential information,
      including technology and trade secrets, proprietary to Royal Group;•
    Mr.
      De Zen will retire as a director of Royal Group effective at the time that
      the Share Conversion is approved by our shareholders;•
    the
      De Zen Group will vote all Multiple Voting Shares and all Subordinate
      Voting Shares that they hold in favour of the Share Conversion;•
    the
      term of the options held by Mr. De Zen, which are exercisable for
      1,360,000 Subordinate Voting Shares (common shares if the Share Conversion
      is approved) and which would have expired in accordance with the terms
      thereof three months after Mr. De Zen ceased to be an employee of Royal
      Group, will be extended and will expire on the earlier of December 18,
      2006 and the original expiry date of such options none of which options
      are currently in-the-money;•
    the
      term of the options held by Mr. Bordin, which are exercisable for 50,000
      Subordinate Voting Shares (common shares if the Share Conversion is
      approved) and which would have expired in accordance with the terms
      thereof three months after Mr. Bordin ceased to be an employee of Royal
      Group, will be extended and will expire on the earlier of December 18,
      2006 and the original expiry date of such options none of which options
      are currently in-the-money; and•
    we
      will release the De Zen Group and their affiliates from any potential
      claims that we may have that we are currently aware of, including in
      respect of the Vaughan West Lands Transaction.
  ***Effective
Date***
  If
shareholders approve the Share Conversion, we will file Articles of Amendment in
accordance with the special resolution as soon as practicable after the meeting.
The effective date of the amendment:
  •
    to
      permit an increase in the stated capital of only our Multiple Voting
      Shares will be determined by our board of directors and set out in the
      Articles of Amendment but, in any event, will be not more than 10 business
      days after the meeting; and
   17
  •
    to
      (i) remove the Multiple Voting Shares and Subordinate Voting Shares, as
      well as the rights, privileges, restrictions and conditions attaching
      thereto, (ii) replace all references to “subordinate voting shares” with
      “common shares”, and (iii) to make such consequential amendments as may be
      necessary to provide for one class of voting common shares, will be at
      least one business day after the relevant amount is added to the stated
      capital amount for the Multiple Voting Shares and after the De Zen Group
      has converted all Multiple Voting Shares to Subordinate Voting Share but,
      in any event, will be not more than 10 business days after the meeting.
  ***Treatment
of Outstanding Options and DSUs***
  Adjustment
provisions included in our Directors DSU Plan, LTIP and SMIP (see “Executive
Compensation”) will operate to ensure that references to Subordinate Voting
Shares therein will mean common shares upon completion of the Share Conversion.
  ***Share
Certificates***
  Share
certificates representing Subordinate Voting Shares will be deemed to represent
common shares from and after the effective date specified in the Articles of
Amendment to be filed as contemplated by the special resolution to effect the
Share Conversion. Delivery of Subordinate Voting Share certificates will
continue to be good delivery for settlement of trades through the facilities of
the TSX and the NYSE. There will be no need to exchange existing share
certificates for new share certificates.
  ***Impact
of Addition to Stated Capital Account for Multiple Voting Shares***
  The
increase to the stated capital account of the Multiple Voting Shares will
increase the adjusted cost base of such shares for Canadian income tax purposes.
As a result, the amount of gain realized for income tax purposes on a
disposition of such shares will be reduced. The amount of the increase is
designed to be less than or equal to the safe income of the Multiple Voting
Shares. In general terms, safe income represents the portion of the consolidated
after-tax retained earnings, computed on an income tax basis, of Royal Group
that can reasonably be considered to have contributed to the gain on such
shares. Income rules accommodate this type of planning in order to minimize
double taxation of income that would otherwise arise due to the fact that
corporate income is reflected in the gain on shares of a company and would
otherwise be taxable on a disposition of such shares.
  The
addition to the stated capital account we maintain in respect of our Multiple
Voting Shares as provided for in the special resolution will have no adverse
effect on the Subordinate Voting Shares.
  Holders
of Subordinate Voting Shares who wish, at their own cost, to effect an increase
in the stated capital of their shares and thereby reduce capital gains under the *Income
Tax* Act
(Canada) upon subsequent disposition of such shares, may make arrangements to do
so by contacting our Corporate Secretary at Royal Group Technologies Limited, 1
Royal Gate Boulevard, Vaughan, Ontario, L4L 8Z7.
  **EX
ECUTIVE COMPENSATION**
  The
fiscal 2004 compensation of our senior executives was determined by our Human
Resources and Compensation Committee and approved by our board of directors. Our
policy is to provide a compensation package that will attract and retain
qualified and experienced executives.
  **Summary
Compensation**
  The
following table sets out all compensation paid in fiscal 2004, comprised of the
15 months ended December 31, 2004, and in fiscal 2003 and fiscal 2002, comprised
of the 12 months ended September 30, 2003 and 2002, respectively, for the
individuals who were at December 31, 2004 our *Named
Executive Officers* ,
as determined in accordance with applicable securities laws.
  18
  **Summary
Compensation Table**
 
 **Long-Term
      Compensation**
      ******Annual
      Compensation**
    **Awards**
      ****
    **Payouts**Name
      and Principal Position as at December 31, 2004
    Fiscal
      Year
    Salary
      ($)
    Bonus
      ($)
    Other
      Annual compensation(1) ($)
    Securities(2)
      Under Options granted (#)
    Shares
      or Units Subject to Resale Restrictions ($)
    LTIP
      Payouts
      ($) (3)
    All
      Other CompensationJames
      Sardo(4) Interim President and Chief Executive Officer
    2004
    $58,333
    Nil
    $1,200
    Nil
    $79,607(5)
    Nil
    NilRobert
      Lamoureux(6) Interim Chief Financial Officer
    2004
    $33,333
    Nil
    $1,200
    Nil
    $45,488(5)
    Nil
    NilAngelo
      Bitondo President, Custom Profiles, Outdoor Products, Royal Building
      Technologies Divisions
    2004
      2003
      2002
    $516,154
      $218,000
      $165,000
    $203,571
      $169,500
      $70,000
    $14,770
      $12,000
      $12,000
    Nil
      Nil
      25,000
    $1,440,000(7)
      Nil
      Nil
    Nil
    NilLarry
      Meehan President, Exterior Cladding Division
    2004
      2003
      2002
    $481,250
      $312,500
      $250,000
    $364,146
      $85,968
      $86,200
    $15,000
      $12,000
      $12,000
    Nil
      Nil
      25,000
    $600,000(7)
      Nil
      Nil
    Nil
    NilEnzo
      Macri President, Housewares Division
    2004
      2003
      2002
    $294,060
      $232,820
      $232,820
    $30,000
      $27,000
      $104,600
    $15,000
      $12,000
      $12,000
    Nil
    $300,000(7)
      Nil
      Nil
    Nil
    NilVic
      De Zen(8) Former Co-Chief Executive Officer
    2004
      2003
      2002
    $245,308
      $900,000
      $500,000
    $25,000
      $780,250
      $3,829,548(9)
    $3,000
      $20,536
      $20,234
    Nil
      Nil
      320,000
    Nil
    Nil
    NilDouglas
      Dunsmuir(11) Former President and Chief Executive Officer
    2004
      2003
      2002
    $1,200,731
      $900,000
      $358,000
    $119,262
      $780,250
      $2,221,820(9)
    $13,000
      $13,707
      $13,647
    Nil
      Nil
      200,000
    $2,400,000(10)
      Nil
      Nil
    Nil
    NilRon
      Goegan(12) Former Chief Financial Officer, Senior Vice President
    2004
      2003
      2002
    $655,385
      $500,000
      $204,000
    $268,095
      $728,150(13)
      $487,728
    $14,318
      $12,000
      $12,000
    Nil
      25,000
      60,000
    $1,980,000(10)
      Nil
      Nil
    Nil
    NilLu
      Galasso(14) Former Vice President and Director of Taxation
    2004
      2003
      2002
    $294,616
      $300,000
      $204,000
    $47,500
      $216,050
      $487,728
    $12,273
      $12,000
      $12,000
    Nil
      25,000
      60,000
    Nil
    Nil
    $550,000(14)Gwain
      Cornish(15) Former Senior Vice President
    2004
      2003
      2002
    $377,885
      $425,000
      $280,000
    $150,000
      $166,050
      $922,728
    $3,000
      $12,000
      $12,000
    Nil
    $480,000(7)
      Nil
      Nil
    Nil
    $2,000,000(15)
 
 (1)
    Other
      Annual Compensation consists of a car allowance. In the case of Mr. De Zen
      and Mr. Dunsmuir, it also includes directors’ fees from two Italian
      subsidiaries of Royal Group which have minority shareholders.(2)
    Options
      exercisable for Subordinate Voting Shares.(3)
    There
      have been no payouts under our SMIP.
  19
  (4)
    Mr.
      Sardo was appointed as our Interim President and Chief Executive Officer
      on November 26, 2004. Table discloses all Mr. Sardo’s compensation paid in
      respect of fiscal 2004.(5)
    DSU
      representing an entitlement to, in the case of Mr. Sardo, 79,607
      Subordinate Voting Shares and, in the case of Mr. Lamoureux, 45,488
      Subordinate Voting Shares. Represents the value of DSU granted pursuant to
      the Directors Deferred Stock Unit Plan. See “-- Election of Directors -
      Directors Deferred Stock Unit Plan” and “Report on Executive Compensation
      - Interim President and Chief Executive Officer and Interim Chief
      Financial Officer Compensation”. Value based on the $12.59 closing price
      of Subordinate Voting Shares on November 26, 2004..(6)
    Mr.
      Lamoureux was appointed as our Interim Chief Financial Officer on November
      26, 2004. Table discloses all Mr. Lamoureux’s compensation paid in respect
      of fiscal 2004.(7)
    RSU
      representing an entitlement to, in the case of Mr. Bitondo, 120,000
      Subordinate Voting Shares, in the case of Mr. Meehan, 50,000 Subordinate
      Voting Shares, in the case of Mr. Macri, 25,000 Subordinate Voting Shares,
      and in the case of Mr. Cornish, 40,000 Subordinate Voting Shares.
      Represents the value of RSU granted pursuant to the SMIP (see “--
      Stock-based Compensation Plans - Senior Management Incentive Plan”). Such
      RSU will vest in 2007 if specified 2006 earnings per share and
      consolidated return on invested capital targets are met. The achievement
      of one of the targets will result in the vesting of 50% of the RSU
      granted. Value based on the $12 closing price of Subordinate Voting Shares
      on the TSX on July 1, 2004, the trading day prior to the grant date.(8)
    Mr.
      De Zen retired as our Co-Chief Executive Officer on December 18, 2003.
      Table discloses all Mr. De Zen’s compensation paid in respect of fiscal
      2004.(9)
    In
      fiscal 2003, our board established the Human Resources and Compensation
      Committee for the review of executive compensation, commencing with the
      retroactive review of bonuses paid to Mr. De Zen and Mr. Dunsmuir for
      fiscal 2002. As a result of that review, the fiscal 2002 bonuses awarded
      to such individuals were reduced by $1,800,000 in respect of Mr. De Zen
      and $1,000,000 in respect of Mr. Dunsmuir. The reductions of the fiscal
      2002 bonuses previously paid to such individuals have been recorded as
      receivables by Royal Group. Accordingly, the above table reflects their
      net bonuses awarded for fiscal 2002 after deducting the reductions (the
      pre-reduction bonuses were $5,629,548 for Mr. De Zen and $3,221,820 for
      Mr. Dunsmuir). Such receivables were to be collected from Mr. De Zen and
      Mr. Dunsmuir by offset to subsequent incentive bonuses awarded and
      otherwise payable to them and as determined by the committee. In fiscal
      2003, the committee reviewed and approved new salary and bonus amounts for
      our executive officers. As directed by the committee, each of Mr. De Zen
      and Mr. Dunsmuir offset $670,250 of their fiscal 2003 bonus award against
      their outstanding receivables. Mr. Dunsmuir repaid the remainder of such
      receivable to Royal Group in fiscal 2004. As at December 31, 2004, the
      remaining amount receivable in respect of Mr. De Zen’s fiscal 2002 bonus
      was $1,129,750. Such amount will be repaid by Mr. De Zen pursuant to the
      Conversion Agreement following conversion of all outstanding Multiple
      Voting Shares to Subordinate Voting Shares.(10)
    All
      such RSU granted to Mr. Dunsmuir and Mr. Goegan in 2004 were cancelled
      effective November 26, 2004.(11)
    During
      fiscal 2004, Mr. Dunsmuir acted as our President and Co-Chief Executive
      Officer from September 15, 2003 to December 18, 2003 and as our President
      and sole Chief Executive Officer from December 18, 2003 to November 26,
      2004. Mr. Dunsmuir’s employment with Royal Group was terminated on
      November 26, 2004. Table discloses all Mr. Dunsmuir’s compensation paid in
      respect of fiscal 2004.(12)
    Mr.
      Goegan was terminated as our Chief Financial Officer on November 26, 2004.(13)
    Mr.
      Goegan was paid a special bonus of $250,000 in fiscal 2003, as recommended
      by a Special Committee of independent directors and approved by the Human
      Resources and Compensation Committee, in recognition of Mr. Goegan’s
      assistance with the Special Committee’s review of shareholder value
      maximization alternatives.(14)
    Mr.
      Galasso retired on October 1, 2004 and received $550,000 payable in six
      equal monthly instalments. See “Report on Executive Compensation -
      Termination of Employment, Change in Responsibilities and Employment
      Agreements”.(15)
    Mr.
      Cornish retired on July 5, 2004 and received $2,000,000 upon his
      retirement. See “Report on Executive Compensation. - Termination of
      Employment, Change in Responsibilities and Employment Agreements”.
 
 **Stock-Based
Compensation Plans**
  We
have two stock-based compensation plans: our Long-Term Incentive Plan
( *LTIP* )
and our Senior Management Incentive Plan ( *SMIP* ),
both of which have been approved by shareholders. The LTIP and SMIP resulted
from an initiative undertaken by our board to design an overall long-term
compensation and incentive regime for our officers and employees consistent with
our interests and those of our shareholders. Our Human Resources and
Compensation Committee is responsible for the administration of both the LTIP
and the SMIP.
  Under
the LTIP and the SMIP and any other stock-based compensation plan that we may
adopt:
  •
    the
      aggregate number of Subordinate Voting Shares initially reserved for
      issuance was 9,328,855 shares;
   20
  •
    the
      aggregate number of Subordinate Voting Shares reserved for issuance to
      insiders (excluding those who are insiders solely by virtue of being a
      director or senior officer of Royal Group) may not exceed 10% of our
      outstanding Subordinate Voting Shares;•
    the
      number of Subordinate Voting Shares issued within a one-year period to
      insiders (excluding those who are insiders solely by virtue of being a
      director or senor officer of Royal Group) may not exceed 10% of our
      outstanding Subordinate Voting Shares;•
    the
      aggregate number of Subordinate Voting Shares authorized for issuance to
      any one insider (excluding those who are insiders solely by virtue of
      being a director or senior officer of Royal Group) within a one-year
      period is limited to 5% of our outstanding Subordinate Voting Shares;•
    the
      aggregate number of Subordinate Voting Shares reserved for issuance may
      not exceed 10% of our outstanding voting shares;•
    the
      number of Subordinate Voting shares issuable in a one-year period may not
      exceed 10% of our outstanding voting shares;•
    as
      at April 22, 2005, since shareholder approval of such plans in January
      2004, a total of 10,000 Subordinate Voting Shares have been issued under
      the LTIP, 88,322 Subordinate Voting Shares were issued in connection with
      a restricted stock unit plan approved by shareholders in February 2004
      which is no longer in effect, and no Subordinate Voting Shares have been
      issued under the SMIP; and•
    as
      at April 22, 2005, an aggregate of 9,230,533 Subordinate Voting Shares
      remain available for issuance under such plans.
  ***Long-Term
Incentive Plan***
  The
LTIP was initially adopted as a stock option plan in 1994 and was amended in
January 2004 to provide for performance vesting criteria. The key features of
the LTIP are set out below.
  •
    The
      maximum number of Subordinate Voting Shares issuable under the LTIP is
      7,830,533 (representing 8.4% of our outstanding voting shares as at April
      22, 2005).•
    The
      aggregate number of Subordinate Voting Shares reserved to any one person
      under any stock option may not exceed 5% of the outstanding Subordinate
      Voting Shares.•
    As
      at April 22, 2005, there were options exercisable for an aggregate of
      3,067,953 Subordinate Voting Shares outstanding representing approximately
      3.3% of our outstanding voting shares as at April 22, 2004.•
    Officers,
      employees and certain consultants of Royal Group are eligible to
      participate in the LTIP. Commencing January 2004 non-management directors
      are no longer eligible for grants under the LTIP.•
    The
      maximum term of each option is nine years from the date of grant.•
    The
      exercise price of each option granted is the closing market price of our
      Subordinate Voting Shares on the day prior to the date of grant on (a) the
      TSX generally, or (b) the New York Stock Exchange in the case of options
      granted to U.S. residents.•
    The
      Human Resources and Compensation Committee may establish performance-based
      vesting criteria based on performance objectives for Royal Group and/or
      individual optionees and any options in respect of which the performance
      vesting criteria is not satisfied are cancelled unless the committee
      determines otherwise.
   21
  •
    Subject
      to the satisfaction of applicable performance criteria, if any, options
      issued after the 2004 amendments to the LTIP vest on the third anniversary
      of the grant date;•
    In
      respect of options granted prior to January 2004, generally, 50% of the
      options awarded pursuant to a specific grant become exercisable at any
      time after the third anniversary of the grant date and the remaining 50%
      of such options become exercisable at any time after the sixth anniversary
      of the grant date.•
    Options
      are not assignable or transferable by an optionee except to a trust, the
      sole trustee and beneficiary of which is the optionee, or by will or the
      laws of devolution and distribution in accordance with the LTIP.•
    Although
      the LTIP permits our board to provide financial assistance to an
      optionholder to enable the exercise some or all of such holder’s options,
      no such assistance was provided in fiscal 2004.•
    Upon
      termination of an optionholders’ employment, options are exercisable,
      subject to satisfaction of any vesting requirements, until the earlier of
      their expiry date and the date that is three months after the optionee’s
      employment ceased (or one year from the optionee’s death or long-term
      disability) unless the Human Resources and Compensation Committee
      determines otherwise except that, if an optionee resigns or is terminated
      for cause, all unexercised options granted to the optionee, whether vested
      or unvested, terminate as at the date of resignation or notice of
      termination of employment, as the case may be, unless the committee
      determines otherwise.•
    The
      LTIP may not be amended without the prior regulatory and shareholder
      approval.
 
 No
options were granted under the LTIP in fiscal 2004. In fiscal 2004, a total of
135,553 options issued under the LTIP were exercised. The following table shows
options exercised by Name of Executive Officers in fiscal 2004 and the value of
unexercised options held by such officers.
  **Aggregated
Option Exercises During the Financial Year Ended December 31, 2004 and Financial
Year End Option Values**
  **Name**
    **Securities****(1)****Acquired
      on Exercise (Number)**
    **Aggregate
      Value Realized**
    **Unexercised
      Options at**
      **December
      31, 2004**
      **(Number)**
    **Value
      of Unexercised**
      **In-The-Money
      Options at**
      **December
      31, 2004****(2)****Exercisable**
    **Unexercisable**
    **Exercisable**
    **Unexercisable**James
      Sardo
    Nil
    Nil
    Nil
    Nil
    Nil
    NilRobert
      Lamoureux
    Nil
    Nil
    Nil
    Nil
    Nil
    NilAngelo
      Bitondo
    Nil
    Nil
    25,000
    25,000
    Nil
    NilLarry
      Meehan
    Nil
    Nil
    30,000
    25,000
    Nil
    NilEnzo
      Macri
    Nil
    Nil
    30,000
    Nil
    Nil
    NilVic
      De Zen
    Nil
    Nil
    1,360,000
    Nil
    Nil
    NilDouglas
      Dunsmuir
    Nil
    Nil
    Nil
    Nil
    Nil
    NilRon
      Goegan
    9,333
    $12,870
    Nil
    Nil
    Nil
    NilLu
      Galasso
    9,333
    $12,870
    42,500
    42,500
    Nil
    NilGwainCornish
    21,777
    $70,775
    Nil
    Nil
    Nil
    Nil
 
 (1)
    Subordinate
      Voting Shares.(2)
    The
      closing price on December 31, 2004 of the Subordinate Voting Shares on the
      TSX was $12.59. No exercise prices are tied to NYSE closing
      prices.
 
 22
  **Senior
Management Incentive Plan**
  The
key features of our SMIP are set out below:
  •
    The
      maximum number of Subordinate Voting Shares issuable under the SMIP is
      1,400,000 (representing approximately 1.5% of our outstanding voting
      shares as at April 22, 2005).•
    As
      at April 22, 2005, there were allocated restricted stock units
      (*RSU*)
      representing the right to receive up to 1,020,000 Subordinate Voting
      Shares, representing approximately 1.1% of our outstanding voting shares
      as at April 22, 2005.•
    Senior
      management and senior employees of Royal Group are eligible to participate
      in the SMIP. Non-management directors may not participate in the SMIP.•
    Participants,
      at the discretion of the Human Resources and Compensation Committee, may
      be allocated RSU as a bonus for services rendered in a year.•
    RSU
      represent the participant’s entitlement to receive on a specified date
      (the*Entitlement
      Date*)
      one Subordinate Voting Share or a cash payment based on the closing price
      on the TSX of the Subordinate Voting Shares on the last trading day
      preceding the Entitlement Date;•
    RSU
      may be subject to vesting criteria established by the Human Resources and
      Compensation Committee, which may include performance objectives for Royal
      Group and/or individual participants, such objectives to be measured as
      determined by such committee. RSU that have not vested by the Entitlement
      Date are cancelled unless the committee otherwise determines.•
    Subordinate
      Voting Shares delivered in satisfaction of RSU entitlements may be issued
      from treasury or purchased in the open market or by private agreement
      (subject to applicable stock exchange rules and policies),•
    If
      a participant dies while in the employment of Royal Group prior to the
      Entitlement Date in respect of a grant of vested RSU, the participant’s
      estate will be entitled to receive, on the Entitlement Date (or on such
      other date determined by the Human Resources and Compensation), the number
      of Subordinate Voting Shares that the participant would have been entitled
      to, or the cash payment that would have been made to the participant, as
      the case may be, had he or she not died and continued in the employment of
      Royal Group until such date.•
    If
      a participant retires prior to the Entitlement Date in respect of a grant
      of RSU, the RSU allocated to such participant will be cancelled (unless
      otherwise determined by the Human Resources and Compensation Committee) as
      of the date of retirement.•
    If
      a participant’s employment with Royal Group terminates for any reason,
      other than death or retirement, prior to the Entitlement Date in respect
      of a grant of RSU, unless otherwise determined by the Human Resources and
      Compensation Committee, the RSU allocated to such participant will be
      cancelled as at the date the participant ceases to be employed with Royal
      Group.•
    The
      SMIP may not be amended without prior TSX approval.
 
 23
 **Securities
Authorized for Issuance Under Equity Compensation Plans**
  **Number
      of securities to be**
      **issued
      upon exercise of**
      **outstanding
      options,**
      **warrants
      and rights**
    **Weighted-average**
      **exercise
      price of outstanding**
      **options,
      warrants and rights**
    **Number
      of securities**
      **remaining
      available for**
      **future
      issuance under equity**
      **compensation
      plans**
      **(excluding
      securities reflected**
      **in
      column (a))****(a)**
    **(b)**
    **(c)****Long-Term
      Incentive Plan****(1)**
    3,067,953
    **$**27.78
    4,762,580**Senior
      Management Incentive Plan****(1)**
    1,020,000(2)
    N/A
    380,000**Total**
    4,087,953
    
    5,142,580
 
 (1)
    Both
      plans were approved by Shareholders on February 25, 2004.(2)
    Represents
      number of Subordinate Voting Shares that may be issued or purchased in the
      market assuming all outstanding RSU vest before applicable Entitlement
      Dates
 
 **REPORT
ON EXECUTIVE COMPENSATION**
  The
Human Resources and Compensation Committee is responsible for, and reports to
the board on, matters relating to compensation, succession planning and
executive level development of Royal Group’s senior officers, in accordance with
the committee’s mandate. As part of its mandate, the Human Resources and
Compensation Committee makes specific recommendations to the board regarding
compensation of senior executives and specifically regarding their base salaries
and bonus awards
  Our
compensation program is intended to attract, retain and motivate individuals
required for the long-term success of Royal Group. Overall compensation is
designed to provide a compensation package that is competitive in the
marketplace in which we compete for resources, which in the case of our most
senior corporate officers includes a group of North American companies of
similar size and scope.
  It
is our policy to compensate our senior executives using three forms of
remuneration: a base salary, bonus awards, and stock option and/or restricted
share units. The relative weight of each component of total compensation is
determined on a case by case basis for each individual senior executive. Royal
Group does not provide retirement benefits to its executives over and above
those made available to all eligible employees under Royal Group’s Group
RRSP/DPSP and 401(k) savings programs.
  **Base
Salaries**
  Base
salaries are set to reflect the responsibilities of each senior executive
officer and to reflect competitive market conditions, usually with reference to
the market median.
  **Bonus
Awards**
  Our
EBITDA-based (earnings before interest, taxes, depreciation and amortization)
bonus plan has been in place since 1994. The bonus plan does not include
financing and capital expenditure decisions. Under this plan, 2% of the EBITDA
of each of our operating units is distributed semi-annually to each such unit’s
senior employees and key operating personnel. If EBITDA for any specific
operating unit is $0 or less, then no EBITDA bonus is awarded to such unit.
Additionally, under this plan, 2% of the consolidated EBITDA of Royal Group
(being the sum of the EBITDA of each operating unit, positive or negative, plus
the further effect of the elimination of all intercompany transactions) is
distributed semi-annually to executive management. Bonus pools in each case are
calculated on an annual basis independent of prior years. The allocation of
bonus pool relating to executive management for fiscal 2004 was determined by
the Human Resources and Compensation Committee based on their evaluation of each
executive’s contribution to Royal Group during fiscal 2004. Bonuses paid to
Named Executive Officers under this plan are disclosed in the Summary
Compensation Table. The committee reviewed the EBITDA-based bonus plan in fiscal
2004 and determined to discontinue the plan commencing January 1, 2005.
 
 24
 The
committee replaced Royal Group’s EBITDA-based bonus plan described above
effective January 1, 2004 for its three most senior corporate executives with a
bonus plan that was weighted 50% for achieving our free cash flow target for
calendar 2004 and 50% for achieving our EBITDA return on invested capital target
for calendar 2004. The bonus opportunity for achieving target performance was
80% of salary for Mr. Dunsmuir and 60% each for Mr. Goegan and Mr. Bitondo. The
committee awarded Mr. Bitondo a $200,000 bonus for calendar 2004 with respect to
the achievement of our predetermined free cash flow target. No bonus was paid
for the EBITDA return on invested capital portion of the plan. In addition, Mr.
Bitondo received a residual bonus under the former corporate EBITDA plan for the
first quarter of fiscal 2004. Mr. Meehan’s and Mr. Macri’s fiscal 2004 bonuses
were based on their divisional bonus plan arrangements. Bonuses paid to such
Named Executive Officers under this plan are disclosed in the Summary
Compensation Table.
  **Stock
Options**
  Variables
in compensation linked to our corporate performance are comprised of bonuses and
stock option grants. Current option grants are taken into account when
determining whether and how many new options grants are to be granted. No option
grants were made during fiscal 2004 to any of Royal Group’s employees, including
the Named Executive Officers.
  **Senior
Management Incentive Plan**
  The
committee made grants under the shareholder-approved SMIP as of July 2, 2004.
These grants will vest 50% based on a predetermined fiscal 2006 earnings per
share target and 50% based on a predetermined fiscal 2006 EBITDA return on
invested capital target. Mr. Dunsmuir’s and Mr. Goegan’s SMIP grants were
cancelled on November 29, 2004. No SMIP grants have been made to Mr. Sardo or
Mr. Lamoureux in their interim capacities.
  **Compensation
of the Chief Executive Officer**
  Mr.
Dunsmuir’s calendar 2004 salary and target total cash compensation were
established by the committee with reference to the median of the comparator
group. His 200,000 SMIP grants cancelled on November 29, 2004 had the same
fiscal 2006 vesting conditions as applied to the grants to all the other
executives.
  **Interim
President and Chief Executive Officer and Chief Financial Officer Compensation**
  Mr.
Sardo’s and Mr. Lamoureux’s interim executive compensation arrangements were
established by the committee after giving due consideration to the advice
provided by two independent executive compensation consulting firms.
  Mr.
Sardo’s and Mr. Lamoureux’s compensation from November 29, 2004 consist of an
annual salary of $700,000 and $400,000 respectively, quarterly DSU grants equal
to 100% of their salary during each quarter divided by the November 26, 2004
closing price of our Subordinate Voting Shares of $10.00, plus a restructuring
bonus of $350,000 each that will be payable on June 30, 2005 conditional on
Royal Group maintaining its required bank financing, as well as securing fiscal
2004 financial statement sign off from Royal Group’s auditors. In addition, they
will receive an allowance of $1,200 per month for the duration of their interim
roles in lieu of reimbursement of automobile expenses or of any other
perquisites. These arrangements are subject to 45 days notice of termination.
  The
intent of the Human Resources and Compensation Committee in setting the
compensation arrangements for our Interim President and Chief Executive Officer
and Interim Chief Financial Officer was to arrive at total compensation,
including the restructuring bonus, in the 50 th percentile range of Royal Group’s comparator group.
  The
foregoing Report on Executive Compensation has been made by the current
independent members of the Human Resources and Compensation Committee: Ronald
Slaght (Chair), Irvine Hollis and Ralph Brehn. Prior to November 29, 2004, the
members of the committee were James Sardo, Ronald Slaght and Irvine Hollis.
 
 
 25
 **Termination
of Employment, Change in Responsibilities and Employment Agreements**
  Mr.
Cornish, our former Senior Vice President, retired effective July 5, 2004 and
was paid $2,000,000 upon his retirement. Mr. Cornish has agreed to act as a
consultant to Royal Group for the period commencing September 1, 2004 and ending
August 31, 2007 for which he is being paid US$240,000 per year.
  Mr.
Galasso, our former Vice President and Director of Taxation, resigned effective
October 1, 2004 and received $550,000 payable in 6 equal monthly instalments.
Mr. Galasso agreed to act as a consultant to Royal Group for the period October
1, 2004 to May 1, 2005 at a fee of $200 per hour. Subject to Mr. Galasso’s
performance being deemed satisfactory to our Chief Executive Officer during this
period, Mr. Galasso is to be paid $50,000 at the end of this term.
  Mr.
Dunsmuir and Mr. Geogan received no severance with respect to their termination
by Royal Group on November 29, 2004.
  No
severance or retirement payments have been or will be made to Mr. De Zen with
respect to his resignation.
  **Performance
Graph**
  The
following graph compares the total cumulative shareholder return for Cdn. $100
invested in Royal Group’s Subordinate Voting Shares (Royal Group has never paid
any dividends) with the cumulative total return of each of the S&P/TSX
Composite Index (see www.tse.com) and the TSX Construction Materials Index since
January 1, 2000.
  **ROYAL
GROUP TECHNOLOGIES LIMITED**
  Share
Performance Graph
 Cumulative
Total Return on Investment of $100
 January 1,
2000 through December 31, 2004
 Dollar
values provided for each fiscal year end.(1)
 
 
 (1) Royal Group has previously compared
      against the TSX Construction Materials Index which is no longer published.
      Commencing fiscal 2004, Royal Group references the TSX Building Products
      Index in the alternative.
 
 
 26
  **INDEBTEDNESS
OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS**
  Except
for the approximately $1.3 million receivable owed by Vic De Zen to Royal Group
described under footnote 11 to the Summary Executive Compensation Table and
under the heading “matters to be voted on at the meeting -
Proposed Share Conversion - Conversion Agreement”, as at the date hereof, no
officer or director or any of their associates is indebted to Royal Group or its
subsidiaries. Royal Group has a policy of not providing loans to any of its
directors, its Chief Executive Officer, Chief Financial Officer or any of its
Senior Vice Presidents.
  **STATEMENT
OF CORPORATE GOVERNANCE PRACTICES**
  Our
current corporate governance practices are in accordance with all but two of the
14 TSX’s Guidelines for Corporate Governance *.* Applicable
provisions of the *Sarbanes-Oxley
Act of 2002* and
rules adopted and proposed by the SEC pursuant to the requirements of that Act
also influence our approach to corporate governance.
  A
detailed comparison of our corporate governance practices compared with the
guidelines is set out in our Corporate Governance Report attached as Appendix B.
  As
a foreign private issuer, we are not required to comply with all of the NYSE’s
corporate governance rules but are required to disclose any significant ways in
which our corporate governance practices differ from such rules.
  Directors
are informed of Royal Group’s business through, among other things, regular
reports from the Chief Executive Officer, and materials provided to them for
their information and review for participation in meetings of the board of
directors and its committees. Certain board meetings in fiscal 2004 were held by
telephone to enable the board to receive brief updates on recent developments in
the business and to approve more pressing matters between regularly scheduled
meetings.
  **DIRECTORS’
AND OFFICERS’ LIABILITY INSURANCE AND INDEMNIFICATION**
  On
our own behalf, and on behalf of our subsidiaries, we maintain directors’ and
officers’ liability insurance which, subject to the provisions contained in the
insurance policy, protects our directors and officers, as such, against all
claims during the term of their office provided they acted honestly and in good
faith with a view to the best interests of the applicable corporation. Such
insurance provides for an aggregate $40 million annual protection against
liability for and reimbursement of amounts paid. The policy carries a $5 million
deductible for each indemnifiable claim made under this indemnification
liability coverage. There is no deductible for claims made against directors and
officers. We paid a premium in connection with this insurance for the financial
year ended December 31, 2004 of $780,453.
  In
connection with an intellectual property dispute, Royal Group paid legal
expenses of Messrs. De Zen and Dunsmuir incurred in fiscal 2004 in the amount of
U.S.$19,915 and U.S.$14,434, respectively.
  **INTEREST
OF INFORMED PERSONS IN MATERIAL TRANSACTIONS**
  Other
than as described under “Proposed Share Conversion”, no informed person (as such
term is defined in National Instrument 51-102), no proposed director of Royal
Group, or any associate or affiliate of any informed person or proposed
director, has or has had any material interest, direct or indirect, in any
transaction or in any proposed transaction since the commencement of our most
recently completed financial year which has materially affected or would
materially affect Royal Group, its affiliates or any of their collective
subsidiaries.
  **RECEIPT
OF SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING**
  Shareholders
entitled to vote at the next annual meeting of shareholders in 2006 and who wish
to submit a proposal in respect of any matters to be raised at such meeting must
ensure that our Corporate Secretary receives the proposal
no later than December 31, 2005 and any such proposal must comply with the
requirements of the *Canada
Business Corporations Act* .
  27
 **DIRECTORS’
APPROVAL**
  The
contents and the sending of this circular to each shareholder entitled to
receive notice of the meeting, to each director and to our auditors have been
approved by the board of directors of Royal Group.
  -s-
Scott Bates
 Scott
Bates
 Vice
President, General Counsel
 and
Corporate Secretary
  Vaughan,
Ontario
 April
22, 2005
  28
  **APPENDIX
A**
 **SPECIAL
RESOLUTION**
  **BE
IT RESOLVED AS A SPECIAL RESOLUTION THAT:**
  1.
    the
      articles of the Corporation be amended to add the following sentence at
      the end of paragraph 9.1 of Section C of Schedule “A”:“This
      paragraph 9.1 does not apply to an increase in stated capital related
      solely to the Multiple Voting Shares.”;2.
    not
      more than $10.00 per share be added to the stated capital account that the
      Corporation maintains in respect of the Multiple Voting Shares of the
      Corporation;3.
    the
      articles of the Corporation to be amended to:(i)
      remove all references to the Multiple Voting Shares, including all rights,
      privileges, restrictions and conditions in respect of the Multiple Voting
      Shares;(ii)
      replace all references to “subordinate voting shares” with “common
      shares”; and(iii)
      make all such consequential amendments as may be necessary to provide for
      one class of voting common shares;4.
    notwithstanding
      that this special resolution has been duly passed by the shareholders of
      the Corporation, the directors of the Corporation are hereby authorized
      and empowered, without further notice to, or approval of, the shareholders
      of the Corporation not to proceed with the amendments to the articles at
      any time prior to the issuance of a certificate of amendment giving effect
      to the amendments;5.
    any
      director or officer of the Corporation is hereby authorized, acting for,
      in the name of and on behalf of the Corporation, to execute, whether under
      the corporate seal of the Corporation or otherwise, and to deliver
      articles of amendment, and such other documents as are necessary or
      desirable, to the Director under the*Canada
      Business Corporations Act*for filing; and6.
    any
      director or officer of the Corporation is hereby authorized, acting for,
      in the name of and on behalf of the Corporation, to execute or cause to be
      executed, under the corporate seal of the Corporation or otherwise, and to
      deliver or to cause to be delivered, all such documents, agreements and
      instruments, and to do or to cause to be done all such other acts and
      things, as such director or officer determines to be necessary or
      desirable in order to carry out the intention of the foregoing paragraphs
      of this resolution and the matters authorized thereby, such determination
      to be conclusively evidenced by the execution and delivery of such
      document, agreement or instrument or the doing of any such act or thing.
 
  A-1
  **APPENDIX
B**
 **CORPORATE
GOVERNANCE REPORT**
  This
corporate governance report has been reviewed by the Nomination and Corporate
Governance Committee and approved by the board of directors of Royal Group.
  Extensive
regulatory changes are in progress, primarily arising from the United States *Sarbanes-Oxley
Act of 2002* and the recently adopted New York Stock Exchange ( *NYSE* )
corporate governance rules, and further changes anticipated from the Ontario
Securities Commission. Royal Group continues to monitor these changes and as
clarification on each is available, appropriate action will be taken.
  For
the purposes of Royal Group’s NYSE listing, it is considered a “foreign private
issuer” which means that Royal Group is not required to comply with most of the
NYSE’s corporate governance listing standards. Under NYSE rules, Royal Group is
required to disclose any significant ways in which its corporate governance
practices differ from those followed by U.S. domestic companies under the NYSE’s
listing standards. Royal Group believes that there are no significant
differences between its corporate governance practices and those required to be
followed by U.S. domestic issuers under the NYSE listing standards except that
Royal Group complies with the TSX rules to obtain shareholder approval of share
compensation arrangements that involve a new issue of shares. Unlike the NYSE
rules, the TSX rules do not require shareholder approval for compensation
arrangements involving share purchases in the open market at fair value. This
disclosure can be accessed at www.royalgrouptech.com.
  Mandates
for Royal Group’s board of directors and committees of the board may be accessed
at www.royalgrouptech.com or may be obtained by writing to: Royal Group Technologies Limited, Attention:
Corporate Secretary, 1 Royal Gate Boulevard, Vaughan, Ontario, L4L 8Z7.
  Described
below are Royal Group’s governance procedures compared with the TSX corporate
governance disclosure guidelines and, where applicable, NYSE rules.
  **Royal****Group****TSX
      Guideline**
    **Alignment**
    **Royal
      Group’s Corporate Governance Practices**1.
      Board should explicitly assume responsibility for stewardship of the
      Corporation, and specifically for:
    Yes
    The
      Board of Directors’ mandate is to supervise the management of the business
      and affairs of Royal Group and to act with a view to the best interests of
      Royal Group. The Board fulfils its mandate directly and through its
      Committees. The Board seeks to ensure that Royal Group is managed so as to
      enhance shareholder value and to ensure its long-term viability. The
      directors are kept informed of Royal Group’s operations at directors’
      meetings and committee meetings and through reports and discussions with
      executive management.In
      April 2005, Royal Group adopted a Code of Business Conduct and Ethics (the*Code*)
      for its directors, officers and employees. The Code is posted on Royal
      Group’s website atwww.royalgrouptech.com.
      No waivers of the Code for directors or executive officers have been
      granted.a)
      Adoption of strategic planning process and approval of a strategic plan
      which takes into account the opportunities and
    Yes
    The
      Board acts in a supervisory role and expects management to be responsible
      for the day-to-day operations of the Corporation and for the development
      of individual business units and overall corporate strategy. The Board
      regularly receives reports on and considers
 
  B-1
  
 **TSX
      Guideline**
    **Royal**
      **Group**
      **Alignment**
    **Royal
      Group’s Corporate Governance Practices**risks
      of the business;
    
    Royal
      Group’s financial position and operating performance and at Board meetings
      considers, together with the Chief Executive Officer and executive
      management, strategy and operational matters.
      
      The
      role of the Board is to review, question and approve the strategies
      proposed by executive management. In addition to those matters which must
      by law be approved by the Board, management must consult with the Board
      before engaging in any significant venture that is outside of Royal
      Group’s existing businesses. Changes in executive management must also be
      approved by the Board.b)
      Identification of the principal risks of the Corporation’s business and
      ensuring and implementation of appropriate systems to manage those risks;
    Yes
    The
      Board considers on a periodic basis the principal risks faced by Royal
      Group and the steps implemented by management to manage these risks. In
      addition, the Audit Committee monitors Royal Group’s internal controls and
      management information systems and reports directly to the Board on a
      regular basis.
      
      As
      required by the United States’*Sarbanes-Oxley
      Act of 2002*,
      the Chief Executive Officer and the Chief Financial Officer certify Royal
      Group’s annual report on Form 40-F and evaluate and report on the
      effectiveness of the Corporation’s disclosure controls and procedures.c)
      Succession planning, including appointing, training and monitoring senior
      management;
    Yes
    The
      Board is responsible for choosing the Chief Executive Officer and
      appointing executive management. The Chief Executive Officer is
      responsible for management development. Through the Human Resources and
      Compensation Committee, the Board reviews and monitors executive
      management’s compensation.d)
      Communications policy;
    Yes
    Royal
      Group has adopted a Disclosure Policy which reflects its commitment to
      provide timely and accurate corporate information to investors,
      shareholders and the general public. This policy sets out the procedures
      to be followed in communicating with investors, shareholders, analysts,
      the media and the general public.
      
      The
      Board approves the annual and interim financial statements, the annual
      information form, all other significant financial communications to
      shareholders, management proxy circulars and press releases on major
      developments.
      
      Royal
      Group maintains an investor relations team which communicates with
      potential and current shareholders and responds to inquiries from the
      public. Communication with the Corporation’s stakeholders is done by
      various means including news releases, trade bulletins, the corporate
      internet sitewww.royalgrouptech.com,
 
  B-2
  
 **TSX
      Guideline**
    **Royal**
      **Group**
      **Alignment**
    **Royal
      Group’s Corporate Governance Practices**mailings
      and regular staff meetings. Most inquiries from shareholders and the
      investment community are referred to Royal Group’s Vice-President of
      Marketing and Corporate Communications who is responsible for ensuring
      that the inquiry is considered by the appropriate members of management
      and that a reply is provided in a timely manner.e)
      Integrity of internal control and management information systems.
    Yes
    The
      Audit Committee is responsible for the oversight of the reliability and
      integrity of accounting principles and practices, financial statements and
      other financial reporting, and disclosure practices followed by
      management. The Audit Committee has oversight responsibility for the
      establishment by management of an adequate system of internal controls and
      the maintenance of practices and processes to assure compliance with
      applicable laws.2.
      A majority of directors should be “unrelated”.
    No
    The
      Board is currently composed of seven directors. Based on information
      provided by directors as to their individual circumstances, three of our
      directors are “outside” (i.e. non-management) directors who are
      “unrelated” to Royal Group and Vic De Zen, its significant shareholder,
      within the meaning of the Guidelines. The “unrelated” directors are Ralph
      Brehn, Irvine Hollis and Ronald Slaght. The “related” directors are Vic De
      Zen, Gwain Cornish, James Sardo and Robert Lamoureux. The “unrelated”
      directors meet regularly without management or related directors present.
      The unrelated directors determine at each meeting of the Board and each
      Committee meeting which of them will preside over the meeting.3.
      The Board has responsibility for applying the definition of “unrelated
      director” to each individual director and for disclosing annually the
      analysis of the application of the principles of supporting this
      definition and whether the Board has a majority of unrelated directors.
    Yes
    The
      Board evaluates whether directors are “related” or “unrelated” in
      accordance with the principles set out in the Guidelines. A director is
      unrelated to the Corporation under the Guidelines if the director is
      independent of management and is free from any interest and any business
      or other relationship which could, or could reasonably be perceived to
      materially interfere with the director’s ability to act in the best
      interests of the Corporation, other than interests and relationships
      arising from the director’s shareholdings. As Royal Group has a
      significant shareholder, the Board also evaluates individual director’s
      interests and relationships with this shareholder to ensure that the
      make-up of the Board fairly reflects the investments in the Corporation by
      shareholders other than the significant shareholder.
      
      Based
      on information provided by directors as to their individual circumstances,
      the Board has determined that seven of the ten persons proposed for
      election to the Board for 2005 are “unrelated” to Royal Group and its
      significant shareholder.
      
      Royal
      Group is controlled by Vic De Zen who, directly or
 
  B-3
  
 **TSX
      Guideline**
    **Royal**
      **Group**
      **Alignment**
    **Royal
      Group’s Corporate Governance Practices**indirectly,
      owns or controls 100% of the outstanding Multiple Voting shares of Royal
      Group and a nominal number of the outstanding Subordinate Voting Shares of
      Royal Group and is a “significant shareholder” within the meaning of the
      Guidelines. Mr. De Zen is also the former Chairman and Chief Executive
      Officer of Royal Group and a “related” director within the meaning of the
      Guidelines.
      
      Gwain
      Cornish was formerly a Senior Vice-President of Royal Group and therefore
      is an “inside” and “related” director within the meaning of the
      Guidelines.
      
      James
      Sardo and Robert Lamoureux are Royal Group’s Interim President and Chief
      Executive Officer and Interim Chief Fianncial Officer, respectively, and
      therefore are “inside” and “related” directors.
      
      NYSE
      rules require that a majority of the Board be “independent” directors.
      Such independence is contingent on the affirmative determination by the
      Board that a director has no material relationship with Royal Group
      (either directly or as a partner, shareholder or officer of an
      organization that has a relationship with Royal Group). Certain listed
      relationships serve as bars to independence. Based on the information
      provided by the directors as to their individual circumstances, the Board
      has determined that seven of the ten persons proposed for election to the
      Board for 2005 are “independent”. Each of Messrs. De Zen, Sardo and
      Lamoureux is not “independent” for the reasons referred to above.4.
      The Board should appoint a committee of directors composed exclusively of
      outside directors, a majority of whom are “unrelated” directors, with
      responsibility for proposing new nominees to the Board and for assessing
      directors on an ongoing basis.
    Yes
    The
      Nomination and Corporate Governance Committee is responsible for
      recommending to the Board suitable director candidates. In undertaking
      this responsibility, the Committee assesses the competencies, skills and
      qualities of the existing Board and committees and identifies any
      additional competencies, skills and qualities deemed to be beneficial.
      
      Prospective
      candidates are identified by the Committee and approached by one or more
      of the directors to explore their interest in joining the Board. Prior to
      joining the Board, a prospective director meets with the Chairman, the
      Lead Director and/or the Chief Executive Officer and various directors to
      discuss the role of
      the
      Board, the role of the Committees and their expectation of the
      contribution of the director, including the time and effort required to be
      effective.
      
      The
      Committee is composed of three “outside” and “unrelated” directors. Such
      directors are “independent” under the NYSE rules.
      
      In
      2004, Royal Group delegated the assessment of directors to the Nomination
      and Corporate Governance Committee.
 
  B-4
  
 **TSX
      Guideline**
    **Royal**
      **Group**
      **Alignment**
    **Royal
      Group’s Corporate Governance Practices**5.
      The Board should implement a process, to be carried out by an appropriate
      committee, for assessing the effectiveness of the Board, its committees
      and individual directors.
    No
    The
      Nomination and Corporate Governance Committee is responsible for assessing
      the effectiveness of the Board and its committees and the contribution of
      individual directors*.*
      
      In
      2005, the Nomination and Corporate Governance Committee will implement a
      process for assessing the Board, its committees and individual directors.6.
      The Board should provide orientation and education programs for new
      directors.
    Yes
    New
      directors are provided with a full orientation on Royal Group. They are
      also provided with a Directors’ Manual which contains historical public
      information about the Corporation, details regarding the structure of the
      Board and its Committees, Royal Group’s corporate policies and by-laws and
      other relevant corporate and business information. New directors also meet
      with members of management and are provided tours of the Corporation’s
      operations. On an ongoing basis, presentations are made and reports are
      provided to the Board on various aspects of Royal Group’s operations.
      
      Each
      director is also entitled to be reimbursed for up to $2,000 of
      professional development expenses each year.7.
      The Board should examine its size and undertake, where appropriate, a
      program to establish the size of the Board which facilitates effective
      decision-making.
    Yes
    The
      Board has determined that it is appropriate for the Board to be composed
      of between seven and twelve directors to allow for open, efficient and
      effective deliberation and does not believe that it would add to the
      quality or efficiency of its decision-making to increase the Board’s size
      beyond twelve. At the annual and special shareholders’ meeting on May 25,
      2005, ten directors will stand for election for a one-year period. The
      Board continues to assess potential candidates for future nominations.8.
      The Board should review the adequacy and form of compensation of directors
      in light of risks and responsibilities involved in being an effective
      director.
    Yes
    At
      least once per year, the Human Resources and Compensation Committee
      reviews the compensation paid to directors to ensure that it is
      competitive and is consistent with the time commitment, contribution,
      risks and responsibilities involved in being an effective director. Only
      non-management directors are compensated. The Committee has engaged an
      external compensation consultant to assist it in this
    process.9.
      Committees of the Board should generally be composed of outside directors,
      a majority of whom are unrelated although some board committees may
      include one or more inside directors.
    Yes
    The
      Board has three standing Committees: the Audit Committee, the Human
      Resources and Compensation Committee and the Nomination and Corporate
      Governance Committee. Each Committee is currently composed of three
      “outside” and “unrelated” directors and all Committee members are
      “independent” under the NYSE rules. Members of management are not members
      of the Committees. Although each Committee meets regularly without members
      of management present, management members regularly attend portions of
      Committee meetings.
 
  B-5
  
 **TSX
      Guideline**
    **Royal**
      **Group**
      **Alignment**
    **Royal
      Group’s Corporate Governance Practices**10.
      The Board should assume responsibility for, or assign to a committee of
      directors responsibility for, developing the approach to corporate
      governance issues. This committee, would among other things, be
      responsible for the Corporation’s response to these governance guidelines.
    Yes
    The
      Nomination and Corporate Governance Committee monitors the practices for
      governance amongst Canadian and United States companies and reviews Royal
      Group’s governance practices to ensure Royal Group continues to enhance
      its standards for corporate governance. Subject to the Board’s oversight,
      this Committee is responsible for Royal Group’s response to these
      governance guidelines.
      
      The
      Chief Executive Officer, Chief Financial Officer and the Vice President,
      Accounting and Financial Reporting must comply with Royal Group’s Code of
      Ethics for Principal Executive Officers and Senior Financial Officers. The
      Nomination and Corporate Governance Committee is responsible for granting
      any waivers of this Code. None have been granted to date.11.
      The Board, together with the Chief Executive Officer, should develop
      position descriptions for the Board, and for the Chief Executive Officer,
      including the definition of the limits to management’s responsibilities.
      The Board should approve or develop corporate objectives which the Chief
      Executive Officer is responsible for meeting and assess the Chief
      Executive Officer against these objectives.
    Yes
    The
      Board has established written mandates for itself and for its Committees.
      The Board’s mandate includes Royal Group’s corporate governance
      guidelines. Such mandates are posted on Royal Group’s website atwww.royalgrouptech.com.
      
      The
      Board has developed a description of the role of the Chief Executive
      Officer including the corporate objectives for which the Chief Executive
      Officer is responsible.
      
      It
      is the intention of the Nomination and Corporate Governance Committee to
      review the Chief Executive Officer’s position description in 2005 and to
      recommend changes to the Board where appropriate.
      
      The
      Board looks to executive management to identify matters which should be
      considered by the Board, to provide it with all information and
      documentation relevant to the Board’s consideration of those issues and to
      remain alert to developments in the business environment in which Royal
      Group operates. The Board is satisfied that Royal Group’s executive
      management is responding to these expectations.12.
      The Board should implement structures and procedures which ensure that it
      can function independently of management. An appropriate structure would
      be to (i) appoint a chair of the Board who is not a member of management
      with responsibility to ensure that the Board discharges its
      responsibilities or
    Yes
    Royal
      does not currently have a Chairman of the Board. The Lead Director and the
      Interim President and Chief Executive Officer are different people.
      
      The
      Interim President and Chief Executive Officer and the Interim Chief
      Financial Officer are the only current members of management on the Board.
      All directors are expected to exercise critical judgement at all times and
      the “unrelated” directors have unrestricted, direct access to
 
  B-6
  
 **TSX
      Guideline**
    **Royal**
      **Group**
      **Alignment**
    **Royal
      Group’s Corporate Governance Practices**(ii)
      adopt alternate means such as assigning this responsibility to a committee
      of the Board or to a director, sometimes referred to as the “lead
      director”. Appropriate procedures may involve the Board meeting on a
      regular basis without management present and may involve assigning the
      responsibility for administering the Board’s relationship with management
      to a committee of the Board.
    
    Royal
      Group’s executive management and to its external auditors. The Board and
      its Committees meet independently of management and “related” directors
      where appropriate.
      
      As
      Royal Group does not currently have a Chairman of the Board, when meeting
      independently the “unrelated” directors select a chairperson from amongst
      themselves.13.
      The Audit Committee should be:a)
      composed of only “outside” directors.
    Yes
    The
      Audit Committee is composed of three “outside” and “unrelated” directors.
      All members of the Audit Committee are “independent” under the NYSE rules
      as well as the applicable U.S. Securities Exchange Act of 1934 rules for
      audit committee independence.b)
      The Audit Committee’s duties should include oversight responsibility for
      management reporting on internal control. While it is management’s
      responsibility to design and implement an effective system of internal
      control, it is the responsibility of the Audit Committee to ensure that
      management has done so.
    Yes
    The
      Audit Committee requires management to implement and maintain appropriate
      internal controls. The Committee approves the audit and non-audit services
      provided by the external auditors to ensure they are consistent with
      maintaining the auditors’ independence. The Audit Committee reviews the
      independence of the external auditors and confirms the independence of the
      external auditors in accordance with applicable regulations. The external
      auditors are accountable to the Audit Committee and to the Board as
      representatives of the shareholders.14.
      The Board should implement a system to enable an individual director to
      engage an outside advisor at the Corporation’s expense in appropriate
      circumstances. The engagement of the outside advisor should be subject to
      the approval of an appropriate committee of the Board.
    Yes
    An
      individual director may engage outside advisors, including financial
      advisors, accountants and lawyers, at the expense of the Corporation
      subject to the approval of the Audit Committee. The Audit Committee is
      composed of “outside” and “unrelated” directors.
 
 
 
 B-7
 
 
 
 
 
 
 
 
 
   
 **Royal
Group Technologies Limited**
  **Head
Office**
 1
Royal Gate Blvd.
 Vaughan,
Ontario
 Canada
L4L 8Z7
  Telephone:
(905) 264-0701
 Facsimile:
(905) 264-0702
  E-mail:
info@royalgrouptech.com
 Web
Site: www.royalgrouptech.com
  **Royal
and the crown design are trademarks of Royal Group Technologies Limited and are
used by it and its affiliates.**
  Copyright
© 2005 Royal Group Technologies Limited.
 All
Rights Reserved.