Document:

EX-4.5

 Exhibit 4.5 
  

 
 Management’s Discussion & Analysis 

As at May 9, 2016 
 Management’s Discussion &
Analysis (“MD&A”) provides a review of the results of operations of Emera Incorporated and its subsidiaries and investments (“Emera”) during the first quarter of 2016 relative to 2015; and its financial position as at
March 31, 2016 relative to December 31, 2015. To enhance shareholders’ understanding, certain multi-year historical financial and statistical information is also presented. Throughout this discussion, “Emera Incorporated”,
“Emera” and “Company” refer to Emera Incorporated and all of its consolidated subsidiaries and investments. 
 This discussion and
analysis should be read in conjunction with the Emera Incorporated unaudited condensed consolidated interim financial statements and supporting notes as at and for the three months ended March 31, 2016; and the Emera Incorporated annual
MD&A and audited consolidated financial statements and supporting notes as at and for the year ended December 31, 2015. Emera follows United States Generally Accepted Accounting Principles (“USGAAP” or “GAAP”). 

The accounting policies used by Emera’s rate-regulated entities may differ from those used by Emera’s non-rate-regulated businesses with respect to
the timing of recognition of certain assets, liabilities, revenues and expenses. Emera’s rate-regulated subsidiaries and investments include: 
  

			
	 Emera Rate-Regulated Subsidiary or Investment
	  	 Accounting Policies Approved/Examined By

	Subsidiary	  	
		
	 Nova Scotia Power Inc. (“NSPI”)
	  	 Nova Scotia Utility and Review Board (“UARB”)

		
	 Emera Maine
	  	 Maine Public Utilities Commission (“MPUC”) and the Federal Energy Regulatory Commission
(“FERC”)

		
	 Barbados Light & Power Company Limited (“BLPC”)
	  	 Fair Trading Commission, Barbados

		
	 Grand Bahama Power Company Limited (“GBPC”)
	  	 The Grand Bahama Port Authority (“GBPA”)

		
	 Dominica Electricity Services Ltd. (“Domlec”)
	  	 Independent Regulatory Commission, Dominica (“IRC”)

		
	 Emera Brunswick Pipeline Company Limited (“Brunswick Pipeline”)
	  	 National Energy Board (“NEB”)

		
	Investment	  	
		
	 NSP Maritime Link Inc. (“NSPML”)
	  	 UARB

		
	 Maritimes & Northeast Pipeline Limited Partnership and Maritimes & Northeast Pipeline LLC
(“M&NP”)
	  	 NEB and FERC

		
	 Labrador Island Link Limited Partnership (“LIL”)
	  	 Newfoundland and Labrador Board of Commissioners of Public Utilities

		
	 St. Lucia Electricity Services Limited (“Lucelec”)
	  	 Government of St. Lucia

 All amounts are in Canadian dollars (“CAD”), except for the Emera Maine and Emera Caribbean sections of the
MD&A, which are reported in US dollars (“USD”), unless otherwise stated. 

  
 1 

 Additional information related to Emera, including the Company’s Annual Information Form, can be found on
SEDAR at www.sedar.com. 
 Forward-Looking Information 

This MD&A contains “forward-looking information” and statements which reflect the current view with respect to the Company’s expectations
regarding future growth, results of operations, performance, business prospects and opportunities and may not be appropriate for other purposes within the meaning of applicable Canadian securities laws. All such information and statements are made
pursuant to safe harbor provisions contained in applicable securities legislation. The words “anticipates”, “believes”, “could”, “estimates”, “expects”, “intends”, “may”,
“plans”, “projects”, “schedule”, “should”, “budget”, “forecast”, “might”, “will”, “would”, “targets” and similar expressions are often intended to
identify forward-looking information, although not all forward-looking information contains these identifying words. The forward-looking information reflects management’s current beliefs and is based on information currently available to
Emera’s management and should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the time at which, such events, performance or results will be achieved. 

The forward-looking information is based on reasonable assumptions and is subject to risks, uncertainties and other factors that could cause actual results to
differ materially from historical results or results anticipated by the forward-looking information. Factors which could cause results or events to differ from current expectations are discussed in the Outlook section of the MD&A and may also
include: regulatory risk; operating and maintenance risks; changes in economic conditions; commodity price and availability risk; capital market and liquidity risk; completion of the TECO Energy, Inc. (“TECO Energy”) acquisition;
uncertainty regarding the length of time required to complete the TECO Energy acquisition; future dividend growth; timing and costs associated with certain capital projects; the expected impacts on Emera of challenges in the global economy;
estimated energy consumption rates; maintenance of adequate insurance coverage; changes in customer energy usage patterns; developments in technology could reduce demand for electricity; weather; commodity price risk; construction and development
risk; unanticipated maintenance and other expenditures; derivative financial instruments and hedging availability and inability to complete the Debenture Offering and the financing; failure by the Company to repay the acquisition credit facilities;
alternate sources of funding that would be used to replace the acquisition credit facilities may not be available when needed; impact of acquisition related expenses; interest rate risk; credit risk; commercial relationship risk; disruption of fuel
supply; country risks; environmental risks; foreign exchange; regulatory and government decisions, including changes to environmental, financial reporting and tax legislation; risks associated with pension plan performance and funding requirements;
loss of service area; risk of failure of information technology infrastructure and cybersecurity risks; market energy sales prices; labour relations; and availability of labour and management resources. 

Readers are cautioned not to place undue reliance on forward-looking information as actual results could differ materially from the plans, expectations,
estimates or intentions and statements expressed in the forward-looking information. All forward-looking information in this MD&A is qualified in its entirety by the above cautionary statements and, except as required by law, Emera undertakes no
obligation to revise or update any forward-looking information as a result of new information, future events or otherwise. 

  
 2 

 Structure of MD&A 

This MD&A begins with an Introduction and Strategic Overview; followed by the Consolidated Financial Review and Outstanding Common Stock data; then
presents information specific to Emera’s consolidated subsidiaries and investments: 
  

	 	•	 	NSPI; 

  

	 	•	 	Emera Maine; 

  

	 	•	 	Emera Caribbean includes BLPC and Domlec and their parent company, Emera (Caribbean) Incorporated (“ECI”), GBPC, and Lucelec; 

 

	 	•	 	Pipelines includes Brunswick Pipeline and M&NP; 

  

	 	•	 	Emera Energy includes Emera Energy Services (“EES”); Emera Energy Generation (“EEG”) which includes Bridgeport Energy, Tiverton Power and Rumford Power (“New England Gas Generating
Facilities”), Brooklyn Power Corporation (“Brooklyn Energy” or “Brooklyn”) and Bayside Power Limited Partnership (“Bayside Power” or “Bayside”); Bear Swamp Power Company LLC (“Bear Swamp”);

  

	 	•	 	Corporate and Other includes: 

  

	 	•	 	Interest revenue on intercompany financings and costs associated with corporate activities that are not directly allocated to the operations of Emera’s consolidated subsidiaries and investments; 

 

	 	•	 	Acquisition costs related to the pending acquisition of TECO Energy; 

  

	 	•	 	Emera Utility Services Inc. (“Emera Utility Services”); 

  

	 	•	 	Emera Newfoundland & Labrador Holdings Inc. (“ENL”) and its investments in NSPML and LIL; 

  

	 	•	 	Emera Reinsurance Limited; 

  

	 	•	 	Emera’s investment in Algonquin Power & Utilities Corp. (“APUC”) and; 

  

	 	•	 	Other investments 

 The Liquidity and Capital Resources, including Consolidated Cash Flow Highlights, Outlook,
Transactions with Related Parties, Risk Management and Financial Instruments, Disclosure and Internal Controls, Critical Accounting Estimates, Changes in Accounting Policies and Practices and Summary of Quarterly Results sections of the MD&A are
presented on a consolidated basis. 
 INTRODUCTION AND STRATEGIC OVERVIEW 

Emera Incorporated is a geographically diverse energy and services company that invests in electricity generation, transmission and distribution, gas
transmission and utility services. Emera provides regional energy solutions by connecting its assets, markets and partners in Canada, the United States, and the Caribbean. Emera is targeting eight-per-cent annual dividend growth through 2019. 

Regulated utilities are the foundation of Emera’s business, providing the Company with strong and consistent earnings. At the core of Emera’s
utilities strategy is identifying opportunities to invest in the transition from higher-carbon methods of electricity generation to lower-carbon alternatives. NSPI has invested in wind energy, biomass and hydroelectricity and is on track to meet a
minimum 40 per cent renewable standard by 2020. In the Caribbean, Emera is similarly focused on introducing cleaner generation alternatives, with an emphasis on affordability and fuel cost stability for its customers. 

Emera is investing in electricity transmission to help deliver new renewable energy to market. Emera’s ownership in the Maritime Link Project will
contribute to the transformation of the electricity market in the Atlantic Provinces, enabling growth in the availability of clean, renewable energy for the region. In addition, the Atlantic Provinces will be connected to the northeastern United
States, providing potential for excess renewable energy to be delivered throughout that region. 

  
 3 

 Since its formation in 2003, Emera Energy has become an active participant in the northeastern United States
electricity and natural gas market. It has built a strong marketing, trading and asset management business, based on comprehensive market knowledge, focus on customer service and robust risk management. The integration and performance of the three
New England Gas Generating Facilities purchased in 2013 has contributed significantly to the success of Emera Energy. 
 Energy markets worldwide, in
particular across North America, are undergoing foundational changes that have created significant investment opportunities for companies with Emera’s experience and capabilities. Key trends contributing to these investment opportunities
include: aging infrastructure, environmental concerns (including demand for new, less carbon-intensive and renewable generation), lower-cost natural gas, growing demand for new electric heating solutions, and the requirement for large-scale
transmission projects to deliver new energy sources to customers. Within this context, Emera is focused on growing shareholder value by identifying reliable and affordable energy solutions, typically involving the replacement of higher-carbon
electricity generation with generation from cleaner sources, and the related transmission and distribution infrastructure to deliver that energy to market. 

Emera has strong partnerships and relationships throughout the regions in which it operates and has established a diverse investment and operations profile
that links its assets and capabilities in those regions. At the core of Emera’s strategy is the ability to leverage these particular linkages and adjacencies to create solutions for customers and investment opportunities for the Company. 

The foundation of Emera’s strategy is its collaborative approach to strategic partnerships, its ability to find creative solutions to work within and
across multiple jurisdictions, and its experience dealing with complex projects and investment structures. The Company will continue to make investments in its regulated utilities to benefit customers and focus on providing rate stability for
customers. From time to time, Emera will make acquisitions, both regulated and unregulated, where the business or asset acquired aligns with Emera’s strategic initiatives and delivers shareholder value. 

To ensure stability in adjusted net income and cash flows, Emera employs operating and governance models that focus on safety and operational excellence,
constructive regulatory approaches, proactive stakeholder engagement and a customer focus through service reliability and rate stability. 
 Emera targets
achieving 75 to 85 per cent of its adjusted income (a non-GAAP measure described in the section below) from rate-regulated subsidiaries, which generally contribute strong, predictable income and cash flows that fund dividends, reinvestment and
which is reflective of the Company’s risk tolerance. 
 In 2015, approximately 65 per cent of Emera’s adjusted net income was earned by its
rate-regulated subsidiaries, which is lower than previous years and the Company’s strategic target. Specifically, the lower percentage of adjusted net income was the result of a substantial increase in Emera Energy’s earnings primarily due
to strong performance by the New England Gas Generating Facilities, and a strengthening US dollar. It was not the result of a change in Emera’s risk tolerance, nor is it from additional capital allocations to non-regulated businesses.
Rather, it was the result of strong operating and financial performance of existing non-regulated investments and businesses. Following the close of the pending TECO Energy acquisition, the Company is expected to achieve its adjusted net income
target. 
 Emera has grown its asset base to enable growth and deliver on its strategic objectives. Over the last 10 years, Emera’s ability to raise
the capital necessary to fund investments has been a strong enabler of the Company’s growth. This was demonstrated in Emera’s recent issue of convertible debentures represented by instalment receipts in relation to the pending TECO Energy
acquisition. In addition to access to debt and equity capital markets, cash flow from operations will continue to play a role in financing the Company’s future growth. Maintaining strong, investment grade credit ratings is an important
component of Emera’s financing strategy. 
 The energy industry is seasonal in nature. Seasonal patterns and other weather events, including the number
and severity of storms, can affect demand for energy and cost of service. Similarly, mark-to-

  
 4 

 
market adjustments that do not qualify for hedge accounting or regulatory accounting can have a material impact on the financial results for a specific period. Results in any one quarter are not
necessarily indicative of results in any other quarter, or for the year as a whole. 
 Non-GAAP Financial Measures 

Emera uses financial measures that do not have standardized meaning under USGAAP and may not be comparable to similar measures presented by other entities.
Emera calculates the non-GAAP measures by adjusting certain GAAP measures for specific items the Company believes are significant, but not reflective of underlying operations in the period, as detailed below: 

 

			
	 Non-GAAP measure
	  	 GAAP measure

	Adjusted net income attributable to common shareholders or adjusted net income	  	Net income attributable to common shareholders
		
	Adjusted earnings per common share – basic	  	Earnings per common share – basic
		
	Adjusted contribution to consolidated net income	  	Contribution to consolidated net income
		
	Adjusted income before provision for income taxes	  	Income before provision for income taxes
		
	Adjusted contribution to consolidated earnings per common share – basic	  	Contribution to consolidated earnings per common share – basic
		
	EBITDA	  	Net income
		
	Adjusted EBITDA	  	Net income
		
	Electric margin	  	Income from operations

 Adjusted Net Income 

Emera calculates an adjusted net income measure by excluding the effect of: 
  

	 	•	 	the mark-to-market adjustments related to Emera’s held-for-trading (“HFT”) derivative instruments, including adjustments related to the price differential between the point where natural gas is sourced
and where it is delivered; 

  

	 	•	 	the mark-to-market adjustments included in Emera’s equity income related to the business activities of Bear Swamp; 

  

	 	•	 	the amortization of transportation capacity recognized as a result of certain Emera Energy marketing and trading transactions; 

  

	 	•	 	the mark-to-market adjustments related to an interest rate swap in Brunswick Pipeline; and 

  

	 	•	 	the mark-to-market adjustments included in Emera’s other income related to the effect of pending TECO Energy acquisition related USD-denominated currency and forward contracts. These contracts were put in place to
economically hedge the anticipated proceeds from the 2015 sale of $2.1 billion four per cent convertible unsecured subordinated debentures represented by instalment receipts (“the Debenture Offering” or “Debentures” or
“Convertible Debentures”) for the pending TECO Energy acquisition. 

 Management believes excluding from income the effect of these
mark-to-market valuations and changes thereto, until settlement, better aligns the intent and financial effect of these contracts with the underlying cash flows and the ongoing operations of the business, and allows investors to better understand
and evaluate the business. Management and the Board of Directors use this non-GAAP measure for evaluation of performance and incentive compensation. 

Mark-to-market adjustments are further discussed in the Consolidated Financial Highlights section, Emera Energy – Review of 2016, Pipelines – Review
of 2016 and Corporate and Other – Review of 2016. 

  
 5 

 The following is a reconciliation of reported net income attributable to common shareholders to adjusted net
income attributable to common shareholders, and reported earnings per common share – basic to adjusted earnings per common share – basic: 
  

									
	For the	  	Three months ended March 31	 
	 millions of Canadian dollars (except per share amounts)
	  	2016	 	  	2015	 
	 Net income attributable to common shareholders
	  	$	44.3	  	  	$	160.1	  
	 After-tax mark-to-market gain (loss)
	  	$	(75.9	) 	  	$	(11.5	) 
	 Adjusted net income attributable to common shareholders
	  	$	120.2	  	  	$	171.6	  
	 Earnings per common share – basic
	  	$	0.30	  	  	$	1.10	  
	 Adjusted earnings per common share – basic
	  	$	0.81	  	  	$	1.18	  

 EBITDA and Adjusted EBITDA 

Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) is a non-GAAP financial measure used by Emera. EBITDA is used by
numerous investors and lenders to better understand cash flows and credit quality. EBITDA is useful to assess Emera’s operating performance and indicates the Company’s ability to service or incur debt, make capital expenditures and finance
working capital requirements. 
 Adjusted EBITDA is a non-GAAP financial measure used by Emera. Similar to adjusted net income calculations, this measure
represents EBITDA absent the income effect of Emera’s mark-to-market adjustments, as previously discussed. 
 The Company’s EBITDA and Adjusted
EBITDA may not be comparable to the EBITDA measures of other companies, but in management’s view appropriately reflects Emera’s specific financial condition. These measures are not intended to replace “Net income attributable to
common shareholders” which, as determined in accordance with GAAP, is an indicator of operating performance. EBITDA and Adjusted EBITDA are discussed further in the Consolidated Financial Review, NSPI, Emera Maine, Emera Caribbean, Pipelines,
Emera Energy, and Corporate and Other sections. 
 EBITDA and Adjusted EBITDA Reconciliation 

 

									
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 	  	2016	 	  	2015	 
	 Net income
	  	$	54.8	  	  	$	174.1	  
	 Interest expense, net
	  	 	75.2	  	  	 	44.4	  
	 Income tax expense (recovery)
	  	 	26.8	  	  	 	61.4	  
	 Depreciation and amortization
	  	 	87.5	  	  	 	82.8	  
	 EBITDA
	  	 	244.3	  	  	 	362.7	  
	 Mark-to-market gain (loss), excluding income tax and interest
	  	 	(75.1	) 	  	 	(21.5	) 
		  	  
	  
	 	  	  
	  
	 
	 Adjusted EBITDA
	  	$	319.4	  	  	$	384.2	  
		  	  
	  
	 	  	  
	  
	 

 Electric Margin 

“Electric margin” is a non-GAAP financial measure used to show the amounts that NSPI, BLPC, GBPC and Domlec retain to recover non-fuel costs.
Prudently incurred fuel costs are recovered from customers, except in Domlec, where substantially all fuel costs are passed to customers through the fuel pass-through mechanism. Management believes measuring electric margin shows the portion of
these utilities’ revenues that directly contribute to Emera’s income as distinguished from the portion of revenues that are managed through fuel adjustment mechanisms, which have a minimal impact on income. 

  
 6 

 Emera Energy also reports “Electric margin” because the sales price of electricity and the cost of
natural gas used to generate it are highly correlated. However, their absolute values can vary materially over time. Emera Energy believes that “Electric margin”, as the net result, provides a meaningful measure of business performance in
addition to the absolute values of sales and fuel expenses, which are also reported. 
 Electric margin, as calculated by Emera, may not be comparable to
the electric margin measures of other companies, but in management’s view appropriately reflects Emera’s specific condition. This measure is not intended to replace “Income from operations” which, as determined in accordance with
GAAP, is an indicator of operating performance. Electric margin is discussed further in the NSPI – Electric Margin, the Emera Caribbean – Electric Margin and the Emera Energy – Adjusted EBITDA sections. 

Significant Items Affecting Earnings 
 2016 

After-Tax Mark-to-Market Losses 
 After-tax mark-to-market
losses increased $64.4 million to $75.9 million in Q1 2016 compared to $11.5 million in Q1 2015 primarily due to reversal of the 2015 gain on USD-denominated currency and forward contracts related to the financing of the pending TECO Energy
acquisition and the amortization of 2015 Emera Energy gas transportation assets. This increase was partially offset by the reversal of 2015 mark-to-market losses and changes in gas and power contract positions at Emera Energy. 

Acquisition Related Costs 
 Emera incurred after-tax costs
of $17.5 million ($0.12 per common share) in Q1 2016 (2015 – nil) related to its pending acquisition of TECO Energy, including legal, advisory, and financing costs. 

As discussed and included above in “After-Tax Mark-to-Market Losses”, the foreign currency earnings effect related to the Debenture Offering USD
cash balance and the forward contracts were recorded as a mark-to-market after-tax loss of $121.1 million in “Other income (expenses), net” in Q1 2016 (2015 – nil). 

2015 
 Sale of Northeast Wind Partnership II, LLC
(“NWP”) Equity Investment 
 On January 29, 2015, Emera completed the sale of its 49-per-cent interest in NWP for $282.3 million ($223.3
million USD). This sale resulted in a pre-tax gain of $18.6 million or $0.13 per common share (after-tax gain of $11.5 million or $0.08 per common share), which was recorded in “Other income (expenses), net” in Q1 2015. 

CONSOLIDATED FINANCIAL REVIEW 
 In Q1 2016, Emera
affiliates in the northeastern United States and Atlantic Canada experienced less demand for electricity as a result of unseasonably warm weather. Specifically, NSPI, Emera Maine and Emera Energy’s New England Gas Generating Facilities results
were affected. Below is a table highlighting significant changes between adjusted net income from 2015 to 2016. 

  
 7 

					
	For the	 	Three months ended	 
	 millions of Canadian dollars
	 	March 31	 
	 Adjusted net income – 2015
	 	$	171.6	  
	 Emera Energy (largely due to New England Gas Generation Facilities) (1)
	 	 	(17.0	) 
	 Acquisition and financing costs relating to the pending acquisition of TECO Energy (1)
	 	 	(17.5	) 
	 NSPI
	 	 	(15.5	) 
	 2015 gain on the sale of NWP
	 	 	(11.5	) 
	 Increased equity earnings from NSPML and LIL
	 	 	3.8	  
	 Other (1)
	 	 	6.3	  
		 	  
	  
	 
	 Adjusted net income – 2016
	 	$	120.2	  
		 	  
	  
	 

  

	(1)	These numbers include the impact of the stronger USD. 

 Consolidated Financial Highlights 

 

									
	For the	  	Three months ended March 31	 
	 millions of Canadian dollars (except per share amounts)
	  	2016	 	  	2015	 
	 Operating revenues
	  	$	877.0	  	  	$	888.5	  
	 Income from operations
	  	 	270.0	  	  	 	232.1	  
	 Net income attributable to common shareholders
	  	 	44.3	  	  	 	160.1	  
	 After-tax mark-to-market gain (loss)
	  	 	(75.9	) 	  	 	(11.5	) 
	 Adjusted net income attributable to common shareholders
	  	 	120.2	  	  	 	171.6	  
	 Earnings per common share – basic
	  	$	0.30	  	  	$	1.10	  
	 Earnings per common share – diluted
	  	$	0.30	  	  	$	1.09	  
	 Adjusted earnings per common share – basic
	  	$	0.81	  	  	$	1.18	  
		  	  
	  
	 	  	  
	  
	 
	 Dividends per common share declared
	  	$	0.4750	  	  	$	0.3875	  
		  	  
	  
	 	  	  
	  
	 
	 Adjusted EBITDA
	  	$	319.4	  	  	$	384.2	  
		  	  
	  
	 	  	  
	  
	 
		
	For the	  	Three months ended March 31	 
	 millions of Canadian dollars (except per share amounts)
	  	2016	 	  	2015	 
	 Operating Unit Contributions to Adjusted Net Income
	  				  			
	 NSPI
	  	$	52.5	  	  	$	68.0	  
	 Emera Maine
	  	 	9.3	  	  	 	11.5	  
	 Emera Caribbean
	  	 	9.8	  	  	 	8.8	  
	 Pipelines
	  	 	9.7	  	  	 	9.9	  
	 Emera Energy
	  	 	47.9	  	  	 	76.4	  
	 Corporate and Other
	  	 	(9.0	) 	  	 	(3.0	) 
	 Adjusted net income attributable to common shareholders
	  	$	120.2	  	  	$	171.6	  
	 After-tax mark-to-market gain (loss)
	  	 	(75.9	) 	  	 	(11.5	) 
		  	  
	  
	 	  	  
	  
	 
	 Net income attributable to common shareholders
	  	$	44.3	  	  	$	160.1	  
		  	  
	  
	 	  	  
	  
	 
		
	For the	  	Three months ended March 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Operating cash flow before changes in working capital
	  	$	232.4	  	  	$	257.5	  
	 Change in working capital
	  	 	(51.8	) 	  	 	(137.9	) 
	 Operating cash flow
	  	$	180.6	  	  	$	119.6	  
	 Investing cash flow
	  	$	(139.3	) 	  	$	195.9	  
		  	  
	  
	 	  	  
	  
	 
	 Financing cash flow
	  	$	(45.8	) 	  	$	(259.3	) 
		  	  
	  
	 	  	  
	  
	 
			
	As at	  	March 31	 	  	December 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Working capital
	  	$	580.3	  	  	$	599.2	  
	 Total assets
	  	$	11,448.6	  	  	$	11,950.0	  

  
 8 

 Q1 Consolidated Income Statement and Operating Cash Flow Highlights 

Operational Results 
 Income from operations increased
$37.9 million to $270.0 million in Q1 2016 compared to $232.1 million in Q1 2015 primarily due to mark-to-market increases of $91.7 million, the impact of a stronger USD and increased marketing and trading margin at Emera Energy. This was partially
offset by decreased margin at the New England Gas Generating Facilities and decreased income from operations at NSPI. 
 Details of the operating revenues
and operating expenses line item variances are described below: 
 Total operating revenues decreased 1.3 per cent to $877.0 million in Q1 2016
compared to $888.5 million in Q1 2015 primarily due to: 
  

	 	•	 	mark-to-market changes increased operating revenues by $95.9 million. 

  

	 	•	 	a $60.1 million decrease at the New England Gas Generating Facilities reflecting lower hedged and market commodity prices and decreased sales volumes due to weather; 

 

	 	•	 	a $49.0 million decrease in NSPI revenues as a result of lower sales volumes due to weather; 

  

	 	•	 	a $10.5 million decrease at Bayside primarily due to lower power prices; 

  

	 	•	 	a $10.4 million increase at Emera Maine primarily due to the impact of a stronger USD; 

  

	 	•	 	an $8.1 million increase in marketing and trading margin at Emera Energy primarily due to the impact of a stronger USD and growth in the volume of business. 

Total operating expenses decreased 7.5 per cent to $607.0 million in Q1 2016 compared to $656.4 million in Q1 2015. This was primarily the result of
decreased fuel costs at NSPI and New England Gas Generating Facilities reflecting lower commodity prices and decreased sales volumes due to weather, partially offset by higher operating, maintenance and general expenses (“OM&G”) at
NSPI reflecting increased storm costs, and the impact of a stronger USD. 
 Other income (expenses), net 

Other income decreased $161.1 million to $(139.2) million in Q1 2016 compared to $21.9 million in Q1 2015. This was primarily due to mark-to-market losses
relating to the effect of USD-denominated currency and forward contracts put into place to economically hedge anticipated proceeds from the Debenture Offering financing and the 2015 gain on the sale of NWP. 

Interest expense, net 
 Interest expense increased $30.8
million to $75.2 million in Q1 2016 compared to $44.4 million in Q1 2015 primarily due to interest on convertible debentures represented by instalment receipts related to the pending acquisition of TECO Energy. 

Income tax expense (recovery) 
 Income tax expense
decreased $34.6 million to $26.8 million in Q1 2016 compared to $61.4 million in Q1 2015. This was primarily due to decreased income before provision for income taxes including mark-to-market adjustments, partially offset by the non-deductible
portion of TECO Energy related mark-to-market losses on USD-denominated currency and forward contracts related to the pending acquisition. 

  
 9 

 Operating Activities 

Net cash provided by operating activities increased $61.0 million to $180.6 million in Q1 2016 compared to $119.6 million in Q1 2015. Cash from operations
before changes in working capital decreased by $25.1 million primarily due to decreased margin at the New England Gas Generating Facilities and the payment of financing costs related to the pending acquisition of TECO Energy. 

Changes in working capital increased operating cash flows by $86.1 million primarily due to favourable changes in accounts receivable reflecting lower sales
volumes at NSPI and favourable changes in inventory reflecting the purchase of emission credits by the New England Gas Generating Facilities in 2015. 

Effect of Foreign Currency Translation 
 Emera’s
foreign currency-denominated results are affected by exchange rate fluctuations. Revenue, operating expense, net income, and adjusted net income are translated at the weighted average rate of exchange. The amounts in the table below are calculated
by multiplying the current period foreign denominated results by the change in the weighted average foreign exchange from the prior period. The table below shows the estimated effect of foreign currency translation on key income statement items:

  

									
	 millions of Canadian dollars (except per share amounts)
	  	Q1 2016 vs Q1 2015	 	  	Q1 2015 vs Q1 2014	 
	 Impact on income from continuing operations
	  				  			
	 Total operating revenues
	  	$	48.5	  	  	$	43.3	  
	 Total operating expenses
	  	 	(25.7	) 	  	 	(32.5	) 
	 Net income
	  	 	15.8	  	  	 	9.2	  
	 Adjusted net income
	  	 	7.2	  	  	 	11.0	  
	 Impact on earnings per share
	  				  			
	 Basic
	  	$	0.11	  	  	$	0.06	  
	 Basic -adjusted
	  	$	0.05	  	  	$	0.08	  

 Emera’s weighted average exchange rates are shown in the following table: 

 

													
	 	  	Three months ended March 31	 
	 Average equivalent of $1.00 USD
	  	2016	 	  	2015	 	  	2014	 
	 CAD
	  	 	1.38	  	  	 	1.24	  	  	 	1.10	  

  
 10 

 Consolidated Balance Sheets Highlights 

Significant changes in the consolidated balance sheets between December 31, 2015 and March 31, 2016 include: 

 

							
	 	  	Increase	 	 	 
	 millions of Canadian dollars
	  	(Decrease)	 	 	 Explanation

	Assets	  				 	
	Cash and cash equivalents	  	$	(73.9	) 	 	Decreased primarily due to the impact of a stronger CAD
	Receivables, net	  	 	32.9	  	 	Increased due to seasonal trends of business at NSPI and Emera Energy
	Inventory	  	 	(53.5	) 	 	Decreased primarily due to lower fuel inventory volumes as a result of consumption and lower commodity pricing at NSPI
	Derivative instruments (current and long-term)	  	 	(239.3	) 	 	Decreased primarily due to the effect of a stronger CAD and settlements of derivative instruments at Emera Energy and NSPI
	Prepaid expenses	  	 	22.1	  	 	Increased primarily due to timing of provincial grants in lieu of taxes and insurance payments at NSPI
	Property, plant and equipment, net of accumulated depreciation	  	 	(173.1	) 	 	Decreased primarily due to the effect of a stronger CAD on the translation of Emera’s foreign subsidiaries and depreciation, offset by additions
	Investments subject to significant influence	  	 	64.4	  	 	Increased primarily due to increased investments in LIL and NSPML
	Other assets (current and long-term)	  	 	(70.2	) 	 	Decreased primarily due to the amortization of transportation/storage capacity assets at Emera Energy
	Liabilities and Equity	  				 	
	Short-term debt and long-term debt (including current portion)	  	 	(27.5	) 	 	Decreased primarily due to the effect of a stronger CAD on debt held by foreign subsidiaries
	Accounts payable	  	 	(22.7	) 	 	Decreased primarily due to the effect of a stronger CAD on the translation of Emera’s foreign subsidiaries
	Derivative instruments (current and long-term)	  	 	(218.2	) 	 	Decreased primarily due to settlements of natural gas and power contracts at Emera Energy
	Regulatory liabilities (current and long-term)	  	 	(74.4	) 	 	Decreased primarily due to changes in regulated derivatives, partially offset by an increased FAM regulatory liability at NSPI
	Other liabilities (current and long-term)	  	 	(47.8	) 	 	Decreased primarily due to the effect of a stronger CAD on the Bear Swamp investment, payment of restructuring costs at Emera Caribbean and timing of accruals
	Common stock	  	 	41.5	  	 	Increased primarily due to issuance of common stock for the dividend reinvestment program
	Accumulated other comprehensive income	  	 	(130.7	) 	 	Decreased primarily due to the effect of a stronger CAD on the translation of Emera’s foreign subsidiaries
	Retained earnings	  	 	(25.7	) 	 	Decreased due to dividends payments in excess of net income
	Non-controlling interest in subsidiaries	  	 	(28.8	) 	 	Decreased due to increased ownership by Emera in ECI

 Developments 
 Emera

 Pending Acquisition of TECO Energy 
 On
September 4, 2015, the Company announced a definitive agreement (“the acquisition agreement”) for Emera to acquire TECO Energy (NYSE:TE) (“the Transaction”). TECO Energy shareholders will receive $27.55 USD per common share
in cash, which represents an aggregate purchase price of approximately $10.4 billion USD and includes the assumption of approximately $3.9 billion USD of debt. 

  
 11 

 TECO Energy is an energy-related holding company with regulated electric and gas utilities in Florida and New
Mexico. TECO Energy’s holdings include: Tampa Electric, an integrated regulated electric utility which serves nearly 725,000 customers in West Central Florida; Peoples Gas System, a regulated gas distribution utility which serves nearly 365,000
customers across Florida; and New Mexico Gas Co., a regulated gas distribution utility which serves more than 515,000 customers across New Mexico. 
 The
Transaction is expected to close mid-2016. Closing of the pending acquisition remains subject to approval by the New Mexico Public Regulation Commission (“NMPRC”), and the satisfaction of customary closing conditions. 

On April 11, 2016, Emera and TECO Energy filed an unopposed Stipulation Agreement reflecting a settlement reached with intervening parties in the
acquisition case pending before the NMPRC for approval of Emera’s proposed acquisition of TECO Energy and the indirect acquisition of New Mexico Gas Co. 

The Stipulation Agreement sets out a number of Emera’s commitments including honouring commitments made by TECO Energy in its 2014 acquisition case,
investing in the expansion of the natural gas system to underserved communities and the Mexican border, and providing resources to support certain economic growth projects and programs. The Stipulation Agreement is subject to review and approval by
the NMPRC. The hearing for Emera’s pending acquisition of TECO Energy occurred on May 2, 2016. A decision is expected mid-2016. 
 On
March 23, 2016, The Committee on Foreign Investment in the United States approval was received. 
 ECI Amalgamation 

On February 24, 2016, the common shareholders of ECI approved an amalgamation transaction, which resulted in an Emera wholly owned subsidiary owning all
common shares of ECI. Prior to this, Emera held 95.5 per cent of ECI’s common shares.
 To effect the amalgamation, all issued and
outstanding common shares of ECI were converted to Class A redeemable preferred shares. In Q1 2016, the Class A redeemable preferred shares of ECI not owned were redeemed. Minority ECI shareholders could elect to receive $23.26 ($33.30
Barbadian dollars (“BBD”)) in cash per common share (“Cash Offer”) or 2.1 Depositary Receipts (“DR”) per common share, with each DR representing one quarter of a common share of Emera (“DR Offer”); or a
combination of the two offers. The total consideration paid to redeem the minority interest was $15.3 million ($23.4 million BBD), consisting of $14.4 million of the Cash Offer ($22.0 million BBD) and $0.9 million of the DR Offer ($1.4 million
BBD). The amalgamated entity retained the name Emera (Caribbean) Incorporated. 
 Recent Financing Activity 

NSPI 
 On April 28, 2016, NSPI increased its committed
syndicated revolving bank line of credit to $600 million from $500 million. The increase will support ongoing business requirements and general corporate purposes. 

  
 12 

 OUTSTANDING COMMON STOCK DATA 
  

									
	Common stock	  	millions of	 	  	millions of Canadian	 
	 Issued and outstanding:
	  	shares	 	  	dollars	 
	 December 31, 2014
	  	 	143.78	  	  	$	2,016.4	  
	 Issuance of common stock (1)
	  	 	1.25	  	  	 	53.7	  
	 Issued for cash under Purchase Plans at market rate
	  	 	2.10	  	  	 	88.3	  
	 Discount on shares purchased under Dividend Reinvestment Plan
	  	 	—  	  	  	 	(4.1	) 
	 Options exercised under senior management stock option plan
	  	 	0.08	  	  	 	2.3	  
	 Employee Share Purchase Plan
	  	 	—  	  	  	 	0.9	  
		  	  
	  
	 	  	  
	  
	 
	 December 31, 2015
	  	 	147.21	  	  	$	2,157.5	  
	 Issuance of common stock (1)
	  	 	0.06	  	  	 	2.7	  
	 Issued for cash under Purchase Plans at market rate
	  	 	0.58	  	  	 	26.2	  
	 Discount on shares purchased under Dividend Reinvestment Plan
	  	 	—  	  	  	 	(1.2	) 
	 Options exercised under senior management stock option plan
	  	 	0.50	  	  	 	13.6	  
	 Employee Share Purchase Plan
	  	 	—  	  	  	 	0.2	  
		  	  
	  
	 	  	  
	  
	 
	 March 31, 2016
	  	 	148.35	  	  	$	2,199.0	  
		  	  
	  
	 	  	  
	  
	 

  

	1)	During the three months ended March 31 2016, Emera issued 0.06 million (2015 - 1.25 million) common shares to facilitate the creation and issuance of an additional 0.2 million (2015 - 5 million)
depositary receipts in connection with the ECI amalgamation transaction. The depositary receipts are listed on the Barbados Stock Exchange. 

As at April 25, 2016, the amount of issued and outstanding common shares was 148.4 million. 

The weighted average shares of common stock outstanding – basic, which includes both issued, outstanding common stock and outstanding deferred share
units, for the three months ended March 31, 2016 was 148.7 million (2015 – 144.9 million). 

  
 13 

 NSPI 

Overview 
 NSPI is a fully-integrated regulated electric
utility with assets of approximately $4.6 billion. It is the primary electricity supplier in Nova Scotia providing electricity generation, transmission and distribution services to approximately 507,000 customers. NSPI’s target regulated return
on equity (“ROE”) range is currently 8.75 per cent to 9.25 per cent, based on an actual five-quarter average regulated common equity component of up to 40.0 per cent. 

Review of 2016 
 NSPI Net Income 

 

									
	For the	  	Three months ended
March 31	 
	 millions of Canadian dollars (except per share amounts)
	  	2016	 	  	2015	 
	 Operating revenues – regulated
	  	$	397.5	  	  	$	446.5	  
	 Regulated fuel for generation and purchased power (1)
	  	 	141.5	  	  	 	189.4	  
	 Regulated fuel adjustment mechanism and fixed cost deferrals
	  	 	17.6	  	  	 	(7.2	) 
	 Operating, maintenance and general
	  	 	87.4	  	  	 	79.6	  
	 Provincial grants and taxes
	  	 	9.7	  	  	 	9.6	  
	 Depreciation and amortization
	  	 	48.4	  	  	 	51.5	  
	 Total operating expenses
	  	 	304.6	  	  	 	322.9	  
	 Income from operations
	  	 	92.9	  	  	 	123.6	  
	 Other expenses, net
	  	 	1.3	  	  	 	3.8	  
	 Interest expense, net
	  	 	31.0	  	  	 	28.8	  
	 Income before provision for income taxes
	  	 	60.6	  	  	 	91.0	  
	 Income tax expense (recovery)
	  	 	8.1	  	  	 	21.0	  
	 Net income of Nova Scotia Power Inc.
	  	 	52.5	  	  	 	70.0	  
	 Preferred stock dividends
	  	 	—  	  	  	 	2.0	  
	 Contribution to consolidated net income
	  	$	52.5	  	  	$	68.0	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated earnings per common share
	  	$	0.35	  	  	$	0.47	  
		  	  
	  
	 	  	  
	  
	 
	 EBITDA
	  	$	140.0	  	  	$	171.3	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Regulated fuel for generation and purchased power includes affiliate transactions and proceeds from the sale of natural gas. 

In Q1 2016, NSPI’s contribution to consolidated net income decreased $15.5 million to $52.5 million compared to $68.0 million in Q1 2015. 

Highlights of the net income changes are summarized in the following table: 
  

					
	For the	 	Three months ended	 
	 millions of Canadian dollars
	 	March 31	 
	 Contribution to consolidated net income – 2015
	 	$	68.0	  
	 Decreased electric margin (see Electric Margin section below for explanation)
	 	 	(19.5	) 
	 Increased operating, maintenance and general (“OM&G”) expenses primarily due to
higher maintenance and storm costs, partially offset by decreased demand side management (“DSM”) program costs
	 	 	(7.8	) 
	 Decreased fixed cost deferrals primarily due to 2015 DSM regulatory deferral, partially offset by
a reduction in the amount of non-fuel revenues deferred
	 	 	(5.6	) 
	 Decreased income taxes primarily due to decreased income before provision for income
taxes
	 	 	12.9	  
	 Decreased depreciation and amortization primarily due to a lower regulatory amortization as a
result of a fixed cost deferral from 2012 being fully amortized in 2015
	 	 	3.1	  
	 Other, net (1)
	 	 	1.4	  
		 	  
	  
	 
	 Contribution to consolidated net income – 2016
	 	$	52.5	  
		 	  
	  
	 

  

	(1)	Amounts exclude variances included in the calculation of electric margin. 

  
 14 

 Operating Revenues – Regulated 

NSPI’s Operating Revenues – regulated include sales of electricity and other services as summarized in the following table: 

 

									
	For the	  	Three months ended March 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Electric revenues
	  	$	391.7	  	  	$	440.0	  
	 Other revenues
	  	 	5.8	  	  	 	6.5	  
		  	  
	  
	 	  	  
	  
	 
	 Operating revenues – regulated
	  	$	397.5	  	  	$	446.5	  
		  	  
	  
	 	  	  
	  
	 

 Electric Revenues 

Electric sales volume is primarily driven by general economic conditions, population, weather, and DSM activities. Residential and commercial electricity sales
are seasonal, with Q1 being the strongest period, reflecting colder weather and fewer daylight hours in the winter. 
 NSPI’s residential load
generally comprises individual homes, apartments and condominiums. Commercial customers include small retail operations, large office and commercial complexes, universities and hospitals. Industrial customers include manufacturing facilities and
other large volume operations. Other electric revenues consist primarily of sales to municipal electric utilities and revenues from street lighting. 

Electric sales volumes are summarized in the following tables by customer class: 
  

													
	 Q1 Electric Sales Volumes

Gigawatt hours (“GWh”)
	  	 	 	  	 	 	  	 	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Residential
	  	 	1,431	  	  	 	1,589	  	  	 	1,568	  
	 Commercial
	  	 	840	  	  	 	919	  	  	 	883	  
	 Industrial
	  	 	578	  	  	 	602	  	  	 	601	  
	 Other
	  	 	79	  	  	 	111	  	  	 	90	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	2,928	  	  	 	3,221	  	  	 	3,142	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Electric revenues are summarized in the following tables by customer class: 

 

													
	Q1 Electric Revenues	 
	 millions of Canadian dollars
	  	 	 	  	 	 	  	 	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Residential
	  	$	223.4	  	  	$	248.2	  	  	$	232.8	  
	 Commercial
	  	 	109.2	  	  	 	119.4	  	  	 	109.1	  
	 Industrial
	  	 	48.1	  	  	 	57.9	  	  	 	55.8	  
	 Other
	  	 	11.0	  	  	 	14.5	  	  	 	13.3	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	391.7	  	  	$	440.0	  	  	$	411.0	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 15 

 Electric revenues decreased $48.3 million to $391.7 million in Q1 2016 compared to $440.0 million in Q1 2015.
Highlights of the changes are summarized in the following table: 
  

					
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 Electric revenues – 2015
	  	$	440.0	  
	 Decreased fuel related electricity pricing effective January 1, 2016
	  	 	(3.8	) 
	 Decreased commercial and residential sales volume due to weather
	  	 	(31.5	) 
	 Decreased industrial sales volume
	  	 	(9.6	) 
	 Other
	  	 	(3.4	) 
		  	  
	  
	 
	 Electric revenues – 2016
	  	$	391.7	  
		  	  
	  
	 

 Regulated Fuel for Generation and Purchased Power 

 

													
	Q1 Production Volumes	 
	 GWh
	  	 	 	  	 	 	  	 	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Coal and petroleum coke (“petcoke”)
	  	 	1,688	  	  	 	2,248	  	  	 	2,273	  
	 Natural gas
	  	 	285	  	  	 	164	  	  	 	179	  
	 Oil
	  	 	141	  	  	 	249	  	  	 	135	  
	 Purchased power – other
	  	 	95	  	  	 	87	  	  	 	47	  
	 Total non-renewables
	  	 	2,209	  	  	 	2,748	  	  	 	2,634	  
	 Wind and hydro – renewables
	  	 	406	  	  	 	384	  	  	 	416	  
	 Purchased power – renewables, including IPP and COMFIT
	  	 	469	  	  	 	317	  	  	 	254	  
	 Biomass – renewables
	  	 	70	  	  	 	52	  	  	 	53	  
	 Total renewables
	  	 	945	  	  	 	753	  	  	 	723	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total production volumes
	  	 	3,154	  	  	 	3,501	  	  	 	3,357	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
				
	 Q1 Average Fuel Costs
	  	 	 	  	 	 	  	 	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Dollars per megawatt hour (“MWh”) produced
	  	$	45	  	  	$	54	  	  	$	51	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Average unit fuel costs decreased in Q1 2016 compared to Q1 2015 primarily due to decreased commodity pricing and decreased
load, requiring less generation to be sourced from higher cost alternatives. 
 NSPI’s Fuel Costs are affected by commodity prices and generation mix
which is largely dependent on economic dispatch of the generating fleet, bringing the lowest cost options on stream first (after renewable energy from independent power producers (“IPP”), including Community Feed-In Tariff
(“COMFIT”) participants), such that the incremental cost of production generally increases as sales volumes increase. Generation mix may also be affected by plant outages, availability of renewable generation, plant performance and
compliance with environmental standards and regulations. 
 Historically, coal and petcoke have the lowest per unit fuel cost, after NSPI-owned regulated
hydro and wind, which have no fuel cost component. Purchased power, natural gas, oil and biomass have the next lowest fuel cost, depending on the relative pricing of each.

The generation mix is transforming with the addition of new non-dispatchable renewable energy sources such as wind, including IPP and COMFIT, which typically
has a higher cost per MWh. 

  
 16 

 Regulated fuel for generation and purchased power decreased $47.9 million to $141.5 million in Q1 2016 compared
to $189.4 million in Q1 2015. Highlights of the changes are summarized in the following table: 
  

					
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 Regulated fuel for generation and purchased power – 2015
	  	$	189.4	  
	 Change in generation mix
	  	 	11.2	  
	 Decreased commodity prices
	  	 	(38.2	) 
	 Decreased sales volumes
	  	 	(18.3	) 
	 Other
	  	 	(2.6	) 
		  	  
	  
	 
	 Regulated fuel for generation and purchased power – 2016
	  	$	141.5	  
		  	  
	  
	 

 Regulated Fuel Adjustment Mechanism (“FAM”) and Fixed Cost Deferrals 

Regulated Fuel Adjustment Mechanism and FAM Regulatory Deferral 

NSPI has a Fuel Adjustment Mechanism which enables it to seek recovery of Fuel Costs through regularly scheduled rate adjustments. Differences between actual
Fuel Costs and amounts recovered from customers through electricity rates in a given year are deferred to a FAM regulatory asset or liability and recovered from or returned to customers in a subsequent year.

The FAM is subject to an incentive, with NSPI retaining or absorbing 10 per cent of the over or under-recovered to a maximum of $5 million. The incentive
was suspended for 2012 to 2015, as a result of UARB approved settlement agreements and is in effect for 2016. 
 In December 2015, the UARB approved
NSPI’s 2016 base cost of fuel and its recovery of prior period unrecovered fuel related costs as submitted in NSPI’s filings. Approved customer rates reset the base cost of fuel rate for 2016 and seek to recover $13.7 million of prior
years’ unrecovered Fuel Costs in 2016. Recovery of these costs began January 1, 2016. 
 On December 18, 2015, the Electricity Plan
Implementation (2015) Act (the “Electricity Plan Act”) was enacted by the Province of Nova Scotia. In accordance with the Electricity Plan Act, NSPI filed with the UARB, on March 7, 2016, a three-year rate plan for Fuel Costs,
requesting an average increase of 1.3 per cent for 2017 through 2019. A hearing is scheduled for June 13, 2016. Differences between actual Fuel Costs and amounts recovered from customers through electricity rates during this period will be
deferred to a FAM regulatory asset or liability and recovered from or returned to customers subsequent to 2019. 
 The Electricity Plan Act further directed
NSPI to apply any non-fuel revenues in excess of NSPI’s approved range of return in 2015 and 2016 to the FAM, which will be reserved to be applied in the 2017 to 2019 period. In addition, the financial benefit resulting from a change in the
recognition of tax benefits for the South Canoe and Sable Wind Projects is to be reserved and applied to the FAM to be used in the 2017 to 2019 period. The exception to this direction is application of a sufficient amount of non-fuel revenues to
offset potential fuel related rate increases for certain customer classes in 2016 that would otherwise have been required. This amount totals $4.6 million. Therefore, as at December 31, 2015, NSPI had deferred $4.6 million of excess non-fuel
revenues to 2016 and $40.1 million of excess non-fuel revenues for the periods 2017 to 2019. 
 In Q1 2016, NSPI applied $3.8 million of non-fuel revenues
to the FAM for periods 2017 to 2019. This was as a result of applying the tax benefits associated with the South Canoe and Sable Wind Projects, as directed by the Electricity Plan Act. 

Pursuant to the FAM Plan of Administration, NSPI’s Fuel Costs are subject to independent audit. The audit for fiscal 2014 and 2015 is currently underway.

  
 17 

 The FAM included in the Statements of Income includes the effect of Fuel Costs in both the current and preceding
years, specifically, and as detailed in the table below: 
  

	 	•	 	The difference between actual Fuel Costs and amounts recovered from customers in the current year. This amount, net of the incentive component, is deferred to a FAM regulatory asset in “Regulatory assets” or a
FAM regulatory liability in “Regulatory liabilities” on the Balance Sheets; and 

  

	 	•	 	The recovery from (rebate to) customers of under (over) recovered Fuel Costs from prior years. 

 The FAM
regulatory asset (liability) includes amounts recognized as a regulated fuel adjustment mechanism and associated interest that is included in “Interest expense, net” on the Consolidated Statements of Income. Details of the FAM regulatory
asset (liability), classified in “Regulatory assets” or “Regulatory liabilities” on the Consolidated Balance Sheets, are summarized in the following table: 

 

					
	 millions of Canadian dollars
	  	2016	 
	 FAM regulatory liability – Balance as at January 1
	  	$	(28.3	) 
	 Under (over) recovery of current period Fuel Costs
	  	 	(10.0	) 
	 Rebate to (recovery from) customers of prior years’ Fuel Costs
	  	 	(3.8	) 
	 Interest on FAM balance
	  	 	(0.7	) 
	 Application of non-fuel revenues
	  	 	(3.8	) 
		  	  
	  
	 
	 FAM regulatory liability – Balance as at March 31
	  	$	(46.6	) 
		  	  
	  
	 

 Electric Margin 
 NSPI
distinguishes electric revenues related to the recovery of Fuel Costs (“fuel electric revenues”) from revenues related to the recovery of non-fuel costs (“non-fuel electric revenues”) because the FAM effectively seeks to recover
all prudently incurred fuel costs, and consequently, Fuel Costs and related revenues (Fuel Electric Revenues) do not have a material effect on NSPI’s electric margin or net income, with the exception of the incentive component of the FAM,
whereby NSPI retains or absorbs 10 per cent of the over or under recovered amount to a maximum of $5 million. 
 Electric margin is influenced
primarily by revenues relating to non-fuel costs. NSPI’s customer classes contribute differently to NSPI’s non-fuel electric revenues, with residential and commercial customers contributing more than industrial customers under current
rates. Accordingly, changes in residential and commercial load, largely due to the effects of weather, from general economic conditions and from DSM have the largest effect on non-fuel electric revenues and electric margin. Changes in industrial
load, which are generally due to economic conditions, have less of an effect on non-fuel electric revenues than would a similar volume change in residential and commercial load. 

The addition of new generation sources to meet legislated greenhouse gas emission reductions and renewable generation requirements is among the drivers
increasing NSPI’s fixed costs. Electric margin, which represents revenues available to cover these costs, has increased in a corresponding manner. 

  
 18 

 Operating revenues are summarized in the following table: 

 

									
	For the	  	Three months ended March 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Fuel electric revenues – current year
	  	$	152.0	  	  	$	165.7	  
	 Fuel electric revenues – recovery of preceding years
	  	 	3.8	  	  	 	18.2	  
	 Non-fuel electric revenues
	  	 	235.9	  	  	 	256.1	  
	 Other revenues
	  	 	5.8	  	  	 	6.5	  
		  	  
	  
	 	  	  
	  
	 
	 Operating revenues
	  	$	397.5	  	  	$	446.5	  
		  	  
	  
	 	  	  
	  
	 

 Electric margin is summarized in the following table: 

 

									
	 Fuel electric revenues – current year
	  	$	 152.0	  	  	$	 165.7	  
	 Fuel electric revenues – recovery of preceding years
	  	 	3.8	  	  	 	18.2	  
	 Total fuel electric revenues
	  	 	155.8	  	  	 	183.9	  
	 Regulated fuel for generation and purchased power
	  	 	(141.5	) 	  	 	(189.4	) 
	 Regulated fuel adjustment mechanism
	  	 	(13.8	) 	  	 	5.4	  
	 Fuel-related foreign exchange gain (loss) (1)
	  	 	0.2	  	  	 	0.1	  
	 Net fuel revenue (expense) (2)
	  	 	0.7	  	  	 	—  	  
	 Non-fuel electric revenues
	  	 	235.9	  	  	 	256.1	  
		  	  
	  
	 	  	  
	  
	 
	 Electric margin
	  	$	236.6	  	  	$	256.1	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	As reported in “Other expenses, net” on the Consolidated Statements of Income. 

	(2)	Net fuel revenue is a result of the FAM incentive. 

 NSPI’s electric margin decreased $19.5 million to
$236.6 million in Q1 2016 compared to $256.1 million in Q1 2015 due to decreased non-fuel electric revenues primarily due to decreased residential and commercial sales reflecting decreased load, primarily due to weather. 

 

													
	 Q1 Average Electric Margin/MWh
	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Dollars per MWh sold
	  	$	81	  	  	$	80	  	  	$	80	  

 NSPI’s electric margin per MWh is consistent period over period. 

  
 19 

 Non-GAAP Measure 

Electric Margin Reconciliation 
 “Electric
margin” is a non-GAAP financial measure used to show the amounts that NSPI retains to recover its non-fuel costs, as effectively all prudently incurred Fuel Costs are recovered through the FAM. NSPI’s electric margin may not be comparable
to other companies’ electric margin measures, but in management’s view appropriately reflects NSPI’s regulatory framework. This measure is not intended to replace “Income from operations” which, as determined in accordance
with GAAP, is an indicator of operating performance. Electric margin was discussed in the Financial Review Electric Margin section above. 
  

									
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 	  	2016	 	  	2015	 
	 Income from operations
	  	$	92.9	  	  	$	123.6	  
	 Less:
	  				  			
	 Fuel electric revenue
	  	 	155.8	  	  	 	183.9	  
	 Other revenue
	  	 	5.8	  	  	 	6.5	  
	 Add back:
	  				  			
	 Regulated fuel for generation and purchased power
	  	 	141.5	  	  	 	189.4	  
	 Operating, maintenance and general
	  	 	87.4	  	  	 	79.6	  
	 Provincial grants and taxes
	  	 	9.7	  	  	 	9.6	  
	 Depreciation and amortization
	  	 	48.4	  	  	 	51.5	  
	 Regulated fuel adjustment mechanism and fixed cost deferrals
	  	 	17.6	  	  	 	(7.2	) 
	 Other fuel related costs
	  	 	0.7	  	  	 	—  	  
		  	  
	  
	 	  	  
	  
	 
	 Electric margin
	  	$	236.6	  	  	$	256.1	  
		  	  
	  
	 	  	  
	  
	 

 EMERA MAINE 
 Overview

 Emera Maine is a transmission and distribution electric utility with assets of approximately $1.1 billion, serving 158,000 customers in the State of
Maine in the United States. 
 Emera Maine’s electric revenue is comprised of distribution operations, local and regional transmission operations and
stranded cost recoveries. The rates for each element are established in distinct regulatory proceedings.
  

	 	•	 	Emera Maine’s distribution rates are set on a 9.55 per cent ROE, with a common equity component of 49 per cent.

  

	 	•	 	For local transmission operations, the rate for the Bangor Hydro District is set on a 10.57 per cent ROE. For the Maine Public Service District, the rate is set on a 10.2 per cent ROE effective June 1 for
wholesale and July 1 for retail customers. The Bangor Hydro District’s bulk transmission assets are managed by ISO-New England as part of a region-wide pool of assets and have a ROE range of 11.07 per cent to 11.74 per cent. The
common equity component is based upon the average balances in the prior calendar year.

  

	 	•	 	For stranded cost recoveries, the rate for the Bangor Hydro District is set on a 5.9 per cent ROE, with a common equity component of 48 per cent and for the Maine Public Service District it is set on
6.75 per cent ROE with a common equity component of 48 per cent. 

 Emera Maine operates under a traditional cost-of-service
regulatory structure. All amounts are reported in USD, unless otherwise stated. 

  
 20 

 Review of 2016 

Emera Maine Net Income 
  

									
	For the	  	Three months ended March 31	 
	 millions of US dollars (except per share amounts)
	  	2016	 	  	2015	 
	 Operating revenues – regulated
	  	$	57.7	  	  	$	55.8	  
	 Operating revenues – non-regulated
	  	 	0.2	  	  	 	—  	  
	 Total operating revenues
	  	 	57.9	  	  	 	55.8	  
	 Regulated fuel for generation and purchased power
	  	 	7.8	  	  	 	7.7	  
	 Transmission pool expense (1)
	  	 	6.3	  	  	 	6.1	  
	 Operating, maintenance and general
	  	 	15.9	  	  	 	13.2	  
	 Provincial, state and municipal taxes
	  	 	3.6	  	  	 	3.5	  
	 Depreciation and amortization
	  	 	10.7	  	  	 	8.8	  
	 Total operating expenses
	  	 	44.3	  	  	 	39.3	  
	 Income from operations
	  	 	13.6	  	  	 	16.5	  
	 Other income (expenses), net
	  	 	0.2	  	  	 	1.1	  
	 Interest expense, net
	  	 	3.6	  	  	 	3.4	  
	 Income before provision for income taxes
	  	 	10.2	  	  	 	14.2	  
	 Income tax expense (recovery)
	  	 	3.4	  	  	 	4.9	  
	 Contribution to consolidated net income – USD
	  	$	6.8	  	  	$	9.3	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated net income – CAD
	  	$	9.3	  	  	$	11.5	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated earnings per common share – CAD
	  	$	0.06	  	  	$	0.08	  
		  	  
	  
	 	  	  
	  
	 
	 Net income weighted average foreign exchange rate – CAD/USD
	  	$	1.37	  	  	$	1.24	  
		  	  
	  
	 	  	  
	  
	 
	 EBITDA – USD
	  	$	24.5	  	  	$	26.4	  
		  	  
	  
	 	  	  
	  
	 
	 EBITDA – CAD
	  	$	33.5	  	  	$	32.8	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Transmission pool expense is included in “Regulated fuel for generation and purchased power” on the Consolidated Statements of Income. 

Emera Maine’s USD contribution to consolidated net income in Q1 2016 decreased by $2.5 million to $6.8 million compared to $9.3 million in Q1 2015.
Highlights of the USD net income changes are summarized in the following table: 
  

					
	For the	 	Three months ended	 
	 millions of US dollars
	 	March 31	 
	 Contribution to consolidated net income – 2015
	 	$	9.3	  
	 Increased operating revenues – (see Operating Revenues – Regulated Section
below)
	 	 	1.9	  
	 Increased OM&G primarily due to decreased capitalized construction overheads as a result of
lower capital spending and storm costs
	 	 	(2.7	) 
	 Increased depreciation and amortization primarily due to higher plant in service
	 	 	(1.9	) 
	 Other
	 	 	0.2	  
		 	  
	  
	 
	 Contribution to consolidated net income – 2016
	 	$	6.8	  
		 	  
	  
	 

 Emera Maine’s CAD contribution to consolidated net income decreased in Q1 2016 by $2.2 million to $9.3 million from $11.5
million in Q1 2015. The impact of a stronger USD, quarter-over-quarter, increased CAD earnings by $0.9 million for the three months ended March 31, 2016. 

  
 21 

 Operating Revenues – Regulated 

Emera Maine’s operating revenues – regulated include sales of electricity and other services as summarized in the following table: 

 

									
	For the	  	Three months ended March 31	 
	 millions of US dollars
	  	2016	 	  	2015	 
	 Electric revenues
	  	$	41.7	  	  	$	40.0	  
	 Transmission pool revenues
	  	 	11.6	  	  	 	12.2	  
	 Resale of purchased power
	  	 	4.4	  	  	 	3.6	  
		  	  
	  
	 	  	  
	  
	 
	 Operating revenues – regulated
	  	$	57.7	  	  	$	55.8	  
		  	  
	  
	 	  	  
	  
	 

 Electric Revenues 

Electric sales volume is primarily driven by general economic conditions, population and weather. 

 

													
	 Q1 Electric Sales Volumes
	 
	 GWh
	  	2016	 	  	2015	 	  	2014	 
	 Residential
	  	 	218	  	  	 	235	  	  	 	232	  
	 Commercial
	  	 	198	  	  	 	207	  	  	 	206	  
	 Industrial
	  	 	81	  	  	 	101	  	  	 	105	  
	 Other
	  	 	4	  	  	 	3	  	  	 	4	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	501	  	  	 	546	  	  	 	547	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Electric revenues are summarized in the following tables by customer class: 

 

													
	 Q1 Electric Revenues

millions of US dollars
	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Residential
	  	$	20.7	  	  	$	21.6	  	  	$	20.7	  
	 Commercial
	  	 	14.8	  	  	 	14.3	  	  	 	14.9	  
	 Industrial
	  	 	3.2	  	  	 	3.3	  	  	 	4.1	  
	 Other (1)
	  	 	3.0	  	  	 	0.8	  	  	 	2.7	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	41.7	  	  	$	40.0	  	  	$	42.4	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	(1)	Other revenue includes amounts recognized relating to FERC transmission rate refunds and other transmission revenue adjustments. 

Electric revenues increased $1.7 million to $41.7 million in Q1 2016 compared to $40.0 million in Q1 2015. Highlights of the changes are summarized in the
following table: 
  

					
	For the	  	Three months ended	 
	 millions of US dollars
	  	March 31	 
	 Electric revenues – 2015
	  	$	40.0	  
	 Increased due to rate changes
	  	 	3.3	  
	 Decreased sales volume primarily due to weather
	  	 	(3.4	) 
	 Increased due to FERC transmission rate refund reserves
	  	 	1.2	  
	 Amortization of transmission revenue adjustments
	  	 	0.6	  
		  	  
	  
	 
	 Electric revenues – 2016
	  	$	41.7	  
		  	  
	  
	 

  

													
	 Q1 Average Electric Revenue / MWh
	 
	 US dollars
	  	2016	 	  	2015	 	  	2014	 
	 Dollars per MWh
	  	$	83	  	  	$	73	  	  	$	78	  

 The change in average electric revenue per MWh in Q1 2016 compared to Q1 2015 reflects increased transmission rates and sales
mix. 

  
 22 

 Transmission Pool Revenues and Expenses 

Transmission pool revenues are recorded in “Operating revenues – regulated” and transmission pool expenses are recorded in “Regulated fuel
for generation and purchased power” in the Consolidated Statements of Income. 
 Transmission pool revenues and expenses are summarized in the
following table: 
  

									
	For the	  	Three months ended	 
	 millions of US dollars
	  	March 31	 
	 	  	2016	 	  	2015	 
	 Transmission pool revenues
	  	$	11.6	  	  	$	12.2	  
	 Transmission pool expenses
	  	 	6.3	  	  	 	6.1	  
		  	  
	  
	 	  	  
	  
	 
	 Net transmission pool revenues
	  	$	5.3	  	  	$	6.1	  
		  	  
	  
	 	  	  
	  
	 

 Emera Maine’s net transmission pool revenues decreased $0.8 million to $5.3 million in Q1 2016 compared to $6.1 million
in Q1 2015 primarily due to changes in the level of investment in regionally funded transmission assets and the effect of weather. 
 EMERA CARIBBEAN

 Overview 
 Emera Caribbean includes the following
consolidated and non-consolidated investments: 
 Consolidated Investments 
  

	 	•	 	100.0 per cent (December 31, 2015 – 95.5 per cent) investment in ECI and its wholly owned subsidiary BLPC, a vertically integrated utility which is the provider of electricity on the island of Barbados.
BLPC serves 126,000 customers and is regulated by the Fair Trading Commission, Barbados. BLPC’s approved regulated return on rate base for 2016 is 10.0 per cent. A fuel pass-through mechanism provides the opportunity to recover all fuel
costs in a timely manner. Emera completed the purchase of the remaining 4.5 per cent of common shares from minority shareholders of ECI in Q1 2016. 

  

	 	•	 	50.0 per cent direct and 30.4 per cent indirect interest (through a 60.7 per cent interest in ICD Utilities Limited (“ICDU”)) in GBPC, which is a vertically integrated utility and a sole
provider of electricity on Grand Bahama Island. GBPC serves 19,000 customers and is regulated by the GBPA. Effective February 1, 2016, the GBPA approved GBPC’s regulated return on rate base of 8.8 per cent applicable for the 2016
through 2018 period. A fuel pass-through mechanism provides the opportunity to recover all fuel costs in a timely manner. 

  

	 	•	 	51.9 per cent (December 31, 2015 – 49.6 per cent indirect controlling interest), through ECI, in Domlec, an integrated utility on the island of Dominica. Domlec serves 36,000 customers and is regulated by
the IRC. Domlec’s approved allowable regulated return on rate base for 2016 is 15.0 per cent. A fuel pass-through mechanism provides the opportunity to recover substantially all fuel costs in a timely manner. 

Equity Investment 
  

	 	•	 	19.1 per cent (December 31, 2015 – 18.2 per cent indirect interest), through ECI, in Lucelec, a vertically integrated regulated electric utility on the island of St. Lucia which is regulated by the
Government of St. Lucia. The investment in Lucelec is accounted for on the equity basis. 

  
 23 

 Review of 2016 

Emera Caribbean Net Income 
  

									
	For the	  	Three months ended March 31	 
	 millions of US dollars (except per share amounts)
	  	2016	 	  	2015	 
	 Operating revenues – regulated
	  	$	71.0	  	  	$	83.1	  
	 Operating revenues – non-regulated
	  	 	—  	  	  	 	1.9	  
	 Total operating revenues
	  	 	71.0	  	  	 	85.0	  
	 Regulated fuel for generation and purchased power
	  	 	26.7	  	  	 	39.1	  
	 Non-regulated direct costs
	  	 	—  	  	  	 	1.8	  
	 Operating, maintenance and general
	  	 	21.6	  	  	 	22.8	  
	 Property taxes (1)
	  	 	0.6	  	  	 	0.4	  
	 Depreciation and amortization
	  	 	9.4	  	  	 	8.6	  
	 Total operating expenses
	  	 	58.3	  	  	 	72.7	  
	 Income from operations
	  	 	12.7	  	  	 	12.3	  
	 Income from equity investment
	  	 	0.4	  	  	 	0.5	  
	 Other income (expenses), net
	  	 	0.3	  	  	 	1.5	  
	 Interest expense, net
	  	 	2.8	  	  	 	2.7	  
	 Income before provision for income taxes
	  	 	10.6	  	  	 	11.6	  
	 Income tax expense (recovery)
	  	 	1.0	  	  	 	1.0	  
	 Net income
	  	 	9.6	  	  	 	10.6	  
	 Non-controlling interest in subsidiaries
	  	 	1.2	  	  	 	2.2	  
	 Preferred stock dividends (2)
	  	 	1.3	  	  	 	1.3	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated net income – USD
	  	$	7.1	  	  	$	7.1	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated net income – CAD
	  	$	9.8	  	  	$	8.8	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated earnings per common share – CAD
	  	$	0.07	  	  	$	0.06	  
		  	  
	  
	 	  	  
	  
	 
	 Net income weighted average foreign exchange rate – CAD/USD
	  	$	1.38	  	  	$	1.24	  
		  	  
	  
	 	  	  
	  
	 
	 EBITDA – USD
	  	$	22.8	  	  	$	22.9	  
		  	  
	  
	 	  	  
	  
	 
	 EBITDA – CAD
	  	$	31.5	  	  	$	28.3	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Included in “Provincial, state and municipal taxes” on the Consolidated Statements of Income. 

	(2)	Preferred stock dividends are included in “Non-controlling interest in subsidiaries” on the Consolidated Statements of Income. 

Emera Caribbean’s USD contribution to consolidated net income did not change in Q1 2016 compared to Q1 2015. 

Emera Caribbean’s CAD contribution to consolidated net income increased by $1.0 million to $9.8 million in Q1 2016 compared to $8.8 million in Q1 2015 as
a result of a stronger USD. 
 Operating Revenues – Regulated 

Emera Caribbean’s operating revenues – regulated include sales of electricity and other services as summarized in the following table: 

 

									
	For the	  	Three months ended March 31	 
	 millions of US dollars
	  	2016	 	  	2015	 
	 Electric revenues – base rates
	  	$	44.0	  	  	$	43.6	  
	 Fuel charge
	  	 	26.1	  	  	 	38.6	  
	 Total electric revenues
	  	 	70.1	  	  	 	82.2	  
	 Other revenues
	  	 	0.9	  	  	 	0.9	  
		  	  
	  
	 	  	  
	  
	 
	 Operating revenues – regulated
	  	$	71.0	  	  	$	83.1	  
		  	  
	  
	 	  	  
	  
	 

  
 24 

 Electric Revenues 

Electric sales volume is primarily driven by general economic conditions, population and weather. Residential and commercial electricity sales are seasonal,
with Q3 being the strongest period, reflecting warmer weather. 
  

													
	Q1 Electric Sales Volumes	 
	 GWh
	  	 	 	  	 	 	  	 	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Residential
	  	 	109	  	  	 	105	  	  	 	104	  
	 Commercial
	  	 	179	  	  	 	179	  	  	 	177	  
	 Industrial
	  	 	23	  	  	 	27	  	  	 	24	  
	 Other
	  	 	6	  	  	 	6	  	  	 	7	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	317	  	  	 	317	  	  	 	312	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Electric revenues are summarized in the following tables by customer class: 

 

													
	Q1 Electric Revenues	 
	 millions of US dollars
	  	 	 	  	 	 	  	 	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Residential
	  	$	22.5	  	  	$	25.9	  	  	$	31.2	  
	 Commercial
	  	 	39.3	  	  	 	46.1	  	  	 	58.5	  
	 Industrial
	  	 	6.8	  	  	 	8.6	  	  	 	8.4	  
	 Other
	  	 	1.5	  	  	 	1.6	  	  	 	1.7	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	70.1	  	  	$	82.2	  	  	$	99.8	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Electric revenues decreased $12.1 million to $70.1 million in Q1 2016 compared to $82.2 million in Q1 2015. Highlights of the
changes are summarized in the following table: 
  

					
	For the	  	Three months ended	 
	 millions of US dollars
	  	March 31	 
	 Electric revenues – 2015
	  	$	82.2	  
	 Decreased fuel charge primarily due to lower fuel prices
	  	 	(12.5	) 
	 Increased due to higher sales volumes at BLPC
	  	 	0.4	  
		  	  
	  
	 
	 Electric revenues – 2016
	  	$	70.1	  
		  	  
	  
	 

  

													
	Q1 Average Electric Revenue/MWh	 
	 US dollars
	  	2016	 	  	2015	 	  	2014	 
	 Dollars per MWh
	  	$	221	  	  	$	259	  	  	$	320	  

 The change in average electric revenues per MWh in Q1 2016 compared to Q1 2015 was the result of the decreased fuel charge
primarily due to lower fuel prices. 
 Electric Margin 

Emera Caribbean distinguishes revenues related to the recovery of fuel costs through the fuel charge from revenues related primarily to the recovery of
non-fuel costs (“base rates”). Emera Caribbean’s electric margin and net income are influenced primarily by base rates, whereas the fuel charge and fuel costs do not have a material effect on electric margin or net income. Emera
Caribbean’s customer classes contribute differently to the Company’s base rate revenue, with residential and commercial customers contributing more than industrial customers. Residential and commercial load is primarily affected by changes
in weather and economic conditions, while industrial load is primarily affected by economic conditions. 

  
 25 

 Electric margin is summarized in the following table: 

 

									
	For the	  	Three months ended March 31	 
	 millions of US dollars
	  	2016	 	  	2015	 
	 Operating revenues – regulated
	  	$	71.0	  	  	$	83.1	  
	 Less: Other revenues
	  	 	(0.9	) 	  	 	(0.9	) 
		  	  
	  
	 	  	  
	  
	 
	 Total electric revenues
	  	$	70.1	  	  	$	82.2	  
		  	  
	  
	 	  	  
	  
	 

 Total electric revenues are broken down as follows: 

 

									
	 Electric revenues – base rate
	  	$	44.0	  	  	$	43.6	  
	 Fuel charge
	  	 	26.1	  	  	 	38.6	  
	 Total electric revenues
	  	 	70.1	  	  	 	82.2	  
	 Regulated fuel for generation and purchased power
	  	 	26.7	  	  	 	39.1	  
	 Regulatory amortization (1)
	  	 	0.6	  	  	 	0.7	  
		  	  
	  
	 	  	  
	  
	 
	 Electric margin
	  	$	42.8	  	  	$	42.4	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Included in “Depreciation and amortization” on the Consolidated Statements of Income. 

  

													
	 Q1 Average Electric Margin /MWh
	 
	 US dollars
	  	2016	 	  	2015	 	  	2014	 
	 Dollars per MWh
	  	$	135	  	  	$	134	  	  	$	133	  

 Electric margin and average electric margin/MWh is consistent quarter over quarter. 

Regulated Fuel for Generation and Purchased Power 
  

													
	 Q1 Production Volumes
	 
	 GWh 
	  	 	 	  	 	 	  	 	 
	 	  	2016	 	  	2015	 	  	2014	 
	 Oil
	  	 	337	  	  	 	335	  	  	 	330	  
	 Hydro
	  	 	9	  	  	 	7	  	  	 	8	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	346	  	  	 	342	  	  	 	338	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Regulated fuel for generation and purchased power decreased $12.4 million to $26.7 million in Q1 2016 compared to $39.1
million in Q1 2015 primarily due to lower fuel prices. 
  

													
	 Q1 Average Fuel Costs/MWh
	  	 	 	  	 	 	  	 	 
	 US dollars
	  	2016	 	  	2015	 	  	2014	 
	 Dollars per MWh
	  	$	77	  	  	$	114	  	  	$	170	  

 The change in average fuel costs in Q1 2016 compared to Q1 2015 was the result of lower fuel prices. 

Non-GAAP Measure 
 Electric Margin Reconciliation

 “Electric margin” is a non-GAAP financial measure used to show the amounts that BLPC, GBPC and Domlec retain to recover their non-fuel
costs, as substantially all prudently incurred fuel costs are recovered from customers. 
 The companies’ electric margin may not be comparable to
electric margin measures of other companies, but in management’s view appropriately reflects Emera’s specific condition. Management believes measuring electric margin shows the portion of revenues managed through fuel adjustment mechanism,
which have a minimal impact on income. This measure is not intended to replace “Income from operations” which, as determined in accordance with GAAP, is an indicator of operating performance. 

  
 26 

									
	For the	  	Three months ended	 
	 millions of US dollars
	  	March 31	 
	 	  	2016	 	  	2015	 
	 Income from operations
	  	$	12.7	  	  	$	12.3	  
	 Less:
	  				  			
	 Operating revenues – non-regulated
	  	 	—  	  	  	 	1.9	  
	 Other revenue
	  	 	0.9	  	  	 	0.9	  
	 Add back:
	  				  			
	 Non-regulated direct costs
	  	 	—  	  	  	 	1.8	  
	 Operating, maintenance and general
	  	 	21.6	  	  	 	22.8	  
	 Property taxes
	  	 	0.6	  	  	 	0.4	  
	 Depreciation and amortization (1)
	  	 	8.8	  	  	 	7.9	  
		  	  
	  
	 	  	  
	  
	 
	 Electric margin
	  	$	42.8	  	  	$	42.4	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Depreciation and amortization excludes $0.6 million of regulatory amortization in Q1 2016 (2015 – $0.7 million). 

  
 27 

 PIPELINES 

Overview 
 Pipelines is comprised of Emera’s wholly
owned Brunswick Pipeline and the Company’s 12.9 per cent interest in the M&NP. 
  

	 	•	 	Brunswick Pipeline is a 145-kilometre pipeline delivering re-gasified natural gas from the CanaportTM liquefied natural gas (“LNG”) import terminal near Saint John, New Brunswick, to markets in the
northeastern United States for Repsol Energy Canada under a 25-year firm service agreement which expires in 2034. The NEB, which regulates Brunswick Pipeline, has classified it as a Group II pipeline. The agreement is accounted for as a direct
financing lease. 

  

	 	•	 	M&NP is a 1,400-kilometre transmission pipeline built to transport natural gas from offshore Nova Scotia to markets in Atlantic Canada and the northeastern United States. The investment in M&NP is accounted for
on the equity basis. 

 Mark-to-Market Adjustments 

Pipelines’ “Interest expense, net” and “Income tax expense (recovery)” are affected by mark-to-market adjustments on an interest rate
swap. Pipelines’ income table below shows these amounts net of mark-to-market adjustments and details the adjustments in the footnotes. 
 Review of
2016 
 Pipelines’ Adjusted Net Income 
  

									
	For the	  	Three months ended March 31	 
	 millions of Canadian dollars (except per share amounts)
	  	2016	 	  	2015	 
	 Operating revenues – regulated
	  	$	12.9	  	  	$	13.1	  
	 Operating maintenance and general
	  	 	0.1	  	  	 	0.2	  
	 Accretion (1)
	  	 	0.1	  	  	 	0.1	  
	 Income from equity investment
	  	 	5.9	  	  	 	5.9	  
	 Other income (expenses), net
	  	 	(0.2	) 	  	 	0.7	  
	 Interest expense, net (2)
	  	 	5.7	  	  	 	6.2	  
	 Adjusted Income before provision for income taxes
	  	 	12.7	  	  	 	13.2	  
	 Income tax expense (recovery)
	  	 	3.0	  	  	 	3.3	  
	 Adjusted contribution to consolidated net income
	  	$	9.7	  	  	$	9.9	  
	 After-tax derivative mark-to-market gain (loss)
	  	 	(0.3	) 	  	 	—  	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated net income
	  	$	9.4	  	  	$	9.9	  
		  	  
	  
	 	  	  
	  
	 
	 Adjusted contribution to consolidated earnings per common share
	  	$	0.07	  	  	$	0.07	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated earnings per common share
	  	$	0.06	  	  	$	0.07	  
		  	  
	  
	 	  	  
	  
	 
	 Adjusted EBITDA
	  	$	18.5	  	  	$	19.5	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Accretion related to the reclamation of the pipeline is included in “Depreciation and amortization” on the Consolidated Statements of Income. 

	(2)	Interest expense, net excludes a pre-tax mark-to-market loss of $0.3 million in Q1 2016 compared to nil for the same period in 2015. 

Pipelines’ contribution to consolidated net income in Q1 2016 is consistent with Q1 2015. 

  
 28 

 EMERA ENERGY 

Overview 
 Emera Energy includes the following: 

 

	 	•	 	Emera Energy Services (“EES”), a wholly owned physical energy marketing and trading business; 

  

	 	•	 	Emera Energy Generation (“EEG”), a wholly owned portfolio of electricity generation facilities in New England and the Maritime provinces of Canada with 1,410 megawatts (“MW”) of total capacity;

  

	 	•	 	Equity investment in a 50.0 per cent joint venture ownership of Bear Swamp, a 600 MW pumped storage hydroelectric facility in northwestern Massachusetts. 

Wholly owned investments are consolidated. The investment in Bear Swamp is accounted for on an equity basis. 

Mark-to-Market Adjustments 
 Emera Energy’s
“Marketing and trading margin”, “Electricity sales”, “Non-regulated fuel for generation and purchased power”, “Income from equity investments” and “Income tax expense (recovery)” are affected by
mark-to-market (“MTM”) adjustments. The Emera Energy income table shows these amounts net of mark-to-market adjustments and details these adjustments in footnotes to the income statement. Management believes excluding the effect of
mark-to-market valuations, and changes thereto, from income until settlement better matches the financial effect of these contracts with the underlying cash flows. 

Emera Energy has a number of Asset Management Agreements (“AMAs”) with counterparties, including local gas distribution utilities, power utilities,
and natural gas producers in the northeast. The AMAs involve Emera Energy buying or selling gas for a specific term, and the corresponding release of the counterparties’ gas transportation/storage capacity to Emera
Energy. Mark-to-market adjustments on these AMA’s arise on the price differential between the point where gas is sourced and where it is delivered. At inception, the MTM adjustment is offset fully by the value of the corresponding gas
transportation asset, which is amortized over the term of the AMA contract.
 Subsequent changes in gas price differentials, to the extent they are not
offset by the accounting amortization of the gas transportation asset, will result in MTM gains or losses recorded in income. MTM adjustments may be substantial during the term of the contract, specifically in the winter months of a contract
when delivered volumes and market volatility are usually at peak levels. As a contract is realized, and volumes reduce, MTM volatility is expected to decrease. Ultimately, the gas transportation asset and the mark-to-market adjustment
reduce to zero at the end of the contract term. As the business grows, and AMA volumes increase, MTM volatility resulting in gains and losses may also increase.

  
 29 

 Review of 2016 

Emera Energy Adjusted Contribution to Consolidated Net Income 
  

									
	For the	  	Three months ended
March 31	 
	 millions of Canadian dollars (except per share amounts)
	  	2016	 	  	2015	 
	 Marketing and trading margin (1)
	  	$	46.9	  	  	$	38.8	  
	 Electricity sales (2)
	  	 	180.1	  	  	 	250.9	  
	 Total operating revenues – non-regulated
	  	 	227.0	  	  	 	289.7	  
	 Non-regulated fuel for generation and purchased power (3)
	  	 	114.1	  	  	 	159.9	  
	 Operating, maintenance and general
	  	 	25.3	  	  	 	20.1	  
	 Provincial, state and municipal taxes
	  	 	0.9	  	  	 	1.4	  
	 Depreciation and amortization
	  	 	10.9	  	  	 	9.3	  
	 Total operating expenses
	  	 	151.2	  	  	 	190.7	  
	 Adjusted income (loss) from operations
	  	 	75.8	  	  	 	99.0	  
	 Income from equity investments (4)
	  	 	3.8	  	  	 	4.0	  
	 Other income (expenses), net
	  	 	(2.6	) 	  	 	22.2	  
	 Interest expense, net
	  	 	6.2	  	  	 	1.0	  
	 Adjusted income (loss) before provision for income taxes
	  	 	70.8	  	  	 	124.2	  
	 Income tax expense (recovery) (5)
	  	 	22.9	  	  	 	47.8	  
	 Adjusted contribution to consolidated net income (loss)
	  	$	47.9	  	  	$	76.4	  
		  	  
	  
	 	  	  
	  
	 
	 After-tax derivative mark-to-market gain (loss)
	  	$	45.5	  	  	$	(11.5	) 
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated net income
	  	$	93.4	  	  	$	64.9	  
		  	  
	  
	 	  	  
	  
	 
	 Adjusted contribution to consolidated earnings per common share – basic
	  	$	0.32	  	  	$	0.53	  
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated earnings per common share – basic
	  	$	0.63	  	  	$	0.45	  
		  	  
	  
	 	  	  
	  
	 
	 Adjusted EBITDA
	  	$	87.9	  	  	$	134.5	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Marketing and trading margin excludes a pre-tax mark-to-market gain of $72.3 million for the quarter ended March 31, 2016 (2015 - $13.9 million gain). 

	(2)	Electricity sales exclude a pre-tax mark-to-market loss of $8.3 million for the quarter ended March 31, 2016 (2015 - $45.8 million loss). 

	(3)	Non-regulated fuel for generation and purchased power excludes a pre-tax mark-to-market gain of $2.8 million for the quarter ended March 31, 2016 (2015 - $7.0 million gain). 

	(4)	Income from equity investments excludes a pre-tax mark-to-market loss of $2.4 million for the quarter ended March 31, 2016 (2015 - $3.4 million gain). 

	(5)	Income tax expense (recovery) excludes an $18.9 million expense relating to mark-to-market gains for the quarter ended March 31, 2016 (2015 - $10.0 million recovery). 

Emera Energy’s contribution to consolidated net income increased $28.5 million to $93.4 million in Q1 2016 compared to $64.9 million in Q1 2015.
Highlights of the net income changes are summarized in the following table: 

  
 30 

					
	 For the
millions of Canadian dollars
	  	Three months ended
March 31	 
	 Contribution to consolidated net income – 2015
	  	$	64.9	  
	 Increased marketing and trading margin – See Marketing and Trading Margin below
	  	 	8.1	  
	 Decreased electricity sales primarily due to lower hedged and market power prices at the New
England Gas Generating Facilities, lower market prices at Bayside Power, and decreased sales volumes at the New England Gas Generating Facilities driven by weather, partially offset by a stronger USD
	  	 	(70.8	) 
	 Decreased non-regulated fuel for generation and purchased power mainly due to lower hedged and
market commodity prices at the New England Gas Generating Facilities, lower market commodity prices at Bayside Power, and decreased purchase volumes at the New England Gas Generating Facilities driven by weather, partially offset by a stronger
USD
	  	 	45.8	  
	 Increased OM&G primarily due to a stronger USD and increased performance-based compensation
resulting from increased marketing and trading margin
	  	 	(5.2	) 
	 Decreased other income primarily due to a gain on the sale of NWP in 2015
	  	 	(24.8	) 
	 Increased interest expense, net primarily due to higher interest rates on internal
financing
	  	 	(5.2	) 
	 Decreased income tax expense primarily due to decreased income before provision for income taxes,
changes in the proportion of income earned in higher tax rate foreign jurisdictions and a stronger CAD
	  	 	24.9	  
	 Increased mark-to-market, net of tax primarily due to the reversal of 2015 mark-to-market losses
and changes in gas and power contract positions, partially offset by amortization of 2015 gas transportation assets
	  	 	57.0	  
	 Other
	  	 	(1.3	) 
		  	  
	  
	 
	 Contribution to consolidated net income – 2016
	  	$	93.4	  
		  	  
	  
	 

 A portion of earnings are exposed to foreign exchange fluctuations, thereby impacting adjusted CAD contribution to net
earnings. The impact of a stronger USD, quarter-over-quarter, increased CAD earnings by $5.3 million in Q1 2016 compared to Q1 2015. 
 Emera Energy
Services 
 Adjusted EBITDA 
 Adjusted EBITDA for
Emera Energy Services is summarized in the following table: 
  

									
	 For the
millions of Canadian dollars
	  	Three months ended
March 31	 
	 	  	2016	 	  	2015	 
	 Marketing and trading margin
	  	$	46.9	  	  	$	38.8	  
	 OM&G
	  	 	10.4	  	  	 	7.5	  
	 Other income (expenses), net
	  	 	(3.7	) 	  	 	3.5	  
		  	  
	  
	 	  	  
	  
	 
	 Adjusted EBITDA
	  	$	32.8	  	  	$	34.8	  
		  	  
	  
	 	  	  
	  
	 

 Marketing and Trading Margin 

Marketing and trading margin increased $8.1 million to $46.9 million in Q1 2016 compared to $38.8 million in Q1 2015. This increase is primarily due to a
stronger USD and growth in the volume of business, including investment in transportation capacity, which offset the impact of sustained low pricing and volatility in several of Emera Energy’s markets in Q1 2016, largely the result of weather.

 Other Income 
 Other income decreased $7.2 million to
$(3.7) million in Q1 2016 compared to $3.5 million in Q1 2015. This decrease is primarily due to foreign exchange losses recorded in 2016 as a result of the stronger CAD since December 31, 2015. 

  
 31 

 Emera Energy Generation 

Adjusted EBITDA 
 Adjusted EBITDA for Emera Energy
Generation is summarized in the following table: 
  

																									
	 	  	Three months ended March 31	 
	For the	  	New England	 	  	Maritime Canada	 	 	Total	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 	  	2016	 	  	2015	 	 	2016	 	  	2015	 
	 Energy sales
	  	$	139.3	  	  	$	201.3	  	  	$	28.3	  	  	$	39.0	  	 	$	167.6	  	  	$	240.3	  
	 Capacity and other
	  	 	12.5	  	  	 	10.6	  	  	 	—  	  	  	 	—  	  	 	 	12.5	  	  	 	10.6	  
	 Electricity sales
	  	$	151.8	  	  	$	211.9	  	  	$	28.3	  	  	$	39.0	  	 	$	180.1	  	  	$	250.9	  
	 Non-regulated fuel for generation and purchased power
	  	 	94.1	  	  	 	133.4	  	  	 	18.3	  	  	 	28.6	  	 	 	112.4	  	  	 	162.0	  
	 Non-regulated electric margin
	  	$	57.7	  	  	$	78.5	  	  	$	10.0	  	  	$	10.4	  	 	$	67.7	  	  	$	88.9	  
	 Provincial taxes
	  	 	0.7	  	  	 	1.1	  	  	 	0.2	  	  	 	0.3	  	 	 	0.9	  	  	 	1.4	  
	 OM&G
	  	 	9.0	  	  	 	7.3	  	  	 	5.5	  	  	 	4.5	  	 	 	14.5	  	  	 	11.8	  
	 Other income (expenses), net
	  	 	—  	  	  	 	1.3	  	  	 	1.1	  	  	 	(1.3	) 	 	 	1.1	  	  	 	—  	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 Adjusted EBITDA
	  	$	48.0	  	  	$	71.4	  	  	$	5.4	  	  	$	4.3	  	 	$	53.4	  	  	$	75.7	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	  	  
	  
	 

 Adjusted EBITDA decreased $22.3 million to $53.4 million in Q1 2016 from $75.7 million in Q1 2015 primarily due to lower
margins realized in the New England Gas Generating Facilities, reflecting less favourable short-term economic hedges and fewer optimization opportunities driven by weather across the northeastern United States. This was partially offset by the
stronger USD, which contributed $4.7 million. 
 Operating Statistics 
  

																									
	 For the
	  	Three months ended March 31	 
	 	  	Sales Volumes (GWh) (1)	 	  	Plant Availability (%) (2)	 	 	Net Capacity Factor (%) (3)	 
	 	  	2016	 	  	2015	 	  	2016	 	 	2015	 	 	2016	 	 	2015	 
	 New England
	  	 	1,299	  	  	 	1,410	  	  	 	96.1	% 	 	 	98.0	% 	 	 	54.6	% 	 	 	60.8	% 
	 Maritime Canada
	  	 	518	  	  	 	483	  	  	 	95.8	% 	 	 	99.2	% 	 	 	75.9	% 	 	 	70.0	% 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total
	  	 	1,817	  	  	 	1,893	  	  	 	96.0	% 	 	 	98.3	% 	 	 	59.3	% 	 	 	63.1	% 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

  

	(1)	Sales volumes represent the actual electricity output of the plants. 

	(2)	Plant availability represents the percentage of time in the period that the plant was available to generate power regardless of whether it was running. Effectively, it represents 100% availability reduced by planned and
unplanned outages. 

	(3)	Net capacity factor is the ratio of the utilization of an asset as compared to its maximum capability, within a particular time frame. It is generally a function of plant availability and plant economic vis-à-vis
the market. 

 Sales volumes and net capacity factor decreased quarter-over-quarter at the New England Gas Generating Facilities primarily due
to the impact of weather across the northeastern United States. 
 The New England Gas Generating Facilities sell into price based competitive markets. The
primary reason that the overall capacity factor is lower for New England Gas Generating Facilities as compared to the Maritime facilities is because the Rumford Plant, in particular, generally operates with a capacity factor of approximately
20 per cent, reflecting current electricity and gas supply price dynamics in its markets. 

  
 32 

 Adjusted income from equity investments 

Adjusted income from equity investments is summarized in the following table: 
  

									
	 For the
millions of Canadian dollars
	  	Three months ended
March 31	 
	 	  	2016	 	  	2015	 
	 Bear Swamp
	  	$	3.8	  	  	$	2.1	  
	 NWP
	  	 	—  	  	  	 	1.9	  
		  	  
	  
	 	  	  
	  
	 
	 Adjusted income from equity investments
	  	$	3.8	  	  	$	4.0	  
		  	  
	  
	 	  	  
	  
	 

 Income from equity investments decreased $0.2 million to $3.8 million in Q1 2016 compared to $4.0 million in Q1 2015, largely
due to the sale of NWP in Q1 2015 and higher interest costs at Bear Swamp as a result of its Q4 2015 refinancing, largely offset by favourable pricing at Bear Swamp and the effect of a stronger USD. 

CORPORATE AND OTHER 
 Corporate 

Corporate encompasses certain corporate-wide functions including executive management, strategic planning, treasury services, legal, financial reporting, tax
planning, corporate business development, corporate governance, internal audit, investor relations, risk management, insurance, acquisition related costs and corporate human resource activities. It also includes interest revenue on intercompany
financings recorded in “Intercompany revenue” in the table below, and costs associated with corporate activities that are not directly allocated to the operations of Emera’s subsidiaries and investments. 

Other 
 Other includes the following consolidated and
non-consolidated investments: 
 Consolidated Investments 
  

	•	 	Emera Utility Services is a utility services contractor primarily operating in Atlantic Canada (recorded in “Non-regulated operating revenue” in the table below). 

 

	•	 	Emera Reinsurance Limited is a captive insurance company providing insurance and reinsurance to Emera and certain of its affiliates, to enable more cost efficient management of risk and deductible levels across Emera
(recorded in “OM&G” and “Other income (expenses), net” in the table below). 

 Non-consolidated investments
(recorded in “Income (loss) from equity investments” in the table below) 
  

	•	 	Emera’s 19.4 per cent (December 31, 2015 – 19.6 per cent) investment in APUC. APUC is a diversified generation, transmission and distribution utility traded on the Toronto Stock Exchange
(“TSX”) under the symbol “AQN”. The investment in APUC is accounted for on the equity basis. There is a one-quarter lag in reporting as APUC’s information is generally not publicly available at the time of Emera’s
public release of its financial results. As at March 31, 2016, Emera owned 50.1 million common shares, 12.9 million outstanding subscription receipts and dividend equivalents, at an average conversion price of $9.19. The outstanding
subscription receipts and dividend equivalents will automatically convert to common shares in Q4 2016, if an election is not made. If converted, Emera’s interest would increase to 23.2 per cent. The subscription receipts and dividend
equivalents are included in “Investments subject to significant influence” on the Consolidated Balance Sheets. 

  
 33 

	•	 	Emera’s 100 per cent investment in ENL, which holds investments in the following: 

  

	 	•	 	Emera’s 100 per cent investment in NSPML, a $1.56 billion transmission project, including two 170-kilometre subsea cables, between the island of Newfoundland and Nova Scotia. The investment in NSPML is
accounted for on the equity basis with equity earnings equal to the return on equity component of AFUDC. This will continue until the Maritime Link Project goes into service, which is expected in 2017. 

 

	 	•	 	Emera’s 59.0 per cent (December 31, 2015 - 55.1 per cent) investment in the partnership capital of LIL, a $3.1 billion electricity transmission project in Newfoundland and Labrador to enable the
transmission of Muskrat Falls energy between Labrador and the island of Newfoundland. Emera’s percentage ownership in LIL is subject to change based on the balance of capital investments required from Emera and Nalcor Energy to complete
construction of the LIL. Emera’s ultimate percentage investment in LIL will be determined upon completion of the LIL and final costing of all transmission projects related to the Muskrat Falls development, including the LIL and Maritime Link
Projects, such that Emera’s total investment in the Maritime Link and LIL will equal 49 per cent of the cost of all of these transmission developments. The investment in LIL is accounted for on the equity basis. This project is
expected to go into service in 2017. 

  

	•	 	Other investments. 

 Mark-to-Market Adjustments 

Specific to the pending TECO Energy acquisition, Emera has recorded after-tax mark-to-market losses of $121.1 million for the three months ended March 31,
2016 (2015 – nil) related to the effect of USD-denominated currency and forward contracts put in place to hedge the anticipated proceeds from the second instalment of the Debenture Offering of the pending acquisition, expected to close
mid-2016. 
 “Other income (expenses), net” and “Income tax expense (recovery)” are affected by the mark-to-market adjustments discussed
above. Corporate and Other’s income table below shows these amounts net of mark-to-market adjustments and details the adjustments in the footnotes. 

  
 34 

 Review of 2016 

Corporate and Other 
  

									
	For the	  	Three months ended
March 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Intercompany revenue (1)
	  	$	9.9	  	  	$	5.3	  
	 Non-regulated operating revenue
	  	 	8.4	  	  	 	8.8	  
	 Non-regulated direct costs
	  	 	8.2	  	  	 	9.7	  
	 Operating, maintenance and general
	  	 	13.7	  	  	 	12.7	  
	 Depreciation and amortization
	  	 	0.7	  	  	 	0.3	  
	 Total operating expenses
	  	 	22.6	  	  	 	22.7	  
	 Income (loss) from operations
	  	 	(4.3	) 	  	 	(8.6	) 
	 Income (loss) from equity earnings
	  	 	18.1	  	  	 	11.9	  
	 Other income (expenses), net (2)
	  	 	3.6	  	  	 	(0.2	) 
	 Interest expense
	  	 	33.1	  	  	 	6.3	  
	 Adjusted income (loss) before provision for income taxes
	  	 	(15.7	) 	  	 	(3.2	) 
	 Income tax expense (recovery) (3)
	  	 	(13.7	) 	  	 	(7.9	) 
	 Preferred stock dividends
	  	 	7.0	  	  	 	7.7	  
	 Adjusted contribution to consolidated net income
	  	$	(9.0	) 	  	$	(3.0	) 
	 After-tax mark-to-market gain (loss)
	  	 	(121.1	) 	  	 	—  	  
	 Contribution to consolidated net income
	  	 	(130.1	) 	  	 	(3.0	) 
	 Adjusted contribution to consolidated earnings per common share – basic
	  	 	(0.06	) 	  	 	(0.02	) 
		  	  
	  
	 	  	  
	  
	 
	 Contribution to consolidated earnings per common share – basic
	  	$	(0.87	) 	  	$	(0.02	) 
		  	  
	  
	 	  	  
	  
	 
	 Adjusted EBITDA
	  	$	18.1	  	  	$	3.4	  
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Intercompany revenue consists of interest from Brunswick Pipeline, M&NP and EEG. 

	(2)	Other income (expenses) net, excludes a pre-tax mark-to-market loss of $139.5 million in Q1 2016 compared to nil for the same period in 2015. 

	(3)	Income tax expense (recovery), excludes an $18.4 million recovery relating to mark-to-market losses in Q1 2016 compared to nil for the same period in 2015. 

Corporate and Other’s contribution to consolidated net income decreased $127.1 million to $(130.1) million in Q1 2016 compared to $(3.0) million in Q1
2015. Highlights of the income changes are summarized in the following table: 
  

					
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 Contribution to consolidated net income – 2015
	  	$	(3.0	) 
	 Increased intercompany revenue primarily due to the issuance of a loan to Emera Energy
Generation
	  	 	4.6	  
	 Income from equity investments - see table below for highlights
	  	 	6.2	  
	 Increased interest expense primarily due to interest on the pending TECO Energy acquisition
related convertible debentures represented by instalment receipts
	  	 	(26.8	) 
	 Increased income tax recovery primarily due to decreased income before provision for income
taxes
	  	 	5.8	  
	 After-tax mark-to-market gain (loss) - see After-Tax Mark-to-Market Gain (Loss) section
below
	  	 	(121.1	) 
	 Other
	  	 	4.2	  
		  	  
	  
	 
	 Contribution to consolidated net income – 2016
	  	$	(130.1	) 
		  	  
	  
	 

  
 35 

 Acquisition Related Costs 

Highlights of the TECO Energy related acquisition costs summarized in the following table: 

 

									
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 	  	2016	 	  	2015	 
	 Operating, maintenance, and general
	  	$	0.1	  	  	$	—  	  
	 Interest expense, net
	  	 	25.5	  	  	 	—  	  
	 Income tax expense (recovery)
	  	 	(8.1	) 	  	 	—  	  
		  	  
	  
	 	  	  
	  
	 
	 Acquisition related costs
	  	$	17.5	  	  	$	—  	  
		  	  
	  
	 	  	  
	  
	 

 After-Tax Mark-to-Market Gain (Loss) 

The foreign currency earnings impact related to the translation from the convertible debenture USD cash balance and the mark-to-market adjustments from forward
contracts from economically hedging the Debenture Offering are recorded as a mark-to-market adjustment. These pre-tax losses totaled $139.5 million in Q1 2016 and are recorded in “Other income (expenses), net” on the Consolidated
Statements of Income ($121.1 million after-tax loss). These losses offset a pre-tax mark-to-market gain of $118.9 million ($100.5 million after-tax gain) recorded in Q4 2015. The after-tax mark-to-market gain (loss) is summarized in the following
table: 
  

									
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 	  	2016	 	  	2015	 
	 Foreign exchange on USD cash
	  	$	(44.7	) 	  	$	—  	  
	 Mark-to-market adjustment on USD forward contracts
	  	 	(94.8	) 	  	 	—  	  
	 Income tax (expense) recovery
	  	 	18.4	  	  	 	—  	  
		  	  
	  
	 	  	  
	  
	 
	 After-tax mark-to-market gain (loss)
	  	$	(121.1	) 	  	$	—  	  
		  	  
	  
	 	  	  
	  
	 

 Income from Equity Investments 

Income from equity investments are summarized in the following table: 
  

									
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 	  	2016	 	  	2015	 
	 APUC
	  	$	9.0	  	  	$	6.6	  
	 NSPML
	  	 	4.4	  	  	 	3.6	  
	 LIL
	  	 	4.7	  	  	 	1.7	  
		  	  
	  
	 	  	  
	  
	 
	 Income from equity investments
	  	$	18.1	  	  	$	11.9	  
		  	  
	  
	 	  	  
	  
	 

 Income from equity investments increased $6.2 million to $18.1 million in Q1 2016 compared to $11.9 million in Q1 2015.
Highlights of the changes are summarized in the following table: 
  

					
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 Income from equity investments – 2015
	  	$	11.9	  
	 APUC – Higher equity earnings and the reclassification of APUC subscription receipts
	  	 	2.4	  
	 NSPML – AFUDC earnings as a result of increased investment
	  	 	0.8	  
	 LIL – AFUDC earnings as a result of increased investment
	  	 	3.0	  
		  	  
	  
	 
	 Income from equity investments – 2016
	  	$	18.1	  
		  	  
	  
	 

  
 36 

 NSPML has invested $796.7 million as at March 31, 2016 of equity, debt and working capital, including $90.3
million of AFUDC, in the development of the Maritime Link Project. Project to date, Emera has invested a total of $206.4 million in equity, which is comprised of $169.3 million in equity contributed and $37.1 million of accumulated retained
earnings, with the remaining costs being funded with working capital and debt. The debt has been guaranteed by the Government of Canada. AFUDC on invested equity is being capitalized at an annual rate of 9 per cent. Proceeds from the federally
guaranteed debt financing completed in April 2014, were used to fund project costs until the Project’s target debt to equity ratio reached 70 per cent to 30 per cent respectively, in Q4 2015. From that point forward, project costs are
being funded with debt and equity at a 70 per cent and 30 per cent ratio, with equity contributions of $14.4 million in Q1 2016. 
 Emera has
invested $250.4 million in the LIL as at March 31, 2016, which is comprised of $224.5 million in equity contributed and $25.9 million of accumulated equity earnings. Equity earnings are being recorded based on an annual rate 8.8 per cent
of the equity invested. The rate is approved by the Newfoundland and Labrador Board of Commissioners of Public Utilities. 
 LIQUIDITY AND CAPITAL
RESOURCES 
 The Company generates cash primarily through its investments in various regulated and non-regulated energy related entities and investments.
Utility customer bases are diversified by both sales volumes and revenues among customer classes. Emera’s non-regulated businesses provide diverse revenue streams and counterparties to the business. Circumstances that could affect the
Company’s ability to generate cash include general economic downturns in markets served by Emera, the loss of one or more large customers, regulatory decisions affecting customer rates and the recovery of regulatory assets and changes in
environmental legislation. Emera’s subsidiaries maintain solid credit metrics and are generally in a financial position to contribute cash dividends to Emera provided they do not breach their debt covenants, where applicable, after giving
effect to the dividend payment. 
 Consolidated Cash Flow Highlights 

Significant changes in the statements of cash flows between the three months ended March 31, 2016 and 2015 include: 

 

													
	 millions of Canadian dollars
	  	2016	 	  	2015	 	  	$ Change	 
	 Cash and cash equivalents, beginning of period
	  	$	1,073.4	  	  	$	221.1	  	  	$	852.3	  
	 Provided by (used in):
	  				  				  			
	 Operating cash flow before change in working capital
	  	 	232.4	  	  	 	257.5	  	  	 	(25.1	) 
	 Change in working capital
	  	 	(51.8	) 	  	 	(137.9	) 	  	 	86.1	  
	 Operating activities
	  	 	180.6	  	  	 	119.6	  	  	 	61.0	  
	 Investing activities
	  	 	(139.3	) 	  	 	195.9	  	  	 	(335.2	) 
	 Financing activities
	  	 	(45.8	) 	  	 	(259.3	) 	  	 	213.5	  
	 Effect of exchange rate changes on cash and cash equivalents
	  	 	(69.4	) 	  	 	28.0	  	  	 	(97.4	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Cash and cash equivalents, end of period
	  	$	999.5	  	  	$	305.3	  	  	$	694.2	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 37 

 Operating Cash Flows 

Refer to Consolidated Income Statement and Operating Cash Flow Highlights for details. 

Investing Cash Flows 
 Net cash used in investing
activities increased $335.2 million to $139.3 million for the three months ended March 31, 2016 compared to net cash provided by investing activities of $195.9 million for the same period in 2015. The increase was primarily due to proceeds from
the sale of NWP in 2015 and increased investments in NSPML and LIL in 2016. 
 Capital expenditures for the three months ended March 31, 2016,
including AFUDC and net of proceeds from disposal of assets, were $87 million compared to $83 million during the same period in 2015. Details of the capital spend are shown below: 

 

	 	•	 	$48 million at NSPI (2015 – $51 million); 

  

	 	•	 	$9 million at Emera Maine (2015 – $19 million); 

  

	 	•	 	$22 million at Emera Caribbean (2015 – $9 million); 

  

	 	•	 	$6 million at Emera Energy (2015 – $2 million); 

  

	 	•	 	$2 million in Corporate and Other (2015 – $2 million) 

 Financing Cash Flows 

Net cash used in financing activities decreased $213.5 million to $45.8 million for the three months ended March 31, 2016 compared to $259.3 million for
the same period in 2015. The decrease was primarily due to the repayment of debt in 2015, partially offset by the 2015 proceeds of the long-term debt issuance by Brunswick Pipeline. 

  
 38 

 Contractual Obligations 

As at March 31, 2016, contractual commitments for each of the next five years and in aggregate thereafter consisted of the following: 

 

																													
	 millions of Canadian dollars
	 	2016	 	 	2017	 	 	2018	 	 	2019	 	 	2020	 	 	Thereafter	 	 	Total	 
	 Long-term debt
	 	$	268.8	  	 	$	49.5	  	 	$	23.8	  	 	$	610.1	  	 	$	748.5	  	 	$	2,301.2	  	 	$	4,001.9	  
	 Purchased power (1)
	 	 	166.5	  	 	 	229.8	  	 	 	204.0	  	 	 	198.7	  	 	 	195.2	  	 	 	2,380.5	  	 	 	3,374.7	  
	 Solid fuel supply
	 	 	114.5	  	 	 	75.7	  	 	 	12.0	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	202.2	  
	 DSM
	 	 	22.1	  	 	 	34.0	  	 	 	34.9	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	91.0	  
	 Pension and post-retirement obligations (2)
	 	 	11.1	  	 	 	19.2	  	 	 	19.8	  	 	 	20.2	  	 	 	20.9	  	 	 	716.7	  	 	 	807.9	  
	 Asset retirement obligations
	 	 	5.1	  	 	 	4.0	  	 	 	4.3	  	 	 	4.2	  	 	 	1.7	  	 	 	317.2	  	 	 	336.5	  
	 Interest payment obligations (3)
	 	 	140.0	  	 	 	177.4	  	 	 	175.1	  	 	 	167.7	  	 	 	138.8	  	 	 	2,244.7	  	 	 	3,043.7	  
	 Convertible debentures represented by instalment
receipts (4)
	 	 	727.6	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	727.6	  
	 Interest obligations on the first instalment of convertible debentures represented by instalment
receipts (4)
	 	 	54.1	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	54.1	  
	 Transportation (5)
	 	 	188.9	  	 	 	118.6	  	 	 	78.2	  	 	 	43.2	  	 	 	41.1	  	 	 	86.3	  	 	 	556.3	  
	 Long-term service agreements (6)
	 	 	48.6	  	 	 	49.6	  	 	 	34.4	  	 	 	47.1	  	 	 	20.4	  	 	 	202.1	  	 	 	402.2	  
	 Capital projects
	 	 	69.2	  	 	 	5.6	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	74.8	  
	 Equity investment commitments (7)
	 	 	356.0	  	 	 	183.0	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	539.0	  
	 Leases and other (8)
	 	 	18.9	  	 	 	9.9	  	 	 	9.0	  	 	 	8.4	  	 	 	7.3	  	 	 	19.0	  	 	 	72.5	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
		 	$	2,191.4	  	 	$	956.3	  	 	$	595.5	  	 	$	1,099.6	  	 	$	1,173.9	  	 	$	8,267.7	  	 	$	14,284.4	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

  

	(1)	Annual requirement to purchase 20 to 100 per cent of electricity production from independent power producers over varying contract lengths up to 25 years. 

	(2)	Defined benefit funding contractual obligations were determined based on funding requirements and assuming pension accruals cease as at December 31, 2015. Credited service and earnings are assumed to be
crystallized as at December 31, 2015. The Company’s contractual obligations for post-retirement (non-pension) benefits assumes members must be age 55 or over as at December 31, 2015 to be eligible. As the defined benefit pension plans
currently undergoes regular reviews to revise contribution requirements and members are still accruing service under the plans, actual future contributions to the plans will differ from the amounts shown. 

	(3)	Future interest payments are calculated based on the assumption that all debt is outstanding until maturity. For debt instruments with variable rates, interest is calculated for all future periods using the rates in
effect at March 31, 2016, including any expected required payment under associated swap agreements. 

	(4)	In 2015, to finance a portion of the pending acquisition of TECO Energy, Emera completed the sale of $2.185 billion aggregate principal amount of four per cent convertible unsecured subordinated debentures. The
Debentures were sold on an instalment basis, with 1/3 paid on closing of the Debenture Offering, and the remaining payable on a date to be fixed following satisfaction of conditions precedent to the closing of the acquisition of TECO Energy.

	(5)	Purchasing commitments for transportation of solid fuel and transportation capacity on various pipelines. 

	(6)	Maintenance of certain generating equipment, services related to a generation facility and wind operating agreements, outsourced management of computer and communication infrastructure and vegetation management.

	(7)	Emera has a commitment in connection with the Federal Loan Guarantee (“FLG”) to complete construction of the Maritime Link. Thirty per cent of the financing of this project will come from Emera as equity.
Emera also has a commitment to make equity contributions to the Labrador Island Link Limited Partnership upon draw requests from the general partner. The amounts forecasted are a combination of equity investments for both projects and are subject to
change in both timing and amounts as the projects advance through construction. 

	(8)	Operating lease agreements for office space, land, plant fixtures and equipment, telecommunications services, rail cars and vehicles. 

Other Contractual Obligations 
 On September 4, 2015,
the Company announced a definitive agreement for Emera to acquire TECO Energy for $27.55 USD per common share in cash, which represents an aggregate purchase price of approximately $10.4 billion USD and includes the assumption of approximately $3.9
billion USD of debt. Further information on the pending acquisition of TECO Energy is discussed in the Developments section. 

  
 39 

 Debt Management 

In addition to funds generated from operations, Emera and its subsidiaries have, in aggregate, access to approximately $1.3 billion committed syndicated
revolving bank lines of credit per the table below. NSPI has an active commercial paper program for up to $400 million, of which the full amount outstanding is backed by NSPI’s operating credit facility referred to below. The amount of
commercial paper issued results in an equal amount of its operating credit facility being considered drawn and unavailable. 
 As at March 31, 2016,
the Company’s total credit facilities, outstanding borrowings and available capacity were as follows: 
  

																	
	 millions of dollars
	  	Maturity	 	  	Revolving
Credit
Facilities	 	  	Utilized	 	  	Undrawn
and
Available	 
	 Emera – Operating and acquisition credit facility
	  	 	June 2020 – Revolver	  	  	$	700	  	  	$	276	  	  	$	424	  
	 NSPI – Operating credit facility
	  	 	October 2020 – Revolver	  	  	 	500	  	  	 	386	  	  	 	114	  
	 Emera Maine – in USD – Operating credit facility
	  	 	September 2019 – Revolver	 	  	 	80	  	  	 	21	  	  	 	59	  
	 Other – in USD – Operating credit facilities
	  	 	Various	  	  	 	32	  	  	 	2	  	  	 	30	  

 Emera and its subsidiaries have debt covenants associated with their credit facilities. Covenants are tested regularly and the
Company is in compliance with covenant requirements as at March 31, 2016. 
 For the purpose of bridge financing for the pending acquisition of TECO
Energy, on September 4, 2015, the Company secured an aggregate of $6.5 billion USD non-revolving term credit facilities (“Acquisition Credit Facilities”) from a syndicate of banks. The non-revolving term credit facilities are
comprised of a $4.3 billion USD debt bridge facility, repayable in full on the first anniversary following its advance, and a $2.2 billion USD equity bridge facility repayable in full on the first anniversary following its advance. On
October 16, 2015, Emera permanently reduced the USD bridge facilities in the amount of $588.3 million USD with the proceeds of the first instalment of the convertible debentures and the proceeds from the Bear Swamp financing. The credit
facilities table above does not include the Acquisition Credit Facilities. 
 Emera is required to effect reductions or make prepayments of the Acquisition
Credit Facilities in an amount equal to the net cash proceeds from any common equity, preferred equity, bond or other debt offerings and any non-ordinary course asset sales by Emera and its subsidiaries, subject to certain prescribed exceptions and
certain other prescribed transactions. Net proceeds from any such offerings, including the net proceeds of the final instalment under the Debenture Offering, or from any such non-ordinary course asset sales or transactions, will be applied to
permanently reduce the commitments of the lenders under the Acquisition Credit Facilities or to repay the Acquisition Credit Facilities after they are drawn. Any prepayment under the Acquisition Credit Facilities may not be re-borrowed. The
Acquisition Credit Agreements contain customary representations and warranties and affirmative and negative covenants of Emera that will closely resemble those in Emera’s existing revolving credit facility. 

Emera’s future liquidity and capital needs, not including the capital needs to fund the pending TECO Energy acquisition, will be predominately for
working capital requirements and capital expenditures in support of growth throughout the businesses, potential new acquisitions, dividends and debt servicing. These liquidity and capital needs will be financed through internally generated cash
flows, short-term credit facilities, and ongoing access to capital markets. 

  
 40 

 The cash purchase price of the pending TECO Energy acquisition and the acquisition related costs will be financed
at the closing of the acquisition with one or more of the following sources: (i) net proceeds of the first instalment and second instalment under the Debenture Offering, (ii) net proceeds of any subsequently completed preferred equity or
bond or other debt offerings, (iii) amounts drawn under the acquisition credit facilities and the revolving facility, and (iv) existing cash on hand and other sources available to the Company. Common equity and other available sources are
expected to comprise $1.7 billion USD to $2.1 billion USD of the long-term financing for the acquisition, preferred equity offerings are expected to amount to $0.8 billion USD to $1.2 billion USD and bond or other debt offerings are expected to
amount to $3.4 billion USD to $3.8 billion USD. 
 Emera and its subsidiaries recent financing activity is discussed further in the Developments section.

 Guarantees and Letters of Credit 
 There were no
changes in Emera’s standby letters of credit since its year end disclosure at December 31, 2015. 
 OUTLOOK 

Energy markets across North America are affected by a number of trends that shape the environment in which energy and utility companies are operating. Some of
these trends are short-term or cyclical, while others evolve to have a significant long-term impact on businesses and stakeholders across the sector. 

Among the key trends influencing Emera’s long-term strategy is the increasing expectation by customers and policy-makers for a permanent reduction in the
carbon-equivalent levels of electricity generation. This advocacy drive for cleaner, renewable sources of electricity has become a defining trend in the industry in recent years, not just in the markets Emera serves, but on a global basis. While it
is still unclear whether economic volatility and lower fossil fuel prices will slow the pace of this transformation, its impact on the sector continues to be felt in the form of mandated and incented carbon reductions throughout eastern North
America and in the Caribbean. As such, investment in wind and hydro generation, and natural gas infrastructure, is likely to continue across the sector. 

This transformation in generation and fuel selection also has a significant impact on the requirement for new transmission infrastructure. Increasingly, in
addition to the traditional issues of infrastructure life expectancy and changing technology, infrastructure renewal planning must now also take into account the changing energy landscape. Gas extraction from the Marcellus Shale region of the United
States, major new hydro developments in Newfoundland and Labrador, and development of new wind farms in northern New England and Atlantic Canada (to name a few) require significant new transmission infrastructure to bring this energy to market. 

The capital spending requirements related to this renewal underscore the intense focus placed by customers and regulators on electricity price and
affordability that is required by our franchise agreements and basic rate regulation. Going forward, the ability of energy companies to achieve their growth objectives, environmental targets and other goals, will continue to be a key success
factor. 
 As technology advances, so does the availability and demand for affordable new mechanisms that allow consumers to have more control over their
energy usage and for utilities to introduce more efficient energy solutions for their customers. This includes grid modernization or ‘smart grid’ advances that, when combined with in-home products such as heat pumps and electric thermal
storage units, have the potential to significantly increase energy efficiency for consumers while allowing utilities to better manage peak load demand. In addition, like wind turbine technology, advancements in solar technology have reduced solar
generation costs significantly, bringing them more in line with the cost of fossil fuel generation in some higher-cost jurisdictions. This gives rise to customer expectations that they will be 

  
 41 

 
able to benefit from options such as distributed generation. Continued and advancing development of energy storage technology will further transform and support the efficient and practical
utilization of renewables. 
 These and other trends create opportunities and challenges for businesses, regulators, investors and other stakeholders within
the energy sector, and are expected to drive increased regional cooperation and interconnection within the energy industry. Whether it is the need to transport natural gas and electricity from disparate regions to markets on the eastern seaboard, or
the need to gain efficiencies by coordinating electricity generation and dispatch across multiple jurisdictions, inter-regional cooperation has emerged as an important trend in itself. 

Business Outlook 
 The pending TECO Energy acquisition
will result in further acquisition costs in 2016. The transaction is expected to be accretive to EPS by approximately 5 per cent in the first full year following its completion (2017), growing to more than 10 per cent by the third full
year (2019) assuming a USD/CAD exchange rate consistent with that at the time of announcement. Approximately 95 per cent of the expected foreign exchange exposure to close the pending acquisition has been effectively hedged. 

Emera’s operations are affected by the US dollar relative to the Canadian dollar. With the disparity between the two currencies, the effect on
Emera’s income is noteworthy, as approximately 50 per cent of Emera’s adjusted net income was derived from subsidiaries with a US functional currency. TECO Energy operations are conducted in US dollars and following the pending
acquisition, Emera‘s consolidated net income and cash flows will be impacted to a greater extent by movements in the US dollar relative to the Canadian dollar. 

NSPI 
 NSPI’s earnings are most directly impacted by
the range of rate of return on equity and capital structure approved by the UARB; the prudent management and approved recovery of operating costs, load, the approved recovery of regulatory deferrals; and the timing and amount of capital
expenditures. 
 While NSPI has experienced an unseasonably warm heating season with increased storm activity, NSPI anticipates earning within its allowed
ROE range in 2016 and expects its earnings and rate base to be generally consistent with prior years. 
 Over the past several years, the requirement to
reduce Nova Scotia’s reliance upon high carbon and greenhouse gas emitting sources of energy has resulted in NSPI making a significant investment in renewable energy sources and purchasing third party renewable energy. In December 2015, the
Electricity Plan Act was enacted by the Province of Nova Scotia, with a goal of providing rate stability and predictability for customers for the 2017 through 2019 period. In accordance with the Electricity Plan Act, NSPI filed a three-year
rate plan with the UARB for Fuel Costs in Q1 2016, which requested average annual rate increases of 1.3 per cent for 2017 through 2019. NSPI also announced that it will not file a general rate application for non-fuel costs for the 2017 to 2019
period. This was a result of NSPI continuing to work towards rate stability for customers through a focused effort on operating costs, productivity levels and service improvements. 

In 2015, NSPI filed an application with the UARB for the introduction of a regulatory framework to enable the purchase by retail customers of renewable
low-impact electricity generated in Nova Scotia from retail suppliers licensed by the UARB. In Q1 2016, The UARB issued a decision affirming NSPI’s proposed framework subject to small revisions. It is expected the market implementation
process will be completed by the end of 2016. 

  
 42 

 Capital expenditures for 2016, including AFUDC are forecasted to be $282.5 million (2015 - $274.0 million
actual). 
 Emera Maine 
 Emera Maine’s earnings
are most directly impacted by the combined impacts of the range of rates of return on equity and rate base approved by its regulators, the prudent management and approved recovery of operating costs, load, and the timing and amount of capital
expenditures. 
 Emera Maine’s 2016 ROE and earnings are expected to be generally consistent with prior years. Its ongoing investment in transmission
and distribution infrastructure is expected to result in modest growth in rate base.
 Emera Maine has an agreement with Central Maine Power Company to
pursue specific transmission opportunities in northern Maine that would relieve transmission congestion and more efficiently collect and deliver wind to southern New England markets. As part of this agreement, Emera Maine and Central Maine Power
Company jointly responded in Q1 2016 to a request for proposals from Massachusetts, Connecticut and Rhode Island. The demand for new renewable energy, and the infrastructure to deliver that energy to market, is growing as a result of increasing
renewable portfolio requirements of the southern New England states. 
 There are three outstanding pending complaints, with the FERC, to challenge the
ISO-New England Open Access Transmission Tariff-allowed base ROE. On March 22, 2016, the Administrative Law Judge (“ALJ”) issued a recommended decision to the FERC with respect to the first two outstanding ROE complaints. The ALJ
recommendation for the ENE Case was a 9.59 per cent base ROE, with a 10.42 per cent maximum ROE, and the recommendation for MA AG II Case was a 10.90 per cent base ROE, with a 12.19 per cent maximum ROE. A reserve was
calculated on a 10.57 per cent base and represents Emera Maine’s best estimate of the probable outcome for the two outstanding complaints, and no update was made to the reserve based on the ALJ recommendation, as it is pending approval by
the FERC and considered uncertain until that time. On April 29, 2016, an additional complaint was filed with FERC challenging the ROE under the ISO-NE transmission tariff. The complaint was filed by the Eastern Massachusetts
Consumer-Owned Systems (“EMCOS”), a collection of thirteen municipal light departments, seeking to reduce the base transmission ROE to a maximum of 8.93 per cent and the maximum ROE of 11.24 per cent. No reserve has been made as
a result of this complaint, as the outcome is considered uncertain. 
 In 2016, Emera Maine expects to invest approximately $89.5 million (2015 - $66
million actual), including approximately $42.9 million for transmission projects. 
 Emera Caribbean 

Earnings from Emera Caribbean are most directly impacted by the combined impacts of the range of rates of return on rate base approved by their regulators,
capital structure, prudent management and approved recovery of operating costs, load, and the timing and amount of capital expenditures. Earnings are also affected by the investment returns of Emera’s interest in BLPC’s self-insurance
fund. 
 The Barbados economy is forecasted to grow modestly in 2016. With oil being the predominant fuel source for generation of electricity in the
Caribbean, reduced oil prices may result in an economic benefit on the island in decreased cost of electricity to ratepayers. 
 The economy of Grand Bahama
is highly correlated to the United States economy. In 2015, the economy of Grand Bahama exhibited signs of improving with economic growth in the industrial sector and weather related growth in the residential sector. 2016 sales are expected to be
flat compared to 2015. 

  
 43 

 Overall, Emera Caribbean earnings and rate base are expected to be generally consistent with prior years.
GBPC’s 2016 earnings will reflect its 8.8 per cent allowable return on rate base. 
 Emera Caribbean plans to invest approximately $125.2 million
in capital programs in 2016 (2015 - $44.0 million actual). This increase is due to spending on a new solar facility in Barbados. 
 Pipelines 

The timing of the income from Pipelines is predominately a result of capital lease accounting treatment of the Emera Brunswick Pipeline, which yields declining
earnings over the life of the asset. 
 Pipelines’ 2016 earnings are expected to be lower than 2015 as a result of less favourable foreign exchange
exposure and higher OM&G costs. 
 Emera Energy 

Emera Energy Services 
 Emera Energy Services, Emera Energy’s
marketing and trading business, is generally dependent on market conditions. In particular, volatility in electricity and natural gas markets, which can be influenced by weather, local supply constraints and other supply/demand factors, can provide
higher levels of margin opportunity. 
 In addition to capitalizing on volatility-driven market opportunities, Emera Energy Services expects to continue to
grow organically building market share through superior customer service and expanding its geographic reach to adjacent markets, including the Marcellus Shale region. 

Planned investment by the industry in gas transportation infrastructure within the northeast United States over the next few years could reduce the degree of
volatility recently experienced in the market, all other things being equal. This could negatively affect profitability during certain periods. 
 Emera
Energy Generation 
 Earnings from Emera Energy Generation’s assets are largely dependent on market conditions, in particular, the relative pricing of
electricity and natural gas and capacity pricing for the New England Gas Generation Facilities. Efficient operations of the fleet to ensure unit availability, cost management and effective commercial performance are key success factors. 

2016 adjusted earnings from Emera Energy generating assets are expected to be lower than 2015, reflecting lower hedged and expected margins as compared to
2015. 
 In addition to energy margins and ancillary revenue, the New England Gas Generating Facilities and Bear Swamp earn revenue from capacity payments
through the forward capacity market (“FCM”), the annual reconfiguration capacity market and the monthly reconfiguration capacity market. Prices for the FCM, the larger of the two components, are determined through an auction process held
annually, three years in advance, providing revenue visibility to 2020, presuming the facilities continue to be available to support their capacity obligations. Details of pricing and estimated revenues are outlined in the table below for the New
England Gas Generating facilities, and Emera Energy’s 50 per cent interest in Bear Swamp. 

  
 44 

					
	 Forward Capacity Auction (“FCA”) Year
	  	 Clearing Price in $/kW-month (in USD)
	  	 Approximate Estimated

Annual Capacity Revenue (in USD) (1)

	 FCA6 (June 2015 to May 2016)
	  	$3.43	  	$40 million
	 FCA7 (June 2016 to May 2017)
	  	$3.15	  	$40 million
	 FCA8 (June 2017 to May 2018)
	  	$7.025	  	$100 million
	 FCA9 (June 2018 to May 2019)
	  	$9.55 and $11.08 (2)	  	$145 million
	 FCA 10 (June 2019 to May 2020)
	  	$7.03	  	$106 million

  

	(1)	Includes Emera’s 50 per cent share of Bear Swamp’s capacity revenue 

	(2)	$11.08 was awarded for the Southeast Massachusetts/Rhode Island zone only and, as such, applies only to Tiverton 

Bear Swamp’s adjusted earnings will be lower in 2016 and the first half of 2017 primarily due to higher interest costs as a result of its Q4 2015
refinancing. Beginning Q3 2017, these interest costs are expected to be offset by higher capacity revenues. 
 In 2016, Emera Energy expects to invest
approximately $41.0 million (2015 – $42.0 million actual) in capital projects related to its generating assets in order to further improve reliability and increase plant capacity. 

Corporate and Other 
 Corporate and Other is dependent, in
part, on business development and acquisition related initiatives, which in 2016 will include further costs related to the pending TECO Energy acquisition, AFUDC earnings as a result of equity investments in the Maritime Link Project and the
Labrador-Island Link, project-based construction services activity by Emera Utility Services, growth in APUC earnings (which Emera accounts one quarter after APUC reports such earnings), corporate financing costs and other corporate activities. 

Corporate’s contribution to consolidated net income in 2016 is expected to be lower than 2015 primarily due to further acquisition costs and associated
financing initiatives related to the pending TECO Energy acquisition. These costs will include a non-cash accounting charge for the difference between Emera’s closing share price on the issuance date of the convertible debentures and their
exercise price. This will be recognized once contingencies surrounding regulatory and other approvals are resolved. 
 On February 9, 2016, APUC
announced its intention to acquire The Empire District Electric Company in a $3.4 billion transaction, which is expected to close in Q1 2017. The closing of this transaction and its related financing will reduce Emera’s percentage
ownership interest in APUC. 
 In 2016, Corporate and Other expects to invest approximately $8.0 million (2015 - $10.0 million actual). 

ENL 
 NSP Maritime Link Inc. (“NSPML”)

 Through its subsidiary, NSP Maritime Link Inc., ENL had invested at March 31, 2016, approximately $796.7 million of equity, debt and working
capital, including $90.3 million of AFUDC, in the development of the Maritime Link Project. Project to date, ENL has invested $206.4 million in equity, comprised of $169.3 million in equity contributed and $37.1 million of accumulated retained
earnings, with the remaining costs being funded with working capital and debt. The debt has been guaranteed by the Government of Canada. AFUDC on invested equity is being capitalized at an annual rate of 9 per cent. 

ENL’s future earnings contribution from the Maritime Link Project will be affected by the amount and timing of capital expenditures for design and
construction activities, which will determine the component of costs to be funded by equity. Proceeds from the federally guaranteed debt financing completed in 2014 were used to fund project costs until the Project’s debt to equity ratio
reached 70 per cent to 30 per cent respectively in Q4 2015. From that point forward, project costs are being funded with debt and equity at a 70 per cent to 30 per cent ratio, with equity contributions of $14.4 million in Q1
2016. 

  
 45 

 Maritime Link Project forecasted equity contributions for 2016 and 2017 are $160 million and $156 million
respectively, with total equity for the Project estimated to be $470.9 million. 
 Labrador Island Link (“LIL”) 

ENL is a limited partner with Nalcor Energy in LIL, currently estimated at approximately $3.1 billion. As at March 31, 2016, ENL has invested $250.4
million, comprised of $224.5 million in equity contributed and $25.9 million of accumulated equity earnings in LIL. Equity earnings are recorded based on an annual rate of 8.8 per cent of the equity invested. The return on ROE is
approved by the Newfoundland and Labrador Board of Commissioners of Public Utilities (“NLPUB”). There is currently an application filed by another regulated electrical utility in Newfoundland and Labrador, being heard by the NLPUB,
which includes a review of ROE. The NLPUB’s decision on ROE, expected in Q2 2016, will be applicable for all regulated electrical utilities in Newfoundland and Labrador and become the ROE applicable to ENL’s investment in
LIL. Future earnings are dependent on the amount and timing of additional equity investments and the approved ROE. Total equity contributions for Q1 2016 for LIL were $38.4 million. 

LIL forecasted equity contributions for 2016 and 2017 are $196.0 million and $27.0 million respectively, with total equity investment, by Emera, in the
Project estimated to be $409.1 million. 
 Both the NSPML and LIL investments are recorded as “Investments subject to significant influence” on
Emera’s consolidated balance sheets. 
 TRANSACTIONS WITH RELATED PARTIES 

In the ordinary course of business, Emera provides energy, construction and other services and enters into transactions with its subsidiaries, associates and
other related companies on terms similar to those offered to non-related parties. Inter-company balances and inter-company transactions have been eliminated on consolidation, except for the net profit on certain transactions between non-regulated
and regulated entities in accordance with accounting standards for rate-regulated entities. The net profit on these transactions, which would be eliminated in the absence of the accounting standards for rate-regulated entities, is recorded in
non-regulated operating revenues, with an offset to property, plant and equipment, regulated fuel for generation and purchased power, or operating, maintenance and general, depending on the nature of the transaction. Below are transactions between
Emera and its associated companies reported in the Consolidated Statements of Income: 
  

													
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 	  	 	  	 	  	2016	 	 	2015	 
	 	  	 Nature of Service
	  	 Presentation
	  	 	 	 	 	 
	 Sales to:
	  		  		  				 			
	 APUC

subsidiary
	  	Net sale of natural gas and transportation	  	Operating revenue – non-regulated	  	$	2.0	  	 	$	1.6	  
	 Purchases from:
	  		  		  				 			
	 M&NP
	  	Natural gas transportation capacity	  	Regulated fuel for generation and purchased power	  	 	0.3	  	 	$	0.2	  
	 M&NP
	  	Natural gas transportation capacity	  	Operating revenue – non-regulated	  	$	(8.1	) 	 	 	(6.3	) 

 Operating revenue – non-regulated includes intercompany profit relating to the sale of natural gas, sale of power,
construction, operations management and engineering services, and hedging services to rate-regulated subsidiaries of Emera totaling $0.3 million for the three months ended March 31, 2016 (2015 – $(0.2) million). 

  
 46 

 Amounts reported on Emera’s Consolidated Balance Sheets due (to) from its equity investments are summarized
in the following table: 
  

									
	As at	  	March 31	 	  	December 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Due from related parties:
	  				  			
	 NSPML – current
	  	$	1.2	  	  	$	1.6	  
	 Subsidiary of APUC – current
	  	 	0.3	  	  	 	0.7	  
	 M&NP – loan receivable – long-term
	  	 	2.5	  	  	 	2.5	  
	 Due to related parties:
	  				  			
	 M&NP – current
	  	 	2.3	  	  	 	2.1	  
		  	  
	  
	 	  	  
	  
	 
	 Net due from (to) related parties
	  	$	1.7	  	  	$	2.7	  
		  	  
	  
	 	  	  
	  
	 

 All amounts are under normal interest and credit terms, except for a loan receivable from M&NP bearing interest at
1 per cent per annum maturing on November 30, 2019.
 RISK MANAGEMENT AND FINANCIAL INSTRUMENTS 

Emera’s risk management profile and practices have not changed materially from December 31, 2015. 

Hedging Items Recognized on the Balance Sheets 
 The
Company has the following categories on the balance sheet related to derivatives in valid hedging relationships: 
  

									
	As at	  	March 31	 	  	December 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Derivative instrument assets (current and other assets)
	  	$	11.7	  	  	$	19.8	  
	 Derivative instrument liabilities (current and long-term liabilities)
	  	 	(28.5	) 	  	 	(46.2	) 
		  	  
	  
	 	  	  
	  
	 
	 Net derivative instrument assets (liabilities)
	  	$	(16.8	) 	  	$	(26.4	) 
		  	  
	  
	 	  	  
	  
	 

  
 47 

 Hedging Impact Recognized in Net Income 

The Company recognized gains (losses) related to the effective portion of hedging relationships under the following categories: 

 

									
	For the	  	Three months ended
March 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Operating revenues – regulated
	  	$	(3.2	) 	  	$	(2.1	) 
	 Non-regulated fuel for generation and purchased power
	  	 	4.2	  	  	 	5.6	  
	 Income from equity investments
	  	 	(0.3	) 	  	 	(0.2	) 
		  	  
	  
	 	  	  
	  
	 
	 Effective net gains (losses)
	  	$	0.7	  	  	$	3.3	  
		  	  
	  
	 	  	  
	  
	 

 The effectiveness gains (losses) reflected in the above table would be offset in net income by the hedged item realized in the
period. 
 The Company recognized in net income the following gains (losses) related to the ineffective portion of hedging relationships under the following
categories: 
  

									
	For the	  	Three months ended
March 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Non-regulated fuel for generation and purchased power
	  	$	(1.0	) 	  	$	(0.6	) 
		  	  
	  
	 	  	  
	  
	 
	 Ineffective gains (losses)
	  	$	(1.0	) 	  	$	(0.6	) 
		  	  
	  
	 	  	  
	  
	 

 Regulatory Items Recognized on the Balance Sheets 

The Company has the following categories on the balance sheet related to derivatives receiving regulatory deferral: 

 

									
	As at	  	March 31	 	  	December 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Derivative instrument assets (current and other assets)
	  	$	131.3	  	  	$	209.9	  
	 Regulatory assets (current and other assets)
	  	 	51.5	  	  	 	64.3	  
	 Derivative instrument liabilities (current and long-term liabilities)
	  	 	(49.8	) 	  	 	(64.3	) 
	 Regulatory liabilities (current and long-term liabilities)
	  	 	(131.3	) 	  	 	(209.9	) 
		  	  
	  
	 	  	  
	  
	 
	 Net asset (liability)
	  	$	1.7	  	  	$	—  	  
		  	  
	  
	 	  	  
	  
	 

 Regulatory Impact Recognized in Net Income 

The Company recognized the following net gains (losses) related to derivatives receiving regulatory deferral as follows: 

 

									
	For the	  	Three months ended
March 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Regulated fuel for generation and purchased power (1)
	  	$	3.0	  	  	$	(1.1	) 
		  	  
	  
	 	  	  
	  
	 
	 Net gains (losses)
	  	$	3.0	  	  	$	(1.1	) 
		  	  
	  
	 	  	  
	  
	 

  

	(1)	Realized gains (losses) on derivative instruments settled and consumed in the period, hedging relationships that have been terminated or the hedged transaction is no longer probable. Realized gains (losses) recorded in
inventory will be recognized in “Regulated fuel for generation and purchased power” when the hedged item is consumed. 

  
 48 

 Held-for-trading Items Recognized on the Balance Sheets 

The Company has the following categories on the balance sheet related to HFT derivatives: 

 

									
	As at	  	March 31	 	  	December 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Derivative instruments assets (current and other assets)
	  	$	33.7	  	  	$	95.3	  
	 Derivative instruments liabilities (current and long-term liabilities)
	  	 	(141.8	) 	  	 	(331.9	) 
		  	  
	  
	 	  	  
	  
	 
	 Net derivative instrument assets (liabilities)
	  	$	(108.1	) 	  	$	(236.6	) 
		  	  
	  
	 	  	  
	  
	 

 Held-for-trading Items Recognized in Net Income 

The Company has recognized the following realized and unrealized gains (losses) with respect to HFT derivatives in net income: 

 

									
	For the	  	Three months ended
March 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Operating revenues – non-regulated
	  	$	221.6	  	  	$	94.0	  
	 Non-regulated fuel for generation and purchased power
	  	 	(0.7	) 	  	 	0.2	  
		  	  
	  
	 	  	  
	  
	 
	 Net gains (losses)
	  	$	220.9	  	  	$	94.2	  
		  	  
	  
	 	  	  
	  
	 

 Other Derivatives Recognized on the Balance Sheets 

The Company has the following categories on the balance sheet related to other derivatives: 

 

									
	As at	  	March 31	 	  	December 31	 
	 millions of Canadian dollars
	  	2016	 	  	2015	 
	 Derivative instrument assets (current and other assets)
	  	$	1.1	  	  	$	92.1	  
	 Derivative instrument liabilities (current and long-term liabilities)
	  	 	(7.0	) 	  	 	(2.9	) 
		  	  
	  
	 	  	  
	  
	 
	 Net derivative instrument assets (liabilities)
	  	$	(5.9	) 	  	$	89.2	  
		  	  
	  
	 	  	  
	  
	 

 Other Derivatives Recognized in Net Income 

The Company recognized in net income the following gains (losses) related to other derivatives: 

 

									
	For the	  	Three months ended	 
	 millions of Canadian dollars
	  	March 31	 
	 	  	2016	 	  	2015	 
	 Other income (expense)
	  	$	(94.8	) 	  	$	—  	  
	 Interest expense, net
	  	 	(0.3	) 	  	 	—  	  
		  	  
	  
	 	  	  
	  
	 
	 Total gains (losses)
	  	$	(95.1	) 	  	$	—  	  
		  	  
	  
	 	  	  
	  
	 

 DISCLOSURE AND INTERNAL CONTROLS 

The Company, under the supervision and participation of management, including the Chief Executive Officer and Chief Financial Officer, has designed as at
March 31, 2016 disclosure controls and procedures (“DC&P”) and internal controls over financial reporting (“ICFR”). These terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’
Annual and Interim Filings (“NI 52-109”). 
 There have been no changes in Emera or its consolidated subsidiaries’ ICFR for the three months
ended on March 31, 2016, which has materially affected, or is reasonably likely to materially affect the Company’s ICFR. 
  

  
 49 

 CRITICAL ACCOUNTING ESTIMATES 

The preparation of consolidated financial statements in accordance with generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management evaluates the Company’s estimates on an
ongoing basis based upon historical experience, current conditions and assumptions believed to be reasonable at the time the assumption is made. Significant areas requiring the use of management estimates relate to rate-regulated assets and
liabilities, pension and post-retirement benefits, unbilled revenue, useful lives for depreciable assets, goodwill impairment assessments, income taxes, including deferred taxes, asset retirement obligations, capitalized overhead and valuation of
derivative instruments. Actual results may differ significantly from these estimates. 
 CHANGES IN ACCOUNTING POLICIES AND PRACTICES 

The new US GAAP accounting policies that are applicable to, and were adopted by Emera, effective during 2016, are described as follows: 

Income Statement – Extraordinary and Unusual Items, Accounting Standard Update (“ASU”) 2015-01 

In January 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-01, Income Statement – Extraordinary and Unusual Items,
which simplifies the income statement presentation requirements by eliminating the concept of extraordinary items. The Company has adopted this standard in Q1 2016, with no impact on its consolidated financial statements. 

Consolidation, ASU 2015-02 
 In February 2015, the FASB
issued ASU 2015-02, Consolidation, which changes the analysis a reporting entity must perform to determine whether it should consolidate certain types of legal entities. Some of the more notable amendments are (1) the identification of
variable interests when fees are paid to a decision maker or service provider, (2) the variable interest entity (“VIE”) characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination.
All legal entities are subject to re-evaluation under the revised consolidation model. The Company has adopted this standard in Q1 2016, with no impact on its consolidated financial statements. 

Interest – Imputation of Interest, ASU 2015-03 
 In
April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest, which simplifies the presentation of debt issuance costs. The amendments require debt issuance costs be presented on the balance sheet as a direct
deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs is not affected. The Company has adopted this standard effective Q1 2016 and
December 31, 2015 balances have been retrospectively restated. This change resulted in $62.3 million of deferred financing costs, as at December 31, 2015, previously presented as other assets, being reclassified as a deduction from the
carrying amount of the related long-term debt and convertible debentures represented by instalment receipts on the Consolidated Balance Sheets. 
 In
accordance with ASU 2015-15 Interest: Imputation of Interest, the Company continues to present deferred issuance costs related to its revolving credit facilities and related instruments in other long-term assets on its Consolidated Balance
Sheets. 

  
 50 

 Compensation – Retirement Benefits, ASU 2015-04 

In April 2015, the FASB issued ASU 2015-04, Compensation – Retirement Benefits, which is part of FASB’s initiative to reduce complexity in
accounting standards. This standard provides certain practical expedients for defined benefit pension or other post-retirement benefit plan measurement dates. The Company has adopted this standard in Q1 2016, with no impact on its consolidated
financial statements. 
 Intangibles – Goodwill and Other – Internal-Use Software, ASU 2015-05 

In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software, which
provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer would account for the software license element of the arrangement
consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer would account for the arrangement as a service contract. The guidance does not change GAAP for a
customer’s accounting for service contracts. The Company has adopted this standard in Q1 2016, with no impact on its consolidated financial statements. 

Technical Corrections and Improvements, ASU 2015-10 
 In
June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements, covering a wide range of topics in the codification to correct unintended application of guidance, or make minor improvements to the Codification. The Company has
adopted this standard in Q1 2016, with no impact on its consolidated financial statements. 
 Inventory – Simplifying the Measurement of Inventory,
ASU 2015-11 
 In July 2015, the FASB issued ASU 2015-11, Inventory – Simplifying the Measurement of Inventory. The
amendments require an entity to measure inventory at the lower of cost or net realizable value, whereas previously, inventory was measured at the lower of cost or market. ASU 2015-11 is effective for annual reporting periods, including interim
reporting within those periods, beginning after December 15, 2016. Early adoption is permitted for any interim or annual financial statements that have not yet been issued. The Company has adopted this standard in Q1 2016, with no
impact on its consolidated financial statements. 
 Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge
Accounting Relationships, ASU 2016-05 
 In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging Effect of Derivative Contract Novations
on Existing Hedge Accounting Relationships. The standard clarifies that a change in the counterparty to a derivative contract, in and of itself, does not require the de-designation of a hedging relationship provided that all other hedge
accounting criteria continue to be met. ASU 2016-05 is effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2017 and early adoption is permitted. The Company has
adopted this standard in Q1 2016, with no impact on its consolidated financial statements. 
 Investments – Equity Method and Joint Ventures, ASU
2016-07 
 In March 2016, the FASB issued ASU 2016-07, Investments – Equity Method and Joint Ventures, which is part of FASB’s
initiative to reduce complexity in accounting standards. This standard eliminates the requirements of an investor to retroactively account for an investment under the equity method when an investment qualifies for equity method accounting. ASU
2016-07 is effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2016, with early adoption permitted. The Company has adopted this standard in Q1 2016, with no impact on its
consolidated financial statements. 

  
 51 

 Future Accounting Pronouncements 

Revenue from Contracts with Customers, ASU 2014-09 
 In May
2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which creates a new, principle-based revenue recognition framework and a new topic in the Accounting Standards Codification (“ASC”), Topic 606. ASC 606 also
changes the basis for determining when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific aspects of revenue recognition and expands revenue disclosures. In March 2016, the FASB issued ASU
2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations. The amendments are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. In
April 2016, the FASB issued ASU 2016-10 Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing. The guidance will be effective beginning in 2018, with early adoption permitted in 2017, and will allow for
either full retrospective adoption or modified retrospective adoption. The Company is continuing to evaluate the impact of adoption of these standards on its consolidated financial statements. 

Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-01 

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Recognition and Measurement of Financial Assets and Financial
Liabilities. The standard provides guidance for the recognition, measurement, presentation and disclosure of financial assets and liabilities. ASU 2016-01 is effective for annual reporting periods, including interim reporting within
those periods, beginning after December 15, 2017. The Company is currently in the process of evaluating the impact of adoption of this standard on its consolidated financial statements. 

Leases (Topic 842), ASU 2016-02 
 In February 2016, the
FASB issued ASU 2016-02, Leases. The standard increases transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet for lease terms of more than 12 months. The effect of leases
on the Consolidated Statements of Income and the Consolidated Statements of Cash Flows is largely unchanged. In addition, the guidance will require additional disclosures regarding key information about leasing arrangements. ASU 2016-02 is effective
for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2018. Early adoption is permitted, and will be applied using a modified retrospective approach. The Company is currently in the process
of evaluating the impact of adoption of this standard on its consolidated financial statements. 

  
 52 

 SUMMARY OF QUARTERLY RESULTS 
  

																																	
	For the quarter ended	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	millions of dollars	 	Q1	 	 	Q4	 	 	Q3	 	 	Q2	 	 	Q1	 	 	Q4	 	 	Q3	 	 	Q2	 
	 (except per share amounts)
	 	2016	 	 	2015	 	 	2015	 	 	2015	 	 	2015	 	 	2014	 	 	2014	 	 	2014	 
	 Operating revenues
	 	$	877.0	  	 	$	731.6	  	 	$	642.3	  	 	$	526.9	  	 	$	888.5	  	 	$	782.7	  	 	$	539.0	  	 	$	566.6	  
	 Net income attributable to common shareholders
	 	 	44.3	  	 	 	192.1	  	 	 	35.0	  	 	 	10.0	  	 	 	160.1	  	 	 	151.2	  	 	 	28.2	  	 	 	24.5	  
	 Adjusted net income attributable to common shareholders
	 	 	120.2	  	 	 	87.1	  	 	 	23.3	  	 	 	48.0	  	 	 	171.6	  	 	 	78.5	  	 	 	49.9	  	 	 	44.2	  
	 Earnings per common share – basic
	 	 	0.30	  	 	 	1.31	  	 	 	0.24	  	 	 	0.07	  	 	 	1.10	  	 	 	1.05	  	 	 	0.20	  	 	 	0.17	  
	 Earnings per common share – diluted
	 	 	0.30	  	 	 	1.30	  	 	 	0.24	  	 	 	0.07	  	 	 	1.09	  	 	 	1.02	  	 	 	0.20	  	 	 	0.17	  
	 Adjusted earnings per common share – basic
	 	 	0.81	  	 	 	0.59	  	 	 	0.16	  	 	 	0.33	  	 	 	1.18	  	 	 	0.54	  	 	 	0.35	  	 	 	0.31	  

 Quarterly operating revenues and net income attributable to common shareholders are affected by seasonality. The first quarter
is generally the strongest because a significant portion of the Company’s operations are in northeastern North America, where winter is the peak electricity season. As the energy industry is seasonal in nature for companies like Emera, seasonal
and other weather patterns, as well as the number and severity of storms, can affect the demand for energy and the cost of service. Quarterly results could be affected by items outlined in the Significant Items section and mark-to-market
adjustments. 

  
 53EX-4.6

Table of Contents

 Exhibit 4.6 
 Emera 
 Incorporated 
 Notice
of Annual and Special Meeting of Common Shareholders 
 Tuesday, May 17, 2016 and Management Information Circular 

 
  
  

 
 

 

Table of Contents

 Dear Fellow Shareholders: 

We invite you to attend the annual and special meeting of the common shareholders of Emera Incorporated, which will be held at the Design Exchange, 234
Bay St., Toronto, Ontario, on Tuesday, May 17, 2016 at 2:00 p.m. (Eastern Time). 
 The Board of Directors and the executive team look forward
to meeting with you to present our analysis of our 2015 financial results and outline our plans for the future. 
 Please take time to read this
document. The Management Information Circular contains important information about the business to be conducted at the annual meeting, about the Directors nominated for election, how we compensate our executive officers and Directors and about our
corporate governance practices. If you cannot attend the annual meeting, please use the proxy or voting instruction form provided to you in order to submit your vote prior to the meeting. It is important to us that your shares be counted. 

Live coverage of the annual meeting will be available on our website at www.emera.com/investors. 

A recording of the meeting will be available on the site for several weeks following the meeting. 

We hope you can join us. 
 Sincerely, 

 
 

 
 Jackie Sheppard 
 Chair of the Board 

 
 

 
 Christopher Huskilson 
 President and Chief
Executive Officer 
  
 Table of Contents 

 

					
	 Notice of Annual and Special Meeting
	  	 	1	  
	 Management Information Circular
	  	 	2	  
	 Business of the Meeting
	  	 	4	  
	 Director Nominees
	  	 	7	  
	 Skills and Experience
	  	 	8	  
	 Statement of Corporate Governance Practices
	  	 	24	  
	 Letter from the Management Resources and Compensation Committee to
Shareholders
	  	 	36	  
	 Statement of Executive Compensation
	  	 	39	  
	 Compensation Discussion and Analysis
	  	 	43	  
	 Performance Graph
	  	 	54	  
	 NEO Summary Compensation Table
	  	 	56	  
	 Appendix “A” – Board of Directors Charter
	  	 	66	  
	 Appendix “B” – Amended Articles of Association
	  	 	68	  

Table of Contents

 Notice of Annual and Special Meeting 

 

							
	Tuesday, May 17, 2016	  	Design Exchange	  	Record Date	  	
	2:00 p.m. Eastern Time	  	234 Bay Street	  	Close of business	  	
		  	Toronto, Ontario	  	March 28, 2016	  	

 Items of Business 

	1.	Electing Directors to serve until the next annual meeting of shareholders; 

	2.	Appointing Auditors; 

	3.	Authorizing the Directors to establish the Auditors’ fee; 

	4.	To consider an advisory resolution on the Company’s approach to executive compensation; 

	5.	Approving amendments to the Company’s Articles of Association; and 

	6.	Transacting such other business as may properly come before the meeting. 

  

 
 As a shareholder, it is important that you vote. Common shareholders are encouraged to return their
proxy or voting instruction form as soon as possible. A postage-paid, pre-addressed envelope is provided. As an alternative, shareholders may choose to vote by telephone or on Internet as provided for on the proxy or voting instruction form. Proxies
must be received prior to 5:00 p.m. Eastern time on Monday, May 16, 2016, or if the meeting is adjourned, at least 48 hours (not including Saturdays, Sundays, or statutory holidays in Nova Scotia) prior to the reconvened meeting. 

Should you have questions or comments, you may contact Emera Incorporated by writing to the Corporate Secretary, Emera Incorporated, P.O. Box 910, Halifax, Nova Scotia
B3J 2W5, by calling 1-800-358-1995 from anywhere in North America or (902) 428-6060 within the Halifax-Dartmouth area. 
  
 

 
 Stephen D. Aftanas 
 Corporate Secretary 

  
 Emera Inc. — Management
Information Circular 2016          1 

Table of Contents

			
	MANAGEMENT INFORMATION CIRCULAR	 	

 Information as of March 17, 2016 

(unless otherwise noted) 

Meeting Materials and Notice and Access 
 Canadian
securities rules (“Notice and Access”) permit Emera Incorporated (the “Company” or “Emera”) to provide you with electronic access to this Management Information Circular (the “Circular”) and the 2015 Annual
Report (the “Meeting materials”) for the annual and special meeting of common shareholders (“Shareholders”) instead of sending you a paper copy. This year, Emera is sending Meeting materials to registered holders and beneficial
owners using Notice and Access. It is more environmentally friendly as it helps reduce paper use. The notice you received includes instructions on how to access and review an electronic copy of the Meeting materials or how to request a paper copy.
The notice also provides instructions on voting by proxy at the meeting. If you would like to receive a paper copy of the Meeting materials, please follow the instructions in the notice. 

For those Shareholders who have previously provided instructions to receive paper copies of Meeting materials, we sent you a paper copy in addition to the notice
regarding their electronic availability. 
 Solicitation of Proxies 

This Circular is furnished in connection with the solicitation of proxies by the Board of Directors and management of Emera for use at the annual and special meeting
(“Meeting”) of Shareholders of the Company to be held on Tuesday, May 17, 2016, as set forth in the Notice of Annual and Special Meeting (the “Notice”). 

You have received a proxy or voting instruction form. The solicitation of proxies will be primarily by mail although proxies may also be solicited by telephone,
facsimile, in writing, or in person, by Directors, Officers, or other employees or agents of the Company. 
 The Company wishes to have as many Shareholders vote as
possible and has retained D.F. King Canada as the proxy solicitation agent to assist with the solicitation of votes from Shareholders. The proxy solicitation agent will monitor the number of Shareholders voting and will contact Shareholders in order
to increase participation in voting. The cost of this solicitation will be borne by the Company and is not expected to exceed $50,000. 
 Record
Date and Voting of Shares 
 The date for determining which Shareholders are entitled to receive the Notice is Monday, March 28, 2016. This is called the
“Record Date”. Only Shareholders of record at the close of business on the Record Date will be entitled to vote. Each common share owned as of the Record Date entitles the holder to one vote. 

To the knowledge of the Directors and Officers, as of the date of this Circular, no person owned or exercised control over more than 10 per cent of the outstanding
common shares of the Company and the only outstanding voting shares were 148,327,777 common shares. 
 Beneficial (or Non-Registered) Owners

 The voting process is different depending on whether you are a registered Shareholder, Non-Objecting Beneficial Owner or Objecting Beneficial Owner. 

If you have shares registered in your own name, you are a registered Shareholder. If you do not hold shares in your own name, you are a beneficial or non-registered
owner. If your shares are listed in an account statement provided to you by a broker, then it is likely that those shares will not be registered in your name, but under the broker’s name or under the name of an agent of the broker such as CDS
Clearing and Depository Services Inc., the nominee for many Canadian brokerage firms, or its nominee. 
 There are two kinds of beneficial owners: (i) Objecting
Beneficial Owners – those who object to their name being made known to the issuers of shares which they own and (ii) Non-Objecting Beneficial Owners – those who do not object to their name being made known to the issuers of the shares
which they own. Non-Objecting Beneficial Owners will receive a voting instruction form from Emera’s registrar and transfer agent, CST Trust Company (“CST”). This is to be completed and returned to CST in the envelope provided. In
addition, CST provides both telephone voting and Internet voting as described on the voting instruction form. 
 Securities regulation requires brokers or agents to
seek voting instructions from Objecting Beneficial Owners in advance of the Meeting. Objecting Beneficial Owners should be aware that brokers or agents can only vote shares if instructed to do so by the Objecting Beneficial Owner. Your broker or
agent (or their agent Broadridge) will have provided you with a voting instruction form or form of proxy for the purpose of obtaining your voting instructions. Every broker has its own mailing procedures and provides instructions for voting. You
must follow those instructions carefully to ensure your shares are voted at the Meeting. 
 If you are an Objecting Beneficial Owner receiving a voting instruction
form or proxy from a broker or agent, you cannot use that proxy to vote in person at the Meeting. To vote your shares at the Meeting, the voting instruction form or proxy must be returned to the broker well in advance of the Meeting. If you wish to
attend and vote your shares in person at the Meeting, follow the instructions for doing so provided by your broker or agent. 

  

2          Emera Inc. — Management Information Circular 2016 

Table of Contents

 MANAGEMENT INFORMATION CIRCULAR 

     
  

Shareholder Proxy Materials 
 These security holder
materials are being sent to both registered and non-registered owners of the securities. If you are a non-registered owner, and the issuer or its agent has sent these materials directly to you, your name, address, and information about your holdings
of securities, have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding on your behalf. Emera has arranged for its registrar and transfer agent, CST, to send materials directly to
Non-Objecting Beneficial Owners. Emera will bear the cost of delivering shareholder proxy materials to registered Shareholders, Non-Objecting Beneficial Owners and Objecting Beneficial Owners. 

By choosing to send these materials to you directly, Emera (and not the intermediary holding on your behalf) has assumed responsibility for (i) delivering these
materials to Non-Objecting Beneficial Owners, and (ii) executing their proper voting instructions. Please return voting instructions as specified in the voting instruction form or form of proxy. 

Appointment and Revocation of Proxies 
 The persons named
in the enclosed proxy are Jackie Sheppard, Chair of the Board, and Christopher Huskilson, President and Chief Executive Officer, both of whom are Directors of the Company, and Stephen Aftanas, who is Corporate Secretary of the Company. 

In order for a vote by proxy or voting instruction form to be counted, it should be received prior to 5:00 p.m. (Eastern Time) on Monday, May 16, 2016. The Company
reserves the right to accept late proxies and to waive the proxy cut-off with or without notice, but is under no obligation to accept or reject any particular late proxy. For Canadian residents, a postage-paid, pre-addressed envelope is provided for
this purpose. In order for your vote to be counted, you may vote by proxy or voting instruction form via mail, the Internet or telephone. If you are a registered Shareholder or a Non-Objecting Beneficial Owner, you may attend the Meeting in person
and submit your completed proxy or vote by ballot. 
 Completion of a proxy gives discretionary authority to the proxyholder to vote as he or she sees fit in respect of
amendments to matters identified in the Notice, and other matters that may properly come before the Meeting or any adjournment thereof, whether or not the amendment or other matter that comes before the Meeting is or is not routine, and whether or
not the amendment or other matter that comes before the Meeting is contested. Management of the Company is not aware of any amendments or other matters to be presented for action at the Meeting. 

If you appoint Ms. Sheppard, Mr. Huskilson or Mr. Aftanas as your proxyholder, they will vote, or withhold from voting, in accordance with your
directions. If you do not specify how you want your shares voted, they will vote “For” the: 
  

	•	election of Directors named in this Circular;  

	•	appointment of Ernst & Young LLP as Auditors; 

	•	authorization of the Directors to establish the Auditors’ fee; 

	•	advisory resolution on the Company’s approach to executive compensation; and  

	•	approval of the amendments to the Company’s Articles of Association. 

 They will vote in accordance with their
best judgment if any other matters are properly brought before the Meeting. 
 You may appoint any other person (who need not be a Shareholder) to represent you at
the Meeting by inserting that person’s name in the space provided on the accompanying proxy. That person is your proxyholder and must attend and vote at the Meeting in order for your vote to count. 

You may revoke your proxy by providing new voting instructions in a new proxy or voting instructions form with a later date, or at a later time if you are voting on
Internet or by telephone. Any new voting instructions, however, will only take effect if received prior to 5:00 p.m. (Eastern Time) on Monday, May 16, 2016 or if the meeting is adjourned, at least 48 hours (not including Saturdays, Sundays or
statutory holidays in Nova Scotia) prior to the reconvened meeting. You may also revoke your proxy without providing new voting instructions by giving written notification addressed to Mr. Stephen Aftanas, Corporate Secretary, P.O. Box 910,
Halifax, Nova Scotia, B3J 2W5, no later than the last business day preceding the day of the Meeting or any postponement or adjournment thereof or with the Chair of the Meeting on the day of the Meeting or any postponement or adjournment thereof or
in any other manner permitted by law. Registered shareholders may attend the Meeting and vote in person and, if they do so, any voting instructions previously given by such persons for such shares will be revoked. 

Restrictions on Share Ownership and Voting 
 Under Nova
Scotia legislation, no Emera Shareholder may own or control, directly or indirectly, more than 15 per cent of the outstanding voting shares. Shareholders who are not residents of Canada may not hold, in the aggregate, more than 25 per cent
of the outstanding voting shares. 
 These restrictions may be enforced by limiting non-complying Shareholders’ voting rights, dividend rights and transfer rights.
Shareholders may be required, at any time, to furnish a statutory declaration to verify the number of shares held and/or residency in order to ensure compliance with these restrictions. 

If you have any questions about share ownership and voting restrictions, please contact the Corporate Secretary using the contact information contained in the Notice
above. 

  
 Emera Inc. — Management
Information Circular 2016          3 

Table of Contents

      
  

Business of the Meeting 
  

	1.	Election of the Board of Directors: The 12 nominees proposed for election as Directors at the 2016 Meeting are identified under Director Nominees in this Circular. For more information about the process for
nominating Directors, see Nomination of Directors in the Statement of Corporate Governance Practices. 

 All nominees are currently
Directors of the Company. Each nominee has indicated his or her willingness to serve as a Director. Each Director elected at the Meeting will hold office until the next Annual Meeting of Shareholders. 

Ms. Sheppard, Mr. Huskilson and Mr. Aftanas intend to vote “For” the 12 nominees unless instructed otherwise by Shareholders in
their proxy. 
  

	2.	Appointment of Auditors: The Audit Committee has reviewed the performance of Ernst & Young LLP, including its independence relating to the audit and recommends the re-appointment of Ernst &
Young LLP as Auditors. Ernst & Young LLP have been Auditors of the Company since its inception in 1998, and before that were Auditors of the Company’s subsidiary, Nova Scotia Power Inc. (NSPI), since 1991. 

Ms. Sheppard, Mr. Huskilson and Mr. Aftanas intend to vote “For” the re-appointment of Ernst & Young LLP as Auditors of
the Company, to hold office until the close of the next Annual Meeting of Shareholders, unless a Shareholder specifies their shares be withheld from voting. 
  

	3.	Auditors’ Fee: The Company is incorporated under the Nova Scotia Companies Act. Shareholder approval of the authorization of Directors to establish the Auditors’ fee is required pursuant to the
Companies Act. The aggregate fees billed by Ernst & Young LLP, during the last two fiscal years ended December 31, 2014 and December 31, 2015, were as follows: 

 

									
	Service Fee	  	2015 ($)	 	  	2014 ($)	 
			
	 Audit Fees
	  	 	1,167,187	  	  	 	1,074,859	  
	 Audit-Related Fees
	  	 	242,568	  	  	 	342,664	  
	 Tax Fees
	  	 	544,615	  	  	 	298,531	  
	 All Other Fees
	  	 	125,000	  	  	 	Nil	  
	 Total
	  	 	2,079,370	  	  	 	1,716,054	  

 Ms. Sheppard, Mr. Huskilson and Mr. Aftanas intend to vote “For” the authorization of Directors
to establish the Auditors’ fee, unless a Shareholder instructs otherwise in their proxy. 
  

	4.	Advisory Vote on Executive Compensation: You will be asked to consider and approve, on an advisory basis, a resolution on Emera’s approach to executive compensation as disclosed in this Circular.

 Our executive compensation programs are designed to attract, retain, motivate and reward high-calibre leaders to deliver strong
performance in alignment with Emera’s corporate strategy and to create and sustain shareholder value. Programs are designed to reflect a blend of short- and long-term incentive plans to reflect our pay-for-performance philosophy and to provide
for a significant portion of an executive’s compensation to be at risk, while aligning the structure of programs and payouts with sound risk management and good governance principles. 

The Board, through the MRCC, has directed and reviewed the contents of the Statement of Executive Compensation in this Circular and has unanimously
approved it as part of the Committee’s report to you. 
 As our shareholder, on an advisory basis, you have the opportunity to vote “For”
or “Against” our approach to executive compensation through the following resolution: 
 “BE IT RESOLVED, on an advisory basis,
and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in the Company’s information circular delivered in advance of the 2016 annual and special
meeting of shareholders.” 
 Since your vote is advisory, it will not be binding on the Board, however, the Board and, in particular the MRCC,
will seriously consider the outcome of the vote as part of its ongoing review of executive compensation. 
 Unless otherwise instructed,
Ms. Sheppard, Mr. Huskilson and Mr. Aftanas intend to vote “For” the advisory resolution on executive compensation. 

  

4           Emera Inc. — Management Information Circular 2016 

Table of Contents

 MANAGEMENT INFORMATION CIRCULAR 

     
  

 

	5.	Approval of the Amendments to the Company’s Articles of Association: 

	  	Background 

 The Articles of Association of Emera (the “Articles”) adopted on
incorporation were repealed and replaced in 1998 to comply with the Nova Scotia Power Reorganization (1998) Act. They were further amended in 2001 (to adopt a retirement age for Directors) and 2007 (to reduce from 10 the minimum size of
the Board to eight Directors). 
 In the fall of 2015, the Company conducted a thorough review of the Articles and proposes that they be amended and
restated. The primary intent of the substantive amendments proposed is to modernize aspects of the Articles to reflect developments in technology, business practice, governing law and the regulatory environment. There are a broad range of amendments
proposed and the significant amendments include such matters as: the adoption of a requirement for advance notice of director nominations, an increase in the quorum for shareholder meetings, a simplification of the description of the committee
structure, and provision for electronic voting to take advantage of future developments from time to time in law, voting technology and practices. Other amendments are also included to update the Articles to reflect changes in the law, and to effect
housekeeping and drafting cleanup changes. 
 In drafting these proposed amendments, the Company sought external legal counsel and other third party
advice in order that the amendments were reviewed from a shareholder’s perspective to confirm they do not impede shareholder rights, or derogate from the existing rights. On the basis of those consultations, we believe the amendments respect
and in some cases, enhance shareholders’ interest. 
 The Board of Directors, on the recommendation of the Nominating and Corporate Governance
Committee, approved the amendments as shown in detail in a redlined version of the Articles attached to the Circular as Appendix B, which you will be asked to approve. The major amendments are summarized below: 

 

			
	  
 Proposed Amendments
  
	  	New Article Numbers
	  
 Interpretation
Provision
 Addition of an interpretive paragraph intended to ensure that the Articles are not read narrowly in the face of technological developments, whether or
not yet known, which are not expressly contemplated by the Articles. For example, references to meetings occurring at a particular place should not in the future be read to preclude telephonic meetings.

 
	  	  

2

	  
 Record Date and Other
Dates
 Amendments to conform the timeframe for setting record dates and other dates to securities rules and, subject to applicable law, to provide for more
flexibility in calling meetings and otherwise fixing dates.
  
	  	  

51, 67, 70, 178

	  
 Advance Notice
Provision
 Amendments requiring advance notice of director nominations and confirming that business to be brought by shareholders before the meeting is limited to
the items specified in the notice of meeting or shareholder proposal submitted pursuant to the Companies Act.
  

Advance notice of director nominations generally must be provided for general meetings at least 30 days prior to the meeting date. But if there is less than 50 days
between the date of announcement of the meeting date and the meeting date, the deadline is 10 days after the meeting date is announced. For special meetings involving director elections, the deadline is 15 days following the announcement of the
special meeting date. The notice must contain specific information about: (i) the proposed nominee, including name, age, addresses, occupation, and holdings of the Company’s shares; (ii) the nominating shareholder, including holdings
of the Company’s shares; and (iii) the proposed nominee’s independence. The chair of the meeting is given the power to determine whether a nomination was made in accordance with the procedures. The Board may in its discretion waive
any of the advance notice requirements for director nominations.
  
	  	  

68, 69

	  
 Electronic Voting

Changes in meeting procedures and voting procedures reflect modern technology.
 The
changes allow the board to authorize and adopt procedures for shareholders and proxyholders not physically present at a meeting of shareholders to participate and vote in the meeting by means of a telephonic, electronic or other communication
facility, and permit ‘virtual’ shareholder meetings.
  
	  	  

73, 81

	  
 Board Meetings

The changes clarify the ability of directors to attend and participate and vote at Board meetings by means of a telephonic, electronic or other communication facility.
Certain other procedural matters are clarified.
  
	  	  

115, 116, 119, 121, 122

	  
 Quorum and General Meeting
Procedures
 Amendments to increase shareholder quorum requirements to 25 per cent, and update and clarify rules for proceedings at general meetings, including
clarifying that the Board Chair does not have a second or casting vote.
  
	  	  

70, 71, 75, 76, 78, 79, 82, 83, 85, 109

  
 Emera Inc. — Management
Information Circular 2016          5 

Table of Contents

      
  

			
	  

Proposed Amendments (continued)
  
	  	  

New Article Numbers
  

	  

Proxy Voting
 Amendments to provide greater specifics dealing with proxy voting
consistent with accepted practice.
  
	  	  

89, 90, 92, 93, 94

	  

Committees
 Amendments streamlining rules dealing with Board committees to give
further discretion to directors to establish and regulate committees for better governance.
  
	  	  

99, 105, 108, 123–130

	  

Indemnity Provision
 Amendments modernizing director and officer indemnity
provisions.
  
	  	  

172, 173

	  

Dividends, Financial Statements, and other changes in Law
 Amendments to address
changes in Nova Scotia corporate law applicable to the Company, including in respect of the declaration and payment of dividends, the keeping of registers, borrowing, and financial statements, or to make the Articles more consistent with existing
corporate law.
  
	  	  

50, 56, 57, 60, 107, 131, 132,
 134, 142, 155, 157, 159, 160, 161

	  
 Alteration of
Capital
 Amendments in respect of alteration and reduction of capital. Notably, probably due to the provisions of the Nova Scotia Power Privatization Act,
the Articles as initially prepared did not include language enabling future creation or redemption of classes of shares. For clarity, the alteration and reduction of capital pursuant to these amendments in each case requires shareholder
approval.
  
	  	  
 52, 53, 54,
55

	  

Further Amendments
 Housekeeping and drafting clean-up amendments which
include:
  
	  	 
	  

(a)    Adding and amending definitions (i) to define capitalized terms used in the Articles which were
not previously defined and other terms which do not have particular meaning at law; (ii) to make clear that certain inconsistent terms used in the Articles have the same meaning.

 
	  	  

1

	
(b)    Modernizing language to reflect current standard practice (for example, references to
“monies” are now to “funds” or “amounts”, terms like “debenture stock” are deleted).
  
	  	  

8, 21, 25, 26, 143, 147, 148, 152

	  

(c)    Changes made for internal consistency (for example consistent use of defined terms and consistent
capitalization).
  
	  	  

6, 17, 20, 30, 38, 47, 64, 65, 66, 74, 86, 95, 100, 117, 136, 157, 163, 164, 166, 181
  

	  

(d)    Other changes for language clarity.
	  	  

58, 97, 101, 102, 114, 119, 136, 137, 140, 165
  

	  

(e)    Providing for officers of the Company other than those expressly listed.

 
	  	  

112, 113

	  

(f)    In respect of share certificates and share transfers, allowing the board to provide for direct
registration and uncertificated shares when applicable and to adopt other modern practices.
  
	  	  

14, 15, 18, 40, 182

	  

(g)    Changes to address typographical errors and other apparent errors in and omissions from the earlier
Articles.
  
	  	  

46

	  

(h)    Provisions modernizing the notice requirements.

 
	  	  

162, 167, 169, 170

	  

(i)    Deleting provision which is no longer applicable.

 
	  	  

former Article 5

 Shareholders are being asked to approve the amendments to and restatement of the Articles. At the Meeting, Shareholders will be asked to
consider and, if deemed appropriate, to pass, with or without variation, a special resolution (meaning that a majority of not less than three-fourths of Shareholders entitled to vote as are present in person or by proxy must vote in favour of the
resolution), in the form set out below, subject to such amendments, variations or additions as may be approved at the Meeting, approving the amendment and restatement to the Articles. 

  

6           Emera Inc. — Management Information Circular 2016 

Table of Contents

 MANAGEMENT INFORMATION CIRCULAR 

     
  

Resolution Approving the Amendments to the Articles 
 The
text of the resolution approving the amendments to the Articles to be put before shareholders at the Meeting is as follows: 
 “BE IT RESOLVED as
a special resolution of the Company that: 
  

	1.	the Articles of Association of the Company be repealed and new Articles of Association in the form attached hereto as Appendix B be and are hereby adopted; 

 

	2.	the amendments provided for hereby shall not in any way prejudice or affect any acts, matters or things done or performed by the shareholders, directors, officers or agents of the Company pursuant to existing
Memorandum of Association and Articles of Association of the Company; and 

  

	3.	any officer or director of the Company be and is hereby authorized and directed to do all things and execute all documents, under the corporate seal where required, necessary or desirable to give effect to the
foregoing.” 

 The new Articles of Association referred to in the above resolution are those attached as Appendix B to this Circular, except that
Appendix B includes markings to show changes to the current Articles, which markings are not part of the new Articles of Association. 
 Where text is underlined in
Appendix B that text is being added in the new Articles of Association. Where text is struck-through in Appendix B it is being deleted in the new Articles of Association. Text which is neither underlined nor struck-through is not being changed. 

Board’s Recommendation 
 For the reason indicated
above, the Board and Management of the Company unanimously recommend that Shareholders vote for the Amendments to the Articles. Unless the Amendments to the Articles are approved by three-fourths of the votes cast at the Meeting by shareholders
voting in person or by proxy, it will not come into force or effect. 
 Unless otherwise instructed, Ms. Sheppard, Mr. Huskilson and Mr. Aftanas intend
to vote “For” the resolution approving the amendment to and restatement of the Articles. 
 Director
Nominees 
 The following pages set out the names of the nominees proposed for election as Directors of Emera. Biographical information about the Director
nominees is also provided, including, age, municipality and country of residence, year first elected or appointed as a Director, principal occupation, education, skills and experience. The information about each Director nominee includes Committee
memberships and meeting attendance. Their membership on other public company boards in the last five years is also described. 
 There is information about the common
shares and Deferred Share Units (DSUs) of Emera held by each Director nominee for the past three years. The estimated value of each Director nominee’s common shares and DSUs holdings is based on the following: 

 

			
	 Year-end
  
	  	 Closing price of Emera common shares ($)

 

		
	 December 31, 2013
	  	30.57
	 December 31, 2014
	  	38.64
	 December 31, 2015

 
	  	 43.23

 

 All Director nominees are required to meet share ownership guidelines. The information below details their status under those guidelines.
For further information on the share ownership guidelines for Directors, see Director Share Ownership Guidelines in the Statement of Corporate Governance Practices later in this Circular. For further information on the share ownership
guidelines for the Company’s executive officers, including Mr. Huskilson, President and Chief Executive Officer, see Executive Share Ownership Requirements in the Statement of Executive Compensation. 

All Director nominees, except Mr. Huskilson, are considered by the Board to be independent. For more information about the Company’s definition of
independence, see Director Independence in the Statement of Corporate Governance Practices later in the Circular. 

  
 Emera Inc. — Management
Information Circular 2016          7 

Table of Contents

      
  

Skills and Experience Total 
  

 
 The above bar-chart shows eight categories of skills and experience important to the Company’s business and governance (along the
vertical axis), and that number of the 12 Director nominees who possess those skills and experience (along the horizontal axis). The details of each Director nominee’s skills and experience are contained in their biographies later in this
Circular. 
 The voting results for those Directors who were nominees for election in the 2015 annual meeting of shareholders are shown in the two rows below. 

 

																																																	
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 	  	 

  
	 
	  

Percentage of votes cast “For” each

Director (%)
  
	  	  

 
	  

99.58
	  

  
	  	  

 
	  

96.4
	  

  
	  	  

 
	  

98.88
	  

  
	  	  

 
	  

99.06
	  

  
	  	  

 
	  

98.95
	  

  
	  	  

 
	  

99.59
	  

  
	  	  

 
	  

99.69
	  

  
	  	  

 
	  

98.94
	  

  
	  	  

 
	  

97.44
	  

  
	  	  

 
	  

99.03
	  

  
	  	  

 
	  

99.46
	  

  
	  	  

 
	  

98.36
	  

  

	  

Percentage of votes cast

“Withheld” (%)
  
	  	  

 
	  

0.42
	  

  
	  	  

 
	  

3.6
	  

  
	  	  

 
	  

1.12
	  

  
	  	  

 
	  

0.94
	  

  
	  	  

 
	  

1.05
	  

  
	  	  

 
	  

0.41
	  

  
	  	  

 
	  

0.31
	  

  
	  	  

 
	  

1.06
	  

  
	  	  

 
	  

2.56
	  

  
	  	  

 
	  

0.97
	  

  
	  	  

 
	  

0.54
	  

  
	  	  

 
	  

1.64
	  

  

  

8           Emera Inc. — Management Information Circular 2016 

Table of Contents

  
 Sylvia Chrominska 

Age: 64 
 Toronto, Ontario 

Canada 
 Director Since: 2010 

Independent 
  
 

 
 Skills and Experience 
  

	•	 	CEO/Senior Executive 

  

	•	 	Customer/Stakeholder 

  

	•	 	M&A/Growth Strategy 

  

	•	 	Governance/Other Directorship 

  

	•	 	Financial 

  

	•	 	Compensation and Human Resources 

  

	•	 	Legal and Regulatory 

  

 

  

	
	 
	 

 MANAGEMENT INFORMATION CIRCULAR 
  

 
 Ms. Chrominska has been a Director since September 2010.
She has been a member of the Management Resources and Compensation Committee since November 2010, and was a member of the Nominating and Corporate Governance Committee from June 2012 to September 2014. She was Chair of the ad hoc Pension Governance
Committee from its inception in November 2013 until its termination in May 2014. 
 Ms. Chrominska is the former Group Head of Global Human Resources and
Communications for The Bank of Nova Scotia, where she had global responsibility for human resources, corporate communications, government relations, public policy and corporate social responsibility of the Scotiabank Group. Ms. Chrominska is
former Chair of the Board of Scotia Group Jamaica Limited. She is also former Chair of the Board of Scotiabank Trinidad and Tobago Limited. Ms. Chrominska is also a director of Wajax Corporation. 

Ms. Chrominska graduated from the University of Western Ontario with an Honours Degree in Business Administration. She also serves on the Dean’s Advisory Board
at the Richard Ivey School of Business. She was appointed to the Board of Governors of the University of Western Ontario in November 2015. 
 Ms. Chrominska’s
30-year career in the banking sector has provided her with valuable skills and knowledge in financial and credit matters. In particular, the experience she has gained through her senior executive leadership roles, with responsibilities encompassing
a broad spectrum of areas within a complex, global business organization, is a distinct asset. 
  

							
	  

Board/Committee

Membership
  
	 	  

Attendance  
  
	 	  
 Total    
  
	 	  

Public company board membership
 during the last five years
  

	 	 	 	 
	
•    Board Member

•    Management Resources and Compensation Committee Member
	 	 11 of 11    

4 of 4    
	 	 100%    

100%    
	 	
•    Wajax Corporation (May 2015 to present)

•    Scotia Group Jamaica Limited (2009 to March 2016)

•    Scotiabank Trinidad and Tobago Limited (January 2013 to March 2015)

 

  

					
	  
    Total
Compensation
  
	  	  	  	  
	  

Fees earned in 2015 ($)    

 
	  	  

All other compensation ($)    

 
	  	  

Total ($)    
  

	  

136,875    
  
	  	  

N/A    
  
	  	  

136,875    
  

  

					
	  
    DSUs
Awarded and Held
  
	  	  
	  

2015 share-based    

awards ($)    
  
	  	  

Total 2015 increase in value    

of all DSUs held ($)    
  
	  	  

Market value of total    

DSUs holdings ($)    
  

	  

118,906    
  
	  	  

221,970    
  
	  	  

756,439    
  

  

			
	  
    Instalment Receipts
(1)
  
	  	  
	  
   Number of Instalment
Receipts Held
  
	  	  

30    
  

  

									
	  

Securities Held
  
	  	  
	 Year  

 
	  	  

Common  
Shares  
  
	  	 DSUs  

 
	  	 Value of shares  
and DSUs ($)  

 
	  	 Status under share 

ownership guidelines
  

	  

2015   2014   2013  
	  	  
 1,813  
1,813   1,813  
	  	  
 17,498  
13,832   9,645  
	  	  
 834,815  
604,523   350,271  
	  	  

Ms. Chrominska owns shares and DSUs valued at 192% of the requirement under the Share Ownership Guidelines; therefore, the Guidelines are met.

  

	(1)	Convertible debentures were sold by Emera on an instalment basis at a price of $1,000 per debenture, with the first instalment of $333 payable on the closing of the offering. Instalment receipts represent the first
instalment payment. See the definition of “Instalment Receipts” and the description of convertible debentures for more information in the section later in this Circular entitled “Convertible Debentures”.

 

  
 Emera Inc. — Management
Information Circular 2016          9 

Table of Contents

  
 Henry Demone 

Age: 61 
 Lunenburg, Nova Scotia 

Canada 
 Director Since: 2014 

Independent 
  
 

 
 Skills and Experience 
  

	•	 	CEO/Senior Executive 

  

	•	 	Customer/Stakeholder 

  

	•	 	M&A/Growth Strategy 

  

	•	 	Governance/Other Directorship 

  

	•	 	Compensation and Human Resources 

 

  

	
	 
	 

  
  

 
 Mr. Demone joined the Emera Board of Directors in
September 2014. He also became a member of the Management Resources and Compensation Committee at that time. 
 He is the Chairman of High Liner Foods of Lunenburg,
Nova Scotia, the leading North American processor and marketer of value-added frozen seafood. He was President of High Liner Foods since 1989 and its President and Chief Executive Officer from 1992 until May 2015. 

Mr. Demone currently sits on the Board of Saputo Inc. He is past-Chair of the Fisheries Council of Canada and The Groundfish Forum, a global trade association
representing industry leaders. He has served on the Boards of Dover Industries Ltd. and Maritime Tel & Tel (Aliant). Mr. Demone was also the first non-US citizen to be named Chair of the National Fisheries Institute, a US national
trade association. 
 Mr. Demone received his Bachelor of Science in Mathematics with honours from Acadia University. 

In both public and private entities, Mr. Demone has extensive experience in strategic planning, global markets, mergers and acquisitions. As a long-time business
leader in Atlantic Canada, Mr. Demone’s robust business relationships and his solid reputation make him a valuable member of Emera’s Board of Directors. 
  

							
	  

Board/Committee

Membership
  
	 	  

Attendance    
  
	 	  
 Total    
  
	 	  

Public company board membership
 during the last five years
  

	 	 	 	 
	
•    Board Member

•    Management Resources and Compensation Committee
	 	 11 of 11    

3 of 4    
	 	 100%    

75%    
	 	
•    High Liner Foods Inc.
(1989 to present)

•    Saputo Inc. (2012 to present)

 

  

					
	  
    Total
Compensation
  
	  	  	  	  
	  

Fees earned in 2015 ($)    

 
	  	  

All other compensation ($)    

 
	  	  

Total ($)    
  

	  

134,250    
  
	  	  

N/A    
  
	  	  

134,250    
  

  

					
	  

   DSUs Awarded and Held
  
	  	  
	  

2015 share-based    

awards ($)    
  
	  	  

Total 2015 increase in value    

of all DSUs held ($)    
  
	  	  

Market value of total    

DSUs holdings ($)    
  

	  

134,250    
  
	  	  

158,307    
  
	  	  

194,319    
  

  

			
	  
    Instalment Receipts

  
	  	  
	  
   Number of Instalment
Receipts Held
  
	  	  

170    
  

  

									
	  

Securities Held
  
	  	  
	
Year  
  
	  	  

Common  
Shares  
  
	  	 DSUs  

 
	  	  

Value of shares  
and DSUs ($)  

 
	  	 Status under share 

ownership guidelines
  

	  

2015  
 2014  
	  	  

5,000  
 Nil  
	  	  

4,495  
 932  
	  	  

410,469  
 36,012  
	  	  

Mr. Demone owns shares and DSUs valued at 94% of the requirement under the Share Ownership Guidelines. He has until January 2021 to meet the Guidelines.

 

  

 

  

10          Emera Inc. — Management Information Circular 2016 

Table of Contents

  
 Allan Edgeworth 

Age: 65 
 Calgary, Alberta 

Canada 
 Director Since: 2005 

Independent 
  
 

 
 Skills and Experience 
  

	•	 	CEO/Senior Executive 

  

	•	 	Customer/Stakeholder 

  

	•	 	M&A/Growth Strategy 

  

	•	 	Governance/Other Directorship 

  

	•	 	Financial 

  

	•	 	Energy Sector 

  

	•	 	Compensation and Human Resources 

  

	•	 	Legal and Regulatory 

 

  

	
	 
	 

 MANAGEMENT INFORMATION CIRCULAR 
  

 
 Mr. Edgeworth has been a Director since November 2005.
He has been a member of the Management Resources and Compensation Committee since February 2006 and has been serving as Committee Chair since May 2010. 

Mr. Edgeworth was a member of the Audit Committee from April 2008 to May 2013. From May 2007 to April 2008, Mr. Edgeworth was a member of the Nominating and
Corporate Governance Committee. He also served as a Director of Nova Scotia Power Inc. from November 2005 to October 2006. 
 Mr. Edgeworth is former President of
ALE Energy Inc. and is also a Director of AltaGas Ltd. Previously he was the President and Chief Executive Officer of Alliance Pipeline. Until March 31, 2012, he was a Commission Member and Director of the Alberta Securities Commission. He is
also a former Director of Pembina Pipeline Corporation. Mr. Edgeworth has also served on the Boards of the Interstate National Gas Association of America and the Canadian Gas Association. He is past Chair of the Canadian Energy Pipeline
Association. 
 Mr. Edgeworth holds a Bachelor of Applied Science from the University of British Columbia in Geological Engineering and is a graduate of the
Queen’s Executive Program. His extensive experience as a senior leader in the energy sector combined with his expertise in corporate governance makes Mr. Edgeworth a valuable member of the Board. 

 

							
	  

Board/Committee

Membership
  
	 	  

Attendance  
  
	 	  
 Total    
  
	 	  

Public company board membership
 during the last five years
  

	 	 	 	 
	
•    Board Member

•    Management Resources and Compensation Committee Chair
	 	 11 of 11    

4 of 4    
	 	 100%    

100%    
	 	
•    AltaGas Ltd.
(previously AltaGas Income Trust)

(March 2005 to present)

•    Pembina Pipeline Corporation

(July 2006 to May 2014)

 

  

					
	  
    Total
Compensation
  
	  	  	  	  
	  

Fees earned in 2015 ($)    

 
	  	  

All other compensation ($)    

 
	  	  

Total ($)    
  

	  

154,500    
  
	  	  

N/A    
  
	  	  

154,500    
  

  

					
	  

   DSUs Awarded and Held
  
	  	  
	  

2015 share-based    

awards ($)    
  
	  	  

Total 2015 increase in value    

of all DSUs held ($)    
  
	  	  

Market value of total    

DSUs holdings ($)    
  

	  

109,750    
  
	  	  

332,011    
  
	  	  

1,606,513    
  

  

			
	  
    Instalment Receipts

  
	  	  
	  
   Number of Instalment
Receipts Held
  
	  	  

60    
  

  

									
	  

Securities Held
  
	  	  
	 Year  

 
	  	  

Common  
Shares  
  
	  	 DSUs  

 
	  	 Value of shares  
and DSUs ($)  

 
	  	 Status under share 

ownership guidelines
  

	  

2015   2014   2013  
	  	  
 1,000  
1,000   1,000  
	  	  
 37,162  
32,984   28,547  
	  	  
 1,649,743  
1,313,142   903,252  
	  	  

Mr. Edgeworth owns shares and DSUs valued at 379% of the requirement under the Share Ownership Guidelines; therefore, the Guidelines are met.

 

  

 

  
 Emera Inc. — Management
Information Circular 2016          11 

Table of Contents

  

James Eisenhauer, FCPA, FCA 
 Age: 64

 Lunenberg, Nova Scotia 
 Canada 

Director Since: 2011 
 Independent 

 
 

 
 Skills and Experience 
  

	•	 	CEO/Senior Executive 

  

	•	 	Customer/Stakeholder 

  

	•	 	Governance/Other Directorship 

  

	•	 	Financial 

 

  
  

	
	 
	 

  
  

 
 Mr. Eisenhauer has been a Director of the Company since
May 2011. He is Chairman of the Board of Directors of Emera’s subsidiary, Nova Scotia Power Inc., having served on its Board since 2008. 
 He is President and
Chief Executive Officer of ABCO Group Limited, which has holdings in manufacturing and distribution. He is a Professional Engineer and a Fellow of the Chartered Professional Accountants of Nova Scotia. Mr. Eisenhauer was a member of the Board
of Nova Scotia Business Inc. from 2005 to January 2013, serving as Chair from November 2010 to October 2012. He has also been a member of the Board Stelia Aerospace North America Inc. since 2014 (and its predecessors Composites Atlantic Limited
since 1993 and Cellpack Aerospace Limited since 1987). He is also on the Advisory Board of Atlantic Industries Limited and is Chair of its Advisory Audit Committee. 

Mr. Eisenhauer holds a Bachelor of Science from Dalhousie University and a Bachelor of Engineering (with distinction) from the Technical University of Nova Scotia.

 Mr. Eisenhauer’s professional knowledge and experience combined with his executive leadership in manufacturing and distribution businesses are valuable
assets. His leadership role in the Nova Scotia business community provides him with valuable stakeholder and governance skills and experience. 
  

							
	  

Board/Committee

Membership
  
	 	  

Attendance  
  
	 	  
 Total  
  
	 	  

    Public company board membership

    during the last five years

 

	 	 	 	 
	
•    Board Member
	 	10 of 11    	 	91%  	 	 Nova Scotia Power Inc. 

(September 2008 to present)

 

  

					
	  
    Total
Compensation
  
	  	  	  	  
	  

Fees earned in 2015 ($)    

 
	  	  

All other compensation ($)    

 
	  	  

Total ($)    
  

	  

N/A    
  
	  	  

166,500    
  
	  	  

166,500    
  

  

					
	  
    DSUs
Awarded and Held
  
	  	  
	  

2015 share-based    

awards ($)    
  
	  	  

Total 2015 increase in value    

of all DSUs held ($)    
  
	  	  

Market value of total    

DSUs holdings ($)    
  

	  

166,500    
  
	  	  

354,661    
  
	  	  

1,372,207    
  

  

			
	  
    Instalment Receipts

  
	  	  
	  
   Number of Instalment
Receipts Held
  
	  	  

100    
  

  

									
	  

Securities Held
  
	  	  
	 Year  

 
	  	  

Common  
Shares  
  
	  	 DSUs  

 
	  	 Value of shares  
and DSUs ($)  

 
	  	 Status under share 

ownership guidelines
  

	  

2015   2014   2013  
	  	  
 Nil  

Nil  
 Nil  
	  	  
 31,742  
26,334   20,310  
	  	  
 1,372,207  
1,017,546   620,877  
	  	  

Mr. Eisenhauer owns DSUs valued at 315% of the requirement under the Share Ownership Guidelines; therefore,  the Guidelines are met.

 

 
 

  

12          Emera Inc. — Management Information Circular 2016 

Table of Contents

  
 Christopher Huskilson

 Age: 58 
 Wellington, Nova Scotia 

Canada 
 Director Since: 2004 

Not Independent 
 President and Chief Executive Officer of Emera 

 
 

 
 Skills and Experience 
  

	•	 	CEO/Senior Executive 

  

	•	 	Customer/Stakeholder 

  

	•	 	M&A/Growth Strategy 

  

	•	 	Governance/Other Directorship 

  

	•	 	Financial 

  

	•	 	Energy Sector 

  

	•	 	Compensation and Human Resources 

  

	•	 	Legal and Regulatory 

 

  
  

	
	 
	 

 MANAGEMENT INFORMATION CIRCULAR 
  

 
 Mr. Huskilson has been a Director and the President and
Chief Executive Officer of Emera since November 2004. 
 He is a Director of NSPI and serves as the Chair or as a Director of a number of other Emera affiliated
companies. He has been a Director of Algonquin Power & Utilities Corp. since 2009. He has held a number of positions within Nova Scotia Power Inc. and its predecessor, Nova Scotia Power Corporation, since June 1980. 

Mr. Huskilson holds a Bachelor of Science in Engineering and a Master of Science in Engineering from the University of New Brunswick. 

Mr. Huskilson’s decades of experience and extensive knowledge of various roles within Emera and Nova Scotia Power Inc. allow him to provide leadership within
the Company, and in the broader electricity industry, regionally, nationally and internationally. 
  

							
	  

Board/Committee

Membership
  
	 	  

Attendance  
  
	 	  
 Total  
  
	 	  

Public company board membership
 during the last five years
  

	 	 	 	 
	
•    Board Member
	 	11 of 11    	 	100%  	 	
•    Emera (Caribbean) Incorporated (formerly Light & Power Holdings Limited) (June 2010 to
present) (1)
 •    Nova Scotia Power Inc.
(November 2004 to present) (1)
 •    ICD
Utilities Limited
(September 2008 to present) (1)

•    Algonquin Power and Utilities Corp.
(July 2009 to present)

 

  

					
	  

   DSUs Awarded and Held
  
	  	  
	  

2015 share-based    

awards ($)    
  
	  	  

Total 2015 increase in value    

of all DSUs held ($)    
  
	  	  

Market value of total    

DSUs holdings ($)    
  

	  

0    
  
	  	  

1,272,432    
  
	  	  

9,078,214    
  

  

			
	  
    Instalment Receipts

  
	  	  
	  
   Number of Instalment
Receipts Held
  
	  	  

750    
  

  

									
	  

Securities Held
  
	  	  
	 Year  

 
	  	  

Common  
Shares  
  
	  	 DSUs  

 
	  	 Value of shares  
and DSUs ($)  

 
	  	 Status under share 

ownership guidelines
  

	  

2015   2014   2013  
	  	  
 25,537  
25,523   25,516  
	  	  
 209,998  
202,013   193,580  
	  	  
 10,182,178  
8,791,991   6,697,765  
	  	  

Mr. Huskilson is subject to Executive Share Ownership Requirements, which require that he own shares and/or DSUs valued at four times his salary.He exceeds this
requirement.
  

  

	(1)	Emera (Caribbean) Inc., Nova Scotia Power Inc. and ICD Utilities Limited are subsidiaries of Emera.

 

  
 Emera Inc. — Management
Information Circular 2016          13 

Table of Contents

  
 Wayne Leonard 

Age: 65 
 New Orleans, Louisiana 

USA 
 Director Since: 2014 

Independent 
  
 

 
 Skills and Experience 
  

	•	 	CEO/Senior Executive 

  

	•	 	M&A/Growth Strategy 

  

	•	 	Governance/Other Directorship 

  

	•	 	Energy Sector 

  

	•	 	Legal and Regulatory 

 

  
  

	
	 
	 

  
  

 
 Mr. Leonard joined the Emera Board of Directors in
September 2014. He also became a member of the Audit Committee at that time. 
 Mr. Leonard is the former Chairman and Chief Executive Officer of Entergy
Corporation, an integrated electricity producer and retail distributor. He joined Entergy Corporation as President and Chief Operating Officer in 1998, becoming CEO in 1999. Previously, he was President of Cinergy Corporation’s Energy
Commodities Strategic Business Unit and Capital & Trading Group from 1996 to 1997, and before that its Group Vice President and Chief Financial Officer. Mr. Leonard also held various senior management roles with PSI Energy Inc.,
including Senior Vice President and Chief Financial Officer from 1987 to 1994. He has served as an expert witness in numerous utility regulatory proceedings on various policies and financial issues, including, cost of capital and incentive
regulation. 
 Mr. Leonard has been a member of the Board of Tidewater Inc. since 2003. Previously, he served on the Boards of the Edison Electric Institute and
the Center for Climate and Energy Solutions. He is past Chairman of the New Orleans United Way Board of Trustees, the Mississippi River Delta Business LINC (appointed in 2000 by former President Bill Clinton), the Business Council of New Orleans,
the National D-Day Museum Foundation Board of Trustees, and the Ball State University College of Business Advisory Board. 
 A Certified Public Accountant (CPA),
Mr. Leonard received his Bachelor of Science, Accounting and Political Science from Ball State University and his MBA from Indiana University. He was awarded an Honorary Doctorate of Law Degree from Ball State University in 2004. 

With his considerable experience in regulated and non-regulated utilities and capital markets, Mr. Leonard is a valuable member of the Emera Board. 

 

							
	  

Board/Committee

Membership
  
	 	  

Attendance  
  
	 	  
 Total  
  
	 	  

Public company board membership
 during the last five years
  

	 	 	 	 
	
•    Board Member

•    Audit Committee Member
	 	 8 of 11    

 
 6 of 6    
	 	
72%(1)  

 
 100%  
	 	
•    Tidewater Inc. (2003 to present)

•    Entergy Corporation (1999 to 2013)

 

  

					
	  
    Total
Compensation
  
	  	  	  	  
	  

Fees earned in 2015 ($)    

 
	  	  

All other compensation ($)    

 
	  	  

Total ($)    
  

	  

135,250    
  
	  	  

N/A    
  
	  	  

135,250    
  

  

					
	  

   DSUs Awarded and Held
  
	  	  
	  

2015 share-based    

awards ($)    
  
	  	  

Total 2015 increase in value    

of all DSUs held ($)    
  
	  	  

Market value of total    

DSUs holdings ($)    
  

	  

135,250    
  
	  	  

161,310    
  
	  	  

208,412    
  

  

			
	  
    Instalment Receipts

  
	  	  
	  
 Number of Instalment Receipts
Held
  
	  	  

Nil (2)    
  

  

									
	  

Securities Held
  
	  	  
	 Year  

 
	  	  

Common  
Shares  
  
	  	 DSUs  

 
	  	 Value of shares  
and DSUs ($)  

 
	  	 Status under share 

ownership guidelines
  

	  

2015   2014  
	  	  
 Nil  

Nil  
	  	  
 4,821  
1,219  
	  	  
 208,412  
47,102  
	  	  

Mr. Leonard owns shares and DSUs valued at 48% of the requirement under the Share Ownership Guidelines. He has until January 2021 to meet the Guidelines.

 

  

	(1)	Mr. Leonard was unable to participate in three Board meetings in 2015; in one instance due to an unavoidable travel commitment, and in two instances due to medical commitments. 

	(2)	The instalment receipts were not offered or sold in the United States, therefore, Mr. Leonard as a U.S. resident was unable to participate in the offering.

 

  

14          Emera Inc. — Management Information Circular 2016 

Table of Contents

 Lynn Loewen, FCPA, FCA 

 
 Age: 54 

Westmount, Quebec 
 Canada 

Director Since: 2013 
 Independent 

 
 

 
 Skills and Experience 

	•	 	CEO/Senior Executive 

	•	 	Governance/Other Directorships 

	•	 	Customer/Stakeholder 

	•	 	Financial 

 

  
  

	
	 
	 

 MANAGEMENT INFORMATION CIRCULAR 
  

 
 Ms. Loewen has been a Director of the Company since
February 2013 and a member of the Audit Committee since May 2013. 
 Ms. Loewen is currently President of Minogue Medical Inc. She was President of Expertech
Network Installation Inc. from 2008 to 2011. She held key positions with Bell Canada Enterprises, as Vice President of Finance Operations from 2005 to 2008, and as Vice President of Financial Controls from 2003 to 2005. Prior to that, she was Vice
President of Corporate Services and Chief Financial Officer of Air Canada Jazz, where she held positions of increasing responsibility since 1988. 
 Ms. Loewen was
a member of the Public Sector Pension Investment Board from 2001 to 2007, where she served on the Audit Committee from 2003 to 2007 and as Audit Committee Chair from 2006 to 2007. She was Chair of the Governance Committee from 2003 to 2006. 

Ms. Loewen holds a Bachelor of Commerce from Mount Allison University and obtained her Chartered Accountant designation in 1986. She served on the Mount Allison
University Board of Regents from 1998 to 2008 and as Chair from 2007 to 2008. She also served as a member of the Advisory Board of the Ron Joyce Centre for Business Studies from 2009 to 2011. 

Ms. Loewen’s financial expertise and business acumen gained as a senior executive in the telecom and airline sectors are valuable assets for Emera’s Board.

  

											
	  

Board/Committee
Membership
  
	  	 Attendance

 
	 	  	 Total  

 
	 	  	
Public company board membership
 during the last five years
  

	  

•  Board Member
	  	  
  
	  
 11 of 11
	  
   
	  	  
  
	  
 100%  
	  
   
	  	  
 None

	
•  Audit Committee Member
  
	  	 	6 of 6	  	  	 	100%  	  	  	 

  

					
	  

Total Compensation
  
	 	  
	  

Fees earned in 2015 ($)  
  
	 	
All other compensation ($)  
  
	 	 Total
($)
  

	  

139,625  
  
	 	  

N/A  
  
	 	  

139,625
  

		 		 	
	  

DSUs Awarded and Held
  
	 	  
	  
 2015
share-based  
 awards ($)  
  
	 	
Total 2015 increase in value  
of all DSUs held ($)  

 
	 	 Market
value of total
 DSUs holdings ($)
  

	  

139,625  
  
	 	  

202,259
  
	 	  

471,077
  

  

			
	  

Instalment Receipts
  

	  
 Number of Instalment Receipts
Held
  
	  	 100

 

  

															
	  

Securities Held
  

	 Year 
  
	  	  

Common
Shares
  
	 	  	 DSUs

 
	 	  	 Value of shares
and DSUs ($)

 
	 	 	 Status under
share
 ownership guidelines
  

	 2015 

2014 

2013 
	  	 
  

 
	1,134
 1,090

1,044
	  
   

  
	  	 
  

 
	10,897
 6,957

2,800
	  
   

  
	  	 
  

 
	520,100
 310,936

115,511
	  
   

  
	 	 Ms. Loewen owns shares and
DSUs valued at 120% of the requirement under the Share Ownership Guidelines; therefore, the Guidelines are met.
  

 
 

  
 Emera Inc. — Management
Information Circular 2016          15 

Table of Contents

 John McLennan 

Age: 70 
 Mahone Bay, Nova Scotia 

Canada 
 Director Since: 2005 

Independent 
  
 

 
 Skills and Experience 

	•	 	CEO/Senior Executive 

	•	 	Customer/Stakeholder 

	•	 	M&A/Growth Strategy 

	•	 	Governance/Other Directorship 

	•	 	Financial 

	•	 	Compensation and Human Resources 

	•	 	Legal and Regulatory 

 

	
	 
	 

  

Mr. McLennan has been a Director since April 2005 and was Chair of the Board from May 2009 to May 2014. He has been a member of the Nominating and Corporate
Governance Committee since September 2014. He was a member of the Management Resources and Compensation Committee and the Nominating and Corporate Governance Committee from April 2005 to May 2009 when he became Chair of the Board. He was Chair of
the ad hoc Board Chair Succession Committee. He was also a Director of Nova Scotia Power Inc. from April 2005 to November 2013, and was the Chair of that Board from May 2006 to May 2009. 

Mr. McLennan is the former Vice Chair and Chief Executive Officer of Allstream Inc. (formerly AT&T Canada). He served as President and Chief Executive Officer of
Bell Canada and Bell Mobility from 1990 to 1997. He is the former Chief Executive Officer of Cantel Inc. He is a former Board member of Chorus Aviation Inc. from January 2006 to May 2014. He currently sits on the Board of Amdocs Ltd. 

Mr. McLennan holds a Bachelor of Science, Master of Science and Honorary Doctorate of Science degrees from Clarkson University in New York. From 1996 to 2006, he was
Chancellor of Cape Breton University where he also received an Honorary Doctorate. 
 Mr. McLennan’s extensive chief executive officer
experience with complex organizations across a variety of industries provides him with valuable strategic insight and leadership capabilities. Through his membership on several public company boards, he has gained extensive governance skills and
business acumen. 
  

											
	  

Board/Committee
Membership
  
	  	 Attendance

 
	 	  	 Total  

 
	 	  	
Public company board membership
 during the last five years
  

	  

•  Board Member

•  Nominating and Corporate Governance Committee Member
	  	  
  
 
	  
 11 of 11
4 of
4
	  

  
  
	  	  
  

 
	  
 100%  

100%  
	  
   

  
	  	  

•  Amdocs Limited
(November 1999 to present)

•  Chorus Aviation Inc. (and its predecessor Jazz Air Holding G.P. Inc.)
(January 2006 to May 2014)

•  Nova Scotia Power Inc.
(April 2005 to November 2013)

 

  

					
	  

Total Compensation
  
	 	  
	  

Fees earned in 2015 ($)  
  
	 	
All other compensation ($)  
  
	 	 Total
($)
  

	  

134,250  
  
	 	  

N/A  
  
	 	  

134,250
  

		 		 	
	  

DSUs Awarded and Held
  
	 	  
	  
 2015
share-based  
 awards ($)  
  
	 	
Total 2015 increase in value  
of all DSUs held ($)  

 
	 	 Market
value of total
 DSUs holdings ($)
  

	  

134,250  
  
	 	  

549,358  
  
	 	  

2,988,663
  

  

			
	  

Instalment Receipts
  

	  
 Number of Instalment Receipts
Held
  
	  	 500

 

  

															
	  

Securities Held
  

	 Year 
  
	  	  

Common
Shares
  
	 	  	 DSUs

 
	 	  	 Value of shares
and DSUs ($)

 
	 	 	 Status under
share
 ownership guidelines
  

	  

2015 

2014 

2013 
	  	  
  

 
  
	  

5,000
 5,000

5,000
	  

  
   

  
	  	  
  

 
  
	  

69,134
 63,129

55,956
	  

  
   

  
	  	  
  

 
  
	  

3,204,813
 2,632,505

1,863,456
	  

  
   

  
	 	  

Mr. McLennan owns shares and DSUs valued at 737% of the requirement under the Share Ownership Guidelines; therefore, the Guidelines are met.

 

 
 

  

16          Emera Inc. — Management Information Circular 2016 

Table of Contents

  
 Donald Pether 

Age: 67 
 Dundas, Ontario 

Canada 
 Director Since: 2008 

Independent 
  
 

 
 Skills and Experience 

	•	 	CEO/Senior Executive 

	•	 	Customer/Stakeholder 

	•	 	M&A/Growth Strategy 

	•	 	Governance/Other Directorship 

	•	 	Financial 

	•	 	Compensation and Human Resources 

	•	 	Legal and Regulatory 

 

  

	
	 
	 

 MANAGEMENT INFORMATION CIRCULAR 
  

 
 Mr. Pether has been a Director since November 2008. He
has been a member of the Nominating and Corporate Governance Committee since May 2009, and was appointed Chair of the Committee in April 2012. He became a member of the Audit Committee in November 2014 and was a member of the Management Resources
and Compensation Committee from May 2009 to September 2014. 
 Mr. Pether is the former Chair of the Board and Chief Executive Officer of ArcelorMittal Dofasco
Inc., a Canadian steel producer. He is a past-Chair of the Board of the Hamilton Health Sciences Foundation, the McMaster Innovation Park and McMaster University. He currently sits on the Board of the Manning Innovation Awards Foundation and the
Council of Governors for the Art Gallery of Hamilton. He is a Director of Samuel, Son & Co. Ltd and Schlegel Health Care Inc. 
 Mr. Pether has a Bachelor
of Science in Metallurgical Engineering from the University of Alberta and holds a Doctor of Laws (Hon) from McMaster University. 
 Mr. Pether’s experience
as a chief executive officer of a steel producer owning assets in the mining and automotive parts industry, and with employees in the U.S., Mexico and Canada, provides him with valuable business and stakeholder skills. Mr. Pether’s
experience throughout his career with employee and labour relations, as well as with innovative manufacturing and maintenance processes, are of significant benefit to the Board. 

 

											
	  

Board/Committee
Membership
  
	  	 Attendance

 
	 	  	 Total  

 
	 	  	
Public company board membership
 during the last five years
  

	  

•  Board Member

•  Nominating and Corporate Governance Committee Chair
	  	  
  

 
	  
 10 of 11

4 of 4
	  
   

  
	  	  
  

 
	  
 91%  

100%  
	  
   

  
	  	  

•  Primary Energy Recycling Corporation
(April 2010 to December 2014)

	
•  Audit Committee Member
  
	  	 	6 of 6	  	  	 	100%  	  	  

  

					
	  

Total Compensation
  
	 	  
	  

Fees earned in 2015 ($)  
  
	 	
All other compensation ($)  
  
	 	 Total
($)
  

	  

154,875  
  
	 	  

N/A  
  
	 	  

154,875
  

		 		 	
	  

DSUs Awarded and Held
  
	 	  
	  
 2015
share-based  
 awards ($)  
  
	 	
Total 2015 increase in value  
of all DSUs held ($)  

 
	 	 Market
value of total
 DSUs holdings ($)
  

	  

154,875  
  
	 	  

322,241  
  
	 	  

1,221,896
  

  

			
	  

Instalment Receipts
  

	  
 Number of Instalment Receipts
Held
  
	  	 50

 

  

															
	  

Securities Held
  

	 Year 
  
	  	  

Common
Shares
  
	 	  	 DSUs

 
	 	  	 Value of shares
and DSUs ($)

 
	 	 	 Status under
share
 ownership guidelines
  

	 2015 

2014 

2013 
	  	 
  

 
	Nil
 Nil

Nil
	  
   

  
	  	 
 
 
	28,265
23,283
17,902
	  
  
  
	  	 
 
 
	1,221,853
899,655
547,234
	  
  
  
	 	 Mr. Pether owns DSUs
valued at 281% of the requirement under the Share Ownership Guidelines; therefore, the Guidelines are met.
  

 
 

  
 Emera Inc. — Management
Information Circular 2016          17 

Table of Contents

  
 Andrea Rosen 

Age: 61 
 Toronto, Ontario 

Canada 
 Director Since: 2007 

Independent 
  
 

 
 Skills and Experience 

	•	 	CEO/Senior Executive 

	•	 	M&A/Growth Strategy 

	•	 	Governance/Other Directorships 

	•	 	Financial 

 

  

	
	 
	 

      

 
  

Ms. Rosen has been a Director since January 2007 and a member of Emera’s Audit Committee since May 2007. She was appointed Audit Committee Chair in April 2008.
She was a member of the ad hoc Committee formed by the Board in August 2015 to oversee certain aspects of the financing related to the TECO Energy, Inc. transaction. 

Ms. Rosen was Vice Chair of TD Bank Financial Group and President of TD Canada Trust from 2002 to 2005. 

Prior to this, she was Executive Vice President of TD Commercial Banking and Vice Chair of TD Securities. Previously, Ms. Rosen also served as Vice President of
Varity Corporation from 1991 to 1994. Between 1981 and 1990, she held a variety of roles at Wood Gundy Inc. (later CIBC Wood Gundy) eventually becoming Vice President and Director. Ms. Rosen is also a Director of the Alberta Investment
Management Corporation and Manulife Financial Corporation. 
 Ms. Rosen received her Bachelor of Laws degree from Osgoode Hall Law School and a Masters of Business
Administration from the Schulich School of Business at York University. She earned a Bachelor of Arts degree from Yale University. 
 Ms. Rosen has spent over 20
years in the corporate finance field and is an experienced senior executive. Her career in the investment and commercial banking industry has given her extensive financial and investment knowledge. Her expertise is of significant value to the Board.

  

											
	  

Board/Committee
Membership
  
	  	 Attendance

 
	 	  	 Total  

 
	 	  	
Public company board membership
 during the last five years
  

	  

•  Board Member

•  Audit Committee Chair
	  	  
  

 
	  
 10 of 11

6 of 6
	  
   

  
	  	  
  

 
	  
 91%  

100%  
	  
   

  
	  	  

•  Manulife Financial Corporation (August 2011 to present)

•  Hiscox Ltd.
(October 2006 to October 2015)

	 •  Ad
Hoc Committee Member (1)
  
	  	 	3 of 3	  	  	 	100%  	  	  

  

					
	  

Total Compensation
  
	 	  
	  

Fees earned in 2015 ($)  
  
	 	
All other compensation ($)  
  
	 	 Total
($)
  

	  

157,125  
  
	 	  

N/A  
  
	 	  

157,125
  

		 		 	
	  

DSUs Awarded and Held
  
	 	  
	  
 2015
share-based  
 awards ($)  
  
	 	
Total 2015 increase in value  
of all DSUs held ($)  

 
	 	 Market
value of total
 DSUs holdings ($)
  

	  

157,125  
  
	 	  

382,170  
  
	 	  

1,634,570
  

  

			
	  

Instalment Receipts
  

	  
 Number of Instalment Receipts
Held
  
	  	 600

 

  

															
	  

Securities Held
  

	 Year 
  
	  	  

Common
Shares
  
	 	  	 DSUs

 
	 	  	 Value of shares
and DSUs ($)

 
	 	 	 Status under
share
 ownership guidelines
  

	 2015 

2014 

2013 
	  	 
  

 
	Nil
 Nil

Nil
	  
   

  
	  	 
  

 
	37,811
 32,412

26,886
	  
   

  
	  	 
  

 
	1,634,570
 1,252,400

821,874
	  
   

  
	 	 Ms. Rosen owns DSUs valued
at 376% of the requirement under the Share Ownership Guidelines; therefore, the Guidelines are met.
  

  

	(1)	This Ad Hoc Committee oversaw aspects of the financing related to the TECO Energy, Inc. transaction.

 

  

18          Emera Inc. — Management Information Circular 2016 

Table of Contents

 Richard Sergel 

Age: 66 
 Wellesley, Massachusetts 

USA 
 Director Since: 2010 

Independent 
  
 

 
 Skills and Experience 

	•	 	CEO/Senior Executive 

	•	 	Customer/Stakeholder 

	•	 	M&A/Growth Strategy 

	•	 	Governance/Other Directorship 

	•	 	Financial 

	•	 	Energy Sector 

	•	 	Compensation and Human Resources 

	•	 	Legal and Regulatory 

 

  

	
	 
	 

 MANAGEMENT INFORMATION CIRCULAR 

 
 Mr. Sergel has been a Director since September 2010. He
has been a member of the Nominating and Corporate Governance Committee since November 2012, and a member of the Management Resources and Compensation Committee since September 2014. He was a member of the ad hoc Pension Governance Committee from
November 2013 to May 2014, and was a member of the ad hoc Committee formed by the Board in August 2015 to oversee certain aspects of the financing related to the TECO Energy, Inc. transaction. Mr. Sergel is also a member of the Board of the
Company’s subsidiary Emera U.S. Holdings Inc. 
 Mr. Sergel is the former President and Chief Executive Officer of the North American Electric Reliability
Corporation (NERC). He served as President and Chief Executive Officer of National Grid USA, and its predecessor New England Electric System, from 1998 to 2004. 

Mr. Sergel is presently a director of State Street Corporation. He also served on the boards of the Edison Electric Institute, the Consortium for Energy Efficiency,
and the United Way of the Merrimac Valley. 
 Mr. Sergel holds a Bachelor of Science in Mathematics from Florida State University, a Master of Science in Applied
Mathematics from North Carolina State University, and a Master of Business Administration from the University of Miami. 
 Mr. Sergel’s extensive career in
the United States electricity sector has provided him with valuable industry and business skills and experience. His regulatory background is a distinct asset. 
  

							
	  

Board/Committee

Membership
  
	  	  

Attendance  
  
	  	  

Total  
  
	  	  

Public company board membership
 during the last five years
  

	 	 	 	 
	
•    Board Member

•    Nominating and Corporate Governance Committee Member
	  	 11 of 11  

4 of 4  
	  	 100%  

100%  
	  	 State Street Corporation
(September 1999 to present)

 

	
•    Management Resources and Compensation Committee
	  	4 of 4  	  	100%  	  	 
	
•    Ad Hoc Committee Member (1)

 
	  	3 of 3  	  	100%  	  	 

 

					
	  
    Total
Compensation
  
	  	  	  	  
	  

Fees earned in 2015 ($)  
  
	  	  

All other compensation ($)  
  
	  	  

Total ($)  
  

	  

154,500  
  
	  	  

17,479  
  
	  	  

171,979  
  

  

					
	  
    DSUs
Awarded and Held
  
	  	  
	  

2015 share-based  
 awards
($)  
  
	  	  

Total 2015 increase in value  

of all DSUs held ($)  
  
	  	  

Market value of total  

DSUs holdings ($)  
  

	  

65,000  
  
	  	  

109,162  
  
	  	  

326,473  
  

  

			
	  
    Instalment
Receipts
  
	  	  
	  
 Number of Instalment Receipts
Held
  
	  	  

Nil (2)    
  

  

									
	  

Securities Held
  
	  	  
	Year  	  	  

Common  
Shares  
  
	  	DSUs  	  	Value of shares  
and DSUs ($)  	  	 Status under share 

ownership guidelines

	  

2015 2014 2013
	  	  

4,000   4,000   4,000  
	  	  

7,552   5,624   3,640  
	  	  

499,393   371,871   233,555  
	  	  

Mr. Sergel owns shares and DSUs valued at 115% of the requirement under the Share Ownership Guidelines; therefore, the Guidelines are met.

 

  

	(1)	This Ad Hoc Committee oversaw aspects of the financing related to the TECO Energy, Inc. transaction. 

	(2)	The instalment receipts were not offered or sold in the United States, therefore, Mr. Sergel as a U.S. resident was unable to participate in the offering.

 

  
 Emera Inc. — Management
Information Circular 2016          19 

Table of Contents

 Jackie Sheppard 

Age: 60 
 Calgary, Alberta 

Canada 
 Director Since: 2009 

Independent 
  
 

 
 Skills and Experience 

	•	 	CEO/Senior Executive 

	•	 	Customer/Stakeholder 

	•	 	M&A/Growth Strategy 

	•	 	Governance/Other Directorship 

	•	 	Financial 

	•	 	Energy Sector 

	•	 	Compensation and Human Resources 

	•	 	Legal and Regulatory 

 

  

	
	 
	 

  

  
  

Ms. Sheppard has been an Emera Director since February 2009, and became Chair of the Board in May 2014. She was a member of the Audit Committee from May 2009 to
October 2014, and a member of the Management Resources and Compensation Committee from May 2009 to May 2014. She was Chair of the ad hoc Committee formed by the Board in August 2015 to oversee certain aspects of the financing related to the TECO
Energy, Inc. transaction. Ms. Sheppard is also a Director of the Company’s subsidiary, Emera Newfoundland & Labrador Holdings Inc. 

Ms. Sheppard is the former Executive Vice President, Corporate and Legal of Talisman Energy Inc. She served as Chair of the Research and Development Corporation of
the Province of Newfoundland and Labrador, a Provincial Crown Corporation, until June 2014. She is founder and Lead Director of Black Swan Energy Inc., an Alberta upstream energy company that is private equity financed. Ms. Sheppard is founder
and former Director of Marsa Energy Inc., an oil and gas corporation. She is a Director of Cairn Energy PLC, a publicly traded UK-based international oil and gas producer, and a Director of the general partner of Pacific NorthWest LNG LP, which was
formed for the purpose of constructing, owning and operating an LNG facility in British Columbia. 
 Ms. Sheppard is a Rhodes Scholar, having received an Honors
Jurisprudence, Bachelor of Arts and Master of Arts from Oxford University in 1979. She earned a Bachelor of Laws degree (Honours) from McGill University in 1981, and a Bachelor of Arts degree from Memorial University of Newfoundland in 1977. 

With her extensive roles as an executive in the oil and gas industry, and as a director of public, private and crown corporations, Ms. Sheppard’s experience in
strategic planning, business development, public markets and governance are the foundation for her leadership of the Board. 
  

							
	  

Board/Committee

Membership
  
	  	  

Attendance  
  
	  	  
 Total  
  
	  	  

Public company board membership
 during the last five years
  

	 	 	 	 
	
•    Board Member

•    Ad Hoc Committee Chair (1)
	  	 11 of 11  

3 of 3  
	  	 100%  

100%  
	  	
•    Cairn Energy PLC
(May 2010 to present)

•    NWest Energy Corp.
(July 2008 to July 2012)

 

  

					
	  
    Total
Compensation
  
	  	  
	  

Fees earned in 2015 ($)  
  
	  	  

All other compensation ($)  
  
	  	  

Total ($)  
  

	  

245,000  
  
	  	  

N/A  
  
	  	  

245,000  
  

  

					
	  
    DSUs
Awarded and Held
  
	  	  
	  

2015 share-based  
 awards
($)  
  
	  	  

Total 2015 increase in value  

of all DSUs held ($)  
  
	  	  

Market value of total  

DSUs holdings ($)  
  

	  

245,000  
  
	  	  

453,589   
  
	  	  

1,531,336   
  

  

			
	  
    Instalment
Receipts
  
	  	  
	  
 Number of Instalment Receipts
Held
  
	  	  

500  
  

  

									
	  

Securities Held
  
	  	  
	Year  	  	  

Common  
Shares  
  
	  	DSUs  	  	Value of shares  
and DSUs ($)  	  	 Status under share 

ownership guidelines

	  

2015  
	  	  
 Nil  
	  	  
 35,423  
	  	  
 1,531,336  
	  	  

Ms. Sheppard owns DSUs valued at 352% of the requirement under the Share Ownership Guidelines; therefore, the Guidelines are met.

 

	2014  	  	Nil  	  	27,893  	  	1,077,747  	  
	2013  	  	Nil  	  	20,404  	  	623,750  	  
	 	  	 	  	 	  	 	  

  

	(1)	This Ad Hoc Committee oversaw aspects of the financing related to the TECO Energy, Inc. transaction.

 

  

20          Emera Inc. — Management Information Circular 2016 

Table of Contents

 MANAGEMENT INFORMATION CIRCULAR 

     
  

Compensation of Directors in 2015 

Purpose of Director Compensation 
 The compensation of
Directors is designed to: 

	•	 	attract and retain highly skilled and experienced individuals to serve on Emera’s Board; 

	•	 	ensure alignment with long-term Shareholders’ interest; and 

	•	 	recognize the substantial time commitment required to oversee management of the Company. 

 For more information about the
process of determining Director compensation, see Director Compensation in the Statement of Corporate Governance Practices later in the Circular. 
 Deferred Share Units (DSUs) 
 Directors have the ability to elect to receive some or all of their cash compensation in the form of DSUs. In
2015, the annual retainer for each Director was $105,000, of which $65,000 was payable in DSUs. More information about the Directors’ DSUs Plan is provided later in this section of the Circular. The Company does not offer option-based awards,
non-equity incentive plan participation, or participation in a Company pension plan to its Directors. 
 Board Chair’s All-Inclusive
Retainer 
 The annual Chair’s Retainer is an all-inclusive fee, meaning the Board Chair receives no meeting fees or any other retainer for serving as
Emera’s Board Chair. The all-inclusive annual retainer of the Board Chair in 2015 was $245,000. This was comprised of $115,000 in DSUs, and the remainder in cash. 

Compensation Rates for Directors 
 Listed below are the
annual compensation rates for independent Directors in 2015. These rates are not applicable to: 

	•	 	Mr. Huskilson, who is an employee of the Company, 

	•	 	Mr. Eisenhauer, who received an annual all-inclusive annual retainer from NSPI as the Chair of the NSPI Board. 

  

													
	Annual retainers and meeting fees for Directors in 2015	  	Cash Amount ($)	 	  	DSUs ($)	 	  	Total ($)	 
	  
	 
				
	 Annual Chair’s retainer
	  	 	130,000  	  	  	 	115,000	  	  	 	245,000	  
	 Annual Director’s retainer
	  	 	40,000  	  	  	 	65,000	  	  	 	105,000	  
	 In-person meeting fee (1)
	  				  				  	 	1,750	  
	 Telephone meeting fee (1)
	  				  				  	 	1,250	  
	 Travel fee (if one-way travel is 5 hours or more)
	  				  				  	 	1,750	  
	 Travel fee (if one-way travel is at least 3 hours but less than 5 hours)
	  				  				  	 	875	  
	 Annual Audit Committee Chair’s retainer
	  				  				  	 	20,000	  
	 Annual Audit Committee member’s retainer
	  				  				  	 	5,000	  
	 Annual Management Resources and Compensation Committee Chair’s retainer
	  				  				  	 	15,000	  
	 Annual Management Resources and Compensation Committee member’s retainer
	  				  				  	 	3,000	  
	 Annual Nominating and Corporate Governance Committee Chair’s retainer
	  				  				  	 	10,000	  
	 Annual Nominating and Corporate Governance Committee member’s retainer
	  				  				  	 	3,000	  
	  
	 

	(1)	Members of ad hoc Committees received meeting fees for their participation in each Committee meeting. They received no annual retainer for being a member of an ad hoc Committee. 

Total Director Compensation in 2015 
 The following table
sets out the total compensation earned by the Directors who served on Emera’s Board during 2015. Compensation is made up of applicable retainers and fees for attendance at Board and Committee meetings for which a Director attended as a member
or guest, briefing meetings, education sessions, and travel fees. Mr. Huskilson is not included in the table as his compensation for service as Emera’s President and CEO is disclosed in the Statement of Executive Compensation. He does not
receive any additional compensation for his services as a member of the Board of Emera or as a member of the Board of any of Emera’s subsidiaries or investments. 

  
 Emera Inc. — Management
Information Circular 2016          21 

Table of Contents

      
  

The table below entitled “Total Compensation” shows the compensation earned by Emera Directors in 2015 for serving on the Company’s Board of Directors. It
includes compensation earned by Emera Directors who served on the Boards of Emera subsidiaries. See Compensation of Emera Directors on Subsidiary Boards for more information about Emera’s Directors who served on the Boards of its
subsidiaries. 
 In the table below, the three columns under the heading “DSUs Awarded and Held” show detailed information about DSUs received by Directors as
compensation. 
 Total Compensation 
  

																											
	  
	 
	 	  	 	 	 	 	 	 	 	 	 	  	  	 	 	 	 	 	 	 	 
					 	
	 	  	 	 	 	 	 	 	 	 	 	  	  	 DSUs Awarded and Held	 
	  
	 	 	 	  	  
	  
	 
	Director	  	 
 	Fees earned
in 2015 ($)	  
 (1) 	 	 
 	All other
compensation ($)	  
  	 	 	Total ($)	  	 	 	  	 
 
 	2015
share-based
awards ($)	  
  
 (2) 	 	 
 
 
 	Total 2015
increase in
value of all
DSUs held ($)	  
  
  
 (3) 	 	 
 
 	Market value
of total DSU
holdings ($)	  
  
 (4) 
	  
	 	 	 	  	  
	  
	 
					 			
	 Sylvia Chrominska
	  	 	136,875	  	 				 	 	136,875	  	 	 	  	 	118,906	  	 	 	221,970	  	 	 	756,439	  
	 Henry Demone
	  	 	134,250	  	 				 	 	134,250	  	 	 	  	 	134,250	  	 	 	158,307	  	 	 	194,319	  
	 Allan Edgeworth
	  	 	154,500	  	 				 	 	154,500	  	 	 	  	 	109,750	  	 	 	332,011	  	 	 	1,606,513	  
	 James Eisenhauer (5)
	  	 	N/A	  	 	 	166,500	  	 	 	166,500	  	 	 	  	 	166,500	  	 	 	354,661	  	 	 	1,372,207	  
	 Wayne Leonard
	  	 	135,250	  	 				 	 	135,250	  	 	 	  	 	135,250	  	 	 	161,310	  	 	 	208,412	  
	 Lynn Loewen
	  	 	139,625	  	 				 	 	139,625	  	 	 	  	 	139,625	  	 	 	202,259	  	 	 	471,077	  
	 John McLennan
	  	 	134,250	  	 				 	 	134,250	  	 	 	  	 	134,250	  	 	 	549,358	  	 	 	2,988,663	  
	 Don Pether
	  	 	154,875	  	 				 	 	154,875	  	 	 	  	 	154,875	  	 	 	322,241	  	 	 	1,221,896	  
	 Andrea Rosen
	  	 	157,125	  	 				 	 	157,125	  	 	 	  	 	157,125	  	 	 	382,170	  	 	 	1,634,570	  
	 Richard Sergel
	  	 	154,500	  	 	 	17,479 	(6) 	 	 	171,979	  	 	 	  	 	65,000	  	 	 	109,162	  	 	 	326,473	  
	 Jackie Sheppard
	  	 	245,000	  	 				 	 	245,000	  	 	 	  	 	245,000	  	 	 	453,589	  	 	 	1,531,336	  
	  
	 

	(1)	The “Fees Earned In 2015” column is the amount of Directors’ fees, and includes the dollar value of that portion of their retainer paid in DSUs. All fees are in Canadian dollars. 

	(2)	This column shows the portion of Directors’ fees earned in 2015 that was allocated to DSUs. DSUs granted in 2015 are based on the value of the Emera common share closing price on December 31, 2014 ($38.64).

	(3)	This column shows (i) the increase in value in 2015 of all DSUs held by each Director at the beginning of the year, plus (ii) the value of all DSUs received in 2015, including dividends earned on the DSUs (in
the form of additional DSUs), multiplied by the December 31, 2015 closing Emera common share price of $43.23. 

	(4)	This column shows the value of all DSUs held by each Director at the end of 2015 based on the December 31, 2015 closing Emera common share price of $43.23. 

	(5)	$25,000 of the compensation earned by Mr. Eisenhauer is paid in the form of DSUs. 

	(6)	Mr. Sergel received compensation for serving as a Director of Emera Energy Generation II LLC, Rumford Power Inc., Tiverton Power LLC, Bridgeport Energy LLC, Emera CNG Holdings Inc., and Emera CNG LLC until his
retirement as a Director of those companies on September 30, 2015. Mr. Sergel also received compensation for serving as a Director of Emera US Holdings Inc. effective October 1, 2015. 

Compensation of Emera Directors on Subsidiary Boards 

The Emera Board of Directors, on the recommendation of the Nominating and Corporate Governance Committee, determines the compensation to be received by Emera Directors
who serve on the boards of Emera’s subsidiaries. Such compensation received by each Emera Director that serves as a Director on the board of an Emera subsidiary is reported under “All Other Compensation” and “Total” in the
Total Compensation table above. 
 Mr. Eisenhauer is Chair of the Board of Directors of NSPI. The NSPI Board Chair’s retainer is an annual all-inclusive fee
paid by NSPI, meaning the NSPI Board Chair receives no meeting fees or other retainer. As of December 31, 2015, the all-inclusive annual retainer of the NSPI Board Chair was $166,500, of which at least $25,000 is payable in DSUs. 

Emera Newfoundland & Labrador Holdings Inc. (“ENL”) is a wholly-owned subsidiary of Emera and the parent company of NSP Maritime Link Inc. and ENL
Island Link Inc. Ms. Sheppard is a member of the ENL Board. As Emera Board Chair, Ms. Sheppard receives the Chair’s all-inclusive retainer and does not receive any additional compensation for her service on the ENL Board. 

Mr. Sergel was a member of the Board of Directors (or in the case of limited liability companies, Board of Managers) of Emera CNG Holdings Inc. and Emera CNG LLC,
for which he received a combined annual retainer of $10,000. Mr. Sergel was also on the Boards of Emera Energy Generation II LLC, Rumford Power Inc., Tiverton Power LLC and Bridgeport Energy LLC, for which he also received a combined annual
retainer of $10,000. On September 30, 2015, he resigned from the Boards of Emera CNG Holdings Inc., Emera CNG LLC, Emera Energy Generation II LLC, Rumford Power Inc., Tiverton Power LLC and Bridgeport Energy LLC. On October 1, 2015,
Mr. Sergel joined the Board of Emera US Holdings Inc., a United States holding company which is a direct subsidiary of Emera and holds certain US based investments of Emera, including the above subsidiaries, the boards from which he resigned on
September 30, 2015. He receives an annual retainer of US $10,000 for serving on the Emera US Holdings Inc. Board, plus US $1,000 for any Board meetings. 

  

22           Emera Inc. — Management Information Circular 2016 

Table of Contents

 MANAGEMENT INFORMATION CIRCULAR 

     
  

Directors’ Share Ownership Guidelines 
 In order to
align the interests of Directors and Shareholders, the Directors are subject to share ownership guidelines that require them to own common shares and/or DSUs with a value of not less than three times the annual Director’s Retainer within a
specified timeframe. For the status of each Director nominee under the Director Share Ownership Guidelines, see their biographies earlier in this Circular. For more information about the Director Share Ownership Guidelines, see Director Share
Ownership Guidelines in the Statement of Corporate Governance Practices. 
 Convertible Debentures 

Directors purchased 2,860 instalment receipts (“Instalment Receipts”) in connection with the offering of convertible debentures issued by Emera in September
2015 in respect of the financing of the Company’s acquisition of TECO Energy, Inc. Convertible debentures were sold by Emera on an instalment basis at a price of $1,000 per debenture, with the first instalment of $333 payable on the closing of
the offering. The final instalment of $667 is payable following notification to holders that certain approval conditions have been fulfilled or waived as set out in the agreement and plan of merger dated September 4, 2015 among Emera, Emera US
Inc. and TECO Energy, Inc. At the option of the holder, on payment of the final instalment, each debenture will be convertible into common shares of Emera at a conversion price of $41.85 per common share, being a conversion rate of 23.8949 common
shares per $1,000 principal amount of debentures. 
 Directors’ DSU Plan 

Under the Directors’ Deferred Share Unit Plan (the “Directors’ DSU Plan”), independent Directors may elect to receive all or any portion of their
compensation in DSUs in lieu of cash compensation, subject to requirements to receive a minimum portion of their annual retainer in DSUs. Directors’ fees are paid on a quarterly basis and, at the time of each quarterly payment, the applicable
amount is converted to DSUs. The number of DSUs to be credited is determined by dividing (a) the quarterly portion of the Director’s annual fee that the Director elected to be paid in DSUs by (b) the fair market value on the last
trading day of the preceding calendar year, with fractions computed to three decimal places. 
 A DSU is a unit that has a value based upon the value of one Emera
common share. When a dividend is paid on Emera’s common shares, the Director’s DSU account is credited with additional DSUs computed by dividing: (a) the amount obtained by multiplying the amount of the dividend declared and paid per
common share by the number of DSUs recorded in the Director’s account on the record date for the payment of such dividend, by (b) the market price of a common share as of the dividend payment date. 

DSUs cannot be redeemed for cash until the Director leaves the Board. The cash redemption value of a DSU equals the market value of a common share at the time of
redemption. DSUs are not shares, cannot be converted to shares, and do not carry voting rights. DSUs received by Directors in lieu of cash compensation and held by them represent an at-risk investment in Emera. The value of DSUs is based on the
value of the common shares of Emera, and therefore is not guaranteed. See Director Compensation in the Statement of Corporate Governance Practices in this Circular for more information about the compensation of Directors. Independent
Directors are not entitled to participate in any other compensation plan of the Company or in Emera’s Employee Common Share Purchase Plan. 
 Committees of the Board of Directors 
 The Board of Directors has three standing Committees to assist it in carrying out its duties. They are
the: 

	•	 	Audit Committee; 

	•	 	Management Resources and Compensation Committee (MRCC); and 

	•	 	Nominating and Corporate Governance Committee (NCGC). 

 From time to time the Board may establish ad hoc committees to
assist the Board on specific matters of a temporary nature. Most recently, such an ad hoc committee was formed in August 2015 to oversee certain aspects of the financing related to the TECO Energy, Inc. transaction. Its membership consisted of
Jackie Sheppard, as Committee chair, with Andrea Rosen and Richard Sergel as members, and it met three times in September 2015. In terms of compensation, members of ad hoc committees receive meeting fees for their participation in each committee
meeting, but typically receive no annual retainer for being a member of an ad hoc committee because of the nature of the committee’s existence, having generally been established for a specific purpose and a temporary period of time. For further
information on the Company’s Committees, see Committees of the Board of Directors in the Statement of Corporate Governance Practices later in this Circular. 

Certain Proceedings 
 To the knowledge of the Company,
none of the proposed nominees for election as Directors of the Company: 
  

	(a)	are, as at the date of this Circular, or have been, within 10 years before the date of this Circular, a director, chief executive officer or chief financial officer of any company that: 

	 	(i)	was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than
30 consecutive days (an “Order”) that was issued while the proposed nominee was acting in the capacity as director, chief executive officer or chief financial officer; or 

  
 Emera Inc. — Management
Information Circular 2016          23 

Table of Contents

      
  

	 	(ii)	was subject to an Order that was issued after the proposed nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting
in the capacity as director, chief executive officer or chief financial officer; 

  

	(b)	are, as at the date of this Circular, or have been within 10 years before the date of this Circular, a director or executive officer of a company that, while that person was acting in that capacity, or within a year of
that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver,
receiver manager or trustee appointed to hold its assets; or 

  

	(c)	have, within the 10 years before the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or
compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed nominee. 

Statement of Corporate Governance Practices 

 

			
	  

Corporate Governance at a Glance

 
	  	 
	 
	 Emera’s Board of Directors
annually reviews its approach to corporate governance. It monitors best practices of leading corporations with a view to enhancing governance to create and preserve long-term Shareholder value. Details of Emera’s corporate governance
practices may be found in this Statement of Corporate Governance Practices.
  

	 	 
	 Governance
Highlights
  
	  	For details see
	 	 
	 All Emera Directors are
independent from management except the President and Chief Executive Officer.
  
	  	 Board of Directors

page 25
  

	 	 
	 The Board oversees the
Company’s strategy, which includes reviewing the strategic planning process and annually approving the strategic plan, taking into account, among other things, the opportunities and risks of the business.

 
	  	 Board of Directors

page 25

	 	 
	 The Board oversees the
Company’s risk management.
  
	  	 Board of Directors

page 25
  

	 	 
	 The Chair of the Board
Charter and position descriptions for each of the Committee Chairs describe the roles and responsibilities for these leadership positions.
  
	  	 Position Descriptions

page 27
  

	 	 
	 Directors receive an
orientation when they become Board members and receive support for continuing education to familiarize them with the business, investments and key Company personnel.
  
	  	 Orientation of New Directors and Continuing Education

page 27
  

	 	 
	 Creating a culture of
integrity begins with the tone at the top. Directors, Officers and employees are required to annually acknowledge that they have reviewed and understand the Emera Group of Companies Standards for Business Conduct.

 
	  	 Ethical Business Conduct

page 28
  

	 	 
	 New Directors are recruited
on the basis that they will make a strong contribution and have background, skills and experience needed by the Board in view of the Company’s strategy.
  
	  	 Nomination of Directors

page 29
  

	 	 
	 The Company maintains
compensation for Directors designed to recognize the substantial time commitment required to oversee management of the Company and to align Directors’ interests with the long-term interest of Shareholders.

 
	  	 Director Compensation

page 31
  

	 	 
	 Three standing Committees
assist the Board in carrying out its responsibilities: the Audit Committee; the Management Resources and Compensation Committee; and the Nominating and Corporate Governance Committee.

 
	  	 Committees of the Board of Directors

page 33
  

	 	 
	 The Board annually assesses
its performance in order to find ways to improve its effectiveness and the performance of the Chair, individual Directors and the Board Committees.
  
	  	 Board and Director Performance Assessments

page 32
  

	 
	Please read Emera’s entire Statement of Corporate Governance Practices
below for more important details about the Company’s governance practices.

  

24           Emera Inc. — Management Information Circular 2016 

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Board of Directors 
 Director
Independence 
 All Emera Directors are independent from management, except Mr. Huskilson, who is the President and CEO of the Company. Use of the term
“independent” in relation to a Director in this Circular means a Director is independent as defined under applicable Canadian securities laws and, in particular, is free of any direct or indirect material relationship, which could, in the
view of the Board of Directors, be reasonably expected to interfere with the Director’s independent judgment. 
 None of the independent Directors receive
remuneration from Emera other than Directors’ retainers, fees or retainers for service as Chair of the Board or Chair of a Committee. Mr. Eisenhauer, who is Chair of the Board of Emera’s subsidiary, NSPI receives an all-inclusive
annual retainer from NSPI. Ms. Sheppard receives an all-inclusive annual retainer as Chair of the Board of Emera. Mr. Sergel received a retainer for being a member of the boards of Emera’s subsidiaries, Emera CNG Holdings Inc., Emera
CNG LLC, Emera Energy Generation II LLC, Rumford Power Inc., Tiverton Power LLC and Bridgeport Energy LLC and Emera US Holdings Inc. 
 The Company’s Articles of
Association provide that no more than two Directors may be employees of the Company or of a subsidiary or affiliate of the Company. Mr. Huskilson, as President and CEO of the Company, is the only Director employed by the Company. 

Board of Directors Charter 
 The Board of Directors
believes that clear accountabilities lead to the best governance and, therefore, maintains a Charter for the Board. The Board of Directors Charter is attached to this Circular as Appendix A. Under the Charter, the Board is responsible for overseeing
the management of the business of the Company and for providing stewardship and governance to ensure the viability and growth of its business. The Charter describes the duties and responsibilities of the Board in matters of independence and
integrity, strategic planning, risk responsibility, leadership and succession, financial reporting, corporate communications, public disclosure, and corporate governance. We encourage you to carefully review the Charter for more detail about the
obligations of the Board in these areas. 
 Strategic Planning 

The President and CEO, in collaboration with executive officers and the Board of Directors, develop a strategic plan, which is presented to the Directors at a Board
retreat. Under the Board of Directors Charter, oversight and guidance on the Company’s strategy is one of the primary roles of the Board. Directors participate in the development of the corporate strategy, which determines the annual and
longer-term objectives for the Company. The Directors devote significant time at regular Board meetings to evaluate progress made in executing the Company’s strategy. 

Risk Management 
 The Board of Directors is responsible
for overseeing risk. Under the Board of Directors Charter, the Board is responsible for overseeing the implementation by management of appropriate systems to identify, report and manage the principal risks of Emera’s business. The Charter
requires the Board to consider Emera’s risk profile and to oversee Emera’s risk management by reviewing: 

	(a)	the annual identification and assessment of the principal risks of Emera; 

	(b)	the process for ongoing monitoring and reporting of the principal risks of Emera; 

	(c)	the effectiveness of Emera’s mitigation response to its principal risks; and 

	(d)	the alignment of risk management with Emera’s risk profile, its strategy, and its organizational objectives, including capital and resources allocation. 

The Board is also responsible for reviewing Emera’s annual insurance program, its uninsured exposure, and its business continuity and disaster recovery plans. The
Board receives regular updates on the status of risk management activities and initiatives. 
 Directors Meet without Management 

There were 28 Emera Board and Committee meetings during 2015. Each Board and Committee has adopted the practice of meeting in an in-camera session, during which
management is excluded, at every Board and Committee meeting. The Board implemented this practice and held an in-camera session at each Board meeting, which excluded management, including the President and CEO. 

The Board also holds an evening session before the day of a regularly scheduled Board meeting and prior to the Board’s annual strategy meeting. As a governance
practice, and at least once a year, the independent Directors conduct such an evening session to the exclusion of all management, including the President and CEO. See Board Dinner Sessions for more information. 

  
 Emera Inc. — Management
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Independent Chair 
 Ms. Sheppard, the Chair of the
Board, is an independent Director. The Articles of Association of the Company require that the Chair of the Board and the President and CEO be separate individuals. 

Chair of the Board of Directors Charter 
 The Chair
provides leadership to the Board, in order that it may fulfill its duties effectively, efficiently and independent of management. The Chair’s role is to see that the Board and Shareholder meetings function effectively. The Chair provides advice
and counsel to Directors and the President and CEO. The Chair participates in the recruitment of Directors and the assessment of their performance. 
 Directors’ Membership on Other Public Company Boards 
 Public company board membership for each Director during the last five years
is set forth in their biographies earlier in the section of this Circular, entitled Director Nominees. The effectiveness of the Board, each Director and the Board Chair is annually evaluated through the Board and Director Performance
Assessment process described in more detail below in Board and Director Performance Assessments. 
 Common Memberships on Boards of
Public Companies 
 Except for the membership of Mr. Huskilson and Mr. Eisenhauer on the Board of Emera’s subsidiary NSPI, there are currently no
common memberships on boards of public companies among Emera’s Directors. 
 Board Size 

The Articles of Association provide that the number of Directors on the Company’s Board must not be less than eight and not more than 15. 12 Director nominees are
being proposed for election at the 2016 Annual and Special Meeting. 
 Majority Voting for Election of Directors 

The confidence of Shareholders in the actions of the Board and management are important. In order to provide a mechanism for Shareholders to express that confidence in
each Director, the Board has adopted a Majority Voting Policy for Directors. The Policy states: 
 Should a director nominee, in an uncontested
election at a meeting of shareholders of Emera Inc. at which directors are to be elected, receive a majority of “withheld” votes from his or her election as a director (a “Majority Withheld Vote”), the individual shall submit his
or her resignation to the Board for consideration immediately following such shareholders’ meeting. 
 The votes determining a Majority
Withheld Vote shall be the total votes cast by ballot by shareholders and proxyholders at, or if a ballot vote was not conducted, shall be the total votes represented by proxies validly deposited prior to, the shareholders’ meeting. 

The directors who received a majority “for” vote at the shareholders’ meeting shall consider whether or not to accept the resignation.
If there are less than three such directors, the entire Board shall consider whether or not to accept the resignation. The resignation of a director who received a Majority Withheld Vote shall be accepted absent exceptional circumstances and is
effective when accepted by the directors. The determination shall be made within 90 days following the date of the shareholders’ meeting and a news release disclosing such determination shall be issued promptly following such determination. If
the resignation is rejected, the news release shall include the reasons for rejecting the resignation. A copy of the press release shall be provided to the Toronto Stock Exchange. 

Since the adoption of the Majority Voting Policy in 2008, all Director nominees have received a majority “For” vote at the Company’s meetings of
Shareholders. 

  

26           Emera Inc. — Management Information Circular 2016 

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Position Descriptions 
 Chair of the Board 

The Chair of the Board of Directors Charter describes the fundamental responsibility of the Chair of the Board of Directors of the Company. This Charter confirms that the
Chair of the Board is to lead the Board to fulfill its duties effectively, efficiently and independent of Management. For the full text of the Chair of the Board of Directors Charter, visit www.emera.com/governance. 

Committee Chairs 
 The Board has adopted position descriptions for each
Committee Chair, which detail the duties of the Committee Chairs. Each Committee Chair is required to provide leadership to the Committee members and support the Committee’s effective operation in order to fulfill its mandate. For the full text
of the position description for Committee Chairs, visit www.emera.com/governance. 
 President and Chief Executive Officer 

The roles and responsibilities of the President and CEO are contained in his employment contract, which provides that he is chief executive of the Company. The President
and CEO’s employment contract is reviewed by the Chair of the Board of Directors and the MRCC, and it is approved by the Board of Directors. 
 Orientation of Directors and Continuing Education 
 For each new Director to be effective in their roles, they must be knowledgeable about the
Company, its strategy, strengths and challenges. In order to best bring their skills and experience to the operation of the Board, new Directors receive an in-depth orientation to the Company’s executive leaders, business, strategy, financial
information and governance practices. This allows them to effectively integrate with the operation of the Board. The Board and management have built and continue to expand a long term program of training for Directors to enhance their effectiveness
and reinforce a collegial working relationship among members of the Board. 
 Orientation sessions are attended by the President and CEO, the CFO and other executive
officers or leaders of key subsidiaries. The Chair also attends the orientation meetings with a new Director. A reference manual is provided in advance of the session that includes the following: 

	(a)	Recent annual and interim MD&A and financials, Management Information Circular and Annual Information Form; 

	(b)	Board and Committee Charters; 

	(c)	Strategic Plan and Business Plan; 

	(d)	Guide to the Company’s management structure; 

	(e)	Insider trading guidelines; 

	(f)	Emera Group of Companies Standards for Business Conduct; and 

	(g)	Minutes of previous Board meetings. 

 Continuing Education for Directors 

The oversight function of Directors is enhanced when they are well informed about the Company’s business and its industry. Management regularly seeks opportunities
to update, educate and inform the Directors in areas they request or that management determines are relevant to issues facing the Company. 
 The Board and Committees
receive regular presentations from senior management updating Directors about market and industry conditions and trends that may impact the Company’s business and influence its strategy. The Board is also provided with opportunities to make
site visits to operational facilities to assist Directors to more fully understand the business. From time to time, the Board receives specialized presentations on various matters of significance to the Company. 

Directors participated in education sessions and received education materials about specific topics in 2015 as follows on the next page. 

  
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	 Education
Presentations
  
	  	 Date

 
	  	 Participants

 

	 	 	 
	 Site visit to West Sunrise Generation Plant, Freeport, Grand
Bahama
  
	  	 February 6, 2015

 
	  	 All Board members

 

	 	 	 
	 Regulatory Accounting Session – Utility Finance and
Accounting Seminar
  
	  	 February 26, 2015

 
	  	 H. Demone, A. Edgeworth and J. Eisenhauer

 

	 	 	 
	 Annual Environmental Oversight Education

 
	  	 May 21, 2015

 
	  	 All Board members

 

	 	 	 
	 Maritime Provinces’ Natural Gas Infrastructure
presentation
  
	  	 May 21, 2015

 
	  	 All Board members

 

	 	 	 
	 Presentation of Smart Grid technologies

 
	  	 May 21, 2015

 
	  	 All Board members

 

	 	 	 
	 New England Clean Energy Transformation presentation

 
	  	 June 24, 2015

 
	  	 All Board members

 

	 	 	 
	 Cape Sharp Tidal Venture – Multi Phase Development of
Demonstration Array in the Bay of Fundy presentation and tour of manufacturing site
  
	  	 September 24, 2015        

 
	  	 All Board members except W. Leonard

 

	 	 	 
	 Regulatory Accounting Education Session

 
	  	 September 25, 2015

 
	  	 All Board members except W. Leonard

 

	 	 	 
	 U.S. Federal Energy Regulatory Commission Training –
written presentation only
  
	  	 September 25, 2015

 
	  	 All Board members except W. Leonard

 

	 	 	 
	 U.S. Environmental Protection Agency’s Proposed Clean
Power Plan Presentation
  
	  	 November 12, 2015

 
	  	 All Board members except W. Leonard

 

	 	 	 
	 Presentation entitled Canada and the Road to Paris
respecting the 2015 United Nations Climate Change Conference of the Parties (COPS) Implications for North America
  
	  	 November 12, 2015

 
	  	
All Board members except W. Leonard
  

	 	 	 
	 Presentation by external compensation consultant about
governance trends and regulatory updates, guidelines of proxy advisory firms in Canada and governance principles applicable to compensation
  
	  	 September 24, 2015

 
	  	 All MRCC members were present

 

	 	 	 
	 Presentation on best practices in corporate governance

 
	  	 September 24, 2015

 
	  	 All NCGC members were present

 

 The Board of Directors encourages, and the Company pays for, Directors to pursue education sessions provided by third parties that are
directly related to the business of the Company and the performance of their duties as a Director of the Company. 
 Board Dinner Sessions

 Board dinner sessions are scheduled the evening prior to regularly scheduled Board meetings. Board dinners are treated as an opportunity to accomplish a
number of important governance objectives, including: 

	•	 	Meeting as independent directors in an atmosphere that is not a Board meeting. The Board’s practice is to have one dinner each year at which only the independent directors attend; 

	•	 	Meeting in a less formal atmosphere with the CEO and other senior officers; 

	•	 	Holding educational sessions on important topics for the Company’s business and strategic direction; 

	•	 	Meeting high-potential employees in order to advance the succession planning for the Company; and 

	•	 	Strengthening Directors’ collegial working relationship. 

 Ethical Business Conduct

 The Board is committed to sustaining a culture of integrity and ethical business practices throughout the Company. 

  

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Standards for Business Conduct 
 The Board has adopted
written Standards for Business Conduct (Standards for Business Conduct) that apply to everyone at Emera and its subsidiaries. Directors, Officers and employees are required to annually acknowledge that they have reviewed and understand the Standards
for Business Conduct. These Standards for Business Conduct are available on Emera’s website at www.emera.com, or a copy may be obtained by contacting the Chief Human Resources Officer, Emera Inc., P.O. Box 910, Halifax, Nova Scotia B3J 2W5.

 The Board regularly reviews the Standards for Business Conduct, and makes revisions in order to update the content in keeping with best practices. 

Whistleblowers Policy 
 The Company has a whistleblowers
policy entitled “Procedures for the Reporting of Irregularities and Dishonesty”. These Procedures establish a method for dealing appropriately with any complaints made by employees of irregular or dishonest accounting, internal accounting
control, auditing matters, or fraudulent or illegal activity by any employee or employees. Any employee who in good faith reports such activity will be protected from threats of retaliation, or discrimination because of the report. Any employee who
retaliates against another employee who reports such activity, could face disciplinary action under the Procedures. If an employee believes that retaliation has occurred, the employee may submit a complaint in writing to the Director, Internal
Audit. 
 Reports under the Standards for Business Conduct and Procedures for the Reporting of Irregularities and Dishonesty are addressed by the Company, and on a
quarterly basis the Internal Audit department informs the Audit Committee of all reports and their status. 
 Ethics Hotline 

The Company has established a confidential business conduct helpline, called “The Ethics Hotline”, hosted by an external service provider. The Ethics Hotline is
available to employees to report allegations of conduct not in compliance with the Standards for Business Conduct or the Procedures for the Reporting of Irregularities and Dishonesty. The Board monitors compliance with the Standards for Business
Conduct and the Procedures for the Reporting of Irregularities and Dishonesty. There have been no instances of any waiver of compliance with the Standards or the Procedures for any Director or Officer. 

Corporate Disclosure Policy 
 The Board has approved a
Disclosure Policy to ensure that communications to investors and potential investors are timely, factual and accurate, and that the information is disseminated in accordance with all applicable legal and regulatory requirements to the investing
public, analysts and the media. 
 Conflicts of Interest 

Directors are required to declare any conflict of interest which they may have in a matter before the Board. In any matter requiring approval of the Board, a Director is
prohibited by the Company’s Articles of Association from voting in respect of the matter in which the Director is interested. 

Director’s Occupation 
 The Directors have also
instituted a policy, which requires them to submit their resignation as a Director if there is a significant change in their principal occupation. The resignation is then reviewed by the Board to determine if the circumstances warrant acceptance of
the resignation, whether due to a conflict of interest arising by virtue of a new principal occupation or otherwise. 
 Nomination of Directors

 The NCGC is responsible for providing the Company with a list of nominees for election as Directors at the Company’s annual meeting of Shareholders. The
NCGC creates and reviews the criteria for selecting Directors by assessing the personal qualities, business experience and qualifications of current Directors. It also assesses the Company’s ongoing needs and circumstances, geographical
representation and the overall experience of the Board. In recruiting new Directors, the NCGC considers the background, skills and experience desired for Directors in view of the Company’s strategy and activities. It develops a plan for the
recruitment of additional director nominees who can provide those characteristics. 
 Director nominees must, in the opinion of the members of the NCGC, be able to
contribute to the broad range of issues which come before the Board for consideration. They must be able to devote the time necessary to prepare for and attend meetings of the Board and Committees of the Board to which they may be appointed. 

The NCGC regularly evaluates the expected turnover of Directors in advance of their retirement from the Board and develops an effective succession plan. 

  
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Mechanism for Board Renewal 
 While Emera has no term
limits for its Directors, the Board of Directors oversees processes for renewal of the Board, which balance a number of factors, and have as their ultimate objective the fulfillment of the fundamental responsibility of the Board to provide
stewardship and good governance for the Company. Those processes primarily include: 

	•	 	A robust Director recruitment process; 

	•	 	An age limit for Directors; and 

	•	 	Governance practices which provide for renewal in a deliberate manner. 

 Director Recruitment
Process 
 In developing a list of nominees for election as Directors at Emera’s annual meeting of Shareholders, the Board’s NCGC evaluates the size of
the Board and the mix of skills and experience of its Directors, and the level of representation of women on the Board. The NCGC will consider the likely potential tenure of a director candidate before making a selection. This is factored into the
selection decision having regard to the current make-up of the Board, what skills and experience the candidate offers as a Director, and keeping in mind the age limit for Directors. 

The average tenure of all of Emera’s 12 Director nominees is approximately six and a half years. The longest serving independent Directors have served on the Board
for about 11 years; the shortest serving nominees have served about a year and a half. This represents an appropriate mix of longer-serving Directors with a history on the Emera Board, and Directors that are newer to Emera, who bring fresh
perspective and approach to the Company’s Board table. 
 Age Limit 

Director nominees must be under 70 years of age at the time of the Company’s annual meeting in order to qualify for nomination. In certain exceptional circumstances,
the Committee may determine and recommend that an individual be permitted to serve as a member of the Board beyond age 70 because of the individual’s contribution and skills. Such determination is made annually. All Director nominees for the
Company’s 2016 Shareholders’ meeting are under 70 years of age, except John McLennan. 
 Mr. McLennan will be age 71 at the time of the
Shareholders’ meeting on May 17, 2016. The Committee has recommended to the Board of Directors that Mr. McLennan continue to serve as a Director because of his extensive experience with the Company, and because of the support and
continuity he provides to the Board Chair in light of recent Board membership changes and the growth of the Company. The Emera Board of Directors accepted the recommendation of the NCGC. As a result, Mr. McLennan has been included in the list
of nominee Directors for election at the Meeting. 
 Governance Practices 

Emera’s governance practices prescribe that planned departures of Board members in any one year will not exceed two Directors. This practice contributes to Board
renewal in a deliberate manner. 
 Board Renewal Ongoing 

The Board does not have term limits, but it does have an age limit. The age limit does not replace the rigorous annual performance assessment process that takes place
under the leadership of the Board Chair with support from the NCGC, see Board and Director Performance Assessments below. The annual performance assessment in combination with its current age limit for Directors – which the NCGC has the
discretion to extend in exceptional circumstances – are the current mechanisms the Board possesses to provide for Board renewal and will continue to serve the Company’s best interests, providing for appropriate renewal of the membership on
the Board. 
 Board Diversity 
 To ensure that there
are a significant number of women on the Company’s Board of Directors, the Company recruits Board members under a long-standing corporate governance practice, which requires that no fewer than 25 per cent of the members of the Board of
Directors are women. Emera has achieved and, in fact, exceeded this requirement. Emera’s Board of Directors has four women, or 33 per cent of the total members of the Board. The list of Director nominees for the Meeting on May 17,
2016, includes four women out of twelve Director nominees, or 33 per cent. 
 The NCGC reviews the criteria for selecting director nominees in light of this
governance practice. This governance practice reflects the Board’s view that gender diversity is an important part of fostering diversity of perspective and experience around the Board table, leading to improved overall performance of the Board
and its Committees. 

  

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Representation of Women in Executive Officer Appointments 

While Emera does not have targets regarding women in executive officer appointments, management is of the view that gender diversity among the senior executive team
within the Emera group of companies serves the best interests of the Company in the following ways: 

	•	 	It is important that Emera’s executive ranks reflect our diverse customer base. 

	•	 	Gender diversity will help the Company better understand the needs of its customer base. 

	•	 	The available workforce is increasingly made up of women. As baby boomers retire and as a competitive labour market is anticipated, Emera needs to access talent from the broadest recruitment pool. 

	•	 	Leadership in diversity will make the Company an employer of choice and help us to recruit, retain, and engage high-performing employees. 

	•	 	It is demonstrable that business performance improves with greater gender diversity; it is good for business. 

 Among the
executive officers of Emera Inc. and its major subsidiary, Nova Scotia Power Inc., nine are female, representing 33 per cent. Emera monitors the progression of women into leadership positions within Emera and its subsidiary companies. The
increase in 2015 in the number of female executive officers relative to the prior year reflects the promotion of women employees to such positions during the year. 

With a view to fostering diversity within Emera, the Company’s management does not believe that targets are the right approach. Rather it is reviewing the adoption
of a diversity strategy in order to address emerging trends in the business climate, including access to diverse talent, to increase employee engagement, to foster innovation and fresh perspectives and to serve the needs of diverse customers, with
the intended result of broadening the diversity of Emera’s entire employee population. 
 One of Emera’s subsidiaries, Emera Newfoundland & Labrador
(ENL), is demonstrating leadership within the Company in the area of diversity. ENL has entered into a Benefits Agreement with the Provinces of Newfoundland & Labrador and Nova Scotia in respect of the construction of the Maritime Link
Transmission Project (the “Maritime Link Project”). The Benefits Agreement requires ENL to develop and implement a Diversity Plan. Under the Maritime Link Project’s Diversity Plan, gender equity, diversity and inclusiveness must be
considered in each contract, procurement and employment decision. 
  

Compensation 
 Executive
Compensation 
 On the recommendation of the MRCC, the Board of Directors determines the compensation for the Company’s senior executives and other officers
of the Company. See Compensation Discussion and Analysis with respect to compensation of the Company’s Named Executive Officers. 

Director Compensation 
 The Board of Directors determines
the compensation for the Company’s Directors on the recommendation of the NCGC. The compensation of Directors is designed to recognize the substantial time commitments required to oversee management of the Company. It is intended to attract and
retain highly skilled and experienced individuals to serve on Emera’s Board, and to ensure alignment with Shareholders’ long-term interests. Appropriate compensation for Directors, independently determined, is also intended to support
their independence of management. 
 The annual retainer for Directors in 2015 was $105,000 per annum, payable as follows: 

	•	 	$40,000 cash; and 

	•	 	$65,000 in DSUs. 

 For more details on total compensation received by Emera Directors in 2015, see Compensation
of Directors. 

  
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Annual Review and 2015 Increase 
 The NCGC annually
reviews the compensation of the Directors to ensure it is appropriate. The NCGC reviews the compensation practices of Canadian publicly traded companies similar to Emera’s operations and size and determines whether the Directors are
appropriately compensated for the responsibilities and risks involved in being a member of the Company’s Board. The review is based upon publicly available information concerning Directors’ compensation, public surveys and comparison of
compensation of Directors of publicly traded companies in Canada. 
 As previously disclosed, the NCGC has adopted the 50th percentile as a target for Director
compensation, and has determined it would be appropriate for Emera to continue to position total compensation of Directors at approximately the median of the peer group. 

Based on this approach and on such annual review, in November 2015, the Board of Directors approved an NCGC recommendation to increase the annual retainer for Emera
Directors by $40,000 per annum, $5,000 payable in cash and $35,000 payable in DSUs, for a total annual retainer of $145,000 effective January 1, 2016. The Board also approved an NCGC recommendation to increase the annual retainer for the Chair
of the Board by $35,000 to $280,000, $20,000 payable in cash and $15,000 payable in DSUs, effective January 1, 2016. 
 Further, to address the negative impact of
changes in the Canadian and U.S. foreign exchange rate, the cash portion of retainers for U.S.-domiciled Board members will be paid in U.S. dollars using a one to one conversion rate to the Canadian dollar, effective January 1, 2016. 

Director Share Ownership Guidelines 
 Under guidelines
established by the Board of Directors, within a prescribed timeframe, each Director must own Emera common shares and DSUs with a market value of three times the annual Board retainer. Based on the increased annual retainer for Emera Directors noted
above, under these guidelines, each Director must own Emera shares or DSUs, or a combination of the two, worth $435,000, within five years following their appointment date or within five years of any change to the Director’s compensation,
whichever is the later date. 
 Details of each Director’s share and DSU ownership, and status under the Share Ownership Guidelines, is shown in each Director
nominee biography earlier in this Circular. All of Emera’s Director nominees are in compliance with these Guidelines. 
 Directors are
Increasing Their Share/DSU Ownership over Time 
 By virtue of this increase in compensation payable in DSUs, more than 60 per cent of the annual retainer
for Emera Directors will be paid in DSUs, which mirror the value of Emera common shares. The Directors increase their DSU ownership by at least $100,000 per annum, and in many cases, Directors have elected to receive DSUs in lieu of all cash
compensation they would otherwise be entitled to as Emera Directors. Members of Emera’s Board of Directors support Directors’ ownership of shares and DSUs, believing that it contributes to the alignment of the interests of Directors with
those of Emera Shareholders. 
 Board and Director Performance Assessments 

The Board regularly assesses its effectiveness in order to find ways to improve its performance. 

Assessment Process 
 Each year, the NCGC, in consultation
with the Board Chair, determines the process by which assessments of the Board, Directors and its Committees will be conducted. The process has included the use of questionnaires and one-on-one interviews with Directors by the Board Chair. A written
report on the assessment is provided to the NCGC and the Board of Directors, and a dinner and in-camera Board session are also held to consider the report. Issues arising from the assessment are identified, an action plan is developed and progress
is monitored by the NCGC. 

  

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2014 Assessment Findings and Action Plans to Address Findings 

The 2014 Board and Director Performance Assessment resulted in several priority actions for 2015. With the assistance of the NCGC, the Board Chair reviewed progress made
to address those priorities. This progress was reported to the Board, with significant areas including: 
  

	(a)	Strategy and Business Plan: Strategy has been and will continue to be incorporated into the agendas of Board meetings, and throughout the year the Company has examined several strategic merger and acquisition
opportunities; 

	(b)	Organizational Structure and Capacity: Regular Board dialogue and feedback on organizational structure and capacity has focused plans to engage senior leaders and, in response to the Board’s feedback, led to
new senior management positions and focused development plans for leaders; 

	(c)	Corporate Governance: Action taken in response to Directors’ feedback through the Board assessment process has demonstrated the importance of that feedback, and the commitment of the Board to the Assessment
process. An example of action taken includes the review of the governance structure for subsidiary boards. Directors emphasized that sound corporate governance for subsidiary boards is important to each business. They directed that management take a
flexible approach to looking at the structure of each of Emera’s subsidiary boards with a view to continuing with the practice of keeping a connection to the communities with external directors and local boards, maximizing the benefit from, and
effectiveness of, subsidiary boards, and ensuring a disciplined approach to the governance of the subsidiary is maintained. 

2015 Board Director/Board Chair Performance Assessment 

The Chair of the Board interviewed each external Director as part of the 2015 Board and Director Performance Assessment. A series of questions was sent to each Director
for advance consideration. The questions pertained to a number of themes, including: 

	•	 	Emera’s strategy and business; 

	•	 	Organizational structure and capacity; 

	•	 	The effectiveness of the operation of the Board and Committees; 

	•	 	Corporate governance; 

	•	 	An assessment of their own performance as Directors, including what might make them more effective as Directors; and 

	•	 	An assessment of their peer Directors on the Board. 

 The assessment of the Chair of the Board was conducted in a meeting
of all Directors that excluded the Board Chair, and was led by the Chair of the NCGC. Directors were asked to provide feedback directly to, and were given an opportunity to discuss the assessment of the Chair of the Board in a one-on-one format
with, the Chair of the NCGC. 
 2015 Assessment Findings 

The 2015 Board and Director Performance Assessment findings involved major themes, such as Emera’s strategy, its organizational structure and capacity, and its
corporate governance. In the area of strategy, Directors acknowledged that significant work had been done to define the Company’s strategy for Shareholders, including defined dividend growth strategy (eight per cent per annum) and desired mix
of 75 to 85 per cent regulated assets. Focus will remain on the delivery pursuant to that strategy. In connection with organizational structure and capacity, it was found that leadership development and succession planning had progressed. A
high priority will be placed on planning for the anticipated closing of the acquisition of TECO Energy, Inc. 
 With support from the NCGC, the Chair of the Board will
develop the action plan based on the 2015 Board and Director Performance Assessment findings, and progress on the action plan will continue to be reported to the Board. Recognizing that in person board meetings are limited and important
opportunities for dialogue and engagement, the Board Chair will be working with management to enhance dialogue and reporting at Board meetings in order to focus upon those matters that are critical to, and foster the delivery of, the Company’s
business plan and its long term strategy, with a view to creating shareholder value over the longer term. 
 Committees of the Board of
Directors 
 The Board is committed to effectively and efficiently carrying out its oversight responsibilities. As such, it strongly supports the work of its
three standing Committees, to which certain functions are delegated as set forth in the written charters. The Board Committees are: 

	•	 	the Audit Committee 

	•	 	the MRCC 

	•	 	the NCGC 

 From time to time the Board may establish ad hoc committees. 

In consultation with the Chair of the Board, the Board and its Committees may retain outside advisors as they deem necessary. 

  
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Audit Committee 
 The Audit Committee is comprised of:

 Chair: Ms. Rosen 
 Members: Ms. Loewen, Mr. Leonard,
Mr. Pether 
 The Audit Committee assists the Board in discharging its oversight responsibilities concerning the integrity of Emera’s financial statements,
its internal control systems, the internal audit and assurance process, the external audit process and its compliance with legal and regulatory requirements. 
 The
Committee consists of independent Directors only, who each have a high degree of financial acumen. The Committee is responsible for reviewing and recommending to the Board the annual and interim financial statements and all related management
discussion and analysis. 
 The Committee evaluates and recommends to the Board the appointment of the external auditor and the compensation of such external auditor.
Once appointed, the external auditor reports directly to the Committee, and the Committee oversees the work of the external auditor concerning the preparation or issuance of the auditor’s report or the performance of other audit, review or
attest services for Emera. The Committee reviews management controls and processes concerning the administration of investment activities, financial reporting, and financial performance and funding of the pension plans. 

The Company’s internal auditor also reports directly to the Audit Committee, and the Committee oversees the appointment, replacement or termination of the internal
auditor. 
 For the full text of the Audit Committee Charter, visit www.emera.com/governance. 

Nominating and Corporate Governance Committee (NCGC) 

The NCGC is comprised of: 
 Chair: Mr. Pether 

Members: Mr. McLennan, Mr. Sergel 
 The NCGC assists the Board with a
variety of matters relating to corporate governance. These duties include responsibility for providing the Company with a list of nominees for election as Directors to be included in the Company’s Management Information Circular prior to each
annual meeting of Shareholders of the Company. For more information about the nomination of Directors, see Nomination of Directors, earlier in this Statement. The Committee consists of independent Directors only, selected by the Board. The
Articles of Association of the Company provide that the Chair of the Board may not be a member of the Committee. 
 The NCGC is responsible for developing and
communicating the Company’s approach to corporate governance issues, and reviews and approves Emera’s disclosure of corporate governance practices, including this Statement of Corporate Governance Practices. The Committee keeps abreast of
best governance practices benchmarks and regularly evaluates the governance practices of Emera. It reviews any disclosure of the Company’s corporate governance practices in accordance with applicable rules and regulations. 

The NCGC oversees the orientation of new Directors. This orientation program for new Directors is reviewed each time that a new Director joins the Board and is updated as
required. 
 The Committee is responsible for assisting the Board of Directors in determining the proper and effective allocation of risk oversight responsibilities.

 Other duties and responsibilities of the Committee include: 

	(a)	assisting the Board and its Committees in determining Committee composition, as well as reviewing and updating the mandate of each Committee, for submission to the Board; 

	(b)	making recommendations to the Board on all components of non-employee Director compensation, including the Board Chair and Committee Chairs; 

	(c)	ensuring procedures are in place to assist the Board in obtaining information necessary to carry out its duties and ensuring the Board has access to executive management; and 

	(d)	reviewing and updating the Company’s Standards for Business Conduct. 

 For the full text of the NCGC Charter, visit
www.emera.com/governance. 

  

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Management Resources and Compensation Committee (MRCC) 

The MRCC is comprised of: 
 Chair: Mr. Edgeworth (1) 
 Members: Ms. Chrominska, Mr. Demone, Mr. Sergel 

The MRCC consists of independent Directors only. The Committee reviews overall compensation, including salary and benefits policies and recommends such policies to the
Board of Directors for approval. 
 The MRCC supports the Chair of the Board in conducting a review of corporate goals and objectives relevant to the President and
CEO’s compensation and supports the Chair of the Board in recommending such goals and objectives for the current year to the Board of Directors. The Committee ensures that an assessment of the President and CEO’s performance in relation to
these goals and objectives is completed. It makes recommendations to the Board of Directors relating to the President and CEO’s total compensation, including participation in incentive-compensation and equity-based plans. It also makes
recommendations about senior management total compensation and incentive compensation plans and equity-based plans. It approves grants of stock options, Performance Share Units (PSUs) and DSUs in accordance with the provisions of the respective
plans. It reviews executive compensation disclosure prior to the Company releasing such information to the public. 
 The Committee recommends executive officer
appointments to the Board of Directors for approval. It supports and contributes to the Board’s succession planning process in respect of the President and CEO of the Company. It annually reviews the succession planning process for senior
management and other potential senior management candidates, including for Emera’s subsidiaries, and oversees and contributes to that process. It reviews share ownership guidelines for executive officers. It satisfies itself that there are
appropriate labour relations strategies in place and it regularly reviews management’s direction and decisions made in support of labour and employee relations. It also reviews the design of pension plans for the Company’s employees. 

The MRCC is responsible for evaluating the compensation programs to determine that they do not reward executive officers for taking inappropriate risks that may harm the
interests of the Company and its Shareholders. Under its Charter, the Committee must conduct a compensation risk review annually to ensure that the compensation policies are designed to take account of, and mitigate: 

	(a)	incentive opportunities that inadvertently encourage excessive and unnecessary risk taking; 

	(b)	pay structures that inadvertently encourage behaviour that negatively impacts long-term value; 

	(c)	misalignment of pay and performance; and 

	(d)	payouts which are not aligned with Emera’s business strategy. 

 For the full text of the MRCC Charter, visit
www.emera.com/governance. 
 Communication with Directors 

The Directors are always interested in receiving Shareholders’ views about the Company, its governance and its operation. The Board oversees systems for receiving
feedback from Shareholders and it monitors feedback received by the Company. 
 Shareholders may communicate with the Chair of the Board or other independent Directors
by mailing (by regular mail or other means of delivery) to the corporate head office at: 
 Attention: Chair of the Board, P.O. Box 910, Halifax, Nova Scotia B3J 2W5

 In a sealed envelope marked “Private and Confidential – Attention, Chair of the Board of Directors of Emera Incorporated” 

Additional Information 
 Additional information relating
to the Company may be found at System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. The Company’s financial information is contained in its comparative financial statements and management’s discussion and
analysis for the financial year ended December 31, 2015. 
 For copies of the Company’s financial statements and management’s discussion and analysis,
you may also contact the Office of the Corporate Secretary at: 
 Corporate Secretary 

P.O. Box 910, Halifax, Nova Scotia B3J 2W5 
 Telephone: (902) 428-6096; Facsimile:
(902) 428-6171; email: stephen.aftanas@emera.com 
  

	(1)	Effective May 17, 2016, Mr. Edgeworth will step down as MRCC Chair, and Ms. Chrominska will become Committee Chair. Mr. Edgeworth will remain a member of the Committee. 

  
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A Letter from the Management Resources and Compensation Committee to Our Shareholders 

Dear Fellow Shareholders: 
 Emera is committed to creating sustainable value for all
shareholders of the Company, which is significantly influenced by the quality of our executive team and their ability to lead and motivate all employees to act in the best interests of shareholders and customers. A fundamental principle of the
Company’s compensation philosophy is that our compensation programs should align pay with performance, so that a significant portion of the compensation we pay our executives is directly linked to the achievement of objectives that measure
whether shareholders are experiencing strong value for their investment. Moreover, we believe that aligning the interests of our executives with those of our shareholders is of utmost importance when making compensation decisions, which is why we
require executives to hold significant equity in the Company. Our share ownership guidelines formalize our belief that executives must also be shareholders and maintain a material personal financial stake in the Company. 

The Management Resources and Compensation Committee (MRCC or the Committee) is the steward of the Company’s compensation programs and oversees all aspects of
executive compensation as part of our ongoing efforts to meet the expectations of our shareholders, customers, and regulators. The MRCC carefully determines how performance measures and targets are set. These measures and targets reflect the
Company’s core values and short and long term strategic priorities. The targets must be achieved within the principles of prudent risk management, good corporate governance, and compliance with relevant standards and regulations. It is in light
of these principles that the MRCC diligently oversees the establishment of the Company’s performance goals and assesses our executive compensation programs, while continuously seeking to improve our practices and standards. 

We are pleased to provide you with an overview of our approach to executive compensation, the Board’s assessment of Emera’s 2015 performance, and our decisions
relating to executive compensation. 
 Shareholder Engagement 

In keeping with our ongoing commitment to strong corporate governance practices, we had our first “Say on Pay” advisory vote at our 2015 Annual General Meeting
that allowed shareholders to indicate whether they were in agreement with Emera’s compensation practices and policies. Of the votes cast, 97.7 per cent were in favour of our approach to executive compensation and we will once again be
presenting a “Say on Pay” non-binding advisory resolution at this year’s AGM. As part of our continued commitment to shareholder engagement, it is important for us to receive direct feedback from our shareholders and have constructive
dialogue about our compensation decisions and other governance matters. 
 2015 Compensation Decisions 

Our compensation philosophy targets the median level of compensation in the market, which is based primarily on companies in the utility and energy sector whose
operations are of a similar size and nature as Emera. In recognition of the sustained leadership of Emera’s President and CEO in driving consistent top-quartile results, we position his target total compensation between the 50th and 75th
percentile of the comparator group. At the end of 2014, the Committee reviewed benchmarking analyses from both management’s external compensation advisor, Mercer (Canada) Ltd., and the Committee’s independent compensation advisor, Hugessen
Consulting Inc. The reviews indicated that the compensation of our named executive officers was below the targeted percentiles when compared against companies in our comparator group, particularly with respect to long-term incentive levels. 

In light of our comparative compensation positioning to market, and to recognize the significant achievements of the named executive officers, the Committee adjusted the
target compensation levels of our named executive officers in 2015 to bring them closer to the prevailing market levels. The average increase in base salaries was 2.7 per cent and the average increase in total target compensation (which
consists of base salary, short-term incentive and long-term incentive) was 14.5 per cent. Based on the market data and in keeping with our pay-for-performance approach, the increases focused primarily on long-term incentive levels, which link
compensation to performance metrics that measure long-term shareholder value. As a result of the changes, the variable or ‘at risk’ component of our named executive officers’ compensation increased from an average of 60 per cent
to 64 per cent. 
 The Committee also made some adjustments to the stock option component of the Company’s long-term incentive plan in 2015. Each year, the
Committee uses the Black-Scholes valuation methodology to value our stock options. After a review of the initial valuation in 2015, which would have led to a significant increase in the number of options granted in 2015 compared to 2014, the
Committee instead opted to use an average of the previous three years’ Black-Scholes valuations to value the options, which led to fewer options being granted. The Committee believes the use of the three-year average was a prudent step to
better reflect prevailing market conditions. 
 To further address the valuation of stock options, the Committee, with the assistance of its compensation advisor,
Hugessen Consulting Inc., undertook a thorough review of market practices. The review concluded that while Black-Scholes remained an appropriate valuation methodology, the adoption of a ‘floor’ valuation ratio of 10 per cent (as a
percentage of the share price) was reasonable. Accordingly, for the 2016 stock option grant, the Committee adopted the floor, which will apply when the Black-Scholes methodology leads to a valuation of less than 10 per cent of the share price.
This will result in fewer stock options being granted, while maintaining options as a part of the long-term incentive plan. 

  

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As in previous years, with the assistance of Mercer (Canada) Ltd., the Committee conducted a risk assessment intended to identify any potential risks associated with
Emera’s current compensation design and policies, including any risks associated with the changes noted above. The assessment did not identify any material risks, but notwithstanding this positive result, we will continue to diligently monitor
our programs so that we maintain our high governance standards. 
 Rewarding Results 

2015 was a year of significant achievements for the Company, the most noteworthy of which was the announcement of the pending acquisition of TECO Energy, Inc. for $10.4
billion USD, one of the largest acquisitions in recent Canadian history. The addition of TECO Energy, Inc. is expected to be significantly accretive and will make Emera one of the 20 largest North American utilities, with more geographic, regulatory
and business mix diversification. Some of the Company’s other key accomplishments in 2015 include: 

	•	 	Emera announced two increases totaling 22.6 per cent in its annualized common share dividend rate, bringing the annual dividend to $1.90. The annual dividend growth target increased to eight per cent through 2019;

	•	 	Operating revenues (excluding mark-to-market impacts) increased to $2.83 billion in 2015 compared to $2.78 billion in 2014; 

	•	 	Earnings before interest, income taxes, depreciation and amortization (EBITDA), excluding mark-to-market impacts, reached $1.03 billion, an 8.9 per cent increase over 2014 ($946.5 million); 

	•	 	Adjusted net income increased to $330 million in 2015; adjusted net income, also excluding the costs associated with the pending acquisition of TECO Energy, Inc. was $382.8 million, compared to $319.2 million in 2014;

	•	 	Adjusted earnings per share (EPS) increased to $2.26 in 2015; adjusted EPS, also excluding the costs associated with the pending acquisition of TECO Energy, Inc. was $2.63, compared to $2.23 in 2014; 

	•	 	Emera’s total assets increased 21.9 per cent to $12 billion in 2015 compared to $9.85 billion in 2014; 

	•	 	The Company completed a $2.185 billion debenture offering, including an over-allotment of $285 million, to help fund the acquisition of TECO Energy, Inc. 

The significant achievements noted above have led to Emera’s total shareholder return (TSR) considerably exceeding most of our market comparators, both over the past
year as well as on an annualized basis over the past five years, as shown in the following table: 
 Total Shareholder Return 

 
 

 

  
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Emera’s TSR exceeded the S&P/TSX Capped Utilities Index by 19.9 per cent in 2015 and by 7.6 per cent on an annualized basis over five years. Our TSR
also exceeded the S&P/TSX Composite Index by 24.7 per cent over the past year and by 8.8 per cent on an annualized basis over the past five years. 

Recognizing Emera’s strong performance against objectives established for the 2015 Corporate Balanced Scorecard, the Board approved an annual short-term incentive
plan payout of 144.18 per cent of target. This short-term incentive plan ensures executives are rewarded for the achievement of key objectives linked to the Company’s corporate strategy. A full description of the 2015 Scorecard’s
metrics and results is provided in 2015 Short-Term Incentive Results.  
 Our long-term incentive plan, which consists of Performance Share Units (PSUs) and
stock options, is aligned closely with our performance objectives. PSUs are linked to performance metrics that are measured over a three-year period. The 2013 PSU Grant, which had a performance period from January 1, 2013 to December 31,
2015, used two equally-weighted metrics: (1) Emera’s TSR relative to the total return of the S&P/ TSX Capped Utilities index, and (2) the average growth in Emera’s earnings per share. Based on our strong performance against
those two key metrics, the performance factor applied to the 2013 PSU Grant was 1.5, which is the maximum allowable under the PSU Plan. As a governance measure to help ensure payouts are not excessive, the PSU Plan caps each participant’s
payout at two-times the initial grant value (when factoring in share price appreciation, notional dividend reinvestment, and the performance factor). The cap applied to the 2013 PSU payouts, thereby reducing the payouts from 212 per cent of the
initial grant value to 200 per cent. More details are provided in the Performance Share Unit Plan section. 
 In addition, Emera’s strong performance
led to an 11.9 per cent increase in our common share price, going from $38.64 as at December 31, 2014 to $43.23 as at December 31, 2015, which positively affected the value of the stock options we granted to our senior executives.

 The Committee carefully reviews the metrics chosen for our incentive plans each year to ensure they continue to reflect the Company’s key strategic objectives.

 The Committee also engaged Hugessen Consulting Inc. to update the Pay-for-Performance analysis of the compensation paid to the President and CEO, which is an
annual review the Committee undertakes. The review looked at the compensation paid to Mr. Huskilson over his full tenure as President and CEO (from January 2005 to December 2015), and compared the investment returns experienced by shareholders
over that same period. The analysis included both realized pay (consisting of amounts actually paid) and realizable pay (which consists of changes in the value of any outstanding equity-based awards). Once again, the analysis concluded that there
was a close alignment between the President and CEO’s realized/realizable pay and the shareholders’ investment return experience over the long-term. Please see Total Shareholder Return vs. Named Executive Officer Compensation for
more information on the analysis. 
 Based on the Company’s performance in 2015, we remain confident that our incentive plans and resulting payouts are
closely aligned with the interests of our shareholders, so that both our shareholders and our executives benefit when the Company achieves strong results. 
 Sustaining Shareholder Value 
 Emera continues to grow and diversify its businesses, as evidenced by our strong financial results, with all of
Emera’s operations throughout North America and the Caribbean playing an important role in the Company’s overall success. The significant accomplishments, both financial and non-financial, referenced in this Circular demonstrate the
strength of our team of leaders and employees who will help ensure the Company is well positioned for the exciting period of growth and opportunity that lies ahead of us. We were pleased to see Emera receive an exceptional result in The Globe and
Mail’s 2015 ‘Board Games’, an annual corporate governance rating compiled by the Report on Business. 
 We remain confident that our executive
compensation programs appropriately incent and reward strong performance, and we will continue to monitor our practices and industry trends and adjust our practices accordingly. We welcome your review of our compensation programs and results, which
are described in more detail in the Statement of Executive Compensation that follows. We encourage you to take part in our “Say on Pay” vote and, as always, we welcome your questions and feedback which can be provided by contacting the
Corporate Secretary’s Office. 
  

							
	Allan Edgeworth	  	Sylvia Chrominska	  	Richard Sergel	  	Henry Demone
	Director and Chair of the	  	Director and Member of the	  	Director and Member of the	  	Director and Member of the
	Management Resources and	  	Management Resources and	  	Management Resources and	  	Management Resources and
	Compensation Committee	  	Compensation Committee	  	Compensation Committee	  	Compensation Committee

 Note: Operating revenues (excluding mark-to-market impacts), EBITDA (excluding mark-to-market impacts), adjusted net income and adjusted
EPS are non-GAAP measures and do not have a standardized meaning. These non-GAAP measures are disclosed more fully in Emera’s 2015 Annual Report, which includes a reconciliation of non-GAAP measures to GAAP measures. 

  

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Statement of Executive Compensation 

Compensation Philosophy 
 The purpose of Emera’s
executive compensation program is to: 

	•	 	reward Emera’s executives for sustained increases in shareholder value; 

	•	 	attract, retain and motivate highly qualified and high-performing executives; and 

	•	 	align the interests of executives with the interests of Emera’s shareholders and customers. 

 Programs are designed to
reflect a blend of short- and long-term incentive plans to reflect the Company’s pay-for-performance philosophy and to provide for a significant portion of an executive’s compensation to be at risk, while aligning the structure of programs
and payouts with sound risk management and good governance principles. 
 Market Competitiveness 

Emera’s executive compensation program is designed to generally provide total target compensation at the median or 50th percentile of compensation paid by companies
in the utility and energy sector whose operations are of a similar size and nature as Emera. Pay positioning, in some specific cases, can be above or below the median based on experience, uniqueness of responsibilities, and performance. “Total
target compensation” for senior management, including the named executive officers (NEOs), is comprised of base salary, target short-term incentive, and target long-term incentives linked to total shareholder value. 

Pay-for-Performance 
 A central tenet of Emera’s
executive compensation philosophy is that a significant portion of executive compensation must be at risk and linked to the achievement of objectives that measure whether shareholders are experiencing strong value for their investment. The at-risk
components include both short- and long-term incentives, which establish measurable financial, customer, asset, employee and/or safety objectives that, if achieved, add value to the Company. 

The incentive compensation plans are designed to pay larger amounts for superior performance and smaller amounts if target performance is not achieved. In addition, the
Company must achieve a threshold level of performance for any payment against a particular objective, failing which there is no payment against that objective. Executives’ performance against those objectives are measured and rated by the
President and CEO with a recommendation to the MRCC which, in turn, recommends to the Board of Directors for approval. The President and CEO’s performance is assessed by the Board Chair in collaboration with the MRCC. 

Generally, the at-risk compensation component of total compensation increases based on the individual executive’s level of responsibility. Management considers many
factors when developing the incentive plans, including current compensation trends, plan costs at payout including maximum payout values, expected value to be delivered to participants and analysis of threshold, target and stretch payouts. Both
short- and long-term incentive plan designs are modelled using historical and prospective performance scenarios. This stress testing provides the MRCC with reasonable assurance that the plan payouts will be appropriate and aligned with shareholder
and Company objectives. Analysis is done every year to determine how actual payouts compare to expected payouts and whether the plan components require any changes. 

The MRCC reserves the right to exercise discretion in recommending that the Board adjust compensation payouts to align with Company results. 

  
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Compensation Program 
 Emera’s compensation program
includes the following components, which are discussed further in the pages noted: 
  

	
	  
 Base
Salary (page 48): Salaries are benchmarked against companies of similar size and scope as Emera and are set to reflect the degree of special skills and knowledge required for the position, and the performance and contribution of the
individual.
  

	 
	 Annual
Short-Term Incentive (page 48): Short-term incentive objectives are set forth in annual scorecards and consist of key objectives linked to the Company’s corporate strategy. These scorecards establish measurable financial, customer, asset,
employee and health and safety objectives that, if achieved, are designed to add value to the Company.
  

	 
	 Long-Term
Incentive (page 50): Consists of Performance Share Units (“PSUs”) and stock options. Levels are determined based on competitive benchmarking data and the degree of responsibility within the Company. They are intended to align executive
performance with a long-term focus on creating and preserving shareholder value.
  

	 
	 Pension
(page 58): The Pension Plan consists of both defined benefit and defined contribution components, and a supplemental employee retirement plan, all of which are governed by a pension oversight governance framework.

 

	 
	 Other
Benefits (page 62): As an important part of competitive compensation, the Company also offers market competitive non-cash compensation components such as group benefits, vacation, car allowances, and wellness incentives.

 

 Management Resources and Compensation Committee 

The Board has assigned responsibility to the MRCC to determine the compensation for Emera’s executive officers, and to review, recommend and oversee the
administration of all of the Company’s executive compensation plans and programs. Current members of the MRCC are: 

	•	 	Mr. Edgeworth (Chair), 

	•	 	Ms. Chrominska, 

	•	 	Mr. Sergel, and 

	•	 	Mr. Demone. 

 All members of the MRCC are independent Directors. Each member of the MRCC has experience with
human resources issues and compensation matters. More detailed information is contained in Director Nominees. 
 The MRCC considers best practices in determining
and monitoring Executive Compensation as discussed in this Circular: 
  

	
	 
	 The
MRCC’s Letter to Shareholders outlines the Company’s approach to executive compensation.
  

	 
	 The Company
provides shareholders with the opportunity to vote on a “Say on Pay” resolution at its Annual General Meeting, which allows shareholders to indicate whether they are in agreement with Emera’s compensation practices and policies (97.7
per cent of votes cast last year were in favour of the Company’s approach).
  

	 
	 The
Company’s compensation programs are aligned with Emera’s corporate strategy through the use of performance metrics that support both short- and long-term strategic goals.

 

	 
	 The MRCC has
the discretion to reduce or withhold payouts under the short-term and equity-based incentive plans for results below expectations.
  

	 
	 Compensation
awards are tested for appropriate alignment between pay and performance under a number of scenarios.
  

	 
	 Detailed
information is provided on those companies used in the Company’s comparator group for benchmarking purposes.
  

	 
	 Executive
pay is aligned with shareholders’ interests by having a significant component at risk and tied to both short- and long-term performance.
  

	 
	 Share
ownership requirements are in place for designated executive officers.
  

	 
	 A
substantial portion of long-term incentives for the majority of the senior executives and other employees whose actions may have a material impact on the Company’s risk profile is deferred to discourage leaders from taking short-term or
excessive risks.
  

	 
	 A pension
oversight governance framework is in place for pension benefits.
  

	 
	 The Company
monitors the ratio of its NEOs’ total compensation to the average employees’ total compensation.
  

	 
	 The Company
has a clawback policy that allows the Company to recoup short- and long-term incentive payments made to senior executives.
  

  

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Committee Governance 
 The MRCC is responsible for
reviewing the alignment of Emera’s compensation programs, including incentive pay programs, with Emera’s strategic plans, performance and risk management principles. The Committee annually reviews compensation for the President and CEO and
senior management of the Company. The MRCC oversees the administration of the incentive plans providing for the award of short-term incentives, stock options, PSUs and deferred share units (DSUs) in accordance with the provisions of the respective
plans. 
 The Committee reviews, and recommends to the Board of Directors, compensation policies and processes, any new incentive and equity compensation plans and any
changes to such plans. 
 The Board Chair collaborates with the MRCC in assessing the performance of the President and CEO on an annual basis. 

Risk Management and Compensation 
 As part of the Board
and MRCC’s oversight responsibilities for the design and administration of the Company’s executive compensation programs, the MRCC identifies and discusses design features or processes that may potentially represent conflicts of interest
and/or inducements for unnecessary or excessive risk-taking by senior executives. 
 The MRCC also regularly monitors industry trends with respect to risk management
and conducts an annual risk assessment. Emera’s compensation programs and policies are designed to incorporate the Company’s view on appropriate risk, as demonstrated by the elements shown below, which are discussed in greater detail in
the sections that follow: 
  

	
	 
	 The Company
regularly reviews its executive compensation programs with third party compensation advisors to confirm the programs continue to support shareholder interests and regulatory compliance, and are aligned with sound principles of risk management and
governance. The MRCC retains an independent compensation advisor that does not provide any services directly to management.
  

	 
	 The Company
has a pay-for-performance philosophy and the mix of short- and long-term programs assist in mitigating excessive risk taking.
  

	 
	 Caps on
payouts, vesting requirements, stress-testing potential payouts, clawback provisions and share ownership requirements are part of the Company’s overall plan design.

 

	 
	 The
Company’s compensation governance structure involves the Board, the MRCC, the MRCC’s external compensation advisor, management and management’s external compensation advisors.

 

	 
	 All members
of the MRCC are knowledgeable individuals who have the necessary background and expertise in human resources issues and compensation matters to fulfil their obligations to the Board and to shareholders.

 

  
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Risk Assessment 
 In 2015, the MRCC conducted its annual
compensation risk review of its executive compensation programs and policies. Mercer (Canada) Ltd. (“Mercer”) was engaged to review the previous year’s comprehensive risk assessment that it conducted for any material changes over the
course of the year. Mercer once again concluded that Emera has risk mitigation policies in place that are aligned with market best practices and did not identify any material risks arising from Emera’s compensation policies and practices. Based
on this assessment, the MRCC determined that: 
  

	•	 	Total compensation is appropriately balanced between short-term and long-term horizons and the mix of base salary and short- and long-term incentives does not create an inducement to take inappropriate risk to the
detriment of the Company’s shareholders; 

	•	 	The existence of multiple performance measures in the incentive plans (including non-financial measures) helps to avoid undue focus on any one particular metric; 

	•	 	The short-term incentive plan focuses on growth of annual earnings and cash flow, but caps incentive payouts in a manner consistent with market practice, thereby reducing risk; 

	•	 	Risks associated with the Long-term Incentive Plan are mitigated by annual grants (versus front-loading grants) of PSUs and stock options, and also by caps on payouts in the case of grants under the PSU Plan;

	•	 	The MRCC’s discretion to reduce or withhold payment under the short-term and equity-based incentive plans for results below expectations decreases any risks associated with those plans; 

	•	 	Emera’s executive share ownership requirements decrease risk in the compensation program by encouraging alignment between the interests of senior officers and shareholders. In addition, the Company’s
anti-hedging policy helps to maintain that alignment by prohibiting senior officers from hedging, pledging, monetizing or otherwise reducing or limiting their economic risk with respect to any Emera securities they hold. The ownership requirement
includes a one-year hold period post-retirement for the President and CEO; 

	•	 	The vesting conditions on retirement are an important retention tool for designated executives of the Company; 

	•	 	The clawback policy also contributes to the Company’s risk mitigation efforts (the clawback policy allows the Company to recoup short- and long-term incentive payments made to senior executives in cases where:
(a) such payments were based upon reported financial results that were subsequently corrected or restated as a result (or partial result) of the executive’s gross negligence, misconduct, or fraud and the reward received would have been
lower had the financial results been properly reported; or (b) where the executive commits a serious breach of the Company’s Standards for Business Conduct; and 

	•	 	The inclusion of double trigger provisions in employment contracts for senior officers and the absence of enhanced benefits for change of control mitigates the risk arising from termination. 

Accordingly, based on the governance practices in place and the results of the risk assessment, the MRCC concluded that Emera’s compensation programs did not create
inordinate risk to shareholders because an appropriate system of checks and balances is in place to mitigate the level of risk undertaken by management. The MRCC satisfies itself as to the adequacy of the information it receives regarding risk, the
independence of the risk assessment and reviews, and the reporting of financial results on which certain important compensation decisions (e.g., the amount of short-term incentive to be paid) are based. 

The MRCC and Board will continue to review the relationship between enterprise risk and the Company’s executive compensation plans and policies to confirm they
continue to be optimally aligned with shareholder interests while maintaining an acceptable level of risk exposure. 
 Succession Planning and
Leadership Development 
 The MRCC has responsibility for overseeing the succession planning process for senior management of the Company and its affiliates, and
reviews this process on an annual basis. The Board has responsibility for the development of succession plans and the approval of all executive appointments. At Emera, succession planning is a dynamic, ongoing process of systematically identifying,
assessing and developing leadership competencies and business skills. The purpose is to confirm the Company’s capacity to meet future strategic objectives and to replenish critical organizational roles over time. 

As part of the comprehensive succession planning process at Emera, the President and CEO annually provides a list of potential successors for his position to the MRCC. In
addition, the President and CEO identifies internal successors for each of the NEOs and senior management positions throughout the Company and its affiliates. The Committee oversees the management succession planning process and developmental
strategy. 
 Emera is committed to developing leaders at all levels and has a comprehensive annual assessment process and framework to coordinate leadership development
across the Company. This assessment process identifies areas of development for individuals as well as the overall leadership team with regards to identified core leadership capabilities. Personal development plans and overall Company leadership
development programs are in place for both existing and potential leaders. The Company focuses on ensuring challenging work assignments are offered, secondments to affiliates occur where appropriate, regular leadership development training occurs
and mentors are assigned where beneficial. 
 Emera will continue these focused efforts to build leadership capacity throughout the organization in support of its
long-term growth strategy. 

  

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Compensation Advisors 
 The MRCC retains the services of
independent compensation advisors to assist in discharging its duties, including determining the compensation payable to the President and CEO and other senior officers. 

Since 2007, the MRCC has engaged Hugessen Consulting Inc. (“Hugessen”) as its principal advisor to provide independent advice, compensation analysis and other
information for compensation recommendations. Hugessen provides advice on the competitiveness and appropriateness of compensation practices and comparator groups for Emera and its affiliates. In addition, Hugessen provides advice to the MRCC on
policy recommendations made by management, and also reviews and provides commentary on the Company’s Statement of Executive Compensation. As independent advisors to the MRCC, Hugessen does not provide any professional services to management.

 The MRCC has adopted a number of practices with regard to its executive compensation advisor: 

	•	 	The MRCC annually reviews its advisor’s performance and fees. 

	•	 	With input from Company management and the advisor, the MRCC annually, or on an as-needed basis, determines the specific work to be undertaken by the advisor and the fees associated with this work. 

	•	 	All services provided by the MRCC’s advisor beyond its role in supporting the requirements of the MRCC require written pre-approval by the MRCC Chair, outlining the scope of work and related fees.

	•	 	The MRCC does not approve any such work that, in its view, could compromise the advisor’s independence in serving the MRCC. 

In addition to the MRCC’s compensation advisor, in 2015, Emera engaged the services of Mercer and Morneau Shepell to assist in executive compensation matters. 

In making its decisions on the compensation program, the MRCC reviews information and recommendations provided by Hugessen, Mercer, and Morneau Shepell, but all decisions
remain the responsibility of the MRCC and the Board. 
 The table below summarizes the fees paid to all external compensation advisors in 2014 and 2015. 

 

																	
	 	  	 	 	  	2015	 	  	 	 	  	2014	 
	  
	 
	  
 Advisor
	  	  
 MRCC
work ($)

 
	 	  	  
 Other
work ($)

 
	 	  	  
 MRCC
work ($)

 
	 	  	  
 Other
work ($)

 
	 
	  
	 
					
	 Hugessen Consulting Inc.
	  	 	188,177	  	  	 	Nil	  	  	 	90,025	  	  	 	Nil	  
	 Morneau Shepell
	  	 	Nil	  	  	 	56,654	  	  	 	Nil	  	  	 	67,628	  
	 Mercer (Canada) Ltd.
	  	   
	Nil  
	    
	  	 	60,761	  	  	 	Nil	  	  	 	38,501	  
	  
	 

 Compensation Discussion and Analysis 

Named Executive Officer Compensation 
 For the purposes
of compensation disclosure, the individuals disclosed in this Compensation Discussion and Analysis are the President and CEO, the CFO, and the next three most highly compensated executive officers of the Company, or its subsidiaries, as defined by
Canadian securities legislation (the “Named Executive Officers” or “NEOs”): 

	•	 	Christopher Huskilson, President and Chief Executive Officer, Emera Inc. (“President and CEO”); 

	•	 	Scott Balfour, Chief Financial Officer and Chief Operating Officer, Northeast and Caribbean, Emera Inc. (“CFO”); 

	•	 	Nancy Tower, Chief Corporate Development Officer, Emera Inc.; 

	•	 	Robert Bennett, President and Chief Executive Officer, Emera U.S. Inc.; and 

	•	 	Robert Hanf, President and Chief Executive Officer, Nova Scotia Power Inc. (“NSPI President and CEO”). 

Christopher Huskilson, President and Chief Executive Officer, Emera Inc. 
 The
strong performance of Emera in 2015 was led by the President and CEO. Under Mr. Huskilson’s leadership, Emera posted strong financial results in 2015 and achieved a number of important strategic milestones across the business. The Company
strengthened earnings year over year, raised the dividend by 22.6 per cent and was among the leaders in the sector in value creation. This past September, Emera announced the acquisition of TECO Energy, Inc., a significantly accretive
transaction that will make Emera one of the 20 largest electric utilities in North America. 
 The Company made substantial progress against its strategy to deliver
cleaner and more affordable energy for its customers. Renewable energy projects under development include the Maritime Link, Cape Sharp Tidal and a utility-scale solar generating facility in Barbados. 

Scott Balfour, Chief Financial Officer and Chief Operating Officer, Northeast and Caribbean, Emera Inc. 

Mr. Balfour took on an expanded role in 2015 as Chief Operating Officer for Emera’s existing businesses in the US and Caribbean. He played a central role in the
planning and financing for $2.6 billion of capital market financings, including the $2.2 billion convertible debenture financing for TECO Energy, Inc. He also led key aspects of Emera’s strategy work and the further shaping of Emera’s
capital market positioning. This included the enhancement of Emera’s dividend strategy by increasing the annual dividend growth target to eight per cent through 2019. 

  
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Nancy Tower, Chief Corporate Development Officer, Emera Inc. 
 Ms. Tower
has responsibility for overall business development opportunities across Emera and all affiliates to ensure alignment with the Company’s long-term strategy. She led the comprehensive effort to analyze and propose the acquisition of TECO Energy,
Inc., which is a key and transformational accomplishment in 2015. She continues to be focused on the important task of closing the transaction in 2016. 
 Robert
Bennett, President and Chief Executive Officer, Emera U.S. Inc. 
 Mr. Bennett took on the new role of President and CEO, Emera U.S. Inc. in late 2015 in which
he will lead the planning and integration of TECO Energy, Inc. Prior to this role, he held the position of Chief Operating Officer, Eastern Canada with Emera Inc. where he was responsible for governance and oversight of Canadian affiliates. This
included supporting leadership development and aligning opportunities for regional synergies within Nova Scotia Power Inc., Emera Maine, Emera New Brunswick and Emera Utility Services. 

Robert Hanf, President and Chief Executive Officer, Nova Scotia Power Inc. 

Mr. Hanf completed his third year as President and CEO of Nova Scotia Power Inc., delivering strong results, which included the establishment of a rate stability
plan and fuel cost reductions. He remained focused on an improved business model, service delivery to Nova Scotia Power Inc.’s customers and capital planning. 

The total target compensation for each NEO in 2015 is outlined below: 
  

																									
	 Name
  
	  	 Base
salary ($)
  
	 	  	 Short-term
incentive at target
(% of salary)

 
	 	  	 Short-term
incentive at
target ($)

 
	 	  	 Long-term
incentive at target
(% of salary)

 
	 	  	 Long-term
incentive at
target ($)

 
	 	  	 Total target
compensation
($)

 
	 
	  
	 
							
	 Christopher Huskilson
	  	 	875,000	  	  	 	90	  	  	 	787,500	  	  	 	240	  	  	 	2,100,000	  	  	 	3,762,500	  
	 Scott Balfour
	  	 	475,000	  	  	 	70	  	  	 	332,500	  	  	 	125	  	  	 	593,750	  	  	 	1,401,250	  
	 Nancy Tower
	  	 	475,000	  	  	 	60	  	  	 	285,000	  	  	 	100	  	  	 	475,000	  	  	 	1,235,000	  
	 Robert Bennett
	  	 	475,000	  	  	 	60	  	  	 	285,000	  	  	 	100	  	  	 	475,000	  	  	 	1,235,000	  
	 Robert Hanf
  
	  	 	400,000	  	  	 	50	  	  	 	200,000	  	  	 	60	  	  	 	240,000	  	  	 	840,000	  
	  
	 

 The following table shows the percentage weighting of each component of the total target compensation for the NEOs. In keeping with the
Company’s pay-for-performance philosophy, the 2015 compensation plan design resulted in at least 50 per cent of each NEO’s total target compensation being at risk, with the average for the five NEOs being 64 per cent. 

 

																	
	 Name
  
	  	 Base
salary (%)
  
	 	  	 Annual
incentive at
target (%)

 
	 	  	 Long-term
incentive at
target (%)

 
	 	  	 Total pay
at risk (%)

 
	 
	  
	 
					
	 Christopher Huskilson
	  	 	23	  	  	 	21	  	  	 	56	  	  	 	77	  
	 Scott Balfour
	  	 	34	  	  	 	24	  	  	 	42	  	  	 	66	  
	 Nancy Tower
	  	 	38	  	  	 	24	  	  	 	38	  	  	 	62	  
	 Robert Bennett
	  	 	38	  	  	 	24	  	  	 	38	  	  	 	62	  
	 Robert Hanf
  
	  	 	48	  	  	 	24	  	  	 	28	  	  	 	52	  
	  
	 

  

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Compensation Process 
 Benchmarking Data 

The MRCC is responsible for annually reviewing the composition and use of comparator groups to assist in determining the compensation recommendations for the
Company’s senior officers, including its President and CEO, which are then brought to the Board for approval. The MRCC undertakes periodic reviews of compensation design and total compensation opportunities for the senior management team,
including the NEOs. This practice ensures the programs are current and that they fairly compare for particular roles, recognizing varying responsibility and scope of executive positions within Emera and its affiliates. 

Emera management engages the services of Mercer, an independent compensation advisor, to compile market information on senior management compensation relating to base
salary, short-term and long-term incentives. A complete benchmarking review takes place every two years and the scope of services includes: competitive market reviews of senior executive compensation levels; review and observations of current
executive compensation philosophy, policies and practices; and a review of pay and performance comparators. Mercer conducted a compensation benchmarking review of the executive team for 2015 and, with the assistance of Hugessen, the MRCC undertook a
review of the competitiveness and appropriateness of compensation programs specifically for the President and CEO and the CFO. 
 The MRCC reviews compensation data
based on a comparator group of companies, primarily regulated utilities and other energy industry enterprises that are of a similar size and scope as Emera. The rationale for incorporating the energy industry is that senior talent can migrate
between similar organizations (i.e. industry, scale, complexity) and the fact that Emera’s strategic objectives include expansion into various energy-related sectors. 

In 2015, with the assistance of both Mercer and Hugessen, the MRCC also conducted a thorough review of the comparator companies to confirm they continued to be
appropriate in terms of size and scope. The review focused on companies in the Canadian utility and energy sectors that are of comparable size to Emera, which was generally viewed as being within the range of half to twice the size of Emera in terms
of total enterprise value and total asset size. Based on that review, the Committee updated the comparator group to the following 13 organizations: 

Pay Benchmarking Comparator Group (Applicable to Emera NEOs) 
  

					
	  
 Utilities Industry Comparables
  
	  	
	 	 	
	ATCO Ltd.	  	Fortis Inc.	  	
	Capital Power Corporation	  	TransAlta Corporation	  	
	 EPCOR Utilities Inc.

 
	  	 Hydro One

 
	  	
		  		  	
	  
 Energy Industry Comparables
  
	  	
	 	 	
	AltaGas Ltd.	  	Inter Pipeline Ltd.	  	
	ARC Resources Ltd.	  	Pembina Pipeline Corporation	  	
	Canadian Oil Sands Ltd.	  	Tourmaline Oil Corp.	  	
	 Crescent Point Energy Corp.

 
	  	 	  	

  
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The following table shows where Emera is positioned compared to the companies in the peer group identified above, based on selected key financial metrics. Emera is
generally positioned around the median of the comparator group metrics. 
 Emera vs. Pay Benchmarking Comparator Group 

 
 

 
  

	(1)	As at most recent comparator screening (as of September 2, 2015). Market Capitalization is calculated based on the number common voting shares multiplied by the closing share price. Total Enterprise Value is
calculated on Market Capitalization plus net debt. 

	(2)	Reported assets, as at most recent fiscal quarter end (as of June 30, 2015). 

	(3)	Last twelve months as at most recent fiscal quarter end (as of June 30, 2015). 

	  	Note: The above table was prepared by Hugessen Consulting using data from S&P Capital IQ. 

 With the expected
acquisition of TECO Energy, Inc. in 2016, the MRCC expects to reevaluate the comparator group in light of the significant increase in size of Emera and the broader geographic scope and complexity. In late 2015, the MRCC worked with Hugessen to begin
deliberations on the appropriate market comparators for the Company on a post-acquisition basis. Any changes to the comparator group that the MRCC approves in 2016 will be reported in next year’s Management Information Circular. 

A different comparator group is used to benchmark the NSPI President and CEO, which reflects the size, scope and nature of Nova Scotia Power Inc.’s operations.
Concurrent with the Emera comparator group review, the MRCC and the NSPI Human Resources and Governance Committee conducted a review of the comparator group for NSPI. The review focused on companies in the Canadian utility sector that are of
comparable size to NSPI, which was generally viewed as being within the range of half to twice NSPI’s revenue and total asset size. Based on that review, the NSPI comparator was updated to the following group: 

   Pay Benchmarking Comparator Group (Applicable to NSPI President and CEO) 

 

					
	  

Utilities Industry Comparables – Publicly Available Disclosure

 
	  	
	  
 Alberta Electric System
Operator
	  	  
 FortisBC
	  	
	ENMAX Corporation	  	Northland Power Inc.	  	
	EPCOR Utilities	  	Toronto Hydro	  	
	 Fortis Alberta

 
	  	 	  	

 The NSPI Human Resources and Governance Committee and MRCC will continue to regularly review the composition of NSPI’s
comparator group to ensure it continues to reflect NSPI’s characteristics. 

  

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In addition to using publicly disclosed compensation data referenced above, the MRCC also uses Mercer’s Total Compensation Survey for the Energy Sector to benchmark
executive compensation using data from energy and services companies with similar revenues to Emera. To provide sufficient data in some cases, the Mercer Benchmark Database Survey (which is a general industry database) is also used to expand the
survey scope to include Canadian general industry companies of similar size to Emera. 
 Annual Compensation Review Process 

For each executive position, a range for base salary, target short-term incentive, and target long-term incentive is established annually, using the benchmarking data
referenced above along with other information on industry trends for positions of similar scope and responsibility. 
 The President and CEO conducts annual performance
assessments on members of the senior management team, including each of the NEOs, which shape the annual salary adjustment recommendations. Based on the performance assessments and the benchmarking data, the President and CEO then recommends total
target compensation for each senior leader, including the NEOs (but excluding himself) to the MRCC for review and approval. With respect to the President and CEO, the MRCC reviews benchmark data and other information regarding industry trends for
positions of similar scope. 
 Following this process, the MRCC makes recommendations for total target compensation for all of the senior management team including the
NEOs and the President and CEO, to the Board of Directors. As part of the annual compensation review process, the MRCC reviews emerging best practices and risk considerations. 

At the end of 2014, the Company’s external compensation advisors, Mercer and Hugessen provided the results of their benchmarking reviews, which indicated that the
compensation of the NEOs was below the targeted percentiles when compared against companies in the Company’s comparator group, particularly with respect to long-term incentive levels. In light of the comparative compensation positioning to
market, and to recognize the significant achievements of the named executive officers, the MRCC recommended adjustments to the target compensation levels of the NEOs in 2015 to bring them closer to the prevailing market rates, which were approved by
the Board of Directors. 
 The compensation changes from 2014 to 2015 are summarized below: 
  

											
	 	 	 	 	 	 
	  	 	 	 	Short-Term	 	Long-Term	 	Total Target	 	  
	  	 	 	 	Incentive Target	 	Incentive Target	 	Compensation	 	  
	  	 	 Base Salary
  
	 	(% of base salary)	 	(% of base salary)	 	(% increase)	 	Compensation at Risk
	 	 	 	 	 	 
	Christopher Huskilson	 	No change	 	No change	 	 Increase from
 220 to 240
	 	4.9	 	 Increase from 76 per cent to 77 per cent

 

	 	 	 	 	 	 
	Scott Balfour	 	Increase from $473,800 to $475,000	 	Increase from 60 to 70	 	 Increase from
 80 to 125
	 	23.2	 	 Increase from 58 per cent to 66 per cent

 

	 	 	 	 	 	 
	Nancy Tower	 	 Increase from
 $460,000 to $475,000
	 	No change	 	 Increase from
 70 to 100
	 	16.7	 	 Increase from 57 per cent to 62 per cent

 

	 	 	 	 	 	 
	Robert Bennett	 	 Increase from
 $460,000 to $475,000
	 	No change	 	 Increase from
 70 to 100
	 	16.7	 	 Increase from 57 per cent to 62 per cent

 

	 	 	 	 	 	 
	Robert Hanf	 	 Increase from

$360,000 to $400,000
	 	No change	 	No change	 	11.1	 	 No change (52 per cent)

 

 Based on the market data and in keeping with the Company’s pay-for-performance approach, the increases focused primarily on long-term
incentive levels, which link compensation to performance metrics that measure long-term shareholder value. The average increase to base salaries was 2.7 per cent, while the average increase in target total compensation (which consists of base
salary, short-term incentive and long- term incentive) was 14.5 per cent. As a result of the changes, the variable or ‘at risk’ component of the NEOs’ compensation increased from an average of 60 per cent to an average of
64 per cent. 
 The changes made to the compensation of the respective NEOs in 2015 are also reflected in the NEO Summary Compensation Table. 

  
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Elements of Compensation 
 Base Salary 

As noted in Benchmarking Data, the MRCC is responsible for annually reviewing the composition of the compensation the Company pays its executives, including base
salary. While the MRCC focuses on total compensation as a whole, base salary remains an important part of the overall compensation package the Company offers its executives. 

Short–Term Incentive Program 
 The compensation awarded under the
Short-Term Incentive Program is intended to link a portion of an executive’s compensation to the achievement of predetermined levels of performance in support of corporate and business unit objectives. These objectives are designed to focus on
short-term goals (typically on an annual basis) that are intended to deliver value to customers and contribute to increased shareholder value in the longer term. Emera has adopted the scorecard approach to translate corporate strategies into
measurable incentive plan goals. Target payouts under the scorecards are generally set as a percentage of salary and are benchmarked against the median for positions with similar responsibilities in comparator companies. 

On the recommendation of the MRCC, the Board of Directors of Emera approves scorecards that set forth corporate objectives and related threshold, target and stretch
performance levels to be achieved each year. For NEOs who participate in the NSPI Scorecard instead of the Emera Scorecard, the Board of Directors of NSPI approves the respective corporate objectives and performance levels. Short-term incentive
payouts for the majority of senior management, including the NEOs, are based on scorecard results with potential payouts ranging from 0 to 200 per cent of target. 

All NEOs have their short-term incentive payout calculated based on results achieved through scorecard results. 

2015 Short-Term Incentive Results 
 2015 Emera Corporate Scorecard 

The scorecard for Emera (“Emera Corporate Scorecard”) was developed by management and approved by the Emera Board of Directors, on the recommendation of the
MRCC, at the beginning of 2015. It was used to determine the short-term incentive payout for Emera’s President and CEO, the CFO, the Chief Corporate Development Officer, and the President and Chief Executive Officer, Emera U.S. Inc. 

The Emera Corporate Scorecard objectives were based on the Company’s Business Plan for the year and established threshold, target, and stretch performance standards
for each objective. 
 The following table shows the elements and results of the Emera Corporate Scorecard for 2015. 

 

													
	 	 	 	 	 	 	 
	  	  	  	  	  	  	  	  	  	  	Actual  	  	Percentage  
	
Emera Corporate Objective  
  
	  	Weighting (%)  	  	Threshold ($)  	  	Target ($)  	  	Stretch ($)  	  	Result ($)  	  	Payout (%) (1)  
	 	 	 	 	 	 	 
	Cash From Operations (2)	  	 50  

 
	  	539.4M  	  	674.2M  	  	809.0M  	  	725.9M  	  	69.18  
	 	 	 	 	 	 	 
	Earnings Per Share (2)	  	 30  

 
	  	2.07  	  	2.27  	  	2.47  	  	2.63  	  	60.00  
	 	 	 	 	 
	Continued Development of Leaders	  	10  	  	 90% of Emera’s senior leadership team participate in a training session on two of the following
areas of focus: strategy, communication and/or goal alignment PLUS improvement in results of the Future Vision Index on the Employee Survey over 2014 results.
  
	  	Target Achieved  	  	10.00  
	 	 	 	 	 
	Safety & Environment	  	10  	  	 Increase number of proactive incident reports to total recordable injuries across Emera to a ratio of 40:1 AND Environmental Audit Program
completed with no findings of major risk PLUS All Injury Frequency Rate of 1.30 or less AND all Environmental critical targets are 100% complete PLUS Move safety culture forward with results of 86% or greater in the safety section of the Employee
Engagement Survey.
  
	  	 Threshold  

Achieved  
	  	5.00  
	 	 	 	 	 	 	 
	 	  	 100  

 
	  	 	  	 	  	 	  	 	  	 Total: 144.18  

 

  

	(1)	Percentage payouts, below or above target for financial measures, are prorated on a scale between each level of performance (50 per cent for threshold, 100 per cent for target and capped at 200 per cent for
stretch). 

	(2)	Cash from operations and EPS for compensation purposes are non-GAAP measures. See footnotes 3, 4 and 5 in the table following for information on the calculation of these measures. 

  

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As a result of two safety incidents at Emera’s affiliate companies in 2015, management made a recommendation to the MRCC to reduce the ‘Safety &
Environment’ metric result to the threshold level. The MRCC and the Board agreed with the recommendation and adjusted the Scorecard accordingly, leading to an overall result of 144.18 per cent. 

The table below shows how Emera’s EPS and cash from operations has trended from 2010 to 2015 (the amounts shown are as at December 31 of each year). 

 

																									
	 	  	 	2010	 (1) 	 	 	2011	 (1)(2) 	 	 	2012	 (2) 	 	 	2013	 (2) 	 	 	2014	 (2) 	 	 	2015	 (3)(4) 
							
	 Earnings Per Share ($) (5)
	  	 	1.76	  	 	 	1.77	  	 	 	1.85	  	 	 	1.96	  	 	 	2.23	  	 	 	2.63	  
	 Cash From Operations ($) (5)
	  	 	419.2M	  	 	 	399.5M	  	 	 	397.6M	  	 	 	564.2M	  	 	 	762.5M	  	 	 	725.9M	  

  

	(1)	EPS for compensation purposes in 2010 and 2011 reflected reported EPS, excluding mark-to-market gains and losses and Light & Power Holdings, Ltd. acquisition gains. 

	(2)	EPS for compensation purposes in 2011, 2012, 2013 and 2014 reflected EPS-basic adjusted for the income effect of Emera’s held-for-trading derivative instruments and the mark-to-market adjustments included in
Emera’s equity income related to the business activities of Bear Swamp Power Company LLC (“BSPC”) and Northeast Wind Partners II, LLC (“NWP”), as well as the amortization of transportation capacity recognized as a result of
certain trading and market transactions. 

	(3)	EPS for compensation purposes in 2015 reflected EPS-basic adjusted for the income effect of Emera’s held-for-trading derivative instruments and the mark-to-market adjustments included in Emera’s equity income
related to the business activities of BSPC and NWP, until NWP’s sale on January 29, 2015, the amortization of transportation capacity recognized as a result of certain trading and market transactions, the mark-to-market adjustment related
to an interest rate swap in Brunswick Pipeline as well as the mark-to-market adjustments included in Emera’s other income related to the effect of USD denominated currency and forward contracts put in place to economically hedge the anticipated
proceeds from Emera’s Debenture Offering and acquisition costs including legal, advisory, and financing costs related to Emera’s pending acquisition of TECO Energy, Inc. 

	(4)	Cash from operations for compensation purposes in 2015 reflected net cash provided by operating activities adjusted for the cash flow effect of acquisition costs including legal, advisory, and financing costs related to
the pending TECO Energy, Inc. acquisition. Cash from operations for compensation purposes is a non-GAAP measure and is disclosed more fully in Emera’s 2015 Annual Report. 

	(5)	Cash from operations and EPS for compensation purposes are non-GAAP measures and are disclosed more fully in Emera’s Annual Report for the applicable year. 

Scorecard payouts on average over the last five years have been 39 per cent over target. EPS performance has trended upwards over the same period, increasing
49 per cent over the period from 2010 to 2015. 
 2015 Nova Scotia Power Incorporated (NSPI) Corporate Scorecard 

The 2015 NSPI Scorecard set out corporate objectives and related threshold, target and stretch performance levels for 2015. It was used to determine the short-term
incentive payout for the NSPI President and CEO. 
 The NSPI Scorecard is developed and recommended by NSPI management for approval by the NSPI Human Resources and
Governance Committee and Board, which in turn recommends the NSPI Scorecard for final approval at the beginning of each year by the Emera MRCC. 
 On the recommendation
of the NSPI Human Resources and Governance Committee, the Emera MRCC approved the 2015 NSPI scorecard to be paid out at 115.36 per cent of target, which was used to calculate the payout for the NSPI President and CEO. 

The table on the following page shows the elements and results of the NSPI Scorecard for 2015. 

  
 Emera Inc. — Management
Information Circular 2016          49 

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	  	  	  	  	  	  	  	  	Percentage  
	 NSPI Corporate
Objective
  
	  	Target	  	Weighting (%)  	  	Actual Result  	  	Payout (%)  
	 	 	 	 	 
	 Safety

Build and sustain continual improvement toward World Class Safety performance
	  	 95% of senior management team complete two critical task reviews; PLUS 80% of employees complete Safe Start
education session; PLUS 10% increase in Proactive Incident reporting over 2014 actuals; PLUS 10% reduction in controllable vehicle Incidents in 2015
  
	  	7.5  	  	Below   Threshold  	  	0  
	 	 	 	 	 
	 People

Enhance Employee Engagement
	  	 95% of senior management team develop and implement leadership action plans from the 2014 Annual Employee
Survey; PLUS 75% of senior management team execute one team building activity focusing on engaging employees and connecting with the community; PLUS achieve 3% points improvement on the Employee Engagement Index, PLUS 3% points improvement on
employee survey follow-up
  
	  	12.5  	  	Target  	  	12.50  
	 	 	 	 	 
	 Customer

Build reputation for service and reliability
	  	 Continue to improve system reliability, as represented by System Average Interruption Frequency Index (SAIFI) x
System Average Interruption Duration Index (SAIDI) (including extreme events) < 26%; PLUS Customer Satisfaction Score > 71%
  
	  	25  	  	 Between Target  

and Stretch  
	  	27.50  
	 	 	 	 	 
	 Asset Management

Transition the generation resources in a cost effective and sustainable manner for our customers
	  	 Projects >$1.5M are executed in 2015 with total spending within plus 2.5% or minus 10% of total project
budget; PLUS adoption of a Generation Unit Utilization & Investment Plan and T&D Asset Management strategy; PLUS achieve an average DAFOR =<3% on generating units with capacity factors over 70%

 
	  	15  	  	 Between Target  

and Stretch  
	  	22.50  
	 	 	 	 	 
	Financial - Earnings and Cost Structure (1)	  	 $130M of earnings or regulated ROE of 9.25% AND an incremental $5M reduction of the current non-fuel deferrals
AND OM&G spend (excluding pension and storms) of $202.5M
  
	  	20  	  	Stretch  	  	30.00  
	 	 	 	 	 
	Financial – Cash Flow (1)	  	$370M and average working capital as a % of revenue of 22.2%	  	20  	  	 Between Target  

and Stretch  
  
	  	22.86  
	 	 	 	 	 
	 	  	 	  	100  	  	 	  	 Total: 115.36  

 

  

	(1)	The financial measures are prorated on a scale between each level of performance. Percentage payouts in between threshold and target, and in between target and stretch, are prorated on a scale between each level of
performance (50 per cent for threshold, 100 per cent for target and 150 per cent to 200 per cent for stretch). The threshold level for Earnings was $129 million and an OM&G spend (excluding pension and storms) of $212.5 million,
while the stretch level was $130 million or regulated ROE of 9.25 per cent, an incremental $5 million reduction of the non-fuel deferrals, and an OM&G spend (excluding pension and storms) of $202.5 million. The cash flow objective at
threshold was $355M and average working capital of 24.3 per cent of revenue; the stretch level was cash flow from operations of $385M and average working capital of 20.4 per cent of revenue. 

As a result of a safety incident at Nova Scotia Power Inc. in 2015, management made a recommendation to the Nova Scotia Power Inc. Human Resources and Governance
Committee and the MRCC to reduce the ‘Safety’ metric result to zero. The Nova Scotia Power Inc. Human Resources and Governance Committee, the MRCC and the Board agreed with the recommendation and adjusted the overall Scorecard accordingly,
leading to an overall result of 115.36 per cent. 
 Long-Term Incentive Program 

There are two primary components of long-term incentive compensation for senior management, including the NEOs: the Performance Share Unit Plan (the “PSU Plan”)
and the Senior Management Stock Option Plan (the “Stock Option Plan”). The MRCC is responsible for granting PSUs and stock options. 
 The number of PSUs and
stock options granted to senior management is determined after considering competitive benchmarking data and the individual’s level of responsibility within the Company. Grants are calculated each year based on each executive’s long-term
incentive target percentage and base salary and, generally, the grant amount increases with the level of responsibility. The value of PSUs and stock options increase or decrease over the term of a particular grant based on increases or decreases in
Emera’s common share price. 
 The MRCC takes into account previous grants and looks at a three-year history of total compensation each year before approving any
new stock option and PSU grants for senior management (including the NEOs). This helps to ensure grants remain reasonable in light of market data and the performance of both the Company and the individual. 

  

50           Emera Inc. — Management Information Circular 2016 

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In 2015, 50 per cent of the target long-term incentive compensatory value for the President and CEO consisted of PSUs and 50 per cent consisted of stock
options. For all other NEOs, PSUs made up 75 per cent of the target long-term incentive compensatory value and stock options made up the remaining 25 per cent. More details about the PSU Plan and the Stock Option Plan are set forth below.

 Performance Share Unit Plan 
 The PSU Plan is designed to retain and incent
employee participants by allowing senior management and key employees in specific roles to participate in the long-term success of the Company. A PSU is a notional share unit that is based on the value of an Emera common share – the value of a
PSU changes directly in correlation to the value of an Emera share. PSUs also attract dividends similar to Emera shares; when a dividend is paid on Emera’s common shares, each participant is allocated additional PSUs based on the dividend paid
on an equivalent number of Emera common shares. 
 Each year, designated senior leaders are awarded PSUs based on a pre-determined target of their base salary and the
average 50 trading-day Emera common share price immediately preceding the effective grant date (the average is used to smooth out any short-term fluctuations in the share price). Each PSU grant has a three-year performance period. In addition to
being affected by fluctuations in the Emera share price, the value of a PSU is also dependent on the achievement of financial objectives that help measure the increase in shareholder value. The MRCC establishes these financial objectives at the
beginning of the performance period. By linking the value of the PSUs to Emera’s financial performance, the plan aligns the interests of senior leaders with the interests of Emera’s shareholders and helps ensure that both shareholders and
plan participants benefit when the Company achieves strong results. All PSU grants and payouts must be approved by the MRCC. 
 At the end of the performance period, a
performance factor is applied to the PSU grant based on the achievement of the financial objectives. If the Company fails to meet the performance objectives for a particular PSU grant, the Plan may pay out at less than target, or may not pay out any
amounts at all. If targets are exceeded, payouts may be as much as, but not more than, two times the initial grant value. 
 Accordingly, the amount payable to
participants, including NEOs, at the end of the three-year performance period is determined by: 
  

													
							
	     PSU Payout    

 
	 	    =    	 	Original Grant + Notional Dividends	  	    x    	 	    Performance Factor    	  	    x    	 	    Closing Share Price    

 Similar to the methodology on grant, the payout is based on the average 50-day closing price for Emera common shares at the end of the
three-year performance period to smooth out short-term price fluctuations. 
 The metrics for the 2013 PSU Grant, which had a performance period of January 1, 2013
to December 31, 2015, are shown below. 
 Performance Factor 1 
 The first
performance factor was based on Emera’s average three-year total shareholder return (TSR) relative to the average three-year TSR of the S&P/TSX Capped Utilities Index as illustrated in the table below. 

 

					
	 Relative annual return to S&P/TSX Capped Utilities Index

 
	  	 Performance factor

 
	 
		
	 Less than –5%
	  	 	0	  
	 –5%
	  	 	0.5	  
	 0%
	  	 	1.0	  
	 5% or more
	  	 	1.5	  

 Performance Factor 2 
 The second performance
factor was based on Emera’s average annual growth in EPS: 
  

					
	 Emera average three-year Earnings Per Share growth

 
	  	 Performance factor

 
	 
		
	 Less than 4%
	  	 	0	  
	 4%
	  	 	0.5	  
	 6%
	  	 	1.0	  
	 8% or more
	  	 	1.5	  

 In addition, dividends had to be maintained at or higher than the December 31, 2012 levels; if dividends were reduced, the second
performance factor would be deemed to be zero regardless of the EPS growth. 
 Each performance factor was weighted equally at 50 per cent and the value of each
performance factor was interpolated on the basis of the actual relative returns. All annual average returns or percentages over the three-year performance period were determined on a compounded basis. 

  
 Emera Inc. — Management
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The following table shows the performance factor results for the three-year period from January 1, 2013 to December 31, 2015: 

 

																					
	 	 	Factor 1:	 	 	 	 	 	 	 	 	 	 	 
	 	 	Relative Total Shareholder Return (TSR)	 	 	 	 	Factor 2:	 	 	 	 	 	 
		 		 	
	  
	 	 	 	 	  
	  
	 	 	 	 			
				 		 	
	 	 	 	 	 	S&P/TSX Capped	 	 	  	 	Earnings per	 	 	  	 	    Overall Performance	 
	 	 	Emera TSR	 	 	Utilities Index TSR	 	 	  	 	Share Growth	 	 	  	 	Factor	 
		 		 	
	  
	 	 	 	 	  
	  
	 	 	 	 	  
	  
	 
				 		 	
	 Year – 2013
	 	 	–8.3%	  	 	 	–4.4%	  	 	 	 	 	5.9%	  	 	 	 			
	 Year – 2014
	 	 	31.9%	  	 	 	16.1%	  	 	 	 	 	13.8%	  	 	 	 			
	 Year – 2015
	 	 	16.4%	  	 	 	–3.5%	  	 	 	 	 	17.5%	  	 	 	 			
	  
	 	 	 	 	  
	  
	 	 	 	 			
	 Average Annual Compounded Return
	 	 	12.1%	  	 	 	2.3%	  	 	 	 	 	12.3%	  	 	 	 			
	  
	 	 	 	 	  
	  
	 	 	 	 			
	 Emera’s Relative TSR
	 				 	 	9.8%	  	 	 	 				 	 	 			
	  
	 	 	 	 	  
	  
	 	 	 	 	  
	  
	 
	 Resulting Performance Factor
	 				 	 
 	1.5
(Weighted at 50%)	  
  	 	 	 	 
 	1.5
  (Weighted at 50%)	  
  	 	 	 	 	1.5	  
	  
	 	 	 	 	  
	  
	 	 	 	 	  
	  
	 

 The overall performance factor applied to the 2013 PSU Grant was 1.5 (the maximum performance factor), based on Emera’s TSR
exceeding the TSR of the S&P/TSX Capped Utilities Index by 9.8 per cent and average annual EPS growth being 12.3 per cent. 
 To ensure that PSU payouts
are not excessive, the PSU Plan caps the maximum payout to participants at twice the participant’s grant value. The cap factors in share price appreciation, notional dividend reinvestment, and the performance factor. Based on the average share
price (during the last 50 trading days of 2015) of $42.95, the performance factor of 1.50, and the dividend reinvestment over the performance period, the payout for the 2013 PSU grant would have been 212 per cent of the grant value for each
participant. Accordingly, the cap was triggered and the payouts were reduced to 200 per cent of the grant value for each participant. The MRCC considers the PSU Plan payout cap to be an important element of the Company’s risk mitigation
practices (as noted in Mercer’s compensation risk assessment) and maintains the important balance between linking pay to performance while ensuring incentive plan payouts are reasonable. 

The total payout for all PSU Plan participants in respect of the 2013 PSU Grant was approximately $9.3M. 

2015 PSU Grant Performance Metrics 
 The performance period for PSUs granted in
2015 is from January 1, 2015 to December 31, 2017 and the performance metrics are the same as the 2013 grant noted above, with the exception that dividends must be maintained at or higher than the December 31, 2014 and the levels for
the EPS metric have been adjusted to the following: 
  

					
	 Emera average three-year Earnings Per Share growth

 
	  	 Performance factor

 
	 
		
	 Less than 2%
	  	 	0	  
	 2%
	  	 	0.5	  
	 6%
	  	 	1.0	  
	 10% or more
	  	 	1.5	  

 The performance targets for the PSU awards are used for compensation purposes only and are not suitable for any other purpose. There is
no assurance that any performance level will be met. The targets may also constitute forward-looking information. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and
uncertainties, any of which are beyond Emera’s control, which could cause actual results to differ materially from the performance targets. Please see the cautionary statement in Emera’s 2015 Annual Report respecting risks and assumptions
relevant to Emera’s determination of performance targets for compensation purposes. 

  

52           Emera Inc. — Management Information Circular 2016 

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Senior Management Stock Option Plan 
 The Board of Directors has delegated the
administration of the Senior Management Stock Option Plan (the “Stock Option Plan”) to the MRCC. The MRCC is responsible for designating, based on management’s recommendation, which employees of the Company and its affiliates will be
eligible to participate in the Stock Option Plan. 
 Stock options are designed to deliver a percentage of the long-term incentive opportunity for senior management,
including the NEOs, and have been retained to recognize their importance as a component of competitive executive compensation in preserving a long-term focus. Grants are calculated each year based on each executive’s long-term incentive target
percentage and base salary and, generally, the grant amount increases with the level of responsibility. The Company considers stock options to be in alignment with long-term shareholder interests and the MRCC continues to review the use of options
annually. All NEOs participate in the Stock Option Plan and have received stock options in 2015 as a part of their long-term incentive. 
 Stock options are valued
based on the Black-Scholes valuation methodology. The value of the stock options granted to the NEOs in 2015 was determined to be equal to 8.6 per cent of the February 11, 2015 closing share price of $42.71, or $3.67 per option (the value
of each stock option is determined by multiplying the share price by the option value ratio). The value ratio of 8.6 per cent was calculated using the three-year average of Emera’s value ratio for the 2012, 2013, and 2014 grants (9.2 per
cent, 8.2 per cent and 8.4 per cent, respectively), which were also calculated using the Black-Scholes methodology. The initial valuation of the 2015 stock options resulted in a value ratio of 5.5 per cent. Because the initial
Black-Scholes valuation would have led to a significant increase in the number of options granted in 2015 compared to 2014, the MRCC instead opted to use the average of the previous three years’ Black-Scholes value ratios to value the options,
which resulted in fewer options being granted (all other factors being equal, the use of a higher value ratio leads to fewer options). 
 Following the 2015 stock
option grant, which occurred in February 2015, and to address the valuation of stock options, the Committee engaged Hugessen to assist in reviewing market practices regarding valuation methodologies. The review concluded that Black-Scholes remained
an appropriate valuation methodology and that the adoption of a ‘floor’ value ratio of 10 per cent was appropriate. Accordingly, for the 2016 stock option grant, the Committee adopted the floor and, where the Black-Scholes methodology
leads to a value ratio that is less than 10 per cent, the floor of 10 per cent will apply. 
 The Committee considers both the use of the three-year average
to value the options in 2015 and the adoption of a 10 per cent floor going forward to be a prudent step to maintaining stock options as a part of the long-term incentive plan, while reflecting prevailing market conditions. 

Unless a stock option has expired, vested options may be exercised within the 24 months following the option holder’s date of retirement or termination for other
than just cause, and within six months following the date of termination for just cause, resignation, or death. If stock options are not exercised within such time, they expire. However, certain senior executives (including the NEOs) are entitled to
an enhanced retirement vesting provision, which allows unvested stock options to continue to vest and be exercised for two years post-retirement. 
 The maximum
percentage of shares under all security-based compensation arrangements (including the Stock Option Plan) issuable to insiders of the Company at any time is 10 per cent of the issued and outstanding shares of the Company. The maximum number of
shares to be optioned to any one person under the Stock Option Plan is five per cent of the issued and outstanding shares of the Company at the date of the grant of the option. The number of shares issued to insiders, within any one-year period,
under all security-based compensation arrangements, will not exceed 10 per cent of the issued and outstanding shares of the Company. 
 Under the Stock Option
Plan, options may be granted in respect of authorized and unissued common shares of the Company to a maximum of 11.7 million shares, or approximately 7.89 per cent of the total issued and outstanding common shares of the Company (all
figures in this section are as of March 16, 2016, unless otherwise noted). 
 There have been 4,931,640 common shares issued under the Stock Option Plan since its
inception, which represents approximately 3.32 per cent of the total issued and outstanding common shares of the Company. There are 3,198,968 common shares issuable under actual grants of options which represent approximately 2.16 per cent
of the total issued and outstanding common shares of the Company and, of that amount, 1,733,881 are vested and 1,465,087 are unvested. 
 The Board of Directors of the
Company may amend or discontinue the Stock Option Plan by resolution at any time; provided, however, that shareholder approval is required for any amendment that: 

	•	 	increases the number of Common Shares reserved for issuance, except an increase made in proportion to an increase in the number of common shares outstanding due to a stock dividend, stock split, amalgamation,
reorganization, merger or similar event; 

	•	 	extends eligibility to participate to non-employee directors; 

	•	 	permits rights under the Stock Option Plan to be transferred other than for normal estate settlement purposes; 

	•	 	permits awards to be granted under the Stock Option Plan in addition to options; 

	•	 	increases either of the 10 per cent insider participation limits; 

	•	 	reduces the option price of an option except for the purpose of maintaining option value in connection with a change of control or pursuant to the provisions in the Stock Option Plan, which permit equitable adjustments
to be made to the option price in connection with a stock dividend, stock split, share reclassification, amalgamation, reorganization, merger or similar event; 

	•	 	extends the term of a stock option beyond the original expiry date; 

	•	 	permits the expiry of a stock option to be beyond ten years from its date of grant; or, 

	•	 	deletes or reduces the range of amendments, which require shareholder approval under this paragraph. 

  
 Emera Inc. — Management
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The table below summarizes certain ratios regarding the Stock Option Plan, namely dilution, burn rate and overhang as defined in the table and measured as a percentage of
the total number of shares outstanding as of December 31, 2015, 2014, and 2013. 
  

									
	  	  	December 31,
2015 (%)	 	  	    December 31,
2014 (%)	  	     December 31,
2013 (%)

 

				
	 Dilution

(total number of options outstanding, divided by total number of shares outstanding)
	  	 	1.99	  	  	1.69	  	1.56
	 Burn Rate

(total number of options granted in a fiscal year, minus expired options, divided by the total number of shares outstanding)
	  	 	0.40	  	  	0.43	  	0.45
	 Overhang

(total shares available for issuance, plus options outstanding, divided by the total number of shares outstanding)
	  	 	4.94	  	  	5.11	  	1.96

 The stock options issued under the Stock Option Plan are non-assignable, though the Plan permits transfers from the estate of a deceased
option holder to the ultimate beneficiaries. The option can then be exercised by such beneficiaries. 
 In 2015, the Company provided no financial assistance to
participants under the Stock Option Plan to facilitate the purchase of shares under the Plan. 
 Performance Graph 

The following performance graph compares Emera’s cumulative total shareholder return or “TSR” (assuming an investment of $100 and reinvestment of
dividends) for its common shares with that of the S&P/TSX Capped Utilities Index and the S&P/TSX Composite Index. 
 Cumulative Total Return on $100
Investment – December 31, 2010 to December 31, 2015 
  
 

 
  

																									
	As at December 31	  	2010 ($)	 	    	2011 ($)	 	    	2012 ($)	 	    	2013 ($)	 	    	2014 ($)	 	    	2015 ($)	 
	
	  
	 
							
	 

 Emera
	  	 	100.00	  	    	 	109.76	  	    	 	120.07	  	    	 	110.12	  	    	 	145.27	  	    	 	169.02	  
	 

 S&P TSX Utilities
	  	 	100.00	  	    	 	106.47	  	    	 	110.71	  	    	 	105.79	  	    	 	122.77	  	    	 	118.50	  
	 

 S&P TSX Composite
	  	 	100.00	  	    	 	91.29	  	    	 	97.85	  	    	 	110.56	  	    	 	122.23	  	    	 	112.06	  
	  
	 

 As indicated in the chart, Emera has created significant value for its shareholders over the last five years. Emera’s cumulative TSR
for the five-year period from December 31, 2010 to December 31, 2015, was 69 per cent, which was significantly higher than the 18.5 per cent return of the S&P/TSX Capped Utilities Index and the 12 per cent return of the
S&P/TSX Composite Index. 
 The chart above also shows the significant growth of Emera’s TSR in 2015, during which Emera’s TSR increased 16.4 per
cent, compared to the decrease in the return of the S&P/TSX Capped Utilities Index by 3.5 per cent and a decrease in the return of the S&P/TSX Composite Index by 8.3 per cent. In relative terms, Emera’s TSR was 19.8 percentage
points higher than the S&P/TSX Capped Utilities Index and 24.7 percentage points higher than the S&P/TSX Composite Index. 

  

54           Emera Inc. — Management Information Circular 2016 

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 MANAGEMENT INFORMATION CIRCULAR 

     
  

Total Shareholder Return vs. Named Executive Officer Compensation 

As noted in the Letter from the Management Resources and Compensation Committee to Our Shareholders, a fundamental principle of Emera’s compensation
philosophy is to align pay with performance, by linking a significant portion of the compensation the Company pays its executives to the achievement of objectives measuring whether shareholders are experiencing strong value for their investment.

 In light of this principle, at the end of 2015, the Company undertook its annual analysis of the alignment between the President and CEO’s compensation and the
experience of shareholders. The analysis reviewed the President and CEO’s compensation over a number of timeframes and compared the results to the shareholder experience, as measured by TSR, over the same periods. The review included both
realized pay (which consists of amounts actually paid out for a particular performance year) and realizable pay (which consists of changes in the value of any outstanding equity-based awards year-over-year). 

The analysis looked at the shareholders’ experience using 11 different measurement periods, recognizing that shareholders have acquired their shares at different
times. Each period had the same end point (December 31, 2015) but started at a different beginning period, going from January 1, 2005 to January 1, 2015. The analysis measured the dollar return per $100 of investment over each period as
compared to the President and CEO’s economic experience, measured by the dollar realized and realizable per $100 of target compensation awarded over the same periods. The average return for shareholders over the 11 periods was $223, while the
average realized/realizable compensation relative to target for the President and CEO was $212, indicating a close alignment between President and CEO’s compensation and the shareholders’ experience. Accordingly, the analysis concluded
that Emera’s compensation framework provided a very close alignment between the President and CEO’s compensation and the shareholder experience over the long-term. 

In keeping with Emera’s compensation philosophy, a significant component of NEO compensation consists of long-term incentives (PSUs and stock options), which are
designed to focus executives on the long-term success of the Company. These long-term incentives are directly affected by changes in Emera’s common share price and Emera’s TSR relative to the S&P/TSX Capped Utilities Index. This helps
create a direct correlation between the shareholder experience and the compensation the Company pays its senior executives. 
 As described in Performance Share Unit
Plan, each PSU grant is subject to the achievement of financial objectives and, at the end of the performance period, a performance factor is applied, which is determined based on the extent to which the Company has met those objectives. The
performance factors for the PSU Plan, expressed in terms of a percentage, for the past five years were 149 per cent (the performance year ended in 2011), 126 per cent (2012), 57 per cent (2013), 150 per cent (2014), and
150 per cent (2015). The general trend shows performance factors at or above 100 per cent in years where Emera outperforms the S&P/TSX Capped Utilities Index, and below 100 per cent when the Company underperforms the Index,
indicating an alignment between executive and shareholder interests. 
 The total annual salary, short-term incentive and long-term PSU payouts earned in 2015 for the
NEOs totalled $9.0 million, which represents 2.3 per cent of the Company’s net earnings applicable to common shares of $397.2 million for the period ended December 31, 2015. 

NSPI Ratepayers 
 No portion of the compensation paid to Emera’s President
and CEO, the CFO, the Chief Corporate Development Officer, or the President or the Chief Executive Officer, Emera U.S. Inc. in 2015 was paid by NSPI or NSPI ratepayers. 

  
 Emera Inc. — Management
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 NEO Summary Compensation Table 

 
  
  

																																	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Non-equity	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	incentive plan	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	compensation  
	 	 	 	 	 	 	 	 	 	 
	 Name and

principal position
  
	 	   
	 Year 
	    
	 	   
	Salary ($)   
	(1)   
	 	 
   
	Share-based
awards ($) 
 
	  
(2)(3)   
	 	 
   
	Option-based
awards ($)  
	  
 (4)   
	 	 
 
   
	Annual
incentive
plans ($)  
	  
  
 (5)   
	 	 
 
   
	Pension
value
($)  
	  
  
 (6)   
	 	 
 
   
	All other
compensation
($)  
	  
  
 (7)   
	 	 
 
   
	Total
compensation
 ($) 
	  
  
    

	  
	 
									
	Christopher Huskilson	 				 				 				 				 				 				 				 			
	President and	 	 	2015	  	 	 	875,000	  	 	 	1,050,018	  	 	 	1,049,987	  	 	 	1,135,418	  	 	 	179,000	  	 	 	25,472	  	 	 	4,314,895	  
	Chief Executive	 	 	2014	  	 	 	875,000	  	 	 	962,380	  	 	 	962,608	  	 	 	1,237,399	  	 	 	550,000	  	 	 	31,817	  	 	 	4,619,204	  
	Officer	 	 	2013	  	 	 	871,635	  	 	 	962,542	  	 	 	962,445	  	 	 	1,358,438	  	 	 	579,000	  	 	 	32,120	  	 	 	4,766,180	  
	  
	 
	Scott Balfour	 				 				 				 				 				 				 				 			
	 Chief Financial Officer
 and Chief Operating Officer,
	 	 
  
  
	2015
 2014

2013
	  
   

  
	 	 
  
  
	474,958
 473,376

460,000
	  
   

  
	 	 
  
  
	445,498
 284,376

241,624
	  
   

  
	 	 
  
  
	148,268
 94,656

80,370
	  
   

  
	 	 
  
  
	479,399
 926,308

601,100
	  
   

  
	 	 
  
  
	128,000
 90,000

122,000
	  
   

  
	 	 
  
  
	23,864
 25,940

29,216
	  
   

  
	 	 
  
  
	1,699,987
 1,894,656

1,534,310
	  
   

  

	Northeast and Caribbean	 				 				 				 				 				 				 				 			
	  
	 
	Nancy Tower	 				 				 				 				 				 				 				 			
	Chief Corporate	 	 	2015	  	 	 	474,481	  	 	 	356,086	  	 	 	118,908	  	 	 	410,913	  	 	 	214,000	  	 	 	26,226	  	 	 	1,600,614	  
	Development Officer	 	 
  
	2014
 2013
	  
   
	 	 
  
	460,000
 458,385
	  
   
	 	 
  
	241,482
 241,624
	  
   
	 	 
  
	80,512
 80,370
	  
   
	 	 
  
	433,679
 601,100
	  
   
	 	 
  
	194,000
 388,000
	  
   
	 	 
  
	26,724
 24,106
	  
   
	 	 
  
	1,436,397
 1,793,585
	  
   

	  
	 
	Robert Bennett	 				 				 				 				 				 				 				 			
	President and	 	 	2015	  	 	 	474,481	  	 	 	356,086	  	 	 	118,908	  	 	 	410,913	  	 	 	239,000	  	 	 	23,664	  	 	 	1,623,052	  
	 Chief Executive Officer,
 Emera US Inc.
	 	 
  
	2014
 2013
	  
   
	 	 
  
	460,000
 458,923
	  
   
	 	 
  
	241,482
 241,624
	  
   
	 	 
  
	80,512
 80,370
	  
   
	 	 
  
	433,679
 476,100
	  
   
	 	 
  
	342,000
 499,000
	  
   
	 	 
  
	26,190
 18,845
	  
   
	 	 
  
	1,583,863
 1,774,862
	  
   

	  
	 
	Robert Hanf (8)	 				 				 				 				 				 				 				 			
	President and	 	 	2015	  	 	 	398,615	  	 	 	380,194	  	 	 	59,821	  	 	 	230,800	  	 	 	275,000	  	 	 	22,686	  	 	 	1,367,116	  
	 Chief Executive Officer,
 Nova Scotia Power Inc.
	 	 
  
	2014
 2013
	  
   
	 	 
  
	360,000
 364,483
	  
   
	 	 
  
	161,860
 134,981
	  
   
	 	 
  
	54,128
 45,030
	  
   
	 	 
  
	185,310
 252,000
	  
   
	 	 
  
	128,000
 361,000
	  
   
	 	 
  
	25,195
 73,736
	  
   
	 	 
  
	914,493
 1,231,230
	  
   

	  
	 

  

	(1)	The figure shown represents actual base earnings paid in 2015. 

	(2)	Includes PSU grants and special DSU grants, but does not reflect DSUs received in lieu of cash bonuses, as their value is already reflected in the ‘Annual incentive plans’ column—see Deferred Share
Unit Plan for further details. The grant value of PSUs granted in 2015 was based on the average 50 trading-day closing share price up to December 31, 2014 ($38.08). The 50-day share price average is used for PSU and DSU grants to smooth out
any short-term fluctuations in share price immediately preceding the grant date. The value of PSUs on payout is subject to the achievement of specific performance objectives over the three-year performance period from January 1, 2015, to
December 31, 2017. If those objectives are not met, payouts may be less than the initial value of the grant noted above and if performance objectives are exceeded, the payout may be higher than the amount noted above. 

	(3)	The value shown for Mr. Hanf includes a special grant of 5,010 DSUs, valued at $200,000, which occurred on February 16, 2015 based on the average 50 trading-day closing share price immediately preceding the
grant ($39.92). The special grant was to acknowledge Mr. Hanf’s leadership in transforming the cost structure of Nova Scotia Power Inc. to provide rate stabilization and avoid a general rate application in 2016. No portion of the cost of
the special DSU grant will be borne by ratepayers. 

	(4)	Stock options are valued based on the Black-Scholes valuation methodology. The value of the stock options granted to the NEOs in 2015 was determined to be equal to 8.6 per cent of the February 11, 2015 closing
share price of $42.71 or $3.67 per option. The valuation ratio of 8.6 per cent was calculated using the three-year average of Emera’s value ratio (for the 2012, 2013 and 2014 grants, which were also calculated using the Black-Scholes
methodology). The initial valuation of the 2015 stock options was based on a value ratio of 5.5 per cent, which was determined using the following assumptions: an estimated volatility of 13.6 per cent (based on daily historical share price
for the four-year period ending on December 31, 2014), estimated dividend yield of 4.3 per cent, and a risk-free interest rate of 1.79 per cent. Because the initial Black-Scholes valuation of 5.5 per cent would have led to a
significant increase in the number of options granted in 2015 compared to 2014, the MRCC instead opted to use the average of the previous three years’ Black-Scholes valuations to value the options (the use of a higher value ratio leads to fewer
options being granted). 

	(5)	In 2015, Mr. Huskilson, Mr. Balfour, Ms. Tower, and Mr. Bennett participated in the Emera Corporate Scorecard and Mr. Hanf participated in the NSPI Corporate Scorecard. The payouts to the NEOs
participating in the Emera Corporate Scorecard were based on a scorecard result of 144.18 per cent and the payout to Mr. Hanf was based on the NSPI Scorecard result of 115.36 per cent. The Short-Term Incentive Plan and the 2015
results are described in greater detail in Short-Term Incentive Plan. The figures shown reflect amounts earned in the 2015 performance year and paid in 2016. Mr. Balfour elected to receive 50 per cent of his short-term incentive in
the form of DSUs and Mr. Hanf elected to receive 25 per cent of his short-term incentive in the form of DSUs. 

	(6)	Further information concerning pension values can be found in Pension Plan Benefits. 

	(7)	All other compensation in 2015 includes: (a) a car allowance for each NEO in the following amounts: $18,000 for Mr. Huskilson; $13,200 for Mr. Balfour; $12,000 for Ms. Tower; $13,200 for
Mr. Bennett; and $14,400 for Mr. Hanf; and (b) other taxable benefits. 

	(8)	All compensation paid to Mr. Hanf was paid by NSPI, though only a portion his salary ($205,792) and $26,753 of his other compensation and benefits was included in NSPI rates, in accordance with the Public
Utilities Act and Nova Scotia Power Incorporated Regulations. None of the compensation paid to Mr. Huskilson, Mr. Balfour, Ms. Tower or Mr. Bennett was included in NSPI rates. 

  

56           Emera Inc. — Management Information Circular 2016 

Table of Contents

 MANAGEMENT INFORMATION CIRCULAR 

     
  

Outstanding Share-based Awards and Option-based Awards 
 The following table
describes all option-based and share-based awards outstanding as of December 31, 2015 for each NEO: 
  

																																	
	 Option-based awards
(1)
 (stock options)

 
	 	 	 	 	 	 	 Share-based awards

(performance share units (PSUs) and deferred share units (DSUs))

 
	 
	 Name
  
	 	  

 
 
 
 
 
  
	  
 Number
of
securities
underlying
unexercised
option (#)
  
	  

  
  
  
  
  
  
	 	 
 
   
	Option
exercise
 price ($) 
	  
  
    
	 	 
 
  
  
	Option
expiration
 date

 
	  
  
   

 
	 	 
 
 
   
	Value of
unexercised
in-the-money
options ($)  
	  
  
  
 (2)
  
	 	 	 		 	 
 
   

 
	Number of
shares or unit of

shares that havenot vested (#) 

 
	  
  

  (3) 
  
	 	  

 
 
 
 

 
  
	  
 Market
or
payout value of
share-based
awards that have
 not vested ($)

 
	  

  
  
  
  
  (4) 
  
	 	  
  

 
 
 

 
  
	  

Market or payout
 value of vested
share-based awards
that have not been
 paid out ($)

 
	  
   

  
  
  
  (5) 
  

						 				
	 Christopher
	 	 	168,100	  	 	 	21.99	  	 	 	12-Feb-2019	  	 	 	3,570,444	  	 	 	 		 	 	63,372	  	 	 	2,721,808	  	 	 	9,019,424	  
	 Huskilson
	 	 	147,000	  	 	 	23.94	  	 	 	16-Feb-2020	  	 	 	2,835,630	  	 	 	 		 				 				 			
		 	 	26,400	  	 	 	24.63	  	 	 	5-Jun-2020	  	 	 	491,040	  	 	 	 		 				 				 			
		 	 	72,500	  	 	 	32.06	  	 	 	15-Feb-2021	  	 	 	809,825	  	 	 	 		 				 				 			
		 	 	97,700	  	 	 	33.35	  	 	 	14-Feb-2022	  	 	 	965,276	  	 	 	 		 				 				 			
		 	 	337,700	  	 	 	34.80	  	 	 	12-Feb-2023	  	 	 	2,846,811	  	 	 	 		 				 				 			
		 	 	353,900	  	 	 	32.35	  	 	 	11-Feb-2024	  	 	 	3,850,432	  	 	 	 		 				 				 			
	 	 	   
	 286,100 
	    
	 	   
	 42.71 
	    
	 	   
	 11-Feb-2025 
	    
	 	   
	 148,772 
	    
	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 
	  
 Scott Balfour
	 	  
  
	  
 100,000
	  
   
	 	  
  
	  
 33.73
	  
   
	 	  
  
	  
 15-Apr-2022
	  
   
	 	  
  
	  
 950,000
	  
   
	 	 	 		 	 	22,417	  	 	 	962,822	  	 	 	1,261,189	  
		 	 	28,200	  	 	 	34.80	  	 	 	12-Feb-2023	  	 	 	237,726	  	 	 	 		 				 				 			
		 	 	34,800	  	 	 	32.35	  	 	 	11-Feb-2024	  	 	 	378,624	  	 	 	 		 				 				 			
	 	 	   
	 40,400 
	    
	 	   
	 42.71 
	    
	 	   
	 11-Feb-2025 
	    
	 	   
	 21,008 
	    
	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 
	 Nancy Tower
	 	  
  
	  
 16,900
	  
   
	 	  
  
	  
 21.58
	  
   
	 	  
  
	  
 14-Feb-2018
	  
   
	 	  
  
	  
 365,885
	  
   
	 	 	 		 	 	18,430	  	 	 	791,548	  	 	 	2,544,819	  
		 	 	21,600	  	 	 	21.99	  	 	 	12-Feb-2019	  	 	 	458,784	  	 	 	 		 				 				 			
		 	 	21,300	  	 	 	23.94	  	 	 	16-Feb-2020	  	 	 	410,877	  	 	 	 		 				 				 			
		 	 	16,900	  	 	 	32.06	  	 	 	15-Feb-2021	  	 	 	188,773	  	 	 	 		 				 				 			
		 	 	22,800	  	 	 	33.35	  	 	 	14-Feb-2022	  	 	 	225,264	  	 	 	 		 				 				 			
		 	 	28,200	  	 	 	34.80	  	 	 	12-Feb-2023	  	 	 	237,726	  	 	 	 		 				 				 			
		 	 	29,600	  	 	 	32.35	  	 	 	11-Feb-2024	  	 	 	322,048	  	 	 	 		 				 				 			
	 	 	   
	 32,400 
	    
	 	   
	 42.71 
	    
	 	   
	 11-Feb-2025 
	    
	 	   
	 16,848 
	    
	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 
	 Robert Bennett
	 	  
  
	  
 2,500
	  
   
	 	  
  
	  
 21.58
	  
   
	 	  
  
	  
 14-Feb-2018
	  
   
	 	  
  
	  
 54,125
	  
   
	 	 	 		 	 	18,430	  	 	 	791,548	  	 	 	1,885,545	  
		 	 	9,700	  	 	 	21.99	  	 	 	12-Feb-2019	  	 	 	206,028	  	 	 	 		 				 				 			
		 	 	13,725	  	 	 	23.94	  	 	 	16-Feb-2020	  	 	 	264,755	  	 	 	 		 				 				 			
		 	 	14,500	  	 	 	32.06	  	 	 	15-Feb-2021	  	 	 	161,965	  	 	 	 		 				 				 			
		 	 	28,943	  	 	 	33.35	  	 	 	14-Feb-2022	  	 	 	285,957	  	 	 	 		 				 				 			
		 	 	28,200	  	 	 	34.80	  	 	 	12-Feb-2023	  	 	 	237,726	  	 	 	 		 				 				 			
		 	 	29,600	  	 	 	32.35	  	 	 	11-Feb-2024	  	 	 	322,048	  	 	 	 		 				 				 			
	 	 	   
	 32,400 
	    
	 	   
	 42.71 
	    
	 	   
	 11-Feb-2025 
	    
	 	   
	 16,848 
	    
	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 
	 Robert Hanf
	 	  
  
	  
 5,025
	  
   
	 	  
  
	  
 32.06
	  
   
	 	  
  
	  
 15-Feb-2021
	  
   
	 	  
  
	  
 56,129
	  
   
	 	 	 		 	 	10,756	  	 	 	461,989	  	 	 	1,087,679	  
		 	 	12,200	  	 	 	33.35	  	 	 	14-Feb-2022	  	 	 	120,536	  	 	 	 		 				 				 			
		 	 	15,800	  	 	 	34.80	  	 	 	12-Feb-2023	  	 	 	133,194	  	 	 	 		 				 				 			
		 	 	19,900	  	 	 	32.35	  	 	 	11-Feb-2024	  	 	 	216,512	  	 	 	 		 				 				 			
	 	 	   
	 16,300 
	    
	 	   
	 42.71 
	    
	 	   
	 11-Feb-2025 
	    
	 	   
	 8,476 
	    
	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 

  

	(1)	Option-based awards include both vested and unvested options. 

	(2)	The value of all unexercised option-based awards was calculated using a December 31, 2015 closing share price of $43.23. 

	(3)	Unvested share-based awards include PSU and unvested special DSU grants, and any additional PSUs and DSUs from dividend reinvestment relating to such grants as of December 31, 2015. 

	(4)	The market or payout value of share-based awards was calculated based on an assumed performance factor of 1.0 and the average closing share price for the last 50 trading days of 2015 ($42.95). 

	(5)	These figures represent only vested DSUs, as PSUs are paid out upon vesting, and are based on the average closing share price for the last 50 trading days of 2015 ($42.95). 

  
 Emera Inc. — Management
Information Circular 2016          57 

Table of Contents

      
  

Incentive Plan Awards – Value Vested or Earned During the Year 
 The
following table describes all option-based awards, share-based awards and non-equity incentives that vested, or were earned, during 2015 for each NEO: 
  

													
	Name	  	 
 	Option-based awards
value vested during 2014 ($)	  
 (1) 	 	 
 
 
 	Share-based awards
(Performance Share Units (PSUs)
and Deferred Share Units (DSUs))
value vested during 2015 ($) 	  
  
  
(2) (3) 	 	 
 
 	Non-equity incentive plan
compensation - value earned
during the 2015 ($) 	  
  
(4) 
	
	  
	 
				
	 Christopher Huskilson
	  	 	1,912,057	  	 	 	2,223,643	  	 	 	1,135,418	  
	 Scott Balfour
	  	 	331,808	  	 	 	483,248	  	 	 	479,399	  
	 Nancy Tower
	  	 	219,230	  	 	 	515,070	  	 	 	410,913	  
	 Robert Bennett
	  	 	226,666	  	 	 	517,877	  	 	 	410,913	  
	 Robert Hanf
	  	 	127,025	  	 	 	491,617	  	 	 	230,800	  
	  
	 

  

	(1)	Represents the aggregate dollar value that would have been realized if stock options had been exercised on the applicable vesting (eligibility) date in 2015. 

	(2)	The value of PSUs vested in 2015 is based on the 2013 PSU grant, which had a three-year performance period from January 1, 2013 to December 31, 2015. The payout is calculated based on the original grant with
accumulated dividends, multiplied by the performance factor, multiplied by the average closing share price for the last 50 trading days of 2015 ($42.95). The performance factor for the 2013 PSU grant was based on Emera’s total shareholder
return relative to the S&P/TSX Capped Utilities Index and Emera’s average annual growth in EPS – the overall performance factor result was 1.5 and the payout was capped at two-times the grant date value, as per the terms of the PSU
Plan. More details on the PSU Plan and results can be found in Performance Share Unit Plan. 

	(3)	This dollar amount includes the value of DSUs from special grants that vested in 2015, including additional DSUs from dividend equivalents on such grants, and calculated using a closing share price for the last 50
trading days of 2015 ($42.95). This amount equalled $298,560 for Mr. Huskilson, $31,822 for Ms. Tower, $34,629 for Mr. Bennett, and $221,655 for Mr. Hanf. 

	(4)	This amount represents the 2015 incentive payouts as disclosed in the NEO Summary Compensation Table. 

 Aggregate
Option Exercise during 2015 and 2015 Option Values 
 The following table summarizes the number of common shares, if any, each NEO acquired pursuant to the exercise
of stock options in 2015, the aggregate value realized upon exercise, and the number of common shares covered by unexercised options under the Stock Option Plan as at December 31, 2015. The aggregate value realized upon exercise is the
difference between the fair market value of the common shares on the exercise date and the exercise price of the option. The value of unexercised in-the-money options at year-end is the difference between the exercise price of the options and the
fair market value of the common shares on December 31, 2015, which was $43.23. 
  

																									
	 	  	 	 	  	 	 	  	  	 	  	 Unexercised options at
December 31, 2015

 
	 	  	
Value of unexercised in-the-money
options at December
31, 2015
  
	 
	Name	  	Securities acquired
on exercise (#)	 	  	Aggregate value
realized ($)	 	  	Exercisable (#)	 	  	Unexercisable (#)	 	  	Exercisable ($)	 	  	Unexercisable ($)	 
	
	  
	 
							
	 Christopher Huskilson
	  	 	0	  	  	 	0	  	  	 	744,600	  	  	 	744,800	  	  	 	10,816,910	  	  	 	4,701,321	  
	 Scott Balfour
	  	 	0	  	  	 	0	  	  	 	97,800	  	  	 	105,600	  	  	 	926,019	  	  	 	661,339	  
	 Nancy Tower
	  	 	4,600	  	  	 	99,130	  	  	 	115,300	  	  	 	74,400	  	  	 	1,792,642	  	  	 	433,563	  
	 Robert Bennett
	  	 	0	  	  	 	0	  	  	 	83,632	  	  	 	75,936	  	  	 	1,100,713	  	  	 	448,739	  
	 Robert Hanf
	  	 	6,100	  	  	 	76,070	  	  	 	27,050	  	  	 	42,175	  	  	 	267,256	  	  	 	267,591	  
	  
	 

 Pension Plan Benefits 
 The NEOs are members of
the corporate pension plan (Pension Plan) and participate on either a defined benefit basis or a defined contribution basis. For 2015, all NEOs participated in the defined benefit component of the Pension Plan. 

  

58           Emera Inc. — Management Information Circular 2016 

Table of Contents

 MANAGEMENT INFORMATION CIRCULAR 

     
  

Defined Benefit 
 The following table shows years of credited service, estimated
pension amounts, and changes to accrued obligations from January 1, 2015 to December 31, 2015 for the NEOs who participated in the Pension Plan on a defined benefit basis. 

 

																													
	 	  	 	 	  	 Annual benefits payable

 
	 	  	 	 	  	 	 	  	 	 	  	 	 
	Name	  	 
 
 	Number of
years credited
service (#)	  
  
  	  	 
 	At year-end   
($) (1)	  
  	  	 
 	At age 65
($)	  
  	  	 
 
 	Accrued
obligation at
start of year ($)	  
  
  	  	 
 	Compensatory   
change ($) (2)	  
  	  	 
 
 	Non-   
compensatory   
change ($) (2)	  
  
  	  	 
 
 	Accrued
obligation at
year-end ($)	  
  
  
	
	  
	 
								
	 Christopher Huskilson (3)
	  	 	35.0	  	  	 	650,000   	  	  	 	650,000	  	  	 	15,377,000	  	  	 	179,000   	  	  	 	235,000   	  	  	 	15,791,000	  
	 Scott Balfour
	  	 	3.7	  	  	 	42,000   	  	  	 	197,000	  	  	 	362,000	  	  	 	128,000   	  	  	 	37,000   	  	  	 	527,000	  
	 Nancy Tower
	  	 	18.3	  	  	 	200,000   	  	  	 	290,000	  	  	 	3,934,000	  	  	 	214,000   	  	  	 	182,000   	  	  	 	4,330,000	  
	 Robert Bennett
	  	 	27.7	  	  	 	295,000   	  	  	 	373,000	  	  	 	6,440,000	  	  	 	239,000   	  	  	 	231,000   	  	  	 	6,910,000	  
	 Robert Hanf
	  	 	13.5	  	  	 	105,000   	  	  	 	198,000	  	  	 	1,953,000	  	  	 	275,000   	  	  	 	52,000   	  	  	 	2,280,000	  
	
	  
	 

  

	(1)	With the exception of Mr. Huskilson and Ms. Tower, the NEOs are not eligible for an immediate pension at year-end. The amount shown is the accrued pension starting at the NEO’s unreduced retirement date
if the NEO terminated employment at December 31, 2015. 

	(2)	The compensatory and non-compensatory changes are described in more detail below. 

	(3)	Mr. Huskilson’s pension is capped, which is described in further detail below. 

 The accrued obligation of a
pension entitlement is the present value of the expected future annual benefits payable taking into account service accrued to date and the expected salaries used to determine the annual benefit payable at retirement. Each year the value of the
accrued obligation changes as a result of compensatory changes and non-compensatory changes, which are shown in the table above. 
 Compensatory changes are caused by
changes in the annual benefit payable and result primarily from three factors: (i) new accrued service (the employer current service cost); (ii) the impact of salary increases greater than expected on past benefits (estimated increases are
already built into the accrued benefit obligation), and; (iii) plan changes impacting, for example, accrued service or when benefits are payable. There were no Pension Plan changes that materially affected the above figures in 2015. 

Non-compensatory changes are caused by interest on the accrued obligation and current service cost, employee required contributions and changes in the assumptions used to
calculate the present value of the future annual benefit payment stream. These assumptions include the mortality table, salary scale, retirement assumption and the inflation assumption used for calculating indexing and the discount
rate. The non-compensatory changes in 2015 were driven largely by interest on the accrued obligation and current service cost as there were no material changes in assumptions. 

The defined benefit component of the Pension Plan entitles members to pension benefits based on two per cent of the average of the member’s five highest years of
pensionable earnings, multiplied by each year of credited service to a maximum of 35 years credited service. For the NEOs, pensionable earnings include base salary plus up to 50 per cent of their target short-term incentive. Upon reaching age
65, pension benefits under the Pension Plan are reduced by an amount approximately equal to the amount payable under the Canada Pension Plan. For members who retire from active service, the pension is payable on an unreduced basis upon the earlier
of age 60 or age 55, provided that age and years of service add to at least 85. For members who joined the Pension Plan on or after July 1, 2004, the age 60 unreduced retirement age condition is replaced by age 62 with 15 years of service. A
member may also retire on a reduced formula if the member has attained age 55, but does not qualify for the rule of 85. Spousal benefits are paid on the death of a member at the rate of 60 per cent of regular pension benefits. Pensions are
indexed to the consumer price index to a maximum of six per cent per annum. 
 For 2015, members of the defined benefit component of the plan contributed 7.4 per
cent of eligible earnings up to the year’s maximum pensionable earnings (“YMPE”) under the Canada Pension Plan, and 9.5 per cent of earnings between the YMPE and the amount on which pension benefits may be earned under a
registered pension plan as permitted by the Income Tax Act (Canada). 
 Due to Canada Revenue Agency’s limitations on the maximum pension benefit that may
be paid under the Pension Plan, a portion of the pension the NEOs earned after January 1, 1992 is provided under the terms of a Supplementary Retirement Plan, which is unfunded but secured by a letter of credit deposited in a retirement
compensation trust. The Supplementary Retirement Plan is non-contributory. 
 In 2011, Mr. Huskilson’s pension amount payable under the Pension Plan and
Supplementary Retirement Plan was capped. The limit at future potential retirement dates was determined based on the pension formula and an assumed increase in pensionable earnings of approximately four per cent per year from the 2010 pensionable
earnings levels. This limit is expected to reduce the amount that would otherwise be payable under the normal Pension Plan terms. As a result, year-over-year changes of more than four per cent to Mr. Huskilson’s earnings have no
impact on his compensatory change component. 
 The accrued pension obligation is calculated following the method prescribed under US GAAP (section 715 of FASB)
and by the Canadian Institute of Chartered Accountants and is based on management’s best estimate of future events that affect the cost of pensions, including assumptions about future salary adjustments and short-term incentive awards. 

The defined benefit component of the Pension Plan was closed to new non-union employees hired after January 8, 2013 and to new union employees hired after
October 31, 2014. 

  
 Emera Inc. — Management
Information Circular 2016          59 

Table of Contents

      
  

Defined Contribution 
 Under the defined contribution component of the plan, the
Company contributes a base amount to the participant’s account each pay period. The amount is expressed as a percentage of eligible earnings. Plan participants can also make contributions to the defined contribution component, with the Company
matching a portion of these contributions. Canada Revenue Agency limits apply. 
 Upon ending active employment with the Company at any age between 55 and 65, plan
participants may start receiving retirement income through the purchase of a life annuity or by converting their account to a Life Income Fund. 
 The defined
contribution component of the plan is administered on behalf of the Company by a major Canadian insurance company, which acts in accordance with the provisions of the defined contribution component of the plan, the Income Tax Act, and the
Nova Scotia Pension Benefits Act. 
 Since all the NEOs participate in the pension plan on a defined benefit basis, they have not accrued any amounts under the
defined contribution component of the plan. 
 Deferred Share Unit Plan (“DSU Plan”) 

The Deferred Share Unit (DSU) Plan is another component of Emera’s long-term incentive program for senior leaders. A DSU is a notional share unit that is based on
the value of an Emera common share – the value of a DSU changes directly in correlation to an Emera share and earns dividend equivalents in the form of additional DSUs. When a dividend is paid on Emera’s common shares, each
participant’s DSU account is allocated additional DSUs based on the dividend paid on an equivalent number of Emera common shares. DSUs are not paid out until such time as the participant is no longer employed by the Company or any of its
affiliates. When redeemed, the value of a participant’s DSUs is equivalent to the fair market value of an equal number of common shares of the Company. 
 The DSU
Plan is intended to facilitate achievement of share ownership guidelines (discussed in Executive Share Ownership Requirements) without diluting the shareholder base. Prior to the start of each performance year, each plan participant may elect
to defer some or all of the short-term incentive payout associated with that performance year in the form of DSUs. When the short-term incentive is paid to the NEOs, the portion elected is allocated to DSUs rather than paid in cash. Since DSUs are
principally an income deferral mechanism, there are no performance metrics attributable to DSUs. 
 Following a participant’s departure from the Company and on a
date selected by the participant not later than December 15 of the next calendar year after departure, the value of the participant’s DSUs is calculated by multiplying the number of DSUs in the participant’s account by the average
closing Emera common share price for the 50 trading days preceding the payout date (the 50-day average is used to smooth out any short-term price fluctuations). The after-tax amount is paid to the participant. If a participant is a U.S. taxpayer,
payment is made six months following the termination date. 
 In addition, special DSU awards may be made from time to time by the MRCC to selected executives and
senior management to recognize singular achievements or the achievement of certain corporate objectives. In 2015, Mr. Hanf was awarded a special grant of 5,010 DSUs, valued at $200,000 based on the average 50 trading-day closing share price
immediately preceding the grant ($39.92). The special grant was to recognize Mr. Hanf’s leadership in transforming the cost structure of Nova Scotia Power Inc. to provide rate stabilization and avoid a general rate application in 2016.

 2015 DSU Plan Allocations 
 The table below identifies how much of the
short-term incentive for 2015 that each NEO elected to allocate to DSUs: 
  

									
	 Name
  
	  	 Percentage of 2015 annual incentive
elected to deferred share units (%)

 
	 	  	 Dollar amount of 2015 annual incentive
elected to deferred share units ($)

 
	 
	  
	 
			
	 Christopher Huskilson
	  	 	0	  	  	 	0	  
	 Scott Balfour
	  	 	50	  	  	 	239,700	  
	 Nancy Tower
	  	 	0	  	  	 	0	  
	 Robert Bennett
	  	 	0	  	  	 	0	  
	 Robert Hanf
  
	  	   
	 25 
	    
	  	   
	 57,700 
	    

	  
	 

  

60           Emera Inc. — Management Information Circular 2016 

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 MANAGEMENT INFORMATION CIRCULAR 

     
  

Executive Share Ownership Requirements 
 To align the interests of senior
management with the interests of shareholders, share ownership guidelines were introduced for designated executive officers in 2003. The MRCC amended the guidelines in 2015 to apply to the top three levels of executives across all affiliates
(regardless of whether they are officers of Emera Inc. or an affiliate). Mr. Huskilson is required to hold shares equal to at least four-times his base salary and all other executives subject to the guidelines (including Mr. Balfour,
Ms. Tower, Mr. Bennett and Mr. Hanf) are required to hold shares equal to at least hold two-times their respective base salaries. 
 Share ownership is
calculated based on: (1) the number of Emera shares an executive owns; and (2) DSUs acquired pursuant to the DSU Plan, which are considered share equivalents. PSUs do not count for purposes of the share ownership guidelines. Executives
have five years to reach the required ownership level and are required to allocate a portion of their short-term incentive into DSUs until their target share ownership is met. 

All executives are subject to an anti-hedging policy prohibiting them from hedging, pledging, monetizing, or otherwise reducing or limiting their economic risk with
respect to any Emera securities they hold (including DSUs, PSUs and stock options). Mr. Huskilson is required to maintain his share ownership target for at least one year post-retirement. 

The share ownership levels for the NEOs are set out below. The value shown is based on the closing price of Emera’s common shares on December 31, 2015 of
$43.23. 
  

																					
	Name	  	Required ownership level as
a multiple of base salary	 	  	Shares/share
equivalents (#)	 	  	Estimated
value ($)	 	  	Multiple of
base salary	 	  	Target
achieved	 
	
	  
	 
						
	 Christopher Huskilson
	  	 	4.0	  	  	 	235,535	  	  	 	10,182,179	  	  	 	11.6	  	  	 	Yes	  
	 Scott Balfour
	  	 	2.0	  	  	 	50,942	  	  	 	2,202,212	  	  	 	4.6	  	  	 	Yes	  
	 Nancy Tower
	  	 	2.0	  	  	 	65,996	  	  	 	2,853,005	  	  	 	6.0	  	  	 	Yes	  
	 Robert Bennett
	  	 	2.0	  	  	 	45,435	  	  	 	1,964,166	  	  	 	4.1	  	  	 	Yes	  
	 Robert Hanf
	  	 	2.0	  	  	 	29,556	  	  	 	1,277,707	  	  	 	3.2	  	  	 	Yes	  
	
	  
	 

 The above table does not include instalment receipts representing convertible unsecured subordinated debentures of Emera Inc., which were
sold in relation to the pending acquisition of TECO Energy, Inc. Mr. Huskilson purchased 750 instalment receipts (valued at $750,000), Mr. Balfour purchased 250 (valued at $250,000), Ms. Tower purchased 450 (valued at $450,000),
Mr. Bennett purchased 100 (valued at $100,000) and Mr. Hanf purchased 100 (valued at $100,000). The instalment receipts are convertible to Emera common shares following the closing of the TECO Energy, Inc. acquisition. 

The total share and share equivalent ownership for Mr. Huskilson, when factoring in PSUs and the above-noted installment receipts as of December 31, 2015, is
illustrated below: 
  

																					
	 Shares ($)  
  
	  	 DSUs ($)

 
	 	  	 PSUs ($)

 
	 	  	  
 Instalment receipts
for convertible
unsecured
subordinated
debentures ($) (1)

 
	 	  	 Total share
and
share equivalent
ownership ($)
  
	 	  	 Total shares
and
share equivalents as
a multiple of base
salary
  
	 
	 	 	 	 	 	 
	
        1,103,965   
	  	   
	 9,078,214 
	    
	  	   
	 2,739,552 
	    
	  	   
	 750,000 
	    
	  	   
	 13,671,731 
	    
	  	   
	 15.6 
	    

  

	(1)	All debentures sold through Emera’s Bought Deal Offering were purchased on an instalment basis at a price of $1,000 per Debenture, of which $333 is payable on the closing of the Offering and the remaining $667 is
payable on a date to be fixed by the Company following satisfaction of all conditions precedent to the closing of Emera’s acquisition of TECO Energy, Inc. 

  
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Other Executive Benefits 
 The Company provides executives with additional
benefits in accordance with the compensation program objectives. As part of their compensation and consistent with market practice, executives, including the NEOs, are eligible to receive: 

	•	 	annual income tax return preparation; 

	•	 	monthly parking; 

	•	 	monthly car allowance plus mileage, as applicable; and 

	•	 	annual wellness/fitness allowance. 

 Executives are also eligible to participate in the Employee Common Share Purchase
Plan, which allows employees of Emera and its affiliates to purchase Emera common shares through regular payroll deductions or lump-sum payments. Participants can contribute up to $8,000 per year and the Company will match 20 per cent of the
first $3,000 in contributions, and 10 per cent of any contributions between $3,000 and $8,000. 
 These benefits are considered taxable benefits and are reported
in the Summary Compensation Table for the NEOs. 
 Termination and Change of Control Benefits 

The following table provides the estimated amounts of incremental payments, payables and benefits to which each NEO would be entitled based on differing departure
scenarios – resignation, termination for cause, termination without cause, separation from the Company in circumstances of a change of control, and retirement, assuming the triggering event took place on December 31, 2015. 

 

																											
	Name	 	 Departure
 scenario (1)
	 	 
 
 	Cash
severance
($)	  
  
  	 	 
 
 	Short-term
incentive
($)	  
  
  	 	 	PSUs ($) 	(2) 	 	 
 	Stock
options ($) 	  
(3) 	 	 
 
 
 	Continuation
of benefits
(present
value) ($) 	  
  
  
(4) 	 	 	Total ($)	  
	
	  
	 
	 Christopher Huskilson    
	 	Resignation	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination for Cause
	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination without Cause
	 	 	1,750,000	  	 	 	1,575,000	  	 	 	—  	  	 	 	—  	  	 	 	45,413  	  	 	 	3,370,413	  
		 	 Control Change
	 	 	1,750,000	  	 	 	1,575,000	  	 	 	—  	  	 	 	—  	  	 	 	45,413  	  	 	 	3,370,413	  
		 	 Retirement
	 	 	—	  	 	 	—	  	 	 	2,721,808  	  	 	 	3,664,327  	  	 				 	 	6,386,135	  
	
	  
	 
	 Scott Balfour
	 	Resignation	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination for Cause
	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination without Cause
	 	 	475,000	  	 	 	332,500	  	 	 	962,822  	  	 	 	—  	  	 	 	5,519  	  	 	 	1,775,841	  
		 	 Control Change
	 	 	475,000	  	 	 	332,500	  	 	 	962,822  	  	 	 	—  	  	 	 	5,519  	  	 	 	1,775,841	  
		 	 Retirement
	 	 	—	  	 	 	—	  	 	 	467,770  	  	 	 	—  	  	 				 	 	467,770	  
	
	  
	 
	 Nancy Tower
	 	Resignation	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination for Cause
	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination without Cause
	 	 	475,000	  	 	 	285,000	  	 	 	388,532  	  	 	 	—  	  	 	 	18,718  	  	 	 	1,167,250	  
		 	 Control Change
	 	 	475,000	  	 	 	285,000	  	 	 	791,548  	  	 	 	—  	  	 				 	 	1,551,548	  
		 	 Retirement
	 	 	—	  	 	 	—	  	 	 	791,548  	  	 	 	344,627  	  	 				 	 	1,136,175	  
	
	  
	 
	 Robert Bennett      
	 	Resignation	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination for Cause
	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination without Cause
	 	 	475,000	  	 	 	285,000	  	 	 	388,532  	  	 	 	—  	  	 	 	5,519  	  	 	 	1,154,051	  
		 	 Control Change
	 	 	475,000	  	 	 	285,000	  	 	 	791,548  	  	 	 	—  	  	 				 	 	1,551,548	  
		 	 Retirement
	 				 				 	 	791,548  	  	 	 	359,800  	  	 				 	 	1,151,348	  
	
	  
	 
	 Robert Hanf
	 	Resignation	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination for Cause
	 	 	—	  	 	 	—	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—	  
		 	 Termination without Cause
	 	 	400,000	  	 	 	200,000	  	 	 	237,568  	  	 	 	—  	  	 	 	18,141  	  	 	 	855,709	  
		 	 Control Change
	 	 	400,000	  	 	 	200,000	  	 	 	237,568  	  	 	 	—  	  	 	 	18,141  	  	 	 	855,709	  
		 	 Retirement
	 	 	—	  	 	 	—	  	 	 	461,989  	  	 	 	209,225  	  	 				 	 	671,214	  
	
	  
	 

  

	(1)	Please see the tables following for a description of the entitlements of each NEO under the various departure scenarios. 

	(2)	Payouts for PSUs assume a performance factor of 1.0 and are valued using the average closing share price for the last 50 trading days of 2015 ($42.95). 

	(3)	Payouts for stock options on retirement represent the value of stock options that are unvested as of December 31, 2015 (the assumed retirement date) that would vest within 24 months from the assumed retirement
date, using the closing share price as of December 31, 2015 ($43.23). 

	(4)	Continuation of benefits may reflect amounts for car allowance, health and dental benefits and insurance benefits, pursuant to the terms of the NEOs’ employment contracts, as applicable. 

  

62           Emera Inc. — Management Information Circular 2016 

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The following is a summary of the entitlements on departure afforded to each NEO under his or her employment contract or the applicable plans as of December 31,
2015. 
  

			
	  

Christopher Huskilson
  
	 	 
	  

Resignation
  
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated for cause
  
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated without cause        
	 	  

Entitled to 24 months’ compensation based upon annual salary, short-term incentive at target and car allowance. Health, dental and other such benefits will be
continued for up to 12 months. Unvested PSUs and stock options are forfeited.
  

	  

Change in control
	 	  

If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities and there is a substantial
reduction in responsibilities or scope of authority, Mr. Huskilson may elect within three months following such substantial reduction in responsibilities or scope of authority, to terminate employment and receive 24 months’ compensation
based upon annual salary, short-term incentive at target, and car allowance. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs and stock options are forfeited.

 

	  

Retirement
	 	  

Mr. Huskilson was eligible to retire with an unreduced pension as of June 30, 2012. He has agreed to advise the Company at least 12 months in advance of any proposed
retirement. Information regarding pension entitlement is contained in Pension Plan Benefits. PSUs continue to be eligible to vest in accordance with the applicable performance criteria and will be paid out upon vesting. Unvested stock options
continue to be eligible to vest for two years past retirement. Any stock options that have not vested within two years of retirement are forfeited. All vested stock options must be exercised by the earlier of (a) two years from the date of
retirement, and (b) 10 years from the original grant date.
  

 

			
	  

Scott Balfour
  
	 	 
	  

Resignation
  
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated for cause
  
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated without cause
	 	  

Entitled to a lump sum equal to 12 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be
continued for up to 12 months. Unvested PSUs are deemed to vest on the termination date. Unvested stock options are forfeited.
  

	  

Change in control
	 	  

If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities and there is a substantial
reduction in responsibilities or scope of authority, Mr. Balfour may elect, within three months following such substantial reduction in responsibilities or scope of authority, to terminate employment and receive 12 months’ compensation
based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs are deemed to vest on the termination date. Unvested stock options are forfeited.

 

	  

Retirement
	 	  

Mr. Balfour becomes eligible to retire with an unreduced pension as of April 30, 2027. Information regarding pension entitlement is contained in Pension Plan
Benefits. PSUs continue to be eligible to vest in accordance with the applicable performance criteria and will be paid out on a prorated basis upon vesting. Unvested stock options are forfeited.

 

	  

Other
	 	  

If Mr. Balfour’s employment is terminated without cause, he is entitled to a relocation program for reimbursement of reasonable relocation costs back to Ontario
to a maximum of $200,000, which is payable up to 12 months after the termination date.
  

  
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Information Circular 2016          63 

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Nancy Tower
  
	 	 
	  

Resignation
  
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated for cause
  
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated without cause
  
	 	  

Entitled to a lump sum equal to 12 months’ compensation based upon annual salary, short-term incentive at target and car allowance. Health, dental and other such
benefits will be continued for up to 12 months. Unvested PSUs are prorated to the date of termination and paid out based on an estimated future value. Unvested stock options are forfeited.

 

	  

Change in control
  
	 	  

If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities and there is a substantial
reduction in responsibilities or scope of authority, Ms. Tower may elect, within three months following such substantial reduction in responsibilities or scope of authority, to terminate employment and receive 12 months’ compensation
calculated on the basis of her annual salary and short-term incentive at target. Unvested PSUs are deemed to vest on the termination date. Unvested stock options are forfeited.

 

	  

Retirement
  
	 	  

Ms. Tower becomes eligible to retire with an unreduced pension as of March 31, 2019. Information regarding pension entitlement is contained in Pension Plan
Benefits. PSUs continue to be eligible to vest for two years following retirement in accordance with the applicable performance criteria. Unvested stock options continue to be eligible to vest for two years past retirement. Any stock options
that have not vested within two years of retirement are forfeited. All vested stock options must be exercised by the earlier of (a) two years from the date of retirement; and (b) 10 years from the original grant date.

 

  

			
	  

Robert Bennett
  
	 	 
	  

Resignation
  
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated for cause
  
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated without cause
  
	 	  

Entitled to a lump sum equal to 12 months’ compensation based upon annual salary and short-term incentive at target. Health, dental and other such benefits will be
continued for up to 12 months. Unvested PSUs are prorated to the date of termination and paid out based on an estimated future value. Unvested stock options are forfeited.

 

	  

Change in control
  
	 	  

If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities and there is a substantial
reduction in responsibilities or scope of authority, Mr. Bennett may elect, within three months following such substantial reduction in responsibilities or scope or authority, to terminate employment and receive 12 months’ compensation
calculated on the basis of his annual salary and short-term incentive at target. Unvested PSUs are deemed to vest on the termination date. Unvested stock options are forfeited.

 

	  

Retirement
  
	 	  

Mr. Bennett becomes eligible to retire with an unreduced pension as of October 31, 2017. Information regarding pension entitlement is contained in Pension Plan
Benefits. PSUs continue to be eligible to vest for two years following retirement in accordance with the applicable performance criteria. Unvested stock options continue to be eligible to vest for two years past retirement. Any stock options
that have not vested within two years of retirement are forfeited. All vested stock options must be exercised by the earlier of (a) two years from the date of retirement; and (b) 10 years from the original grant date.

 

	  

Other
  
	 	  

In a termination without cause scenario, Mr. Bennett is entitled to receive his pension on his earliest retirement eligibility date, to be calculated based on his
earliest retirement eligibility date in 2017 and, in accordance with his supplemental pension agreement, the pension would be calculated using his salary and annual target bonus in effect at the time of termination.

 

  

64           Emera Inc. — Management Information Circular 2016 

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Robert Hanf
  
	 	 
	  

Resignation
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated for cause
	 	  

All unvested PSUs and stock options are forfeited.
  

	  

Terminated without cause
	 	  

Entitled to a lump sum equal to 12 months’ compensation based upon annual salary, short-term incentive at target and car allowance. Health, dental and other such
benefits will be continued for up to 12 months. Unvested PSUs are prorated to the date of termination and paid out based on an estimated future value. Unvested stock options are forfeited.

 

	  

Change in control
	 	  

If there is a change of control of the ownership of the Company, such that any one party acquires 50 per cent or more of voting securities and there is a substantial
reduction in responsibilities or scope of authority, Mr. Hanf may elect, within three months following such substantial reduction in responsibilities or scope or authority, to terminate employment and receive 12 months’ compensation
calculated on the basis of his annual salary, short-term incentive at target and car allowance. Health, dental and other such benefits will be continued for up to 12 months. Unvested PSUs are prorated to the date of termination and paid out based on
an estimated future value. Unvested stock options are forfeited.
  

	  

Retirement
	 	  

Mr. Hanf becomes eligible to retire with an unreduced pension as of November 30, 2022. Information regarding pension entitlement is contained in Pension Plan
Benefits. PSUs continue to be eligible to vest for two years following retirement in accordance with the applicable performance criteria. Unvested stock options continue to be eligible to vest for two years past retirement. Any stock options
that have not vested within two years of retirement are forfeited. All vested stock options must be exercised by the earlier of (a) two years from the date of retirement; and (b) 10 years from the original grant date.

 

 Shares Authorized for Issuance under Equity-based Compensation Plans 

The following table shows shares authorized for issuance under the Stock Option Plan and the Employee Common Share Purchase Plan as of December 31, 2015. There are
no equity-based compensation plans that were not approved by Shareholders. 
  

													
	  	  	 (A)

 
	 	  	 (B)

 
	 	  	 (C)

 
	 
	 Plan Category
  
	  	
Number of shares to be
issued upon exercise of
outstanding options

 
	 	  	 Weighted-average
exercise price of
outstanding options ($)

 
	 	  	  

Number of shares available
for future issuance under
equity compensation plans
(excluding column (A))

 
	 
	  
 Equity-based compensation plans approved by Shareholders
	  				  				  			
	 •  Senior Management Stock Option Plan
	  	 	2,927,068	  	  	 	33.07	  	  	 	4,339,210	  
	 •  Employee Common Share Purchase Plan
	  	 	N/A	  	  	 	N/A	  	  	 	1,620,410	  
	 Total

 
	  	   
	2,927,068  
	    
	  	   
	33.07  
	    
	  	   
	5,959,620  
	    

 Loans to Directors and Officers 
 No current or
former directors, officers, or employees of Emera, or any of its subsidiaries, had any loans with Emera or any of its subsidiaries at any time in 2015, other than routine indebtedness previously outstanding as defined under Canadian securities laws.

 Material Transactions 
 During the most recently completed financial year,
insiders of the Company and its affiliates, including Directors, executive officers, proposed nominee Directors or their associates or corporations they controlled, did not have any material interest, direct or indirect, in any transaction or in any
proposed transaction that has materially affected or will materially affect the Company. 
 Management Contracts 

There are no functions of management that are performed by a person or company other than the Directors, executive officers or other employees of the Company. 

Audit Committee Information 
 For information regarding Emera’s Audit
Committee, including its Charter, composition, relevant education and experience of its members, Audit Committee oversight, policies and procedures for the approval of non-audit services and Auditors’ service fees, please refer to Emera’s
Annual Information Form, available on SEDAR at www.sedar.com, or by contacting the Corporate Secretary of the Company. 

  
 Emera Inc. — Management
Information Circular 2016          65 

Table of Contents

 Appendix A 

Emera Incorporated Board of Directors Charter 
 The
fundamental responsibility of the Board of Directors (the “Board”) is to provide stewardship and governance to Emera Incorporated (“Emera”) to ensure the viability of the Company by overseeing management of the business. 

In addition to the powers set out in Emera’s Articles of Association, the Board shall have the following duties and responsibilities. 

Independence and Integrity 
 The Board shall be comprised
of a majority of “Independent Directors” as defined from time to time under applicable legislation and the rules of any stock exchange on which Emera’s securities are listed for trading. 

The Chair shall be an “Independent Director” as defined above. 
 The Board
shall review and approve standards for ethical business conduct for employees, Officers and Directors of Emera and its subsidiaries and affiliates and a procedure for monitoring compliance with such code throughout the Company. 

The Board shall satisfy itself as to the integrity of the Chief Executive Officer and executive officers and the creation of an integrity-based culture throughout the
Company. 
 The Board shall, through its oversight of management, continue to foster an organization which operates in an environmentally responsible manner. 

Strategic Planning 
 The Board shall provide oversight
and guidance on the strategic issues facing Emera. 
 The Board shall oversee a strategic planning process resulting in a strategic plan which shall be approved on an
annual basis and will take into account, among other things, the opportunities and risks of the business. 
 The Board shall regularly consider Emera’s strategy,
evaluate progress made in pursuing that strategy, and consider any adjustments to the strategy that may be required from time to time. 
 The Board shall review and
approve the Company’s financial objectives, plans and actions, including significant capital allocations and expenditures. 
 The Board shall review and approve
all material acquisitions, dispositions, projects, business plans and budgets. 
 Risk Responsibility 

The Board shall oversee the implementation by management of appropriate systems to identify, report and manage the principal risks of Emera’s business. The Board
will consider Emera’s risk profile and oversee Emera’s risk management by reviewing: 

	(a)	the annual identification and assessment of the principal risks of Emera; 

	(b)	the process for ongoing monitoring and reporting of the principal risks of Emera; 

	(c)	the effectiveness of Emera’s mitigation response to its principal risks; and 

	(d)	the alignment of risk management with Emera’s risk profile, its strategy and its organizational objectives, including capital and resources allocation. 

The Board shall also review Emera’s annual insurance program and uninsured exposure, and Emera’s business continuity and disaster recovery plans. 

The Board shall receive regular updates on the status of risk management activities and initiatives. 

The Board shall approve and monitor processes that provide reasonable assurance of compliance with applicable legal and regulatory requirements. 

Leadership Succession 
 The Board shall oversee policies
and practices to enable the Company to attract, develop and retain the human resources required by the Company to meet its business objectives. 
 The Board shall
appoint executive officers and delegate the necessary authority for the conduct of the business. 
 The Board shall establish annual performance expectations and
corporate goals and objectives for the Chief Executive Officer and monitor progress against those expectations. 

  

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The Board shall evaluate the performance and, following a review of recommendations from the Management Resources and Compensation Committee, approve compensation for
executive officers. 
 The Board shall oversee the succession planning program for the Chief Executive Officer and other key executive positions from time to time. 

Financial 
 The Board shall oversee the financial
reporting and disclosure obligations imposed on the Company by laws, regulations, rules, policies and other applicable requirements. 
 The Board shall review the
financial performance of the Company and declare dividends as appropriate. 
 The Board shall approve for release to the public as necessary the Company’s
financial statements, management’s discussion and analysis (MD&A) and earnings releases prepared by management, and oversee the Company’s compliance with applicable audit, accounting and reporting requirements. 

The Board shall review the quality and integrity of Emera’s internal controls and management information systems. 

Corporate Communications and Public Disclosure 
 The
Board shall review and approve a formal corporate disclosure policy and oversee policies and processes for accurate, timely and appropriate public disclosure. 
 The
Board shall oversee systems for receiving feedback from stakeholders and monitor such feedback received by the Company. 
 Governance
Responsibility 
 The Board is responsible for overseeing the Company’s corporate governance policies and practices and shall maintain a set of corporate
governance practices that are specifically appropriate to the Company. 
 Pursuant to the Articles, the Directors shall appoint one of the Directors as Chair of the
Board, and such Director shall not be an employee of Emera or any of its affiliates or subsidiaries. 
 The Board shall establish appropriate structures and procedures
to allow the Board to function independently of management and in the interests of the Company and its Shareholders. 
 The Board, in carrying out its mandate, shall
appoint Committees of the Board and delegate certain functions to those Committees, each of which shall have its own written charter. Notwithstanding such delegation, the Board retains its oversight function and ultimate responsibility for these
delegated functions. 
 The Board shall oversee a process for the selection of qualified individuals for board nomination, and shall approve selection criteria for
identifying Director candidates, taking into account the competencies and skills the Board as a whole should possess. 
 The Board shall undertake regular evaluation of
the Board, the Chair of the Board, the Board Committees and individual Directors. 
 The Board shall undertake regular evaluation of Directors’ compensation. 

The Board shall review this Charter annually to ensure it appropriately reflects the Board’s stewardship responsibilities. 

  
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 Appendix B 

Emera Incorporated Amended Articles of Association 

Amended Articles of Association of Emera Incorporated 

Part A 
 Interpretation 

 

	1.	In these Articles (including for greater certainty Part B hereof), unless there be something in the subject or context inconsistent therewith: 

 

	 	(a)	“the “Act” means the Companies Act, R.S.N.S. 1989, c. 81 and all amendments thereto81, as amended and restated from time to time; 

 

	 	(b)	“affiliate” for purposes of these Articles shall mean: 

  

	 	(i)	one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; and

  

	 	(ii)	if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.; 

 

	 	(c)	“business day” means any day other than a Saturday or Sunday on which the banks in Halifax, Nova Scotia or the Company are generally open for business; 

 

	 	(d)	(c) “the “Company” means NS Power HoldingsEmera Incorporated; 

  

	 	(e)	(d) “the OfficeDirector” means the registered officea director of the Company for the time being of the Company; and
“Board”, “board” and “Board of Directors” means the board of directors of the Company for the time being; 

  

	 	(f)	a “meeting” shall, to the extent permitted by the Act and other applicable law, absent express provisions herein to the contrary, include a meeting held in whole or in part by telephonic, electronic or
other means of communication contemplated by these Articles; 

  

	 	(g)	the terms “member” (when not expressly referring to a member of another body, group or organization), “shareholder” and “Shareholder” each means a member of the Company, as that term is
used in the Act in connection with a company limited by shares; 

  

	 	(h)	the “Office” means the registered office for the time being of the Company; 

  

	 	(i)	(e) “the “Register” means the register of members kept pursuant to Secion 42 ofthe Act and, where context permits, includes any branch register of members;

  

	 	(j)	(f) “the “Registrar” means the Registrar of Joint Stock Companies appointed under the Act and includes thea Deputy Registrar or any person authorized by the
Governor in Council to perform the duties of the Registrar in the absence of the Registrar; 

  

	 	(k)	(g) “month” means calendar month; 

  

	 	(l)	(h) “in writing” and “written” includes printing, lithography and other modes of representing or reproducing words in visible form; 

 

	 	(m)	“sent”, “given”, “delivered” and similar terms in relation to shareholders of the Company shall for greater certainty and without limitation include the “notice and access”
method or any other manner of providing information permitted for any such purpose by the Act and applicable securities regulation; 

  

	 	(n)	(i) “these Articles” and “these presents” include theseArticles” of Association“means these articles of association and all
amendments thereto; 

  

	 	(o)	(j) “reporting company” and “reporting issuer” shall havehas the meaningsmeaning as set out in
Section 2 ofgiven thereto in the Act; 

  

	 	(p)	(k) “Secretary” includes any person appointed to perform the duties of the Secretary temporarily; 

  

	 	(q)	(l) “special resolution” means, in relation to the Company, notwithstanding the provisions of the Act, a resolution passed by a majority of not less thatthan
three fourths of such members of the Company entitled to vote as are present in person or by proxy at a general meeting of the Company of which notice specifying the intention to propose the resolution as a special resolution has been duly given;

  

	 	(r)	(m) “subsidiary” for purposes of these Articles a body corporate is a “subsidiary” of another body corporate if; 

 

	 	(i)	it is controlled by 

  

	 	(A)	that other body corporate; 

  

	 	(B)	that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate,; or 

  

	 	(C)	two or more bodies corporate each of which is controlled by that other body corporate; or 

  

  

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	 	(ii)	it is a subsidiary of a body corporate that is a subsidiary of that other body corporate. 

  

	 	(s)	(n) “proxyholder” includes an alternate proxyholder; 

  

	 	(t)	(o) “Privatization Act” means the Nova Scotia Power Privatization Act, S.N.S., 1992, c.8 – and all amendments thereto; 

 

	 	(u)	(p) “Reorganization Act” means the Nova Scotia Power Reorganization (1998) Act, S.N.S., 1998, c.19 – and all amendments thereto; 

 

	 	(v)	“stated capital account” means a capital account maintained or deemed to be maintained by the Company for shares of a class or series pursuant to the Act; 

 

	 	(w)	(q) words importing the singular number only include both the singular and the plural number and vice versaunless the context otherwise
requires; 

  

	 	(x)	(r) words importing the masculinegender onlyinclude the feminine genderall genders unless the context otherwise requires; 

 

	 	(y)	(s) words importing persons include corporationsboth natural persons and bodies corporate and, where context permits, include partnerships and other entities.

  

	2.	These Articles have been prepared and adopted for use in an environment in which technology is evolving. Language used herein is not intended to limit the use of technology by the Company and its Directors, but
rather is intended to facilitate the use of new technologies by the Company and its Directors wherever the objectives of these Articles can be well accomplished through the use of technology, subject to applicable law. These Articles are to be
interpreted in the context of such intention, and terms used herein, including terms which suggest place, time or action, shall be interpreted to allow activities and processes to occur with the aid of technology by a means that may not be covered
by the ordinary meanings of such terms. For greater certainty, the intention expressed here applies to technologies which existed at the time these Articles were originally prepared or most recently amended and any expressed or implied
reference to the use of technology by the Company or the Directors in one provision of these Articles shall not preclude other provisions from being interpreted as applying to the use of other technologies by the Company and its Directors in light
of such intention. The Board may make rules of interpretation from time to time which shall govern the interpretation of these Articles. 

  

	3.	2. The regulations appearing in Table A in the First Schedule to the Act shall not apply to the Company. 

  

	4.	3. The Directors may enter into and carry into effect or adopt and carry into effect any agreement or agreements made in connection with the reorganization of the Company pursuant to the
Reorganization Act on behalf of the Company and shall have full power to agree to any modification in the terms of any such agreements, either before or after their execution. 

 

	5.	4. The Directors may, out of any moneys of the Company, pay all expenses incurred for the formation and reorganization of the Company. 

 

	5.	The business of the Company may be commenced as soon as the Directors think fit. 

  

	6.	The head office, registered officeOffice and principal executive offices of the Company shall be situated in the Province of Nova Scotia. 

Shares 
  

	7.	The Directors shall control the shares and, subject to the provisions of these Articles and the Reorganization Act, may allot or otherwise dispose of them to such persons at such times, on such terms and conditions, for
such consideration and either at a premium or at par as they think fit. 

  

	8.	The Directors may pay on behalf of the Company a reasonable commission to any person in consideration of that person subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares in the
Company, or procuring or agreeing to procure subscriptions whether absolute or conditional) for any shares in the Company. TheSubject to the Act, the commission may be paid or satisfied in cash or in shares debentures or
debenture stockother securities of the Company. 

  

	9.	On the issue of shares the Company may arrange among the holders thereof differences in the calls to be paid and in the times for their payment. 

 

	10.	If the whole or part of the allotment price of any shares is, by the conditions of their allotments, payable in instalments, every such instalment, shall, when due, be payable to the Company by the person who is at such
time the registered holder of the shares. 11. Shares may be registered in the names of joint holders not exceeding three in number. 

  

	12.	The joint holders of a share shall be severally as well as jointly liable for the payment of all instalments and calls due in respect of such share. On the death of one or more joint holders of shares the survivor or
survivors of them shall alone be recognized by the Company as having title to the shares. 

  

	13.	Save as herein otherwise provided, the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not, except as ordered by a court of competent
jurisdiction or required by statute, be bound to recognize any equitable or other claim to or interest in such share on the part of any other person. 

  
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 Certificates 
  

	14.	Certificates of title to shares shall comply with the Act and be in such form as the Directors may from time to time approve. Nothing in these Articles shall require, should at any time the Act and applicable
laws otherwise permit, that all or any shares issued by the Company be evidenced by certificates and, subject to applicable laws, the Directors may from time to time issue regulations, complying with the Act and other applicable laws, establishing
book-based or other share ownership and transfer systems as they may see fit. 

  

	15.	Certificates of title to shares shall be signed (i) by the President, a Vice-President or a Director, and (ii) by the Secretary, an Assistant Secretary or such other persons as the Directors may authorize and,
(iii) if the Directors have appointed a transfer agent for the Company, (iii) by an authorized officer of such transfer agent. The signature of the President or a Vice-President or Director and, if a transfer
agent has been appointed, of the Secretary or an Assistant Secretary or other authorized person signing in lieu of them, may be engraved, lithographed or printed upon the certificates or any one or more of them and all such
certificates, when signed by the Secretary, an Assistant Secretary, such other person as the Directors authorize, or, if a transfer agent has been appointed, an authorized officer of such transfer agent, shall be valid and binding upon the Company.
If the Company has appointed only one Director and officer, share certificates shall be signed by that Director alone as sole Director. If a certificate contains a printed or mechanically reproduced signature of a person, the Company may issue
the certificate, notwithstanding that the person has ceased to be a Director or an officer of the Company and the certificate is as valid as if such person were a Director or an officer at the date of its issue. Any certificate representing shares
of a class publicly traded on any stock exchange shall be valid and binding on the Company if it complies with the rules of such exchange whether or not it otherwise complies with this Article. 

 

	16.	Subject to any regulations made at any time of the Directors, each shareholder may have title to the shares registered in the shareholder’s name evidenced by any number of certificates so long as the aggregate of
the shares stipulated in such certificates equals the aggregate registered in the shareholder’s name. 

  

	17.	Where shares are registered in the names of two or more persons, the Company shall not be bound to issue more than one certificate or one set of certificates, and such certificate or set of certificates
shall be delivered to the person first named on the registerRegister. 

  

	18.	AnySubject to any regulations issued by the Directors, any certificate that has become worn, damaged or defaced may, upon its surrender to the DirectorsCompany, be
cancelled and replaced by a new certificate. AnySubject to any regulations issued by the Directors, any certificate that has become lost or destroyed may also be replaced by a new certificate upon proof of such loss or
destruction to the satisfaction of the Directors and the furnishing to the Company of such undertakings of indemnity as the Directors deem adequate. 

  

	19.	The sum of one dollar or such other sum as the Directors from time to time determine shall be paid to the Company for every certificate other than the first certificate issued to any holder in respect of any share or
shares. 

  

	20.	The Directors may cause one or more branch registers of membersRegisters to be kept in any place or places, whether inside or outside of the Province of Nova Scotia. 

Calls 
  

	21.	The Directors may from time to time make such calls as they think fit upon the shareholders in respect of all moniesamounts unpaid on the shares held by them respectively and not made payable at
fixed times by the conditions on which such shares were allotted and each shareholder shall pay the amount of every call so made on him or her to the persons and at the times and places appointed by the Directors. A call may be made payable by
instalments. 

  

	22.	A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed. 

  

	23.	At least fourteen days’ notice of any call shall be given, and such notice shall specify the time and place at which and the person to whom such call shall be paid. 

 

	24.	If the sum payable in respect of any call or instalment is not paid on or before the day appointed for the payment thereof, the holder for the time being of the share in respect of which the call has been made or the
instalment is due shall pay interest on such call or instalment at the rate of fifteen per centumcent per annum from the day appointed for the payment thereof up to the time of actual payment. 

 

	25.	At the trial or hearing of any action for the recovery of any moneyamount due for any call, it shall be sufficient to prove that the name of the shareholder sued is entered on the
registerRegister as the holder or one of the holders of the share or shares in respect of which such debt accrued, that the resolution making the call is duly recorded in the minute book and that notice of such call was duly
given to the shareholder sued in pursuance of these Articles. It shall not be necessary to prove the appointment of the Directors who made such call or any other matters whatsoever and the proof of the matters stipulated shall be conclusive evidence
of the debt. 

  

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	26.	The Directors may, if they think fit, receive from any shareholders willing to advance it all or any part of the moniesamounts due upon shares held by the shareholder beyond the sums actually
called for; and upon the moniesamounts so paid or satisfied in advance or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made the
Company may pay interest at such rate, not exceeding fifteen per centumcent per annum, as the shareholder paying such sum in advance and the Directors agree upon or the Directors may agree with such shareholder that the
shareholder may participate in profits upon the amount so paid or satisfied in advance. 

 Forfeiture of Shares 

 

	27.	If any shareholder fails to pay any call or instalment on or before the day appointed for payment, the Directors may at any time thereafter while the call or instalment remains unpaid serve a notice on such shareholder
requiring the shareholder to pay the call or instalment together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment. 

 

	28.	The notice shall name a day (not being less than fourteen days after the date of the notice) and a place or places on and at which such call or instalment and such interest and expenses are to be paid. The notice shall
also state that, in the event of non-payment on or before the day and at the place or one of the places so named, the shares in respect of which the call was made or instalment is payable will be liable to be forfeited. 

 

	29.	If the requirements of any such notice are not complied with, any shares in respect of which such notice has been given may at any time thereafter, before payment of all calls or instalments, interest and expenses due
in respect thereof, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. 

 

	30.	When any share has been so forfeited, notice of the resolution shall be given to the shareholder in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture shall be made in the
register.Register. 

  

	31.	Any share so forfeited shall be deemed the property of the Company and the Directors may sell, re-allot or otherwise dispose of it in such manner as they think fit. 

 

	32.	Directors may at any time before any share so forfeited has been sold, re-allotted or otherwise disposed of, annul the forfeiture thereof upon such conditions as they think fit. 

 

	33.	Any shareholder whose shares have been forfeited shall nevertheless be liable to pay and shall forthwith pay to the Company all calls, instalments, interest and expenses owing upon or in respect of such shares at the
time of the forfeiture together with interest thereon at the rate of fifteen per cent per annum from the time of forfeiture until payment. The Directors may enforce such payment if they think fit, but are under no obligation to do so.

  

	34.	A certificate in writing under the hand of the Secretary stating that a share has been duly forfeited on a specified date in pursuance of these Articles and the time when it was forfeited shall be conclusive evidence of
the facts therein stated as against all persons who would have been entitled to the share but for such forfeiture. 

 Lien on Shares 

 

	35.	The Company shall have a first and paramount lien upon all shares (other than fully paid up shares) registered in the name of each shareholder (whether solely or jointly with others) and upon the proceeds from the sale
thereof for the debts, liabilities and other engagements of the shareholder, solely or jointly with any other person, to or with the Company, whether or not the period for the payment, fulfilment or discharge thereof has actually arrived, and such
lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed, the registration of a transfer of shares shall operate as a waiver of any lien of the Company on such shares. 

 

	36.	For the purposes of enforcing such lien the Directors may sell the shares subject to the lien in such manner as they think fit; but no sale shall be made until the period for the payment, fulfilment or discharge of such
debts, liabilities or other engagements has arrived, and until notice in writing of the intention to sell has been given to such shareholder, or to the shareholder’s executors or administrators and default has been made by the shareholder or
the executors or administrators in such payment, fulfilment or discharge for seven days after such notice. 

  

	37.	The net proceeds of any such sale after the payment of all costs shall be applied in or towards the satisfaction of such debts, liabilities or engagements and the residue, if any, paid to such shareholder or
thesuch shareholder’s executors, administrators or assigns. 

  
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 Validity of Sales 
  

	38.	Upon any sale after forfeiture or the enforcing of a lien in purported exercise of the powers given by these Articles the Directors may cause the purchaser’s name to be entered in the
registerRegister in respect of shares sold, and the purchaser shall not be bound to see to the regularity of the proceedings or to the application of the purchase money, and after the purchaser’s name has been entered in
the registerRegister in respect of such shares the validity of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

 Transfer Of Shares 
  

	39.	The instrument of transfer of any share in the Company shall be signed by the transferor. The transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the
registerRegister in respect thereof and shall be entitled to receive any dividend declared thereon before the registration of the transfer. 

 

	40.	The instrument of transfer of any share shall be in writing in the following form or as near thereto as circumstances will permitto the following effect or as may be otherwise approved by the
Directors or the Company’s transfer agent from time to time: 

 For value received I (we) assign and transfer
unto                                        
                             

Please insert social insurance number or other tax identifying number of
assignee                                       
                      
 Please print name
and address including postal code of assignee shares                 of the Company represented by this certificate. 

Date                        
                                         
                    

Signature                       
                                         
             
 SIGNATURE GUARANTEE: The signature must be guaranteed by a bank, trust
company or a member of a recognized stock exchange whose signature is acceptable to the Transfer AgentCompany’s transfer agent. 
  

	41.	The Directors may, without assigning any reason therefor, decline to register any transfer of shares not fully paid up or upon which the Company has a lien. 

 

	42.	Every instrument of transfer shall be left at the officeOffice of the Company or the office of its transfer agent where the principal or a branch register of
membersRegister is maintained for registration together with the certificate of the shares, if any, to be transferred and such other evidence as the Company may require to prove the title of the transferor or the right of the
transferor to transfer the shares. 

  

	43.	A fee not exceeding Five Dollars ($5.00) may be charged for each transfer and shall, if required by the Directors, be paid before its registration. 

 

	44.	Every instrument of transfer shall, after its registration, remain in the custody of the Company. 

  

	45.	Any instrument of transfer that the Directors decline to register shall, except in case of fraud, be returned to the person who deposited it. 

Transmission of Shares 
  

	46.	The executors or administrators of a deceased member (not being one of several joint holders) shall be the only persons recognized by the Company as having any title to the shares registered in the name of such member.
When a share is registered in the names of two or more joint holders, the survivor or survivors or the executors or administrators of the deceased survivorlast surviving member, shall be the only persons recognized by the
Company as having any title to, or interest in, such share. 

  

	47.	Notwithstanding anything in these Articles, if the Company has only one member, not being one of several joint holders, and that member dies, the executors or administrators of such deceased member shall be entitled to
register themselves in the register of membersRegister as the holders of such deceased member’s share whereupon they shall have all the rights given by these Articles and law to members. 

 

	48.	AnySubject to the Reorganization Act, any person becoming entitled to shares in consequence of the death or bankruptcy of any member or any way other than by allotment or transfer upon producing
such evidence of being entitled to act in the capacity claimed or of such person’s title to the shares as the Directors think sufficient, may, with the consent of Directors, (which they shall not be under any obligation to
give) be registered as a member in respect of such shares, or may, without being registered, transfer such shares subject to the provisions of these Articles respecting the transfer of shares. 

 

	49.	The Directors shall have the same right to refuse to register a person entitled by transmission to any shares, or that person’s nominee, as if the person were the transferee named in an ordinary transfer presented
for registration. 

  

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Stated Capital Accounts 
  

	50.	Notwithstanding anything contained in the Act: 

  

	 	(a)	The Company shall maintain a separate stated capital account, sometimes called a stated capital account, for each class and series of shares it issues; and, should it
fail to do so will be deemed to maintain such account as contemplated by the Act. 

  

	 	(b)	The Company shall add to the appropriate stated capital account the full amount of any consideration it receives for any shares it issues;. 

 

	 	(c)	Notwithstanding paragraph (b) of this Article 50, where the Company issues shares in exchange for 

  

	 	(i)	property of a person who immediately before the exchange or that, because of the exchange, did not deal with the Company at arm’s length within the meaning of that term in the Income Tax Act (Canada), or

  

	 	(ii)	shares of a body corporate that immediately before the exchange or that, because of the exchange, did not deal with the Company at arm’s length within the meaning of that term in the Income Tax Act (Canada),

 the Company may, subject to paragraph (d) of this Article 50, add to the stated capital accounts maintained for the shares of the
classes or series issued the whole or any part of the amount of the consideration it received in the exchange. 
  

	 	(d)	On the issue of a share the Company shall not add to a stated capital account in respect of the share it issues an amount greater than the amount of the consideration it received for the share. 

Record Dates 
  

	51.	Notwithstanding anything contained in the Act: 

  

	 	(a)	For the purpose of determining shareholders: 

  

	 	(i)	entitled to receive payment of a dividend; 

  

	 	(ii)	entitled to participate in a liquidation distribution; or 

  

	 	(iii)	for any other purpose except the right to receive notice of or to vote at a meeting, 

 the Directors may
fix in advance a date as the record date for such determination of shareholders but such record date shall not precede by more than fifty days the particular action to be taken by more than the longer of (A) sixty days, or
(B) such longer period as is fixed from time to time by the Directors and complies with all applicable laws; 
  

	 	(b)	For the purpose of determining shareholders entitled to receive notice of a meeting of shareholders, the Directors may fix in advance a date as the record date for such determination of shareholders,
but, unless different periods complying with all applicable laws are fixed from time to time by the Directors, such record date shall not precede by more than fiftysixty days or be less than twenty-one days
before the date on which the meeting is to be held; 

  

	 	(c)	For the purpose of determining shareholders entitled to vote at a meeting of shareholders, the Directors may fix in advance a date as the record date for such determination of shareholders, but such record
date shall not precede the date on which the meeting is to be held by more than longer of (A) sixty days, or (B) such longer period complying with all applicable laws as is fixed from time to time by the Directors; 

 

	 	(d)	(c) If no record date is fixed, 

  

	 	(i)	The record date for the determination of shareholders entitled to receive notice of a meeting of shareholders shall be 

  

	 	(A)	at the close of business on the day immediately preceding the day on which the notice is given; or 

  

	 	(B)	if no notice is given, the day on which the meeting is held; and 

  

	 	(ii)	the record date for the determination of shareholders for any purpose other than to establish a shareholder’s right to receive notice of a meeting or a vote shall be at the close of business on the day on which the
Directors pass the resolution relating thereto; 

  

	 	(e)	(d) If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the Register at the
close of business on the day the directorsDirectors fix the record date, notice thereof shall, not less than seven days before the date so fixed, be given 

  
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	 	(i)	either (A) by advertisement in a newspaper published or distributed in the place where the corporationCompany has its registered officeOffice and in each place
in Canada where it has a transfer agent or where a transfer of its shares may be recorded; or (B) as may be otherwise permitted under applicable securities law and the Act; and 

 

	 	(ii)	by written notice to each stock exchange in Canada on which the shares of the Company are listed for trading. 

ReductionAlteration of Capital 
  

	52.	Subject to the the rights, if any, of the holders of shares of any class or series of shares to vote separately as a class or series thereon, the Company may, from time to time, by special resolution reduce its
share capital and any capital redemption reserve fund in any way, and having done so shall in accordance with the Act seek an order of the Court confirming such reduction. Act, the Reorganization Act, the provisions of this Article and
Part B of these Articles, and the rights, if any, under the Act or other applicable law, of the holders of shares of any class or series of shares to vote separately as a class or series thereon, the Company may by resolution of its
shareholders, add, change or remove any provision of its Memorandum to increase its share capital by the creation of new shares of such amount as it thinks expedient and may by special resolution, add, change or remove any provision of its
Memorandum to: 

  

	 	(a)	increase its share capital to authorize a new class of shares without nominal or par value, either stating the maximum number of shares of such class that the Company is authorized to issue or, where there is
no limit on the number of shares of such class, a statement to that effect; 

  

	 	(b)	change the maximum number of shares of a class of shares without nominal or par value that the Company is authorized to issue, which may include a change to or from an unlimited number of shares of that class;

  

	 	(c)	consolidate and divide all or any of its share capital into shares of larger amounts than its existing shares; 

  

	 	(d)	change the shares of any classes, whether issued or unissued, into a different number of shares of the same class or into the same or different number of shares of another class; 

 

	 	(e)	convert all or any of its paid-up shares into stock and reconvert that stock into paid-up shares of any denomination or into shares without nominal or par value; 

 

	 	(f)	subdivide its shares, or any of them, into shares of smaller amounts than is fixed by the Memorandum, so, however, that in the subdivision the proportion between the amount paid and the amount, if any, unpaid
on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived, and the special resolution whereby any share is subdivided may determine that as between the holders of the shares resulting from
such subdivision, one or more of such shares shall have some preference or special advantage as regards dividend, capital, voting or otherwise, over, or as compared with, the others or other; 

 

	 	(g)	exchange shares of one denomination for another, including shares without nominal or par value; 

  

	 	(h)	convert any part of its issued or unissued share capital into preferred shares redeemable or purchasable by the Company; 

 

	 	(i)	except in the case of preferred shares, convert all or any of its previously authorized unissued or issued and fully paid-up shares with nominal or par value into the same number of shares without any nominal
or par value and reduce, maintain or increase accordingly its liability on any of its shares so converted, but the power to reduce its liability on any of its shares so converted where it results in a reduction of paid-up capital may only be
exercised in accordance with any applicable restriction in the Act; 

  

	 	(j)	convert all or any of its previously authorized, unissued or issued, fully paid-up shares without nominal or par value into the same or a different number of shares with nominal or par value, and for such
purpose the shares issued without nominal or par value and replaced by shares with a nominal or par value shall be considered as fully paid, but their aggregate par value shall not exceed the value of the net assets of the Company as represented by
the shares without par value issued before the conversion; 

  

	 	(k)	change the designation of all or any of its shares and add, change or remove any rights, privileges, restrictions or conditions including rights to accrued dividends, in respect of all or any of the shares,
whether issued or unissued; or 

  

	 	(l)	make any change or do anything which is permitted by, or not restricted by, the Act 

  

	53.	Subject to the Act, the Company may by resolution of its shareholders, add, change or remove any provision of its Memorandum to cancel shares that at the date of the passing of the resolution in that behalf, have not
been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled. 

  

	54.	Where the shares of a class are issued in series, and any designation, rights, privileges, restrictions or conditions attaching to any series of such shares are set out in the Memorandum, all provisions of these
Articles respecting the creation, amendment, exchange, cancellation or other change of shares of any class, apply thereto. 

  

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	55.	Subject to the Act, the Reorganization Act, the provisions of this Article and Part B of these Articles, and the rights, if any, under the Act or other applicable law, of the holders of shares of any class or series
of shares to vote separately as a class or series thereon and the restrictions on allotment and issuance in these Articles and the Memorandum, any shares authorized to be issued may be issued upon such terms and conditions and with such rights,
privileges, limitations, restrictions and conditions attached thereto as the Company by resolution of its shareholders shall direct or, if no direction is given, as the Directors determine, and in particular such shares may be issued with a
preferential or qualified right to dividends and in the distribution of assets of the Company, and with a special right, or without any right, of voting. Except as otherwise provided by the conditions of issue, or by these Articles, any capital
raised by the creation of new shares shall be considered part of the original capital and shall be subject to the provisions herein contained with reference to payment of calls and instalments, transfer and transmission, forfeiture, surrender, lien
and otherwise. 

 Redemption of Shares and Other Reductions of Capital 

 

	56.	Subject to the Act, the Reorganization Act, the provisions of this Article and Part B of these Articles, and the rights, if any, under the Act or other applicable law, of the holders of shares of any class or series
of shares to vote separately as a class or series thereon, the Company may reduce all or a portion of the paid-up capital on a class or series of shares, or certain shares of such class or series of shares, in any way and for any purpose. Where such
reduction of paid-up capital is so authorized, the shareholders approving such reduction may in such authorizing resolution determine when the paid-up capital shall be reduced on the shares of the particular class or series of shares, or certain
shares of such class or series of shares, the amount of paid-up capital to be reduced on each such share (where such does not necessarily follow from the determination of the amount reduced on the class or series as a whole) and the manner in which
and purpose for which such reduction shall be effected. If the shareholders fail to determine any such matter in such resolution they may subsequently determine such matter by special resolution, failing which the Directors, or such persons as may
be authorized by the shareholders by special resolution, may make any such determination or determinations not inconsistent with a prior determination of the shareholders as may be necessary or desirable from time to time. The manner in which or
purpose for which the reduction shall be effected may include, without limitation, any of the following: 

  

	 	(a)	reducing or extinguishing any liability of the holders of any shares of any class or series including, without limitation, extinguishing or reducing the liability on any of such shares not paid-up;

  

	 	(b)	either with or without extinguishing or reducing liability on shares of any class or series, paying or distributing to the holder of an issued share of any such class or series of shares an amount not exceeding the
paid-up capital thereof; 

  

	 	(c)	declaring its paid-up capital to be reduced, without payment or distribution, by an amount that is lost or unrepresented by realizable assets, or by such other amount as the Company may see fit;

  

	 	(d)	paying cash or transferring other property; 

  

	 	(e)	issuing other securities, debentures, bonds, securities, promissory notes or other indebtedness; 

  

	 	(f)	increasing any share premium, contributed surplus or other surplus account; or 

  

	 	(g)	providing a sinking fund on any terms thought fit for the redemption, purchase or acquisition of shares of any class or series. 

53. SubjectWithout limiting the foregoing but subject to the Act and any provisions of the Act from time to time in
forceattached to such shares, the Company may redeem, purchase or otherwise acquire any of its shares issued by it. Theand the Directors may determine the manner and the terms
for redeeming, purchasing or otherwise acquiring such shares and may from time to time provide a sinking fund on such terms as they think fit for the redemption, purchase or acquisition of such shares.
Preference shares which by their provisions may be redeemed or purchased by the Company shall be redeemed subject to such provisions.shares of any class or series. 

 

	57.	The amount of the reduction in the paid-up capital of the class or series of shares, or certain shares of such class or series of shares, including upon the purchase or redemption of any shares acquired by the
Company, shall be recorded, or shall be deemed to have been recorded, in the accounts of the Company maintained or deemed to be maintained for such class or series of shares. Where the Company has issued more than one class or series of shares, the
special resolution authorizing the reduction in paid-up capital must specify the capital account or accounts from which the paid-up capital returned, cancelled or otherwise extinguished will be deducted. 

  
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 Modification of Rights of Shareholders 
  

	58.	54. The rights, privileges, restrictions and conditions attached to a class or series of shares may be added to, changed or removed only with the prior approval of the holders of the issued shares of
that class or series given as specified herein, in addition to any vote or authorization required by law. Any approval of the holders of the shares with respect to the modification of the rights, privileges, restrictions, and conditions attached to
the shares may be given in such manner as may then be required by law, subject to a minimum requirement that such approval be given either (i) be given by resolution signed by all the holders of the issued and
outstanding shares of the class or series, or (ii) passed by the affirmative vote of at least two-thirds of the votes cast by the holders of the shares who voted in respect of that resolution at a meeting of the holders of the shares duly
called for that purpose at which the holders of at least fifty percent (50%) of the outstanding shares of that class or series are present in person or represented by proxy, or, if such quorum is not present at such meeting, at an adjournment
thereof at which the holders of shares of that class or series then present in person or represented by proxy shall constitute a quorum for all purposes. The formalities to be observed with respect to proxies, the giving of notice, voting, and the
conduct of any such meeting or any adjourned meeting shall be those from time to time prescribed by these articlesArticles or otherwise prescribed by law with respect to meetings of shareholders. Notwithstanding the
foregoing, unless the rights, privileges, terms or conditions attached to a class or series of shares provide otherwise, the holders of shares of a class or of a series are not entitled to vote separately as a class or series and are
not entitled to dissent, upon a proposal to amend the articlesMemorandum or these Articles to, 

  

	 	(a)	increase or decrease any maximum number of authorized shares of such class or series, or increase any maximum number of authorized shares of a class or series having rights or privileges equal or superior to the shares
of such class or series; 

  

	 	(b)	effect an exchange, reclassification or cancellation of all or part of the shares of such class or series; or 

  

	 	(c)	create a new class or series of shares equal or superior to such class or series. 

 This Article shall not
be deemed by implication to limit, restrict or curtail the power of modification which the Company would have if this Article were omitted. 
 Surrender of Shares

  

	59.	55. The Directors may accept the surrender of any share by way of compromise of any question as to the holder being properly registered in respect thereof. Any share so surrendered may be disposed of in
the same manner as a forfeited share. 

 Borrowing Powers and Power of Guarantee 

 

	60.	56. The Directors on behalf of the Company may from time to time in their discretion: 

  

	 	(a)	raise or borrow moneyfunds for any of the purposes of the Company or any of them; 

  

	 	(b)	secure, subject to compliance with Section 102 of the Act, the repayment of moneysfunds so raised or borrowed in such manner and upon such terms and conditions in all
respects as they think fit, and in particular by the execution and delivery of mortgages of the Company’s real or personal property, or by the issue of bonds, debentures or debenture stockother securities of the Company
secured by mortgage or other charge upon all or any part of the property of the Company, both present and future, including its uncalled capital for the time being; 

 

	 	(c)	sign or endorse bills, notes, acceptances, cheques, contracts, and other evidence of or securities for moneyfunds borrowed or to be borrowed for the purposes aforesaid; and

  

	 	(d)	pledge debentures as security for loans. 

  

	61.	57. Bonds, debentures and other securities may be made assignable, free from any equities between the Company and the person to whom such securities were issued. 

 

	62.	58. Any bonds, debentures and other securities may be issued at a discount, premium or otherwise and with special privileges as to redemption, surrender, drawings, allotments of shares, attending and
voting at general meetings of the Company, appointment of Directors and other matters. 

  

	63.	59. The Directors may, from time to time and in their discretion: 

  

	 	(a)	guarantee on behalf of the Company the performance of liabilities, contracts and loans of any kind whatsoever, and give any postponements required in connection with such a guarantee; and 

 

	 	(b)	delegate authority to such officers and Directors of the Company and on such terms and conditions as they, in their sole discretion determine appropriate, to provide guarantees on behalf of the Company as set out in the
preceding sub-paragraph including to give any postponements required in connection with such guarantees. 

  

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Meetings 
  

	64.	60. OrdinaryAnnual general meetings of the Company shall be held at least once in every calendar year at such time and place as may be determined by the Directors and not
later than fifteen months after the preceding ordinaryannual general meeting of the Company. All other meetings of the Company shall be called special general meetings. Annual or special general meetings may be held
either within or without the Province of Nova Scotia. 

  

	65.	61. The Directors may whenever they think fit, convene a special general meeting and they shall, upon the requisition of members shareholders of the Company holding not less than five
percent of the total voting rights of all the members having at the date of the deposit of the requisition a right to vote at general meetings of the Company andissued share capital of the Company in respect of whose shares
all calls or other sums then due have been paid, or otherwise as provided in the Act, forthwith proceed to convene a special general meeting of the Company, to be held at such time and place as the Directors determine. 

 

	66.	62. The requisition shall state the objects of the meeting requested, be signed by the membersshareholders making it and deposited at the registered office of the
CompanyOffice. It may consist of several documents in like form each signed by one or more of the requisitionists. 

  

	67.	63. If the Directors do not proceed to cause a meeting to be held within twenty-one days (21) days from the date that the requisition is so deposited, or within such longer period as may be
permitted by applicable law, the requisitionists, or a majority of them in value, may themselves convene a meeting, provided it is held within three (3) months after the date of the deposit of the requisition. 

	68.	

  

	 	(a)	No business may be transacted at an annual general meeting of shareholders, other than business that is either (i) specified in the Company’s notice of meeting (or any supplement thereto) given by or at the
direction of the Board, (ii) otherwise properly brought before the annual general meeting by or at the direction of the Board or (iii) otherwise properly brought before the annual general meeting by any shareholder of the Company who
complies with the proposal procedures set forth in this Article 68. For business to be properly brought before an annual general meeting by a shareholder of the Company, such shareholder must submit a proposal to the Company for inclusion in the
Company’s management proxy circular; provided that any proposal that includes nominations for the election of Directors shall be submitted to the Company in accordance with the requirements set forth in Article 69. 

 

	 	(b)	At a special general meeting of shareholders, only such business shall be conducted as shall have been brought before the meeting pursuant to the Company’s notice of meeting (or any supplement thereto) given by
or at the direction of the Board. Nominations of persons for election to the Board of Directors may be made at a special general meeting of shareholders at which Directors are to be elected pursuant to the Company’s notice of meeting only
pursuant to and in compliance with Article 69. 

	69.	

  
  

	 	(a)	Only individuals who are nominated in accordance with the procedures set out in this Article 69 and who, at the discretion of the Board, satisfy the qualifications of a Director as set out in applicable law and these
Articles shall be eligible for election as Directors of the Company at any general meeting of shareholders of the Company. Nominations of individuals for election to the Board of Directors of the Company may be made at any annual general meeting of
shareholders, or at any special general meeting of shareholders if one of the purposes for which the special general meeting was called was the election of Directors: 

 

	 	(i)	by or at the direction of the Board, including pursuant to a notice of meeting; 

  

	 	(ii)	by or at the direction or request of one or more shareholders pursuant to a requisition of the shareholders made in accordance with the Act; or 

 

	 	(iii)	by any person (a “Nominating Shareholder”) who 

  

	 	(A)	at the close of business on the date of the giving of the notice provided for below in this Article 69 and on the record date for notice of such meeting, is a registered holder of shares carrying the right to vote at
such meeting on the election of Directors; and 

  

	 	(B)	complies with the notice procedures set forth in this Article 69. 

  

	 	(b)	In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given timely notice thereof and in proper written form to the Secretary
of the Company at the Office. 

  

	 	(c)	To be timely, a Nominating Shareholder’s notice to the Secretary must be made within the applicable period described below: 

 

	 	(i)	in the case of an annual general meeting of shareholders, not less than 30 days prior to the date of the annual general meeting of shareholders; provided, however, that if the annual general meeting of shareholders
is to be held on a date that is less than 50 days after the date (in this Article, the “Notice Date”) on which the first public announcement of the date of the annual general meeting was made, notice by the Nominating Shareholder may be
made not later than the 10th day following the Notice Date; and 

  
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	 	(ii)	in the case of a special general meeting (which is not also an annual general meeting) of shareholders called for the purpose of electing Directors (whether or not called for other purposes), not later than the 15th
day following the day on which the first public announcement of the date of the special meeting of shareholders was made. 

  

	 	(d)	To be in proper written form, a Nominating Shareholder’s notice to the Corporate Secretary must set forth 

  

	 	(i)	as to each individual whom the Nominating Shareholder proposes to nominate for election as a Director 

  

	 	(A)	the name, age, business address and residential address of the individual; 

  

	 	(B)	the principal occupation or employment of the individual; 

  

	 	(C)	the class or series and number of shares in the capital of the Company which are beneficially owned, or over which control or direction is exercised, directly or indirectly, by such individual as of the record date
for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; and 

  

	 	(D)	any other information relating to the individual that would be required to be disclosed in a dissident’s proxy circular or other filings to be made in connection with solicitations of proxies for election of
Directors pursuant to applicable laws, including applicable securities laws; and 

  

	 	(ii)	as to the Nominating Shareholder and any beneficial owner respecting which the notice was given, the names of such person(s) and 

 

	 	(A)	the class or series and number of shares in the capital of the Company which are controlled, or over which control or direction is exercised, directly or indirectly, by such person(s) and each person acting jointly
or in concert with any of them (and for each such person any options or other rights to acquire shares in the capital of the Company, derivatives or other securities, instruments or arrangements for which the price or value or delivery, payment or
settlement obligations are derived from, referenced to, or based on any such shares, hedging transactions, short positions and borrowing or lending arrangements relating to such shares) as of the record date for the meeting of shareholders (if such
date shall then have been made publicly available and shall have occurred) and as of the date of such notice; 

  

	 	(B)	any proxy, contract, agreement, arrangement, understanding or relationship pursuant to which such Nominating Shareholder or beneficial owner has a right to vote any shares in the capital of the Company on the
election of Directors; 

  

	 	(C)	in the case of a special general meeting of shareholders called for the purpose of electing Directors, a statement as to whether the Nominating Shareholder intends to send an information circular and form of proxy to
any shareholders of the Company in connection with any individual’s nomination and (iv) any other information relating to such Nominating Shareholder or beneficial owner that would be required to be made in a dissident’s proxy
circular or other filings to be made in connection with solicitations of proxies for election of Directors pursuant to the Act and applicable securities laws; and 

 

	 	(D)	any other information relating to such Nominating Shareholder or beneficial owner that would be required to be made in a dissident’s proxy circular or other filings to be made in connection with solicitations of
proxies for election of Directors pursuant to the Act and applicable securities laws. 

  

	 	(e)	A Nominating Shareholder’s notice to the Corporate Secretary must also state whether 

  

	 	(i)	in the opinion of the Nominating Shareholder and the proposed nominee, the proposed nominee would qualify to be an independent Director of the Company under Sections 1.4 and 1.5 of National Instrument 52-110 of the
Canadian Securities Administrators (“NI 52-110”); and 

  

	 	(ii)	with respect to the Company the proposed nominee has one or more of the relationships described in Sections 1.4(3), 1.4(8) and 1.5 of National NI 52-110 and, if so, which ones. 

 

	 	(f)	The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in
compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded. A duly appointed proxy holder of a Nominating Shareholder shall be entitled to nominate at a meeting of shareholders the Directors nominated
by the Nominating Shareholder, provided that all of the requirements of this Article 69 have been satisfied. If the Nominating Shareholder or its duly appointed proxy holder does not attend at the meeting of shareholders to present the nomination,
the nomination shall be disregarded notwithstanding that proxies in respect of such nomination may have been received by the Company. 

  

	 	(g)	In addition to the provisions of this Article 69, a Nominating Shareholder and any individual nominated by the Nominating Shareholder shall also comply with all of the applicable requirements of the Act, applicable
securities laws and applicable stock exchange rules regarding the matters set forth herein. 

  

	 	(h)	For purposes of this Article 69, “public announcement” shall mean disclosure in a news release reported by a national news service in Canada, or in a document publicly filed by the Company at such location
determined by the Board of Directors from time to time (including any web site or other virtual location). 

  

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	 	(i)	Notwithstanding any other provision of the Company’s Articles, notice given to the Secretary of the Company pursuant to this Article 69 may only be given by personal delivery (at the Office of the Company) or by
electronic mail (at the e-mail address set out in the Company’s issuer profile on the System for Electronic Document Analysis and Retrieval at www.sedar.com or such other location as may be determined by the Board of Directors from time to
time), and shall be deemed to have been given and made only at the time it is so served by personal delivery to the Corporate Secretary of the Company or sent by e-mail to such e-mail address (provided that receipt of confirmation of such
transmission has been received); provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Halifax Time) on a day which is a business day, then such delivery or electronic
communication shall be deemed to have been made on the next following day that is a business day. 

  

	 	(j)	Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this Article 69. 

  

	70.	64. At least twenty-one (21) days’ notice, or such shorter notice period as is fixed from time to time by the Directors and complies with all applicable laws, of every general meeting,
specifying the place, day and hour of the meeting and, when special business is to be considered, the general nature of such business, shall be given to the membersshareholders entitled to be present at such meeting by notice
given in accordance with the provisions of these Articles. Subject to any exemption authorized pursuant to the Act, when the Company is a reporting issuer, it shall, concurrently with or prior to sending notice of a meeting of the Company, send a
form of proxy to each membershareholder who is entitled to receive notice of the meeting. With the consent in writing of all the membersshareholders entitled to vote at such meeting, a meeting may be
convened by a shorter notice and in any manner theythe Directors think fit, or if all the membersshareholders are present at a meeting either in person or by proxy, notice of the time, place and
purpose of the meeting may be waived. Any previously scheduled annual general meeting of shareholders may be postponed, and any shareholders’ meeting other than an annual general meeting of shareholders may be postponed or cancelled, by the
Company by public notice given to the shareholders prior to the time previously scheduled for such meeting of shareholders. 

  

	71.	65. The accidental omission to give any such notice to any of the membersshareholders or the failure of any shareholder to receive such notice shall not invalidate any resolution
passed at any suchgeneral meeting. 

 Proceedings at General Meetings 

 

	72.	66. The business of any ordinaryannual general meeting shall be to receive and consider the financial statements of the Company, and the reports of the
Directors and Auditorsauditors thereon, to elect Directors in the place of those retiring, to appoint auditors, and to transact any other business which under these Articles ought to be transacted at an
ordinaryannual general meeting. 

  

	73.	If authorized by the Board in its sole discretion, and subject to any applicable law and such guidelines and procedures as the Board may adopt, shareholders and proxyholders not physically present at a meeting of
shareholders may, by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately during the meeting, if the Company makes available such a communication facility: (a) participate in
a meeting of shareholders; and (b) be deemed present in person at the meeting to the fullest extent permitted by law; and (c) vote at the meeting whether such meeting is to be held at a designated place or solely by means of a telephonic,
electronic or other communication facility, provided that (i) the Company shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of a telephonic, electronic or other
communication facility is a shareholder or proxyholder, (ii) the Company shall implement reasonable measures to provide such shareholders and proxyholders a reasonable opportunity to read or hear the proceedings of the meeting substantially
concurrently with such proceedings and to vote on matters submitted to the shareholders, and (iii) if any shareholder or proxyholder votes or takes other action at the meeting by means of a telephonic, electronic or other communication
facility, a record of such vote or other action shall be maintained by the Company. 

  

	74.	67. No business shall be transacted at any general meeting unless the quorum requisite is present at the commencement of the business. A corporationbody corporate that is a
member of the Company and has a duly authorized agent or representative present at any such meeting shall for the purpose of this Article be deemed to be personally present at such meeting. 

 

	75.	68. Three members, where there are more than two members, personally present and entitled to vote shall be a quorum for a general meeting for the choice of a chair and the adjournment of the meeting.
For all other purposes the quorum for a general meeting shall be three members personally present and entitled to vote and holding or representing by proxy not less than one tenth in numbertwenty-five per cent of such of the
issued shares of the Company as confer upon the holders thereof the right to vote at such meeting. 

  

	76.	69. TheUnless otherwise determined by the Board, the Chair of the Board shall be entitled to take the chair at every general meeting or, if there be no Chair of the Board, or if the Chair of the
Board is not present within fifteen minutes after the time appointed for holding the meeting, the President or declines to take the chair, the President, or if the President is not present within fifteen minutes after the time
appointed for holding the meeting or declines to take the chair, a vice-president, shall be entitled to take the chair. If the Chair or the President or a vice-president is not present within fifteen minutes after the time appointed for
holding the meeting or is present but declines to take the chair, the members present entitled to vote at the meeting shall choose another Director as Chairchair of the meeting and, if no Director is present or if all
the Directors present decline to take the chair, then the members present entitled to vote shall choose one of their number to be Chair.chair of the meeting. 

  
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	77.	70. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if it was convened pursuant to a requisition made pursuant to these Articles shall be dissolved;
if it was convened in any other way, it shall stand adjourned to the same day, in the next week, at the same time and place. If at such adjourned meeting a quorum is not present, those members entitled to vote who are present shall be a quorum and
may transact the business for which the meeting was called. 

  

	78.	71. AtSubject to the Act, at any general meeting a resolution put to the meeting may be decided by a show of hands if the vote is unanimous otherwise the resolution shall be decided by a
poll of the members present in person or by proxy and entitled to vote at such meetingunless, either before or on the declaration of the result of the show of hands, a poll is demanded by the chair, a member or a proxyholder; and unless
a poll is so demanded, a declaration by the chair of the meeting that the resolution has been carried, carried by a particular majority, lost or not carried by a particular majority and an entry to that effect in the Company’s book of
proceedings shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution. 

  

	79.	72. A poll shall be taken at the meeting in such manner as the chair of the meeting directs, and either at once or after an interval. The result of the poll shall be deemed to be the resolution of the
meeting at which the poll was taken. The demand of a poll may be withdrawn. When any dispute occurs over the admission or rejection of a vote, it shall be resolved by the chair and such determination made in good faith shall be final and
conclusive. The demand of a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which a poll has been demanded. 

 

	80.	73. When on any motion there is an equality of votes, the motion shall fail. 

  

	81.	Any person entitled to vote at a general meeting where the Company has made available a telephonic, electronic or other communication facility for the purposes of attending and voting at such meeting may vote by
means of the telephonic, electronic or other communication facility that the Company has made available for that purpose. Subject to any applicable law and such guidelines and procedures as the Board may adopt, any vote referred to in these Articles
may be held entirely by means of a telephonic, electronic or other communication facility if the Company makes available such a communication facility, provided, in each case, that the facility: (i) enables the votes to be gathered in a manner
that permits their subsequent verification; and (ii) permits the tallied votes to be presented to the Company. 

  

	82.	74. The chair of a general meeting may, with the consent of a majority of the members presentand if so directed by the meeting must, adjourn the meeting from time to time and
from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting that was adjourned. 

Votes of Members 
  

	83.	75. Subject to the Reorganization Act and Part B of these Articles of Association and the provisions applicable to any shares issued under conditions limiting or excluding the rights of
the holders thereof to vote at general meetings, every member present in person or by proxy (including members deemed to be present) shall have one vote for every share held by such member. In computing the majority on a poll reference shall
be had to the number of votes to which each member is entitled by their shares or by these Articles. 

  

	84.	76. Any person entitled under Article 4648 to transfer any shares may vote at any general meeting in respect thereof in the same manner as if such person were the registered
holder of such shares so long as the person, at least forty-eight hours before the time of holding the meeting or adjourned meeting at which the person proposes to vote, satisfies the Directors that such person has the right to transfer such shares.

  

	85.	77. Where there are joint registered holders of any share, any one of such persons may vote such share at any meeting, either personally or by proxy, as if such person were solely entitled to it. If
more than one of such joint holders is present and voting in person at any meeting, personally or by proxy, the one whose name stands first on the registerRegister in respect of such share shall alone
be entitled to vote it. Several executors or administrators of a deceased member in whose name any share stands shall for the purpose of this Article be deemed joint holders thereof. 

 

	86.	78. Votes may be cast either personally or by proxy or, in the case of a corporationbody corporate, by a representative duly authorized under the Act. 

 

	87.	79. A member of unsound mind in respect of whom an order has been made by any court having jurisdiction may vote by such member’s guardian or other person in the nature of a guardian appointed by
that court and any such guardian or other person may vote by proxy. 

  

	88.	80. Subject to the Act, no member shall be entitled to be present or to vote on any question, either personally or by proxy or as proxy for another member, at any meeting or be recognized for the
purposes of a quorum while any call or other sum is due and payable to the Company in respect of any of the shares of such member. 

  

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Proxies 
  

	89.	81. A proxy shall be in writing and executed in the manner provided in the Act. A proxy or other authority of a corporate shareholder does not require its seal. The provisions of the Act,
and the regulations made thereunder, relating to proxies shall otherwise apply to the Company. 

  

	90.	82. No instrument appointing a proxy shall be valid after the expiration of twelve months from the date of its execution. The chair of any meeting of shareholders may, but need not, at his or
her sole discretion, make determinations as to the acceptability of proxies deposited for use at the meeting, including the acceptability of proxies which may not strictly comply with the requirements of these Articles as to form, execution,
accompanying documentation or otherwise, and any such determination made in good faith shall be final and conclusive. A proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power
or authority shall be deposited at the Office of the Company or at such other place as the Directors may direct. The Directors may, by resolution, fix a time not exceeding 48 hours excluding Saturdays and holidays preceding any meeting or adjourned
meeting before which time proxies to be used at that meeting must be deposited with the Company at its Office or with an agent of the Company. Notice of the requirement for depositing proxies shall be given in the notice calling the meeting. The
chair of the meeting shall determine all questions as to validity of proxies and other instruments of authority. No instrument appointing a proxy shall be valid after the expiration of twelve months from the date of its execution. Notwithstanding
any specified time limits for the deposit of proxies by shareholders, the chair of any meeting or the Chair of the Board may, but need not, at his, her or their sole discretion, waive the time limits for the deposit of proxies by shareholders,
including any deadline set out in the notice calling the meeting of shareholders or in any proxy circular and any such waiver made in good faith shall be final and conclusive. 

 

	91.	83. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death of the principal, the revocation of the proxy, or the transfer of the
share in respect of which the vote is given, provided no intimation in writing of the death, revocation or transfer is received at the officeOffice of the Company before the meeting or by the chair of the meeting before the vote is
given. 

  

	92.	Subject to Articles 90 and 94, every proxy may be revoked by an instrument in writing that is received: (a) at the Office at any time up to and including the last business day before the day set for holding of
the meeting at which the proxy is to be used; or (b) by the chair of the meeting, at the meeting, before any vote in respect of which the proxy is to be used shall have been taken. 

 

	93.	An instrument referred to in Article 89 must be signed as follows: (a) if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her
legal personal representative; (b) if the shareholder for whom the proxy holder is appointed is a body corporate, the instrument must be signed by the body corporate or by a representative appointed for the body corporate.

  

	94.	84. Every instrument of proxy, whether for a specified meeting or otherwise, shall be in such form as the Directors may from time to time determine and as required by law. Unless otherwise
determined by the board in its sole discretion, no shareholder will be provided with access to any proxy materials relating to a meeting of shareholders prior to such meeting taking place. Upon the request of a shareholder not earlier than one day
following a meeting of shareholders, the Company shall provide such shareholder with access to the proxies deposited with the Company in connection with such meeting. 

Resolutions in Writing 
  

	95.	85. A resolution, including a special resolution, in writing and signed by every shareholder who would be entitled to vote on the resolution at a meeting is as valid as if it were passed by such
shareholders at a meeting and satisfied all the requirements of the Act and these Articles respecting meetings of shareholders. A Resolution so passed shall be deemed to constitute a waiver of all notices required to have been given for that
meeting. The signature of a member whoshareholder which is a body corporate shall be evidenced by the signature of an Officerofficer or Officersofficers,
Directordirector or Directordirectors of such body corporate, or other person or persons authorized by the body corporate. 

Directors 
  

	96.	86. Unless otherwise determined by general meeting, the number of Directors shall be determined by the Board of Directors but shall not be less than eight nor shall they be more
than fifteen provided however that the number of the members of the Board of Directors of the Company who are employees of the Company or of a subsidiary or affiliate of the Company shall not exceed two. No director may appoint any other person
to act as his or her alternate to attend or vote at meetings of directors or otherwise act as a director in his or her absence. 

  

	97.	87. The Directors shall have power to increase the number of Directors on the Board at any time and from time to time to appoint any one or more other
personpersons as a DirectorDirectors so long as the total number of Directors does not at any time exceed the maximum number permitted. in Article 96. No such appointment shall
be effective unless two-thirds of the Directors concur in it. 

  
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	98.	88. The Directors shall be paid out of the funds of the Company as remuneration for their service such sums, if any, as the Board may from time to time determine and such remuneration shall be
divided among them in such proportions and in such manner as the Directors determine. Any remuneration so payable to a Director who is also an officer or employee of the Company or who is counsel or solicitor to the Company or otherwise serves it in
a professional capacity may be in addition to the Director’s salary as an officer or professional fees as the case may be. In addition, the Board may by resolution from time to time award special remuneration out of the funds of the Company to
any Director who performs or undertakes any special work or service for, or on behalf of, the Company outside the work or services ordinarily required of a Director of the Company. The Directors shall also be reimbursed for their out of pocket
expenses incurred in attending Board, Committee or Shareholders’ meetings or otherwise in respect of the performance by them of their duties as the Board may from time to time determine. Notwithstanding Article 92,102,
the Directors shall not be required to declare their interest in nor shall the Directors be prohibited from voting in respect of the determination of their remuneration in accordance with this Article. 

 

	99.	89. The continuing Directors may act notwithstanding any vacancy in their body, but if the number of Directors fallfalls below the minimum permitted under these Articles, the
Directors shall not, except in emergencies or for the purpose of filling up vacancies, act so long as the number is below the minimum. If the number of Directors falls below the quorum requirement under these Articles, nominees shall be proposed by
the Nominating Committeecontinuing Directors, or any committee established by them for the purpose, for election at a meeting of shareholders of the Company and called pursuant to the Companies Act.

  

	100.	90. A Director may, in conjunction with the office of Director, and on such terms as to remuneration and otherwise as the Directors arrange or determine, hold any other office or position in the
Company or in any companybody corporate in which thisthe Company is a shareholder or is otherwise interested. 

  

	101.	91. The office of a Director shall ipso facto be vacated: 

  

	 	(a)	if such Director becomes bankrupt or makes an assignment or is petitioned in Bankrupcyfor the benefit of creditors; or 

 

	 	(b)	if such Director is found by a court of competent jurisdiction to be mentally incompetent or of unsound mind; or 

  

	 	(c)	if by notice in writing to the Company such Director resigns the office of Director; or 

  

	 	(d)	if such Director is removed by special resolution of the Company or as otherwise provided by law. 

Directors’ Interest in Contracts 
  

	102.	92. No Director shall be disqualified from contracting with the Company, either as vendor, purchaser, or otherwise, nor shall any such contract, or any contract or arrangement entered into or proposed
to be entered into by or on behalf of the Company in which any Director is in any way interested, either directly or indirectly, be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any
profit realized by any such contract or arrangement by reason only of such Director holding office as a Director of the Company or of the fiduciary relation thereby established. However, the existence and nature of the Director’s interest must
be declared by such Director at a meeting of the Directors of the Company unless the contract, arrangement or transaction is one involving the fixing of remuneration payable to the Directors in their capacitycapacities as
Directors (herein referred to as an “Excluded Transaction”). In the case of a proposed contract or transaction, other than an Excluded Transaction, any Director with an interest in the contract or transaction shall declare the interest of
such Director at the meeting of Directors at which the matter is first taken into consideration, or if the Director was not then interested, at the next meeting held after the Director became so interested. A general notice given to the Directors by
a Director that the Director is a member, shareholder or directorDirector of any specified firm or company and is to be regarded as interested in any transaction or contract with such firm or company shall be deemed to be a
sufficient declaration under this Article and no further or other notice shall be required. No Director shall as a Director vote in respect of any contract or arrangement in which the Director is so interested, and if the Director does so vote, the
vote shall not be counted. This prohibition may at any time or times be suspended or relaxed to any extent by a general meeting and shall not apply to any Excluded Transaction or any contract or arrangement by or on behalf of the Company to
give to the Directors or any of them any remuneration payable to the Directors as such, any security for advances or by way of indemnity. 

Election Of Directors 
  

	103.	93. Subject to the next following Article, at the dissolution of every annual ordinary general meeting all the Directors shall retire from office and be succeeded by the
Directors elected at such meeting. Retiring Directors shall be eligible for re-election at such meeting. 

  

	104.	94. If at any ordinaryannual general meeting at which an election of Directors ought to take place no such election takes place, or if no ordinaryannual
general meeting is held in any year or period of years, the retiring Directors shall continue in office until their successors are elected and a general meeting for that purpose may on notice be held at any time. 

 

	105.	The Directors, or a committee established by them for the purpose, may nominate, and provide to the annual general meeting, nominees to be elected or re-elected as Directors. The Directors or any such committee shall
nominate individuals who, in the reasonable opinion of the Directors or such committee, shall have the ability to contribute to the broad range of issues with which the Directors must deal and who are able to devote the time necessary to prepare for
and attend meetings of the Board and committees of the Board to which they may be appointed. 

  

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	106.	95. The Company in general meeting may from time to time increase or reduce the number of Directors and may determine or alter their qualification. 

 

	107.	96. The Company may, by special resolution or in any other manner permitted by law, remove any Director before the expiration of thetheir period of office and
appoint another person in their stead. The person so appointed shall hold office during such time only as the Director in whose place the person is appointed would have held office if the Director had not been removed. 

 

	108.	97. If at any time, a vacancy occurs on the Board as a result of a Director ceasing to be a Director, the Board of Directors shall fill such vacancy, after receiving a recommendation from the
nominating committee (if any has been established), by the appointment as a Director of an individual who meets the requirements of Article 123.105. 

Chair of The Board 
  

	109.	98. At the first meeting of the Directors of the Company following each general election of Directors by the Shareholders of the Company at an annual general meeting of
Shareholders, the Directors shall appoint a Chair of the Board from their number who provided that such Chair is not an employee of the Company or of any subsidiary or affiliate of the Company. The Chair of the Board shall
perform such duties and receive such special remuneration as the Board may from time to time provide. At any meeting of Directors and at any meeting of shareholders, the Chair of the Board shall not have a casting vote in the event of an equality
of votes. 

 President, Vice President and Vice PresidentOther Officers 

 

	99.	     

  

	110.	(a) The Directors shall elect from their number the President of the Company and may determine the period for which he or she is to hold office. The President shall be the Chief Executive Officer
of the Company and shall have general supervision of the business of the Company and shall perform such duties as may be assigned to him or her from time to time by the Board. 

 

	111.	(b) The Directors may also appoint Vice-Presidents and determine the periodperiods for which they are to hold office. A Vice-President need not be a Director and any Vice-
President shall, at the request of the President or the Board and subject to the directions of the Board, perform the duties of the President during the absence, illness or incapacity of the President. 

 

	112.	The Directors may appoint such other officer or officers of the Company, having such powers and duties, as they see fit. 

  

	113.	If the Directors so decide, the same person may hold more than one of the offices provided for in these Articles. 

Proceedings of Directors 
  

	114.	100. The Directors may meet together for the dispatch of business, and adjourn and otherwise regulate their meetings and proceedings as they think fit, provided that no business shall be
transacted unless there is a quorum. A quorum for a meeting of the Board of Directors shall be a majority of the Directors in office at the commencement of the meeting. 

 

	115.	101. Meetings of Directors may be held either within or without the Province of Nova Scotia and the Directors may from time to time make arrangements relating to the time and place of holding
Directors’ meetings, the notices to be given for such meetings and what meetings may be held without notice. Unless otherwise provided by such arrangements: 

  

	 	(1)	A meeting of Directors may be held at the close of every ordinaryannual general meeting of the Company without notice. 

 

	 	(2)	Notice of every other Directors’ meeting may be in writing and delivered by personal delivery, telex or facsimile transmission or electronic mail, or mailed, or may be given by telephone to each Director
before the meeting is to take place. Such notice shall be delivered, transmitted, mailed or given by telephone at least forty-eight hours before the time fixed for the meeting. 

 

	 	(3)	A meeting of Directors may be held without formal notice if all the Directors are present or if those absent have signified their assent to such meeting or their consent to the business transacted at such meeting.

  

	 	(4)	The accidental omission to give any such notice to any of the Directors or the failure of any directorDirector to receive such notice shall not invalidate any resolution passed at any such
meeting. 

  

	116.	102. A Director may participate in meetings of the Board and in meetings of a Committee of the Board by means of such telephone or other communications facilities as permit all persons
participating in such a meeting to hear each other and a Director participating by such means will be considereda telephonic, electronic or other communication facility that permits all participants to communicate adequately with each
other during the meeting. For the avoidance of doubt, a meeting of the Board or of a committee of the Board may be held entirely by means of a telephonic, electronic or other communication facility. A director participating in a meeting by such
means shall be deemed to be present at thethat meeting. 

  
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	117.	103. The President or any other Director may at any time, and the Secretary, upon the request of the President or any other Director, shall summon a meeting of the Directors to be held at the
Registered Office of the Company. The Chair of the Board or a majority of the Board may at any time summon a meeting to be held elsewhere. 

  

	118.	104. Questions arising at any meeting of Directors shall be decided by a majority of votes and when, on any motion before the Board, there is an equality of votes, the motion shall fail.

  

	119.	105. If no Chair of the Board is elected, or if at any meeting of Directors the Chair is not present within fifteen minutes after the time appointed for holding the meeting, or declines to take the
chair, the President shall preside. If neither the Chair nor the President is present at such time and willing to take the chair, the Directors present shall choose some one of their number to chair the meeting. 

 

	120.	106. A meeting of the Directors at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions for the time being vested in or exercisable by the
Directors generally. 

  

	121.	Any Director participating in a meeting by a telephonic, electronic or other communication facility may vote by any reasonable means (including verbal assent) given the nature of such telephonic, electronic or other
communication facility. 

  

	122.	A resolution in writing signed by all the Directors who would be entitled to vote thereon at a meeting of Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors duly called
and constituted. A resolution so effected shall be deemed to constitute a waiver of any notice required under these Articles or the Act to have been given for such a meeting. 

Committees 
  

	123.	107. The Directors may delegate any of their powers to committees consisting of such number of members of their body as they think fit establish from time to time such committees,
including without limitation, an Executive Committee, an Audit Committee, a Nominating and Corporate Governance Committee, and a Management Resources and Compensation Committee, as the Directors think fit and entrust to and confer upon any such
committee established such powers exercisable under these Articles by the Directors as they think fit, and may confer such powers for such time, and to be exercised for such objects and purposes and upon such terms and conditions, and with such
restrictions as they think expedient; and they may confer such powers either collaterally with, or to the exclusion of, and in substitution for, all or any of the powers of the Directors in that behalf; and may from time to time revoke, withdraw,
alter or vary all or any of such powers. Any committee so formed shall in the exercise of the powers so delegatedentrusted upon them conform to any rules or regulations that may be imposed on them by the Directors
or by these Articles. At least a majority of members of any committee of Directors appointed by the Board shall be Directors who are not employees of the Company or of any subsidiary or affiliate of the Company. 

 

	124.	The Directors, when establishing any committee, shall determine the membership thereof, which membership may include persons who hold a particular office or other position with the Company, if a director, from time
to time. Members of committees shall have such terms of office as the Directors may establish or may serve at pleasure. The Directors may at any time and from time to time change the membership of any committee. 

 

	125.	At least a majority of members of any committee of Directors appointed by the Board shall be Directors who are not employees of the Company or of any subsidiary or affiliate of the Company. For greater certainty,
unless expressly otherwise provided the provisions of this Article apply to committees named in these Articles. 

  

	126.	108. The meetings and proceedings of any such committee consisting of two or more membersDirectors shall be governed by the provisions contained in these Articles for regulating
the meetings and proceedings of the Directors, including notice and quorum, insofar as they are applicable and are not superseded by any rules or regulations made by the Directors. The Directors may make any rules or regulations
which they see fit to govern meetings and proceedings of any committee and shall not be limited by the provisions of these Articles. 

  

	127.	109. All acts done at any meeting of the Directors or of a committee of Directors or by any person acting as a Director shall, notwithstanding that it is afterwards discovered that there was some defect
in the appointment of the Directors or persons so acting, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director. 

 

	128.	110. A resolution in writing signed by all the Directorsmembers of any committee established hereunder shall be as valid and effectual as if it had been passed at a
meeting of the Directorssuch committee duly called and constituted. A Resolution so effected shall be deemed to constitute a waiver of any notice required under these Articles or the Act to have been given for such a meeting.

  

	111.	The Board may establish an Executive Committee of not less than five Directors made up as follows: 

  

	 	(a)	The chief executive officer of the Company, or, if no officer of the Company is designated as chief executive officer, the most senior executive officer of the Company as determined by the
Directors; and 

  

	 	(b)	The balance being Directors who are not employees of the Company or of a subsidiary or affiliate of the Company. 

The Executive Committee shall generally perform such duties and exercise such powers as may be directed or delegated to such committee by the
Board. 

  

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	112.	At least three members of the Executive Committee shall be present at all meetings to constitute a quorum for the transaction of business. 

 

	113.	Any member of the Executive Committee may be removed or replaced at any time by the Board and shall at any time cease to be a member of the Executive Committee upon ceasing to be a Director. Subject to the
foregoing, each member of the Executive Committee shall hold office as such until the next annual meeting of shareholders after the member’s appointment to the committee. 

 

	114.	The Executive Committee shall choose one of its own members to be its Chair and the Secretary of the Company shall be the Secretary of the Executive Committee. 

 

	115.	The times of and places where meetings of the Executive Committee shall be held and the calling of and procedure at such meetings, shall be determined from time to time by the Executive Committee.

  

	116.	The Directors may from time to time entrust to and confer upon the Executive Committee such powers exercisable under these Articles by the Directors as they think fit, and may confer such powers for such time,
and to be exercised for such objects and purposes and upon such terms and conditions, and with such restrictions as they think expedient; and they may confer such powers either collaterally with, or to the exclusion of, and in substitution for, all
or any of the powers of the Directors in that behalf; and may from time to time revoke, withdraw, alter or vary all or any of such powers. 

  

	117.	The Executive Committee shall keep regular minutes of its proceedings and report to the Board as required. 

Audit Committee 
  

	118. (a)	The Board shall appoint annually from among its members a committee to be known as the Audit Committee to be composed of not less than three directors, none of whom shall be employees of the Company or of any
subsidiary or affiliate of the Company. Two members of the audit committee shall constitute a quorum. 

  

	        (b)	Any member of the Audit Committee may be removed or replaced at any time by the Board and shall at any time cease to be a member of the Audit Committee upon ceasing to be a director. Subject to the foregoing,
each member of the Audit Committee shall hold office as such until the next annual meeting of shareholders after the member’s appointment to the Committee. 

 

	119.	The Audit Committee shall: 

  

	129.	Subject to rules and regulations established by the Directors from time to time with respect to such committee or applying to committees generally: 

 

	 	(a)	review the financial statements of the Company before the financial statements are approved by the Directors;Any committee shall choose one of its own members to be its Chair and the secretary.

  

	 	(b)	ensure that appropriate internal control procedures are in place;The times of and places where meetings of the committee shall be held and the calling of and procedure at such meetings, shall be
determined from time to time by the committee. 

  

	 	(c)	review such investments and transactions that could adversely affect the well- being of the Company as the auditor or any officer of the Company may bring to the attention of the committee;The
committee shall keep regular minutes of its proceedings and report to the Board as required. 

  

	 	(d)	meet with the auditor to discuss the financial statements and transactions referred to in this Article; 

  

	 	(e)	meet with the chief internal auditor of the Company, or the officer or employee of the Company acting in a similar capacity, and with management of the Company, to discuss the effectiveness of the internal
control procedures established for the Company; and 

  

	 	(f)	generally perform such other duties and exercise such powers as may be directed or delegated to such committee by the Board. 

 

	130.	120. The members of theany Audit Committee shall have the right for the purpose of performing their duties of inspecting all the books and records of the Company and its
affiliates and of discussing such accounts and records and any matters relating to the financial position of the Company with the officers and auditors of the Company and its affiliates. 

 

	121.	The Audit Committee shall choose one of its own members to be its Chair and the Secretary of the Company shall be the Secretary of the Audit Committee. 

 

	122. (a)	The times of and places where meetings of the Audit Committee shall be held and the calling of and procedure at such meetings shall be determined from time to time by the Audit Committee. The auditor of the
Company shall be given notice of every meeting of the Audit Committee and shall be permitted to attend and be heard at the meeting on matters relating to the auditor’s duties as auditor. 

 

	        (b)	The Audit Committee shall keep regular minutes of its proceedings and report to the Board as required. 

  
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 Nominating Committee 
  

	123. (a)	The Board shall appoint annually from among its members, a Nominating Committee consisting of three Directors and each member of the Nominating Committee shall be neither an employee of the Company or of any
subsidiary or affiliate of the Company nor the Chair of the Board. 

  

	        (b)	Not later than sixty days prior to each annual meeting of shareholders of the Company, the Nominating Committee will provide the Company with a list of nominees for election as Directors to be included in the
Company’s management proxy circular for that meeting. 

  

	        (c)	The nominating committee will include in its list of nominees: 

  

	 	(i)	The chief executive officer of the Company and may include one other senior executive of the Company as determined by the Nominating Committee; and 

 

	 	(ii)	Individuals who in the reasonable opinion of the Nominating Committee: 

  

	 	(A)	other than as expressly authorized by the preceding subparagraph (i), are not employees of the Company or of any subsidiary or affiliate of the Company; 

 

	 	(B)	have not reached seventy (70) years of age, except as provided in (C) below; 

  

	 	(C)	in certain exceptional circumstances, it may be appropriate for individuals to be able to serve on the Board beyond age 70 Should such circumstances occur, the Nominating and Corporate Governance Committee will
determine and recommend that an individual be permitted to serve as a Director beyond age 70 because of the individual’s contribution and skills. Such determination will be made annually. 

 

	 	(D)	A majority of the members of the Nominating Committee shall constitute a quorum. 

  

	 	(E)	All of the nominees to be included in the Nominating Committee’s list of nominees referred to in Article 123(c) shall be individuals who, in the reasonable opinion of the Nominating Committee, shall have
the ability to contribute to the broad range of issues with which the Directors must deal and who are able to devote the time necessary to prepare for and attend meetings of the Board and committees of the Board to which they may be
appointed. 

 Management Resources And Compensation Committee 

 

	124. (a)	The Board shall appoint annually from among its members a Management Resources and Compensation Committee composed of not less than three Directors to make recommendations from time to time to the Board of
Directors with respect to the remuneration of senior management of the Company, any other matter with respect to senior management the Committee deems appropriate and such other matters as the Directors may decide. The Management Resources and
Compensation Committee shall consist of Directors selected by the Board who are not employees of the Company or of any subsidiary or affiliate of the Company nor the Chair of the Board. 

 

	        (b)	A majority of the members of the Management Resources and Compensation Committee shall constitute a quorum. 

Registers 
  

	131.	125. The Directors shall cause to be kept a register of the shareholders of the Companyat the Office or as may otherwise be permitted in accordance with the Act, the Register, a
register of holders of bonds, debentures and securities of the Company and a register of its Directors and may cause to be kept branch registers, including branch registers of the shareholders and holders of bonds, debentures
and securities, either within or without the Province of Nova Scotia in accordance with the Act. The Directors may appoint one or more transfer agents to maintain the central registerRegister, and any other
registers and branch registers of shareholders and holders of bonds, debentures and securities of the Company at any place within Canada. 

  

	132.	126. The Directors shall: 

  

	        (a)	ensure that the Register and all other registers required by these Articles to be prepared and maintained are in a bound or loose-leaf form or in a photographic film form or entered or recorded by any
system of mechanical or electronic data processing or other information storage device that is capable of reproducing in Nova Scotia any required information in intelligible written form within a reasonable time and, where applicable, conforms to
the provisions of the Act; and 

  

	        (b)	cause the Company or its transfer agent to maintain within Nova Scotia an office or other facility at which the transfer of shares, bonds, debentures and securities of the Company may be effected. 

  

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Minutes 
  

	133. 127.	The Directors shall cause minutes to be entered in books designated for the purpose: 

  

	        (a)	of all appointments of officers; 

  

	        (b)	of the names of the Directors present at each meeting of Directors and of any committees of Directors; 

  

	        (c)	of all orders made by the Directors and committees of Directors; 

  

	        (d)	of all resolutions and proceedings of meetings of the Shareholders and of the Directors. 

  

	134. 128.	Any such minutes of any meeting of the Directors or of any committee of the Directors or of the Company, if purporting to be signed by the chair of such meeting or by the chair of the next succeeding meeting, shall be
receivable as prima facie evidence of the matters stated in such minutes. The Directors shall cause the books containing the minutes of proceedings of any general meeting of the Company to be kept at the Company’s Office or at such other
place or places as designated by the Directors as permitted by the Act. 

  

	135. 129.	Any resolution of the Shareholders, the Directors, or a committee of the Directors, passed pursuant to the provisions of Articles 8595, 122 or 110 of these Articles,128,
shall be receivable as prima facie evidence of the matters stated therein. 

 Power of Directors 

 

	136. 130.	The management of the business of the Company shall be vested in the Directors who, in addition to the powers and authorities by these Articles or otherwise expressly conferred upon them, may exercise all such powers
and do all such acts and things as may be exercised or done by the Company and are not hereby or by statute expressly directed or required to be exercised or done by the Company in general meeting, but subject nevertheless to the provisions of
the statutesany statute in that behalf and of the Memorandum and these Articles and to any regulations from time to time made by the Company in general meeting; provided that no regulation so made or modification of
the Memorandum or these Articles shall invalidate any prior act of the Directors that would have been valid if such regulation or modification had not been made. 

 

	137. 131.	Without restricting the generality of the terms of the last preceding Article and without prejudice to the powers conferred thereby, and the other powers conferred by these Articles, the Directors shall have power:

  

	        (a)	(1) To take such steps as they think fit to carry out any agreement or contract made by or on behalf of the Company; 

 

	        (b)	(2) To pay the costs, charges and expenses preliminary and incidental to the promotion, formation, establishment, and registration of the Company; 

 

	        (c)	(3) To purchase or otherwise acquire for the Company any property, rights or privileges, stocks, bonds, debentures, or other securities (including shares in the capital stock of any other
companybody corporate) that the Company is authorized to acquire, and at such price and generally on such terms and conditions as they think fit; 

 

	        (d)	(4) At their discretion to pay for any property, rights, or privileges, stocks, bonds, debentures, or other securities (including shares in the capital stock of any other company) acquired by, or
services rendered to the Company either wholly or partially in cash or in shares (fully paid up or otherwise), bonds, debentures or other securities of the Company, and any such shares may be issued either as fully paid up, or with
such amount credited as paid up thereon as may be agreed upon; 

  

	        (e)	(5) To secure the fulfilment of any contracts or engagements entered into by the Company by mortgaging or charging all or any of the property of the Company and its unpaid capital for the time
being, or in such other manner as they think fit; 

  

	        (f)	(6) To appoint, remove or suspend at their discretion such experts, managers, secretaries, treasurers, officers, clerks, agents and servants for permanent, temporary or special services, as they
from time to time think fit, and to determine their powers and duties, and fix their salaries or emoluments and to require security in such instances and to such amounts as they think fit; 

 

	        (g)	(7) To accept from any member insofar as the law permits and on such terms and conditions as may be agreed upon a surrender of the member’s shareshares or any part
thereofof them; 

  

	        (h)	(8) To appoint any person or persons (whether incorporated or not) to accept and hold in trust for the Company any property belonging to the Company, or in which it is interested, to execute and do
all such deeds and things as may be requisite in relation to any such trust, and to provide for the remuneration of any such trustee or trustees; 

  

	        (i)	(9) To institute, conduct, defend, compound or abandon any legal proceedings by and against the Company, its Directors or its officers or otherwise concerning the affairs of the Company, and
also to compound and allow time for payment or satisfaction of any debts due and of any claims or demands by or against the Company; 

  

	        (j)	(10) To refer any claims or demands by or against the Company to arbitration and observe and perform the awardsaward; 

 

	        (k)	(11) To make and give receipts, releases and other discharges for moneyamounts payable to the Company and for claims and demands of the Company; 

  
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	 	(l)	(12) To determine who shall be entitled to exercise the borrowing powers of the Company and sign on the Company’s behalf bonds, debentures or other securities, bills, notes,
receipts, acceptances, assignments, transfers, hypothecations, pledges, endorsements, cheques, drafts, releases, contracts, agreements and all other instruments and documents; 

 

	 	(m)	(13) To provide from time to time for the management of the affairs of the Company abroad in such manner as they think fit, and in particular to appoint any persons to be the attorneys or agents of
the Company with such powers (including power to sub-delegate) and upon such terms as may be thought fit; 

  

	 	(n)	(14) To invest and deal with any of the moneysfunds of the Company not immediately required for the purposes thereof in such securities and in such manner as they think fit;
and from time to time to vary or realize such investments; 

  

	 	(o)	(15) To execute in the name and on behalf of the Company in favour of any Director or other person who may incur or be about to incur any personal liability for the benefit of the Company such
mortgages of the Company’s property, present and future, as they think fit, and any such mortgages may contain a power of sale and such other powers, covenants and provisions as are agreed on; 

 

	 	(p)	(16) To give any officer or other person employed byemployee of the Company a commission on the profits of any particular business or transaction or a share in the general
profits of the Company, and such commission or share of profits shall be treated as part of the working expenses of the Company; 

  

	 	(q)	(17) To set aside out of the profits of the Company before declaring any dividend such sumsamounts as they think proper as a reserve fund to meet contingencies or provide
for dividends, depreciation, repairing, improving and maintaining any of the property of the Company and such other purposes as the Directors may in their absolute discretion think conducive to the interests of the Company; and to invest the
several sumsamounts set aside in such investments, other than shares of the Company, as they may think fit, and from time to time to deal with and vary such investments, and to dispose of all or any part of them for the
benefit of the Company, and to divide the reserve fund into such special funds as they think fit, with full power to employ the assets constituting the reserve fund in the business of the Company without being bound to keep them separate from the
other assets; 

  

	 	(r)	(18) From time to time to make, vary and repeal rules for the regulation ofand regulations respecting the business of the Company, its officers and
servantsemployees, the members of the Company or any section or class of them, and respecting any other matters contemplated by these Articles; 

 

	 	(s)	(19) To enter into all such negotiations and contracts, rescind and vary all such contracts, and execute and do all such acts, deeds, and things in the name and on behalf of the Company as they may
consider expedient for or in relation to any of the matters aforesaid or otherwise for the purposes of the Company; 

  

	 	(t)	(20) From time to time to provide for the management of the affairs of the Company in such manner as they shall think fit; 

 

	 	(u)	(21) Subject to the Act and the Company’s Memorandum of Association, to sell, lease or otherwise dispose of any property, real or personal, undertaking,
franchises, business, assets, interests or effects which the Company is authorized to sell, lease or otherwise dispose of, for such price or consideration and generally and on such terms and conditions as the
directorsDirectors may think fit, and in particular but without limitation for shares, debentures or other securities of any companybody corporate having objects altogether or in part
similar to those of this Company; 

  

	 	(v)	(22) To delegate any of the duties of the boardBoard to any standing or special committee, or to any manager or any other officer, attorney or agent, and to appoint any
person to be the attorney or agent of the Company, with such powers, including the power to sub-delegate and upon such terms as they think fit. 

Solicitors 
  

	138.	132. The Company may employ or retain a solicitor or solicitors and such solicitor may, at the request of the Board of Directors or on instructions of the Chair of the Board, or the President, attend
meetings of the Directors or Shareholders, whether or not the solicitor is a member or a Director of the Company. If such solicitor is also a Director, the solicitor may nevertheless charge for services rendered to the Company as a solicitor.

 Secretary 
  

	139.	133. The Directors shall appoint a Secretary of the Company to keep the minutes of the shareholders’ and Directors’ meetings and perform such other duties as may be assigned to the Secretary
by the Board. The Directors may also appoint a temporary substitute for the Secretary who shall, for the purposes of these Articles, be deemed to be the Secretary. 

  

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The Seal 
  

	140.	

  

	 	(a)	134. The Common Seal may be affixed to any instrument (i) in the presence of and contemporaneously with the attesting signatures of two persons who are officers and/or
directorsDirectors of the Company, or (ii) in the presence of and contemporaneously with the attesting signature of any one personor more persons designated by and under the authority of a
resolution of the Board of Directors or of a committee thereof. If the Company has only one Director and Officer the common sealCommon Seal may be affixed in the presence of and contemporaneously with the attesting signature
of that Director and Officer. For the purpose of certifying documents or proceedings of the Company the Common Seal may be affixed by any one of the President, a Vice-President, the Secretary, an assistant secretary, any other
officer of the Company or a Director. 

  

	 	(b)	135. (a) The Company may have facsimiles of the Common Seal which may be used interchangeably with the Common Seal. 

 

	 	(c)	(b) The Company may have for use at any place outside Nova Scotia as to all matters to which the corporate existence and capacity of the Company extends an official seal that is a facsimile
of the Common Seal of the Company with the addition on its face of the name of the place where it is to be used; and the Company may by writing under the seal of its Common Seal authorize any person to affix such official seal to
any document at such place to which the Company is a party, and may prescribe and limit the type of documents to which the official seal may be affixed by such person. 

Dividends 
  

	141.	136. The Directors may from time to time declare such dividend as they deem proper upon the shares of the Company according to the rights of the members and the respective classes thereof, and may
determine the date upon which such dividend will be payable and that it will be payable to the persons registered as the holders of such shares at the close of business upon the record date determined in accordance with Article 51. No transfer of
such shares made or registered after the record date so specified shall pass any right to the dividend so declared. 

  

	142.	137. The Company may declare or pay aan otherwise lawful dividend unless there are reasonable grounds for believing that: 

 

	 	(a)	The Company is, or would after the payment be, unable to pay its liabilities as they become due; or 

  

	 	(b)	The realizable value of the Company’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes. 

 

	138.	, including without limitation from profits, retained earnings or other surplus account. The Directors may from time to time pay to the members such interim dividends as in their judgment the position of the
Company justifies. 

  

	143.	139. The Directors may deduct from the dividends payable to any member all such sums of moneyamounts as may be due and payable by the member to the Company on account of calls,
instalments or otherwise, and may apply the same in or towards satisfaction of such sums of moneyamounts so due and payable. 

  

	144.	140. The Directors may retain any dividends on which the Company has a lien, and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien
exists. 

  

	145.	141. The Directors may retain the dividends payable upon shares in respect of which any person is under Article 4648 entitled to become a member, or which any person under that
clause is entitled to transfer, until such person has become a member in respect of or has duly transferred such shares. 

  

	146.	142. Any meeting declaring a dividend may make a call on the members for such amount as the meeting fixes so long as the call on each member does not exceed the dividend payable to him or her. The call
shall be made payable at the same time as the dividend and the dividend may, if so arranged between the Company and the member, be set off against the call. The making of a call under this Article shall be deemed to be and be business of a meeting
which declares such a dividend. 

  

	147.	143. Any meeting declaring a dividend may resolve that such dividend be paid wholly or in part by the distribution of specific assets, paid up shares, debentures, bonds or debenture
stockother securities of the Company or paid up shares, debentures, bonds, or debenture stockother securities of any other Companybody corporate, or in any one or more of such ways.

  

	148.	144.Any meeting may resolve that any moneyscash, investments or other assets forming part of the undivided profits of the Company standing to the credit of the reserve fund or in
the hands of the Company and available for dividends or representing premiums received on the issue of shares and standing to the credit of share premium account, be capitalized and distributed to the shareholdersmembers who
would be entitled to receive them if distributed by way of dividend and in the same proportions, that all or any part or such capitalized fund be applied on behalf of such shareholdersmembers in paying up in full, either at
par or at such premium as the resolution may provide, any unissued shares or debentures or debenture stockother securities of the Company (which shall be distributed accordingly) or in or towards payment of the uncalled
liability on any issued shares or debentures or debenture stockother securities, and that such distribution or payment shall be accepted by such shareholdersmembers in full satisfaction of their
interest in such capitalized sum. 

  
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	149. 145.	For the purpose of giving effect to any resolution under the two last preceding Articles, the Directors may settle any difficulty that may arise in regard to the distribution as they think expedient, and in particular
may issue fractional certificates, may fix the value for distribution of any specific assets, may determine that cash payments will be made to any members upon the footing of the value so fixed or that fractions of less value than $5.00 may be
disregarded in order to adjust the rights of all parties, and may vest any such cash or specific assets in trustees upon such trusts for the persons entitled to the dividend or capitalized fund as may seem expedient to the Directors.

  

	150. 146.	A transfer of shares shall not pass the right to any dividend declared thereon after such transfer and before the registration of the transfer. 

 

	151. 147.	AnyoneAny one of several persons registered as the joint holder of any share may give effectual receipts for all dividends and payments on account of dividends in respect of such share.

  

	152. 148.	Unless otherwise determined by the Directors, any dividend may be paid by a cheque or warrant delivered to or sent through the postmail to the registered address of the member entitled, or, when
there are joint holders, to the registered address of the one whose name stands first on the registerRegister for the shares jointly held. Every cheque or warrant so delivered or sent shall be made payable to the order of the
person to whom it is delivered or sent. 

  

	153. 149.	Notice of the declaration of any dividend, whether interim or otherwise, shall be given to the holders of registered shares in the manner hereinafter provided. 

 

	154. 150.	All dividends unclaimed one year after having been declared may, until claimed, be invested or otherwise made use of by the Directors for the benefit of the Company. 

Accounts 
  

	155. 151.	The Directors shall cause proper books of account to be kept offor the business of the Company. The books of account shall be kept at the head office of the company or at such other place or
places as the Directors may direct. 

  

	156. 152.	The Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to
inspection of the members, and no member shall have any right of inspecting any account or book or document of the Company except as conferred by statute or authorized by the Directors or a resolution of the Company in general meeting.

  

	157. 153.	At the ordinaryannual general meeting in every year the Directors shall lay before the Company the financial statements required by the Act, and the reportreports
to the members of the auditor, if any, and, if the Company is a reporting issuer, the report of the Directors required by subsection 121(1) of the Act. 

 

	158. 154.	The financial statements shall be approved by the Board and such approval shall be evidenced by the signatures on the balance sheet of two Directors or by the Director if there is only one. 

 

	159. 155.	The Directors shall, not less than twenty-one (21) days before the date of the ordinaryannual general meeting or within such shorter period as is fixed from time to time by the Directors
and complies with all applicable laws, send copies of the financial statements together with copies of the auditor’s report, if any, and the report of the Directors, if any, to all members holding voting securities
or otherwise entitled to receive notices of general meetings of the Companymembers who have requested them and such persons as may be required to receive such financial statements and reports under the Act. 

Auditors and Audit 
  

	160. 156.	UnlessExcept in respect of a financial year for which the Company is exempt from the requirements of the Act regarding the appointment and duties of an auditor, an auditor shall be
appointed and the auditor’s duties regulated in accordance with the Act. The Company may appoint as auditor any person, including a shareholder, not disqualified by the Act or other law. An auditor may be removed or replaced in the
circumstances and in the manner specified in the Act. The Directors may fill any casual vacancy in the office of the auditor but while any such vacancy continues the surviving or continuing auditor or auditors, if any, may act.

  

	161. 157.	The auditors shall conduct such audit as may be required by the Act and their report, if any, shall be dealt with by the Company as required by the Act. Every account of the
directorsDirectors, when audited and approved by a general meeting as required by the Act shall be conclusive, except as regards an error discovered therein within three months next after the approval thereof. Whenever
any such error is discovered within the period, the account shall forthwith be corrected, and thenceforth shall be conclusive. 

  

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Notices 
  

	162.	158. A notice may be(including any communication or document) shall be sufficiently given, delivered or served by the Company upon members personally or by sending it through the post in
a prepaid envelope or wrapper addressed to such member at the member’s registered place ofa shareholder, Director, officer or auditor by personal delivery at such person’s registered address (or, in the case of a Director,
officer or auditor, last known address) or by prepaid mail, telegraph, telex, facsimile machine or other electronic means of communication addressed to such person at such address. 

 

	163.	159. MembersShareholders who have no registered place of address shall not be entitled to receive any notice. 

 

	160.	The holder of a share warrant shall not, unless otherwise expressed therein, be entitled in respect thereof to notice of any general meeting of the Company. 

 

	164.	161. Any notice required to be given by the Company to the membersshareholders, or any of them, and not expressly provided for by these Articles, shall be sufficiently given if
given by advertisement. 

  

	165.	162. Any notice given by advertisement shall be advertised twice in a paper published in the place where the head office of the Company is situated, or if no paper is published there, then in any
newspapersnewspaper published in the City of Halifax, Nova Scotia. 

  

	166.	163. All notices shall, with respect to any registered shares to which persons are jointly entitled, be given to whichever of such persons is named first in the registerRegister
for such shares, and notice so given shall be sufficient notice to all the holders of such shares. 

  

	167.	164. Any notice sent by postmail shall be deemed to be given, delivered or served on the earlier of the day of actual receipt or the day following that upon which
the letter, envelope or wrapper containing it is postedmailed, and in proving such service it shall be sufficient to prove that the letter, envelope or wrapper containing the notice was properly addressed and put into
the post officemailed with the postage prepaid thereon. Any notice given by electronic means of communication shall be deemed to be given when entered into the appropriate transmitting device for transmission. A certificate in
writing signed by any manager, secretary or other officialon behalf of the Company that the letter, envelope or wrapper containing the notice was so addressed and postedmailed shall be conclusive
evidence thereof. The foregoing provisions of this clause shall not apply to a notice of a meeting of the Directors. 

  

	168.	165. Every person who by operation of law, transfer or other means whatsoever becomes entitled to any share shall be bound by every notice in respect of such share that prior to such person’s name
and address being entered on the registerRegister was duly served in the manner hereinbefore provided upon the person from whom the person derived title to such share. 

 

	169.	166. Any notice or document so advertised or delivered, sent by post to or left ator otherwise transmitted to the registered address of any member in pursuance of
thethese Articles, shall, notwithstanding that such member is then deceased and that the Company has notice of such death, be deemed to have been served in respect of any registered shares, whether held by such deceased
member solely or jointly with other persons, until some other person is registered instead of such deceased member as the holder or joint holder thereof, and such service shall for all purposes of these Articles be deemed a sufficient service of
such notice or document on the deceased member’s heirs, executors or administrators and all persons, if any, jointly interested with the deceased member in any such share. 

 

	170.	167. The signature to anyAny notice given by the Company may bemay bear the nameor signature, manual or reproduced, of the person giving the notice, written or printed.

  

	171.	168. When a given number of days’ notice or notice extending over any other period is required to be given, the day of service and the day upon which such notice expires shall not, unless it is
otherwise provided, be counted in such number of days or other period. 

 Indemnity 

 

	172.	

  

	 	(a)	The Company shall indemnify each Director and officer, each former Director and officer and each other individual who acts or acted at the Company’s request as a Director or officer or in a similar capacity of
an Other Entity and their respective heirs and legal representatives against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by any such person in respect of any civil,
criminal, administrative, investigative, arbitration, mediation, or other proceeding or investigation to which he is made a party or involved in by reason of being or having been a Director or officer of the Company or such Other Entity at the
request of the Company or in a similar capacity, provided that: 

  

	 	(i)	the individual acted honestly and in good faith with a view to the best interests of the Company or, as the case may be, to the best interest of the Other Entity for which the individual acted as a Director or
officer or in a similar capacity at the Company’s request; and 

  

	 	(ii)	in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds to believe that his conduct was lawful. 

 

	 	(b)	The Company shall, to the full extent permitted by law, advance funds to an individual referred to above for any costs, charges and expenses of a proceeding or investigation provided that such individual shall repay
the funds advanced if the individual does not fulfill the conditions of indemnification set out in this Article. 

  
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	 	(c)	The right of any person to indemnification granted hereunder is not exclusive of any other rights to which any person seeking indemnification may be entitled under any agreement, resolution or other vote of
shareholders or Directors, at law or otherwise. 

  

	 	(d)	169. Every Director, Manager, Secretary and other officer or servant of the Company shall be indemnified by the Company against, and it shall be the duty of the Directors out of the funds of the Company to pay,
all costs, losses and expenses that any such Director, Manager, Secretary or other officer or servant may incur or become liable to pay by reason of any contract entered into, or act or thing done by such person as such officer or servant or in any
way in the discharge of such person’s duties including travelling expenses; and the amount for which suchThe amount for which any indemnity is proved shall immediately attach as a lien on the property of the Company and have
priority as against the members over all other claims. 

  

	 	(e)	For the purposes of this Article, the term “Other Entity” means any affiliate or subsidiary of the Company, and any other body corporate, corporation, limited liability company, partnership, joint venture,
trust, unincorporated association, unincorporated organization, unincorporated syndicate or other enterprise in which the Company, directly or indirectly, now or in the future, holds an interest, whether in debt, equity or otherwise, for which the
Director, officer or other individual serves or served as a Director or officer or in a capacity similar thereto at the request of the Company. 

  

	 	(f)	The Company is authorized to enter into an agreement evidencing and setting out the terms and conditions of an indemnity in favour of any of the persons referred to in this Article. 

 

	173.	170. No Director or other officer of the Company shall, in the absence of any dishonesty on the part of such person, be liable for the acts, receipts, neglects or defaults of any other
Director or officer, or for joining in any receipt or other act for conformity, or for any loss or expense happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the Directors for or on behalf
of the Company, or through the insufficiency or deficiency of any security in or upon which any of the moneysfunds of the Company are invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious act
of any person with whom any moneysfunds, securities or effects are deposited, or for any loss occasioned by error of judgment or oversight on the part of such person, or for any other loss, damage or misfortune whatsoever
which happens in the execution of the duties of such person’s office or in relation thereto. 

  

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Part B Ownership and Voting Restrictions 

Interpretation 
  

	174. 171.	

  

	 	(a)	In this Part “B”, all terms that are not defined have the meanings attributed to those terms in the Privatization Act and: 

“directors’ determination” and similar expressions means a determination made by the directors of the Company in accordance with Article
182185; 
 “excess voting shares” means voting shares held, beneficially owned or controlled in contravention of the
individual share constraint or the non-resident share constraint, as the case may be; 
 “individual share constraint” has the meaning set
forth in Article 172175(a); 
 “non-resident share constraint” has the meaning set forth in Article
173176(a); 
 “non-resident voting constraint” has the meaning set forth in Article 174177;

 “principal stock exchange” means, at any time, the stock exchange in Canada on which the highest volume of voting shares is generally
traded at that time, as determined by the directors of the Company; 
 “sell-down notice” has the meaning set forth in Article
175178(a); 
 “shareholder default” has the meaning set forth in Article 175178(a)(iv); 

“shareholder’s declaration” means a declaration made in accordance with Article 183186; and 

“suspension” has the meaning set forth in Article 176179(a) and “suspend”, “suspended” and similar
expressions have corresponding meanings. 
  

	 	(b)	The provisions of subsections 8(3) and (8) of the Privatization Act are deemed to be incorporated in this Part “B”, with references therein to the “Company”
deemed to be references to the Company. Any provision of this Part “B” that may be read in a manner that is inconsistent with the Privatization Act shall be read so as to be consistent therewith.

  

	 	(c)	For greater certainty, no person is presumed to be an associate of any other person for purposes of paragraph 8(5)(g) of the Privatization Act solely by reason that one of them has given the other the power to vote or
direct the voting of voting shares of a class of voting shares at a meeting of the holders of that class pursuant to a revocable proxy where the proxy is solicited solely by means of an information circular issued in a public solicitation of proxies
that is made in respect of all voting shares of that class and in accordance with applicable law. 

  

	 	(d)	For the purposes of this Part “B”; 

  

	 	(i)	where voting shares of the Company are held, beneficially owned or controlled by two or more persons jointly, the number of voting shares held, beneficially owned or controlled by each such person shall include the
number of voting shares held, beneficially owned or controlled jointly with such other persons; 

  

	 	(ii)	where one or more joint holders of, beneficial owners of or persons controlling voting shares is a non-resident, the voting shares are deemed to be held, beneficially owned or controlled, as the case may be, by such
non-resident; 

  

	 	(iii)	where a person who was not a non-resident becomes a non-resident on any day, the day of acquisition or registration in respect of the acquisition of the voting shares held, beneficially owned or controlled by such
person shall be deemed to be the day that such person became a non-resident; and 

  

	 	(iv)	references to shares “of” a person are to shares held, beneficially owned or controlled, directly or indirectly, otherwise than by way of security only, by that person. 

 

	 	(e)	In this Part “B”, except where the context requires to the contrary, words importing the singular shall include the plural and vice versa and words importing gender shall
include masculine, feminine and neuter genders. 

  
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 Individual Share Constraint 
  

	175. 172.	

  

	 	(a)	No person, together with the associates of that person, shall hold, beneficially own or control, directly or indirectly, otherwise than by way of security only, in the aggregate voting shares to which are attached more
than 15 per cent of the votes that may ordinarily be cast to elect directors of the Company. (The foregoing prohibition is referred to in this Part “B” as the “individual share constraint”.) 

 

	 	(b)	In the event that it appears from the register of members of the Company that any person, together with the associates of that person, is in contravention of the individual share constraint: 

 

	 	(i)	the Company shall not accept any subscription for voting shares from that person or any associate of that person; 

  

	 	(ii)	the Company shall not issue any voting shares to that person or any associate of that person; and 

  

	 	(iii)	the Company shall not register or otherwise recognize the transfer of any voting shares to that person or any associate of that person. 

 

	 	(c)	In the event of a directors’ determination that any person, together with the associates of that person, is in contravention of the individual share constraint: 

 

	 	(i)	the Company shall not accept any subscription for voting shares from that person or any associate of that person; 

  

	 	(ii)	the Company shall not Issue any voting shares to that person or any associate of that person; 

  

	 	(iii)	the Company shall not register or otherwise recognize the transfer of any voting shares to that person or any associate of that person; 

 

	 	(iv)	no person may, in person or by proxy, exercise the right to vote any of the voting shares of that person or of any associate of that person; 

 

	 	(v)	subject to Article 181184(a), the Company shall not declare or pay any dividend, and or make any other distribution: 

 

	 	(A)	on any of the excess voting shares of that person or of any associate of that person; or 

  

	 	(B)	if the directors of the Company determine that the contravention of the individual ownership constraint was intentional and that it would not be inequitable to do so, on all of the voting shares of that person and of
each associate of that person; and any entitlement to such dividend or other distribution shall be forfeited; and 

  

	 	(vi)	the Company shall send a sell-down notice to the registered holder of the voting shares of that person and of each associate of that person. 

 

	 	(d)	In the event that it appears from the register of members of the Company that, or in the event of a directors’ determination that, any person, together with the associates of that person, after any proposed
subscription, issue or transfer of voting shares, would be in contravention of the individual share constraint, the Company shall not: 

  

	 	(i)	accept the proposed subscription for voting shares from; 

  

	 	(ii)	issue the proposed voting shares to; or 

  

	 	(iii)	register or otherwise recognize the proposed transfer of any voting shares to; that person or any associate of that person. 

  

	 	(e)	In the event of a directors’ determination that during any period any person, together with the associates of that person, was in contravention of the individual share constraint, the directors of the Company may
also determine that: 

  

	 	(i)	any votes cast, in person or by proxy, during that period in respect of the voting shares of that person or of any associate of that person shall be disqualified and deemed not to have been cast; and 

 

	 	(ii)	subject to Article 181184(a), each of that person and the associates of that person is liable to the Company to restore to the Company the amount of any dividend paid or distribution received
during that period on: 

  

	 	(A)	the excess voting shares of that person and of each associate of that person; or 

  

	 	(B)	if the directors of the Company determine that the contravention of the individual ownership constraint was intentional and that it would not be inequitable to do so, on all of the voting shares of that person and of
each associate of that person. 

  

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Non-Resident Share Constraint 
  

	176. 173.	

  

	 	(a)	Non-residents shall not hold, beneficially own or control, directly or indirectly, otherwise than by way of security only, in the aggregate voting shares to which are attached more than 25 per cent of the votes
that may ordinarily be cast to elect directors of the Company. (The foregoing prohibition is referred to in this Part “B” as the “non-resident share constraint”.) 

 

	 	(b)	In the event that it appears from the register of members of the Company that, or in the event of a directors’ determination that, there is a contravention of the non-resident share constraint: 

 

	 	(i)	the Company shall make a public announcement, whether by press release, newspaper advertisements or otherwise, reasonably expected to inform the markets in which voting shares are traded of the contravention; and

  

	 	(ii)	the Company shall not: 

  

	 	(A)	accept any subscription for voting shares from any non-resident; 

  

	 	(B)	issue any voting shares to any non-resident; or 

  

	 	(C)	register or otherwise recognize the transfer of any voting shares from any resident to any non-resident. 

  

	 	(c)	In the event of a directors’ determination that there is a contravention of the non-resident share constraint and that to do so would be practicable and would not be unfairly prejudicial to, and would not unfairly
disregard the interests of, persons holding, beneficially owning or controlling voting shares who are non-resident, the Company shall send a sell-down notice to the registered holders of such of those voting shares as shall be chosen on the basis of
inverse order to the order of acquisition or registration of all non-residents, by lot or by such other method that is authorized by a directors’ determination. 

 

	 	(d)	In the event that it appears from the register of members of the Company that, or in the event of a directors’ determination that, after any proposed subscription, issue or transfer of voting shares to a
non-resident, there would be a contravention of the non-resident share constraint, the Company shall not: 

  

	 	(e)	     

	 	(i)	     

  

	 	(i)	accept the proposed subscription for voting shares; 

  

	 	(ii)	issue the proposed voting shares; or 

  

	 	(iii)	register or otherwise recognize the proposed transfer. 

 Non-Resident Voting Constraint 

 

	177.	174. In the event of a directors’ determination that on any motion made at any meeting of shareholders of the Company more than 25 per cent of the votes cast, in person or by proxy, have been
cast in respect of voting shares that are held, beneficially owned or controlled, directly or indirectly, by non-residents, all votes cast, in person or by proxy, in respect of such voting shares on that motion shall be proportionally adjusted so
that such votes cast equal twenty-five percent of all votes cast. (The foregoing adjustment is referred to in this Part “B” as the “non-resident voting constraint”.) 

Sell-Down Notice 
  

	178. 175.	

  

	 	(a)	Any notice (a “sell-down notice”) required to be sent to a registered holder of voting shares pursuant to Article 172175(c)(vi) or Article 173176(c):

  

	 	(i)	shall specify in reasonable detail the nature of the contravention of the individual share constraint or the non-resident share constraint, as the case may be, the number of voting shares determined to be excess voting
shares and the consequences of the contravention specified in Article 172175 or 173176, as the case may be; 

  

	 	(ii)	shall request an initial or further shareholder’s declaration; 

  

	 	(iii)	shall specify a date, which shall be not less than, in the case of a contravention of the individual share constraint, 45 days (or such shorter period as is fixed from time to time by the Directors and complies with
all applicable laws), or, in the case of a contravention of the non-resident share constraint, 60 days (or such shorter period as is fixed from time to time by the Directors and complies with all applicable laws), after the date of the
sell-down notice, by which the excess voting shares are to be sold or disposed of; and 

  
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	 	(iv)	shall state that unless the registered holder either: 

  

	 	(A)	sells or otherwise disposes of the excess voting shares by the date specified in the sell-down notice on a basis that does not result in any contravention of the individual share constraint or the non-resident share
constraint and provides to the Company, in addition to the shareholder’s declaration requested pursuant to Article 175178(a)(ii), written evidence satisfactory to the Company of such sale or other disposition; or

  

	 	(B)	provides to the Company, in addition to the shareholder’s declaration requested pursuant to the Article 175178(a)(ii), written evidence satisfactory to the Company that no such sale or other
disposition of excess voting shares is required; 

  

	 	 	such default (a “shareholder default”) shall result in the consequence of suspension pursuant to Article 176179 and may result in the consequence of sale in accordance with Article
177180 or redemption in accordance with Article 178,181, in each case without further notice to the registered holder, and shall specify in reasonable detail the nature and timing of those
consequences. 

  

	 	(b)	In the event that, following the sending of a sell-down notice, written evidence is submitted to the Company for purposes of Article 175178(a)(iv)(B), the Company shall assess the evidence as
soon as is reasonably practicable and in any event shall give a second notice to the person submitting the evidence not later than 10 days after the receipt thereof stating whether the evidence has or has not satisfied the Company that no sale or
other disposition of excess voting shares is required. If the evidence has so satisfied the Company, such sell-down notice shall be cancelled and such second notice shall so state. If the evidence has not so satisfied the Company, such second notice
shall reiterate the statements required to be made in such sell-down notice pursuant to Articles. 175 178(a)(iii) and (iv). In either case, the 45 day or 60 day period, as the case may be,applicable
periods referred to in Article 175178(a) (iii) shall be automatically extended to the end of the 10 day period referred to in this Article 175Article 178(b) if such 10 day period extends
beyond such 45 day or 60 dayotherwise applicable period. 

 Suspension 

179. 176. 
  

	 	(a)	In the event of a shareholder default in respect of any registered holder of voting shares, then, without further notice to the registered holder: 

 

	 	(i)	all of the voting shares of the registered holder shall be deemed to be struck from the register of members of the Company; 

  

	 	(ii)	no person may, in person or by proxy, exercise the right to vote any of such voting shares; 

  

	 	(iii)	subject to Article 181184(a), the Company shall not declare or pay any dividend, or make any other distribution, on any of such voting shares and any entitlement to such dividend or other
distribution shall be forfeited; 

  

	 	(iv)	the Company shall not send any form of proxy, information circular or financial statements of the Company or any other communication from the Company to any person in respect of such voting shares; and

  

	 	(v)	no person may exercise any other right or privilege ordinarily attached to such voting shares. 

 (All of
the foregoing consequences of a shareholder default are referred to in this Part “B” as a “suspension”.) Notwithstanding the foregoing, a registered holder of suspended voting shares shall have
the right to transfer such voting shares on any securities register of the Company on a basis that does not result in contravention of the individual share constraint or the non-resident share constraint. 

 

	 	(b)	The Directors of the Company shall cancel any suspension of voting shares of a registered holder and reinstate the registered holder to the register of members of the Company for all purposes if they determine that,
following the cancellation and reinstatement, none of such voting shares will be held, beneficially owned or controlled in contravention of the individual share constraint or the non-resident share constraint. For greater certainty, any such
reinstatement shall permit, from and after the reinstatement, the exercise of all rights and privileges attached to the voting shares so reinstated but, subject to Article 181184(a), shall have no retroactive effect.

  

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Sale 
 180. 177. 

 

	 	(a)	In the event of a shareholder default in respect of any registered holder of voting shares, the Company may elect by directors’ determination to sell, on behalf of the registered holder, the excess voting shares
thereof, without further notice thereto, on the terms set forth in this Article 177180 and Article 179.182. 

  

	 	(b)	The Company may sell any excess voting shares in accordance with this Article 177180: 

  

	 	(i)	on the principal stock exchange; or 

  

	 	(ii)	if there is no principal stock exchange, on such other stock exchange or organized market on which the voting shares are then listed or traded as the directors of the Company shall determine; or 

 

	 	(iii)	if the voting shares are not then listed on any stock exchange or traded on any organized market, in such other manner as the directors of the Company shall determine. 

 

	 	(c)	The net proceeds of sale of excess voting shares sold in accordance with this Article 177180 shall be the net proceeds after deduction of any commission, tax or other cost of sale.

  

	 	(d)	For all purposes of a sale of excess voting shares in accordance with this section, the Company is the agent and lawful attorney of the registered holder and the beneficial owner of the excess voting shares.

 Redemption 
 181. 178. 

 

	 	(a)	For the purposes of enforcing the ownership restrictions and constraints imposed pursuant to the foregoing articles and the Reorganization Act, in the event of a shareholder default in respect of any registered holder
of voting shares and in the event that the Directors of the Company determine either that the Company has used reasonable efforts to sell excess voting shares in accordance with Article 177180 but that such sale is
impracticable or that it is likely that such sale would have material adverse consequences to the Company or the holders of voting shares, the Company may, notwithstanding section 51 of the Companies Act, elect by directors’
determination, to redeem the excess voting shares thereof, without further notice thereto, on the terms set forth in this Article 178181 and Article 179.182. 

 

	 	(b)	The redemption price paid the Company to redeem any excess voting shares in accordance with this Article 178181 shall be: 

 

	 	(i)	the average of the closing prices per share of the voting shares on the principal stock exchange (or, if there is no principal stock exchange or if the requisite trading of voting shares has not occurred on the
principal stock exchange, such other stock exchange or such other organized market on which such requisite trading has occurred as the directors of the Company shall determine) over the last 10 trading days on which at least one board lot of voting
shares has traded on the principal stock exchange (or such other stock exchange or such other organized market) in the period ending on the trading day immediately preceding the redemption date; or 

 

	 	(ii)	if the requisite trading of voting shares has not occurred on any stock exchange or other organized market, on such basis as the Directors of the Company shall determine. 

Procedures Relating to Sale and Redemption 
 182. 179.

  

	 	(a)	In the event of any sale or redemption of excess voting shares in accordance with Article 177180 or Article 178,181, respectively, the Company shall deposit an amount
equal to the amount of the net proceeds of sale or the redemption price, respectively, in a special account in any bank or trust company in Canada selected by it. The amount of the deposit, less the reasonable costs of administration of the special
account, shall be payable to the registered holder of the excess voting shares sold or redeemed on presentation and surrender by the registered holder to that bank or trust company of the certificate or certificates, if any, representing the
excess voting shares. Any interest earned on any amount so deposited shall accrue to the benefit of the Company. 

  

	 	(b)	From and after any deposit made pursuant to Article 179182(a), the registered holder shall not be entitled to any of the remaining rights of a registered holder in respect of the excess voting
shares sold or redeemed, other than the right to receive the funds so deposited on presentation and surrender of the certificate or certificates representing the excess voting shares sold or redeemed. 

 

	 	(c)	If a part only of the voting shares represented by any certificate is sold or redeemed in accordance with Articles 177180 or 178,181, respectively, the Company shall, on
presentation and surrender of such certificate and at the expense of the registered holder, and subject to any regulations made by the Directors, issue a new certificate representing the balance of the voting shares. 

  
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	 	(d)	So soon as is reasonably practicable after, and, in any event, not later than 30 days (or such longer period as is fixed from time to time by the Directors and complies with all applicable laws) after, a deposit
made pursuant to Article 179182(a), the Company shall send a notice to the registered holder of the excess voting shares sold or redeemed and the notice shall state: 

 

	 	(i)	that a specified number of voting shares has been sold or redeemed, as the case maybe; 

  

	 	(ii)	the amount of the net proceeds of sale or the redemption price, respectively; 

  

	 	(iii)	the name and address of the bank or trust company at which the Company has made the deposit of the net proceeds of sale or the redemption price, respectively; and 

 

	 	(iv)	all other relevant particular of the sale or redemption, respectively. 

  

	 	(e)	For greater certainty, the Company may sell or redeem excess voting shares in accordance with Articles 177180 or 178181, respectively, despite the fact that the Company
does not possess the certificate or certificates, if any, representing the excess voting shares at the time of the sale or redemption. If, in accordance with Article 177,180, the Company sells excess voting shares
without possession of the certificate or certificates representing the excess voting shares, the Company shall, subject to any regulations made by the Directors, issue to the purchaser of such excess voting shares or its nominee a new
certificate or certificates representing the excess voting shares sold. If, in accordance with Articles 177180 or 178,181, the Company sells or redeems excess voting shares without possession of the
certificate or certificates representing the excess voting shares and, after the sale or redemption, a person establishes that it is a bona fide purchaser of the excess voting shares sold or redeemed, then, subject to applicable law:

  

	 	(i)	the excess voting shares held or beneficially owned by the bona fide purchaser are deemed to be, from the date of the sale or redemption by the Company, as the case may be, validly issued and outstanding voting shares
in addition to the excess voting shares sold or redeemed; and 

  

	 	(ii)	notwithstanding Article 179182(b), the Company is entitled to the deposit made pursuant to Article 179182(a) and, in the case of a sale in accordance with Article
177,180, shall add the amount of the deposit to the stated capital account for the class of voting shares issued. 

Exceptions 
 183. 180. 

 

	 	(a)	Notwithstanding Article 172175 or 173,176, neither the individual share constraint nor the non-resident share constraint applies in respect of voting shares of the Company
that are held: 

  

	 	(i)	(i) by one or more underwriters solely for the purpose of distributing the voting shares to the public; or 

  

	 	(ii)	by any person who provides centralized facilities for the clearing of trades in securities and is acting in relation to trades in the voting shares solely as an intermediary in the payment of funds or the delivery of
securities, or both. 

  

	 	(b)	A person referred to in Article 180183(a)(ii) shall not exercise voting rights attached to the voting shares so held by that person. 

Saving Provisions 
 184. 181. 

 

	 	(a)	Notwithstanding any other provision of this Part “B”; 

  

	 	(i)	(i) the Directors of the Company may determine to pay a dividend or to make any other distribution on voting shares that would otherwise be prohibited by any other provision of this Part
“B” where the contravention of the individual share constraint or the non-resident share constraint that gave rise to the prohibition was inadvertent or of a technical nature or it would otherwise be
inequitable not to pay the dividend or make the distribution; and 

  

	 	(ii)	where a dividend has not been paid or any other distribution has not been made on voting shares as a result of a directors’ determination of a contravention of the individual share constraint or the non-resident
share constraint, or where the amount of a dividend or any other distribution has been restored to the Company pursuant to Article 172175(e)(ii) as a result of a directors’ determination of a contravention of the
individual share constraint, the Directors of the Company shall declare and pay the dividend, make the distribution, or refund the restored amount, respectively, if they subsequently determine that no such contravention occurred. 

  

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	 	(b)	In the event that the Company suspends or redeems voting shares in accordance with Article 176179 or 178,181, respectively, or otherwise redeems, purchases for
cancellation or otherwise acquires voting shares, and the result of such action is that any person and the associates of that person who, prior to such action, were not in contravention of the individual share constraint are, after such action, in
contravention, then, notwithstanding any other provision of this Part “B” , the sole consequence of such action to that person and the associates of that person, in respect of the voting shares of that
person and of the associates of that person held, beneficially owned or controlled at the time of such action, shall be that the number of votes attached to those voting shares shall be reduced to a number that is the largest whole number of votes
that may be attached to the voting shares which that person and the associates of that person could hold, beneficially own or control from time to time in compliance with the individual share constraint. 

 

	 	(c)	Notwithstanding any other provision of this Part “B”, a contravention of the individual share constraint or the non-resident share constraint shall have no consequences except
those that are expressly provided for in this Part “B”. For greater certainty but without limiting the generality of the foregoing: 

 

	 	(i)	no transfer, issue or ownership of, and no title to, voting shares; 

  

	 	(ii)	no resolution of shareholders [(except to the extent that the result thereof is affected as a result of a directors’ determination under Article
172175(e)(i)]); and 

  

	 	(iii)	no act of the Company, including any transfer of property to or by the Company; 

  

	 	 	shall be invalid or otherwise affected by any contravention of the individual share constraint or the non-resident share constraint or the failure to make the adjustment required pursuant to the non-resident voting
constraint. 

 Directors’ Determinations 
 185.
182. 
  

	 	(a)	The Directors of the Company shall have the sole right and authority to administer the provisions of this Part “B” and to make any determination required or contemplated
hereunder. In so acting, the Directors of the Company shall enjoy, in addition to the powers set forth in this Part “B“, all of the powers necessary or desirable, in their opinion, to carry out the intent
and purpose of this Part “B”. The Directors of the Company shall make on a timely basis all determinations necessary for the administration of the provisions of this Part
“B” and, without limiting the generality of the foregoing, if the Directors of the Company consider that there are reasonable grounds for believing that a contravention of the individual ownership
constraint or the non-resident ownership constraint has occurred or will occur, the Directors shall make a determination with respect to the matter. Any directors’ determination that is not inconsistent with the Reorganization Act, the
Privatization Act and other applicable law shall be conclusive, final and binding except to the extent modified by any subsequent directors’ determination. 

  

	 	(b)	The Directors of the Company shall make any directors’ determination contemplated by Article 172175 or 173176: 

 

	 	(i)	after the relevant shareholder’s declaration have been requested and received by the Company, only: 

  

	 	(A)	on a basis consistent with those shareholder’s declarations; or 

  

	 	(B)	if the Directors of the Company are of the opinion that the shareholder’s declarations do not contain adequate or accurate information and they believe and have reasonable grounds for believing that they will not
be provided with shareholder’s declarations that do contain adequate and accurate information; or 

  

	 	(ii)	whether or not any shareholder’s declaration has been requested or received by the Company, only if the Directors of the Company believe and have reasonable grounds for believing that they have sufficient
information to make the directors’ determination, that the consequences of the directors’ determination would not be inequitable to those affected by it and that it would be impractical, under all the circumstances, to request or to await
the receipt of any shareholder’s declaration. 

  

	 	(c)	In administering the provisions of this Part B, including, without limitation, in making any directors’ determination in accordance with Article 182185(b) or otherwise, the Directors of the
Company may rely on any information on which the Directors consider it reasonable to rely in the circumstances. Without limiting the generality of the foregoing, the Directors of the Company may rely upon any shareholder’s declaration, the
register of members of the Company, the knowledge of any Director, officer or employee of the Company or any advisor to the Company and the opinion of counsel to the Company. 

 

	 	(d)	In administering the provisions of this Part B , including, without limitation, in making any directors’ determination, the Directors shall act honestly and in good faith. Provided that the Directors of the Company
so act, they shall not be liable to the Company and neither they nor the Company shall be liable to any holder or beneficial owner of voting shares or any other person for, nor with respect to any matter arising from or related to, any act or
omission to act in relation to this Part B. 

  
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	 	(e)	Any directors’ determination required or contemplated by this Part B shall be expressed and conclusively evidenced by a resolution duly adopted. 

 

	 	(f)	The Directors may delegate any of their powers and duties under this Article 182185 to any standing or special committee consisting of such members of the Board as the Directors may determine.

 Shareholders’ Declarations 
 186.
183. 
  

	 	(a)	For purposes of monitoring the compliance with and of enforcing the provisions of this Part B, the Directors of the Company may require that any registered holder or beneficial owner, or any other person of whom it is,
in the circumstances, reasonable or make such request, file with the Company or its registrar and transfer agent a completed shareholder’s declaration. The Directors of the Company shall determine from time to time written guidelines with
respect to the nature of the shareholder’s declaration to be requested, the times at which shareholder’s declarations are to be requested and any other relevant matters relating to shareholder’s declarations. 

 

	 	(b)	A shareholder’s declaration shall be in the form from time to time determined by the directors of the Company pursuant to Article 183186(a) and, without limiting the generality of the
foregoing may be required to be in the form of a simple declaration in writing or a statutory declaration under the Canada Evidence Act. Without limiting the generality of its contents, any shareholder’s declaration may be required to contain
information with respect to: 

  

	 	(i)	the name, address and residency of the shareholder (“Registered Shareholder”) and if the shareholder is an individual and not a Canadian citizen, such shareholder’s citizenship; 

 

	 	(ii)	the name, address and residency of any person who beneficially owns or controls, directly or indirectly, otherwise than by way of security only, the Registered Shareholder’s shares (“Beneficial
Shareholder”) and if such person is an individual and not a Canadian citizen, such person’s citizenship; 

  

	 	(iii)	the name, address and residency of any person who is an associate of the Registered Shareholder or any Beneficial Shareholder (“Associate”), and if such person is an individual and not a Canadian citizen, such
person’s citizenship; 

  

	 	(iv)	the number of shares held by the Registered Shareholder, each Beneficial Shareholder and each Associate, including the dates such shares were acquired or proposed to be acquired; and 

 

	 	(v)	if the Registered Shareholder, any Beneficial Shareholder or any Associate is a corporation, trust, partnership or unincorporated organization the name, address and residency of each person who is a controlling
shareholder, trustee, partner or member of the corporation, trust, partnership or unincorporated organization, as the case may be, and if such person is an individual and not a Canadian citizen, such person’s citizenship. 

  

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