the annual and special meeting of … annual and special meeting of shareholders to be held on...

Information Circular and Notice of

THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS To Be Held On Tuesday, May 13, 2014

April 8, 2014

This information circular contains important information for shareholders.

Pure Technologies Ltd. - 1 - 2013 Information Circular

Notice is hereby given that the annual and special general meeting (the "Meeting") of holders ("Shareholders") of common shares ("Common Shares") of Pure Technologies Ltd. (the "Corporation") will be held:

DATE: Tuesday, May 13, 2014 BUSINESS OF THE MEETING

TIME: 2:00 p.m. (Mountain time) The purpose of the Meeting is:

PLACE: Pure Technologies Ltd. 300, 705 – 11 Avenue SW Calgary, AB T2R 0E3

1. to receive the consolidated financial statements and auditors’ report thereon for the fiscal year December 31, 2013;

2. to fix the number of directors at six (6), subject to the right of directors of the Corporation to appoint two (2) additional directors at any time prior to the next annual general meeting of Shareholders;

3. to elect James E. Paulson, Peter O. Paulson, Michael M. Kanovsky, David H. McDermid, Charles W. Fischer, and Scott I. MacDonald as directors of the Corporation for the ensuing year, or until their successors are elected or appointed;

4. to appoint auditors of the Corporation to hold office until the close of the next annual meeting of Shareholders at a remuneration to be determined by the board of directors of the Corporation (the "Board" or the "Board of Directors");

5 to consider, and, if deemed advisable, to pass an ordinary resolution approving all unallocated options, rights or other entitlements under the employee stock option plan of the Corporation (the "Stock Option Plan"); and

6. to transact such other business as may be properly brought before the Meeting or any adjournment thereof.

Specific details of the matters to be put before the Meeting are set forth in the accompanying information circular of the Corporation dated April 8, 2014 (the "Circular").

Only registered holders of Common Shares of record as of the close of business on April 8, 2014 are entitled to receive notice of and to vote at the Meeting, except that a transferee of Common Shares after such record date may, at any time before the Meeting, establish a right to vote at the Meeting by providing evidence of ownership of Common Shares and demanding that his or her name be placed on the Shareholder list for the Meeting in place of the transferor.

Registered Shareholders who are unable to attend the Meeting in person are requested to date, sign and return the accompanying form of proxy (the "Instrument of Proxy") by mail or fax to Computershare Trust Company of Canada ("Computershare") located at 600, 530 – 8 Avenue SW, Calgary, AB, T2P 3S8, or vote by proxy on the internet or by the telephone in accordance with the instructions set forth in the Circular. A proxy will not be valid unless it is received by Computershare no later than 48 hours (excluding Saturdays, Sundays and holidays) before the time of Meeting or any postponement or adjournment thereof. Non-registered beneficial Shareholders must follow the instructions in the Circular to vote.

DATED at Calgary, Alberta, this 8th day of April, 2014.

BY ORDER OF THE BOARD OF DIRECTORS OF PURE TECHNOLOGIES LTD.

(signed) "Peter O. Paulson" Chief Executive Officer


TABLE OF CONTENTS

GENERAL INFORMATION .......................................................................................................................... 4 INTERPRETATION ......................................................................................................................................... 4 ADDITIONAL INFORMATION ............................................................................................................................ 4 CONTACT INFORMATION ............................................................................................................................... 4

QUESTIONS AND ANSWERS ..................................................................................................................... 5

VOTING INFORMATION .............................................................................................................................. 8

VOTING SECURITIES AND PRINCIPAL HOLDERS ............................................................................................... 8

BUSINESS OF THE MEETING .................................................................................................................... 8

RECEIPT OF THE CONSOLIDATED FINANCIAL STATEMENTS .............................................................................. 8 APPOINTMENT OF AUDITORS ......................................................................................................................... 8 KPMG LLP, CHARTERED ACCOUNTANTS FEES AND SERVICES .......................................................................... 9 SETTING THE NUMBER OF DIRECTORS ........................................................................................................... 9 ELECTION OF THE BOARD OF DIRECTORS ...................................................................................................... 9 APPROVAL OF UNALLOCATED OPTIONS UNDER THE STOCK OPTION PLAN ....................................................... 13

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS .......................................................... 14 OTHER BUSINESS ...................................................................................................................................... 15 INTEREST OF CERTAIN PERSONS AND COMPANIES IN MATTERS TO BE ACTED UPON ........................................ 15

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS ............................................... 15

COMPENSATION ....................................................................................................................................... 16

COMPENSATION DISCUSSION AND ANALYSIS ................................................................................................ 16 EXECUTIVE COMPENSATION ....................................................................................................................... 16 DIRECTORS COMPENSATION ....................................................................................................................... 17 OTHER ...................................................................................................................................................... 18 EMPLOYEE STOCK OPTION PLAN ................................................................................................................. 18 EMPLOYEE SHARE PURCHASE PLAN ............................................................................................................ 22 OUTSTANDING OPTION-BASED AWARDS....................................................................................................... 22 EMPLOYMENT AGREEMENTS – TERMINATION AND CHANGE OF CONTROL BENEFITS ........................................ 25 PERFORMANCE GRAPH .............................................................................................................................. 28 CORPORATE GOVERNANCE DISCLOSURE ..................................................................................................... 29 BOARD OF DIRECTORS ............................................................................................................................... 29 BOARD MANDATE ....................................................................................................................................... 29 POSITION DESCRIPTIONS ............................................................................................................................ 29 ORIENTATION AND CONTINUING EDUCATION ................................................................................................ 29 ETHICAL BUSINESS CONDUCT ..................................................................................................................... 30 NOMINATION OF DIRECTORS ....................................................................................................................... 30 AUDIT COMMITTEE ..................................................................................................................................... 31 COMPENSATION COMMITTEE ...................................................................................................................... 31 CORPORATE GOVERNANCE AND NOMINATING COMMITTEE ............................................................................ 32 ASSESSMENTS .......................................................................................................................................... 32


APPENDICES

APPENDIX A ............................................................................................. MANDATE OF BOARD OF DIRECTORS


GENERAL INFORMATION

INTERPRETATION

Unless the context otherwise requires, references to "Pure", "Corporation", "Pure Technologies Ltd.", "we", "us" or "our" as used herein refer to Pure Technologies Ltd. and its subsidiaries. All dollar references are in Canadian dollars unless otherwise stated. Unless otherwise indicated, the financial information contained in the Circular is presented as of December 31, 2013 and all other information is current to March 17, 2014. The capitalized terms not otherwise defined herein have the meanings ascribed to them in the notice of meeting accompanying this Circular.

ADDITIONAL INFORMATION

Financial information is provided in our consolidated financial statements and auditor's report thereon for the fiscal year ended December 31, 2013 (the "Annual Financial Statements") and related management’s discussion and analysis of financial condition and results of operations (the "MD&A").

Our financial results are announced by news release. Our Annual Financial Statements, MD&A and other disclosure documents are available on our website at www.puretechltd.com and on SEDAR at www.sedar.com.

The Corporation will provide, without charge to its Shareholders, a copy of the Corporation's annual report containing the Annual Financial Statements and the MD&A, upon request to the Corporate Secretary of the Corporation using the contact information below.

CONTACT INFORMATION

Pure Technologies Ltd. Computershare Trust Company of Canada 300, 705 – 11 Avenue SW Calgary, AB T2R 0E3

600, 530 – 8 Avenue SW Calgary, AB T2P 3S8

Ph: (403) 266-6794 Ph: (403) 267-6800

Fax: (403) 266-6570

Toll Free: 1-800-537-2806

Email: [email protected].


QUESTIONS AND ANSWERS

Q: Who is soliciting my proxy?

A: The management of the Corporation ("Management") is soliciting your proxy for use at the Meeting or at any postponement or adjournment thereof. The solicitation of proxies for the Meeting will be made primarily by mail, but our officers, employees and agents may also solicit proxies personally or by telephone, facsimile or electronic communication. No remuneration will be paid to any person for soliciting proxies. The cost of the solicitation of proxies will be borne by Pure Technologies Ltd. The Corporation will be sending its proxy-related materials directly to non-objecting beneficial owners and intends to pay for Intermediaries (defined below) to send the Corporation's proxy-related materials and voting instruction form to objecting beneficial holders.

Q: Who is entitled to vote?

A: Only holders of Common Shares may vote at the Meeting. As at March 17, 2014, there were 51,640,170 Common Shares issued and outstanding. Each Shareholder is entitled to one vote for each Common Share registered in his or her name as of the close of business on April 8, 2014, the record date for the Meeting. If you purchased Common Shares from a registered shareholder after the record date, you may vote those Common Shares at the Meeting by requesting Computershare to include your name on the list of Shareholders eligible to vote at the Meeting. In that case, you will have to provide properly endorsed share certificates or other documentation that establishes your ownership. This request must be made at least ten (10) days before the Meeting. The contact information for our transfer agent is located on page 4 of this Circular.

Q: How do I vote?

A: The procedure for voting depends on whether you are a Registered Shareholder (as defined below) or a Non-Registered Beneficial Shareholder (as defined below).

If your Common Shares are registered in your name and you have a share certificate or a direct registration advice evidencing ownership (such Shareholders herein referred to as "Registered Shareholders"), you can vote your Common Shares by voting in person at the Meeting or voting by proxy, in either case, in the manner described below. See "Voting Instructions for Registered Shareholders".

If your Common Shares are held through a bank, trust company, securities dealer or broker, trustee or administrator of self administered RRSP's, RRIF's, RESP's or similar plans or other person (any one of which is herein referred to as an "Intermediary") or otherwise not registered in your own name (such Shareholders herein referred to as "Non-Registered Beneficial Shareholders"), your Intermediary is the legal entity entitled to vote your Common Shares for you in the manner that you direct your Intermediary by completing and returning a voting instruction form. See "Voting Instructions for Non-Registered Beneficial Shareholders".

VOTING INSTRUCTIONS FOR REGISTERED SHAREHOLDERS

Q: How do I vote in person at the Meeting as a Registered Shareholder?

A: To vote in person at the Meeting, you must register with Computershare prior to the commencement of the Meeting or any postponement or adjournment thereof.


Q: How do I vote by proxy as a Registered Shareholder?

A: Internet: Go to www.investorvote.com and follow the instructions to vote by proxy on the internet. You will need your 15-digit control number which is noted on your Instrument of Proxy.

Telephone: Call 1-866-732-VOTE (8683) (toll-free in North America) from a touch-tone phone and follow the voice instructions to vote by proxy over the telephone. You will need your 15-digit control number which is noted on your Instrument of Proxy.

Mail or by Fax: Complete, sign and date your Instrument of Proxy and deliver it to Computershare by mail in the envelope provided.

Q: What is the deadline for voting by proxy as a Registered Shareholder?

A: To be valid and acted upon at the Meeting or any postponements or adjournments thereof, you must submit your proxy to Computershare, in any manner described above, such that Computershare receives it no later than 2:00 p.m. on Friday, May 9, 2014 and, in the case of any postponement or adjournment of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and holidays) before commencement of the postponed Meeting or recommencement of the adjourned Meeting.

Q: How do I appoint my proxyholder as a Registered Shareholder?

When you vote by proxy in any manner described above, the Chairman of Pure Technologies Ltd. and, if the Chairman is absent, the Chief Executive Officer of Pure Technologies Ltd. will be the person designated as your proxyholder to attend and vote your Common Shares on your behalf at the Meeting in accordance with your instructions. You have the right to appoint a different person (who need not be a Shareholder) to attend and act on your behalf at the Meeting. To exercise this right, you must: (i) vote by mail and insert the name of the person you would like to appoint as your proxyholder in the space provided on the Instrument of Proxy; or (ii) vote on the internet and follow the instructions on the website on how to appoint a different person as your proxyholder. If you vote by proxy over the telephone, you cannot appoint anyone other than the designees named on your Instrument of Proxy as your proxyholder.

Q: How will my proxyholder vote my Common Shares for me as a Registered Shareholder at the Meeting?

If there is a ballot called for at the Meeting, the Common Shares represented by your proxy will be voted for or withheld from voting or voted for or against, as applicable, in accordance with the instructions you specify on your proxy. If you have not specified how to vote on a particular matter, your proxyholder is entitled to vote your Common Shares as he or she sees fit. If your proxy does not specify how to vote on a particular matter and you have authorized our Chairman or our President and Chief Executive Officer to act as your proxyholder, your Common Shares will be voted in favour of the particular matter.

Q: What if I change my mind and want to change or revoke a vote previously made proxy by me as a Registered Shareholder?

A: If you change your mind and want to change your vote previously made by proxy, you may change it by:


1. by completing, signing and dating a form of proxy in writing, in a form acceptable to the Corporation, bearing a date that is later than your previously submitted proxy, and delivering to Computershare such that it is received no later than 2:00 p.m. on Friday, May 9, 2014 and, in the case of any postponement or adjournment of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and holidays) before commencement of the postponed Meeting or recommencement of the adjourned Meeting;

2. by voting by proxy on the internet or over the telephone no later than 2:00 p.m. on Friday, May 9, 2014 and, in the case of any postponement or adjournment of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and holidays) before commencement of the postponed Meeting or recommencement of the adjourned Meeting; or

3. revoking your proxy in accordance with the instructions below and voting your Common Share at the Meeting in person.

If you change your mind and want to revoke your vote previously made by proxy, you may revoke it by:

1. completing, signing and dating a notice of revocation in writing, bearing a date that is later than the previously submitted proxy, and delivering it to:

a. Computershare at any time up to and including the 5:00 p.m. on the last business day preceding the day of the Meeting, or any postponement or adjournment thereof, at which the proxy is to be used; or

b. the Chair of the Meeting on the day of, but prior to the commencement of, the Meeting or any postponement or adjournment thereof, at which the proxy is to be used; or

2. in any other manner permitted by law.

VOTING INSTRUCTIONS FOR NON-REGISTERED BENEFICIAL SHAREHOLDER

Q: How do I vote by proxy as a Non-Registered Beneficial Shareholder?

Your Intermediary is required to ask you, as a Non-Registered Beneficial Shareholder, for your voting instructions by sending you a voting instruction form. In most cases, you will receive a voting instruction form that allows you to provide your voting instructions by mail, on the internet or over the telephone by using a control number which is on your voting instruction form. In every case, however, you must complete and return the voting instruction form in accordance with the specific instructions noted on the form.

Q: Can I vote in person at the Meeting as a Non-Registered Beneficial Shareholder?

If you want to vote your Common Shares in person at the Meeting, you must appoint yourself as the proxyholder for your Common Shares. To do this, when completing your voting instruction form provided to you by your Intermediary, you must appoint yourself as proxyholder in accordance with the instructions noted on the form and take any additional steps required by your Intermediary to vote your Common Shares in person at the Meeting. If you have any questions about how to vote your Common Shares in person at the Meeting, please contact your Intermediary directly.


Q: If I change my mind, how do I change or revoke my voting instructions as a Non-Registered Beneficial Shareholder?

If you want to change or revoke your voting instructions, you must contact your Intermediary well in advance of the Meeting and follow your Intermediary's instructions.

VOTING INFORMATION

VOTING SECURITIES AND PRINCIPAL HOLDERS

Shareholders at the close of business on April 8, 2014 (the "Record Date") are entitled to receive notice of the Meeting and to vote thereat or at any postponement or adjournment thereof on the basis of one vote for each Common Share held, except to the extent that: (i) a registered holder of Common Shares has transferred the ownership of any Common Shares subsequent to the Record Date; and (ii) the transferee of those Common Shares produces properly endorsed certificates for such Common Shares, or otherwise establishes that such transferee owns the Common Shares and demands, at any time before the Meeting, that the name of such transferee be included on the Shareholder list for the Meeting, in which case, the transferee shall be entitled to vote the Common Shares at the Meeting.

The Corporation is authorized to issue an unlimited number of common shares, and as at the Record Date, there were 51,640,170 Common Shares issued and outstanding. To the knowledge of the directors and executive officers of the Corporation, no person or company, beneficially owns, or controls or directs, directly or indirectly, voting securities carrying 10% or more of the voting rights of the Corporation.

As of the date hereof, 6,976,780 Common Shares were beneficially owned or controlled, directly or indirectly, by the directors and officers as a group, representing 14% of the issued and outstanding Common Shares.

BUSINESS OF THE MEETING

RECEIPT OF THE CONSOLIDATED FINANCIAL STATEMENTS

The Annual Financial Statements have been mailed to Shareholders and can be viewed on SEDAR at www.sedar.com. No formal action will be taken at the Meeting to approve the Annual Financial Statements, which have already been approved by the Board of Directors. If any Shareholder has questions regarding such financial statements, such questions may be brought forward at the Meeting.

APPOINTMENT OF AUDITORS

The independent auditors of the Corporation are KPMG LLP, Chartered Accountants, who have served in that capacity since 1997. The Corporation has requested that KPMG LLP, Chartered Accountants, act as independent auditors for the Corporation, subject to Shareholder approval. The resolution appointing the auditors must be passed by a simple majority of the votes cast with respect to the resolution by Shareholders present in person or by proxy at the Meeting. Unless otherwise directed, the persons named in the Instrument of Proxy intend to vote FOR the appointment of KPMG LLP, Chartered Accountants, of Calgary, Alberta as auditors of the Corporation to hold office until the close of the next annual meeting of Shareholders at a remuneration to be determined by the Board of Directors.


KPMG LLP, CHARTERED ACCOUNTANTS FEES AND SERVICES

Fees Charged by KPMG

The following table summarizes the audit and other fees charged by KPMG LLP for their services during each of the 2013 and 2012 fiscal years:

Financial Year End Audit Fees (1)

Audit RelatedFees (2)

Tax and Tax Related Fees (3) All Other Fees (4) Total

2013 $304,000 Nil Nil Nil $304,000

2012 $314,200 Nil $2,600 Nil $316,800

Notes: 1. "Audit Fees" means the aggregate fees billed by the Corporation's external auditor in each of the last two fiscal years for

audit services.

2. "Audit-Related Fees" means the aggregate fees billed in each of the last two fiscal years for assurance and related services by the Corporation's external auditor that are reasonably related to the performance of the audit or review of the issuer's financial statements and are not reported under the column Audit Fees in the chart above.

3. "Tax Fees" means the aggregate fees billed in each of the last two fiscal years for professional services rendered by the Corporation's external auditor for tax return preparation.

4. "All Other Fees" means the aggregate fees billed in each of the last two fiscal years for products and services provided by the Corporation's external auditor, other than the services reported under Audit Fees, Audit-Related Fees and Tax Fees in the chart above.

SETTING THE NUMBER OF DIRECTORS

Management of the Corporation will seek Shareholder approval of an ordinary resolution fixing the number of directors of the Corporation at six (6), subject to the right of directors under the articles of the Corporation to appoint two (2) additional directors at any time prior to the next annual general meeting of the Shareholders. The persons named in the accompanying Instrument of Proxy intend to vote FOR fixing the number of directors at six (6), subject to the right of directors under the articles of the Corporation to appoint two (2) additional directors at any time prior to the next annual general meeting of the Shareholders.

ELECTION OF THE BOARD OF DIRECTORS

The Board of Directors currently consists of Messrs. James E. Paulson, Peter O. Paulson, Michael M. Kanovsky, Charles W. Fischer, David H. McDermid, Scott I. MacDonald and Helge Daebel. All directors were elected at the last annual and special meeting of the shareholders. All of the directors will stand for re-election except for Mr. Daebel. The Management of the Corporation proposes to nominate, and in the absence of instructions to the contrary, the persons named in the accompanying Instrument of Proxy intend to vote in favour of, the election of the persons named below as directors of the Corporation to hold office until the next annual meeting of the Shareholders, or until his successor is duly elected or appointed. Shareholders will be voting for each individual director rather than a slate of directors.

Management of the Corporation does not contemplate that any of the nominees will be unable to serve as a director, but if that should occur for any reason prior to the Meeting, the persons named in the enclosed Instrument of Proxy reserve the right to vote for another nominee in their discretion. Each nominee elected as a director will hold office until the next annual meeting of the Shareholders or until his successor is duly elected or appointed.


The following information in the charts below and the notes thereto has been provided by the individual nominees.

JAMES E. PAULSON Calgary, Alberta, Canada

Director since December 21, 1996

Bachelor of Commerce, University of Calgary

Masters of Business Administration, Ivey Business School

Mr. James E. Paulson has been the President or Vice President of Yellowbird Products Ltd., a private holding company, since 1976 and has acted as the Chairman of the Corporation since 1996. Yellowbird Products Ltd. is a holding company with interests in real estate, oil and gas, technology and financial investments. He is an officer and director of various private companies.

Board and Committee Meetings Attended During 2013:

Board 4 of 4

Number of Common Shares Beneficially Owned, or Controlled orDirected:

3,990,199 (1)

(1)Messrs. James E. Paulson and Peter O. Paulson control Yellowbird Products Ltd., which holds an aggregate of 3,824,900 Common Shares. James E. Paulson also owns 165,299 Common Shares directly.

PETER O. PAULSON Calgary, Alberta, Canada

Director since December 21, 1996

Bachelor of Science (Physics), University of Calgary

Mr. Peter O, Paulson has been the President or Vice President of Yellowbird Products Ltd., a private holding company, since 1976 and is the Chief Executive Officer and Chief Technology Officer of the Corporation, having held such positions since January 2009. Previous to this, Mr. Paulson was the President & Chief Executive Officer of the Corporation starting in 1996. He has developed and/or patented new technologies or products in several different industries. Yellowbird Products Ltd. is a holding company with interests in real estate, oil and gas, technology and financial investments. Mr. Paulson is the inventor or co-inventor of the Corporation’s patented and patent-pending technologies.


Board 4 of 4

Number of Common Shares Beneficially Owned, or Controlled or Directed:

4,140,700(1)

(1)Messrs. James E. Paulson and Peter O. Paulson control Yellowbird Products Ltd., which holds an aggregate of 3,824,900 Common Shares. Peter O. Paulson also owns 315,800 Common Shares directly.


MICHAEL M. KANOVSKY Calgary, Alberta, Canada

Director since May 14, 2003

Degree in Mechanical Engineering, Queen’s University

Masters of Business Administration, Ivey Business School

Mr. Kanovsky is a professional engineer. He was Vice President of Corporate Finance for Western Canada for a large Canadian investment dealer, prior to co-founding Northstar Energy Corporation in 1978. Mr. Kanovsky served on Northstar Energy Corporation’s board of directors until it was acquired by Devon Energy Corporation in 1998. Mr. Kanovsky has been the President of Sky Energy Corp., a private energy and investment company and is currently active in the energy industry. He is currently a director of Devon Energy Corporation, TransAlta Corporation, Bonavista Energy Corporation and several private companies.


Board 4 of 4 Audit 4 of 4 Governance 1 of 1


1,596,000

DAVID H. MCDERMID Calgary, Alberta, Canada

Director since May 14, 2008

BA and LLB, University of Alberta LLM, London School of Economics

Mr. McDermid practiced law with Bennett Jones LLP and was a partner and Chief Operating Partner of that firm at the time of his retirement in 2000. He is now President and a major shareholder in Ghost River Investments Ltd., a private holding company with interests in a diverse portfolio of public and private investments. He is an officer and director of various private companies.


Board 4 of 4 Audit 4 of 4 Compensation 2 of 2 Governance 1 of 1


203,000


CHARLES W. FISCHER Calgary, Alberta, Canada Director since May 14, 2009 Degree in Chemical Engineering, University of Calgary Masters of Business Administration, University of Calgary

Mr. Fischer was the President and Chief Executive Officer of Nexen Inc., from 2001 to 2008. Since 1994, Mr. Fischer held various executive positions within Nexen Inc., including the positions of Executive Vice President & Chief Operating Officer in which he was responsible for all Nexen's conventional oil and gas business in Western Canada, the US Gulf Coast and all international locations, as well as oil sands, marketing and information systems activities worldwide. Prior thereto, Mr. Fischer held positions with Dome Petroleum Ltd, Hudson's Bay Oil & Gas Ltd., Bow Valley Industry Ltd., Sproule Associates Ltd. and Encor Energy Ltd. Other public and private company board memberships include Enbridge Inc., Enbridge Commercial Trust (a subsidiary of Enbridge Income Fund), Enbridge Income Fund Holdings Inc., Alberta Innovates - Energy and Environment Solutions, and Climate Change and Emission Management Corporation. Mr. Fischer also sits on several non-profit boards.


Board 4 of 4 Audit 4 of 4 Compensation 2 of 2


225,000

SCOTT I. MACDONALD Toronto, Ontario, Canada Director since August 13, 2010 Degree in Physical Education, McMaster University Masters of Business Administration, Dalhousie University

Mr. MacDonald is a co-founder of McRock Capital Corporation, a venture capital firm investing in Intelligent Infrastructure companies across North America. He was previously a partner with Emerald Technology Ventures Inc. and previously served as Chairman of RuggedCom Inc. (TSX:RCM) and SynapSense Corporation and was a director for the Pressure Pipe Inspection Company Ltd., SoftSwitching Technologies Inc., Solicore Inc, WatrHub Inc., and Vaperma Inc. Prior to joining Emerald, Mr. MacDonald held the position of Managing Director in the venture capital subsidiary of Ontario Power Generation, a large North American electrical utility. Board and Committee Meetings Attended During 2013:

Board 4 of 4 Compensation 2 of 2 Governance 1 of 1


0

Information in the charts above as to the number of Common Shares beneficially owned, or controlled or directed, not being within the knowledge of the Corporation, has been furnished by the respective directors individually.


The Board has adopted a majority voting policy that requires that any nominee for director who receives a greater number of votes ‘‘withheld’’ than votes ‘‘for’’ his or her election as a director shall submit his or her resignation to the corporate governance and nominating committee of the Board (the "Corporate Governance And Nominating Committee") for consideration promptly following the Meeting. This policy applies only to uncontested elections, meaning elections where the number of nominees for directors is equal to the number of directors to be elected. The Corporate Governance and Nominating Committee shall consider the resignation and shall provide a recommendation to the Board. The Board will consider the recommendation of the Corporate Governance and Nominating Committee and determine whether to accept it within 90 days of the applicable meeting and a news release will be issued by the Corporation announcing the Board’s determination. A director who tenders his or her resignation will not participate in any meetings to consider whether the resignation shall be accepted.

Shareholders should note that, as a result of the majority voting policy, a ‘‘withhold’’ vote is effectively the same as a vote against a director nominee in an uncontested election.

None of the directors are, as at the date of this Circular, nor have been, within ten years before the date of this Circular, a director, chief executive officer or chief financial officer of any company that was subject to a cease trade, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, which order was in effect for a period of more than 30 consecutive days that was issued while the director was acting in the capacity as director, chief executive officer or chief financial officer, or after such person 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 such a capacity.

None of the directors are, as at the date of this Circular, nor have been, within ten years before the date of this Circular, a director or executive officer of any 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, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

None of the directors have, within the ten 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 director.

None of the directors have been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

APPROVAL OF UNALLOCATED OPTIONS UNDER THE STOCK OPTION PLAN

The Stock Option Plan is a rolling stock option plan, which provides that the maximum number of Common Shares reserved for issuance under the Stock Option Plan and all other security-based compensation arrangements of the Corporation shall not exceed 10% of the issued and outstanding Common Shares.

As at March 17, 2014, there were 3,594,178 options to purchase Common Shares ("stock options") outstanding, representing approximately 7% of the total number of Common Shares issued and outstanding at such date. Accordingly, as of March 17, 2014, 1,569,839 Common Shares remain


unallocated and available for future awards under the Stock Option Plan and any other security-based compensation arrangement of the Corporation, representing 3% of the total number of Common Shares issued and outstanding.

For a summary of the Stock Option Plan, see "Employee Stock Option Plan".

Pursuant to the rules of the Toronto Stock Exchange (the "TSX"), all unallocated options, rights or other entitlements under a security-based compensation arrangement that does not have a fixed maximum number of securities issuable, such as the Stock Option Plan, must be re-approved by a majority of the Board and the Shareholders every three years. The Stock Option Plan was approved by Shareholders at the annual and special meeting of Shareholders held on June 9, 2011 (the "2011 Meeting"). Accordingly, on March 13, 2014, the Board approved all unallocated options, rights or other entitlements under the Stock Option Plan and resolved to submit a resolution approving the unallocated options, rights and other entitlements under the Stock Option Plan to the Shareholders for approval at the Meeting.

The resolution approving the unallocated options, rights and other entitlements under the Stock Option Plan must be passed by a simple majority of votes cast with respect to the resolution by Shareholders present in person or by proxy at the Meeting. The following is the text of the ordinary resolution to be considered by the Shareholders at the Meeting:

"BE IT RESOLVED that:

1. all unallocated options, rights and other entitlements under the incentive option plan of the Pure Technologies Ltd. (the "Corporation"), substantially as described in the Information Circular of the Corporation dated April 8, 2014, are hereby approved;

2. the Corporation shall have the ability to continue granting options under the incentive option plan until May 12, 2017, which is the date that is three years from the date of the shareholder meeting at which shareholder approval is being sought; and

3. any one officer or director of the Corporation be and is hereby authorized and directed to do all such further acts and things and to execute and deliver or sign and file (as the case may be) all such further notices, instruments, certificates and other documents (for and on behalf of the Corporation and whether under corporate seal or otherwise) as such officer or director may consider necessary or advisable having regard to the foregoing paragraphs of this resolution, including but not limited to making such filings as may be required by the rules and policies of the Toronto Stock Exchange."

The Board recommends that you vote FOR the ordinary resolution to approve all unallocated options, rights and other entitlements under the Stock Option Plan. Unless otherwise directed, the persons names in the Instrument of Proxy intend to vote for the ordinary resolution approving all unallocated options, rights and other entitlements under the Stock Option Plan.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

No current or former directors, executive officers or employees of the Corporation are indebted to the Corporation or another entity for which the Corporation or any of its subsidiaries have provided a guarantee, support agreement, letter of credit or other similar arrangement or understanding.


OTHER BUSINESS

Management has no knowledge, as at the date hereof, of any business other than that mentioned in the Notice of Meeting, to be presented for action by the Corporation at the Meeting. However, the proxy solicited hereunder confers upon the proxyholder the discretionary right to exercise the powers conferred thereunder upon any other matters and proposals that may properly come before the Meeting, or any postponement or adjournment thereof.

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

Management of the Corporation is not aware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, of any director, or executive officer who has held office as such since the beginning of the Corporation’s last financial year, any nominee for election as a director or any associate or affiliate of any of the foregoing in any matter to be acted on at the Meeting, other than the election of directors or the appointment of auditor, except as disclosed herein.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

No informed person of the Corporation, proposed director, any associate or affiliate of any informed person or proposed director, or any associate or affiliate of any informed person or proposed director, has or has had any material interest, direct or indirect, in any transaction since the commencement of the Corporation's last financial year or in any proposed transaction that has materially affected or would materially affect the Corporation or any of its subsidiaries.


COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

The compensation committee of the Board (the "Compensation Committee") administers the executive compensation program and provides guidance to management on compensation matters.

The Compensation Committee is comprised of Charles W. Fischer, David H. McDermid, and Scott I. MacDonald, each of whom is a current director of the Corporation. All of the members of the Compensation Committee are independent directors. The Compensation Committee’s mandate includes reviewing and making recommendations to the Board in respect of the compensation matters relating to the executive offers. The Compensation Committee meets at least once each year to review the compensation package for the executive officers. The Compensation Committee also meets at other times during the year as necessary, such as when a component of the Corporation’s overall compensation package, including the Stock Option Plan or the annual bonus program, is being amended or reviewed.

The Corporation’s executive compensation program has been designed to attract highly qualified and motivated individuals, and to provide fair and competitive compensation in accordance with industry standards and with the individual’s expertise and experience. The Corporation compensates its executive officers through a combination of base salary, annual bonuses and stock options. The base salary provides an immediate cash incentive for the executive officers. Bonuses encourage and reward exceptional performance over the financial year. Bonuses are related to performance and may form a greater or lesser part of the entire compensation package in any given year. Stock options ensure that the executive officers are motivated to achieve long term growth of the Corporation and maximize shareholder value. The Compensation Committee reviews the various aspects of this executive compensation program from time to time to ensure the effectiveness of the program and whether it adequately reflect the Corporation’s business objectives.

Base salaries of the executive officers are set by the Compensation Committee on the basis of the applicable executive officer’s responsibilities, experience and past performance. An annual bonus may be paid for each fiscal year based on the Board’s assessment of the Corporation’s general performance and the relative contribution of each of the executive officers. The Board takes into consideration actual to budget performance, special projects and initiatives, safety statistics and progress in international markets when determining the annual bonus. The Board grants stock options from time to time based on its assessment of the appropriateness of doing so in light of the long term strategic objectives of the Corporation, its current stage of development, the need to retain or attract particular key personnel, the number of stock options already outstanding and overall market conditions.

EXECUTIVE COMPENSATION

The following table sets forth, for the periods indicated, the compensation paid by the Corporation to the Chief Executive Officer, the Chief Financial Officer and the three most highly compensated executive officers whose total salary and bonus exceeded $150,000 (the "Named Executive Officers"). During the 2013 financial year, aggregate remuneration in the amount of $2,845,896 was paid to the Named Executive Officers.


Name and Principal Position Year

Salary ($)

Option-based

Awards ($)(8)

Non-equity Incentive Plan Compensation

($)

Pension Value

($)

All Other Compensation

($)(9)

Total Compensation

($)

Annual Incentive Plans

Peter O. Paulson, Chief Executive Officer(1) (2)

2013 2012 2011

275,652 262,500 250,000

88,172 68,013 50,293

275,652 211,125 125,000

Nil Nil Nil

29,766 28,903 28,098

669,242 570,541 453,391

Karen D. Keebler, Chief Financial Officer(1)

2013 2012 2011

203,653 194,250 185,000

61,721 47,609 35,205

101,826 88,540 48,100

Nil Nil Nil

22,832 21,865 20,902

390,032 352,264 289,207

John F. Elliott, President and Chief Operating Officer(1)

2013 2012 2011

275,652 262,500 250,000

88,172 68,013 50,293

275,652 211,125 125,000

Nil Nil Nil

29,791 28,675 39,852

669,267 570,313 465,145

James E. Paulson Chairman(1) (3)

2013 2012 2011

275,652 262,500 250,000

88,172 68,013 50,293

275,652 211,125 125,000

Nil Nil Nil

29,746 28,675 27,870

669,222 570,313 453,163

Mark Holley President, Pure Technologies US Inc. (1) (4)

2013 2012 2011

235,869 (5)

209,349 (6) 203,980 (7)

61,721 47,609 35,205

117,934(5)

98,195 (6) 71,393 (7)

Nil Nil Nil

29,609(2)

26,916 (3) 18,358 (4)

445,133 382,069 328,936

Notes: 1. All Named Executive Officers participated in the Stock Option Plan.

2. Mr. Peter Paulson does not receive any compensation in relation to his role as a director.

3. Mr. James Paulson does not receive any compensation in relation to his role as a director.

4. Pure Technologies US Inc. is a wholly owned subsidiary of Pure Technologies Ltd.

5. Mr. Mark Holley's figures are paid in US dollars and were converted into Cdn.$ at the December 31, 2013 closing exchange rate of 1.0697.



8. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes Merton option pricing model and was calculated in accordance with IFRS 2, Share-based payments. The value of the stock options was determined using an expected life of between 3 to 4 years, risk free interest rate of between 1.14% and 1.24% and expected volatility of between 42% and 47%.

9. These amounts represent annual purchases under the employee stock purchase plan.

DIRECTORS COMPENSATION

The outside directors of the Corporation, being Messrs. Kanovsky, Fischer, MacDonald and McDermid, receive $1,000 per Board of Directors meeting attended (either by phone or in person) and $500 per Committee meeting attended (either by phone or in person) plus reimbursement for any out of pocket expenses required to attend such meeting. The directors are eligible to receive stock options under the


Stock Option Plan. Mr. Daebel did not receive any compensation as he was a representative of Emerald Technology Ventures Inc. and could not receive compensation as directed by Emerald Technology Ventures Inc.

Name(1)

Regular Fees

Earned ($)

Committee Fee ($)

Option-Based Awards ($)(2)


($)(3)

Total

($) Michael Kanovsky 4,000 2,500 44,086 Nil 50,586

David McDermid 4,000 3,500 44,086 Nil 51,586

Charles Fischer 4,000 3,000 44,086 Nil 51,086

Scott MacDonald 4,000 1,500 44,086 4,230 53,815

Helge Daebel Nil Nil Nil 6,335 6,335

Notes: (1) The amounts that Messrs. Peter Paulson and James Paulson received in relation to their roles as directors is disclosed

under the heading "Executive Compensation".

(2) The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes Merton option pricing model and was calculated in accordance with IFRS 2, Share-based payments. The value of the stock options was determined using an expected life of 3 to 4 years, risk free interest rate of between 1.14% and 1.24% and expected volatility of between 42% and 47%.

(3) Directors are reimbursed for travel expenses to attend Board of Director and committee meetings.

OTHER

No consulting fees and/or remuneration has been paid by the Corporation to any promoter, officer, director or other insider of the Corporation or any associate or affiliate thereof nor was any remuneration paid by the Corporation to any party for any work performed for public/investor relations.

EMPLOYEE STOCK OPTION PLAN

Subject to the limitations of the Stock Option Plan, the Board of Directors has the authority to issue stock options to Eligible Employees (as defined below). The purpose of the Stock Option Plan is to advance the interests of the Corporation by encouraging the directors, officers, employees and key consultants of the Corporation or its subsidiaries to acquire Common Shares, thereby (i) increasing the proprietary interests of such persons in the Corporation, (ii) aligning the interests of such persons with the interests of the Shareholders generally, (iii) encouraging such persons to remain associated with the Corporation and (iv) furnishing such persons with an additional incentive in their efforts on behalf of the Corporation. The grant of stock options is recommended to the Board by the Compensation Committee and previous grants of stock options are considered in determining new grants.

The following is a summary of the principal terms of the Stock Option Plan which is provided pursuant to the requirements of Section 613 of the TSX Company Manual.


Eligibility

All of the directors, officers, employees and key consultants of the Corporation (and its direct and indirect subsidiaries) (the "Eligible Employees") are eligible to participate in the Stock Option Plan.

Stock Options

Each stock option provides the holder with an option to purchase Common Shares at a price not less than the "Fair Market Value" of the Common Shares on the date of the grant. The Stock Option Plan defines "Fair Market Value" as the weighted average trading price of a Corporation Share on the TSX during the previous five trading days. Stock options have realizable value only if the price of the Common Shares increases after the stock options are granted. In the event of a change of control pursuant to which the Common Shares are converted into or exchanged for securities of another entity, the stock options outstanding under the Stock Option Plan shall be substituted or replaced for stock options in the continuing entity on substantially the same terms and conditions.

Administration

Unless otherwise determined by the Board, the Stock Option Plan is administered by the Compensation Committee. The Compensation Committee shall affect the grant of stock options under the Stock Option Plan, in accordance with determinations made by the Board pursuant to the provisions of the Stock Option Plan.

Number of the Common Shares Issued and Issuable

As of December 31, 2013, the aggregate number of Common Shares reserved for issuance under the Stock Option Plan was 1,216,421 representing 2.4% of the issued and outstanding Common Shares. The aggregate number of Common Shares reserved for issuance under the Stock Option Plan and all other security-based compensation arrangements shall not exceed 10% of the issued and outstanding Common Shares.

Stock options that were previously granted to employees are taken into consideration when new grants are determined.

Maximum Issuable to One Person and Insiders

The aggregate number of Common Shares issuable as an inducement to employment to any one individual shall not exceed 2% of the issued and outstanding Common Shares. The proportion of Common Shares reserved for issuance under the Stock Option Plan in any one fiscal year to any one individual shall not exceed 25% of the Common Shares so reserved for issuance under the Stock Option Plan during such fiscal year. The aggregate number of Common Shares reserved for issuance under the Stock Option Plan and all of our other security-based compensation arrangements that may be issued to our insiders shall not exceed 10% of the issued and outstanding Common Shares and the aggregate number of Common Shares issued to our insiders, within any one year period, under the Stock Option Plan and all of our other security-based compensation arrangements shall not exceed 10% of the issued and outstanding Common Shares.

Vesting and Term

Unless otherwise provided at the time of grant, each stock option granted under the Stock Option Plan will have a five year term from its original grant date and vest 1/3 on the first anniversary of the date of the grant, 1/3 on the second anniversary of the date of the grant and 1/3 on the third anniversary of the date


of the grant. A stock option must be exercised or surrendered within five years from the date of the grant (or such shorter period of time as the Board may determine and specify in connection with the grant of the stock option), or the stock option will expire immediately after the applicable period.

Subject to the rules of the TSX, if a stock option may not be exercised due to the holder of such stock option being prohibited from trading in securities of the Corporation by a corporate policy of the Corporation at any time within the 3 business day period prior to the normal expiry date of such stock option, the expiry date of such stock option shall be extended for a period of 7 business days following the end of such prohibition (or such longer period as permitted by the TSX and approved by the Board).

Exercise or Surrender of Options

As an alternative to the exercise of stock options for Common Shares, the holder is entitled, at his or her election, to surrender for cancellation, unexercised, any vested stock options which are otherwise then exercisable and, in consideration for such surrender for cancellation, receive a cash payment in an amount equal to the positive difference, if any, obtained by subtracting the aggregate exercise price of the surrendered stock options from the then current Fair Market Value of the Common Shares subject to the surrendered stock options, less applicable source withholdings. The Board has the sole discretion to consent or disapprove of the holder's election to so surrender any vested stock option.

Termination of Employment

Should the holder cease to be an Eligible Employee for disability or leave of absence before the expiry of a stock option, then such stock option shall continue to vest in accordance with its terms and may be exercised or surrendered until the normal expiry of such stock option in accordance with its terms.

Should the holder cease to be an Eligible Employee for reason of retirement before the expiry of a stock option, then such stock option shall continue to vest in accordance with its terms and may be exercised or surrendered at any time within 24 months of the date of the retirement of such Eligible Employee unless otherwise provided in the terms of a particular stock option.

If, before the expiry of a stock option, the holder shall cease to be an Eligible Employee for voluntary resignation, the unvested part of such stock option shall be cancelled and the vested part of such stock option may be exercised or surrendered at any time within 30 days of the date of the voluntary resignation of such Eligible Employee.

If, before the expiry of a stock option, the holder shall cease to be an Eligible Employee for termination without cause, such stock option shall continue to vest in accordance with its terms and may be exercised (if fully vested) or surrendered at any time within 90 days of the date such Eligible Employee was terminated.

If, before the expiry of a stock option in accordance with the terms thereof, a change of control shall occur and the holder shall cease to be a director, officer, employee or key consultant of the Corporation or any of its subsidiaries (the "Employer") by reason of termination: (a) by the Employer or by the entity that has entered into a valid and binding agreement with the Corporation and/or other members of the Corporation to effect the control change at any time after such agreement is entered into or during the control period and such termination was for any reason other than for cause; or (b) by the holder within 30 days after an act of constructive dismissal, provided such act of constructive dismissal occurs during the control period, the holder's stock options shall become fully vested and may be exercised or surrendered by the holder at any time within 90 days of the date of the holder's termination.


Substitution Event

Upon the occurrence of a change of control pursuant to which the Common Shares are converted into or exchanged for other property, whether in the form of securities of another entity, cash or otherwise or upon the occurrence of a reorganization pursuant to which the shareholdings remain substantially the same upon completion of such reorganization, the outstanding stock options shall, under certain circumstances, become fully vested and may be exercised or surrendered by the holder at any time after the holder receives written notice from the Board of such accelerated vesting and prior to the occurrence of such change of control or permitted reorganization, provided, however, that such vesting, exercise or surrender shall be, unless otherwise determine in advance by the Board, effective immediately prior to, and shall be conditional on, the consummation of such change of control or permitted reorganization.

Adjustments

Appropriate adjustments in the number of Common Shares subject to the Stock Option Plan and, with respect to stock options granted or to be granted, in the respective numbers of Common Shares optioned and in the respective exercise prices, shall be made by the Board to give effect to adjustments in the number of Common Shares resulting from subdivisions or consolidations of the Common Shares or the payment of dividends in kind of Common Shares by the Corporation (other than dividends in kind of Common Shares paid in lieu of cash dividends in the ordinary course) or to give effect to reclassifications or conversions of the Common Shares or any other relevant changes in the authorized or issued capital of the Corporation or any other event in respect of which, in the opinion of the Board, such an adjustment would be necessary to preserve the holder's rights under Stock Option Plan and under the stock options, in all such cases which occur subsequent to the approval of the Stock Option Plan by the Board; provided that no stock option shall be adjusted to result in the issuance of a fractional Common Share and all fractions shall be rounded down and provided further that a stock option, which is intended to be exempt from Section 409A of the U.S. Internal Revenue Code of 1986, as amended, shall be adjusted in accordance with Section 409A in order to remain exempt.

Assignability

The assignment or transfer of the stock option or any other benefits under the Stock Option Plan is not permitted other than by operation of law.

Amendment

The Stock Option Plan may be amended or terminated at any time by the Board, except as to rights already accrued by the Eligible Employees, without approval of the Shareholders, but subject to any required regulatory approval. Approval of the Shareholders will be required to, among other things, (i) increase the maximum number of Common Shares reserved for issuance under the Stock Option Plan, (ii) reduce the exercise price in respect of any stock option, and (iii) extend the period of time during which a stock option must be exercised or surrendered.

Equity Compensation Plan Information

Plan Category

Number of Securities to be issued upon

exercise of outstanding options

Weighted-average exercise price of

outstanding options ($)

Number of securities remaining available for future issuance under equity compensation

plans

Equity compensation plans approved by security holders

3,916,649

4.53

1,216,421


EMPLOYEE SHARE PURCHASE PLAN

The employee share purchase plan (the "Employee Plan") permits each permanent employee of the Corporation to contribute up to 10% of his or her base salary to purchase Common Shares. The Corporation matches the employee contribution and the Common Shares are acquired on the open market through the facilities of a brokerage house or from participants in certain circumstances once per month. The Employee Plan is administered by the Board of Directors.

OUTSTANDING OPTION-BASED AWARDS

The following table sets forth certain information respecting the number, exercise price, expiry date and accrued value of unexercised stock options as at December 31, 2013 for the Named Executive Officers.

Name

Number of Securities Underling

Unexercised Options

(#)

Option Exercise Price

($) Option Expiration Date

Value of Unexercised in-the-money Options(1)

($) Peter O. Paulson 50,000

50,000 50,000 50,000

4.65 3.28 4.25 5.90

November 15, 2015 November 10, 2016 November 22, 2017 November 8, 2018

99,500 168,000 119,500 37,000

Karen D. Keebler 35,000

35,000 35,000 35,000 35,000

4.15 4.65 3.28 4.25 5.90

November 20, 2014 November 15, 2015 November 10, 2016 November 22, 2017 November 8, 2018

87,150 69,650

117,600 83,650 25,900

John F. Elliott 50,000 50,000 50,000 50,000 50,000

4.15 4.65 3.28 4.25 5.90


124,500 99,500

168,000 119,500 37,000

James E. Paulson 50,000 50,000 50,000 50,000

4.65 3.28 4.25 5.90


99,500 168,000 119,500 37,000

Mark Holley 25,000

35,000 35,000 35,000 35,000

4.15 4.65 3.28 4.25 5.90


62,250 69,650

117,600 83,650 25,900

Note: 1. The value of the unexercised "in-the-money" stock options has been determined by subtracting the exercise price of the

stock options from the closing price of the Common Shares on December 31, 2013 of $6.64, on the TSX, and multiplying by the number of Common Shares that may be acquired upon the exercise of the stock options.


The following table sets forth certain information respecting the number, exercise price, expiry date and accrued value of unexercised stock options as at December 31, 2013 for the directors.

Name

Number of Securities Underling

Unexercised Options (#)

Option Exercise

Price ($) Option Expiration Date

Value of Unexercised in-

the-Money Options(1)

($) Michael Kanovsky 25,000

25,000 25,000 25,000 25,000

4.15 4.65 3.28 4.25 5.90


62,250 49,750 84,000 59,750 18,500

David McDermid 25,000 25,000 25,000 25,000 25,000

4.15 4.65 3.28 4.25 5.90


62,250 49,750 84,000 59,750 18,500

Charles Fischer 25,000 25,000 25,000 25,000

4.65 3.28 4.25 5.90


49,750 84,000 59,750 18,500

Scott MacDonald 25,000 25,000

4.25 5.90

November 22, 2017 November 8, 2018

59,750 18,500

Note: 1. The value of the unexercised "in-the-money" stock options has been determined by subtracting the exercise price of the

stock options from the closing price of the Common Shares of December 31, 2013 of $6.64, on the TSX, and multiplying by the number of Common Shares that may be acquired upon the exercise of the stock options.


The following table sets forth certain information respecting the value vested or earned during the fiscal year ended December 31, 2013, with respect to incentive plan awards as at December 31, 2013 for the Name Executive Officers.

Name

Option-based Awards - Value Vested During the Year (1)

($)

Non-equity Incentive Plan Compensation - Value Earned During

the Year ($)

Peter O. Paulson $117,002 275,652

Karen D. Keebler $82,486 101,826

John F. Elliott $117,002 275,652

James E. Paulson $117,002 275,652

Mark Holley $82,319 117,934

Notes: 1. For stock options granted on:

a. November 23, 2012 at an exercise price of $4.25, one-third of the stock options vested on November 22, 2013 at a fair market value of $6.69 per share, the previous day’s closing share price.

b. November 10, 2011 at an exercise price of $3.28, one-third of the stock options vested on November 10, 2013 at a fair market value of $5.95 per share, the previous day’s closing share price.

c. November 15, 2010 at an exercise price of $4.65, one-third of the stock options vested on November 15, 2013 at a fair market value of $6.56 per share, the previous day’s closing share price.

The following table sets forth certain information respecting the value vested during the fiscal year ended December 31, 2013, with respect to incentive plan awards as at December 31, 2013 for the directors.

Name

Option-based Awards - Value Vested During the Year (1)

($) Michael Kanovsky $58,500

David McDermid $58,500

Charles Fischer $58,500

Scott MacDonald $20,333

Notes: (1) For stock options granted on:

a. November 23, 2012 at an exercise price of $4.25, one-third of the stock options vested on November 22, 2013 at a fair market value of $6.69 per share, the previous day’s closing share price.

b. November 10, 2011 at an exercise price of $3.28, one-third of the stock options vested on November 10, 2013 at a fair market value of $5.95 per share, the previous day’s closing share price.

c. November 15, 2010 at an exercise price of $4.65, one-third of the stock options vested on November 15, 2013 at a fair market value of $6.56 per share, the previous day’s closing share price.


EMPLOYMENT AGREEMENTS – TERMINATION AND CHANGE OF CONTROL BENEFITS

Peter O. Paulson

On August 14, 2012, the Corporation entered into an employment agreement with Peter O. Paulson, for the provision of services as Chief Executive Officer of the Corporation. The agreement commenced on the same date and continues for an indefinite term. The Corporation is able to terminate the agreement for just cause or following the payment of a cash amount equal to one (1) times the annual compensation of the executive plus one additional month of monthly compensation for each completed year of service to the Corporation to a maximum of two (2) times the annual compensation. In the event of a change of control and a triggering event (any material adverse change by the Corporation or its successor in title, and without the agreement of the executive, in any of the duties, powers, rights, discretions, salary, title, or lines of reporting, such that immediately after such change or series of changes, the responsibilities and status of the executive, taken as a whole, are not at least substantially equivalent to those assigned to him immediately prior to such change, or any other reason which would be considered to amount to constructive dismissal by a Canadian court of competent jurisdiction under common law) within 90 days of both events, the Corporation shall pay the executive two (2) times the annual compensation plus reimbursement of up to $15,000 for relocation or other employment counseling. In 2013, Mr. Paulson’s salary in accordance with the agreement was $275,652.

John F. Elliott

On October 28, 2005, the Corporation entered into an employment agreement with John F. Elliott, for the provision of services as Chief Operating Officer of the Corporation. The agreement commenced on the same date and continues for an indefinite term. The Corporation is able to terminate the agreement for just cause or following the payment of a cash amount equal to two (2) times the annual compensation of the executive plus an allowance of 15% of his annual base salary in lieu of benefits. In the event of a change of control, Mr. Elliott can terminate his employment within 30 days of such an event being finalized in which case Mr. Elliott would be compensated at the same level as previously stated. In 2013, Mr. Elliott's salary in accordance with the agreement was $275,652.

Mark W. Holley

On August 15, 2012, the Corporation entered into an employment agreement with Mark W. Holley, for the provision of services as President of Pure Technologies US Inc. The agreement commenced on the same date and continues for an indefinite term. The Corporation is able to terminate the agreement for just cause or following the payment of a cash amount equal to one (1) times the annual compensation of the executive plus one additional month of monthly compensation for each completed year of service to the Corporation to a maximum of two (2) times the annual compensation. In the event of a change of control and a triggering event (any material adverse change by the Corporation or its successor in title, and without the agreement of the executive, in any of the duties, powers, rights, discretions, salary, title, or lines of reporting, such that immediately after such change or series of changes, the responsibilities and status of the executive, taken as a whole, are not at least substantially equivalent to those assigned to him immediately prior to such change, or any other reason which would be considered to amount to constructive dismissal by a Canadian court of competent jurisdiction under common law) within 90 days of both events, the Corporation shall pay the executive two (2) times the annual compensation plus reimbursement of relocation costs to Canada up to $40,000 and reimbursement of up to $15,000 for relocation or other employment counseling. In 2013, Mr. Holley’s salary in accordance with the agreement was $220,500 USD.


Karen D. Keebler

On August 10, 2012, the Corporation entered into an employment agreement with Karen D. Keebler, for the provision of services as Chief Financial Officer of the Corporation. The agreement commenced on the same date and continues for an indefinite term. The Corporation is able to terminate the agreement for just cause or following the payment of a cash amount equal to one (1) times the annual compensation of the executive plus one additional month of monthly compensation for each completed year of service to the Corporation to a maximum of two (2) times the annual compensation. In the event of a change of control and a triggering event (any material adverse change by the Corporation or its successor in title, and without the agreement of the executive, in any of the duties, powers, rights, discretions, salary, title, or lines of reporting, such that immediately after such change or series of changes, the responsibilities and status of the executive, taken as a whole, are not at least substantially equivalent to those assigned to her immediately prior to such change, or any other reason which would be considered to amount to constructive dismissal by a Canadian court of competent jurisdiction under common law) within 90 days of both events, the Corporation shall pay the executive two (2) times the annual compensation plus reimbursement of up to $15,000 for relocation or other employment counseling. In 2013, Ms. Keebler’s salary in accordance with the agreement was $203,953.

None of the other Named Executive Officers of the Corporation are parties to a written employment contract.

The following table sets forth, for each Named Executive Officer, the amount such person would have been entitled to receive on the termination of their employment, without cause on December 31, 2013, and the amount such person would have been entitled to receive if a change of control triggered the termination event, as per such person's employment agreement on December 31, 2013.


Termination of Employment Without Cause

Name Salary

($)

Option-based

Awards ($)(1)


($)

Pension Value

($)


($)

Total Compensation

($)


Peter O. Paulson,

551,304 0

486,777

Nil

65,325

1,103,406

Karen D. Keebler, 322,926

0 152,293 Nil 41,307 516,526

John F. Elliott,

551,304 172,699

486,777

Nil

82,696

1,296,476

James E. Paulson

551,304 0 486,777 Nil 65,325 1,103,406

Mark Holley

471,738

0 212,245 Nil 101,937 785,920

Termination of Employment Following Change of Control

Name Salary

($)

Option-based

Awards ($)(1)


($)

Pension Value

($)


($)

Total Compensation

($)


Peter O. Paulson,

551,304 0

486,777

Nil

65,325

1,103,406

Karen D. Keebler, 407,906

0 190,366 Nil 51,634 649,906

John F. Elliott,

551,304 172,669

486,777

Nil

82,696

1,296,476

James E. Paulson

551,304 0 486,777 Nil 65,325

1,103,406

Mark Holley 471,738 0 212,245 Nil 101,937 785,920

Notes

(1) The value of unvested equity awards is calculated using the number of all unvested stock options valued at the price of the Common Shares on December 31, 2013 of $6.64, on the TSX


PERFORMANCE GRAPH

The following Performance Graph shows the yearly change in the cumulative total shareholder return on the Common Shares compared with the S&P/TSX Composite Index, from December 31, 2008 to December 31, 2013. The performance of the Common Shares as set out in the graph below is based on historical data and is not indicative of, nor is it intended to forecast, the future performance of the Common Shares.

Dec. 31, 2008

Dec. 31, 2009

Dec. 31, 2010

Dec. 31, 2011

Dec. 31, 2012

Dec. 31, 2013

S&P/TSX Composite Index $100 $131 $150 $133 $138 $151

■ Pure Technologies $100 $140 $153 $91 $148 $215

As indicated by the Performance Graph above, the cumulative total shareholder return for the Corporation was approximately 115% over the period ending December 31, 2008 to the period ending December 31, 2013. This compares to an increase in total executive compensation over the same period of approximately 57%. Generally, the trend in the performance graph correlates to the trend of the compensation paid to the Named Executive Officers. Total compensation for the Named Executive Officers is affected by increases and decreases in the price of the Common Shares as the value of such stock options changes with the Corporation’s share price. Changes in base salary are determined based on competitive market conditions and are generally less affected by movement in the price of Common Shares.


CORPORATE GOVERNANCE DISCLOSURE

The Corporation has adopted and intends to continue to engage in corporate governance practices which comply, in all material respects, with the governance rules and guidelines of the Canadian Securities Administrators and applicable securities legislation, as amended, from time to time. As corporate governance policies will continue to develop over time, Pure and its Board of Directors intends to continue to evaluate and enhance its corporate governance practices by monitoring regulatory developments and adopt, where appropriate, such corporate governance policies and best practices disclosure to enhance its existing practice.

BOARD OF DIRECTORS

Pure’s Board is currently comprised of seven directors, five of whom are independent according to the definition of "independent" set out in National Instrument 52-110 – Audit Committees ("NI 52-110") as it applies to the Board. Peter Paulson, Pure’s Chief Executive Officer, is a member of management and as such is not independent. James Paulson is the Chairman of the Board, but is not considered to be an independent director as he receives direct remuneration in his capacity as Chairman. As James Paulson is not an independent director, the Board has appointed Michael Kanovsky as the Lead Director.

To ensure the independence of the Board of Directors in the discharge of its responsibilities, all of the committees of the Board of Directors are currently comprised of independent directors. The Board of Directors also affords the independent directors the opportunity, at every meeting, to meet without management present in sessions chaired by the Chairman to discuss any procedural or substantive issues.

BOARD MANDATE

The Board of Directors has adopted a formal written Board mandate, a copy of which is attached to this Circular as Appendix A. The mandate of the Board of Directors is to supervise the management of the business and affairs of the Corporation. In fulfilling its mandate the Board of Directors as a whole oversees the development and application of policies regarding corporate governance and dealing with corporate governance issues.

POSITION DESCRIPTIONS

No position description has been prepared for the Chairman or for the chair of each committee. However, the Chairman and the chair of each committee presides over all meetings (of the Board or committee, as applicable), participates in the development of meeting calendars and agenda, and ensures the orderly and efficient use of time in the meetings. Each committee chair reports to the Board on a regular basis.

No written position description has been put in place for the Corporation's Chief Executive Officer. The role and responsibilities of the Chief Executive Officer are delineated through the involvement of the Board of Directors in the Corporation's affairs and the ongoing formal and informal communication between the Board and the Chief Executive Officer.

ORIENTATION AND CONTINUING EDUCATION

It is the Board's intention that when a new nominee for election or appointment is identified, it will ensure that a full program of orientation provided for the nominee, including (but not limited to) provision of a complete corporate history as well as information regarding the Corporation's business and operations.


Senior management makes regular presentations to the Board on the main areas of the Corporation's business.

The Audit Committee is constantly updated on changes in accounting rules and their application to the Corporation.

ETHICAL BUSINESS CONDUCT

The Board has adopted a Code of Conduct (the "Code") that prescribes the minimum moral and ethical standards of conduct required of all directors, officers and employees, and provides that the Corporation’s directors, officers and employees are required to act honestly, ethically, in good faith and in the best interests of the Corporation and its shareholders by avoiding any relationship or activity that might create, or appear to create, a conflict of interest in their personal and professional relationships. Such individuals are prohibited from using their positions with the Corporation to accept excessive or inappropriate gifts or other benefits from persons doing or seeking to do business with the Corporation and the Code contains guidelines to be followed when accepting gifts or entertainment from these parties. A copy of the Code has been filed on SEDAR and is available on Pure's website.

The Code affirms the Corporation’s commitment to foster a work environment in which all individuals are treated with respect and dignity. Harassment on the basis of race, gender, sexual orientation, colour, national or ethnic origin, religion, marital status, family status, citizenship status, veteran status, age or disability is prohibited. The Code also prescribes conduct to maintain an environment that is safe and healthy.

All of Pure's employees, officers and directors are expected to comply with the Code. A specific, limited waiver of any provision of the Code may be granted to directors, officers and employees if it is determined that, based on information deemed credible and persuasive, that such a limited waiver is appropriate under the specific circumstances. If required under applicable securities legislation, conduct of a director, officer or employee that materially departs from the Code will be publicly disclosed. The Code also provides a process by which actual or potential violations of its provisions, or any other Corporation policy or legal requirement, are to be reported to the Chief Financial Officer of the Corporation. Inappropriate delay in reporting a suspected or discovered violation is itself a violation of the Code. The Code confirms that there will not be any reprisals against an individual for reports or complaints regarding suspected violations made in good faith.

In order to facilitate the reporting of complaints, the Audit Committee has established a Whistleblower Policy with procedures for the receipt, retention and treatment of complaints regarding actual or apparent violations of the Code and/or the Corporation’s Disclosure Policy, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

NOMINATION OF DIRECTORS

Under the mandate of the Corporate Governance and Nominating Committee, the Corporate Governance and Nominating Committee, which is comprised solely of independent directors, shall identify and review possible candidates for Board membership consistent with criteria approved by the Board, and annually recommend qualified candidates for a slate of nominees to be proposed for election to the Board at the annual meeting of the Corporation's shareholders. The Corporate Governance and Nominating Committee shall consider the appropriate size of the Board with a view to facilitating effective decision making. In the event of a vacancy on the Board between annual meetings of the Corporation's shareholders, the Corporate Governance and Nominating Committee may identify, review and recommend qualified candidates for Board of Director membership to the Board for consideration to fill such vacancies, if the Board determines that such vacancies will be filled. When formulating these


recommendations, the Corporate Governance and Nominating Committee shall seek and consider advice and recommendations from management, and may seek or consider advice and recommendations from consultants, outside counsel, accountants, or other advisors as it or the Board may deem appropriate. See also "Corporate Governance and Nominating Committee." AUDIT COMMITTEE

Pure has an Audit Committee comprised entirely of independent and financially literate directors within the meaning of NI 52-110. The members are David H. McDermid, Charles W. Fischer, and Michael M. Kanovky (Chair). The Audit Committee is primarily responsible for overseeing the accounting and financial reporting processes of the Corporation and its subsidiaries and all audits and external reviews of the financial statements of the Corporation on behalf of the Board, and has general responsibility for oversight of internal controls, accounting and auditing activities of the Corporation and its subsidiaries.

Additional information relating to the Audit Committee of the Corporation, required to be disclosed pursuant to National Information Form 52-110F1 Audit Committee Information in an AIF, can be found under the heading "Audit Committee Information" in the annual information form of the Corporation dated March 14, 2013.

COMPENSATION COMMITTEE

The Board has formed a Compensation Committee comprised entirely of independent directors within the meaning of NI 52-110. The Corporation's Compensation Committee is comprised of David H. McDermid, Scott I. MacDonald and Charles W. Fischer (Chair).

The Compensation Committee has adopted a Committee Terms of Reference, which describes its roles and responsibilities. The Compensation Committee is responsible for the Corporation's executive compensation policies and annually reviews the various aspects of the Corporation's executive compensation program to ensure the effectiveness of the program and whether it adequately reflects the Corporation's business objective. It also makes recommendations to the Board regarding the form and adequacy of compensation for directors and the executive officers. The review is conducted taking into account the implications of risks associated with the Corporation's executive compensation program. See also "Statement of Executive Compensation – Compensation Discussion and Analysis".

The education and experience of the members of the Compensation Committee is set out below:

David H. McDermid of Calgary, Alberta received his BA and LLB from the University of Alberta and LLM from the London School of Economics. He practised law with Bennett Jones LLP and was a partner and chief operating partner of that firm at the time of his retirement in 2000. He is now President and a major shareholder in Ghost River Investments Ltd. a private holding company with interests in a diverse portfolio of public and private investments. He is an officer and director of various private companies.

Scott I. MacDonald of Toronto, Ontario is a co-founder of McRock Capital Corporation, a venture capital firm investing in Intelligent Infrastructure companies across North America. He was previously a partner with Emerald Technology Ventures Inc. and previously served as Chairman of RuggedCom Inc. (TSX:RCM) and SynapSense Corporation and was a director for the Pressure Pipe Inspection Company Ltd., SoftSwitching Technologies Inc., Solicore Inc, WatrHub Inc., and Vaperma Inc. Prior to joining Emerald, Mr. MacDonald held the position of Managing Director in the venture capital subsidiary of Ontario Power Generation, a large North American electrical utility.

Charles W. Fischer of Calgary, Alberta graduated from the University of Calgary with a degree in Chemical Engineering in 1971, and again with a Masters of Business Administration in 1982. Mr. Fischer


was the President and Chief Executive Officer of Nexen Inc. from 2001 to 2008. Since 1994, Mr. Fischer held various executive positions within Nexen Inc., including the positions of Executive Vice President & Chief Operating Officer in which he was responsible for all Nexen's conventional oil and gas business in Western Canada, the US Gulf Coast and all international locations, as well as oil sands, marketing and information systems activities worldwide. Prior thereto, Mr. Fischer held positions with Dome Petroleum Ltd, Hudson's Bay Oil & Gas Ltd., Bow Valley Industry Ltd., Sproule Associates Ltd. and Encor Energy Ltd. Other public and private company Board memberships include Enbridge Inc., Enbridge Commercial Trust (a subsidiary of Enbridge Income Fund), Enbridge Income Fund Holdings Inc., Alberta Innovates - Energy and Environment Solutions, and Climate Change and Emission Management Corporation. Mr. Fischer also sits on several non-profit Boards.

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

The Corporate Governance and Nominating Committee is composed entirely of independent directors within the meaning of NI 52-110. The members are Michael M. Kanovsky, David H. McDermid, and Scott I. MacDonald (Chair). Under its mandate, the Corporate Governance and Nominating Committee is responsible for proposing new nominees, when deemed appropriate, for appointment or election to the Board and recommending the new Board of Director nominees at the next annual meeting of shareholders. As well, the Corporate Governance and Nominating Committee has the responsibility in general for developing and monitoring the Corporation's approach to corporate governance issues such as: (i) the Corporation's response to applicable rules, policies and guidelines respecting corporate governance matters; (ii) assessing the effectiveness of the Board as a whole, the committees of the Board and the contribution of individual directors on a periodic basis, which will include monitoring the quality of the relationship between management and the Board and recommending any improvements, if necessary; (iii) ensuring that, where necessary, appropriate structures and procedures are in place to ensure that the Board can function independently of management; (iv) periodically examining the size of the Board, with a view to determining the impact of the number of directors upon effectiveness, and making recommendations where appropriate to the Board as to any programs the Corporate Governance and Nominating Committee determines to be appropriate to reduce or increase the number of directors to a number which facilitates more effective decision making; and (v) proposing new nominees, when deemed appropriate, for appointment or election to the Board and recommending the new Board of Director nominees at the next annual meeting of shareholders.

ASSESSMENTS

Ensuring the effectiveness of the Board, including the Chairman of the Board, the Committees and their respective chairs and individual directors has been assigned to the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee, in conjunction with the Lead Director, annually assess the performance and effectiveness of the Board and each Board member individually. The assessments are presented to the Board for discussion and analysis with a focus on continuous improvement. As part of the annual Board and Committee assessments, the Board and the respective Committees review and consider any proposed changes to their respective mandates or terms of reference.

Pure Technologies Ltd. - A-1 - 2013 Information Circular

APPENDIX A

MANDATE OF BOARD OF DIRECTORS

MANDATE OF THE BOARD OF DIRECTORS

1. PURPOSE The purpose of this Mandate is to detail how the board of directors (the “Board”) of Pure Technologies Ltd. (the "Corporation") fulfills its statutory duty to manage the Corporation. 2. RESPONSIBILITIES AND DUTIES As steward of the Corporation’s best interests, the Board has responsibility for the following matters (either itself, or through duly appointed and constituted committees of the Board in accordance with applicable laws): a. The Board has primary responsibility for the development and adoption of the strategic

direction of the Corporation. The Board contributes to the development of strategic direction by approving, at least annually, a strategic plan developed and proposed by management. The plan will take into account the business opportunities and business risks of the Corporation. The Board reviews with management from time to time the strategic planning environment, the emergence of new opportunities, trends and risks and the implications of these developments for the strategic direction of the Corporation. The Board reviews and approves the Corporation’s financial objectives, plans and actions, including significant capital allocations and expenditures.

b. The Board monitors corporate performance against the strategic and business plans, including

assessing operating results to evaluate whether the business is being properly managed. c. The Board identifies the principal business risks of the Corporation and ensures that there are

appropriate systems put in place to manage these risks. d. The Board monitors and ensures the integrity of the internal controls and procedures (including

adequate management information systems) within the Corporation and its financial reporting procedures of the Corporation.

e. The Board is responsible for ensuring appropriate standards of corporate conduct including,

adopting a corporate code of business conduct and ethics (the "Code of Business Conduct") for all employees and senior management, and monitoring compliance with such code, if appropriate. Any waiver from any part of the corporate Code of Business Conduct and Ethics for officers or directors requires the express approval of the Board and, if required by applicable securities regulatory authorities, public disclosure.

f. The Board is responsible for the review and approval of quarterly and annual financial

statements, management’s discussion and analysis related to such financial statements, and forecasts.

g. The Board is responsible for establishing and reviewing from time to time a dividend policy for

the Corporation. h. The Board is responsible for reviewing the compensation of members of the Board to ensure

that the compensation realistically reflects the responsibilities and risks involved in being an effective director and for reviewing the compensation of members of the senior management team to ensure that they are competitive within the industry and that the form of compensation aligns the interests of each such individual with those of the Corporation.

i. The Board reviews and approves material transactions not in the ordinary course of business. j. The Board reviews and approves the budget on an annual basis, including the spending limits

and authorizations, as recommended by the Audit Committee.

k. The Board ensures that there is in place appropriate succession planning, including the appointment, training and monitoring of senior management and members of the Board.

l. The Board is responsible for assessing its own effectiveness in fulfilling its mandate and

evaluating the relevant disclosed relationships of each independent director and shall make an affirmative determination that such relationship does not preclude a determination that the director is independent.

m. The Board approves a disclosure policy that includes a framework for investor relations and a

public disclosure policy. n. The Board is responsible for satisfying itself as to the integrity of the chief executive officer (the

"Chief Executive Officer") and other senior officers and that the Chief Executive Officer and other senior officers create a culture of integrity throughout the organization. The Board is responsible for developing and approving goals and objectives which the Chief Executive Officer is responsible for meeting.

o. The Board is responsible for developing the Corporation’s approach to corporate governance

principles and guidelines that are specifically applicable to the Corporation. p. The Board is responsible for performing such other functions as prescribed by law or assigned

to the Board in the Corporation's governing documents. q. Set forth below are procedures relating to the Board’s operations:

i. Size of Board and selection process – The directors of the Corporation are elected each year by the shareholders at the annual meeting of shareholders. The Board will determine nominees to be presented to the shareholders for election based upon the following considerations: (i) the competencies and skills which the Board as a whole should possess; (ii) the competencies and skills which each existing director possesses; and (iii) the appropriate size of the Board to facilitate effective decision-making. Any shareholder may propose a nominee for election to the Board either by means of a shareholder proposal upon compliance with the requirements of the Business Corporations Act (Alberta) ("OBCA") or at the annual meeting. Between annual meetings, the Board may appoint directors to serve until the next annual meeting, subject to compliance with the OBCA. Individual Board members are responsible for assisting the Board in identifying and recommending new nominees for election to the Board, as needed or appropriate.

ii. Qualifications – Directors should have the highest personal and professional ethics

and values and be committed to advancing the best interests of the Corporation. They should possess skills and competencies in areas that are relevant to the Corporation’s activities. A majority of the directors will be “independent” directors within the meaning of National Instrument 52-110 – Audit Committees, of the Canadian Securities Administrators.

iii. Director orientation and continuing education – The Board, together with the Corporate Governance and Nominating Committee is responsible for providing a comprehensive orientation and education program for new directors which fully sets out:

a. the role of the Board and its committees;

b. the nature and operation of the business of the Corporation; and

c. the contribution which individual directors are expected to make to the Board

in terms of both time and resource commitments. In addition, the Board together with the Corporate Governance and Nominating Committee is also responsible for providing continuing education opportunities to existing directors so that individual directors can maintain and enhance their abilities and ensure that their knowledge of the business of the Corporation remains current.

iv. Meetings – The Board has at least four scheduled meetings a year. The Board is

responsible for its agenda. Prior to each Board meeting, the Chairman of the Board shall circulate an agenda to the Board. The Chairman of the Board shall discuss the agenda items for the meeting with the Chief Executive Officer. Materials for each meeting will be distributed to directors in advance of the meetings. Directors are expected to attend all meetings of the Board held in a given year subject only to illness or unavoidable conflict, and are expected to review meeting materials in advance of all such meetings.

v. The independent directors shall meet at the end of each Board meeting without

management and non-independent directors present. The independent directors shall appoint a chairman to chair these meetings.

vi. Committees – The Board has established the following standing committees to assist

the Board in discharging its responsibilities: the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee. Special committees are established from time to time to assist the Board in connection with specific matters. The chair of each committee reports to the Board following meetings of the committee. The terms of reference of each standing committee are reviewed annually by the Board.

vii. Evaluation – The Corporate Governance and Nominating Committee performs an

annual evaluation of the effectiveness of the Board as a whole, the committees of the Board, and the contributions of individual directors.

viii. Compensation – The Compensation Committee recommends to the Board the

compensation and benefits for non-management directors. The Compensation Committee seeks to ensure that such compensation and benefits reflect the responsibilities and risks involved in being a director of the Corporation and align the interests of the directors with the best interests of the shareholders.

ix. Nomination – The Corporate Governance and Nominating Committee from time to

time, will identify and recommend new nominees as directors of the Corporation, based upon the following considerations

a. the competencies and skills necessary for the Board as a whole to possess;

b. the competencies and skills necessary for each individual director to possess;

c. competencies and skills which each new nominee to the Board is expected to bring; and

d. whether the proposed nominees to the Board will be able to devote sufficient

time and resources to the Corporation.

x. Access to independent advisors – The Board may at any time retain outside financial, legal or other advisors at the expense of the Corporation. Any director may, subject to the approval of the Corporate Governance and Nominating Committee, retain an outside advisor at the expense of the Corporation.

3. LEAD DIRECTOR a. The Board will appoint a Lead Director in circumstances in which the Chairman of the Board is

not considered independent under applicable securities laws, in order to provide independent leadership to the Board and for the other purposes set forth below.

b. The Lead Director will hold office at the pleasure of the Board, until a successor has been duly

elected or appointed or until the Lead Director resigns or is otherwise removed from the office by the Board.

c. The Lead Director will provide independent leadership to the Board and will facilitate the functioning of the Board independently of the Corporation's management. Together with the Chair of the Corporate Governance and Nominating Committee, the Lead Director will be responsible for the corporate governance practices of the Corporation.

4. REPORTING The Board is responsible for reviewing and submitting to the shareholders of the Corporation recommendations concerning any matters to be voted upon at any meeting of the shareholders of the Corporation and assuring that all reporting requirements of the Corporation to its shareholders are met at all times. 5. AUTHORITY The Board has the authority to: a. manage, or supervise the management of, the business and affairs of the Corporation in

accordance with law; b. engage independent counsel and other advisors including accounting or other consultants or

experts as it determines necessary to carry out its duties; c. set and pay the compensation for advisors employed by the Board; d. access, on an unrestricted basis, the books and records of the Corporation; and e. conduct any investigation appropriate to its responsibilities, and it may request the f. external auditors, as well as any officer of the Corporation, or outside counsel for the

Corporation, to attend a meeting of the Board or to meet with any members of, or advisors to, the Board or any Committees of the Board.

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