Statement of Edmund Martin May 31, 2016 I have received a request from a journalist to release a summary of the severance, bonus and pension I receive upon leaving Nalcor Energy. These matters were agreed in the Executive Employment Contract I signed in 2005 and renewed in 2009. The Executive Employment Contract is a public document. As a Crown Corporation, transparency is very important, and in this spirit, I have decided to provide the following information; 1. As previously publically released and reported, I have been paid a severance in lieu of notice payment of 24 month?s pay or effectively two times my annual salary and bonus equaling approximately $1.39 million less the deduction for income tax of approximately $670,000, for an net amount to me of approximately $720,000. 2. It has already been reported publically that I will receive pension benefits from two sources; a. Public Service Pension Plan (PSPP) amount of approximately $95,000 per year, also taxable when received. I have personally contributed my portion of funding this plan over the past 10+ years. b. A Supplementary Executive Retirement Plan (SERP) which has been part of my Executive Employment Contract since 2005. This type of pension plan is a standard piece of many executive arrangements, and has been provided in some cases to previous executives of Hydro the predecessor company to Nalcor. This pension payment is calculated as an annual amount depending on years of service with options to receive either as an annual amount or as a one time, up front lump sum payment based on the commuted value calculated by an outside firm specializing in these types of calculations. This type of choice is also a common feature of such plans. The annual value of this plan is approximately $182,000 per year, before tax. I elected to receive this amount as a one time up front payment calculated at approximately $2.4 million (approximately comprised of $4.7 million less an allowance for income tax of $2.3 million, for a net amount to me of $2.4 million). This is not a severance arrangement but rather a pension bene?t 3. Also attached is a copy of the Settlement Agreement between myself and Nalcor Energy, summarizing the terms and conditions of my settlement arrangements including things such as severance, pension, stronger confidentiality covenants and restrictions on my future employment opportunities. 4. Any other bonus payments received are not part of the settlement agreement but rather paid as part of my 2015 and up to April 2016 compensation as provided for in my employment contract. As indicated in my statement of May 30, 2016 it is important that there be full disclosure and I believe I have tried to accomplish this in difficult circumstances. THIS SETTLEMENT AGREEMENT made as of April 20, 2016. NALCOR ENERGY (hereinafter called ?Nalcor") OF THE ONE PART AND: EDMUND MARTIN, of the City of St. John?s, in the province of Newfoundland and Labrador (hereinafter called the ?Executive") OF THE OTHER PART WHEREAS the Executive has announced he is stepping down as President and Chief Executive Officer of Nalcor and its subsidiaries effective the date hereof; AND WHEREAS the Board of Directors of Nalcor have been advised by the Government of Newfoundland and Labrador that in all the circumstances it has agreed that the Executive is entitled to receive the severance and pay in lieu of notice payments and bene?ts as if the Executive been released by the Board of Directors under clause 16 without cause pursuant to the Executive Employment Agreement between the parties hereto dated as of November 2, 2009 (the Contract?) NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of these presents and the mutual covenants herein set forth, Nalcor and the Executive agree as follows: 1. Nalcor shall pay and grant to the Executive: Severance salary and all benefits (including extended health, drugs, life insurance and dental coverage under such plans or programs that apply to executives while employed for Nalcor), cost shared where applicable, for the equivalent period of two (2) years (twenty four (24) months) in lieu of notice plus the equivalent of the highest annual bonus received in the Executive's best total compensation year prior to the date of termination for each year of the two year pay in lieu of notice period. This amount(s) shall be paid to the Executive in lump sum upon execution of this Agreement subject only to the Executive's direction for payment for tax sheltering purposes; (ii) outplacement services up to $25,000.00 as invoiced to Nalcor by the service provider; Other provisions as agreed by the Executive and the Board of Directors, a lump sum payment of the SERP benefits to which the Executive is entitled under the terms of the Contract; (ii) any other payments to which any employee of Nalcor would be entitled upon the termination of their employment with Nalcor including, but not limited to, any earned but unused annual leave; and access to benefits generally available to retirees; The Executive shall be entitled to retain the benefit of his currently assigned automobile for the two year notice -2- period upon the same (so far as practicable) conditions as if he continued in active employment. Survivor Benefits Should the Executive die within the two year notice period any benefits or payments required hereby and which were not paid or provided to Executive prior to his death shall be paid or provided to the Spouse of the Executive or upon the death of the Spouse to the children of the Executive. Confidentiality (C) ?Confidential Information? means any trade secrets or other information however communicated, disclosed to the Executive or obtained by the Executive through observation or examination of Nalcor's policies, procedures or materials related to its business or operations which derives economic value from not being generally known to be or readily ascertainable by other persons who can obtain value from its disclosure or use. The Executive acknowledges that irreparable injury or damage will result to Nalcor upon the disclosure of Confidential Information to third parties or utilization of same for any purpose other than as contemplated by this Agreement. The Executive will not, without the prior written consent of Nalcor, disclose any Confidential Information to any third party and will not use the Confidential Information for any purpose whatsoever, provided however, that the Executive shall have no liability to Nalcor for any disclosure of any Confidential Information if the Executive can establish that such Confidential Information: is publicly known, available or published, without breach of this Agreement by the Executive; (ii) has become known lawfully by or has become lawfully known to the Executive prior to Nalcor?s disclosure of such information to the Executive, as evidenced by written documents received by the Executive prior to Nalcor?s disclosure to the Executive; has been rightfully and lawfully received by the Executive from third parties; (iv) has been independently developed without reference to or use of the Confidential Information; or has been or is required to be disclosed in accordance with law. The Executive agrees that all restrictions and covenants contained in this Section 3 are reasonable and valid and all defences to the strict enforcement thereof by Nalcor which are founded upon reasonableness or validity of such restrictions and covenants are hereby waived by the Executive. -3- No Solicitation of Nalcor Employees For a period of two years after the date hereof, the Executive shall not, on his own behalf or on behalf of any other person, partnership, association, corporation or other entity, hire or solicit or in any manner attempt to influence or induce any employee of Nalcor or its affiliates (within the meaning of the Corporations Act, Newfoundland and Labrador) to leave the employment of Nalcor or such affiliates, and he shall not use or disclose to any person, partnership, association, corporation or other entity any information obtained while an employee of Nalcor concerning the names and addresses of Nalcor?s employees. Non-Competition (0) The Executive hereby covenants with Nalcor that he shall not, for a period beginning at the date of this Agreement and ending on April 30, 2017, anywhere in the provinces of Quebec, New Brunswick, Nova Scotia, Prince Edward Island, or Newfoundland and Labrador, directly or indirectly, either alone or jointly with or on behalf of any third party: be employed in a senior executive position, offer consulting services, serve as a director of, or in any way aid with the carrying on of any business which operates in competition with the business of Nalcor, including but not limited to business engaged in the generation, distribution, transmission and sale of electrical energy, or the exploration, extraction and production of renewable or non-renewable oil and gas it being understood that mining for minerals is excluded; canvass, solicit or approach or induce or attempt to induce any customer, contractor or supplier to cease doing business with Nalcor, or in any way interfere with the relationships between any customer, contractor or supplier and Nalcor; engage in, carry on, or otherwise be concerned with, employed by, associated with, or in any other manner connected with, or have any interest in, manage, advise, lend money to, guarantee the debts or obligations of, render services or advice to any business which is substantially the same or similar to, or in direct competition with the business of Nalcor. Notwithstanding anything in this Section, the ownership by the Executive as a passive investor of less than five percent of the outstanding publicly traded capital stock of any entity which competes with the business of Nalcor shall not be a violation of this Agreement. The covenants in this Section are given by the Executive acknowledging that he has specific knowledge of the affairs of Nalcor and its subsidiaries and affiliates, and that Nalcor and its subsidiaries and affiliates carry on and attempt to carry on business such that the terms herein are reasonable. In the event that any clause or portion of any such covenant should be unenforceable or be declared invalid for any reason whatsoever, such unenforceability or invalidity shall not affect the enforceability or validity of the remaining portions of the covenants of this Section, and such unenforceable or invalid portions shall be severed from the remainder of this Section. The Executive hereby acknowledges and agrees that all restrictions contained in this Section are reasonable and valid and that all defences to the strict enforcement of this Section by Nalcor which are founded upon reasonableness or validity of such restrictions and covenants are hereby waived by the Executive. Without intending to limit the remedies available to Nalcor, the Executive acknowledges that damages at law will be an insufficient remedy to Nalcor in view of the irrevocable harm which will be suffered if the Executive violates the terms of this Section and agrees that Nalcor may apply for and have injunctive relief in any court of competent jurisdiction, specifically to enforce any of such covenants upon the breach or threatened breach thereof, or otherwise specifically to enforce any such covenants, and hereby waives all defences to the strict enforcement thereof by Nalcor. Nalcor and the Executive each acknowledge and agree that the covenants of the Executive in this Section are essential elements of the agreed upon terms of the Executive?s termination of employment, and that if the Executive had not made such covenants, Nalcor would not have agreed to the terms of this Agreement. The SERP Calculation For the purposes of determining the SERP lump sum as referenced in clause 1(c) above the following provisions shall be considered and applied. Definition: ?Term of Employment? shall include the period of actual employment commencing at the commencement date referred to in the Initial Employment Agreement dated July 21, 2005 plus the actual employment period under the Contract including any period of absence for any reason whether with or without pay, unused vacation entitlement and any period in lieu of notice with the term expressed in years, months and days under both the Initial Employment Agreement and the Contract. Suoplemental Executive Retirement Plan Pavment A sum equivalent to 2% of the Executive?s best annual salary plus 2% of the Executive?s best year annual incentive bonus times years of service included in the Term of Employment with any incomplete years being prorated on the basis of completed months with the last month, if incomplete, being deemed complete. This lump sum shall be the SERP payment adjusted pursuant to the following provisions; (ii) The Executive acknowledges that the payments contemplated arise on termination and are not intended to form part of ?total compensation" during employment, but are payable as part of stand alone pension compensation payable on termination. The SEFIP payment to which the Executive is entitled as a lump sum will be the commuted value of the payment if taken as a benefit but in an actuarially equivalent alternative payment that is calculated in a manner acceptable to the Executive and Nalcor as set out below. (iv) The actuaries are directed to calculate the commuted value of the payment as if indexed and increased annually in accordance with the CPI rate of inflation for Canada, commencing on May 20, 2016 and in accord with generally accepted principles of their profession; On the date to which the Executive is entitled to the SEFIP benefit or as soon as the commuted value has been established in accord with this clause, the Executive may elect to receive as a lump sum which in total is equal to the commuted value of the benefit based on a calculation performed by a firm or actuaries retained by Nalcor. Provided however, that the Executive may, at the expense of Nalcor retain his own firm of actuaries to perform the same actuarially equivalent calculation. In the event the calculations of the two firms of actuaries are within 10% of each other, Nalcor and the Executive agree that the payment/payments will equal the average of the two calculations. (vi) In the event the difference between the calculations is more than 10%, the two firms of actuaries shall appoint a third firm to actuaries to review and present its calculation, which such calculation shall be adopted by the parties as correct. Any reviews undertaken under this clause or costs associated with such reviews shall be paid by Nalcor. (vii) The payment of the benefit (commuted value) in accordance herewith shall terminate all obligations and liability of Nalcor to the Executive, his Surviving Spouse, a Child of the Executive or his designated beneficiary or his estate. Where the Executive is at least 56 years old but is not entitled to receive an annual unreduced pension under PSPP of Total Years of Service times 2% of Base Salary at the time of termination (the ?expected benefits?) the payment to the Executive will be adjusted upward effective the date of termination to bridge any shortfall in the said expected benefits until the shortfall is eliminated. General (C) This Agreement may be executed in counterparts, each of which so executed shall be deemed to be an original, and all such counterparts shall constitute but one and the same instrument. Neither of the parties shall assign, in whole or in part, this Agreement or its rights or obligations hereunder, without prior consent in writing of the other party. This Agreement shall be governed by and construed in accordance with the laws of the Province of Newfoundland and Labrador and the federal laws of Canada applicable therein, and subject to the provisions respecting mediation and arbitration set out herein the Courts of the Province of Newfoundland and Labrador shall have jurisdiction to entertain any action or other legal proceedings based on any provisions of this Agreement. Each party hereto does attorn to the jurisdiction of the Courts of Newfoundland and Labrador. This agreement and everything contained herein shall inure to the benefit of and be binding upon each of the parties hereto and their respective successors, personal representatives and permitted assigns as fully and as effectually as if the same had been mentioned herein. The Executive acknowledges that he has read and understands this Agreement, and acknowledges that he has had the opportunity to obtain legal advice concerning this Agreement. Any dispute arising out of the interpretation or application of this Agreement may be referred by either party to a sole arbitrator, knowledgeable of employment law, and agreed to by the parties within thirty (30) days of the issue arising. Failing agreement on arbitrator, the parties agree to abide by the terms and conditions of appointing a sole arbitrator as are contained in the Arbitration Act, Newfoundland and Labrador. The arbitrator selected by agreement or by operation of the Arbitration Act shall not have the power to amend or modify the Agreement without consent of both parties and shall, in the exercise of jurisdiction conferred by the parties, be bound by the Arbitration Act aforesaid. The fees and expenses of the arbitration shall be paid entirely by Nalcor. Termination of the Contract Upon receipt of the benefits provided for Section 1 hereof, the Executive hereby forever releases and discharges Nalcor from the obligations of Nalcor under the Contract and acknowledges that Nalcor no longer has any further obligations to the Executive under the Contract or any other obligations relating to his employment with Nalcor. Signature page next THIS AREA INTENTIONALLY LEFT BLANK DATED as of April 20, 2016 Executed by the Executive in the presence of: (24184091_1.doc) NALCOFI ENERGY I Wail by: eats Tile: MOE. by: Name: b25771} Title: Fm?rgg $120 We have authority to bind Naclor