<Page>
EXHIBIT 3.4
IMPORTANT INFORMATION FOR SHAREHOLDERS
NOTICE OF THE
ANNUAL MEETING
OF SHAREHOLDERS
OF
CANADA LIFE FINANCIAL CORPORATION
AND
PROXY CIRCULAR
FOR INFORMATION, PLEASE CONTACT:
IN CANADA AND THE UNITED STATES, CALL COMPUTERSHARE, TOLL-FREE, AT
1-888-284-9137
IN IRELAND, CALL COMPUTERSHARE INVESTOR SERVICES (IRELAND) LTD. AT 01-216-3100
IN THE UNITED KINGDOM, CALL COMPUTERSHARE INVESTOR SERVICES PLC AT 0
870-702-0164
IN ALL OTHER COUNTRIES, CALL COMPUTERSHARE IN CANADA, COLLECT AT 416-642-6266
<Page>
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS................................. 1
ELECTRONIC COMMUNICATIONS................................................ 1
PART I -- VOTING......................................................... 2
WHO CAN VOTE?.......................................................... 2
One Vote Per Common Share.............................................. 2
Voting Restrictions.................................................... 2
VOTING IN PERSON....................................................... 2
VOTING BY PROXY........................................................ 2
What is a Proxy?....................................................... 2
Appointing a Proxyholder............................................... 2
Changing Your Mind..................................................... 3
Your Proxy Vote........................................................ 3
Confidentiality........................................................ 3
Non-registered Shareholders............................................ 3
HOW A VOTE IS PASSED................................................... 3
SOLICITATION OF PROXIES................................................ 4
PART II -- BUSINESS OF THE MEETING....................................... 4
FINANCIAL STATEMENTS................................................... 4
ELECTION OF DIRECTORS.................................................. 4
APPOINTMENT OF THE AUDITOR............................................. 6
PART III -- COMPENSATION AND OTHER INFORMATION........................... 6
COMPENSATION OF DIRECTORS.............................................. 6
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION............. 6
COMPENSATION OF NAMED EXECUTIVE OFFICERS............................... 9
SHARE PERFORMANCE GRAPH................................................ 13
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS...... 13
DIRECTORS' APPROVAL.................................................... 13
</Table>
PLEASE NOTE: A Form of Proxy is also enclosed in this package. This form can be
used to vote your shares if you cannot attend the shareholders' meeting. See
"VOTING BY PROXY".
<Page>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Canada Life Financial Corporation
("CLF") will be held at the head office of CLF, 330 University Avenue, Toronto,
Ontario, Canada in the Corporate Conference Centre on Thursday, May 2, 2002 at
10:30 o'clock in the morning (Toronto time) for the following purposes:
- - to receive the financial statements for the year ended December 31, 2001,
and the reports of the Auditor and the Actuary thereon;
- - to elect Directors;
- - to appoint the Auditor; and
- - to carry out any other proper business brought before the Meeting or any
adjournment.
If you cannot attend, you are encouraged to complete and return the Form of
Proxy indicating your voting instructions. TO BE VALID, A COMPLETED FORM OF
PROXY MUST BE RECEIVED BY CLF'S TRANSFER AGENT, COMPUTERSHARE TRUST COMPANY OF
CANADA, 100 UNIVERSITY AVENUE, 9TH FLOOR, TORONTO, ONTARIO, CANADA M5J 2Y1, NOT
LATER THAN 5:00 O'CLOCK IN THE AFTERNOON (TORONTO TIME) ON APRIL 30, 2002. YOU
CAN RETURN YOUR FORM OF PROXY TO COMPUTERSHARE TRUST COMPANY OF CANADA IN THE
ENCLOSED ENVELOPE OR BY FOLLOWING THE INSTRUCTIONS FOR VOTING USING THE
INTERNET. THOSE INSTRUCTIONS ARE ON THE FORM OF PROXY. The information contained
in the Proxy Circular forms part of this notice.
By Order of the Board of Directors
(signed) Roy W. Linden
Secretary
Toronto, Ontario
March 15, 2002
ELECTRONIC COMMUNICATIONS
Electronic Proxy Voting:
Shareholders may now vote using the Internet. Using the Internet provides
an easy and convenient way for shareholders to vote. To do so, simply follow the
Internet voting instructions which can be found on the Form of Proxy enclosed
with these materials.
Electronic Document Delivery:
We plan to extend the use of the Internet in the future to offer you the
option of receiving materials from us electronically. If you want to take
advantage of this option, you need to complete a simple form and return it to
us, as explained in the instructions that come with the Form of Proxy enclosed
with these materials.
If you complete and return this form, we will notify you when the following
becomes available on our web site:
- annual report, including audited financial statements and related
management's discussion and analysis (MD & A);
- notices of shareholder meetings;
- interim financial statements, including related MD & A; and
- proxy-related information.
By allowing you to retrieve and save that information in electronic format,
we will get the information to you faster, reduce our costs and help the
environment.
<Page>
CANADA LIFE FINANCIAL CORPORATION
PROXY CIRCULAR
All information is as of February 6, 2002, unless otherwise indicated.
THIS PROXY CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF
PROXIES BY AND ON BEHALF OF THE MANAGEMENT OF CANADA LIFE FINANCIAL CORPORATION
("CLF") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS OF CLF (THE "MEETING") TO
BE HELD ON MAY 2, 2002 AND AT ANY ADJOURNMENT. NOTE THAT THE ANNUAL MEETING OF
SHAREHOLDER AND POLICYHOLDERS OF THE CANADA LIFE ASSURANCE COMPANY ("CLA") WILL
ALSO BE HELD AT THE SAME TIME AND IN THE SAME PLACE.
PART I -- VOTING
WHO CAN VOTE?
ONE VOTE PER COMMON SHARE
March 15, 2002 is the record date to determine the shareholders who are
entitled to receive notice of the Meeting.
Except for some restrictions as described below, each shareholder is
entitled to one vote for each common share registered in his or her name as of
the close of business on March 15, 2002. If a shareholder transfers common
shares after this date to someone else, and that person becomes a registered
shareholder of CLF, the new shareholder may vote the transferred shares at the
Meeting provided he or she has asked CLF's transfer agent, Computershare Trust
Company of Canada, to include his or her name in the list of common
shareholders. This request must be made at least 10 days before the Meeting.
As of March 15, 2002, there were 160,422,169 common shares of CLF
outstanding.
To the knowledge of the Directors and officers of CLF, no person or entity
owns or exercises control or direction over more than 10 per cent of any class
of shares of CLF.
VOTING RESTRICTIONS
The INSURANCE COMPANIES ACT (Canada) ("the Act") restricts the voting
rights of CLF's shareholders in some ways. Shares cannot be voted -- either in
person or by Proxy -- if:
- - they are beneficially owned by the Government of Canada, or a province, or
the government of a foreign country or any political sub-division of that
country, or any agency of those entities; or
- - the Minister of Finance has ordered that the shares not be voted.
For more information about voting rights, contact the Secretary of CLF.
VOTING IN PERSON
Registered shareholders who attend the Meeting can cast one vote for each
common share held (with the exceptions described above) on resolutions put
before the Meeting.
VOTING BY PROXY
If you do not come to the Meeting, you can make your votes count by
appointing someone who will be there as your proxyholder. You can either tell
that person how you want to vote, or let him or her choose for you.
WHAT IS A PROXY?
A proxy is a document that authorizes someone else to attend the Meeting
and cast your votes for you at the Meeting. Enclosed in this package is a Form
of Proxy for the Meeting. Use it to appoint a proxyholder. (You can also use any
other legal Form of Proxy.)
APPOINTING A PROXYHOLDER
Your proxyholder is the person you appoint to cast your votes for you. You
can choose any individual you want to be your proxyholder; it does not have to
be another shareholder. Just fill in the person's name in the blank space
provided on the enclosed Form of Proxy. Your proxyholder must attend the Meeting
in person in order to vote your shares.
If you leave the space in the Form of Proxy blank, the persons named in the
form are appointed to act as your proxyholder. The persons named on the form are
David A. Nield, Chairman, President and Chief Executive Officer of CLF and
Arthur R.A. Scace, Lead Director and Chairman of the Corporate Governance
Committee of CLF.
Your proxy authorizes the proxyholder to vote and otherwise act for you at
the Meeting, including any continuation after adjournment of the Meeting.
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If you vote on the issues listed by marking the appropriate boxes on the
Form of Proxy, your proxy will be voted as instructed. If you do not mark any
boxes, your proxyholder can vote your shares as he or she sees fit (see "Your
Proxy Vote").
In order to be valid, you must return the completed Form of Proxy by 5:00
o'clock in the afternoon (Toronto time) on April 30, 2002. Please return the
completed form in the envelope provided or, if you have misplaced the envelope,
return it to the Toronto office of CLF's transfer agent, Computershare Trust
Company of Canada, at:
100 University Avenue,
9th Floor,
Toronto, Ontario, Canada M5J 2Y1
Alternatively, you may complete and return your proxy using the Internet by
following the Internet voting instructions, which are on the Form of Proxy.
CHANGING YOUR MIND
If you want to revoke your proxy after you have delivered it, you can do so
any time before it is used. You or your attorney must state clearly, in writing,
that you want to revoke your proxy, and deliver that written document to
Computershare Trust Company of Canada at the address indicated above.
The proxy will only be revoked (A) if a revocation is (i) received by 5:00
o'clock in the afternoon (Toronto time) on the last business day before the day
of the Meeting (or any adjournment), or (ii) deposited with the Chairman of the
Meeting before the commencement of the Meeting (or any adjournment) or (B) in
any other way the law permits. If you revoke your proxy and do not replace it
with another that is deposited with the Toronto office of CLF's transfer agent,
Computershare Trust Company of Canada, on or before the deadline, you can still
vote your own shares, but must do so in person at the Meeting.
If you return more than one proxy, the transfer agent will only count the
one which bears the latest date.
YOUR PROXY VOTE
If you have completed your proxy correctly (exactly as your name appears on
the label on the Form of Proxy), and returned it to the transfer agent by the
deadline, then your proxyholder can vote for you at the Meeting. If you have
specified on the Form of Proxy how you want to vote on a particular issue (by
marking FOR or WITHHOLD), then your proxyholder must vote your shares
accordingly.
IF YOU HAVE NOT SPECIFIED HOW TO VOTE ON A PARTICULAR ISSUE, THEN YOUR
PROXYHOLDER CAN VOTE YOUR SHARES AS HE OR SHE SEES FIT; AND IF YOU HAVE
APPOINTED THE PERSONS DESIGNATED IN THE FORM OF PROXY AS YOUR PROXYHOLDER,
UNLESS OTHERWISE SPECIFIED, YOUR SHARES WILL BE VOTED AT THE MEETING AS FOLLOWS:
- - FOR THE ELECTION AS DIRECTORS OF THE NOMINEES WHOSE NAMES ARE SET OUT IN
THIS PROXY CIRCULAR; AND
- - FOR THE APPOINTMENT OF ERNST & YOUNG LLP AS THE AUDITOR.
For more information on either of these matters, see Part II, "Business of
the Meeting". If any amendments are proposed to either of them, or if any other
matters properly come before the Meeting, your proxyholder can vote your shares
as he or she sees fit. The Notice of Annual Meeting includes all the matters to
be presented at the Meeting that are known to management as of this date.
CONFIDENTIALITY
All proxies are considered confidential and will be returned to CLF's
transfer agent, Computershare Trust Company of Canada. The transfer agent will
count the proxies and tabulate the results, which will be verified by the
Meeting's scrutineers. The transfer agent will refer a proxy to CLF if it has a
comment intended for CLF's management on it, or in connection with applicable
legal requirements.
NON-REGISTERED SHAREHOLDERS
In some cases, a shareholder's shares may be registered in the name of a
third party, such as a broker or trust company. Such non-registered shareholders
should follow the directions of their intermediaries with respect to the
procedures to be followed for voting. Generally, such non-registered
shareholders will either be provided with: (a) a request for voting
instructions; or (b) a Form of Proxy executed by the intermediary but otherwise
uncompleted.
HOW A VOTE IS PASSED
All of the matters to come to a vote at the Meeting, as described in the
attached Notice of Annual Meeting, are ordinary resolutions and can be passed by
a simple majority -- i.e., if more than half the votes that are cast are in
favour, then the resolution is approved.
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SOLICITATION OF PROXIES
CLF's management requests that you complete and return the Form of Proxy to
ensure your votes are exercised at the Meeting. CLF will pay the cost of this
solicitation, which will be primarily by mail. However, regular employees of
CLF, or CLF's agents, may also ask for proxies to be returned.
PART II -- BUSINESS OF THE MEETING
FINANCIAL STATEMENTS
The consolidated financial statements for the year ended December 31, 2001
shall be placed before the shareholders at the Meeting and are included in the
Annual Report, which has been mailed to shareholders with this Notice and Proxy
Circular.
ELECTION OF DIRECTORS
Directors of CLF are appointed for one, two or three year terms, with as
nearly as may be, one third of the Directors elected in each year. The term of
office of each of the nominees proposed for election as Director will expire at
the Meeting. The number of Directors to be elected at the Meeting is six.
Directors elected at the Meeting will serve until the close of the first,
second, or third successive Annual Meeting as set out below unless he or she
resigns or otherwise vacates his or her office.
THE PROPOSED NOMINEES
The following are the nominees proposed for election as Directors of CLF.
All are Directors of CLF.
Unless otherwise instructed, the persons designated in the Form of Proxy
intend to vote FOR the nominees listed below. If, for any reason, any nominee is
unable to serve, unless otherwise specified, the persons designated in the Form
of Proxy will vote in their discretion for a substitute nominee.
SLATE OF DIRECTOR NOMINEES
<Table>
<Caption>
TERM OF COMMON
PROPOSED SHARES OWNED,
ELECTION DIRECTOR CONTROLLED,
NAME AND PLACE OF RESIDENCE IN YEARS PRINCIPAL OCCUPATION SINCE(1) OR DIRECTED(2) COMMITTEES(3)
- --------------------------- -------- -------------------- -------- -------------- -------------
James C. Alfano............. 2 President and Chief 1999 1,000 CR, P
Ancaster, Ontario Executive Officer, 1,010(4)
Stelco Inc.
George S. Bain.............. 3 President and 1999 2,400 CG, HR
Belfast, Northern Ireland Vice-Chancellor,
The Queen's University
of Belfast
Angus A. Bruneau............ 3 Chairman, Fortis Inc. 1999 3,546 A, CR
St. John's,
Newfoundland
and Labrador
John R. Hall................ 1 Corporate Director, 1999 2,641 HR
Lexington, Kentucky Former Chairman and 1,684(4)
Chief Executive
Officer, Ashland
Oil, Inc.
Michael L. Hepher........... 3 Chairman and Chief 1999 16,700 CR
Weybridge, England Executive Officer,
TeleCity plc
John D. Wetmore............. 2 Vice-President, 2001 592 CG
Toronto, Ontario ibm.com, Americas
</Table>
- ----------
NOTES:
(1) All nominees, other than Mr. Wetmore, who became a Director on May 2, 2001,
have been Directors of CLF since its organization in August 1999. Prior to
April 17, 2001, Mr. Wetmore was President and Chief Executive Officer of
IBM Canada Ltd., Markham, Canada.
4
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Prior to January 1, 1998, Mr. Bain was Principal of the London Business
School, London, England. Prior to June 1998, Mr. Hepher was Chairman and
Chief Executive Officer of Charterhouse plc, London, England and has been a
Corporate Director.
(2) The information as to shares owned or over which control or direction is
exercised, not being within the knowledge of CLF, has been furnished by the
respective nominees. Shareholdings are shown as of February 6, 2002.
(3) The nominee presently serves on the specified committee(s) of the Board.
Committees: A -- Audit and Risk Management; CG -- Corporate Governance; CR
-- Conduct Review; HR -- Human Resources; and P -- Pension. A description
of the Roles of Board Committees is in the Corporate Governance section of
the Annual Report.
(4) Represents deferred share units issued in lieu of cash director fees. See
"Compensation of Directors".
In addition to the foregoing nominees, the following individuals are also
Directors of CLF. The remaining term of office of each such individual is
indicated.
<Table>
<Caption>
COMMON
CURRENT SHARES OWNED,
TERM DIRECTOR CONTROLLED,
NAME AND PLACE OF RESIDENCE EXPIRES PRINCIPAL OCCUPATION SINCE(1) OR DIRECTED(2) COMMITTEES(3)
- --------------------------- ------- ----------------------------- -------- -------------- -------------
Monique Jerome-Forget....... 2003 Member of the Quebec National 1999 2,500 A, CR
Montreal, Quebec Assembly, Riding of 1,064(5)
Marguerite-Bourgeoys
David W. Kerr............... 2004 President and Chief Executive 1999 2,500 HR
Toronto, Ontario Officer, Noranda Inc.
David W. Lay................ 2003 Corporate Director 1999 7,000 A, P
Toronto, Ontario 1,160(5)
Harold H. MacKay............ 2002 Chairman, MacPherson Leslie & 2000 4,000 CG, P
Regina, Saskatchewan Tyerman
Diane E. McGarry............ 2003 Chief Marketing Officer, Xerox 1999 9,500 A, CG
New York, New York Corporation 1,873(5)
David A. Nield.............. 2004 Chairman, President and Chief 1999 51,063 --
Toronto, Ontario Executive Officer, CLF and CLA
Cedric E. Ritchie........... 2003 Corporate Director, Former 1999 1,915 HR
Toronto, Ontario Chairman of the Board and
Chief Executive Officer, The
Bank of Nova Scotia
T. Iain Ronald.............. 2003 Corporate Director, Former 1999 6,000 A, HR
Toronto, Ontario Vice-Chairman, Canadian 615(5)
Imperial Bank of Commerce
Arthur R.A. Scace(4)........ 2003 Partner, McCarthy Tetrault 1999 4,000 CG, HR
Toronto, Ontario LLP, Former Chairman, 1,245(5)
McCarthy Tetrault LLP
</Table>
- ----------
NOTES:
(1) All Directors, other than Mr. MacKay, who became a Director on February 8,
2000, have been Directors of CLF since its organization in August 1999.
(2) The information as to shares owned or over which control or direction is
exercised, not being within the knowledge of CLF, has been furnished by the
respective Directors. Shareholdings are shown as of February 6, 2002.
(3) Directors presently serve on the specified committee(s) of the Board.
Committees: A -- Audit and Risk Management; CG -- Corporate Governance; CR
-- Conduct Review; HR -- Human Resources; and P -- Pension. A description
of the Roles of Board Committees is in the Corporate Governance section of
the Annual Report.
(4) Appointed Lead Director in 2001.
(5) Represents the deferred share units issued in lieu of cash director fees.
See "Compensation of Directors".
5
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APPOINTMENT OF THE AUDITOR
During the financial year ended December 31, 2001, Ernst & Young LLP served
as CLF's Auditor. Management proposes that Ernst & Young LLP be re-appointed.
Unless otherwise specified, the persons named in the Form of Proxy intend to
vote FOR the appointment of the Auditor to act until the close of the next
Annual Meeting.
In 2001, fees for audit and audit related services were $4.0 million. Fees
for non-audit services were $2.0 million. These services were provided by Ernst
& Young LLP to CLF and its subsidiaries.
PART III -- COMPENSATION AND OTHER INFORMATION
COMPENSATION OF DIRECTORS
Directors who are officers of CLF do not receive additional compensation
for serving as a Director. The compensation paid to other Directors of CLF is
presently paid to them by The Canada Life Assurance Company ("CLA") in their
capacity as Directors of CLA. The compensation paid to such Directors is as
follows:
- - $25,000 per year.
- - to the chair of each of the Audit and Risk Management, Human Resources, and
Corporate Governance Committees, an additional amount of $7,500 per year,
and to the chair of each of the Conduct Review and Pension Committees, an
additional amount of $4,000 per year.
- - to the Lead Director, an additional amount of $7,500 per year.
- - to each Director who is a member of a committee, an additional amount of
$1,400 per year.
- - to each Director, an additional amount of $1,400 for attendance at each
meeting of the Board and each Committee meeting.
- - to each Director, an additional $1,400 for long distance travel for a round
trip to the meeting site in Toronto from the Director's principal
residence, if the Director travels from outside Canada, or if the Director
travels from inside Canada and the distance travelled is over 700
kilometres.
- - Directors who are non-residents of Canada receive their compensation in
U.S. dollars.
- - Directors have the choice annually to be paid 0%, 50%, or 100% of their
total compensation in either cash or common shares of CLF through a CLF
Share Purchase Plan or deferred share units of CLF (which is a phantom
share plan whereby each "unit" equals the current market price of a CLF
common share), or a combination of any two of them. A Director may not
redeem any units until such time as he or she ceases to be a Director of
CLF.
- - Directors have a Stock Option Plan under which, on November 7, 2001, each
non-employee Director was granted an option to purchase 3,000 shares of CLF
at an exercise price of $42.66 per share, for a ten-year term.
- - Directors may be paid a fee equivalent to a meeting attendance fee, for the
performance of additional tasks at the Company's request.
Directors are also reimbursed for travel and other out-of-pocket expenses
they incur when they attend Board or Committee meetings.
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee of the Board of Directors has a mandate to
review and approve overall compensation policy, including benefits. In addition,
the Human Resources Committee recommends to the Board of Directors of CLA, the
compensation for the Chairman, President and Chief Executive Officer and
vice-presidents, vice-presidential appointments and pension plan amendments. The
Human Resources Committee reviews management succession planning and reports on
it to the Board of Directors.
The Human Resources Committee is comprised of six Directors, and meets a
minimum of four times per year and more often as required. The Board of
Directors reviews and approves the recommendations of the Human Resources
Committee. Described below is the Human Resources Committee's report on
executive compensation to the Board of Directors of CLA for the year ended
December 31, 2001.
COMPENSATION PHILOSOPHY AND PROCESS
CLA's compensation philosophy is to ensure total compensation is
competitive and is directly linked to level of performance. The compensation
objective is to attract, retain and motivate world-
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class leadership and people. The Human Resources Committee targets total
compensation for the Named Executive Officers competitive with the aggregate
compensation levels of a select comparator group as determined for each
operating territory (Canada, the United States, the United Kingdom, Ireland and
other countries as applicable). In Canada, the select comparator group is
comprised of large Canadian life insurance companies and banks. In the United
States, the comparator companies include a group of 33 large diversified
companies comprised of life, property and casualty and multi-line companies. In
the United Kingdom and Ireland, the comparator groups are made up of diversified
financial services companies in each country respectively. In setting
compensation policy in all territories, the Human Resources Committee utilizes
the services of a senior external compensation consultant.
Total compensation is comprised of base salary, annual incentive bonus,
long term incentives, stock options, pension and benefits.
BASE SALARY
The base salary for the Chairman, President and Chief Executive Officer and
each Named Executive Officer is reviewed annually by the Human Resources
Committee within the context of individual performance and market
competitiveness. The market assessment, as prepared by a senior external
compensation consultant, provides total compensation data for comparable
positions taking into consideration magnitude, complexity and incumbent
experience.
ANNUAL INCENTIVE
To deliver a competitive level of total compensation commensurate with
results, the Chairman, President and Chief Executive Officer, as well as the
majority of staff are eligible to participate in an annual incentive plan. Above
the first managerial level, awards range from 15% to 60% of base salary when a
target level of performance is achieved. The maximum awards under the program
range from 30% to 120% when results substantially exceed plan. If performance is
below the planned level, awards would range from 0% to 59% of base salary
depending on results.
In reviewing and recommending annual incentive awards for the Named
Executive Officers, the Human Resources Committee considers overall company,
divisional and individual performance based on the achievement of goals set at
the beginning of each performance year.
LONG TERM INCENTIVE PLAN
In order to focus attention on the long term success of CLA, a long term
incentive plan was introduced effective January 1, 1995. For grant years 1995
and 1996, participants included the Chairman, President and Chief Executive
Officer and his direct reports including international division heads. In 1997,
eligibility was extended to most vice-president positions.
With the introduction of the CLF Stock Option Plan in November 2000, the
long term incentive plan became a closed plan with the last grant of long term
incentive units being made on January 1, 2000. All units granted to date will be
administered in accordance with the plan document until they mature and are paid
out. The plan will be terminated once the units granted in January 2000 mature
on December 31, 2003. Annually, the Human Resources Committee recommended the
eligible participants in the plan and the number of units for which each
participant would be eligible. The performance period for each grant is four
years with the value of each grant being determined by the average Return On
Equity ("ROE"), as adjusted from time to time to exclude any special items as
may be approved by the Board of Directors, over the respective four year period.
The 1998 units matured on December 31, 2001 with awards paid in the first
quarter of 2002. The same relative timing will be applied to all maturing units.
A target, maximum and threshold level of performance is set for each grant.
Target performance for the remaining grants is an average ROE of 10% with a
performance threshold of 8.5% average ROE, below which no awards will be made.
Maximum awards will be paid only if the average ROE is 15% or greater. Long term
incentive awards are not earned until the earlier of the end of the performance
period (4 years) or the retirement, death or disability of the employee.
STOCK OPTION PLAN
The Plan, effective November 4, 2000, provides to Directors and selected
employees of CLF and its subsidiaries options to purchase common shares of CLF
in order to reward significant performance and enhance CLA's ability to attract
and retain key staff. The maximum number of common shares that can be issued
over the life of the Plan is 8,000,000, representing approximately 5% of the
outstanding
7
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common shares of CLF. A detailed description of the Plan is included with the
Stock Option Plan table.
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER COMPENSATION
Total compensation for the Chairman, President and Chief Executive Officer
includes base salary, annual incentive, long term incentive, stock options and
benefits. Total compensation for 2001 was compared to a select comparator group
of major Canadian financial companies, including large life insurance companies
and banks. Comparative information is provided to the Human Resources Committee
by a senior external compensation consultant. All components of compensation are
generally set at a competitive level when compared to the selected comparator
group.
Compensation elements for the Chairman, President and Chief Executive
Officer are reviewed annually, effective in January. In considering the
compensation for the Chairman, President and Chief Executive Officer, the Human
Resources Committee reviews and considers overall corporate results based on
asset growth, earnings, return on surplus, premium income and performance
relative to industry peer companies. As well, the Human Resources Committee
considers other significant contributions of the Chairman, President and Chief
Executive Officer.
Based on the above noted criteria, the Chairman, President and Chief
Executive Officer's incentive in respect of the 2001 performance year, as
detailed in the Summary Compensation Table, represents 60% of base salary.
Submitted by the Human Resources Committee:
C.E. Ritchie (Chair)
G.S. Bain
J.R. Hall
D.W. Kerr
T.I. Ronald
A.R.A. Scace
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COMPENSATION OF NAMED EXECUTIVE OFFICERS
The following table provides a summary of compensation earned by the
Chairman, President and Chief Executive Officer and the other five most highly
compensated executive officers (collectively, the "Named Executive Officers")
during the last three fiscal years. In each case, all such compensation was paid
by Canada Life.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
ANNUAL COMPENSATION(1) LONG TERM COMPENSATION AWARDS
--------------------------------------------- ------------------------------
SECURITIES UNDER
NAME AND OTHER ANNUAL OPTIONS/SAR'S LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY(2) BONUS(3) COMPENSATION(4) GRANTED(#) PAYOUTS(5) COMPENSATION
- ------------------ ------ ------------- ------------- --------------- --------------- -------------- --------------
D.A. Nield 2001 $ 800,000 $ 480,000 $ 24,281 250,000 $ 700,800(6) $ 1,390(10)
Chairman, President 2000 $ 750,000 $ 862,500 $ 22,243 152,000 $ 460,000(7) $ 1,297(10)
and Chief Executive 1999 $ 700,000 $ 700,000 $ 21,308 N/A $ 301,050(8) $ 1,158(10)
Officer of CLF and
CLA
R.M. Smithen 2001 $ 405,000 $ 224,800 $ 16,083 48,000 $ 233,600(6) $ 695(10)
Executive 2000 $ 375,000 $ 318,750 $ 14,508 46,000 $ 172,500(7) $ 658(10)
Vice-President 1999 $ 355,000 $ 267,000 $ 14,653 N/A $ 125,438(8) $ 593(10)
of CLF and CLA
P. Crowley 2001 $ 380,000 $ 190,000 $ 13,897 41,000 N/A(9) $ 50,667(11)
Executive 2000 $ 319,877 $ 267,300 $ 12,842 44,000 N/A(9) $ 50,667(11)
Vice-President and 1999 -- -- -- -- -- --
Chief Financial
Officer of CLF and
CLA
W.L. Acton 2001 $ 380,000 $ 245,100 $ 15,637 45,000 $ 175,200(6) $ 658(10)
Executive 2000 $ 355,000 $ 301,750 $ 14,877 44,000 $ 143,750(7) $ 602(10)
Vice-President 1999 $ 325,000 $ 200,000 $ 14,729 N/A $ 100,350(8) $ 519(10)
of CLF, and
Executive Vice-
President and
Director, Canadian
division of CLA
R.E. Beettam 2001 US$ 305,000 US$ 108,000 US$ 13,776 42,500 US$ 146,000(6) US$ 2,580(13)
Vice-President and 2000 US$ 280,000 US$ 165,200 US$ 21,630 41,000 CDN$ 46,000(7) US$ 11,816(12)
Director, U.S. 1999 US$ 240,000 US$ 115,000 US$ 8,580 N/A N/A(9) US$ 1,350(13)
division of CLA
I. Gilmour 2001 L 200,000 L 51,900 L 12,000 19,000 L 73,000(6) L 2,416(14)
Vice-President and 2000 L 183,000 L 81,435 L 12,000 22,000 N/A(9) L 1,982(10)
General Manager, 1999 L 171,690 L 70,000 L 13,470 N/A N/A(9) L 1,421(10)
U.K.
</Table>
NOTES:
(1) Annual compensation is paid and reported in the currency of residence.
(2) Earned income up to December 31, 2001.
(3) Bonus amounts are paid in cash in the year following the fiscal year in
which they were earned. The Human Resources Committee recommends to the
Board of Directors each year the bonus, if any, to be received by the Named
Executive Officers of CLA under its annual incentive plan. The bonuses
awarded to Named Executive Officers are based upon the achievement of
corporate, divisional and individual goals set at the beginning of each
fiscal year. For 2001, the amounts represent 2001 bonuses paid in February
2002.
(4) Amounts represent perquisites including car and club dues.
(5) In calculating Long Term Incentive Plan payments being paid in 1999, 2000
and 2001, the Board of Directors of CLA, in accordance with the Long Term
Incentive Plan, for the year ended December 31, 1998 determined ROE without
reference to the $117 million special reserve provisions, in respect of
minimum annuity rate guarantees, taken in the third quarter of 1998 with
respect to CLA's U.K. division.
(6) Represents payout for units granted in 1998, maturing December 31, 2001 and
paid out in February 2002.
(7) Represents payout for units granted in 1997, maturing December 31, 2000 and
paid out in February 2001.
(8) Represents payout for units granted in 1996, maturing December 31, 1999 and
paid out in February 2000.
(9) Did not have long term incentive plan units maturing.
(10) Represents term life insurance premiums paid by the Company for the benefit
of the Named Executive Officers.
(11) Represents term life insurance premiums and $50,000 of the signing bonus.
9
<Page>
(12) Amount represents term life insurance premiums and a correction to Mr.
Beettam's relocation payment when he transferred from Canada in 1997.
(13) Represents term life insurance premiums and company contributions under the
401(k) plan on behalf of Mr. Beettam.
(14) Represents term life insurance premiums and company contributions as part
of the Employee Share Purchase Plan.
STOCK OPTION PLAN
In February 2001, CLF granted stock options to the Named Executive Officers
as outlined in the table below. All of the options granted had an exercise price
equal to the market value of CLF shares based on the closing price on The
Toronto Stock Exchange on February 6, 2001. The options may be exercised over a
ten year period or three years following retirement, whichever is earlier; the
options vest at 25% per year with the first 25% vesting on the one year
anniversary of the grant date. The remainder vest at 25% per year over the
following three years.
OPTIONS GRANTED DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
<Table>
<Caption>
MARKET VALUE OF
% OF TOTAL SECURITIES UNDERLYING
OPTIONS GRANTED EXERCISE OR OPTIONS ON THE
SECURITIES UNDER TO EMPLOYEES IN BASE PRICE DATE OF GRANT EXPIRATION
NAME OPTIONS GRANTED # FISCAL 2001 $/COMMON SHARE $/COMMON SHARE DATE
- ------------- ------------------ -------------- --------------- --------------------- ------------
D.A. Nield 250,000 22.7% $ 42.20 $ 42.20 Feb. 7, 2011
R.M. Smithen 48,000 4.4% $ 42.20 $ 42.20 Feb. 7, 2011
P. Crowley 41,000 3.7% $ 42.20 $ 42.20 Feb. 7, 2011
W.L. Acton 45,000 4.1% $ 42.20 $ 42.20 Feb. 7, 2011
R.E. Beettam 42,500 3.9% $ 42.20 $ 42.20 Feb. 7, 2011
I. GILMOUR 19,000 1.7% $ 42.20 $ 42.20 Feb. 7, 2011
</Table>
The following table shows the aggregate number of stock options that each
of the Named Executive Officers holds and the value of these options as of
December 31, 2001. The value of the unexercised in-the-money options at the
financial year end is the difference between the exercise price of the options
and the market value of the Common Shares of CLF on the last trading day
December 31, 2001 which was $44.28 per share.
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
AND FINANCIAL YEAR END OPTION VALUES
<Table>
<Caption>
UNEXERCISABLE OPTIONS VALUE OF UNEXERCISED
AT IN-THE-MONEY OPTIONS
SECURITIES DECEMBER 31, 2001 AT DECEMBER 31, 2001
ACQUIRED ON AGGREGATE VALUE (#) ($)
EXERCISE REALIZED --------------------------- --------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------- ------------ --------------- ------------ ------------- ----------- -------------
D.A. Nield Nil Nil 38,000 364,000 $ 278,540 $ 1,355,620
R.M. Smithen Nil Nil 11,500 82,500 $ 84,295 $ 352,725
P. Crowley Nil Nil 11,000 74,000 $ 80,630 $ 327,170
W.L. Acton Nil Nil 11,000 78,000 $ 80,630 $ 335,490
R.E. Beettam Nil Nil 10,250 73,250 $ 75,132 $ 313,798
I. Gilmour Nil Nil 5,500 35,500 $ 40,315 $ 160,465
</Table>
CHANGE OF CONTROL AGREEMENTS
In May 2001, Change of Control Agreements were entered into with certain
senior officers including the Named Executive Officers. These Agreements are
intended to ensure continuity of management and commitment to CLA in the event
that a proposal is made to obtain control of CLA.
10
<Page>
For the purpose of the Agreements, a "Change of Control" occurs when (i) an
entity at arm's length to CLA acquires beneficial ownership of 50% or more of
the voting shares of CLA or legal or beneficial ownership of 50% or more of the
assets of CLA, or (ii) 50% or more of the current directors of CLA are replaced,
or (iii) the Board otherwise determines, in good faith, that a change of control
in fact has occurred or is about to occur. In the case of the division heads of
principal geographic divisions of CLA, a Change of Control also occurs when an
entity at arm's length to CLA acquires legal or beneficial ownership of all or
substantially all of the assets of the respective division.
The change in control termination benefits for covered senior officers will
be triggered by a Change of Control and termination (except for cause) of the
officer within 24 months of the occurrence of the Change of Control.
The termination benefits will be paid as a lump sum in an amount up to (i)
three years of annual base salary and annual short term incentive target
(collectively, "annual compensation"), in the case of Mr. Nield, and (ii) two
years of annual compensation in the case of the other Named Executive Officers.
In addition, all outstanding stock options will vest, long term incentive units
will vest on a prorated basis and any applicable retirement benefits will vest.
Furthermore, most benefits and perquisites are continued until the end of the
severance period or until alternate employment is obtained, whichever comes
first.
PENSION PLANS
CLA maintains defined benefit pension plans in each of its four geographic
divisions (Canada, U.S., U.K. and Ireland). The pension plans provide pension
benefits based on service and final average earnings with CLA. Unless otherwise
determined by the Board of Directors, executives are eligible to participate in
the pension plans available in their country of residence. The five executives
named in the following table participate in the Canadian plan. The following
describes the pension arrangements.
ESTIMATED ANNUAL BENEFITS PAYABLE UPON RETIREMENT FOR EXECUTIVES IN THE CANADIAN
PLAN
The pension plan for employees in Canada (the "Canadian Plan") is a
contributory final average earnings defined benefit plan. Employees are required
to contribute 2.5% of their pensionable earnings (base salary plus annual bonus)
to the Canadian Plan, up to an annual maximum contribution of $2,500. The normal
retirement benefit is equal to an employee's pensionable service multiplied by:
(a) 1.6% of the average of the highest pensionable earnings paid to the
employee in any three consecutive calendar years in the final 15 years preceding
retirement ("highest three-year average pensionable earnings"), but not to
exceed the final three-year average yearly maximum pensionable earnings
("YMPE"); plus,
(b) 2.0% of the highest three-year average pensionable earnings in excess
of the YMPE.
Pensionable service may not exceed 35 years.
The benefits under the Canadian Plan are subject to a dollar limit under
the INCOME TAX ACT (Canada) equal to $1,722 multiplied by an employee's
pensionable service. CLA also maintains a supplemental retirement plan for
employees in Canada (the "Canadian Supplemental Plan") which provides pension
benefits in excess of the limits under the INCOME TAX ACT (Canada), based upon
the benefit formula under the Canadian Plan. All employees whose benefits under
the Canadian Plan exceed such limits participate in the Canadian Supplemental
Plan.
For an employee with a spouse, the normal form of payment of benefits under
the Canadian Plan and under the Canadian Supplemental Plan is a lifetime pension
payable to the employee with a 60% survivor pension payable for the lifetime of
the spouse with a minimum plan benefit of 60 monthly payments guaranteed. For an
employee without a spouse, the normal form of benefits is a lifetime pension,
reducing to 60% after the employee's death with a minimum plan benefit of 120
monthly payments guaranteed or the equivalent. Annually, pension benefits are
indexed on a formula basis but not to exceed the cumulative increase in the
consumer price index from date of retirement.
As at December 31, 2001, the pensionable service of each of the named
executives is as follows:
<Table>
D.A. Nield 35 years
R.M. Smithen(1) 30.33 years
P. Crowley(2) 2.92 years
W.L. Acton 24.17 years
R.E. Beettam(3) 19.5 years
</Table>
- ----------
NOTES:
(1) Pension subject to certain offsets on account of pension to be received
from a previous employer.
11
<Page>
(2) For each completed year of employment, P. Crowley will receive one
additional year of pensionable service to a maximum of 10 years additional
pension service.
(3) Pensionable earnings for R.E. Beettam are based on his U.S. compensation
taken at par.
The following table shows the estimated annual pension benefits payable
upon normal retirement to D.A. Nield, R.M. Smithen, P. Crowley, W.L. Acton and
R.E. Beettam under the Canadian Plan and the Canadian Supplemental Plan:
<Table>
<Caption>
YEARS OF SERVICE
PENSIONABLE -------------------------------------------------------
EARNINGS 15 20 25 30 35
- ------------ --------- --------- --------- ---------- -----------
$ 300,000 $ 87,734 $ 116,979 $ 146,223 $ 175,468 $ 204,713
400,000 117,734 156,979 196,223 235,468 274,713
500,000 147,734 196,979 246,223 295,468 344,713
600,000 177,734 236,979 296,223 355,468 414,713
700,000 207,734 276,979 346,223 415,468 484,713
800,000 237,734 316,979 396,223 475,468 554,713
900,000 267,734 356,979 446,223 535,468 624,713
1,000,000 297,734 396,979 496,223 595,468 694,713
1,100,000 327,734 436,979 546,223 655,468 764,713
1,200,000 357,734 476,979 596,223 715,468 834,713
1,300,000 387,734 516,979 646,223 775,468 904,713
1,400,000 417,734 556,979 696,223 835,468 974,713
1,500,000 447,734 596,979 746,223 895,468 1,044,713
1,600,000 477,734 636,979 796,223 955,468 1,114,713
1,700,000 507,734 676,979 846,223 1,015,468 1,184,713
1,800,000 537,734 716,979 896,223 1,075,468 1,254,713
</Table>
ESTIMATED ANNUAL BENEFITS PAYABLE UPON RETIREMENT FOR EXECUTIVES IN THE UNITED
KINGDOM PLAN
The pension plan for employees in the United Kingdom (the "U.K. Plan") is a
non-contributory final average earnings defined benefit plan. The normal
retirement benefit is equal to an employee's pensionable service multiplied by
1/60th of the final three-year average pensionable earnings (base salary plus
annual bonus). There is no limit on the number of years of pensionable service
that may be earned under the U.K. Plan.
For employees hired after June 1, 1989, pensionable earnings under the U.K.
Plan are limited under U.K. tax legislation to L 95,400 in 2001. CLA also
maintains a supplemental retirement plan for employees in the U.K. (the "U.K.
Supplemental Plan") affected by the tax limit, which provides pension benefits
for pensionable earnings in excess of L 95,400, based upon the benefit formula
under the U.K. Plan. All employees whose benefits under the U.K. Plan exceed
such limits participate in the U.K. Supplemental Plan.
For an employee with a spouse, the normal form of payment of benefits under
the U.K. Plan and under the U.K. Supplemental Plan is a lifetime pension payable
to the employee with a 50% survivor pension payable for the lifetime of the
spouse, with a minimum of 60 monthly payments guaranteed. For an employee
without a spouse, the normal form of benefits is a lifetime pension payable to
the employee with a 50% survivor pension payable proportionately to each child,
if any, until age 18, with a minimum of 60 monthly payments guaranteed.
Annually, subject to approval by the Board of Directors of Canada Life Limited,
in the U.K., pension benefits may be increased by the rate of inflation.
As of December 31, 2001, the pensionable service for Mr. I. Gilmour
participating in the U.K. Plan and U.K. Supplemental Plan was 4.5 years.
The following table shows the estimated annual pension benefits payable
upon normal retirement (2012) to Mr. I. Gilmour under the U.K. Plan and the U.K.
Supplemental Plan:
<Table>
<Caption>
YEARS OF SERVICE
PENSIONABLE ----------------------------------------------
EARNINGS 5 10 15 20
- ------------ --------- --------- --------- -----------
L 100,000 L 8,333 L 16,667 L 25,000 L 33,333
150,000 12,500 25,000 37,500 50,000
200,000 16,667 33,333 50,000 66,667
250,000 20,833 41,667 62,500 83,333
300,000 25,000 50,000 75,000 100,000
</Table>
12
<Page>
SHARE PERFORMANCE GRAPH
The following graph shows changes since October 28, 1999 in the value of
$100 invested in:
(1) CLF's common shares; and
(2) the TSE 300 Total Return Index.
CLF COMPARISON OF TOTAL COMMON SHAREHOLDERS' RETURN
VALUE OF $100* INVESTED IN CLF VS. TSE 300
<Table>
<Caption>
10/28/99 12/31/99 1/31/00 1/31/01
CL 100.00 119.84 113.14 218.68
TSE 300 100.00 118.61 119.62 133.02
</Table>
The values shown in the preceding graph are based on share price
appreciation plus dividends reinvested.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
At December 31, 2001, none of the officers or Directors of CLF was indebted
to CLF for any amount other than routine indebtedness.
DIRECTORS' APPROVAL
The Board of Directors has approved the contents and the sending of this
Proxy Circular.
(signed) Roy W. Linden
Secretary
March 15, 2002
13