ANNUAL INFORMATION FORM – XEBEC ADSORPTION INC. – For ...

Employees
Xebec’s human resources goal is to develop policies and programs that support the
attraction and retention of the skilled individuals needed to develop its business. Xebec
maintains a high performance work environment and works to invest in high performing
employees by providing additional development opportunities. Through a reward and
recognition program, Xebec recognizes and rewards effort that goes above and beyond when that
effort delivers tangible business results. Certain employees participate in a bonus program that is
only payable based on the successful achievement of financial objectives.
Xebec has 47 full-time permanent employees at its Blainville head office, 17 full-time
permanent employees in British Columbia, 29 full-time permanent employees at its Shanghai
manufacturing facility for a total of 97. In addition, Xebec Singapore employs 4 people. No
employees of Xebec are unionized. All indirect employees are subject to written terms of
employment and confidentiality agreements as a condition of their employment at Xebec.
Government Funding
Xebec has received funding assistance from the Canadian federal government to support
its research and development activities. In 1999, Xebec secured an approximately $5 million
conditionally repayable loan under the Technology Partnerships Canada (“TPC”) program of
Industry Canada. This loan must only be repaid by payment of a specified sales royalty following
the commercialization of the Xebec’s industrial and fuel cell related products. In June 2003,
Xebec secured a second conditionally repayable loan under the TPC program totaling
approximately $9.6 million. This agreement was amended during fiscal 2008. Among other
changes, the total amount of the funding was reduced to approximately $8.14 million. As at
September 30, 2008, Xebec had drawn the full amount of this loan. This funding was used to
support the development of the Company's rapid-cycle hydrogen purification products for
industrial, stationary fuel cells and hydrogen refueling applications. The royalty period for this
second loan began on October 1, 2005 and is based on gross business revenues. Each of the loans
also contains typical TPC requirements relating to the production in Canada of resulting products
until the end of the royalty periods.
In January 2004, the Company was awarded a grant for $225,000 from the Government
of Canada under the Department of Natural Resources Efficiency and Alternative Energy
Program to support the development of hydrogen recycles technology for Molten Carbonate Fuel
Cell Systems. In January 2005, the Company received a similar funding award of $193,944
under the same funding program to support the development of structured adsorbent for the
production of high purity hydrogen.
Xebec has received funding assistance from the government of the province of Québec as
well as the federal government to support its activities. In June 2007, Xebec obtained a grant
from the Ministre du développement économique, de l’innovation et de l’exportation in the
amount of $50,000 for the start-up of its business activities. In December 2007, Xebec obtained
two grants from the Ministre du développement économique, de l’innovation et de l’exportation
in the amounts of $20,000 and $25,000 for the hiring of two engineers. In May 2008, Xebec
received a repayable contribution in the amount of $100,000 from Canada Economic
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