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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Check the appropriate box:

QLT INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

   

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December 3, 2015

To the Shareholders of QLT Inc.

I am pleased to invite you to attend the Annual General Meeting (the "Annual Meeting") of shareholders of QLT Inc. ("QLT") to be held on Friday, January 8, 2016 at 10:00 AM (Pacific Time)/1:00 PM (Eastern Time) at Suite 1800–510 West Georgia Street, Vancouver, British Columbia V6B 0M3.

The attached Notice of Annual Meeting and Proxy Statement provide details of the business to be conducted at the Annual Meeting. The Notice of Annual Meeting and Proxy Statement and the Instrument of Proxy (or voting information form) are first being mailed to shareholders on or about December 8, 2015. The Annual Report on Form 10-K was previously mailed to shareholders on May 12, 2015.

Your vote is very important to us. Whether or not you plan to attend our Annual Meeting, please communicate your vote in accordance with the instructions in the Proxy Statement and the enclosed Instrument of Proxy (or voting information form).

Thank you for your continued support of QLT and I look forward to seeing you at the Annual Meeting on January 8, 2016.

Sincerely,

QLT Inc.

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QLT Inc.
887 Great Northern Way, Suite 250
Vancouver, British Columbia, V5T 4T5

Notice of Annual General Meeting of Shareholders to be held on January 8, 2016

NOTICE IS HEREBY GIVEN that the Annual General Meeting (the "Annual Meeting") of shareholders of QLT Inc. ("QLT" or the "Company") will be held at Suite 1800–510 West Georgia Street, Vancouver, British Columbia V6B 0M3 on Friday, January 8, 2016 at 10:00 AM (Pacific Time) for the following purposes, each of which is described in more detail in the accompanying Proxy Statement (the "Proxy Statement"):

1.

To receive the Annual Report on Form 10-K, and the Audited Consolidated Financial Statements of QLT for the year ended December 31, 2014, together with the Report of the Independent Registered Chartered Accountants on those Financial Statements.

2.

To elect six directors (the "Directors") to serve for the ensuing year.

3.

To approve the appointment of Deloitte LLP (formerly Deloitte & Touche LLP) as independent auditors of QLT for the ensuing year and to authorize the Directors to fix the remuneration to be paid to the auditors.

4.

To conduct an advisory vote on the compensation of our named executive officers.

5.

To transact such other business as may properly come before the Annual Meeting, or at any adjournments or postponements thereof.

You are entitled to receive notice of and attend the Annual Meeting, and may vote at the Annual Meeting, if you were a shareholder of QLT at the close of business on December 3, 2015, which we refer to as the "record date." If you were a registered shareholder on December 3, 2015 and you are unable to attend the Annual Meeting in person, you may vote by proxy on the matters to be considered at the Annual Meeting. Please read the notes accompanying the Instrument of Proxy enclosed with these materials and then follow the instructions for voting by proxy contained in this Proxy Statement. If on December 3, 2015, your shares in QLT were held of record in your brokerage firm, securities dealer, trust company, bank or another similar organization, you may vote at the Annual Meeting if you complete a voting information form obtained from that organization issued in your name and carefully follow any instructions that are provided to you in connection with that voting information form, or if you follow the instructions contained in this Proxy Statement for submitting another form of written documentation to appoint yourself, or your nominee, as a proxyholder.

In order for it to be voted at the Annual Meeting, a proxy must be received (whether delivered by mail, telephone or Internet) by no later than 10:00 AM (Pacific Time)/1:00 PM (Eastern Time) on Wednesday, January 6, 2016 by our registrar and transfer agent, Computershare Investor Services Inc., Attn: Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, telephone number: 1-866-732-VOTE (8683), website: www.investorvote.com. The Chairman of the Annual Meeting may determine, in his sole discretion, to accept or reject an Instrument of Proxy that is delivered in person to the Chairman at the Annual Meeting as to any matter in respect of which a vote has not already been cast.

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The enclosed Instrument of Proxy is solicited by our Board of Directors and management, but you may amend it if you wish by striking out the names listed in the Instrument of Proxy and inserting in the space provided the name of the person you wish to represent you at the Annual Meeting.

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DATED at Vancouver, British Columbia, this 3rd day of December, 2015.

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BY ORDER OF THE BOARD OF DIRECTORS

"Dr. Geoffrey F. Cox"

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Dr. Geoffrey F. Cox
Interim Chief Executive Officer

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Whether or not you plan to attend the Annual Meeting, please communicate your vote in accordance with the instructions in the Proxy Statement and the enclosed Instrument of Proxy (or voting information form) as soon as possible. If you are able to attend the Annual Meeting and wish to vote your shares in person, you may do so at any time before the proxy is exercised.

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This Proxy Statement and our Annual Report for the fiscal year ended December 31, 2014 are available at www.qltinc.com by clicking on "2015 Proxy Materials and Annual Report" or directly at: http://phx.corporate-ir.net/phoenix.zhtml?c=67181&p=irol-proxy

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QLT INC.
887 Great Northern Way, Suite 250
Vancouver, British Columbia, V5T 4T5

PROXY STATEMENT FOR
ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, JANUARY 8, 2016

        We are providing you this Notice of Annual General Meeting and Proxy Statement, together with the enclosed Instrument of Proxy, because our Board of Directors and management are soliciting your proxy to vote at our Annual General Meeting of shareholders to be held on Friday, January 8, 2016 (the "Annual Meeting"). This Proxy Statement contains information about the matters being voted on at the Annual Meeting and important information about QLT. Unless otherwise stated, information in this Proxy Statement is given as of December 3, 2015. As many of our shareholders are expected to be unable to attend the Annual Meeting in person, proxies are solicited, to give each shareholder an opportunity to vote on all matters that will properly come before the Annual Meeting. QLT intends to mail this Proxy Statement and accompanying Instrument of Proxy or voting information form ("VIF"), as applicable, on or about December 8, 2015 to all shareholders of record as of the close of business on December 3, 2015, which we refer to as the "record date."

        We use a number of abbreviations in this Proxy Statement. We refer to QLT Inc. as "QLT" or "the Company," "we," "us" or "our" and to our board of directors as the "Board" or the "Board of Directors." The term "proxy solicitation materials" includes this Proxy Statement and the enclosed Instrument of Proxy or VIF, as applicable. References to "2014" and "2015" mean our 2014 fiscal year which began on January 1, 2014 and ended on December 31, 2014 and our 2015 fiscal year which began on January 1, 2015 and will end on December 31, 2015, respectively. Our Annual General Meeting of Shareholders to be held on Friday, January 8, 2016 is referred to as the "Annual Meeting" or the "Meeting." References in this Proxy Statement to the Annual Meeting include any adjournment or postponement of the Annual Meeting.

QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT
AND OUR ANNUAL MEETING

Why did I receive this Proxy Statement?

        You are receiving these proxy materials from us because you owned common shares of QLT at the close of business on the record date. When you vote using the Instrument of Proxy, you appoint Mr. Jason M. Aryeh or, failing him, Dr. Geoffrey Cox, as your representative at the Annual Meeting. Mr. Aryeh and Dr. Cox will vote your shares at the Annual Meeting as you have instructed them on the Instrument of Proxy. This way, your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to attend the Annual Meeting, it is a good idea to vote by proxy in advance of the Annual Meeting in case your plans change. You have the right to appoint another person to attend and act on your behalf at the Annual Meeting other than the persons named in the enclosed Instrument of Proxy. To exercise this right, you should strike out the names of the persons named in the Instrument of Proxy and insert the name of your nominee in the blank space provided. A person appointed as a proxy holder need not be a shareholder of QLT.

Can I access the proxy materials on the Internet?

        Yes. This Proxy Statement and our Annual Report for the fiscal year ended December 31, 2014 are available on our website at www.qltinc.com by clicking "2015 Proxy Materials and Annual Report" or directly at: http://phx.corporate-ir.net/phoenix.zhtml?c=67181&p=irol-proxy.

What is the date, time and place of the Annual Meeting?

        The Annual Meeting will be held at Suite 1800–510 West Georgia Street, Vancouver, British Columbia V6B 0M3, on Friday, January 8, 2016 at 10:00 AM (Pacific Time)/1:00 PM (Eastern Time).

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Who is entitled to vote at the Annual Meeting?

        Only shareholders of record at the close of business on the record date may vote at the Annual Meeting. On a show of hands every shareholder present in person has one vote, and on a poll every shareholder present in person or by proxy has one vote for each QLT common share registered in the shareholder's name. There are no other classes of voting securities other than the common shares. Cumulative voting is not permitted.

What am I voting on at the Annual Meeting?

        At the Annual Meeting, shareholders will be asked to vote on the following items of business:

1.

the election of six directors for the ensuing year;



2.

the appointment of Deloitte LLP (formerly Deloitte & Touche LLP) as independent auditors of QLT for the ensuing year and the authorization of the directors to fix the remuneration to be paid to the auditors; and



3.

an advisory vote on the compensation of our named executive officers.

        QLT does not know of any business or proposals to be considered at the Annual Meeting other than those set out in this Proxy Statement. If any other business is proposed and properly presented at the Annual Meeting, the proxies received from our shareholders give the proxy holders the authority to vote on the matter at their discretion. The proxy holders intend to vote the shares they represent as directed by our Board.

How does the Board recommend that I vote?

        Our Board believes that each of the resolutions being put to the shareholders at the Annual Meeting is in the best interests of QLT and our shareholders and, accordingly, recommends that each shareholder vote such shareholder's shares "FOR" each of the director nominees, and "FOR" the approval of Deloitte LLP as our independent auditors for 2015. Our Board also recommends that each shareholder vote such shareholder's shares "FOR" the approval of the compensation of our named executive officers, on an advisory basis, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the U.S. Securities and Exchange Commission (the "SEC").

What vote is required to approve each proposal?

        Broker Non-Votes and Abstentions.    Common shares that are represented by "broker non-votes" (i.e., common shares held by a bank, broker or other holder of record holding shares for a beneficial owner that are represented at the Annual Meeting but with respect to which the bank, broker or other holder of record is not empowered to vote on a particular proposal) and common shares held by holders who abstain from voting (or vote "withhold") on any matter will have no effect on the legal outcome of the matter, but are included for quorum purposes. We encourage all shareholders that hold shares through a bank, broker or other holder of record to provide voting instructions to such parties well in advance of the Annual Meeting to ensure that their shares are voted at the Annual Meeting.

        Election of Directors.    For Proposal No. 1, under the Business Corporations Act (British Columbia) (the "BCBCA"), directors are entitled to be elected by a plurality of the votes cast at the Annual Meeting. This means that the six nominees with the most votes for election will be elected, subject to the requirements of the Company's majority voting policy (the "Majority Voting Policy"), which applies for elections of directors at uncontested shareholders' meetings. The Majority Voting Policy is required pursuant to the policies of the Toronto Stock Exchange. Pursuant to this policy, any nominee for director for which there are a greater number of votes "withheld" than votes "for" his or her election will be required to tender his or her resignation as a director of the Company. For more details with respect to the Majority Voting Policy, see "QLT Proposal No. 1: Election of Directors — Majority Voting Policy".

        You may choose to vote, or withhold your vote, separately for each nominee director.

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        Appointment of Auditors.    For Proposal No. 2, the appointment of Deloitte LLP as auditors and authorization of the Board to fix the remuneration to be paid to the auditors, the affirmative vote of a majority of the common shares voted at the Annual Meeting will be required for approval.

        Advisory Vote on the Compensation of Named Executive Officers.    For Proposal No. 3, the compensation of our named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, the affirmative vote of a majority of the common shares voted at the Annual Meeting will be required for approval, on an advisory basis. Because your vote is advisory, it will not be binding on the Board, the Compensation Committee or QLT. However, the Compensation Committee and the Board will review the voting results and take them into consideration when making future decisions about executive compensation.

Who may attend the Annual Meeting?

        All QLT shareholders are invited to attend the Annual Meeting, including shareholders whose shares are held by their brokerage firm or another similar organization, or who otherwise do not hold their common shares in their own name (referred to herein as "Beneficial Shareholders"). Beneficial Shareholders fall into two categories — those who object to their identity being known to the issuers of securities which they own ("OBOs") and those who do not object to their identity being made known to the issuers of the securities which they own ("NOBOs"). Beneficial Shareholders should note that only proxies deposited by shareholders who appear on the records maintained by QLT's registrar and transfer agent as registered holders of common shares will be recognized for the purposes of attending and voting at the Annual Meeting. If common shares are listed in an account statement provided to a Beneficial Shareholder by a broker, then those common shares will, in all likelihood, not be registered in the shareholder's name. Such common shares will more likely be registered under the name of the shareholder's broker or an agent of that broker. Without specific instructions, brokers and their agents and nominees are prohibited from voting shares for the broker's clients. Therefore, each Beneficial Shareholder should ensure that voting instructions are communicated to the appropriate person well in advance of the Annual Meeting.

        Although a Beneficial Shareholder may not be recognized directly at the Annual Meeting for the purposes of voting common shares registered in the name of such shareholders' broker, a Beneficial Shareholder may attend the Annual Meeting as proxyholder for the registered shareholder and vote the common shares in that capacity. A Beneficial Shareholder who wishes to attend the Annual Meeting and to vote their common shares as proxyholder for the registered shareholder, should enter their own name in the blank space on the VIF and return the same to their broker (or the broker's agent) in accordance with the instructions provided by such broker. Alternatively, National Instrument 54-101 — Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54-101") allows a Beneficial Shareholder to submit to the applicable intermediary any document in writing that requests that the Beneficial Shareholder, or a nominee of the Beneficial Shareholder, be appointed as proxyholder. If such a request is received, the applicable intermediary must arrange, without expense to the Beneficial Shareholder, to appoint such Beneficial Shareholder or its nominee as a proxyholder and to deposit that proxy within the time specified in this Proxy Statement, provided that the intermediary receives such written instructions from the Beneficial Shareholder at least one business day prior to the time by which proxies are to be submitted at the Annual Meeting, with the result that such a written request must be received by 10:00 AM (Pacific Time)/1:00 PM (Eastern Time) on the day which is at least three business days prior to the Annual Meeting.

What is the quorum for the Annual Meeting?

        The authorised share structure of QLT is comprised of 500,000,000 common shares and 5,000,000 First Preference shares, of which, there were 52,829,398 common shares of QLT issued and outstanding on the record date. All common shares in the capital of the Company carry the right to one vote. At least (i) two shareholders, (ii) two proxy holders representing two shareholders, or (iii) one shareholder and a proxy holder representing another shareholder entitled to vote at the Annual Meeting, present in person at the beginning of the Annual Meeting and collectively holding or representing by proxy in the aggregate not less than 33¹/3% of the issued and outstanding QLT common shares as of the record date, will constitute a quorum for the Annual Meeting. To the knowledge of the directors and executive officers of QLT, as of December 3, 2015, the only persons or companies that beneficially own, control or direct, directly or indirectly, 10% or more of QLT's common shares is NB Public

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Equity K/S which, as evidenced by public filings, owns 6,447,626 common shares, representing approximately 12.20% of the issued and outstanding common shares.

How do I vote?

        Carefully read and consider the information contained or incorporated by reference in this Proxy Statement. You should also determine whether you hold your shares directly in your name as a registered shareholder or through a broker or other nominee, because this will determine the procedure that you must follow in order to vote. If you are a registered shareholder of QLT (that is, if your shares are registered in your name, as opposed to being held through a broker or other intermediary), you may vote in any of the following ways:

•

in person at the Annual Meeting;



•

by mail — complete, sign and date the enclosed Instrument of Proxy and return it as soon as possible to our registrar and transfer agent, Computershare Investor Services Inc. ("Computershare"), Attn: Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1;



•

by telephone — call 1-866-732-VOTE (8683) toll free from your touch-tone phone and follow the instructions (you will need the control number located on the enclosed Instrument of Proxy). You do not need to return your Instrument of Proxy form if you vote by telephone; or



•

using the Internet — go to www.investorvote.com and follow the instructions on the screen (you will need the control number located on the enclosed Instrument of Proxy). You do not need to return your Instrument of Proxy form if you vote using the Internet.

        All votes made by proxy must be received (whether delivered by mail, telephone or Internet) no later than Wednesday, January 6, 2016 at 10:00 AM (Pacific Time)/1:00 PM (Eastern Time).

        If you are a Beneficial Shareholder, then you will have received this material from your broker or the intermediary seeking your instructions as to how you wish your shares to be voted. In that case, follow the instructions given to you by your broker or the other intermediary. Existing Canadian regulatory policy requires brokers and other intermediaries to seek voting instructions from Beneficial Shareholders in advance of shareholder meetings. The various brokers and other intermediaries have their own mailing procedures and provide their own return instructions to clients, which should be carefully followed by Beneficial Shareholders in order to ensure that their common shares are voted at the Annual Meeting. The form of proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is substantially similar to the Instrument of Proxy provided directly to registered shareholders by QLT. However, its purpose is limited to instructing the registered shareholder (i.e., the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. A Beneficial Shareholder who receives a VIF from its broker or other intermediary cannot use that form to vote common shares directly at the Annual Meeting. The VIFs must be returned to your broker or other intermediary (or instructions respecting the voting of common shares must otherwise be communicated to your broker or other intermediary) well in advance of the Annual Meeting in order to have the common shares voted. If you have any questions respecting the voting of common shares held through a broker or other intermediary, please contact that broker or other intermediary for assistance.

        The Notice of Meeting, Proxy Statement, Instrument of Proxy and VIF, as applicable, are being provided to both registered shareholders and Beneficial Shareholders. Subject to the provisions of NI 54-101, issuers may request and obtain a list of their NOBOs from intermediaries directly or via their transfer agent and may obtain and use the NOBO list for the distribution of proxy-related materials directly to such NOBOs.

        QLT has distributed copies of the Notice of Meeting, Proxy Statement and VIF to intermediaries for distribution to NOBOs. Unless you have waived your right to receive the Notice of Meeting, Proxy Statement and VIF, intermediaries are required to deliver them to you as a NOBO of QLT and to seek your instructions on how to vote your common shares.

        QLT's OBOs can expect to be contacted by their brokers or their broker's agents. QLT will assume the costs associated with the delivery of the Notice of Meeting, Proxy Statement and VIF, as set out above, to OBOs by intermediaries.

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        The Chairman may determine, in his sole discretion, to accept or reject an Instrument of Proxy that is delivered in person to the Chairman at the Annual Meeting as to any matter in respect of which a vote has not already been cast. If you are a shareholder of record, you have the right to appoint another person to attend and act on your behalf at the Annual Meeting other than the persons named in the enclosed Instrument of Proxy. To exercise this right, you should strike out the names of the persons named in the Instrument of Proxy and insert the name of your nominee in the blank space provided. A person appointed as a proxy holder need not be a shareholder of QLT. If you are a Beneficial Shareholder, you should follow the instructions set out above in the section entitled "Who may attend the Annual Meeting?" in connection with appointing another person to attend and act for it at the Annual Meeting.

How will proxies be exercised?

        The proxy holder will vote or withhold from voting according to instructions in the Instrument of Proxy on any ballot that may be called for and for which a choice has been specified. If you properly return your Instrument of Proxy, but do not include instructions on how to vote, your shares will be voted "FOR" the election of the six nominees for election to the Board as set out in this Proxy Statement; "FOR" the approval of the appointment of Deloitte LLP as our independent auditors for the ensuing year and the authorization of the Board to fix the remuneration to be paid to the auditors; and "FOR" the approval of the compensation of our named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC.

        The Instrument of Proxy also confers upon the proxy holder discretionary authority to vote all shares represented by the proxy with respect to amendments or variations to matters identified in the Notice of Meeting and any other matter that properly comes before the Annual Meeting. We know of no such amendment, variation or other matter that is to be presented for action at the Annual Meeting. However, if any other matters which are not now known to us should properly come before the Annual Meeting, the proxies will be voted, or not voted, by the proxy holder in his or her discretion.

What does it mean if I receive more than one set of proxy materials?

        You may receive more than one set of proxy materials because you own QLT common shares that are registered under different names. For example, you may own some shares directly as a shareholder of record and other shares through a broker, or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. It is necessary for you to vote all of the Instruments of Proxy according to the instructions contained in this Proxy Statement and to follow the instructions for any alternative voting procedures you receive in order to vote all of the shares you own. Each Instrument of Proxy you receive will come with its own prepaid return envelope. If you vote by mail, please make sure you return each Instrument of Proxy in the return envelope that accompanies that Instrument of Proxy.

Can I change my vote after I have voted?

        You may revoke your proxy at any time before it is exercised at the Annual Meeting. A proxy may be revoked by voting in person at the Annual Meeting, by an instrument in writing stating that the proxy is revoked and signed and delivered as follows, or in any other manner provided by law. In order to revoke your proxy:

•

the instrument revoking the proxy must be signed by you or by the person to whom you have granted a power of attorney in writing. If the shareholder is a corporation, the instrument of revocation must be signed under that corporate shareholder's corporate seal or by a duly authorized officer or attorney of the corporation; and



•

the instrument revoking the proxy must be (i) delivered to QLT's registered and records office at Suite 2600, 1066 West Hastings Street, Vancouver, British Columbia, Canada V6E 3X1, on or before Thursday, January 7, 2016 at 10:00 AM (Pacific Time)/1:00 PM (Eastern Time) or the last business day preceding the date of any adjournment of the Annual Meeting at which the proxy is to be voted, or (ii) deposited with the Chairman on the date of the Annual Meeting or any adjournment of it before the taking of any vote in respect of which the proxy is to be used.

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        If your shares are held in the name of an intermediary such as a brokerage firm, securities dealer, trust company, bank or other nominee institution, you may change your vote by submitting new voting instructions to your intermediary, as applicable. You will need to contact your brokerage firm, securities dealer, trust company, bank or other nominee institution to learn how to make that change.

Who will tabulate the votes?

        Our transfer agent, Computershare, will tabulate votes cast by proxy by an automated system. Votes cast by proxy or in person at the Annual Meeting will be counted by the persons appointed by us to act as scrutineer for the Annual Meeting.

Who pays the cost of the proxy solicitation?

        We will pay the cost of soliciting these proxies, including the printing, handling and mailing of the proxy materials. Copies of these materials will be given to brokerage firms, securities dealers, trust companies, banks and other institutions that hold our shares that are beneficially owned by others. We will reimburse these brokerage firms, securities dealers, trust companies, banks and other institutions for their reasonable out-of-pocket expenses in forwarding proxy materials to beneficial owners of our shares. Proxies may be solicited by certain directors, officers and employees of QLT personally or by telephone, mail, facsimile or e-mail. No additional compensation will be paid to directors, officers or other QLT employees for soliciting proxies. In addition, we may engage external proxy solicitation services to solicit proxies from brokers, banks and other institutional holders and from beneficial owners and individual holders of record of common shares. In the event we engage such proxy solicitation services, we anticipate that the services would be provided at a standard fee and on other typical commercial terms.

How can shareholders submit proposals for QLT's Next Annual General Meeting?

        Under U.S. securities laws, the deadline for submitting shareholder proposals for inclusion in the Company's proxy statement and form of proxy for the Company's 2016 Annual General Meeting of Shareholders is May 21, 2016. Proposals must be sent to our registered office at Suite 2600, 1066 West Hastings Street, Vancouver, British Columbia, Canada V6E 3X1.

        Under the BCBCA, a proposal for a matter for consideration at the 2016 annual meeting of Shareholders must be received at our registered office at the address above on or before July 14, 2016. For a proposal under the BCBCA to be valid, it must be in writing, accompanied by the requisite declarations and signed by the submitter and qualified shareholders who at the time of signing are the registered or beneficial owners of shares that, in the aggregate, (i) constitute at least 1% of the issued shares of QLT that have the right to vote at general meetings, or (ii) have a fair market value in excess of $2,000. For the submitter or a qualified shareholder to be eligible to sign the proposal, that shareholder must have been the registered or beneficial owner of QLT shares that carry the right to vote at general meetings for an uninterrupted period of at least two years before the date the proposal is signed, among other requirements.

CORPORATE GOVERNANCE

Overview of Our Corporate Governance Principles

        We believe that effective and transparent corporate governance is critical to our long-term success and our ability to create value for our shareholders. We review our corporate governance policies, monitor emerging developments in corporate governance and update our policies and procedures when our Board determines that it would benefit QLT and our shareholders to do so.

        We maintain a corporate governance page on our website that includes key information about our corporate governance, including our Code of Ethics and Code of Exemplary Conduct and the charters for the Audit and Risk, Corporate Governance and Nominating, Compensation, and Scientific Review Committees of our Board, all of which can be found at QLT's website at www.qltinc.com by clicking on "Corporate Governance" under "Investors." The charter of the Audit and Risk Committee is also available on SEDAR at www.sedar.com. The documents noted above will also be provided without charge to any shareholder who requests them. Any

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changes to these documents, and any waivers granted by us with respect to our Code of Ethics, will be posted on our website.

        We also monitor our corporate governance policies and practices to maintain compliance with the provisions of the Sarbanes-Oxley Act of 2002, rules of the SEC, National Instrument 58-101 — Disclosure of Corporate Governance Guidelines, National Policy 58-201 — Corporate Governance Guidelines, National Instrument 52-110 — Audit Committees, the Marketplace Rules of The NASDAQ Stock Market ("NASDAQ"), and the policies of the TSX (collectively, the "Governance Guidelines"). Our policies and practices meet or exceed the Governance Guidelines.

Disclosure Practices

        QLT has in place disclosure controls and procedures to ensure QLT meets its information disclosure obligations on a timely basis. These disclosure controls and procedures are evaluated on an ongoing basis, not less than quarterly, to ensure the controls and procedures allow QLT to accomplish this objective. To implement and review our disclosure controls and procedures, current management of QLT established a Disclosure Practices Committee. The disclosure controls and procedures include procedures for ensuring prompt and effective communication of any material or reportable event to the appropriate executives, and also for designating those individuals within QLT responsible for preparing, reviewing and approving the content of any disclosure.

Corporate Code of Ethics and Code of Exemplary Conduct

        QLT has adopted a Code of Ethics which is applicable to all directors, officers and employees of QLT, as well as a Code of Exemplary Conduct which applies to the Chairman, directors, executive officers and all senior financial managers, internal legal counsel and human resources managers of QLT. As further described in the charter of the Audit and Risk Committee (available on our website at www.qltinc.com), the Audit and Risk Committee is responsible for monitoring compliance with the Code of Ethics and Code of Exemplary Conduct, and, together with the Board, reviewing and, if determined appropriate, updating the Codes annually.

        Our Audit and Risk Committee and our management review and discuss with the Board from time to time the effectiveness of our Code of Ethics and our Code of Exemplary Conduct and any areas or systems that may be further improved. QLT has not been required to, and has not, filed a material change report that pertains to any conduct of any of our directors or executive officers that constitutes a departure from these codes.

        QLT complies with the provisions of the BCBCA that deal with conflict of interest situations. QLT, through directors' and officers' questionnaires and other systems, also gathers and monitors relevant information in relation to potential conflicts of interest that a director or officer may have.

        The Code of Ethics and Code of Exemplary Conduct are available on QLT's website at www.qltinc.com. QLT will also post on its website any amendments to those codes or waivers of compliance by directors or executive officers. In 2014, there were no such amendments made or waivers granted.

Mandate of the Board and the Chairman of the Board

        Our Board is responsible for the supervision of the management of the business and affairs of QLT, the stewardship of QLT and the enhancement of shareholder value. The Board has adopted a written Mandate, which is applicable to all directors, and which has formalized its position on corporate governance. The Board has also developed a written position description for the Chairman of the Board, which is detailed in the Mandate of the Chairman of the Board and described below under the heading "Board Leadership Structure". The Mandate of the Board and the Mandate of the Chairman of the Board are incorporated herein by reference and are available on our website at www.qltinc.com and on SEDAR at www.sedar.com or copies will be provided without charge to any shareholder who requests them by writing to "QLT Investor Relations," 887 Great Northern Way, Suite 250, Vancouver, British Columbia, Canada, V5T 4T5. The Corporate Governance and Nominating Committee of the Board is charged with reviewing and ensuring that good corporate governance practices and the Mandate of the Board are followed. The Corporate Governance and Nominating Committee is also responsible for reviewing and, if determined appropriate, updating the Mandate of the Board.

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        On October 24, 2014, Dr. Geoffrey F. Cox was appointed as the Interim Chief Executive Officer (the "Interim CEO") of the Company. Prior to Dr. Cox's appointment, the Executive Transition Committee (the "ETC") had been performing the function of the CEO on an interim basis. Upon Dr. Cox's appointment the ETC was disbanded. The Board has not developed a written position description for the CEO at this time. Under the Board's written Mandate it is responsible for developing a succession plan for the CEO, and for discussing with the CEO succession plans for other senior management personnel. The CEO (or the Interim CEO) is responsible for recommending and then implementing the corporate strategy approved by the Board and for managing QLT's business with the objective of meeting the corporate goals. The Board reviews, approves and documents in writing the annual corporate goals and objectives that the CEO (or the Interim CEO) is responsible for meeting each year, and the Board, together with the Compensation Committee, will assess the CEO's (or the Interim CEO's) performance against those goals.

        During 2014, the Board kept informed of the business through open discussions with and reports from the ETC, Interim CEO, and key members of management. Going forward, the Interim CEO and key members of management will continue this responsibility. The Board also keeps itself informed by reviewing documents, such as detailed periodic management reports and quarterly financial statements, by attending presentations made during Board meetings and through periodic reports given to the full Board from each of QLT's committees. QLT's directors have access to all books, records and reports upon request, and members of its management are available at all times to answer any questions.

Role of the Board in Risk Oversight

        The Board is actively involved in overseeing risk management for QLT. In accordance with the Mandate of our Board, the Board, as a whole, oversees the development and application of policies regarding corporate governance, and is responsible for adopting the corporate strategies and plans for QLT's business, identifying the principal risks of QLT's business and ensuring the implementation of the appropriate systems to manage these risks, overseeing the integrity of QLT's internal controls and management information systems and maintaining a continuing dialogue with senior management in order to ensure QLT's ability to respond to changes, both internal and external, which may affect its business operations from time to time. This oversight is also conducted through committees of the Board. The Board receives full reports from each committee Chairman regarding the committee's consideration and actions. The oversight responsibility of the Board and its committees is enabled by management reporting processes that are designed to provide visibility to the Board about the identification, assessment and management of critical risks. These areas of focus include financial reporting, compliance, compensation and operations, as summarized below.

        The Audit and Risk Committee reviews and discusses with management significant financial risks and the actions management has taken to monitor and mitigate potential exposures. The Audit and Risk Committee also assesses other areas of enterprise risk exposure as determined by the Board from time to time, and QLT's policies with respect to risk assessment and risk management.

        The Corporate Governance and Nominating Committee oversees risk management as it relates to, among other things, the development and assessment of our corporate governance framework, board and Chairman succession, including board and committee nominations, membership and standards, and potential conflicts of interest.

        The Compensation Committee oversees risk management as it relates to our compensation plans, policies and practices in connection with structuring our executive compensation programs and reviewing our incentive compensation programs for other employees. This includes a review of our material compensation policies and practices under which the Compensation Committee concluded that these policies and practices are not reasonably likely to have a material adverse effect on QLT.

        The Scientific Review Committee reviews management's direction and investment in QLT's research, development and technology initiatives to ensure that the scientific strategy and its implementation are consistent with and support the strategic and business objectives of QLT. The Scientific Review Committee works with management to identify operational risks with respect to current and future research and development programs and products and technology in which QLT is investing its research and development efforts.

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Board Leadership Structure

        We operate under a corporate governance structure where the Chairman of the Board and the CEO are separate positions held by different individuals. Due to the demands of each position, we believe separating these roles enhances the ability of each to discharge his duties and fosters more accountability.

        In 2012, following the departure of Robert Butchofsky, QLT's former President and CEO, the Board formed the ETC to perform the function of a CEO on an interim basis while the Board determined the resources and management necessary to pursue the Company's new strategy.

        The ETC was initially composed of Directors Jason M. Aryeh (Chairman of the Board and the ETC), Dr. Vicente Anido, Jr., Dr. John W. Kozarich and Jeffrey A. Meckler. On February 16, 2013, the ETC was reconstituted to be composed of Dr. Kozarich and Mr. Meckler, with Mr. Meckler serving as Chairman of the ETC. Under this revised committee structure, the Chairman of the Board ceased to be a member of the ETC. On October 24, 2014, Dr. Cox was appointed as Interim CEO and the ETC was disbanded. The Board of Directors believes that all of its members, other than Dr. Cox, are independent. Mr. Aryeh continues to serve as Chairman of the Board.

        We expect to maintain separate positions for the Chairman and the CEO because we believe that having the Board operate under the leadership and direction of a Board member who is independent from management provides the Board with the most appropriate mechanism to fulfill its oversight responsibilities.

Board Attendance at Annual Meeting

        It is a policy of the Board to encourage directors to attend regular Board meetings, Board committee meetings on which they serve and each annual general meeting of the shareholders. In 2014, all members of the Board attended the annual general meeting.

Decisions Requiring Prior Approval of the Board

        In addition to matters that must, by law or by the Articles of QLT, be approved by the Board, management is required to seek approval from the Board for major transactions, for any single expense that exceeds certain specified dollar values, and for certain transactions with related persons. Additional information relating to transactions with related persons is set forth below in this Proxy Statement under the heading "Executive Compensation — Review, Approval or Ratification of Transactions with Related Persons".

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Orientation and Continuing Education Programs

        It is the intention of the Board that as and when a new Board nominee is appointed, the Board will ensure that a full program of orientation and education is provided for the nominee, including, but not limited to, provision of a complete corporate history, copies of past minutes of meetings of the Board and the Mandate of the Board, and information regarding our business and operations. The Corporate Governance and Nominating Committee is responsible for reviewing the current orientation and education program and recommending and initiating improvements to this program as warranted. As part of the ongoing commitment of the Board to effective governance and director continuing education, our directors are encouraged to periodically attend accredited courses on current trends in corporate governance and other relevant areas.

Outside Advice

        Each of the Audit and Risk Committee, the Compensation Committee and the Corporate Governance and Nominating Committee has the authority to engage external advisors as set forth in each of their respective charters. The Scientific Review Committee is also authorized to engage independent consultants with the approval of the Chairman of the Board.

Director and Officer Liability Insurance

        We maintain directors' and officers' liability insurance coverage through a policy covering QLT and its subsidiaries. This insurance provides coverage for indemnity payments made by QLT to our directors and officers as required or permitted by law for losses, including legal costs, incurred by our directors and officers in their capacity as such. This policy also provides coverage directly to individual directors and officers if they are not indemnified by QLT. The insurance coverage for our directors and officers has customary exclusions, including those acts determined to be uninsurable under law, deliberately fraudulent or dishonest, or that have resulted in personal profit or advantage.

Minimum Share Ownership Guidelines for Directors

        The Board believes it to be in the best interests of our shareholders to specify a minimum level of equity holdings in QLT by each independent director to further align the interests of our Board and shareholders. As a result, following consultation with Radford, an Aon Hewitt company ("Radford"), the independent compensation advisor to our Compensation Committee, we adopted share ownership guidelines for our independent directors. Under these guidelines, independent directors are encouraged to acquire (if not already held) common shares of QLT as follows:

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Chairman: an amount equal to three times the Chairman's annual retainer, satisfied within five years from the date he or she assumes the office of Chairman; and



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Directors other than the Chairman: an amount equal to three times the director's annual Board retainer, satisfied within five years from the date the director joined the Board.

        Holdings of vested in-the-money stock options and vested deferred share units (referred to as "DSUs") are counted towards fulfilling the guidelines. According to Radford, the implementation of share ownership guidelines instituted by the Board is consistent with Institutional Shareholder Services' best practices.

        The value of the shares owned for the purposes of fulfilling the share ownership guidelines is determined as the greater of the acquisition cost or the market value at the time of the determination. Compliance with the share ownership guidelines is evaluated on an annual basis by the Corporate Governance and Nominating Committee. All of the members of the Board have satisfied the share ownership guidelines to date.

        Our share ownership guidelines for executive officers are described below in this Proxy Statement under the heading "Compensation Discussion and Analysis".

Director Nomination Process

        To assist with director nominations, the Board has designated a standing committee, the Corporate Governance and Nominating Committee, as being responsible for reviewing and recommending nominees to the

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Board. In evaluating prospective nominees, the Corporate Governance and Nominating Committee looks for the following minimum qualifications: strong business acumen, previous experience as an executive or director with successful companies, the highest standards of integrity and ethics, and a willingness and ability to make the necessary time commitment to diligently perform the duties of a director. In evaluating prospective nominees, the Corporate Governance and Nominating Committee also takes into account shareholder support of prospective nominees in previous director elections of the Company. Nominees are selected with a view to the best interests of QLT as a whole. All nominations proposed by the Corporate Governance and Nominating Committee must receive the approval of the Board.

        The Board prefers a mix of experience among its members to maintain a diversity of viewpoints and ensure that the Board can achieve its objectives. In searching for a new director, the Corporate Governance and Nominating Committee identifies particular areas of specialization that it considers beneficial, in addition to the general qualifications, having regard to the skill sets of the other members of the Board.

        Although we do not have a formal diversity policy, to foster and maintain a diversity of viewpoints, backgrounds and experience on the Board, the Corporate Governance and Nominating Committee evaluates the mix of skills and experience of the directors and assesses nominees and potential candidates in the context of the current composition of the Board and the requirements of QLT. In accordance with its charter, the Corporate Governance and Nominating Committee considers, among other things, the following in recommending candidates for election to the Board: (i) personal and professional integrity, ethics and values, (ii) experience in corporate management, such as serving as an officer or former officer of a publicly-held company, and a general understanding of marketing, finance, product development and other elements relevant to the success of a publicly-traded company in today's business environment, (iii) experience in the biotechnology industry in Canada and the United States, (iv) experience as a board member of another publicly-held company, (v) academic or therapeutic expertise in an area of QLT's operations and (vi) practical and mature business judgment, including the ability to make independent and analytical inquiries.

        The Corporate Governance and Nominating Committee may retain the assistance of a recruiting firm to assist it in identifying and recruiting candidates that possess the desired qualifications. The Corporate Governance and Nominating Committee may also involve other members of the Board or other Board committees to assist it with the recruitment of new directors. Potential nominees and their respective references are interviewed extensively in person before any nomination is endorsed by that Board committee.

        The Board will also consider any director nominees proposed by shareholders. Shareholders may submit nominations to the Board by addressing a communication to the Chairman of the Corporate Governance and Nominating Committee and providing sufficient information to the Corporate Governance and Nominating Committee to permit it to conduct an assessment of the qualifications of the proposed nominee, including biographical information about the candidate and his or her professional experience, confirmation of the candidate's willingness to serve as a director, and complete contact information for the candidate and the nominating shareholder. The methods by which a shareholder may communicate with the Corporate Governance and Nominating Committee are set out on QLT's website at www.qltinc.com. As a matter of policy, the Corporate Governance and Nominating Committee is committed to giving due and fair consideration to proposed nominations submitted by shareholders using the same criteria and processes as other nominations that come before it.

Independence of Directors

        To ensure QLT maintains good and objective governance, the Board strives to maintain strong independence from management. In determining whether directors are independent, each year the Board considers and discusses the nature and materiality of all direct or indirect relationships between each director nominee and QLT, including any family or business relationships. Under the applicable Canadian and United States securities laws, a relationship is considered material where that relationship could, in the view of the Board, reasonably interfere with the exercise of the director's independent judgment. A director who also serves as CEO of a company would be considered a non-independent director of that company under applicable Canadian and United States securities laws.

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        Jeffrey A. Meckler served as Chairman of the ETC from January 1, 2014 to October 22, 2014. The Board carefully considered whether serving as Chairman or a member of the ETC, the mandate of which was to perform the function of the CEO of QLT on an interim basis while the Board determined the resources and management necessary to pursue the Company's new strategy, would interfere with the exercise of such director's independent judgment. The Board determined that serving as a member or Chairman of the ETC has not, at any time, interfered with the exercise of independent judgment by either any of the members of the ETC or any Chairman of the ETC, and that, as a result, the relevant "independence" test under the applicable Canadian and United States securities laws has been met. In making this determination, the Board, among other things, considered the role of the ETC and the division of responsibility among the members, the role of the Chairman of the ETC, the means and amounts by which the Chairman and the other members of the ETC are remunerated for serving as such, the lack of agreements with the Company or terms of service regarding service on the ETC, the fact that all of the members of the ETC are subject to annual election as directors, and the distinction in manner and degree of compensation and benefits between the ETC and the Company's past and current employed executive officers, among other factors. On October 23, 2014, Dr. Geoffrey Cox, a director of QLT, was appointed as the Interim CEO of QLT and the ETC was disbanded. As the Interim CEO of QLT, Dr. Cox is now considered a non-independent director.

        As a result, and in connection with a review of the nature and materiality of all direct or indirect relationships between each director and QLT, the Board has determined that, with the exception of Dr. Cox, who ceased being "independent" upon his appointment as Interim CEO on October 23, 2014, all members of the Board are and have been "independent", under the independence standards of the NASDAQ Marketplace Rules, since their respective appointments to the Board.

        QLT has determined that all Board member nominees for election as directors at the Annual Meeting, other than Dr. Cox, the Interim CEO of QLT, will be independent under the independence standards of the NASDAQ Marketplace Rules.

        From January 1, 2014 to October 22, 2014, Mr. Meckler was considered the Principal Executive Officer of QLT solely for SEC reporting purposes and for the purposes of certifying certain SEC disclosure documents. Dr. Cox assumed the role of Principal Executive Officer on October 23, 2014 upon his appointment as Interim Chief Executive Officer. While, as described above, it is the Board's view that Mr. Meckler qualified as an independent director of QLT under Canadian and U.S. securities laws, the Board acknowledges that his designation as "Principal Executive Officer" of QLT solely for SEC reporting purposes during the period specified above could create the appearance that Mr. Meckler was an executive officer of QLT during such time. Mr. Meckler was not an executive officer of QLT, but rather the ETC which as a whole served the function of the principal executive of QLT. QLT does not believe that listing all members of the ETC during 2014 as executive officers in this Proxy Statement would provide useful disclosure to shareholders. Therefore, QLT has included Mr. Meckler as named executive officer in this Proxy Statement for the period during which he served as Chairman of the ETC.

        In addition, each director who served as a member on each of the Audit and Risk Committee, Compensation Committee, and Corporate Governance and Nominating Committee during 2014 was "independent" as independence for members of such committees is defined in National Instrument 52-110 — Audit Committees and the Marketplace Rules of NASDAQ and the rules of the SEC, as applicable, at the time they served on such committee.

Executive Session of Independent Directors

        The independent members of the Board meet without management and non-independent directors present during a session of periodic Board meetings (unless the independent directors determine such a session is not required).

Audit Committee Financial Expert

        Each member of the Audit and Risk Committee is financially sophisticated, as defined by the Marketplace Rules of NASDAQ, and is financially literate, as defined by Canadian securities regulations, and as required by such rules, able to read and understand fundamental financial statements, including QLT's consolidated balance

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sheet, consolidated statement of income and consolidated statement of cash flows. The Board has determined that John C. Thomas, Jr. is an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act, and that all of our Audit and Risk Committee members are "independent," as independence for audit committee members is defined by the NASDAQ, TSX and applicable U.S. and Canadian securities rules.

Compensation Committee Interlocks and Insider Participation

        During 2014, each of Jeffrey Meckler, John Thomas, Jr., Dr. Stephen Sabba and Dr. Geoffrey Cox served on the Compensation Committee. Dr. Cox resigned from the Compensation Committee upon his appointment as Interim Chief Executive Officer of QLT and was replaced by Jeffrey Meckler. Other than Dr. Cox, none of the members of the Compensation Committee during 2014 is or was previously an officer or employee of QLT or has any relationships requiring disclosure under Item 404 of Regulation S-K promulgated by the SEC.

        Except as described below, none of QLT's executive officers served during 2014 as members of the compensation committee or board of directors of any entity that had one or more executive officers serving as a member of the QLT Compensation Committee or QLT Board. John C. Thomas Jr. is a director and a member of the Compensation, Audit and Risk and Corporate Governance and Nominating Committees of QLT. Mr. Thomas is also a director and Chief Financial Officer of CorMatrix Cardiovascular, Inc. ("CorMatrix"). Jason M. Aryeh is a member of the Board of Directors of CorMatrix and as such, participates in compensation decisions about Mr. Thomas and CorMatrix's other executive officers. Mr. Aryeh is the Chairman of the Board and until February 2013 served as Chairman of the ETC. Mr. Aryeh has not at any time received compensation from QLT other than for his service as a director of QLT.

        The director nominees are also directors of the following publicly traded companies:

Communicating with the Board of Directors

        Any shareholder or interested party who wishes to communicate with the Board or any specific director, the Chairman of the Board, or committee members, may write to:

QLT Inc.
Attn: Board of Directors
887 Great Northern Way, Suite 250
Vancouver, British Columbia, V5T 4T5
Canada

        Depending on the subject matter of the communication, the corporate secretary will:

•

forward the communication to the director or directors to whom it is addressed (matters addressed to the CEO will be forwarded unopened directly to the CEO (currently, the Interim CEO));



•

attempt to handle the inquiry directly where the communication does not appear to require direct attention by the Board, or an individual member, e.g., the communication is a request for information about QLT or is a stock-related matter; or



•

not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

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        Shareholders and other interested persons may submit concerns regarding accounting matters by following the instructions for making a report published in the Corporate Governance subsection of the Investor Relations section of our website.

Board of Directors and Board Committees

        The Board held 24 meetings (in person or by teleconference) during 2014. With the exception of Dr. Geoffrey Cox, subsequent to his appointment as Interim CEO, all of the members of the Board were independent in 2014.

        Each director of the Board attended at least 75% of the aggregate of (1) the total number of meetings of the Board, and (2) the total number of meetings held by all committees of the Board on which such director served during 2014. Director attendance at committee meetings is assessed based on the number of committee meetings a director attended during their relevant term of service on such committee.

        Set forth below is a summary of Board and Committee attendance during 2014:

        The Board has a standing Audit and Risk Committee, Corporate Governance and Nominating Committee, Compensation Committee, and Scientific Review Committee. In addition, from time to time, the Board may establish special committees to assist the Board in respect of certain matters. In 2012, the Board established the Transition Committee and its successor committee, the Strategic Action Committee, as well as the ETC, to assist the Board during the transition period from the previous Board to the current Board, and the change in composition of the executive officers of QLT, following the 2012 annual meeting of shareholders. Set forth below

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is a chart indicating, by committee, each committee's members as at the end of the 2014 fiscal year, key functions and the total number of committee meetings held in 2014:

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Committee Chairmen

        The Board has not developed written position descriptions for the Chairman of each of the committees of the Board. The Chairman of each committee has accepted leadership responsibilities of the committee including setting the agenda for and chairing the meetings, liaising with management as appropriate, as well as for ensuring fulfillment of the mandate set out in the charters of the committees.

COMPENSATION OF DIRECTORS

2014 Independent Director Compensation Program

Overview

        The compensation program for our independent directors is intended to fairly compensate them for the time and effort required of a director based upon the size and complexity of our business, as well as, through an equity component of the program, to further align the interests of our independent directors with those of our shareholders. The amount and form of director compensation is reviewed periodically by the Compensation Committee, with any resulting recommendations made to the Board, to ensure that such compensation realistically reflects the responsibilities and risks of being an effective director.

        To assist in its evaluation of director compensation, the Compensation Committee has the authority to retain independent compensation consultants. During 2014, the Board worked with Radford, to review QLT's director compensation programs.

        In connection with the strategic restructuring of QLT that began in 2012, the Board formed the ETC to perform the function of the Chief Executive Officer on an interim basis. On October 23, 2014, the ETC was disbanded upon the appointment of Dr. Geoffrey F. Cox as Interim CEO. From the departure of QLT's former President and Chief Executive Officer in August 2012, to the date of Dr. Cox's appointment to Interim CEO, QLT did not have a President or Chief Executive Officer and, as a result, members of the ETC and the directors were more heavily involved in overseeing the day-to-day management of QLT than would normally be required. QLT believes that the amount of time and effort that each of the directors has dedicated to the oversight of QLT is significantly higher than the amount of time and effort required of directors of other public companies.

        While the compensation paid to the directors during 2014 may be higher than compensation paid to directors at other public companies of similar size, QLT believes that it fairly reflects the amount of time and effort required of its directors in light of the strategic and other initiatives undertaken by QLT and the fact that over a period of 26 months, QLT did not have a President or Chief Executive Officer.

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        The independent directors receive cash and equity-based compensation for their services on the Board as described below.

Cash Compensation

        The cash compensation component of our program in 2014 included annual Board and Committee member or Chairman position retainers, meeting attendance fees, and fees paid for attending to Board or Committee business other than for attendance at a meeting. Directors are also eligible for reimbursement of their expenses incurred in connection with attendance at Board meetings in accordance with our policies. Director retainers and fees are paid to the Board monthly in arrears.

        In 2014, the fees paid to the members of the Board, all of whom were independent directors in 2014, were as follows:

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Equity-Based Compensation

        In addition to cash compensation, our independent directors also receive equity-based compensation to ensure that their interests are fully aligned with those of our shareholders.

        We maintain a Directors' Deferred Share Unit Plan, which we refer to as the "DDSU Plan". Under the DDSU Plan, at the discretion of the Board, independent directors receive a portion of their equity-based compensation in the form of DSUs, each of which has a value equal to the current price of our common shares on the TSX. A DSU is convertible only into cash (i.e. no shares are issued), and can only be converted after the independent director ceases to be a member of the Board. The DSUs vest monthly over 36 months from the first month after the date of grant.

        The value of a DSU, when converted to cash, will be equivalent to the market value of a QLT common share at the time the conversion takes place. We do not have a history of paying dividends on our common shares; however, if dividends ever are paid on our common shares, an independent director's DSU account will be credited with dividends at the same rate.

        In addition, directors are eligible to receive grants of options and restricted stock units ("RSUs") under the Company's 2000 Incentive Stock Plan (as amended and restated, the "2000 Plan"). The Compensation Committee's objective in recommending the grant of equity awards to independent directors is to provide a reasonable, market-based incentive for directors to deliver increased value to shareholders. Based in part on advice received from Radford, the Compensation Committee and the Board have concluded that, going forward, stock options and RSUs are an effective way to align the interests of the independent directors with those of the shareholders.

        Equity grants to the directors typically occur annually, promptly following each annual general meeting of shareholders. For 2014, consistent with the equity grant to employees, the annual equity grant to the Board was made effective December 17, 2014. On December 17, 2014, Jason M. Aryeh, the Chairman of the Board, received 25,000 stock options and 12,000 RSUs, while the other members of the Board were granted 12,500 stock options and 6,000 RSUs, except Dr. Geoffrey Cox. Given Dr. Cox's appointment as Interim CEO, on October 23, 2014, he was no longer entitled to receive compensation as a Director, despite his continued service as a member of the Board. Instead, Dr. Cox was granted 150,000 employee stock options, on October 29, 2014, in connection with his appointment to Interim CEO. In June, 2015, in connection with certain transformative transactions announced by QLT on June 8, 2015, the Board approved a recommendation of its Compensation Committee to immediately accelerate vesting of all unvested options and unvested RSUs granted to its directors, employees and consultants under, and in accordance with the terms of, the 2000 Plan. Accordingly, all unvested RSUs were vested, settled and the corresponding number of common shares were issued.

        The following table provides information regarding the compensation of our independent directors for 2014.

2014 Director Compensation

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Director Awards Outstanding as at December 31, 2014

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

Information Regarding Director Nominees

        The names of the nominees and certain information about them are set forth below:

        There is no family relationship between any of our directors, director nominees or executive officers. The number of common shares owned by each of the nominees for election as a director is set forth under "Security Ownership of Certain Beneficial Owners and Management" in this Proxy Statement.

        Jason M. Aryeh is the Chairman of the Board and a Director of QLT (since 2012) and serves as the Chairman of the Corporate Governance and Nominating Committee. Currently, Mr. Aryeh is the Founder and Managing General Partner of JALAA Equities, LP (since 1997), a private hedge fund focused on the biotechnology and specialty pharmaceutical sector. Mr. Aryeh also serves on the Board of Directors of Ligand Pharmaceuticals Incorporated ("Ligand") (since 2006), a public biotechnology company, CorMatrix Cardiovascular, Inc. ("CorMatrix") (since 2010), a privately-held medical device company, and the Cystic Fibrosis Foundation's Therapeutics Board (since 2011). Previously, Mr. Aryeh served as a Director of both Nabi Biopharmaceuticals, prior to its merger with Biota Pharmaceuticals, Inc. ("Biota") in November 2012, and of Myrexis, Inc. (2011 to 2013), both of which are public biotechnology companies. Mr. Aryeh earned a B.A. in economics, with honors, from Colgate University, and is a member of the Omnicron Delta Epsilon Honor Society in economics.

        The Board has concluded that Mr. Aryeh is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives stemming from his experience in the biotechnology and specialty pharmaceutical sector as a hedge fund manager and serving on the boards of publicly-traded companies. The Board believes that Mr. Aryeh's strategic insight and in-depth understanding of health care trends and capital markets add significant value to the Board.

        Dr. Geoffrey F. Cox, Ph.D. is a Director of QLT (since 2012) and Interim CEO (since October 23, 2014). Dr. Cox has extensive pharmaceutical and biotechnology experience holding a broad range of senior management and board positions with private and public companies. Dr. Cox remains the Principal of Beacon Street Advisors LLC (since 2013) which provides corporate, operational and organizational strategic advice and interim management support to life sciences companies, but is working full time for QLT. Previously, he was a partner with Red Sky Partners LLC, a life sciences consulting firm (from 2011 to 2013). Dr. Cox served as a Director (2000 to 2012) and the Non-Executive Chairman (2007 to 2012) of Nabi Biopharmaceuticals prior to its merger with Biota in 2012 and continues to serve as a Director of Biota, a public anti-infective drug development company. He also served as a Director of Gallus Biopharmaceuticals LLC (2011 to 2014), a biologics contract manufacturing and development company, and currently serves as a Director of Lakewood-Amedex LLC (since 2013), a company developing novel antibiotics and RNA silencing technology. Dr. Cox was Chairman, President and CEO of GTC Biotherapeutics Inc. (now rEVO Biologics) (2001 to 2010), a company focused on the development of recombinant therapeutic proteins, including proteins for the treatment of rare diseases, using transgenic animal production technology. Prior to 2001, Dr. Cox was Executive VP, Operations, of Genzyme

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Corporation and later Chairman, President and CEO of Aronex Pharmaceuticals Inc. Dr. Cox is a past Chairman and current member of the Board of the Massachusetts Biotechnology Council. He previously served on the Board of the Biotechnology Industries Association and as a member of its Health Governing and Emerging Companies Sections. Dr. Cox received a B.Sc. (Hons) in biochemistry from the University of Birmingham, UK, and a Ph.D. in biochemistry from the University of East Anglia, UK.

        The Board has concluded that Dr. Cox is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives derived from his extensive leadership experience in the biopharmaceutical industry, including as a director and executive officer of publicly-traded biotechnology companies. The Board believes that Dr. Cox's strategic consulting, operations and business development expertise as well as his scientific background bring significant value to the Board.

        Dr. John W. Kozarich, Ph.D. is a Director of QLT (since 2012) and Chairman of the Scientific Review Committee. Dr. Kozarich has over 35 years of experience in academic and pharmaceutical research. Currently, Dr. Kozarich is also Chairman and President of ActivX Biosciences, Inc. (since 2001), a wholly-owned subsidiary of the international pharmaceutical company KYORIN Pharmaceutical Co., Ltd.; Director and Chairman of Ligand (since 2003 and 2007, respectively), a public biotechnology company; a Director of Retrophin, Inc. (since 2015), a public biopharmaceutical company; and a Senior Scientific Advisor to KinDex Therapeutics, Inc. (since 2009), a privately-held company developing molecules that modulate key metabolic regulatory networks. Dr. Kozarich was previously a Director of Corium International Inc. (2006 to 2015), a public transdermal drug delivery company.

        Dr. Kozarich is also an adjunct professor of chemical physiology at the Scripps Research Institute and previously held faculty positions at the University of Maryland and Yale University School of Medicine. He has authored over 150 primary scientific publications. Dr. Kozarich earned his B.S. in chemistry from Boston College (summa cum laude; Phi Beta Kappa), his Ph.D. in biological chemistry from the Massachusetts Institute of Technology, and was a National Institutes of Health postdoctoral fellow at Harvard University.

        The Board has concluded that Dr. Kozarich is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives based on his academic achievements and international experience as an advisor, executive officer and director of biotechnology companies. The Board believes that Dr. Kozarich is well-versed in the challenges of research and development given his extensive academic and pharmaceutical research and leadership background in the life sciences, and provides the Board with invaluable insight into a broad range of issues that impact QLT's research and development efforts.

        Jeffrey A. Meckler is a Director of QLT (since 2012), Chairman of the Compensation Committee and a member of the Audit and Risk and Corporate Governance and Nominating Committees. Mr. Meckler has over 20 years of experience in the life sciences sector. Currently, Mr. Meckler is the CEO and a Director of Cocrystal Pharma, Inc. (since March 2015 and 2014, respectively), a virology focused life sciences company. He is also a Director and the Chairman of Retrophin, Inc. (since October 2014 and June 2015, respectively), which is a public biopharmaceutical company. Previously, Mr. Meckler was Managing Director of The Andra Group (2009-2015), a life sciences consulting firm that assists clients with strategic planning and business development. Additionally, Mr. Meckler acted as a Director (2011 to 2012) and Interim-CEO (2011) of Cypress Bioscience Inc. after its acquisition by Royalty Pharma; a Director of ClearFarma USA (2010 to 2012), a private sustainable food supply research and development company; a Director of Kyalin Bioscience (2011 to 2012), a private company developing therapies for autistic spectrum disorder acquired by Retrophin, Inc.; an Investment Analyst with Ridgeback Capital Management (2007 to 2009); a Director of Alveolus Inc. (2007 to 2009), a private, coated stent company acquired by Merit Medical; and held a series of positions at Pfizer Inc. in Manufacturing Systems, Market Research, Business Development, Strategic Planning and Corporate Finance which included playing a significant role in acquisitions and divestitures (1990 to 2007). Mr. Meckler is the past President and continues to serve on the Board of Children of Bellevue, a non-profit organization focused on advocating and developing pediatric programs at Bellevue Hospital Center (since 2001) and is past President of the Alumni Board of the Carnegie Mellon Tepper School of Business (2009 — 2015). Mr. Meckler received a B.S. in Industrial Management and M.S. in Industrial Administration from Carnegie Mellon University. In addition, Mr. Meckler received a J.D. from Fordham University School of Law.

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        The Board has concluded that Mr. Meckler is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives stemming from his extensive pharmaceutical and biotechnology industry, consulting and financial background. The Board believes that Mr. Meckler's experience regarding strategic business development, operations and corporate finance opportunities as well as health care trends bring significant industry-specific insight to the Board.

        Dr. Stephen L. Sabba, M.D. is a Director of QLT (since 2012), Chairman of the Audit and Risk Committee and a member of the Scientific Review and Compensation Committees. Currently, Dr. Sabba is also a Partner and Health Care Portfolio Manager at Knott Partners, LP (since 2006), an investment fund, and a Director of Ligand (since 2008), a public biotechnology company. Previously, he was a Partner and Director of Research with Kilkenny Capital Management (2001 to 2006), a Chicago-based hedge fund. Dr. Sabba received his medical degree from the New York University School of Medicine, and completed a residency in internal medicine and a fellowship in gastroenterology at the Veterans Administration Medical Center in New York City. He earned a Bachelor of Science degree with honors at Cornell University.

        The Board has concluded that Dr. Sabba is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives based on his capital markets and financial expertise gained from his experience working in the hedge fund and investment fund industries. The Board believes that Dr. Sabba's deep understanding of the biotechnology industry, medicine and health care trends adds significant value to the Board.

        John C. Thomas, Jr. is a Director of QLT (since 2012) and is a member of QLT's Audit and Risk, Corporate Governance and Nominating and Compensation Committees. Mr. Thomas has more than 38 years of experience in a variety of financial and accounting positions, with the last 28 years spent in the medical, pharmaceutical and device fields. Currently, Mr. Thomas also serves as Chief Financial Officer, Secretary and Director of CorMatrix (since 2001), a privately-held medical device company, and as Chief Financial Officer, Secretary and Director of Motion Reality, Inc. (since 1991), a motion capture and simulation company. Since September 2013, Mr. Thomas has served on the Board of Medovex Corporation a publicly-traded medical device company (MDVXU). Since 2014, Mr. Thomas has served on the Board of Directors of NantKwest, Inc., a publicly-traded biotechnology company (NK). In the past ten years, Mr. Thomas served as acting Chief Financial Officer for DemeRx, Inc. (2010 to 2011); as Chief Financial Officer for MRI Interventions, Inc. (1998 to 2010), MiMedx Group, Inc. (2007 to 2008) and DARA BioSciences (2003 to 2009); and as a director of MRI Interventions, Inc. (2004 to 2011) and DARA BioSciences (2012). Previously, Mr. Thomas also served as a Trustee and subsequently the Chairman of the Finance Committee of The Walker School, a private Pre-K through 12 grade school (1999 to 2012). Mr. Thomas is a Certified Public Accountant and graduated from the University of Virginia, McIntire School of Commerce with a Bachelor of Science in Commerce degree in 1975.

        The Board has concluded that Mr. Thomas is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives based on his financial and development stage company expertise and service on the Boards of pharmaceutical and medical device companies. The Board believes that Mr. Thomas' background and experience serving as Chief Financial Officer of a number of life sciences companies provides him with valuable perspective on financial management, performance and strategy for a biotechnology company such as QLT.

        The Board also has determined that Mr. Thomas is an "audit committee financial expert" as defined under the rules of the Securities and Exchange Act of 1934, as amended (the "Exchange Act").

Vote Required and Board of Directors' Recommendation

        Under the BCBCA, directors are elected by a plurality of the votes cast at the Annual Meeting. This means that the six nominees with the most votes for election would be elected, subject to the requirements of a majority voting policy (the "Majority Voting Policy") adopted by the Board, as described below.

        The Board unanimously recommends that our shareholders vote "FOR" the election of all six nominees for director.

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Majority Voting Policy

        The TSX has adopted amendments to its policies which require listed companies to adopt a "majority voting" policy for the election of directors at uncontested shareholders' meetings. As a result, the Board has now adopted a Majority Voting Policy which requires that any nominee for director for which there are a greater number of votes "withheld" than votes "for" his or her election will be required to tender his or her resignation as a director of the Company. This policy applies only to uncontested elections, which are elections in which the number of nominees for election as director is equal to the number of positions available on the Board. If a nominee for director is required under the Majority Voting Policy to tender his or her resignation, the Board will refer the resignation to the Corporate Governance and Nominating Committee (except in certain circumstances, in which case the entire Board will review the resignation without reference to the Corporate Governance and Nominating Committee) which will consider the director's resignation and will recommend to the Board whether or not to accept it. The Corporate Governance and Nominating Committee will generally be expected to recommend accepting the resignation, except in situations where extraordinary circumstances would warrant the applicable director to continue to serve on the Board. The Board will act on the Corporate Governance and Nominating Committee's recommendation within 90 days following the certification by the scrutineer of the voting results of the applicable annual meeting and will promptly disclose by press release its decision whether to accept the director's resignation, including the reasons for rejecting the resignation, if applicable. A director who tenders his or her resignation pursuant to the Majority Voting Policy will not participate in any meeting of the Board or the Corporate Governance and Nominating Committee at which the resignation is considered.

Advance Notice Policy

        The Board has adopted an amended and restated advance notice policy which was ratified and approved by shareholders of the Company at the annual general meeting held on December 15, 2014. The intention of the amended and restated advance notice policy is to facilitate an orderly and efficient annual general or, where the need arises, special meeting, to ensure that all shareholders receive adequate notice of director nominations and sufficient information with respect to all nominees, and allow shareholders to register an informed vote having been afforded reasonable time for appropriate deliberation.

        Pursuant to the advance notice policy, any additional director nominations for an annual general meeting must be received by the Company not less than 30 nor more than 65 days prior to the date of the meeting. If no nominations are received by December 8, 2015, being the date which is 30 days prior to the Meeting date, management's nominees for election as directors set forth below shall be the only nominees eligible to stand for election at the Meeting.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth the common shares in QLT's authorized share structure beneficially owned by (i) each of our current directors and director nominees, (ii) each of our named executive officers listed in the Summary Compensation Table below, (iii) all of our directors, director nominees and executive officers as a group, and (iv) all persons known by us to beneficially own more than 5% of our outstanding voting shares. We have determined the beneficial ownership shown on this table in accordance with the rules of the SEC and the applicable Canadian securities regulators. Under those rules, shares are considered beneficially owned if held by the person indicated, or if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote, to direct the voting of and/or to dispose of or to direct the disposition of such security. Except as otherwise indicated in the accompanying footnotes, beneficial ownership is shown as of December 1, 2015.

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EXECUTIVE COMPENSATION

        Our named executive officers in 2014 are (i) Dr. Geoffrey F. Cox, our Interim Chief Executive Officer, (ii) Sukhi Jagpal, our former Chief Financial Officer, (iii) Alexander Lussow, our former Senior Vice President, Business Development and Commercial Operations, and (iv) Jeffrey A. Meckler, former Chairman of the ETC.

Compensation Discussion and Analysis for the Fiscal Year Ended December 31, 2014

        On July 9, 2012, as a result of a comprehensive business and portfolio review by the Board, QLT announced a new corporate strategy and plans to restructure its operations in order to concentrate its resources on the clinical development programs related to its synthetic retinoid, QLT091001, for the treatment of certain inherited retinal diseases. In connection with the strategic restructuring of QLT, over the course of 2012 and 2013, QLT completed the sale of its Visudyne® business to Valeant Pharmaceuticals International, Inc. and the sale of its punctal plug drug delivery system to Mati Therapeutics Inc., and, as a result, significantly reduced its workforce by approximately 180 employees.

        In connection with the restructuring and following the departure of QLT's former President and Chief Executive Officer, the QLT Board of Directors formed the ETC to perform the function of the Chief Executive Officer on an interim basis while the QLT Board of Directors determined the resources and management necessary to pursue QLT's new strategy.

        On October 23, 2014, Dr. Geoffrey F. Cox was appointed as Interim Chief Executive Officer, and the ETC was disbanded. During 2014, the ETC was comprised of Jeffrey A. Meckler and Dr. John Kozarich, with Jeffrey A. Meckler serving as Chairman. While Mr. Meckler was never employed as an officer or employee, nor was he compensated other than as a director, the Board considered him to be the Principal Executive Officer of QLT for the period January 1, 2014 to October 22, 2014 and he is therefore included in the compensation disclosure below.

        The Compensation Committee administers the compensation policies and programs for QLT's named executive officers. A summary discussion of the 2014 named executive officer compensation actions taken by the Compensation Committee follows in this Compensation Discussion and Analysis report.

        At QLT's 2014 annual general meeting ("AGM"), its shareholders approved, in a non-binding advisory vote, the 2013 compensation of QLT's named executive officers as disclosed in QLT's proxy statement for its 2014 AGM. The Compensation Committee considered this advisory vote and will consider the advisory vote on the 2014 compensation in determining the compensation of our named executive officers for 2015 and will consider future shareholder advisory votes in setting future executive compensation (see "QLT Proposal 4: Advisory Vote on the Compensation of QLT's Named Executive Officers for 2015 ("Say-on-Pay Vote").

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Objectives of Our Compensation Program

        The Compensation Committee evaluates and sets executive compensation consistent with our stated philosophy to provide a compensation package that attracts, retains and motivates executives and rewards business successes that have the potential to increase shareholder value. More specifically, the Compensation Committee seeks to:

•

provide a total compensation program that is competitive with other companies in the pharmaceutical and biotechnology industries with which we compete for executive talent;



•

place a significant portion of executive compensation at risk by linking cash incentive compensation to the achievement of pre-established corporate financial and operational performance objectives and other individual key objectives within the executive's area of responsibility and by using equity as a key component of our compensation program;



•

provide long-term incentive compensation that focuses executives' efforts on building shareholder value by aligning their interests with those of our shareholders; and



•

promote stability and retention of our management team.

        Consistent with our performance-based philosophy, a significant portion of potential compensation is based upon performance-and equity-based programs. These programs include awards that are based on our operational and financial performance and provide compensation in the form of cash, and equity-based incentive awards that are tied to both our short-term and long-term performance and achievement of goals. The performance-based bonus program rewards short-term performance; while our equity awards, coupled with our stock ownership guidelines, reward long-term performance and align the interests of management with those of our shareholders.

Compensation Governance and Advisors

        We are committed to having strong governance standards with respect to our compensation programs, procedures and practices. The Compensation Committee has, among other things, retained Radford, an independent compensation consultant, which reports directly to the Compensation Committee. Our Compensation Committee has assessed the independence of Radford and has concluded that no conflict of interest exists with respect to the services that Radford performs for our Compensation Committee. Radford did not provide any services to the Company other than with respect to the services provided to the Compensation Committee as described below. Radford also informed the Compensation Committee that it was not aware of any conflict of interest with respect to the services that it provides to our Compensation Committee and the services that it provides to other clients.

Compensation Philosophy

        We are engaged in a highly specialized and competitive industry. Success in this environment requires talented and motivated executives. The goal of our named executive officer compensation program is to attract, retain and motivate executives and reward business successes that have the potential to increase shareholder value. The Compensation Committee, which is composed of independent members of the Board, is responsible for implementing our executive compensation program and establishing corporate performance objectives and reviewing individual performance objectives that reward our named executive officers when those objectives are met. In considering executive compensation, the Compensation Committee strives to ensure that our total compensation program is competitive within the industry in which we operate, supports our overall strategy and objectives, reflects both risk and reward for our named executive officers and aligns our executive officers' interests with those of our shareholders. The combination of base salary, annual incentives and long-term incentives that we provide to our named executive officers is designed to accomplish this.

        The Compensation Committee obtains information from a number of sources, including North American surveys and reports on executive compensation in the biotechnology industry, as well as internally generated reports of executive compensation practices of a sub-group of biotechnology companies of similar size and market capitalization. To assist with its evaluation of executive compensation, the Compensation Committee has

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the authority to retain independent compensation consultants. The Compensation Committee has engaged Radford to provide director and executive compensation assessments and recommendations to the Compensation Committee. Radford provides data on the compensation and relative performance of peer companies, provides opinions on the degree to which our compensation arrangements are consistent with market practices and our objectives, consults on other compensation matters as needed and, if applicable, recommends compensation guidelines and provides suggestions on program designs. Additionally, a representative from Radford attends Compensation Committee meetings when requested by the Compensation Committee.

Components of the Compensation Package

        The Compensation Committee supports the core principle that there should be both consequences for underperformance and incentives for outstanding performance. This is achieved through the design of a compensation program in which both fixed and variable components comprise the "pay mix" for each executive officer.

        There are three major elements to our executive compensation:

•

Base salary;



•

Variable performance-based compensation, consisting of annual cash bonuses based on an assessment of individual and corporate performance to pre-set goals and objectives; and



•

Long-term incentives, consisting of annual grants of long-term stock options.

        In addition, our executives are eligible to participate in the benefit plans generally available to all of our employees (as described in "Health and Life Benefits" below).

        The Interim CEO is paid in a combination of Canadian and U.S. dollars and our other executive officers are paid in Canadian dollars. For reporting purposes only, all compensation is set out below in U.S. dollars.

Determining Compensation

        Compensation Consultant and Peer Group.    In April 2014, the Compensation Committee engaged Radford to assist our Compensation Committee in establishing 2014 executive compensation that was competitive and consistent with best practices. In establishing executive officer base salaries for 2014, the Compensation Committee considered non-comparator group market data provided by Radford and other factors consistent with QLT's compensation philosophy. Due to the lack of current proxy data at the time, the Compensation Committee determined that it was impractical to update the peer group used by QLT in 2013, notwithstanding the fact that QLT's market capitalization had decreased significantly upon completion of a special cash distribution to shareholders in the amount of $200.0 million in June 2013 and the 2013 peer group was no longer relevant. The following 14 public biotechnology companies located in North America comprised our 2013 peer group and were then considered comparable to QLT based on size (less than 100 employees), market capitalization (generally between $200 million and $1 billion), and stage of product pipeline (phase II/III companies conducting late stage clinical trials):

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        In connection with the appointment of Dr. Geoffrey Cox to Interim CEO in October 2014, the Compensation Committee engaged Radford to provide market data and assist in determining compensation for Dr. Cox that was competitive and consistent with best practices. Due to the short term nature of Dr. Cox's role as Interim CEO, the Compensation Committee did not request Radford to provide a formal report to the Compensation Committee or update QLT's peer group at that time.

        In November 2014, the Compensation Committee requested that Radford update QLT's peer group. The following 19 public companies located in North America comprised our 2014 peer group and were considered comparable to QLT based on size (less than 100 employees), market capitalization (generally between $100 and $600 million), and stage of product pipelines (phase I/II development stage companies):

Base Salary

        Annual base salary is designed to provide a competitive fixed rate of pay recognizing different levels of responsibility and performance within QLT. Actual salaries reflect the Compensation Committee's consideration of numerous factors, including the individual named executive officer's experience, length of service, position criticality, scope of responsibilities and performance. In determining whether to increase the base salary for a particular executive officer, the Compensation Committee considers a variety of factors, including the results of each executive officer's individual goal achievement and overall performance, comparative survey data, along with the other elements of compensation received by our executive officers

Annual Cash Incentive Compensation

        The Compensation Committee's compensation philosophy for 2014 (other than with respect to Dr. Cox when he became Interim CEO in October 2014) included a pay-at-risk component under the annual cash incentive compensation program. The annual cash incentive award represents income at risk — it is only paid if and to the extent certain goals and objectives are met. The annual cash incentive compensation award that each executive officer is eligible to receive is based on a pre-determined target percentage of his or her base salary, determined in accordance with market data and taking into account scope and level of responsibility. The Compensation Committee also believes that the success of QLT is based, in part, on the achievements of the executive officers as a group and, therefore, the target annual award percentage is determined by considering competitive rates of incentive compensation for the executive officers as a group and not just on a position-specific basis.

        When combined with base salaries, cash incentive awards are intended to provide the opportunity for an executive officer to achieve total cash compensation, when targeted levels of performance are achieved or exceeded, that is competitive with total compensation paid by other companies that have similar profiles and circumstances. QLT defines "total cash compensation" as base salary plus annual target bonus under its annual cash incentive compensation program. The Compensation Committee believes that, given the competitive

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industry, this pay-for-performance compensation strategy allows a biotechnology company of QLT's position and size to competitively attract and retain talented executives while aligning the strategic interests of its executives and shareholders.

        The amount of annual cash incentive compensation that our executive officers were eligible to receive for 2014 was as follows:

        For 2013 and previous years, executive officers with individual goals could attain between 0% and 200% of their individual goals depending on their performance. However, the Compensation Committee had the ability and discretion to recognize additional factors and award bonuses outside of this range. Similarly, executive officers with corporate goals could attain between 0% and 200% of a corporate goal depending on the extent to which the goal was achieved. For 2014, the Board, following the recommendation of the Compensation Committee, determined that executive officers could generally attain between 0% and 100% of corporate and individual goals depending on their performance, with the potential to attain up to 125% under exceptional circumstances.

Annual Cash Compensation Review

        In reviewing the annual compensation of Mr. Jagpal, QLT's former Chief Financial Officer, in April 2014, Radford provided the Compensation Committee with comparative data for pre-commercial organizations with less than 150 employees and a market capitalization below $600 million. As Dr. Lussow, QLT's former Senior Vice-President, Business Development and Commercial Operations, was expected to leave the organization in early 2014, the Compensation Committee did not request Radford to review his compensation.

        Based on Radford's review, the Compensation Committee determined that Mr. Jagpal's base salary of C$250,000 (USD$226,388) and target annual award percentage of 35% were below the 25th percentile and at the 50th percentile of the survey data, respectively. For 2014, Mr. Jagpal's base salary remained unchanged at C$250,000, however, he was granted a retention bonus of C$100,000 on July 17, 2014 payable on the later of 90 days following the completion of the proposed merger with Auxilium Pharmaceuticals, Inc. or February 28, 2015. For more information, refer to the Employment Agreements, Post-Employment Compensation and Change in Control Arrangements — Employment Agreement with Sukhi Jagpal section below.

Establishing Goals

        Individual Goals.    Each year, the criteria for assessing an individual named executive officer's performance are developed and reviewed by the Compensation Committee in consultation with the particular named executive officer. The individual goals are primarily objective and measurable, relate to the individual named executive officer's area of responsibility and are designed to facilitate the achievement of our corporate goals.

        Corporate Goals.    Each year, the criteria for assessing QLT's performance are: (i) developed by the Compensation Committee, (ii) approved by the Board, and (iii) communicated to the participants. In early 2014, on the recommendation of the Compensation Committee, the Board approved specific corporate goals for QLT to achieve. QLT's corporate goals are described below and are weighted from 0-100% in relative allocation. For 2013 and previous years, however, the Compensation Committee had the discretion to recognize additional factors and achievements that it considered appropriate and assess QLT's corporate goal achievement up to a maximum 200%. As noted above, for 2014, the Board, following the recommendation of the Compensation Committee, determined that executive officers could generally attain between 0% and 100% of corporate and

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individual goals depending on their performance, with the potential to attain up to 125% under exceptional circumstances.

        The following is a description of the 2014 corporate goals:

•

Enhancing Shareholder Value:  Complete a review of strategic alternatives, and if any such alternatives are approved by the Board of Directors and/or shareholders, as applicable, complete any related transaction.



•

Synthetic Retinoid Program:  Achieve specific milestones related to the regulatory and clinical development progress for the synthetic retinoid program, including: (i) the initiation of a pivotal trial for the treatment of Inherited Retinal Diseases such as Leber Congenital Amaurosis ("LCA") and Retinitis Pigmentosa ("RP"), (ii) launching a patient registry for an orphan drug program, (iii) completion of a Phase IIa proof-of-concept clinical trial for patients with Impaired Dark Adaptation ("IDA") with positive results, and (iv) completion of a licensing or collaboration transaction.



•

Operational Activities:  Enhance operating efficiencies based on organizational needs to enable achievement of 2014 operational objectives and resolve certain issues pertaining to the QCELLUS laser to facilitate the collection of the milestone payment owing from Valeant related to the receipt of the premarket approval application ("PMA") supplement for the QCELLUS laser from the U.S. Food and Drug Administration ("FDA") on September 26, 2013 (the "Laser Earn-Out Payment").

Evaluating Goal Achievement

        The Compensation Committee determines performance bonuses based on the results achieved as compared to targets established for a particular fiscal year. The Compensation Committee has the discretion to award bonuses that correspond to that level of achievement, or to modify the award payable if it believes a modification would be in the best interests of QLT and its shareholders. In performing its assessment, the Compensation Committee may also consider market, business or organizational factors that may have impacted achievement of a specific goal.

Achievement of Corporate Goals

        In early 2015, the Compensation Committee considered the performance of QLT relative to the corporate objectives set in early 2014. Based on the assessment of QLT's performance and achievements against the corporate goals, the Compensation Committee determined that QLT achieved 73.4% of its 2014 corporate objectives. The following chart illustrates the weighting and level of achievement of each of the 2014 corporate goals:

        In evaluating QLT's performance against its goals established for 2014, and determining the extent to which those goals were successfully achieved, the Compensation Committee considered the following factors:

•

Enhancing Shareholder Value:  In June 2014, QLT entered into an Agreement and Plan of Merger (the "Auxilium Merger Agreement") among QLT, Auxilium Pharmaceuticals, Inc., a Delaware corporation ("Auxilium"), QLT Holding Corp., a Delaware corporation and a wholly owned subsidiary of QLT ("HoldCo"), and QLT Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of HoldCo ("AcquireCo"). The Auxilium Merger Agreement contemplated a business combination, through a stock transaction, whereby AcquireCo would be merged with and into Auxilium and Auxilium would continue as the surviving corporation (the "Auxilium Merger"). On the date of the closing of the Auxilium Merger, Auxilium would have become an indirect wholly owned subsidiary of QLT (the "Combined Company") and Auxilium stockholders would have received common shares representing approximately 76% of the Combined Company, subject to certain adjustments.

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On October 8, 2014, the Auxilium Merger Agreement terminated after Auxilium delivered a notice of termination to QLT informing QLT that Auxilium's board of directors had reviewed an offer from Endo International plc to acquire all of the issued and outstanding shares of Auxilium (the "Endo Proposal") and, after consulting with its financial advisors and external legal counsel, determined that the Endo Proposal was superior to the proposed merger with QLT. Due to this change in recommendation by Auxilium's board of directors and in accordance with the termination provisions of the Auxilium Merger Agreement, on October 9, 2014, Auxilium paid QLT a termination fee of $28.4 million (the "Termination Fee"). On October 22, 2014, pursuant to the terms of our financial advisory services agreement with Credit Suisse, QLT paid Credit Suisse a fee of $5.7 million in connection with the termination of the Auxilium Merger Agreement. The financial advisory services agreement with Credit Suisse was subsequently terminated.

        The Compensation Committee assigned 50% of the 2014 corporate goals to the Enhancing Shareholder Value goal. In determining the extent to which management had met this goal, the Compensation Committee acknowledged the extensive efforts undertaken by management to complete a review of strategic transactions, which ultimately resulted in the signing of the Merger Agreement. The Compensation Committee also noted that the termination of the Merger with Auxilium resulted from the Endo Proposal, an event beyond management's control, and consequently determined that, in recognition of management's efforts towards the transaction, QLT achieved 45% out of the targeted 50% with respect to this goal.

•

Synthetic Retinoid Program:  The following principal clinical and regulatory development objectives to advance QLT's synthetic retinoid program were achieved in 2014:



•

met with the FDA and EMA, including an end-of-phase II meeting with the FDA, in order to progress QLT091001 for the treatment of certain inherited retinal diseases toward pivotal trials;



•

prepared to launch a central patient registry to identify and characterize patient status and then follow disease progression to track the natural history of the disease;



•

completed the Phase IIa proof-of-concept study of QLT091001 for the treatment of Impaired Dark Adaptation.

        The Compensation Committee assigned 40% to the Synthetic Retinoid Program goal. Despite our efforts to advance the program noted above, we did not complete a licensing or collaboration transaction or initiate a pivotal trial of QLT091001 for the treatment of inherited retinal disease in 2014. As a result, the Compensation Committee determined that we achieved 25.6% out of the targeted 40% with respect to this goal.

•

Operational Activities:  The following principal transitional and restructuring objectives were achieved in 2014:



•

reviewed organizational needs to enhance operational efficiencies.

        The Compensation Committee assigned 10% to the Operational Activities goal. Given that we did not favorably resolve issues pertaining to the QCELLUS laser or collect the Laser Earn-Out Payment, the Compensation Committee determined that we achieved 2.8% out of the targeted 10% with respect to this goal.

Achievement of Individual Goals and Total Cash Incentive Compensation

        The extent to which individual goals have been achieved or exceeded is determined largely from the annual performance recommendations for each of the other named executive officers prepared by the Interim CEO, and approved by the Compensation Committee.

        Chief Financial Officer.    In 2014, individual goals were established for Mr. Jagpal, including goals related to (i) supporting potential strategic activities and (ii) effectively managing financial reporting and internal controls. Consistent with the severance terms of his employment agreement, Mr. Jagpal was assessed as having met but not exceeded each of these goals, to achieve, overall by percentage, 100% of his individual goals for 2014. Based upon the achievement of the corporate goals and his individual goals, and the relative weighting between them, Mr. Jagpal was awarded a cash incentive compensation amount for 2014 equal to C$85,148 (US$77,106), which represented approximately 34% of his base salary for 2014.

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        Senior Vice President, Business Development and Commercial Operations.    In 2014, individual goals were established for Dr. Lussow, including goals related to coordinating internal support efforts on certain strategic matters and collection of the Laser Earn-Out Milestone payment. Effective May 31, 2014, Dr. Lussow's employment with QLT was terminated and he was entitled to the following cash incentive compensation payments under the terms of his June 30, 2006 Change of Control Agreement:

•

Upon termination, Dr. Lussow received a lump-sum payment of C$66,757 (US$64,813) pertaining to his 2014 bonus amount payable under QLT's cash incentive compensation plan for the 2014 performance period. The payment was calculated as if all corporate and individual goals were achieved but not exceeded (pro-rated for actual months worked by Dr. Lussow during the 2014 calendar year).



•

Upon termination, Dr. Lussow received a lump-sum payment of C$240,325 (US$217,626), which represents an 18 month bonus entitlement following his termination date (calculated at the maximum cash incentive compensation entitlement that would otherwise have been paid during the severance period as if all corporate and individual goals for that year have been achieved but not exceeded).

Equity Awards

        Equity compensation represents a significant portion of named executive officer total compensation at QLT. The amount and type of equity awards are intended to align QLT's named executive officers' interests with shareholder interests by increasing named executive officer compensation through sustained increases in the value of QLT's common shares. These equity-based awards also serve as a retention incentive. In setting the equity compensation levels of the named executive officers, the Compensation Committee considers numerous factors, including market data, the prior grants of stock options to the named executive officer, the level of responsibility and expected future contributions of the named executive officer, the performance of the named executive officer in the year, the total cash compensation level of the named executive officer, the fair value of long-term incentives awarded to executives in similar positions in a comparator group, and the ability of stock options to retain named executive officers.

        QLT currently maintains one equity compensation plan, the 2000 Plan, which provides for the issuance of stock options to directors, officers, employees and key consultants of QLT and its affiliates. Option grants are meant to directly link executive compensation to value creation for shareholders, and the amount (if any) each executive ultimately realizes from the options depends solely on the increase in value of common shares from the date of grant through the date of exercise. The 2000 Plan also provides for the issuance of RSUs.

        The 2000 Plan is administered by the Compensation Committee. The Compensation Committee or the Board of Directors (upon the recommendation of the Compensation Committee) is authorized to grant equity awards. Generally, except in the case of awards for new hires and specific circumstances described below, equity awards are decided once a year at a regularly scheduled meeting. With respect to certain new hires, the Interim CEO has limited authority to make a limited number of awards to new hires consistent with guidelines specified by the Board of Directors. Under the 2000 Plan, awards are deemed to be granted on the date that the Compensation Committee or the Board of Directors, as applicable, authorizes the grant or such later date as may be determined by the Compensation Committee or the Board of Directors, as applicable, at the time that the grant is authorized. All awards are granted after the market close on the date of grant and the exercise price of stock options will not be less than the closing price on the TSX on the date of grant. RSUs may be granted pursuant to the 2000 Plan with no consideration from the participant. RSUs are generally subject to vesting conditions, including continued employment. The Board of Directors did not grant any RSUs to employees during 2014.

        Except as described below, all currently outstanding options granted to QLT's named executive officers are exercisable for a term of ten years and vest in 36 equal monthly installments. In QLT's view, monthly vesting over three years facilitates retention while also providing a program that is consistent with market practices to attract and retain talent. In addition, in the event of a change of control, the Board of Directors may, in its discretion, accelerate the vesting of all or a portion of any unvested options. These terms provide executives with certain financial incentives that enhance QLT's ability to attract and retain key employees.

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        With the exception of new hires, the Board of Directors typically grants stock options to its executive officers annually, following each annual general meeting of shareholders. Upon his appointment to Interim CEO, Dr. Geoffrey Cox was awarded, upon recommendation by the Compensation Committee, 150,000 stock options. Unlike other options granted to QLT's executive officers, these options vest in six monthly installments beginning on the first monthly anniversary of the date of grant and will expire, if unexercised, on the 90th day after the cessation of his service as an employee or director of QLT.

        In December 2014, the Board of Directors, upon the recommendation of the Compensation Committee and following consultation with Radford, approved stock option grants to most of QLT's employees to enhance motivation and retention in light of QLT's reduced size, streamlined operations and termination of the Merger Agreement by Auxilium. Mr. Jagpal was not granted options given that he tendered his resignation on November 26, 2014.

Principal Executive Officer

        Mr. Meckler was the Chairman of the ETC from February 16, 2013 to October 22, 2014. No goals were set for Mr. Meckler and he was not awarded a bonus in connection with his role as Chairman of the ETC. It is the Board's view that Mr. Meckler has been, since his initial appointment to the Board on June 4, 2012, an "independent" member of the Board and does not consider Mr. Meckler to have been an executive officer of QLT as a result of his role as Chairman of the ETC. However, the designation of Mr. Meckler as "Principal Executive Officer" of QLT for compensation reporting purposes from January 1, 2014 to October 22, 2014, the period in which he served as Chairman of the ETC, may create the appearance that Mr. Meckler served as an executive officer on behalf of QLT during such time. The inclusion of Mr. Meckler as a named executive officer is not intended to imply that he was at any time an executive officer of QLT, and should not be construed as such. Effective October 23, 2014, Dr. Geoffrey Cox assumed the position of "Principal Executive Officer" upon his appointment to Interim CEO. For additional information refer to the Independence of Directors section below.

Minimum Guidelines for Executive Officers

        To further align our executives' financial interests with those of our shareholders, the Board, on the recommendation of the Compensation Committee, has approved share ownership guidelines for executive officers, encouraging share ownership as follows within five years after the latest of: (i) September, 2009 (the date of the implementation of the share ownership guidelines by the Board); (ii) the date the executive officer is hired; and (iii) the date the executive officer assumes a new position as an executive officer:

•

Chief Executive Officer: an amount equal to 1.5 times the CEO's annual base salary; and



•

Other named executive officers: an amount equal to 0.5 times the named executive officer's annual base salary.

        The value of QLT "in-the-money" vested stock options held by the executive is counted towards fulfilling the share ownership guidelines. The value of the shares owned for the purposes of fulfilling the share ownership guidelines is determined as the greater of the acquisition cost or the market value at the time of the determination. Compliance with the share ownership guidelines is evaluated on an annual basis by the Corporate Governance and Nominating Committee. These guidelines were not applied to Mr. Meckler as the former Chairman of the ETC. Assuming that Dr. Cox serves as Interim CEO for a short term period until the appointment of a permanent Chief Executive Officer, he will not be required to fulfill the share ownership guidelines set for the Chief Executive Officer. Given Mr. Jagpal's appointment as an executive officer in 2013 and his departure in early 2015, he was not required to meet the guidelines.

Health and Life Benefits

        Our named executive officers receive medical, dental, life insurance and other benefits generally made available to all of our employees.

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Registered Retirement Savings Plan (RRSP) Matching Program

        Our named executive officers resident in Canada are eligible, along with all other QLT employees resident in Canada, to participate in our registered retirement savings plan ("RRSP") matching program. Under this program, we match the amount contributed by the named executive officer into his or her RRSP annually (or into QLT's group RRSP Plan) up to 50% of the annual maximum amount allowable by the Canada Revenue Agency, less any applicable tax withholdings.

Tax and Accounting Consideration

        The Board and the Compensation Committee generally consider the financial accounting and tax implications of their named executive officer compensation decisions. While QLT is not generally subject to tax in the United States, when applicable, the Compensation Committee and the Board will consider the potential future effects of Section 162(m) of the Internal Revenue Code on the compensation paid to our named executive officers. Section 162(m) disallows a tax deduction for any publicly-held corporation for individual compensation exceeding $1.0 million in any taxable year for the CEO and each of the other named executive officers (other than the Chief Financial Officer), unless compensation is performance-based. The Compensation Committee, where it determines that Section 162(m) is applicable and it is reasonably practicable, will seek to qualify the variable compensation paid to our named executive officers for an exemption from the deductibility limitations of Section 162(m).

Compensation of Executive Officers

        The Interim CEO is paid in a combination of Canadian and U.S. dollars and our other executive officers are paid in Canadian dollars. For reporting purposes only, all compensation is set out below in U.S. dollars.

2014 Summary Compensation Table

        The following table summarizes total compensation for the 2014, 2013, and 2012 fiscal years earned by QLT's named executive officers. As discussed elsewhere in this Proxy Statement, Mr. Meckler, as Chairman of the ETC from February 16, 2013 through October 23, 2014, is included in this table because the ETC served the function of QLT's CEO during such time. Because of this and solely for the reason of providing QLT's shareholders with comprehensive disclosure in accordance with principles of transparency and good corporate governance, QLT has included Mr. Meckler as a named executive officer in the following tables. Mr. Meckler was not employed by QLT, nor compensated by QLT, other than as a director.

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Grants of Plan-Based Awards for the Fiscal Year Ended December 31, 2014

        The following table provides certain information concerning each grant of an award made to a named executive officer in 2014.

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Outstanding Equity Awards at 2014 Fiscal Year-End Table

        The following table provides information concerning unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer outstanding as of December 31, 2014.

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2014 Option Exercises and Stock Vested Table

        The following table provides information with respect to vested stock awards and option exercises during 2014 by our named executive officers.

Pension Benefits and Non-Qualified Deferred Compensation

        We do not have any pension plans or non-qualified deferred compensation plans for our named executive officers.

Employment Agreements, Post-Employment Compensation and Change in Control Arrangements

        We have entered into the agreements summarized below with our named executive officers.

        Employment Agreement with Dr. Geoffrey F. Cox.    On October 23, 2014, Dr. Cox entered into a six-month employment agreement with QLT to serve as the Company's Interim Chief Executive Officer, which was extended for an additional six months on April 21, 2015 and a further six months on October 8, 2015. The term of his employment is currently scheduled to end on April 22, 2016. Dr. Cox is entitled to receive a base salary of US$40,000 per month, health-related benefits, paid vacation, and expense reimbursement in accordance with Company policies. Under the terms of Dr. Cox's employment agreement, QLT is required to provide him with a tax equalization payment if the resulting Canadian taxes associated with his employment by QLT exceed the U.S. tax he would have been required to pay had his employment been entirely performed in the state of Massachusetts. In connection with his employment, on October 29, 2014 QLT also granted Dr. Cox options to purchase 150,000 common shares of QLT at an exercise price of C$4.47 (being the closing price of QLT's common shares on the TSX on the date of the grant). The options vested monthly over 6 months from the grant date and have a ten year expiration term. Following his termination, all vested and unexercised options will be exercisable for 90 days following the later of his termination date and the date that Dr. Cox ceases to be an

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employee or director of QLT. In accordance with the amendment entered into on October 8, 2015, the Company also agreed, subject to Board approval, to grant Dr. Cox up to an additional 150,000 stock options subject to certain terms and conditions of such amendment. In the event that QLT terminates the employment of Dr. Cox prior to the end of his employment term, other than for cause, he will be entitled to receive the lesser of two months base salary and the base salary from the last day of his active employment to April 22, 2016. Following termination of employment, Dr. Cox will be bound by non-competition and non-solicitation terms, which prohibit him from participating in a competitive business or soliciting QLT's customers or employees for a period of nine months following the termination of his employment with QLT. Dr. Cox continues to serve as a member of the Board, however, during the term of the employment agreement, he will not receive any director fees for such Board service.

        Employment Agreement Dr. Alexander R. Lussow.    On June 30, 2006, Dr. Lussow entered into an employment agreement with QLT pursuant to which, during his employment, he was entitled to base salary, cash incentive compensation under our cash incentive compensation plan, participation in our 2000 Plan, and other health-related benefits and registered retirement savings plan employer matching contributions. Except as stated below, in the event that QLT terminated the employment of Dr. Lussow without cause, the employment agreement provided that he was entitled to (a) twelve months' notice, plus one additional month of base salary for each year of service (to a maximum of 24 months in total), (b) payment of salary and bonus earned to the date of termination as if all corporate and individual goals for that year were achieved but not exceeded, (c) an amount to compensate him for lost benefits during the notice period, and (d) payment for outplacement counselling services to assist him in seeking alternative employment. Following termination of employment, Dr. Lussow is bound by the terms of a non-competition and non-solicitation agreement, which prohibits him from participating in a competitive business or soliciting our customers or employees for a period of one year following the termination of his employment.

        Letter Agreement with Dr. Alexander R. Lussow.    Effective December 18, 2013, QLT entered into a letter agreement with Dr. Lussow, in which QLT, among other things, agreed to terminate Dr. Lussow on either March 31, 2014, April 30, 2014 or May 31, 2014, at QLT's discretion and confirmed that, upon such termination, Dr. Lussow would be entitled to severance benefits under his change of control agreement dated June 30, 2006 between QLT and Dr. Lussow (the "2006 Change of Control Agreement") as a result of the change of control that occurred at QLT's 2012 annual general meeting of shareholders. Dr. Lussow agreed not to resign prior to such termination date and to perform his duties up to his termination in a manner consistent with his then current performance. Dr. Lussow was terminated pursuant to the letter agreement effective May 31, 2014, and received the severance benefits below.

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        Employment Agreement with Sukhi Jagpal.    On November 5, 2012, Mr. Jagpal entered into an amended and restated employment agreement with QLT, which was further amended on February 27, 2013. Based on the terms of the employment agreement (as amended), during his employment with QLT, Mr. Jagpal was entitled to base salary, cash incentive compensation under QLT's cash incentive compensation plan, participation in the 2000 Plan, and other health-related benefits and registered retirement savings plan employer matching contributions. In the event that QLT terminated the employment of Mr. Jagpal without cause or Mr. Jagpal terminated his employment upon at least 60 days' prior written notice, the employment agreement provided that he is entitled to (a) 12 months' base salary in a lump sum payment at the time of termination, (b) payment of salary and bonus earned to the date of termination as if all individual goals for that year were achieved but not exceeded and all corporate goals, if any, would be calculated using the average percentage of the 3 years immediately preceding the year in which Mr. Jagpal's employment was terminated, (c) provided that such continuation is approved by QLT's insurance provider, continuation of health benefits with the exception of short-term disability, long-term disability and out of country travel coverage for up to 12 months, or such earlier time as Mr. Jagpal commences an employment or consulting relationship with a third party, and (d) an amount equal to the RRSP matching payments Mr. Jagpal would otherwise have been eligible to receive until his termination date and from his termination date to the last day of his 12 month severance period. Following termination of employment, Mr. Jagpal is bound by the terms of a non-competition and non-solicitation agreement, which prohibits him from participating in a competitive business or soliciting QLT's customers or employees for a period of two years following the termination of his employment. On July 17, 2014, QLT entered into a letter agreement with Mr. Jagpal providing for a retention bonus of C$100,000, payable to Mr. Jagpal on the later of 90 days following completion of the merger contemplated by the Merger Agreement or February 28, 2015, provided that (i) if the Merger Agreement was terminated by either Auxilium or QLT, the retention bonus would be payable to Mr. Jagpal on the later of 30 days from the termination date or February 28, 2015, and (ii) if Mr. Jagpal's employment was terminated without cause, the retention bonus would be payable to Mr. Jagpal within 30 days from his termination of employment.

        On November 26, 2014, Mr. Jagpal tendered his resignation and provided 60 days' written notice to QLT. His employment ceased on January 26, 2015 and on January 30, 2015 he received certain severance and termination benefits in accordance with the terms of his employment agreement, which are summarized below.

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As Mr. Jagpal terminated his employment prior to February 28, 2015, he forfeited his entitlement to his retention bonus of C$100,000.

Deferred Share Units and Restricted Stock Units.

        As noted above, under QLT's DDSU Plan, directors may receive a portion of their equity-based compensation in the form of a DSU, which has a value equal to the price of QLT's common shares on the TSX. A DSU is convertible only into cash (no shares are issued). Upon a change in control of QLT, all outstanding unvested DSUs automatically vest. However, notwithstanding a change in control, DSUs can only be converted to cash after the director ceases to be a member of the QLT Board of Directors.

        RSUs may be subject to vesting conditions, including continued employment or service as a director. Upon a change in control of QLT, all unvested RSUs automatically vest. Upon vesting, each RSU represents the right to receive one common share of QLT.

        Stock Options.    Stock options that have been awarded to a named executive officer are governed by the terms of the stock option agreements entered into between QLT and its named executive officers, which provide:

•

In the event of retirement, unless otherwise determined by the Compensation Committee, (i) if the executive officer has worked with QLT for at least 20 years, or (ii) is at least 60 years of age and has worked continuously on behalf of QLT for at least five years, then all of his previously unvested stock options will vest, and all stock options will remain exercisable until the expiration date of the stock options. In the event of retirement where neither (i) or (ii) above is applicable, and the retiree has received the consent of the Compensation Committee, then the retiree's stock options will immediately vest and will terminate upon the earlier of (a) 90 days following the retirement date, or (b) the expiration date of the stock option.

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•

In the event of death or termination due to disability, all previously unvested stock options of the named executive officer will vest, and all stock options will remain exercisable until the earlier of (a) twelve months following the date of death or termination due to disability of the named executive officer, or (b) the expiration date of the stock option.



•

In the event of a termination of the named executive officer's employment other than for cause, all vested stock options will remain exercisable until the earlier of (a) 90 days following his termination of service, or (b) the expiration date of the stock option.

        With the exception of the stock options granted to Mr. Meckler on November 22, 2013 and Dr. Cox on October 29, 2014, which provide for automatic acceleration upon a change of control, any accelerated vesting of stock options granted to named executive officers following a change of control will be at the QLT Board of Directors' discretion.

        On June 7, 2015, in connection with certain transactions announced by QLT on June 8, 2015, the Board approved a recommendation of the Compensation Committee to accelerate the vesting of all unvested options and unvested RSUs granted to its directors, employees, and consultants in accordance with the terms of the 2000 Plan. On June 7, 2015, the vesting of 64,000 unvested RSUs was accelerated and 64,000 shares were issued to QLT's directors accordingly. In addition, the vesting of 972,135 stock options was accelerated with respect to 98,611 stock options held by directors and 873,524 stock options held by employees.

        Change of Control Agreements.    Prior to the Company's 2012 annual general meeting, the Company entered into separate change of control agreements with each of its named executive officers at the time, including Dr. Lussow. Other than Dr. Lussow, none of the Company's named executive officers is a party to a change of control agreement.

        Dr. Lussow's 2006 Change of Control Agreement contained "double-trigger" change of control severance provisions, such that the change of control did not, by itself, trigger the severance entitlements. The 2006 Change of Control Agreement provided that, in the event of termination by QLT of Dr. Lussow's employment without cause or by Dr. Lussow after a triggering event (as the terms "cause" and "triggering event" are defined in the agreement) within a period of 24 months following a change of control of QLT, he would receive a severance payment equal to 18 months' base salary, the maximum RRSP matching contribution to which Dr. Lussow would otherwise be entitled during the severance period, amounts in lieu of certain other health and retirement benefits for the severance period, relocation expenses, outplacement counselling and an annual cash incentive compensation entitlement calculated at the target cash incentive compensation entitlement that would otherwise have been paid during the severance period. For more information, refer to the Employment Agreements, Post-Employment Compensation and Change in Control Arrangements — Letter Agreement with Dr. Alexander R. Lussow section above.

        A change of control includes an event in which any person acquires 35% or more of the voting securities of QLT, the sale of all or substantially all of the assets of QLT (other than to an affiliate of QLT or to an entity in which our shareholders held 65% of the voting securities prior to the sale), a merger or other reorganization involving QLT in which the original shareholders of QLT own less than 65% of the resulting merged entity, or a change in the majority of the directors on the Board in any consecutive 24 month period or less such that a majority of the Board members ceases to comprise individuals who either have been (a) Board members continuously since the beginning of such period, or (b) appointed or nominated for election as Board members during such period by at least a majority of the Board members described in subsection (a) above who were still in office at the time the Board approved such appointment or nomination.

        Potential Payments upon Termination or Change in Control.    The amount of compensation payable to our named executive officers in the event of a termination of employment or a change of control is set forth in the tables below. The amounts in the tables below were calculated assuming the termination of the named executive officer's employment occurred as of December 31, 2014.

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Geoffrey F. Cox

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Jeffrey A. Meckler

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Sukhi Jagpal

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Alexander Lussow

        Effective December 18, 2013, QLT entered into a letter agreement with Dr. Lussow in which QLT agreed to, among other things, terminate Dr. Lussow on either March 31, 2014, April 30, 2014 or May 31, 2014 at QLT's discretion. Dr. Lussow was terminated effective May 31, 2014 pursuant to that letter agreement and he received the severance benefits discussed above under the Post-Employment Compensation and Change in Control Arrangements — Letter Agreement with Alexander R. Lussow, Ph.D. section.

Review, Approval or Ratification of Transactions with Related Persons

        It is QLT's policy that each director and nominee for election as director delivers to QLT annually a questionnaire that includes, among other things, a request for information relating to any transactions in which both the director or nominee, or their family members, and QLT participates, and in which the director or nominee, or such family member, has a material interest. The QLT Board of Directors is requested to review all such transactions reported to it by a director or nominee in response to the questionnaire, or that are brought to its attention by management or otherwise. After the review, the disinterested directors approve, ratify or disapprove such transactions. Management also updates the QLT Board of Directors as to any material changes to proposed transactions as they occur. This policy is not in writing but is followed consistently by the QLT Board of Directors.

        During 2014, QLT was not a party to any transaction where the amount involved exceeded $120,000 and in which an executive officer, director, director nominee or 5% shareholder (or their immediate family members) had a material direct or indirect interest, and no such person was indebted to QLT.

Compensation Policies and Practices as They Relate to Risk Management

        In determining if QLT has any compensation policies and practices that could create risks that would be reasonably likely to have a material adverse effect on QLT, the Compensation Committee reviewed its compensation policies and practices, and the mix of compensation elements made available to the executive officers and employees, which generally includes a base salary component and a pay-at-risk component. The pay-at-risk component comprises: (i) variable performance-based compensation, consisting of short-term incentives such as annual cash bonuses based on individual and corporate performance compared to pre-set goals and objectives; and (ii) long-term incentives, consisting of annual grants of long-term stock options.

        As a result of its review, the Compensation Committee believes that QLT's compensation policies and practices are not reasonably likely to have a material adverse effect on QLT, and that the compensation policies and practices do not create any incentives for employees to take inappropriate risks for the following reasons, among others:

•

QLT's compensation is balanced among base salary, annual bonus opportunity and long-term equity;

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•

QLT's annual cash bonus incentive compensation is directly linked to specific performance metrics identified by the Compensation Committee with input from management, such as achieving specific milestones related to the regulatory and clinical development progress for the synthetic retinoid program; completing specific transitional and restructuring activities; and evaluating and implementing shareholder value enhancing initiatives;



•

the Compensation Committee annually designs and assesses performance-based compensation, thereby allowing the Compensation Committee to assess risk management and consequences annually; and



•

QLT's annual equity incentive awards to employees to date have had a term of 10 years and typically vest over three years, encouraging its employees to focus on sustained growth and stockholder value.

COMPENSATION COMMITTEE REPORT

        The Compensation Committee has discussed and reviewed with management the Compensation Discussion and Analysis presented in this Proxy Statement. Based on such review and discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

    •                •                •     

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

        QLT currently maintains one equity compensation plan, the 2000 Plan. The shareholders and directors of QLT have previously approved the 2000 Plan, pursuant to which directors, officers, employees and consultants of QLT and its affiliates may be granted RSUs and stock options to acquire common shares.

        The following table sets out information regarding our common shares that may be issued upon the exercise of options, warrants and other rights granted to employees, consultants or directors under our equity compensation plans, as of December 31, 2014:

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INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

        No current or former directors, executive officers or employees of QLT or any subsidiaries thereof, or proposed nominees for election as a director of QLT, are currently indebted to QLT or its subsidiaries other than routine indebtedness (as defined under Canadian securities rules) of certain employees.

REPORT OF THE AUDIT AND RISK COMMITTEE

        Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate this Proxy Statement or future filings with the Securities and Exchange Commission, in whole or part, the following report shall not be deemed to be incorporated by reference into any such filing.

        The Audit and Risk Committee has reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2014 with the management of QLT and Deloitte LLP, our independent auditors. Each member of the Audit and Risk Committee is "independent" as defined by the rules of NASDAQ.

        The Audit and Risk Committee has discussed with Deloitte LLP the matters required to be discussed by Statement on Auditing Standards No. 61, as amended. In addition, the Audit and Risk Committee has received the written disclosures and the letter from Deloitte LLP required by the Independence Standards Board Standard No. 1 regarding their independence, and has discussed with Deloitte LLP their independence relative to us, including whether the provision of their services is compatible with maintaining Deloitte LLP's independence.

        Based on the review and discussions referred to above, the Audit and Risk Committee recommended to QLT's Board that the audited consolidated financial statements for the year ended December 31, 2014 be included in QLT's Annual Report on Form 10-K for 2014 filed with the SEC.

Audit Fees

        The following table sets forth the aggregate fees billed by Deloitte LLP (formerly Deloitte & Touche LLP), the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, "Deloitte") for the following services during 2014 and 2013.

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Pre-Approval Policies and Procedures

        The charter of the Audit and Risk Committee provides that the Audit and Risk Committee is responsible for the pre-approval of all audit and permitted non-audit services to be performed for QLT by the independent auditors. The fees paid to the independent auditors that are shown in the chart above for 2014 and 2013 were approved by the Audit and Risk Committee in accordance with the procedures described below.

        The Audit and Risk Committee reviews and approves audit and non-audit services proposed to be provided by the independent auditors. The Audit and Risk Committee has delegated to its Chairman, or an alternate member of the Audit and Risk Committee, the authority to grant pre-approvals if either deems it necessary or appropriate to consider a pre-approval request without approval and/or meeting of the full Audit and Risk Committee. Pre-approvals by the Chairman of the Audit and Risk Committee or an alternate member are reviewed with the Audit and Risk Committee at its next regularly scheduled meeting.

        In considering the pre-approval of proposed audit or non-audit services by the independent auditors, management reviews with the Audit and Risk Committee or its delegate a description of and the budget for the proposed service and the reasons that the independent auditors are being requested to provide the services, including any possible impact on the independence of the independent auditors. Additional Audit and Risk Committee approval is required if the pre-approved services exceed the pre-approved budgeted amount for the services.

PROPOSAL NO. 2

APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS

        Deloitte LLP, an independent registered public accounting firm, served as our independent auditors for the year ended December 31, 2014. Upon the unanimous recommendation of the Audit and Risk Committee, the Board has proposed that Deloitte LLP continue to serve as our independent auditors for 2015 at a remuneration to be fixed by the Audit and Risk Committee. Our shareholders are being asked to approve this proposal at the Annual Meeting. QLT has been advised that a representative of Deloitte LLP will attend the Annual Meeting and will have the opportunity to make a statement if he or she decides to do so and will be available to respond to appropriate questions from shareholders.

Vote Required and Board of Directors' Recommendation

        This proposal requires the affirmative vote of the holders of a majority of the QLT common shares properly cast on this proposal at the Annual Meeting. If the proposal is not approved, the BCBCA provides that the current auditors, Deloitte LLP, will continue to act for QLT until such time as the shareholders approve alternate auditors.

        The following resolution will be submitted for a shareholder vote at the Annual Meeting:

"BE IT RESOLVED that Deloitte LLP, an independent registered public accounting firm, be appointed as independent auditors of QLT Inc. for the ensuing year, and the directors of QLT Inc. be authorized to fix the remuneration to be paid to the auditors."

        The Board of Directors unanimously recommends that our shareholders vote "FOR" the proposal to appoint Deloitte LLP as our independent auditors for 2015 at a remuneration to be fixed by the directors of the Company.

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PROPOSAL NO. 3

ADVISORY VOTE ON THE COMPENSATION OF OUR
NAMED EXECUTIVE OFFICERS
("SAY-ON-PAY VOTE")

Background

        The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") enables our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the SEC's rules. At the 2011 annual general meeting, our shareholders voted, on a non-binding, advisory basis, for the Company to hold future, non-binding advisory votes on the compensation of our named executive officers on an annual basis. After taking into consideration this voting result, the Board determined that it intends to hold non-binding advisory votes on the compensation of our named executive officers every year.

        At QLT's 2014 annual general meeting, shareholders approved by a majority of approximately 96% of shares voted, in a non-binding advisory vote, the compensation of QLT's named executive officers as disclosed in QLT's proxy statement for its 2014 annual general meeting. The QLT Compensation Committee has considered and will consider this shareholder advisory vote on executive compensation in determining the compensation of QLT's named executive officers for 2015.

        As more fully described under "Compensation Discussion and Analysis" section of this Proxy Statement, QLT's compensation philosophy is to provide a compensation package that attracts, retains and motivates executives and rewards business successes that have the potential to increase shareholder value. More specifically, the Compensation Committee of the Board seeks to:

•

provide a total compensation program that is competitive with other companies in the pharmaceutical and biotechnology industries with which QLT competes for executive talent;



•

place a significant portion of executive compensation at risk by linking cash incentive compensation to the achievement of pre-established corporate financial and operational performance objectives and other individual key objectives within the executive's area of responsibility and by using equity as a key component of QLT's compensation program;



•

provide long-term incentive compensation that focuses executives' efforts on building shareholder value by aligning their interests with those of QLT's shareholders; and



•

promote stability and retention of QLT's management team.

        Consistent with QLT performance-based philosophy, a significant portion of potential compensation is based upon performance- and equity-based programs. These programs include awards that are based on QLT's operational and financial performance and provide compensation in the form of cash, and equity-based incentive awards that are tied to both QLT's short-term and long-term performance and achievement of goals. The performance-based bonus program rewards short-term performance; while QLT's equity awards, coupled with its stock ownership guidelines, reward long-term performance and align the interests of management with those of QLT's shareholders.

Board of Directors' Recommendation

        Our Board of Directors believes that the information provided above and within the "Compensation Discussion and Analysis" section of this Proxy Statement demonstrates that our executive compensation program will ensure that management's interests are aligned with our shareholders' interests and support long-term value creation.

        The following resolution will be submitted for a shareholder vote at the Annual Meeting:

"BE IT RESOLVED that the shareholders of QLT Inc. approve, on an advisory basis, the compensation of QLT's named executive officers, as disclosed in the Compensation

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Discussion and Analysis, compensation tables and narrative discussion set forth in the Proxy Statement."

        The say-on-pay vote is advisory, and therefore not binding on QLT, the Compensation Committee or our Board of Directors. However, the Board of Directors will review the voting results and take them into consideration when making future decisions about executive compensation.

        The Board of Directors unanimously recommends that our shareholders vote "FOR" the proposal to approve the compensation of QLT's named executive officers, as described in the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in this Proxy Statement.

INTEREST OF CERTAIN PERSONS IN MATERIAL TRANSACTIONS

        Unless otherwise disclosed in this Proxy Statement, none of the directors, director nominees, executive officers, persons who have been directors or executive officers at any time since the beginning of QLT's last completed fiscal year, or any beneficial owner of more than 5% of the outstanding common shares of QLT or any associate or affiliate of such person, had any material interest, direct or indirect, in any transaction or proceeding during the past fiscal year or in any proposed transaction or pending proceeding which has materially affected or will materially affect QLT or its subsidiaries. In the event that a director is determined to have any material interest, direct or indirect, in any transaction or proceeding or in any proposed transaction or pending proceeding of QLT, only those directors not having a material interest would be permitted to consider and evaluate any such transaction or any agreements relating to that transaction, or any actions to be undertaken by QLT relating to such proceeding.

        QLT has entered into indemnity agreements with our directors and all other officers which provide, among other things, that, subject to any requirements that may exist under the BCBCA or the Articles of QLT, QLT will indemnify such officer or director, under the circumstances and to the extent specified, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings to which he or she is or may be made a party by reason of his or her position as a director or officer of QLT.

AUDITED CONSOLIDATED FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION

        A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 was previously mailed to all registered and beneficial shareholders of QLT. The Audited Consolidated Financial Statements of QLT for its most recently completed fiscal year ended December 31, 2014, together with the Auditors' Report thereon, which are included in our Annual Report for Canadian regulatory purposes, will be presented at the Annual Meeting. Copies of the Audited Consolidated Financial Statements, including management discussion and analysis, are available on our website at www.qltinc.com or upon request directly to QLT to the attention of "QLT Investor Relations," 887 Great Northern Way, Suite 250, Vancouver, British Columbia, Canada, V5T 4T5 (Phone: 604-707-7000; Fax: 604-707-7001; e-mail: ir@qltinc.com).

        Additional information relating to QLT has been filed and is available on SEDAR at www.sedar.com and from the SEC's website at www.sec.gov.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and beneficial owners of more than 10% of a registered class of our equity securities to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC. Such executive officers, directors and 10% beneficial owners are also required by SEC rules to furnish us with copies of all Section 16(a) reports they file.

        To our knowledge, based solely on our review of the copies of such reports received by us or written representations from certain reporting persons that no Forms 5 were required for such persons, we believe that during 2014 all Section 16(a) filing requirements applicable to our executive officers, directors and 10% beneficial owners were complied with.

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OTHER BUSINESS

        The Board is not aware of any other matter that will be presented at the Annual Meeting. If other matters properly come before the Annual Meeting, both the Interim Chief Executive Officer and the Chairman of the Board intend to vote the common shares represented by proxy for which either of them is appointed in accordance with their best judgment on such matters.

BY ORDER OF THE BOARD OF DIRECTORS OF QLT INC.

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