SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2012
Shaw Communications
Inc.
(Translation of registrants name into English)
Suite 900, 630 3
rd
Avenue S.W., Calgary, Alberta T2P 4L4 (403) 750-4500
(Address of principal executive offices)
Indicate by check mark whether the
registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F
¨
or Form 40-F
x
Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1):
¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7):
¨
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes
¨
No
x
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
82-
The information contained in this report on Form 6-K shall be deemed
filed with the Securities and Exchange Commission solely for purpose of being and hereby is incorporated by reference into and as part of the Registration Statement on Form F-10 (File No. 333-170416) filed by the registrant under the Securities Act
of 1933, as amended.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Shaw Communications Inc., has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: December 7, 2012
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Shaw Communications Inc.
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By:
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/s/ Steve Wilson
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Steve Wilson
Sr. V.P., Chief Financial
Officer
Shaw Communications Inc.
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EXHIBIT INDEX
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Exhibit
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Description of Exhibit
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1
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Notice & Proxy Circular
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2
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Proxy
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Exhibit 1
TABLE OF CONTENTS
SHAW COMMUNICATIONS INC.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
The annual general meeting
(the
Meeting
) of shareholders of Shaw Communications Inc. will be held as follows:
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Date:
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Wednesday, January 9, 2013
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Time:
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11:00 a.m. (Mountain time)
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Location:
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Shaw Barlow Trail Building
2400 32
nd
Avenue NE
Calgary, Alberta
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for the following purposes:
1.
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to receive the consolidated financial statements for the year ended August 31, 2012 and the auditors report on those statements;
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3.
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to appoint auditors; and
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4.
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to transact such other business as may properly come before the meeting.
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By Order of the Board of Directors,
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(signed)
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Peter A. Johnson
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General Counsel and Corporate Secretary
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Calgary, Alberta
November 21, 2012
Holders of class A participating shares of record at the close of
business on November 21, 2012 are the only shareholders entitled to vote at the Meeting. Holders of class B non-voting participating shares are entitled to attend and speak at the Meeting, but are not entitled to vote on any matter proposed for
consideration.
If you cannot attend the Meeting in person, you are encouraged to complete the accompanying
proxy and deliver or send it in the enclosed envelope to CIBC Mellon Trust Company, c/o Canadian Stock Transfer Company Inc., 600 The Dome Tower, 333 7
th
Avenue S.W., Calgary, Alberta, T2P 2Z1 (mailing address: CIBC Mellon Trust Company, c/o Canadian Stock Transfer Company Inc.,
Proxy Department, P.O. Box 721, Agincourt, Ontario, M1S 0A1), to be received not later than 48 hours (excluding Saturdays, Sundays and holidays) before the time fixed for the Meeting or an adjournment thereof.
SHAW COMMUNICATIONS INC.
PROXY CIRCULAR
The information contained in this proxy circular is provided
in connection with the solicitation of proxies by and on behalf of management of Shaw Communications Inc. (the Corporation) for use at the annual general meeting (the Meeting) of shareholders of the Corporation to be held on
January 9, 2013, and any adjournments thereof, as set forth in the attached Notice of Meeting.
Unless otherwise noted, the
information contained in this proxy circular is given as of November 21, 2012. All sums are expressed in Canadian dollars.
BUSINESS OF THE MEETING
Information concerning the nominees for election to the Board of Directors (the
Board
) of the Corporation is set forth below, along with certain other information relating to meetings of the
Board and its committees.
The number of directors to be elected is 16. Directors will hold office until the next annual meeting of
shareholders of the Corporation or until their successors are elected or appointed.
Management of the Corporation recommends voting in favour of each nominee listed below.
In November 2012 the board adopted a majority voting policy.
Nominees for Election to the Board of Directors
(1)
The following table sets out the name of each nominee, together with his or her municipality of residence, age, year first elected or appointed a
director, biography, meeting attendance record and comparative ownership of securities of the Corporation for the fiscal years ended August 31, 2012 and 2011.
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PETER J.
BISSONNETTE
(8)(11)
Calgary, AB, Canada
Age: 65
Director Since: 2009
Non-Independent
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·
President of the Corporation
Other positions:
·
Director of Cable Television Laboratories, Inc. (CableLabs), a not-for-profit research development consortium
dedicated to pursuing new cable telecommunications technologies
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Fiscal 2012 Board
and Committee Meeting Attendance
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Board of Directors
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7 of 7
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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40,000
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166,388
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1,050,000
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Nil
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$4,484,064
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2011
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40,000
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160,178
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1,050,000
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Nil
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1
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ADRIAN I. BURNS, LLD
Rockcliffe Park, ON,
Canada
Age: 66
Director
Since: 2001
Independent
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·
Corporate Director
·
Former Member of the Copyright Board of Canada
·
Former Commissioner of the Canadian Radio-television and Telecommunications Commission
Other positions:
·
Former Vice Chair and presently a Trustee of the Board of Trustees of the National Arts Centre
·
Board member of several business and community organizations, including Carthy Foundation, Ombudsman for Banking
Services and Investments, RCMP Heritage Center and Western Limited, a Saskatchewan real estate company
·
Honorary Captain of the Royal Canadian Navy
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Fiscal 2012 Board
and Committee Meeting Attendance
(12)
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Board of Directors
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7 of 7
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100%
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Corporate Governance and Nominating Committee
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5 of 5
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100%
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Executive Committee
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1 of 1
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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2,600
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6,000
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50,000
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30,465
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$837,805
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2011
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2,600
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6,000
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70,000
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26,094
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GEORGE F. GALBRAITH
Vernon,
B.C., Canada
Age: 68
Director Since: 1991
Independent
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·
Corporate Director
·
Former President of Vercom Cable Services Ltd. which operated the cable television system serving Vernon, British Columbia
Other positions:
·
Director of Okanagan Innovation Fund
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Fiscal 2012 Board
and Committee Meeting Attendance
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Board of Directors
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7 of 7
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100%
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Corporate Governance and Nominating
Committee
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5 of 5
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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10,000
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547,621
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50,000
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6,359
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$12,034,774
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2011
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10,000
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547,621
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50,000
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3,101
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DR. RICHARD R. GREEN
(9)
Boulder, CO., USA
Age: 75
Director Since:
2010
Independent
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·
Corporate Director
·
Former President and CEO of Cable Television Laboratories, Inc. (CableLabs)
Other Public Board Membership:
·
Liberty Global, Inc. (NASDAQ)
Other positions:
·
Director of several private companies and not-for-profit
organizations
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Fiscal 2012 Board
and Committee Meeting Attendance
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Board of Directors
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6 of 7
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86%
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Human Resources and Compensation
Committee
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5 of 5
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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Nil
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Nil
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70,000
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15,958
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$339,905
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2011
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Nil
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Nil
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70,000
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8,222
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2
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DR. LYNDA HAVERSTOCK, C.M., S.O.M.
Saskatoon, SK, Canada
Age: 64
Director Since: 2007
Independent
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·
Senior Vice President, Operations of RMD Engineering Inc.
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Advisor to the President of the Saskatchewan Indian Institute of Technologies (SIIT)
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Trustee, Government House Foundation
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Former President and Chief Executive Officer of Tourism Saskatchewan, a public-private partnership responsible
for tourism activities (2007 August 2012)
·
Former Lieutenant Governor of Saskatchewan (2000
2006)
Other positions:
·
Former Leader of the Liberal Party of Saskatchewan
·
Former Honorary Colonel of the 2 Canadian Forces Flying Training School
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Fiscal 2012 Board
and Committee Meeting Attendance
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Board of Directors
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7 of 7
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100%
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Corporate Governance and Nominating
Committee
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5 of 5
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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Nil
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Nil
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70,000
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13,005
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$277,007
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2011
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Nil
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Nil
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70,000
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7,844
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GREGG KEATING
Porters Lake, N.S., Canada
Age:
49
Director Since: 2007
Independent
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·
Chairman and Chief Executive Officer of Altimax Venture Capital, parent company of the Keating Group which comprises a diverse portfolio of Business Interests
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Fiscal 2012 Board
and Committee Meeting Attendance
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Board of Directors
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7 of 7
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100%
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Audit Committee
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4 of 4
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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2,500
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63,120
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70,000
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21,926
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$1,870,230
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2011
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2,500
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63,120
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70,000
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17,946
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MICHAEL W. OBRIEN
Canmore, AB, Canada
Age:
67
Director Since: 2003
Lead Director Since: 2009
Independent
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·
Corporate Director
·
Until his retirement in 2002, served as Executive Vice President, Corporate Development and Chief Financial Officer of Suncor Energy Inc., an integrated energy company
Other Public Board Membership:
·
Suncor Energy Inc. (TSX, NYSE)
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Fiscal 2012 Board
and Committee Meeting Attendance
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Board of Directors
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7 of 7
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100%
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Corporate Governance and Nominating Committee
Chair
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5 of 5
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100%
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Executive Committee
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1 of 1
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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10,000
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21,250
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50,000
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34,278
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$1,417,746
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2011
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10,000
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13,000
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70,000
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29,731
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3
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PAUL K. PEW
(12)
Toronto, ON, Canada
Age: 48
Director Since:
2008
Independent
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·
Co-Founder and Co-Chief Executive Officer of G3 Capital Corp., a Toronto based alternative asset manager
·
Corporate Director and Private Investor
·
From August 2004 August 2007, Vice Chairman, Investment Banking GMP Securities Ltd., an independent
investment dealer
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Fiscal 2012 Board
and Committee Meeting Attendance
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Board of Directors
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7 of 7
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100%
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Audit Committee
Chair
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4 of 4
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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Nil
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25,000
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70,000
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33,510
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$1,246,263
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2011
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Nil
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25,000
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70,000
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23,068
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JEFFREY C. ROYER
(12)
Toronto, ON, Canada
Age: 57
Director Since:
1995
Independent
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·
Private Investor
Other positions:
·
Director of several private companies and not-for-profit organizations
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Fiscal 2012 Board
and Committee Meeting Attendance
|
Board of Directors
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7 of 7
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100%
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Audit Committee
|
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4 of 4
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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|
Class B
Non-Voting Shares
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|
Options
(3)
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DSU
(4)
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Equity Value
(13)
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2012
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100,000
(6)
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14,965,572
(6)
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50,000
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40,275
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$1,581,802
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2011
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100,000
(6)
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14,965,572
(6)
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50,000
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31,304
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BRADLEY S. SHAW
(7)(8)
Calgary, AB, Canada
Age: 48
Director Since:
1999
Non-Independent
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·
Chief Executive Officer of the Corporation
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Fiscal 2012 Board
and Committee Meeting Attendance
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Board of Directors
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7 of 7
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100%
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Executive Committee
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1 of 1
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100%
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Securities Owned /
Controlled
(2)
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Year
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Class A Shares
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Class B
Non-Voting Shares
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Options
(3)
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DSU
(4)
/RSU
(5)
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Equity Value
(13)
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2012
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4,426,400
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4,119,516
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750,000
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47,133
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$192,770,024
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2011
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4,426,400
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4,111,647
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750,000
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44,950
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4
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JIM SHAW
(7)(8)(11)
Calgary, AB, Canada
Age: 55
Director Since: 2002
Non-Independent
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·
Vice Chair of the Corporation
Other positions:
·
Director of United Acquisitions II Corp.
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Fiscal 2012 Board
and Committee Meeting Attendance
|
Board of Directors Vice Chair
|
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7 of 7
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100%
|
Securities Owned /
Controlled
(2)
|
Year
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Class A Shares
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|
Class B
Non-Voting Shares
|
|
Options
(3)
|
|
DSU
(4)
|
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Equity Value
(13)
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2012
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4,426,400
|
|
4,902,537
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|
1,050,000
|
|
Nil
|
|
$208,444,438
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2011
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|
4,426,400
|
|
4,891,784
|
|
1,050,000
|
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Nil
|
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|
|
|
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JR SHAW, O.C.
(7)(8)(10)
Calgary, AB, Canada
Age:
78
Director Since: 1966
Non-Independent
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·
Founder and Executive Chair of the Corporation
Other positions:
·
Director and President of the Shaw Foundation
·
Director of several private companies
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Fiscal 2012 Board
and Committee Meeting Attendance
|
Board of Directors Executive Chair
|
|
7 of 7
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100%
|
Executive Committee
Chair
|
|
1 of 1
|
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100%
|
Securities Owned /
Controlled
(2)
|
Year
|
|
Class A Shares
|
|
Class B
Non-Voting Shares
|
|
Options
(3)
|
|
DSU
(4)
|
|
Equity Value
(13)
|
2012
|
|
8,929,800
|
|
26,095,542
|
|
Nil
|
|
Nil
|
|
$765,685,345
|
2011
|
|
8,929,800
|
|
25,617,232
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
|
|
|
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JC SPARKMAN
(9)
Lakewood, CO., USA
Age:
80
Director Since: 1994
Independent
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·
Corporate Director
·
Former Executive Vice President and Executive Officer of Telecommunications Inc. (also known as TCI), one of the largest cable television operators in the U.S.
Other Public Board Membership:
·
Liberty Global, Inc. (NASDAQ)
·
Universal Electronics Inc. (NASDAQ)
|
Fiscal 2012 Board
and Committee Meeting Attendance
|
Board of Directors
|
|
6 of 7
|
|
86%
|
Human Resources and Compensation Committee
|
|
5 of 5
|
|
100%
|
Executive Committee
|
|
1 of 1
|
|
100%
|
Securities Owned /
Controlled
(2)
|
Year
|
|
Class A Shares
|
|
Class B
Non-Voting Shares
|
|
Options
(3)
|
|
DSU
(4)
|
|
Equity Value
(13)
|
2012
|
|
10,000
|
|
56,400
|
|
50,000
|
|
27,245
|
|
$2,016,639
|
2011
|
|
10,000
|
|
66,400
|
|
50,000
|
|
23,021
|
|
|
5
|
|
|
|
|
|
|
|
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CARL E. VOGEL
(9)(12)
Cherry Hills Village, CO., USA
Age: 55
Director Since:
2006
Independent
|
|
·
Private Investor; Senior Advisor to DISH Network
·
Vice Chairman of each of DISH Network Corporation (formerly EchoStar Communications Corporation, a satellite-delivered digital television services provider in the U.S.) and
EchoStar Corp. (a developer of set-top boxes and other electronic technology) from February 2008 until March 2009
·
President from September 2006 and Vice Chairman from June 2005, EchoStar Communications Corporation until
February 2008
·
Former President, Chief Executive Officer and a
director of Charter Communications, a broadband service provider in the U.S.
Other Public Board Membership:
·
Ascent Media Corporation (NASDAQ)
·
DISH Network Corporation (NASDAQ)
·
NextWave Wireless Inc. (NASDAQ)
·
Sirius / XM Corporation (NASDAQ)
·
Universal Electronics Inc. (NASDAQ)
Other positions:
·
Director of several private companies and not-for-profit
organizations
|
Fiscal 2012 Board
and Committee Meeting Attendance
|
Board of Directors
|
|
7 of 7
|
|
100%
|
Audit Committee
|
|
4 of 4
|
|
100%
|
Securities Owned /
Controlled
(2)
|
Year
|
|
Class A Shares
|
|
Class B
Non-Voting Shares
|
|
Options
(3)
|
|
DSU
(4)
|
|
Equity Value
(13)
|
2012
|
|
Nil
|
|
70,000
|
|
70,000
|
|
6,360
|
|
$1,626,468
|
2011
|
|
Nil
|
|
70,000
|
|
70,000
|
|
3,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHEILA C. WEATHERILL, C.M.
Edmonton, AB, Canada
Age:
67
Director Since: 2009
Independent
|
|
·
Corporate Director
·
President and Chief Executive Officer of the Capital Health Authority (Edmonton region health administrative authority) from 1996 to September 2008
Other Public Board Membership:
·
Epcor Utilities Inc.
Other positions:
·
Member, Prime Ministers Advisory Committee on the Public Service
·
Independent Investigator in the Investigation of the 2008 Listeriosis Outbreak
·
Senior Advisor to the Vice-President (External) and Distinguished Executive in residence in the School of Business, University of Alberta
·
Board Member, Alberta Innovates Technology Futures
·
Board Member, Canada Health Infoway
|
Fiscal 2012 Board
and Committee Meeting Attendance
|
Board of Directors
|
|
7 of 7
|
|
100%
|
Human Resources and Compensation
Committee
|
|
5 of 5
|
|
100%
|
Securities Owned /
Controlled
(2)
|
Year
|
|
Class A Shares
|
|
Class B
Non-Voting Shares
|
|
Options
(3)
|
|
DSU
(4)
|
|
Equity Value
(13)
|
2012
|
|
Nil
|
|
Nil
|
|
70,000
|
|
12,475
|
|
$265,718
|
2011
|
|
Nil
|
|
Nil
|
|
70,000
|
|
6,824
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
WILLARD H. YUILL
Medicine
Hat, AB, Canada
Age: 74
Director Since: 1999
Independent
|
|
·
Chairman and Chief Executive Officer, The Monarch Corporation, a private investment company
Other Public Board Membership:
·
Former director of Western Financial Group Inc. (TSX)
Other positions:
·
Director of several private companies and not-for-profit organizations
·
Trustee of the St. Andrews College Foundation
·
Governor of the Western Hockey League
|
Fiscal 2012 Board
and Committee Meeting Attendance
|
Board of Directors
|
|
7 of 7
|
|
100%
|
Human Resources and Compensation
Committee Chair
|
|
5 of 5
|
|
100%
|
Securities Owned /
Controlled
(2)
|
Year
|
|
Class A Shares
|
|
Class B
Non-Voting Shares
|
|
Options
(3)
|
|
DSU
(4)
|
|
Equity Value
(13)
|
2012
|
|
10,800
|
|
5,734,722
|
|
50,000
|
|
10,256
|
|
$122,621,831
|
2011
|
|
10,800
|
|
5,734,722
|
|
50,000
|
|
6,817
|
|
|
Notes:
(1)
|
The Nominees listed above were elected as directors at the annual general meeting of shareholders of the Corporation held on January 12, 2012. For more
information about the committees of the Board (Executive, Audit, Corporate Governance and Nominating, and Human Resources and Compensation), as well as the Corporations system and approach with respect to corporate governance, see
Statement of Corporate Governance.
|
(2)
|
The information as to the securities beneficially owned, or over which control or direction is exercised, except as otherwise noted in Note 6, has been
furnished by each of the nominees as of November 22, 2011 and November 21, 2012.
|
(3)
|
For further details of stock options granted to directors, see the information under the heading Statement of Executive Compensation Compensation
of Directors.
|
(4)
|
DSU
means deferred share unit. The DDSU Plan was adopted effective January 1, 2004. See the information under the heading
Statement of Executive Compensation Compensation of Directors DDSU Plan.
|
(5)
|
RSU
means restricted share unit. The RSU Plan was adopted in June 2011. See the information under the heading Statement of Executive
Compensation Incentive Plan Awards Restricted Share Units.
|
(6)
|
Jeffrey C. Royer beneficially owns 33,988 Class B Non-Voting Shares. Associates of Mr. Royer own 100,000 Class A Shares and 14,931,584 Class B
Non-Voting Shares. Mr. Royer does not beneficially own, directly or indirectly, or exercise control or direction over, such shares. This information is included solely to provide more fulsome disclosure to shareholders.
|
(7)
|
JR Shaw is the father of Bradley S. Shaw and Jim Shaw. All of the Class A Shares owned or controlled by JR Shaw, Bradley S. Shaw and Jim Shaw are subject
to a Voting Trust Agreement, details of which are provided under the heading Proxy Information Voting Shares and Principal Holders Thereof. Certain Class A Shares and Class B Non-Voting Shares shown for Bradley
S. Shaw and Jim Shaw are beneficially owned by such individuals but are held by entities owned or controlled by JR Shaw.
|
(8)
|
Each of JR Shaw, Peter Bissonnette, Bradley S. Shaw and Jim Shaw have elected not to receive director fees.
|
(9)
|
Each of Dr. Richard R. Green and JC Sparkman is a member of the board of directors of Liberty Global, Inc. Each of JC Sparkman and Carl E. Vogel is
a member of the board of directors of Universal Electronics Inc.
|
(10)
|
JR Shaw was a director of Darian Resources Ltd. (
Darian
) prior to its filing for creditor protection under the
Companies Creditors
Arrangement Act
(the
CCAA
) on February 12, 2010. Darian successfully completed its restructuring proceedings under the CCAA on July 2, 2010.
|
(11)
|
Peter J. Bissonnette or Jim Shaw did not serve as a member of a committee of the Board during fiscal 2012.
|
(12)
|
Each of Paul K. Pew, Jeffrey C. Royer and Carl E. Vogel qualifies as a financial expert under the
Sarbanes-Oxley Act of 2002
(
Sarbanes-Oxley Act
) and other applicable regulatory requirements.
|
(13)
|
Equity value is calculated using $23.50 per Class A Share and $21.30 per Class B Non-voting Share, being the closing prices on November 21, 2012.
The equity value for Jeffrey C. Royer is calculated based on the shares beneficially owned by him (see note 6). Each of the directors meets the share ownership guidelines (see Share Ownership Guidelines).
|
7
2.
|
Appointment and Remuneration of Auditors
|
Ernst & Young LLP, Chartered Accountants, the present auditors of the Corporation, has been nominated to serve as auditors of the Corporation to hold office until the next annual general meeting of
shareholders of the Corporation.
The Audit Committee has recommended to the Board and to shareholders the nomination of Ernst & Young LLP as the Corporations auditors.
Audit Fees
The aggregate amounts paid or accrued by the Corporation
with respect to fees payable to Ernst & Young LLP for audit (including financings, regulatory reporting requirements and Sarbanes-Oxley Act related services), audit-related, tax and other services in the fiscal years ended August 31,
2012 and 2011 were as follows:
|
|
|
|
|
|
|
|
|
Type of Service
|
|
Fiscal 2012
|
|
|
Fiscal 2011
|
|
Audit Fees
|
|
$
|
2,915,180
|
|
|
$
|
2,955,953
|
|
Audit-related Fees
|
|
|
387,083
|
|
|
|
100,866
|
|
Tax Fees
|
|
|
280,434
|
|
|
|
393,579
|
|
All Other Fees
|
|
|
|
|
|
|
122,262
|
|
|
|
Total
|
|
$
|
3,582,697
|
|
|
$
|
3,572,660
|
|
|
|
Audit-related fees for fiscal 2012 and for fiscal 2011 relate to consultation on International Financial Reporting
Standards (
IFRS
). The tax fees for fiscal 2012 relate to post-acquisition tax advisory services, linear property tax compliance and general tax advisory services and for fiscal 2011 relate to tax advisory services in respect of
the acquisition of the broadcasting business of Canwest Global Communications Corp. and linear property tax compliance. The other fees for fiscal 2011 relate to project advisory services.
The Audit Committee of the Corporation considered and agreed that the above fees are compatible with maintaining the independence of the
Corporations auditors. Further, the Audit Committee determined that, in order to ensure the continued independence of the auditors, only limited non-audit services will be provided to the Corporation by Ernst & Young LLP and in such
case, only with the prior approval of the Audit Committee. The Chair of the Audit Committee has been delegated authority to approve the retainer of Ernst & Young LLP to provide non-audit services in extraordinary circumstances where it is
not feasible or practical to convene a meeting of the Audit Committee, subject to an aggregate limit of $150,000 in fees payable to Ernst & Young LLP for such services at any time until ratified by the Audit Committee. The Chair of the
Audit Committee is required to report any such services approved by him to the Audit Committee.
8
PROXY INFORMATION
1.
|
Solicitation of Proxies
|
This is a management proxy circular and proxies are hereby solicited by or on behalf of the management of the Corporation for use at the Meeting or any adjournments thereof. It is expected that the solicitation
will primarily be by mail, but may also be made by telephone or other means of telecommunication by directors, officers or employees of the Corporation. The cost of the solicitation will be borne by the Corporation.
2.
|
Appointment of Proxyholders and Revocation of Proxies
|
Each person named in the enclosed form of proxy is a director and officer of the Corporation.
A shareholder who wishes to appoint some other
person to represent him or her at the Meeting may do so either by inserting the name of that person, who need not be a shareholder, in the space provided in the form of proxy and striking out the names of the specified persons, or by completing
another form of proxy.
In either case, the shareholder must deliver or send the completed form of proxy to CIBC Mellon Trust Company, c/o Canadian Stock Transfer Company Inc., 600 The Dome Tower, 333 7th Avenue S.W.,
Calgary, Alberta, T2P 2Z1 (mailing address: CIBC Mellon Trust Company, c/o Canadian Stock Transfer Company Inc., Proxy Department, P.O. Box 721, Agincourt, Ontario, M1S 0A1), so that it will be received not later than
48 hours (excluding Saturdays, Sundays and holidays) before the time fixed for the Meeting or an adjournment thereof.
A
shareholder who has given a proxy may revoke it, in any manner permitted by law, including by signing a proxy bearing a later date or a notice of revocation and, in either case, delivering it to the attention of the Corporate Secretary of the
Corporation at Corporations registered office up to the day before the Meeting or to the Chair of the Meeting on the day of the Meeting.
3.
|
Exercise of Discretion by Proxyholders
|
Where a choice is specified, the persons named in the enclosed form of proxy will vote the shares in respect of which they are appointed in accordance with the directions contained therein. In the absence of
such directions, it is intended that such shares will be voted for the adoption of all resolutions referred to in the Notice of Meeting.
The enclosed form of proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the Notice of Meeting and with respect to other matters
which may properly come before the Meeting. At the date of this proxy circular, management of the Corporation knows of no such amendments, variations or other matters to come before the Meeting other than the matters referred to in the Notice of
Meeting. If any such amendment, variation or other matter which is not now known should properly come before the Meeting, then the persons named in the form of proxy will vote on such matters in accordance with their best judgement with respect to
the shares represented by such proxy.
4.
|
Voting of Class A Shares Advice to Beneficial Holders
|
The information set forth in this section is of significant importance to shareholders who hold class A participating shares
(Class A Shares) in the capital of the Corporation through brokers and their nominees and not in their own name.
Shareholders who do not hold their Class A Shares in their own name (referred to in this proxy circular as
Beneficial Shareholders
) should note that only proxies deposited by shareholders whose names appear on the records of the Corporation as the registered holders of the Class A Shares can be recognized and acted upon at the
Meeting. If Class A Shares are listed in an account statement provided to a shareholder by a broker, then in
9
almost all cases those shares will not be registered under the name of the shareholder on the records of the Corporation. Such shares will more likely be registered under the name of the
shareholders broker or an agent of that broker. Shares held by brokers or their nominees can only be voted for, or withheld from voting, or voted against any resolution upon the instructions of the Beneficial Shareholder. Without specific
instructions, brokers and nominees are prohibited from voting shares for their clients.
Applicable regulatory policy requires
intermediaries and brokers to seek voting instructions from Beneficial Shareholders in advance of shareholders meetings. Every intermediary and broker has its own mailing procedures and provides its own return instructions, which should be
carefully followed by Beneficial Shareholders in order to ensure that their Class A Shares are voted at the Meeting. Often, the form of proxy supplied to a Beneficial Shareholder by its broker is identical to the form of the proxy provided to
registered shareholders; however, its purpose is limited to instructing the registered shareholder how to vote on behalf of the Beneficial Shareholder.
A Beneficial Shareholder receiving a proxy from an intermediary cannot use that proxy to vote
shares directly at the Meeting; rather the proxy must be returned to the intermediary well in advance of the Meeting in order to have the shares voted.
5.
|
Voting Shares and Principal Holders Thereof
|
Only the holders of Class A Shares of record at the close of business on November 21, 2012, the record date fixed by the directors of the Corporation, will be entitled to vote on all matters at the
Meeting. Each holder of Class A Shares is entitled to one vote for each such share held. As of November 21, 2012, there were 22,520,064 outstanding Class A Shares in the capital of the Corporation.
The only person who, to the knowledge of the directors and executive officers of the Corporation, beneficially owns, directly or indirectly, or
exercises control or direction over, more than 10% of the Class A Shares is JR Shaw who beneficially owns, controls or directs 17,782,600 Class A Shares, representing approximately 79% of the issued and outstanding Class A Shares. JR
Shaw, members of his family and corporations owned or controlled by them have entered into a Voting Trust Agreement relating to all Class A Shares they own, control or direct. The voting rights with respect to such shares are exercised by the
representative of a committee of five trustees.
The Corporation has been advised that all of such Class A Shares will be voted in favour of the resolutions referred to in the Notice of the Meeting. The Corporation therefore anticipates that
these resolutions will be approved.
Holders of class B non-voting participating shares (
Class B Non-Voting Shares
) are not entitled to vote at meetings of shareholders of the Corporation, except as provided by law, and will not be
entitled to vote on any matter at the Meeting. In the event of a take-over bid, in certain circumstances which are fully described in the Corporations Annual Information Form dated November 29, 2012, a holder of Class B Non-Voting Shares
may be entitled to convert such shares into Class A Shares for purposes of tendering to the take-over bid. As of November 21, 2012, there were 422,489,064 outstanding Class B Non-Voting Shares in the capital of the Corporation.
10
STATEMENT OF EXECUTIVE COMPENSATION
1.
|
Compensation Discussion and Analysis
|
Executive Summary
Overall, the Board believes the
performance of the senior executive team has made a significant contribution to the growth and success of the Corporation. Over the past five years, revenues have increased $2.2 billion or 80% and operating income before amortization
1
has improved $887 million or 72%. Over the same five year period, free cash
flow
1
(FCF) has totaled $2.6 billion of which over 80% has
been returned to shareholders in the form of dividend payments and share repurchases.
Shaws approach to executive compensation is
to provide fair and equitable total compensation for its senior executive team which includes the named executive officers (the
NEOs
). Under the direction of the Human Resources and Compensation Committee, the Corporation has
taken a comprehensive and strategic approach to executive pay. Our compensation program is designed to align managements interest with the Corporations business objectives and performance, and to attract, retain and motivate the
executive team.
The following discussion and analysis examines the compensation paid during the last financial year of the Corporation
to the NEOs of the Corporation who are:
|
|
JR Shaw, Executive Chair;
|
|
|
Bradley S. Shaw, Chief Executive Officer;
|
|
|
Peter J. Bissonnette, President;
|
|
|
Steve Wilson, Senior Vice President and Chief Financial Officer; and
|
|
|
Jay Mehr, Senior Vice President, Operations.
|
Executive Compensation Guiding Principles
The guiding principles of the
executive compensation philosophy of the Corporation are grounded in clear principles as outlined below.
1.
|
The first principle is to align compensation with the execution of business strategies and overall business performance. This principle is achieved by:
|
|
|
|
encouraging executives to build value for shareholders, customers, employees and community stakeholders over the short, medium and long term;
|
|
|
|
considering both quantitative and qualitative performance factors to maintain a balanced approach to assessing individual and team performance; and
|
|
|
|
rewarding overall performance Shaw does not have separate criteria or bonus structures for each business unit since the approach is to ensure that all
employees are focused on performance and results that contribute to Shaws overall success.
|
Success requires that
Shaw balance competing challenges of growth, investments in network and new technology, regulatory compliance, competition and the general economic environment. This requires:
|
|
|
annually reviewing and assessing compensation practices to ensure that they align with the business strategy and performance;
|
|
|
|
assuring management maintains its focus, knowledge, stability and experience in order to execute business strategies in an intensely competitive environment
with rapidly evolving technology; and making capital allocation decisions involving major long-term capital investments, which shape and determine future growth and profitability.
|
1
|
See definitions and discussion under Key Performance Drivers in the Corporations management discussion and analysis for the year ended
August 31, 2012.
|
11
2.
|
The second principle addresses the components of compensation. Shaws compensation program is designed to provide a combination of compensation elements
including fixed elements that provide security and enable the Corporation to attract and retain key employees and at risk elements that reflect the ability to influence business outcomes and performance. These components include:
|
|
|
|
base salaries, which provide a fixed level of compensation to attract and retain top executives;
|
|
|
|
bonus payouts that respond to corporate and individual performance to motivate our leaders to deliver results based on Corporate strategies and sustain
long-term corporate success;
|
|
|
|
a limited perquisite package, which includes annual executive medical exams; and
|
|
|
|
retirement plans that help attract and retain our senior leaders.
|
3.
|
The third principle is to ensure that Shaws executive compensation practices are market competitive, designed to attract, retain and motivate high
caliber leaders. Shaw measures total compensation (including at risk performance pay) relative to a group of comparators (see discussion of peer group under Benchmarking Compensation).
|
Purpose and Attributes of Executive Compensation Components
The Corporation uses a combination of compensation elements that ensure executives have a significant at risk component of total compensation that reflects their ability to influence business outcomes
and performance. The following table describes the different compensation components, which when combined support the objectives of our compensation philosophy.
The table provides a description of each components key features and objectives:
|
|
|
|
|
|
|
|
|
Type of
Compensation
|
|
Form of Payment
|
|
Performance
Period
|
|
Method of Determining
Compensation
|
|
Objectives
|
Base Salary
|
|
Cash
|
|
Annual review
|
|
Corporate and individual performance and internal equity
|
|
Attract and retain high level executives
|
Short and
Medium-term Incentive
|
|
Cash/Restricted Share Units (RSUs)
|
|
One year
RSUs 2 year life, vesting 100% in year 2
|
|
Discretionary award based on corporate and individual performance against performance measures, comparator analysis and internal equity
|
|
Motivate executives to achieve annual performance goals
Also used to attract and retain executives
|
Long-term
Incentives
|
|
Stock Options
|
|
Granted periodically
Stock options 10 year life, generally vesting 20% per year over 5 years
|
|
Discretionary awards based on corporate and individual performance and internal equity
|
|
Motivate executives to achieve long term performance goals
Also used to attract and retain executives
|
Pension
|
|
Defined Contribution Plan, Supplemental Executive Retirement Plan (SERP)
|
|
On-going
|
|
Approved by the Human Resources and Compensation Committee of the Board based on retention and comparator
analysis
Note: Effective June
27
th
, 2012 the SERP was closed to new members
|
|
Retention of key executives
|
Benefits
|
|
Same as employee benefits
|
|
On-going
|
|
Based on market value and competitiveness
|
|
Maintains engaged and healthy executives
|
Perquisites
|
|
Executive medical
|
|
Annual
|
|
Based on market competitiveness
|
|
12
Collectively, these elements of executive compensation provide:
|
|
|
secure compensation through salary and retirement benefits to attract, retain and recognize the contributions of the senior executives; and
|
|
|
|
at-risk compensation to reward the achievement of goals and enhanced shareholder value.
|
Base salary is designed to provide a level of fixed compensation that is determined at the beginning of each fiscal year. It is reviewed annually taking into account changes in market conditions, changes in
level/scope of responsibility and accountabilities of each role.
Base salary for the NEOs is typically above the
median of the comparator group (approximately 75
th
to 80
th
percentile). The Corporation and the Human Resources and Compensation Committee
determined to pay above the median of competitor group to ensure that the Corporation attracts and retains top executives in the communications industry and to reflect Shaws smaller executive team, lower operating expenses and a flatter
management structure.
b.
|
Short and Medium-term Incentives (Bonus and RSUs)
|
At risk bonus compensation is designed to drive the achievement of the Corporations business and the individuals annual
goals. Bonus payments are made in cash based on corporate and individual performance.
The purpose of the medium-term at-risk
compensation (Restricted Share Units RSUs) is to provide additional compensation on a periodic basis to ensure attraction and retention of executives. RSU awards are discretionary and are granted by the Human Resources and Compensation
Committee from time to time to reward executive performance. RSUs were added to the at-risk compensation in fiscal 2011 and are considered to be medium term compensation. The grants in 2011 have a term of two years and payout in full on
the second anniversary of the grant.
The Human Resource and Compensation Committee in its discretion determines payout levels after
considering FCF and operating income before amortization (but without any particular weighting) and prior year payouts relative to prior year performance. There are no prescribed thresholds, target or maximum performance levels for each measure. As
a general rule, the majority of the bonus amounts (approximately 80%) is based on overall corporate performance with the remainder linked to the results and accomplishments from each individuals annual Personal Leadership Inventory
Commitments as discussed further below. Generally, if performance improves year-over-year, bonus payments are expected to increase; conversely, if performance is poorer year-over-year, bonus payments are expected to decrease.
The purpose of the long-term at-risk compensation is to provide additional compensation on a periodic basis to ensure a continued balanced performance focus with the overall objective of creating
shareholder value. The benefits of option awards require sustained performance through execution.
Stock option awards are discretionary
and are granted by the Human Resources and Compensation Committee from time to time. Relative to Shaws comparators, Shaw grants significantly fewer stock options. The Corporation has rather preferred to reward executive performance through the
bonus program and, as a result, longer-term incentives such as stock
13
option awards were limited. When stock options are granted, the Corporations current practice is to award options for terms of ten years with 20% of the options in a grant vesting on each
of the first, second, third, fourth and fifth anniversaries of the grant.
Shaw has traditionally not used long term incentives to the
extent used by many of its peers due to the significant equity ownership of two of its five NEOs. For this reason, there is currently no formal granting policy of long term incentives.
Particular to Shaw, two of the NEOs are members of the Shaw Family Group that controls the Corporation through its holdings of Class A Shares
and holds a significant interest in Class B Non-Voting Shares (see Voting Shares and Principal Holders Thereof). The Corporation and the Human Resources and Compensation Committee has determined that equity based compensation is a
relatively less effective motivation for Shaws senior executive team than it may be for its comparators.
d.
|
Retirement Plans and Benefits
|
The Human Resources and Compensation Committee approves participation in the Senior Executive Retirement Plan (SERP) for senior executives of the organization (including the NEOs). This defined benefit pension plan
is designed to reflect the significant contributions that the selected senior executives have made and are expected to make to the Corporation. The SERP was established in 2001 and reflects the Corporations preference to deliver competitive
compensation through elements other than equity-based awards. The SERP requires participants to achieve a minimum vesting level before any payment or award. This SERP, which forms part of the senior executives total compensation, is in
addition to the pension benefits earned through the Corporations Defined Contribution Plan, which is generally standard for all employees. The NEOs participate in the same group benefit plans as all other employees.
In June 2012, the Human Resources and Compensation Committee approved several changes to the SERP including: (i) closing the SERP to new
members, (ii) revision to the terms of the SERP so that for the purposes of calculating pension benefits, base salary is fixed at fiscal 2012 levels, and (iii) providing for the funding of the SERP over a period of six years up to 90% of
the obligation. The second change causes a significant impact to the potential retirement compensation of the NEOs, resulting in the compensation summary table showing negative total compensation amounts for two of the five NEOs.
Fiscal 2012 Pay Decisions
The following table outlines changes to base salary from the previous year.
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Fiscal 2011
|
|
|
Fiscal 2012
|
|
|
Percentage change
|
JR Shaw, Executive Chair
|
|
$
|
1,500,000
|
|
|
$
|
1,500,000
|
|
|
0%
|
Bradley S. Shaw, Chief Executive Officer
(1)
|
|
$
|
2,393,940
|
|
|
$
|
2,500,000
|
|
|
4.4% increase
|
Peter J. Bissonnette, President
|
|
$
|
1,750,000
|
|
|
$
|
1,750,000
|
|
|
0%
|
Steve Wilson, Senior VP and CFO
|
|
$
|
1,500,000
|
|
|
$
|
1,500,000
|
|
|
0%
|
Jay Mehr, Senior VP, Operations
(1)
|
|
$
|
1,140,909
|
|
|
$
|
1,250,000
|
|
|
9.6% increase
|
(1)
|
Reflects increase effective November 1, 2010 due to promotion into their respective roles. There have been no increases in the salaries of the NEOs since
November 2010.
|
14
b.
|
Short and medium-term Incentives (Bonus and RSUs)
|
As illustrated in the table below, bonus and RSU incentives combined were reduced in fiscal 2012 responding to corporate performance.
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Fiscal 2011
|
|
|
Fiscal 2012
|
|
|
Percentage change
|
JR Shaw, Executive Chair
|
|
$
|
8,817,965
|
|
|
$
|
7,054,000
|
|
|
20% decrease
|
Bradley S. Shaw, Chief Executive Officer
|
|
$
|
5,500,000
|
(1)
|
|
$
|
4,400,000
|
|
|
20% decrease
|
Peter J. Bissonnette, President
|
|
$
|
4,750,000
|
(2)
|
|
$
|
4,750,000
|
(2)
|
|
0%
|
Steve Wilson, Senior VP and CFO
|
|
$
|
3,250,000
|
(1)
|
|
$
|
2,600,000
|
|
|
20% decrease
|
Jay Mehr, Senior VP, Operations
|
|
$
|
3,250,000
|
(1)
|
|
$
|
2,600,000
|
|
|
20% decrease
|
(1)
|
Includes the value of RSUs granted in fiscal 2011 as of the grant date.
|
(2)
|
Bonus remained unchanged as part of employment/retirement arrangement.
|
There were no long-term incentive awards to the NEOs or Senior Leadership team in fiscal 2011 and 2012.
Performance Measures
Under the direction of the Human Resources and
Compensation Committee, short, medium and long-term incentives are determined by reviewing the performance of the Corporation and individual performance. Bonus amounts are made on a discretionary basis considering corporate and individual
performance.
The Board may exercise its discretion in awarding compensation if performance goals are not attained or alternatively, are
exceeded. For the fiscal year ending August 31, 2012, the Board exercised this discretion in reducing bonus amounts in general by 20% of the combined fiscal 2011 bonus and RSUs amounts as detailed in summary table.
FCF is a key component of the Corporations overall business performance, which supports return of capital initiatives to shareholders and debt reduction, as required. In the last three fiscal years, the
Corporation has generated $1.6 billion in FCF and returned 80% to shareholders through dividend payments and share repurchases. Total dividends paid to shareholders over the past three years was $1.2 billion and share repurchases
approximated $120 million.
The Corporation recognizes that FCF may fluctuate year-to-year, as capital investments are made to
develop and grow the business and as extraneous factors arise. In fiscal 2012 the Board set a FCF goal of approximately $550 million, which was subsequently reduced to $450 million. The Corporation has provided preliminary FCF guidance for fiscal
2013 and the Board will take into account possible risks, opportunities and developments in the competitive market dynamics when evaluating the performance of the senior executive team in achieving the fiscal 2013 targets.
b.
|
Operating Income before Amortization
|
Operating income before amortization and the ability to grow this financial measure is one of the key financial metrics driving the valuation of the Corporation. Over the last three years the Corporation has
increased operating income before amortization by $586 million or 38%. The broadcasting business acquisition (now referred to as Shaw Media) contributed $332 million, while the remaining growth of $254 million related to the core cable
and satellite divisions.
15
Financial results continue to be in the upper quartile of performance. The senior executive
teams focus on operations continues to produce superior operating margins. During fiscal 2012, the Corporations consolidated core cable and satellite operating margin was 45%, and was generally consistent with fiscal 2011, fiscal 2010
(adjusted to exclude the one-time Part II recovery) and fiscal 2009, reflecting continued solid performance in the highly competitive landscape.
The competitive environment continues to increase as telecommunication companies across the Corporations operating areas aggressively expand their service offerings.
The Corporation continues to grow its Internet business and win incremental market share. During the year 35,000 subscribers were added, maintaining
one of the strongest broadband businesses in North America. The Corporation continues to increase the penetration rate of the service and now the equivalent of 86% of Basic subscribers take the Internet service, which represents one of the highest
penetration rates in North America.
The Digital Phone product has been a great success and the Corporation has over 1,350,000 Digital
Phone lines. Customer growth of 131,000 Digital Phone lines was achieved in fiscal 2012, with the equivalent of 61% of Basic subscribers taking the telephone service.
During fiscal 2012 the Corporation lost 71,000 Basic cable subscribers and gained 1,000 Shaw Direct DTH subscribers. This reflects the intensely competitive market and the focus on balancing subscriber growth with
profitability.
d.
|
Other Business Initiatives/Strategic Planning
|
Fiscal 2012 was highlighted with the start of the build of a managed Wi-Fi network to extend the customers broadband experience beyond their
home. The Corporation is the first service provider in Canada to deliver secure and reliable wireless broadband through an extensive Wi-Fi network covering thousands of locations. The Corporation also continued its major network upgrade to convert
television analog tiers to digital (the Digital Network Upgrade). Once complete, this upgrade is expected to significantly increase the capacity of the network and allow the Corporation to expand its Internet, HD and On Demand offerings. The
Corporation continues to invest in technology initiatives to recapture bandwidth and optimize its network, including using advanced encoding and digital compression technologies such as MPEG-4. The Corporation believes this investment in
infrastructure provides further differentiation from the competition.
Fiscal 2012 marked a full year inclusion of the Shaw Media
business. The Shaw Media division performed well and the Corporation included $332 million of operating income before amortization in the consolidated results. This strategic acquisition allows the Corporation to unite broadcasting services and
content with its advanced distribution platforms to offer customers the choices they want in this rapidly evolving competitive landscape.
The executive team is actively involved in making these capital and operating decisions and is focused on ensuring that long-term value and
profitability is being generated from the appropriate investments.
The Corporations efforts to maintain a strong balance sheet and financial
metrics continued in fiscal 2012.
16
e.
|
Management of Talent & Leadership Development
|
As the Corporation continues to grow there has been an increased focus on succession planning and talent development together with the enhancement
of formal leadership programs. Succession planning reviews identifying high performers as well as successors for key positions takes place for all roles director and above. Three talent development programs have been launched, designed to enhance
the development of key leadership potential across the organization. Over 80% of the Corporations leadership positions are filled by internal candidates with key focused external recruitment taking place. Retention of senior leaders is also
critical, particularly given that the Corporation runs with a lean team of talented individuals. At the Vice President level and up, the Corporation experienced no voluntary turnover in 2012. The Corporations enhanced performance management
process known as The Personal Leadership Inventory, has now evolved to include the top 500 leaders across all divisions. Through this process each leader has clear measurable business objectives known as Personal Leadership
Inventory Commitments together with personal leadership development plans.
Employee engagement has also been a key focus over the
last several years and significant improvements have been achieved. The 2010 survey results indicate the Corporation improved into a range categorized as best in class companies and recently the corporation was honored to be named as one
of the Top 100 Employers in Canada.
Summary
The following table details the rationale as to how the above performance measures affect pay decisions for the fiscal 2012 bonus payments.
(C$ millions, unless otherwise stated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Objective
|
|
Original
F12
(1)
|
|
|
F12 Bonus
Target
|
|
Projection
made in
April 2012
|
|
|
Delta
|
|
|
F12 Bonus
Payment
|
FCF
|
|
$
|
550
|
|
|
100% of
|
|
$
|
450
|
|
|
-$
|
100
|
|
|
|
-18.2
|
%
|
|
80% of
|
EBITDA
|
|
$
|
2,225
|
|
|
Target
|
|
$
|
2,108
|
|
|
-$
|
117
|
|
|
|
-5.3
|
%
|
|
Target
|
Core
RGUs
(2)
|
|
|
95,000
|
|
|
bonus/RSUs
|
|
|
91,000
|
|
|
|
-4,000
|
|
|
|
-4.2
|
%
|
|
bonus/RSUs
|
Notes:
(1)
|
Confirmed at October 2011 Board meeting
|
(2)
|
Core RGUs includes subscriber gains/losses in Video (Cable and DTH) and Internet and Digital Phone lines
|
Benchmarking Compensation
The Human Resources and Compensation Committee annually reviews the total compensation of the Corporations senior executives and compensation practices of the Corporation. As part of that review, the peer
group is reviewed to ensure a balance of relevant peer organizations in terms of business commonalities and common market for executive talent.
17
Comparator Group Analysis
In fiscal 2012 the comparator group included the following 15 Canadian and 10 US companies:
|
|
|
|
|
Agrium Inc.
|
|
Comcast Corporation
|
|
Research in Motion Limited
|
Barrick Gold Corp
|
|
The DIRECTV Group Inc.
|
|
Rogers Communications Inc
|
BCE Inc.
|
|
Enbridge Inc
|
|
Talisman Energy Inc.
|
Bombardier Inc.
|
|
EnCana Corporation
|
|
TELUS Corporation
|
Cablevision Systems Corporation
|
|
Finning International Inc.
|
|
Time Warner Cable Inc.
|
Canadian National Railway Co.
|
|
Husky Energy Inc
|
|
Viacom Inc.
|
Canadian Natural Resources
|
|
Liberty Global, Inc
|
|
Verizon Communications Inc.
|
CBS Corp
|
|
Nexen Inc.
|
|
|
Charter Communications Inc.
|
|
Qwest Communications International Inc.
|
|
|
Note:
(1)
|
US companies are in
italics.
|
The above companies were selected to align with the criteria for each of the sub-groups detailed below and ensure there is a sufficient scope of comparator organizations to make the analysis meaningful. Besides
benchmarking the Corporations senior management compensation to the overall comparator group, the Corporations competitive positioning versus three sub-groups is examined as requested by the Human Resources and Compensation Committee.
The sub-groups are:
|
|
Comparable Cable and Media Companies in North America
|
|
|
Five Year Total Shareholder Return
|
Part of this review entails a competitive analysis undertaken by external compensation experts (currently Mercer, a worldwide human resources consulting company). The competitive review is conducted based on the
principles noted above. The consultants report includes: matches of the Corporations NEOs total compensation with the comparator groups; and a summary of how the Corporations executive compensation approach compares with the
comparator group in the following specific areas:
|
|
Short and Medium-term Incentive (Bonus and RSUs)
|
|
|
Retirement Plans and Benefits
|
Risk Considerations in Executive Compensation
The Human Resources and
Compensation Committee is responsible for overseeing the corporations compensation practices to ensure they do not encourage executives to take risks that could have a material adverse effect on the Corporation. The Human Resources and
Compensation Committee has discussed the concept of risk as it relates to the compensation programs and does not believe that the compensation program encourages excessive or inappropriate risk taking.
In accordance with Shaws executive compensation guiding principles the compensation program is designed to align managements interests
with the Corporations business objectives and performance, with the attraction, retention and motivation to the executive team. The following characteristics of the compensation program are designed with this in mind:
|
|
|
Base salary is fixed to provide steady income regardless of share price and therefore does not encourage excessive risk-taking;
|
18
|
|
|
The pay mix is such that it ensures sufficient fixed compensation that in total represents a mix of short, medium and long term rewards;
|
|
|
|
Bonus amounts are linked to performance and are only paid out on the approval of the Human Resources & Compensation Committee and the Board for the
NEOs;
|
|
|
|
Equity awards are only issued on a periodic basis and they vest over an extended period which helps to ensure that performance aligns with shareholders
interests;
|
|
|
|
The Human Resources and Compensation Committee oversees the Corporations pay programs and guidelines in consultation with Mercer, its outside
compensation consultant.
|
The Corporation has adopted a formal policy restricting reporting insiders (which includes
NEOs and directors) from purchasing financial instruments such as prepaid variable forward contracts, equity swaps, collars, or units of exchange funds that are designed to hedge or offset a decrease in market value of their equity based securities
granted as compensation (stock options, RSUs and DSUs).
Stock ownership guidelines
Currently, the Corporation has not adopted guidelines that require minimum levels of share ownership for the NEOs. Since two of the five NEOs are
members of the Shaw Family Group, there is significant stock ownership among the NEOs as a whole. The Corporation also does not require NEOs to hold stock options after they vest for any particular period of time after grant.
Clawbacks
Pursuant to the
Sarbanes-Oxley Act the CEO and CFO of Shaw are subject to a statutory clawback in the event of misconduct which results in a required restatement of any financial reporting required under securities laws.
The Human Resources and Compensation Committee is comprised of four independent directors, Willard H. Yuill (Chair), Dr. Richard R. Green, JC Sparkman and Sheila C. Weatherill. The committee members have
many years of board (including members of other human resource committees), executive and other diverse business experience gained through involvement with public and private enterprises involved in the telecommunications and other industries in
Canada or the United States. The committee is responsible for ensuring effective human resource programs and philosophies are developed and implemented in conformity with the Corporations vision, values and strategic objectives to continue to
ensure the recruitment and attraction of the best talent at all levels. The Human Resources and Compensation Committee is governed by its charter which details the mandate, composition and responsibilities of the committee. The responsibilities of
the Human Resources and Compensation Committee are described under Statement of Corporate Governance Human Resources and Compensation Committee.
The committee, through meetings, presentations and reports, has a good knowledge of the key drivers and issues affecting the Corporation and regularly meets with the executive leaders.
Consistent with the Human Resources and Compensation Committees charter and based on input from management, the committee strategically
reviews executive compensation and the quantum of subsequent awards for all employees within the Corporation and each of the NEOs, including:
|
|
Management bonus payments
|
|
|
Employee success sharing bonus payments
|
19
|
|
Management salary recommendations
|
|
|
Retirement plans and benefits
|
The Committee is engaged in discussion with and considers/reviews recommendations from the Chief Executive Officer regarding:
|
|
Total compensation awards ensuring appropriate internal equity among the senior leaders; and
|
|
|
Participants in the executive and management bonus programs, together with proposed levels of reward.
|
As part of the executive compensation review, the Human Resources and Compensation Committee makes its decisions and recommendations to the full
Board on the compensation levels, stock option grants and RSU grants for each of the NEOs based on each of the above mentioned guiding principles with particular reference to the following performance measures: FCF, operating income before
amortization, subscriber growth, the management of talent and leadership development, as well as other business initiatives/strategic planning.
The Human Resource and Compensation Committee retained Mercer (Canada) Limited (Mercer), a wholly-owned subsidiary of Marsh & McLennan Companies, Inc., beginning in 2010 to assist the Committee
in determining compensation for the Corporations NEOs.
The analysis and advice offered by Mercer includes assisting in identifying
and validating the comparator group of companies and in continuously improving the Corporations disclosure strategy and communication to shareholders.
In addition, the Corporation retained Mercer to provide other services, unrelated to executive and/or director compensation during 2012 and 2011. Services provided by Mercer include (without being limited to)
pension actuarial and administrative services for all defined benefit pension plans. The Corporation also retained Marsh Canada Limited, an affiliate of Mercer, to provide insurance administrative services during 2012 and 2011. The Committee is not
required to pre-approve other services that Mercer or its affiliates provide to the Corporation at the request of management.
The Human
Resources and Compensation Committee has considered Mercers analysis and advice as well as other specific factors the committee deemed to be appropriate and relevant.
Executive Compensation-Related Fees
Mercers aggregate fees billed for
executive compensation services to the Committee in 2012 were $46,164 and in 2011 were $70,579.
All Other Fees
During 2012 and 2011, the aggregate fees paid to Mercer or its affiliates for all other services were $1,670,836 and $858,118, respectively.
20
3.
|
Summary Compensation Table
|
The following table sets forth compensation earned during the last three financial years of the Corporation by the NEOs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
$
|
|
|
Share
Based
Awards
(1)
$
|
|
|
Option
Based
Awards
(2)
$
|
|
Non-Equity
Annual
Incentive
Plan
Compensation
(3)
$
|
|
|
Pension
Value
(5)(7)
$
|
|
|
All Other
Compensation
(8)
$
|
|
|
Total
Compensation
$
|
|
|
|
|
|
|
|
|
|
|
JR SHAW
|
|
|
2012
|
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
7,054,400
|
(4)
|
|
|
(1,270,000
|
)
|
|
|
302,092
|
|
|
|
7,586,492
|
|
Executive Chair
|
|
|
2011
|
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
8,817,965
|
(4)
|
|
|
5,601,000
|
|
|
|
84,710
|
|
|
|
16,003,675
|
|
|
|
|
2010
|
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
6,326,730
|
(4)
|
|
|
(376,000
|
)
|
|
|
230,132
|
|
|
|
7,680,862
|
|
|
|
|
|
|
|
|
|
|
BRADLEY SHAW
|
|
|
2012
|
|
|
|
2,500,000
|
|
|
|
|
|
|
|
|
|
4,400,000
|
|
|
|
(13,796,180)
|
|
|
|
282,427
|
|
|
|
(6,613,753
|
)
|
Chief Executive
|
|
|
2011
|
|
|
|
2,393,940
|
|
|
|
825,000
|
|
|
|
|
|
4,675,000
|
|
|
|
7,765,970
|
|
|
|
191,426
|
|
|
|
15,851,336
|
|
Officer
|
|
|
2010
|
|
|
|
1,750,000
|
|
|
|
|
|
|
|
|
|
5,000,000
|
|
|
|
10,382,450
|
(6)
|
|
|
163,902
|
|
|
|
17,296,352
|
|
|
|
|
|
|
|
|
|
|
PETER J.
|
|
|
2012
|
|
|
|
1,750,000
|
|
|
|
|
|
|
|
|
|
4,750,000
|
|
|
|
(1,921,180
|
)
|
|
|
57,208
|
|
|
|
4,636,028
|
|
BISSONNETTE
|
|
|
2011
|
|
|
|
1,750,000
|
|
|
|
|
|
|
|
|
|
4,750,000
|
|
|
|
110,970
|
|
|
|
129,277
|
|
|
|
6,740,247
|
|
President
|
|
|
2010
|
|
|
|
1,750,000
|
|
|
|
|
|
|
|
|
|
4,750,000
|
|
|
|
1,250,450
|
|
|
|
808,135
|
|
|
|
8,558,585
|
|
|
|
|
|
|
|
|
|
|
STEVE WILSON
|
|
|
2012
|
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
2,600,000
|
|
|
|
(7,248,180
|
)
|
|
|
74,041
|
|
|
|
(3,074,139
|
)
|
Senior Vice
|
|
|
2011
|
|
|
|
1,500,000
|
|
|
|
487,500
|
|
|
|
|
|
2,762,500
|
|
|
|
5,685,970
|
|
|
|
|
|
|
|
10,435,970
|
|
President and Chief
|
|
|
2010
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
3,250,000
|
|
|
|
9,283,450
|
(6)
|
|
|
407,946
|
|
|
|
13,941,396
|
|
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JAY MEHR
|
|
|
2012
|
|
|
|
1,250,000
|
|
|
|
|
|
|
|
|
|
2,600,000
|
|
|
|
874,820
|
|
|
|
|
|
|
|
4,724,820
|
|
Senior Vice
|
|
|
2011
|
|
|
|
1,140,909
|
|
|
|
487,500
|
|
|
|
|
|
2,762,500
|
|
|
|
1,948,970
|
|
|
|
95,842
|
|
|
|
6,435,721
|
|
President, Operations
|
|
|
2010
|
|
|
|
700,000
|
|
|
|
|
|
|
|
|
|
1,400,000
|
|
|
|
266,450
|
|
|
|
61,130
|
|
|
|
2,427,580
|
|
Notes:
(1)
|
Amounts reported in 2011 represent the grant date fair value of the award of RSUs. The fair value is determined based on the average of the closing prices of
the Class B Non-Voting Shares on the Toronto Stock Exchange (the
TSX
) for the five trading days preceding the July 4, 2011 grant date. RSUs vest on the second anniversary of the grant date. See Incentive Plan
Awards Restricted Share Units. The grant fair value differs from the fair value determined in accordance with IFRS-2 Share-based Payment. For financial statement purposes, the accounting fair value for cash settled RSUs is remeasured at
the end of each reporting period using the closing price of the Class B Non-Voting Shares on the TSX and the Black-Scholes option pricing model. The accounting fair value is amortized on a straight-line basis over the two year vesting period. On the
grant date, the accounting fair value for the RSUs was $264,375 higher than the aggregate $1,800,000 compensation value disclosed in the above table.
|
(2)
|
No stock options were granted to the NEOs during fiscal 2012, 2011 or 2010.
|
(3)
|
Amounts reported represent annual cash bonuses.
|
(4)
|
Calculated and paid pursuant to the provisions of the agreement between the Corporation and JR Shaw, as described under the heading Statement of
Executive Compensation Employment Contracts. Under the terms of the agreement, provided that the Corporation reaches its annual financial targets, a bonus shall be paid to JR Shaw in an amount between 0.5% and 1.0% of the
Corporations operating income before amortization (as reported in the Corporations annual consolidated financial statements) calculated excluding the results of Shaw Direct (the
Income Base
) for the year in which it is
to be paid. For fiscal 2010, JR Shaw voluntarily elected to cap the bonus paid to him by the Corporation at $6,326,730. This amount represents approximately 0.4% of the Income Base for fiscal 2010. For fiscal 2011 a bonus representing approximately
0.5% of the Income Base was paid to JR Shaw. For fiscal 2012 a reduced bonus representing approximately 0.4% of the Income Base was paid to JR Shaw (see Short and Medium-term Incentives).
|
(5)
|
Amounts reported include all compensatory amounts related to the Corporations defined contribution and defined benefit plans. The SERP compensatory
amounts are actuarially determined using the projected benefit method and managements best estimate of salary escalation and retirement ages of officers. These SERP amounts do not reflect cash figures in the current period.
|
(6)
|
Defined Benefit Plan amounts of $10,360,000 and $9,261,000 for Bradley S. Shaw and Steve Wilson, respectively, which are included in Pension Value and Total
Compensation, include additional credited service granted during 2010.
|
(7)
|
The pension amounts reflected in 2012 include the impact of the SERP plan amendment to fix the base salary portion of the pensionable earnings at 2012 salary
levels which generally caused a negative overall amount to be reported. See Compensation Discussion and Analysis Retirement Plans and Benefits.
|
(8)
|
Amounts reported include employee share purchase plan, transportation and other benefits. If the value of perquisites and benefits does not exceed either
$50,000 or 10% of the relevant NEOs total salary, no amount is reported.
|
21
4.
|
Incentive Plan Awards Restricted Share Units
|
In June 2011, the Corporation adopted a Restricted Share Unit Plan (
RSU Plan
) under which RSUs may be granted, solely at the
discretion of the Human Resources and Compensation Committee, at a value equal to the market value of one Class B Non-Voting Share at the time of grant for each RSU. On each dividend payment date for the Class B Non-Voting Shares, a number of
additional RSUs is credited to the holders RSU account equal to, for each RSU, the amount of the per Class B Non-Voting Share dividend divided by the then current market value of a Class B Non-Voting Share. Provided the holder is still
employed on such date, on the second anniversary of the grant date (or such other vesting date as the Human Resources and Compensation Committee may set at the time of grant) all RSUs relating to a particular grant will vest and become payable by
cash payment equal to the then current market value of a Class B Non-Voting Share for each such RSU.
5.
|
Incentive Plan Awards Stock Options
|
Options to acquire Class B Non-Voting Shares are granted pursuant to the Corporations stock option plan. The stock option plan of the Corporation provides that options may be granted to directors,
officers, employees and consultants of the Corporation and for such number of Class B Non-Voting Shares as the Board, or a committee thereof, determines in its discretion, at an exercise price not less than the closing price of the Class B
Non-Voting Shares on the TSX on the trading day immediately preceding the date on which the option is granted. An option shall not be immediately exercisable, but rather, shall be exercisable on vesting dates determined by the Board from time to
time; provided that the Board may not grant options with vesting terms more favourable than 50% of the original grant on each of the first and second anniversary dates. Unless otherwise determined by the Board, options expire 10 years from the
date of grant, and subject to limited exceptions, must be exercised while the optionee remains as a director, officer, employee or consultant of the Corporation. Provision is made in the plan for early termination of options in the event of death or
cessation of employment or service arrangement (other than disability or retirement), as the case may be. Options are not transferable or assignable, unless the transfer or assignment is permitted under applicable securities laws and is in respect
of options to purchase 10,000 Class B Non-Voting Shares or greater; and provided further that such transfer or assignment is approved by two senior officers of the Corporation, one of whom must be either the Chief Executive Officer or the Chief
Financial Officer of the Corporation.
The maximum number of Class B Non-Voting Shares issuable under the stock option plan of the
Corporation may not exceed 52,000,000 Class B Non-Voting Shares. As at August 31, 2012, 21,162,672 Class B Non-Voting Shares were issuable on exercise of outstanding options and 13,072,822 Class B Non-Voting Shares were available for future
grant of options under the stock option plan. The plan provides that: (i) the maximum number of Class B Non-Voting Shares which may be reserved for issuance to insiders of the Corporation under the plan and all other security based
compensation arrangements of the Corporation is limited to 10% of the number of Class B Non-Voting Shares outstanding at the date of grant (on a non-diluted basis) and (ii) the maximum number of Class B Non-Voting Shares which may be
issued to insiders of the Corporation under the plan and all other security based compensation arrangements of the Corporation within a one year period is limited to 10% of the number of Class B Non-Voting Shares outstanding at the time of the
issuance (on a non-diluted basis). Subject to applicable law and approval of the Board, the Corporation may provide financial assistance in connection with the exercise of an option, with recourse to the Class B Non-Voting shares purchased upon
such exercise. The plan contains anti-dilution, other adjustment and change of control provisions.
22
Outstanding Option-Based and Share-Based Awards
The following table sets forth details with respect to stock options and RSUs held by the NEOs as of August 31, 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
|
|
Share Awards
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration Date
|
|
|
Aggregate
Value
of
Unexercised
In-the-Money
Options
(1)
($)
|
|
|
|
|
|
|
Number
of Units
that
have not
Vested
(#)
|
|
|
Market or
Payout
Value
of
Share-
Based
Awards
that
have
not
Vested
(2)
($)
|
|
|
Market or
Payout
Value of
Vested
Share
Based
Awards
Not Paid
Out or
Distributed
($)
|
|
|
|
|
|
|
|
|
|
|
|
B
RADLEY
S. S
HAW
|
|
|
400,000
|
|
|
|
24.52
|
|
|
|
01-Sep-2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
20.82
|
|
|
|
01-Jul-2018
|
|
|
|
186,000
|
|
|
|
|
|
|
|
40,962
|
|
|
|
825,791
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
19.54
|
|
|
|
30-Jun-2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P
ETER
J. B
ISSONNETTE
|
|
|
600,000
|
|
|
|
24.52
|
|
|
|
01-Sep-2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
20.82
|
|
|
|
01-Jul-2018
|
|
|
|
217,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
350,000
|
|
|
|
19.54
|
|
|
|
30-Jun-2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S
TEVE
W
ILSON
|
|
|
2,000
|
|
|
|
16.31
|
|
|
|
01-Sep-2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
198,000
|
|
|
|
16.31
|
|
|
|
01-Sep-2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
|
|
|
24.52
|
|
|
|
01-Sep-2017
|
|
|
|
956,000
|
|
|
|
|
|
|
|
24,205
|
|
|
|
487,963
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
20.82
|
|
|
|
01-Jul-2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
19.54
|
|
|
|
30-Jun-2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J
AY
M
EHR
|
|
|
20,000
|
|
|
|
16.31
|
|
|
|
01-Sep-2015
|
|
|
|
201,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
24.52
|
|
|
|
01-Sep-2017
|
|
|
|
|
|
|
|
|
24,205
|
|
|
|
487,963
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
20.82
|
|
|
|
01-Jul-2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
19.54
|
|
|
|
30-Jun-2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based on the difference between the market value of $20.16 per Class B Non-Voting Share on August 31, 2012 and the exercise price of the options.
|
(2)
|
Based on the market value of $20.16 per Class B Non-Voting Share on August 31, 2012.
|
Incentive Plan Awards Value Vested or Earned During the Year
The following table sets forth details on the vesting and payouts of awards under the Corporations incentive plans for the NEOs during the
fiscal year ended August 31, 2012.
|
|
|
|
|
|
|
|
|
|
|
Option-Based Awards
Value Vested
During
the Year
(1)
($)
|
|
|
Non-Equity Incentive Plan
Compensation-Value
Earned During the Year
(2)
($)
|
|
J
R
S
HAW
|
|
|
|
|
|
|
7,054,400
|
|
B
RADLEY
S. S
HAW
|
|
|
|
|
|
|
4,400,000
|
|
P
ETER
B
ISSONNETTE
|
|
|
|
|
|
|
4,750,000
|
|
S
TEVE
W
ILSON
|
|
|
|
|
|
|
2,600,000
|
|
J
AY
M
EHR
|
|
|
|
|
|
|
2,600,000
|
|
|
|
(1)
|
Amounts reported represent the aggregate dollar value that would have been realized if all options that vested during 2012 were exercised on the vesting date.
The value is calculated as the difference between the market value on the vesting date and the exercise price of the options.
|
(2)
|
Amounts reported represent actual annual cash bonuses.
|
During fiscal 2012 the Corporation maintained both a defined contribution pension plan and a defined benefit pension plan, as described below, in which the NEOs participate.
23
Defined Contribution Plan
Under this plan, which is generally made available to all eligible employees, the Corporation makes annual contributions up to a maximum of 5% of
each employees annual salary to a maximum contribution allowable under the
Income Tax Act
(Canada). Funds are accumulated under the employees name and used on retirement to purchase one of several types of annuity at the option of
the employee. Contributions on behalf of the NEOs are included in Pension Value in the Summary Compensation Table under the heading Statement of Executive Compensation. As a defined contribution plan, this pension plan of the
Corporation is fully funded and is not subject to surpluses or deficiencies.
The following table presents the benefits accumulated under
the Corporations defined contribution plan for the NEOs. The actual benefits payable upon retirement will be determined by the size of each participants account values (based on the amount of actual contribution and realized investment
returns), interest rates at the time benefits commence and the type of retirement vehicle selected (life income fund, life annuity, joint annuity, etc.).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(1)
|
|
Accumulated Value
at September 1,
2011
($)
|
|
|
Compensatory
(2)
($)
|
|
|
Non-
Compensatory
(3)
($)
|
|
|
Accumulated
Value at
August 31, 2012
($)
|
|
B
RADLEY
S. S
HAW
|
|
|
384,128
|
|
|
|
23,820
|
|
|
|
11,669
|
|
|
|
419,617
|
|
P
ETER
J. B
ISSONNETTE
|
|
|
322,423
|
|
|
|
23,820
|
|
|
|
9,897
|
|
|
|
356,140
|
|
S
TEVE
W
ILSON
|
|
|
160,470
|
|
|
|
23,820
|
|
|
|
4,976
|
|
|
|
189,266
|
|
J
AY
M
EHR
|
|
|
212,868
|
|
|
|
23,820
|
|
|
|
6,700
|
|
|
|
243,388
|
|
|
|
Notes:
(1)
|
No accumulated funds remain in the plan for JR Shaw as he was required to move funds from the plan by age 71.
|
(2)
|
Includes contributions paid by the Corporation.
|
(3)
|
Includes regular investment income credited to the accounts during the financial year.
|
Defined Benefit Plan (SERP)
Effective September 1, 2002, the Corporation established a SERP for its most senior executive officers. The SERP is a non-contributory defined benefit pension plan.
Benefits under the SERP are based on the officers length of service and his or her highest three year average rate of SERP eligible earnings
(base salary plus annual cash bonus/RSU grant value) during his or her years of service with the Corporation. The SERP provides for payments equal to 5% of SERP eligible earnings for each of the first ten years that an executive officer is in a SERP
eligible position and 1.5% for each SERP eligible year thereafter. The maximum annual pension that an officer may earn under the SERP is 70% of average SERP pensionable earnings.
An executive officer of the Corporation must be in a SERP-eligible position for five years to qualify to receive a pension. Officers who retire at
age 60 or later will receive a full pension as will those officers who retire after age 55 with ten years of SERP-eligible service. Officers between the ages 55 and 60 with less than ten years of SERP-eligible service and
officers between the ages 50 and 55 with 15 years of SERP-eligible service are eligible to retire with a discounted pension.
In June 2012, the Human Resources and Compensation Committee approved several changes to the SERP including: (i) closing the SERP to new
members (membership is restricted to the current total of 15 active and retired members), (ii) revision to the terms of the SERP so that for the purposes of calculating pension benefits, base salary is fixed at fiscal 2012 levels, and
(iii) providing for the funding of the SERP over a period of six years up to 90% of the obligation.
24
The following table presents the credited number of years of service at August 31, 2012 and the
estimated annual retirement benefits payable to NEOs for service up to August 31, 2012 and at age 65. In addition, the total accrued pension obligation for each NEO is shown along with the changes to the obligation during the financial
year ended August 31, 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of
Years of
Credited
Service
(1)
(#)
|
|
|
Annual Benefits Payable
(2)
|
|
|
Accrued
Obligation at
September 1,
2011
(3)
($)
|
|
|
Compensatory
Change
(4)
($)
|
|
|
Non-
Compensatory
Change
(5)
($)
|
|
|
Accrued
Obligation at
August 31,
2012
(3)
($)
|
|
|
|
At Year End
($)
|
|
|
At Age 65
($)
|
|
|
|
|
|
JR S
HAW
|
|
|
46
|
|
|
|
6,230,000
|
|
|
|
6,230,000
|
|
|
|
47,242,000
|
|
|
|
(1,270,000
|
)
|
|
|
8,355,000
|
|
|
|
54,327,000
|
|
B
RADLEY
S. S
HAW
|
|
|
17
|
|
|
|
3,040,000
|
|
|
|
4,830,000
|
|
|
|
50,783,000
|
|
|
|
(13,820,000
|
)
|
|
|
18,732,000
|
|
|
|
55,695,000
|
|
P
ETER
J. B
ISSONNETTE
|
|
|
23
|
|
|
|
4,357,000
|
|
|
|
4,481,000
|
|
|
|
58,628,000
|
|
|
|
(1,945,000
|
)
|
|
|
11,907,000
|
|
|
|
68,590,000
|
|
S
TEVE
W
ILSON
|
|
|
13
|
|
|
|
1,531,000
|
|
|
|
2,870,000
|
|
|
|
27,507,000
|
|
|
|
(7,272,000
|
)
|
|
|
9,814,000
|
|
|
|
30,049,000
|
|
J
AY
M
EHR
|
|
|
2
|
|
|
|
257,000
|
|
|
|
2,580,000
|
|
|
|
2,431,000
|
|
|
|
851,000
|
|
|
|
1,781,000
|
|
|
|
5,063,000
|
|
Notes:
(1)
|
Rounded to nearest whole year as of August 31, 2012.
|
(2)
|
At year end Bradley S. Shaw, Steve Wilson and Jay Mehr are not yet eligible for retirement payments. The amount showing as the annual benefits payable at
August 31, 2012 reflects a notional value calculated on the assumption they are eligible to receive payments. If the NEO exceeds age 65 the current age is used.
|
(3)
|
Amounts represent the actuarial value of projected benefits for service to the date indicated. The calculation uses actuarial assumptions and methods which
are consistent with those used for calculating pension obligations disclosed in the Corporations consolidated financial statements.
|
(4)
|
Amounts represent the projected pension benefit for service in the year plus the change in accrued obligation due to differences between actual and assumed
compensation for the year. The amounts include the impact of the SERP plan amendment to fix the base salary portion of the pensionable earnings at 2012 salary levels.
|
(5)
|
Amounts represent the impact of interest on the obligation, changes in the interest assumption, and any other experience gains and losses.
|
The Corporations obligations and related costs of the SERP benefits earned by executive officers are actuarially
determined using the projected benefit method, pro-rated on service, and managements best estimate of salary escalation and retirement ages of officers. The pension expense with respect to the SERP for the fiscal year ended August 31,
2012 was $1 million and is net of a $25 million curtailment gain due to a plan amendment to fix the base salary portion of the pensionable earnings at 2012 salary levels. As at August 31, 2012 the expected aggregate benefit payments for
the fiscal year ended August 31, 2013, as actuarially determined, are approximately $9 million. The accrued benefit obligation of the SERP at August 31, 2012 was $378 million, of which $377 million has been recognized by the
Corporation as a liability in its accounts in accordance with Canadian generally accepted accounting principles. In the event of a change of control of, or merger involving, the Corporation, the SERP becomes fully vested and fully funded
immediately.
Further information with respect to the SERP, and the Corporations accounting policy with respect thereto, is set
forth in Notes 2 and 26 to the audited annual consolidated financial statements of the Corporation for the year ended August 31, 2012. See Other Information Additional Information.
7.
|
Employee Share Purchase Plan
|
An employee share purchase plan (the
ESPP
) was introduced in 1998 to provide employees of the Corporation with an incentive to increase the profitability of the Corporation and a means to
participate in that increased profitability.
Generally, all non-unionized full time or part time employees of the Corporation and
certain of its subsidiaries are eligible to enroll in the ESPP. Executive officers of the Corporation, including the NEOs, are entitled to participate in the ESPP on the same basis as all other employees of the Corporation.
25
Under the ESPP, each employee contributes, through payroll deductions, a minimum of $25.00 per
semi-monthly pay period or $50.00 per monthly pay period to a maximum of 5% of the participants monthly basic compensation. The Corporation contributes an amount equal to 25% of the participants contributions for that month. Canadian
Western Trust Company, as trustee under the ESPP, or its nominee acquires Class B Non-Voting Shares for the benefit of participants through the facilities of the TSX using monies contributed to the ESPP. A participant may withdraw up to
100% of the shares vested in his or her account up to two times in any 12 month period.
As of August 31, 2012, approximately
66% of eligible employees of the Corporation purchased Class B Non-Voting Shares under the ESPP. At August 31, 2012, an aggregate of 2,745,834 Class B Non-Voting Shares were held under the ESPP.
In 1997, the Corporation entered into an agreement with its Executive Chair, JR Shaw, which provides for, amongst other things, an annual incentive bonus. The agreement recognizes JR Shaws central role
in founding and building the Corporation and ensures that the Corporation retains and utilizes the full benefits of his 46 years of industry experience. As Executive Chair, JR Shaw continues to provide broad stewardship and strategic vision for
the Corporation. In addition, his stature as a national corporate leader and his positive long-standing reputation with government, regulatory, investor and banking communities enhances the Corporations capacity to achieve its strategic and
financial goals.
The agreement with JR Shaw provides for an incentive bonus that is paid to him annually, provided the Corporation
reaches its financial targets. The agreement also specifies that the amount is to be between 0.5% and 1.0% of the Corporations operating income before amortization (as reported in the Corporations annual consolidated financial
statements) calculated excluding the results of Shaw Direct (the
Income Base
) for the year in which it is to be paid. Due to the corporate performance in 2012 JR Shaw was paid a reduced bonus of $7,054,400 which represents 0.4% of
the Income Base.
No other NEO has an employment contract with the Corporation.
26
The following graph compares the cumulative five year return of the Class B Non-Voting Shares (assuming $100 invested on August 31, 2007 and reinvestment of dividends) with the Standard &
Poors/TSX Composite Index and the Consumer Discretionary Index.
Over the past five years, revenues have increased $2.2 billion or 80% and operating income before amortization
has improved $887 million or 72%. During the same period, FCF has totalled $2.6 billion of which over 80% was returned to shareholders in the form of dividend payments and share repurchases. The cash compensation paid to the NEOs who are constant
over this same five year time period (JR Shaw, Bradley S. Shaw, Peter Bissonnette, and Steve Wilson) has grown by $8 million.
Over the
five years the Corporations stock performance has been consistent with the S&P/TSX Composite Index and outperformed the S&P/TSX Consumer Discretionary Index.
27
10.
|
Compensation of Directors
|
Directors of the Corporation are currently remunerated for their services as directors according to the fee schedule set forth in the table below.
|
|
|
|
|
|
|
|
|
Type of Fee
|
|
Amount
($)
|
|
|
Total Fees Paid to
Directors
During Fiscal 2012
($)
|
|
Annual Board Member Retainer Fee
|
|
|
65,000
|
|
|
|
781,824
|
|
Annual Lead Director Retainer Fee
|
|
|
75,000
|
|
|
|
75,000
|
|
Annual Committee Member Retainer Fee
|
|
|
3,000
|
|
|
|
36,112
|
|
Annual Committee Chair Retainer Fee
(1)
|
|
|
10,000
|
|
|
|
20,000
|
|
Annual Audit Committee Chair Retainer Fee
(1)
|
|
|
40,000
|
|
|
|
40,000
|
|
Board and Committee Attendance Fee (per meeting)
|
|
|
1,500
|
|
|
|
230,148
|
|
|
|
Total
|
|
|
|
|
|
|
1,183,084
|
|
|
|
Note:
(1)
|
The annual Committee Chair Retainer Fees include the $3,000 annual retainer fee paid to the Committee Chair as a member of the committee.
|
The fees paid to directors of the Corporation are payable in Canadian dollars for directors resident in Canada and in
U.S. dollars for all other directors. The Corporation also reimburses directors for out-of-pocket expenses incurred in attending Board and committee meetings.
During 2011 the Corporations director compensation was benchmarked against a comparator group by Mercer. In order to maintain director compensation at or above the market medium the Corporation will continue
to benchmark against a comparator group and adjust fees using a mix of cash and DSUs. In fiscal 2012 and 2011, each director was granted 3,000 DSUs.
Director Compensation Table
The following table sets out the
compensation paid to each of the Corporations directors for the financial year ended August 31, 2012. Fees earned are paid in cash or paid in DSUs as elected by each director. See also Statement of Executive Compensation
Compensation of Directors DDSU Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees
Earned
Paid
in
Cash ($)
|
|
|
Fees Earned
Paid in
DSU
(1)
|
|
|
Share-Based
Awards
(2)
($)
|
|
|
All Other
Compensation
(3)
($)
|
|
|
Total
($)
|
|
Adrian I. Burns
|
|
|
96,500
|
|
|
|
-
|
|
|
|
59,460
|
|
|
|
26,712
|
|
|
|
182,672
|
|
George F. Galbraith
|
|
|
86,000
|
|
|
|
-
|
|
|
|
59,460
|
|
|
|
4,676
|
|
|
|
150,136
|
|
Dr. Richard R. Green
|
|
|
-
|
|
|
|
85,362
|
|
|
|
59,464
|
|
|
|
10,853
|
|
|
|
155,679
|
|
Dr. Lynda Haverstock
|
|
|
49,792
|
|
|
|
36,208
|
|
|
|
59,460
|
|
|
|
9,848
|
|
|
|
155,308
|
|
Gregg Keating
|
|
|
84,500
|
|
|
|
-
|
|
|
|
59,460
|
|
|
|
18,958
|
|
|
|
162,918
|
|
Michael W. OBrien
|
|
|
178,500
|
|
|
|
-
|
|
|
|
59,460
|
|
|
|
30,197
|
|
|
|
268,157
|
|
Paul K. Pew
|
|
|
6,000
|
|
|
|
121,500
|
|
|
|
59,460
|
|
|
|
25,618
|
|
|
|
212,578
|
|
Jeffrey C. Royer
|
|
|
-
|
|
|
|
84,500
|
|
|
|
59,460
|
|
|
|
32,989
|
|
|
|
176,949
|
|
JC Sparkman
|
|
|
89,879
|
|
|
|
-
|
|
|
|
59,464
|
|
|
|
23,759
|
|
|
|
173,102
|
|
Carl E. Vogel
|
|
|
85,343
|
|
|
|
-
|
|
|
|
59,464
|
|
|
|
4,674
|
|
|
|
149,481
|
|
Sheila C. Weatherill
|
|
|
43,000
|
|
|
|
43,000
|
|
|
|
59,460
|
|
|
|
8,914
|
|
|
|
154,374
|
|
Willard H. Yuill
|
|
|
93,000
|
|
|
|
-
|
|
|
|
59,460
|
|
|
|
8,238
|
|
|
|
160,698
|
|
Notes:
(1)
|
DSUs are credited to a directors DSU account based on dividing the cash value of the compensation by the average of the high and low prices of the
Class B Non-Voting Shares on the compensation dates. Amounts paid to Dr. Richard Green, JC Sparkman and Carl Vogel, residents of the U.S., are payable in U.S. dollars and have been translated into Canadian dollars at the applicable monthly
average exchange rates.
|
(2)
|
Amounts represent the grant date fair value of the award of 3,000 DSUs to each director. The fair value is determined based on the average of the high and low
prices at which the Class B Non-Voting Shares were traded on the TSX or New York Stock Exchange (the
NYSE
), as applicable, on the grant date.
|
(3)
|
Includes the dollar value of notional dividends paid or payable in DSUs.
|
28
Outstanding Option-Based Awards
The following table sets forth details with respect to stock options held by the directors of the Corporation, other than those that are NEOs, as of
August 31, 2012.
|
|
|
|
|
|
|
|
|
Name
|
|
Number of Securities
Underlying
Unexercised Options
(#)
|
|
Option Exercise
Price
($)
|
|
Option
Expiration Date
|
|
Aggregate Value of
Unexercised In-
the-Money
Options
(1)
($)
|
Adrian I. Burns
|
|
50,000
|
|
26.20
|
|
30-Oct-2017
|
|
|
George F. Galbraith
|
|
50,000
|
|
26.20
|
|
30-Oct-2017
|
|
|
Dr. Richard R. Green
|
|
70,000
|
|
19.17
|
|
02-Jul-2020
|
|
69,300
|
Dr. Lynda Haverstock
|
|
70,000
|
|
26.20
|
|
30-Oct-2017
|
|
|
Gregg Keating
|
|
20,000
|
|
22.27
|
|
24-May-2017
|
|
|
|
|
50,000
|
|
26.20
|
|
30-Oct-2017
|
|
Michael W. OBrien
|
|
50,000
|
|
26.20
|
|
30-Oct-2017
|
|
|
Paul K. Pew
|
|
70,000
|
|
21.31
|
|
15-Jan-2018
|
|
|
Jeffrey C. Royer
|
|
50,000
|
|
26.20
|
|
30-Oct-2017
|
|
|
JC Sparkman
|
|
50,000
|
|
26.20
|
|
30-Oct-2017
|
|
|
Carl E. Vogel
|
|
20,000
|
|
16.31
|
|
30-Jun-2016
|
|
77,000
|
|
|
50,000
|
|
26.20
|
|
30-Oct-2017
|
|
Sheila C. Weatherill
|
|
70,000
|
|
21.31
|
|
20-Jan-2019
|
|
|
Willard H. Yuill
|
|
50,000
|
|
26.20
|
|
30-Oct-2017
|
|
|
(1)
|
Based on the difference between the market value of $20.16 per Class B Non-Voting Share on August 31, 2012 and the exercise price of the options.
|
Incentive Plan Awards Value Vested or Earned During the Year
The following table sets forth details on the vesting of awards under the Corporations incentive plans during the fiscal year ended
August 31, 2012.
|
|
|
Name
|
|
Option-Based Awards Value Vested During the Year
(1)
($)
|
Dr. Richard R. Green
|
|
1,225
|
Note:
(1)
|
Amounts reported represent the aggregate dollar value that would have been realized if all options that vested during 2012 were exercised on the vesting date.
The value is calculated as the difference between the market value on the vesting date and the exercise price of the options. Other directors had option based awards vest during the year, however no amounts are disclosed as the value was out of the
money on the vesting dates.
|
DDSU Plan
The Corporation has a Directors Deferred Share Unit Plan (
DDSU Plan
) under which directors may elect to receive 25%, 50%,
75% or 100% of their annual cash compensation in the form of deferred share units (
DSUs
), provided that any director who has not met the applicable share ownership guideline is generally required to elect to receive at least 25%
of his or her annual compensation in DSUs. The number of DSUs to be credited to a directors account equals such amount of compensation allocated to the DDSU Plan divided by the then current market value of a Class B Non-Voting Share. On each
dividend payment date for the Class B Non-Voting Shares, a number of additional DSUs is credited to the directors DSU account equal to, for each DSU, the amount of the per Class B Non-Voting Share dividend divided by the then current
market value of a Class B Non-Voting Share. When the director ceases to be a director, the DSUs will be payable by a cash payment equal to the current market value of a Class B Non-Voting Share for each DSU at the time of payout.
29
Share Ownership Guideline
The Board supports ownership of the Corporations shares by its directors and has established a related share ownership guideline. The
guideline level of ownership by each director is such number of Class A Shares, Class B Non-Voting Shares and DSUs having an aggregate market value of at least $250,000. As previously stated, any director who has not met the share
ownership guideline is generally required to elect to receive at least 25% of his or her annual compensation in DSUs. Each of the directors meets the share ownership guidelines (see the table under the heading Business of the Meeting
Election of Directors.)
Currently, the directors set out for nomination herein as a group own or control a 14% economic interest
in all of the Corporations outstanding share capital, divided as follows: 12% by the Shaw family group, as controlling shareholders, and 2% by those directors who are not members of the Shaw family group. For these non-controlling directors,
this represents an average ownership position in excess of $11 million. The median value of equity (common shares and DSUs) held by these non-controlling directors is over $1.5 million.
For information concerning the shares, DSUs and options held by each director nominated for election at the Meeting, see the table under the heading
Business of the Meeting Election of Directors.
30
OTHER INFORMATION
1.
|
Securities Authorized for Issuance under Equity Compensation Plans
|
As of August 31, 2012, the Corporation had one compensation plan under which equity securities of the Corporation are authorized for issuance,
as summarized in the table below. Under such plan, options to acquire an aggregate of 21,162,672 Class B Non-Voting Shares were outstanding as of August 31, 2012, representing approximately 5.0% of the Class B Non-Voting Shares issued
and outstanding as of such date.
Equity Compensation Plan Information
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of securities
issuable on exercise
of outstanding options
|
|
|
Weighted average
exercise price of
outstanding options
|
|
|
Number of securities
remaining available for
future issuance under
equity
compensation
plan
|
|
Equity compensation plans approved by
security
holders
(1)
|
|
|
21,162,672
|
|
|
$
|
21.09
|
|
|
|
13,072,822
|
|
Note:
(1)
|
Stock option plan of the Corporation providing for the issuance of options to directors, officers, employees and consultants of the Corporation. See
information under the heading Statement of Executive Compensation Incentive Plan Awards Stock Options.
|
2.
|
Indebtedness of Directors and Executive Officers
|
The following table sets forth the aggregate indebtedness outstanding as at November 21, 2012 of all directors, executive officers and employees,
current or former, of the Corporation or any of its subsidiaries.
|
|
|
|
|
Purpose
|
|
To The Corporation or its Subsidiaries
($)
|
|
To Another Entity
($)
|
Shares Purchases
|
|
Nil
|
|
Nil
|
Other
|
|
415,000
|
|
Nil
|
3.
|
Interest of Informed Persons in Material Transactions
|
Other than as disclosed herein, management of the Corporation is unaware of any material interest of any director or executive officer of the
Corporation, of any management nominee for election as a director of the Corporation or of any person who beneficially owns (directly or indirectly) or exercises control or direction over shares carrying more than 10% of the voting rights attached
to all voting shares of the Corporation, or any associate or affiliate of any such person, in any transaction since the beginning of the last completed financial year of the Corporation or in any proposed transaction that has materially affected or
would materially affect the Corporation or any of its subsidiaries.
4.
|
Normal Course Issuer Bid
|
On November 29, 2011, the Corporation announced renewal of its normal course issuer bid by which it is authorized to acquire up to an additional 20,000,000 Class B Non-Voting Shares, being approximately
6% of the then public float of Class B Non-Voting Shares, until expiry of the bid on November 30, 2012. To date, no Class B Non-Voting Shares have been repurchased under this normal course issuer bid. The Corporation believes that under
the right circumstances purchasing of outstanding Class B Non-Voting Shares constitutes a desirable use of the Corporations free cash flow in the best interests of the Corporation and its shareholders
31
and may enhance the value of Class B Non-Voting Shares. The Notice of Intention to Make a Normal Course Issuer Bid is available by contacting the Corporate Secretary of the Corporation as
described below.
5.
|
Additional Information
|
Financial information of the Corporation is provided in the Corporations consolidated corporate financial statements and managements discussion and analysis thereon for the Corporations fiscal
year ended August 31, 2012. Such documents and other information concerning the Corporation, including the Corporations Business Conduct Standards and Annual Information Form dated November 29, 2012, are available through the
Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) which may be accessed at www.sedar.com or the Corporations website at www.shaw.ca or on request without charge from the Corporate Secretary of the
Corporation, Suite 900, 630 3rd Avenue S.W., Calgary, Alberta, Canada, T2P 4L4, Telephone (403) 750-4500. Copies of any documents referred to in the proxy circular as being available on the Corporations website may
also be obtained from the Corporate Secretary of the Corporation.
32
STATEMENT OF CORPORATE GOVERNANCE
The Board and management of the Corporation recognize that effective corporate governance is central to the prudent direction and operation of the
Corporation in a manner that ultimately enhances shareholder value. The following discussion outlines the Corporations system of corporate governance.
The corporate governance practices and policies of the Corporation have been developed under the general stewardship of the Corporate Governance and Nominating Committee of the Board responding to evolving laws,
policies and practices, including disclosure requirements in National Instrument 58-101
Disclosure of Corporate Governance Practices,
the guidelines in National Policy 58-201
Corporate Governance Guidelines,
the
Sarbanes-Oxley Act and the corporate governance rules adopted by the NYSE.
Board & Committee
Membership and Independence
The Board is currently comprised of 16 directors. At the Meeting, holders of Class A Shares will
vote separately for each nominee to the Board. In November 2012 the board adopted a majority voting policy. The Board members and their committee membership are outlined in the table below.
The Board defines a director to be independent if he or she has no direct or indirect material relationship with the Corporation, as
determined by the Board in consultation with the Corporate Governance and Nominating Committee. A material relationship is a relationship which, in the Boards view, could reasonably be expected to interfere with the exercise of a
directors independent judgment. Based on a review of the applicable factual circumstances, including financial, contractual and other relationships, the Board, in consultation with the Corporate Governance and Nominating Committee, has
determined that 12 Board members, being 75% of the Board, are independent as outlined in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit
Committee
|
|
Corporate
Governance &
Nominating
Committee
|
|
Human
Resources &
Compensation
Committee
|
|
Executive
Committee
|
|
Independence Analysis
|
Peter Bissonnette
|
|
|
|
|
|
|
|
|
|
Not Independent
1
|
Adrian Burns
|
|
|
|
X
|
|
|
|
X
|
|
Independent
|
George Galbraith
|
|
|
|
X
|
|
|
|
|
|
Independent
|
Dick Green
|
|
|
|
|
|
X
|
|
|
|
Independent
|
Lynda Haverstock
|
|
|
|
X
|
|
|
|
|
|
Independent
|
Gregg Keating
|
|
X
|
|
|
|
|
|
|
|
Independent
|
Michael OBrien
|
|
|
|
Chair
|
|
|
|
X
|
|
Independent
|
Paul Pew
|
|
Chair
|
|
|
|
|
|
|
|
Independent
|
Jeff Royer
|
|
X
|
|
|
|
|
|
|
|
Independent
|
Brad Shaw
|
|
|
|
|
|
|
|
X
|
|
Not Independent
2,5
|
Jim Shaw
|
|
|
|
|
|
|
|
|
|
Not Independent
3,5
|
JR Shaw
|
|
|
|
|
|
|
|
Chair
|
|
Not Independent
4,5
|
JC Sparkman
|
|
|
|
|
|
X
|
|
X
|
|
Independent
|
Carl Vogel
|
|
X
|
|
|
|
|
|
|
|
Independent
|
Sheila Weatherill
|
|
|
|
|
|
X
|
|
|
|
Independent
|
Willard Yuill
|
|
|
|
|
|
Chair
|
|
|
|
Independent
|
Notes:
1.
|
Peter Bissonnette is the President of the Corporation.
|
2.
|
Brad Shaw is the Chief Executive Officer of the Corporation.
|
3.
|
JR Shaw is the founder and Executive Chair of the Corporation.
|
4.
|
Jim Shaw is the Vice Chair and former Chief Executive Officer of the Corporation.
|
5.
|
JR Shaw is the father of brothers, Jim Shaw and Bradley S. Shaw. JR Shaw, Jim Shaw and Bradley S. Shaw are deemed to be, or are related to, the
Corporations controlling shareholder through the voting trust described under the heading Proxy Information Voting Shares and Principal Holders Thereof.
|
6.
|
For further details about each director of the Corporation nominated for election at the Meeting, see the information under the heading Business of the
Meeting Election of Directors.
|
33
Board of Directors
The Board has established a written Board mandate which is reviewed, and as considered appropriate, updated on a regular basis by the Corporate
Governance and Nominating Committee and the Board. A copy of the Board mandate is included as Exhibit A to this proxy circular.
Duties
The Board has
responsibility for supervising and overseeing management of the business and affairs of the Corporation. The Boards duties include to:
|
|
appoint, review performance of and approve compensation of senior management;
|
|
|
monitor plans for succession, training and development;
|
|
|
satisfy itself as to the integrity of senior management and ensure that senior management maintains a culture of integrity throughout the Corporation;
|
|
|
approve the Corporations strategic objectives, business plans and budgets as discussed below;
|
|
|
approve significant strategic transactions, including significant acquisitions, dispositions and financings;
|
|
|
identify and assess the principal risks inherent in the business activities of the Corporation and ensure that management takes reasonable steps to implement
appropriate systems to manage such risks;
|
|
|
ensure that the operational and financial performance of the Corporation, as well as any developments that may have a significant and material impact on the
Corporation, are adequately reported to shareholders, regulators and stakeholders on a timely and regular basis; and
|
|
|
develop, implement and oversee a disclosure policy to enable the Corporation to communicate effectively with its shareholders and other stakeholders.
|
Certain responsibilities and powers of the Board have been delegated to committees of the Board as outlined below.
Strategic Planning
With respect to strategic planning, the Board establishes strategic objectives for the Corporation, reviews and approves managements strategic plans and budgets and reviews emerging trends, opportunities,
risks and issues with management.
The Board receives updates from management on strategic developments generally eight times per year
(at the middle and end of each fiscal quarter). The Board reviews adjustments to managements budgets, plans and objectives as may be required during the year.
Executive Chair
JR Shaw is the Boards Executive Chair. As such,
he has overall responsibility for the stewardship of the Corporation.
The Executive Chair also fulfills the role of chair of the Board,
which position is described in the Corporations Board Charter. Responsibilities of the chair include to:
|
|
facilitate effective operation and management of, and provide leadership to, the Board;
|
|
|
act as chair of meetings of the Board;
|
|
|
assist in setting the agenda for each meeting of the Board and otherwise bringing forward for consideration matters within the mandate of the Board;
|
34
|
|
facilitate the Boards interaction with management of the Corporation;
|
|
|
act as a resource and mentor and provide leadership for other members of the Board; and
|
|
|
perform such other duties and responsibilities as may be delegated to the Executive Chair by the Board.
|
Lead Director
In
fiscal 2004, the Corporation created the position of Lead Director to ensure that the directors have an independent leadership contact and maintain and enhance the quality of the Corporations corporate governance practices. Michael
OBrien, an independent director, is the Boards Lead Director.
The Lead Director position is set out in the
Corporations Board Charter. Responsibilities of the Lead Director include to:
|
|
in conjunction with the Corporate Governance and Nominating Committee of the Board, provide leadership to ensure that the Board functions independently of
management of the Corporation;
|
|
|
in the absence of the Executive Chair and the Vice Chair, act as chair of meetings of the Board and chair all
in camera
meetings of the independent
directors;
|
|
|
recommend, where necessary, the holding of special meetings of the Board;
|
|
|
review with the Executive Chair and Chief Executive Officer items of importance for consideration by the Board;
|
|
|
as may be required from time to time, consult and meet with any or all of the independent directors and represent independent directors in discussions with
management on corporate governance issues and other matters;
|
|
|
serve as Board ombudsman, so as to ensure that questions or comments of individual directors are heard and addressed;
|
|
|
with the Corporate Governance and Nominating Committee, ensure that the Board, committees of the Board, individual directors and senior management understand
and discharge their duties and obligations under the Corporations system of corporate governance;
|
|
|
mentor and counsel new members of the Board to assist them in becoming active and effective directors;
|
|
|
with the Corporate Governance and Nominating Committee, facilitate the process of conducting director evaluations;
|
|
|
with the Corporate Governance and Nominating Committee, promote best practices and high standards of corporate governance; and
|
|
|
perform such other duties and responsibilities as may be delegated to the Lead Director by the Board.
|
35
Attendance Record
The Board attendance record for fiscal 2012 is outlined below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number and Percentage of Meetings Attended
|
Director
|
|
Audit
Committee
|
|
|
Corporate
Governance &
Nominating
Committee
|
|
|
Human
Resources &
Compensation
Committee
|
|
|
Executive
Committee
|
|
|
Committees
(Total)
|
|
|
Board
|
|
|
Overall Attendance
|
Peter Bissonnette
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
7/7
|
|
|
7/7 (100%)
|
Adrian Burns
|
|
|
|
|
|
|
5/5
|
|
|
|
|
|
|
|
1/1
|
|
|
|
6/6
|
|
|
|
7/7
|
|
|
13/13 (100%)
|
George Galbraith
|
|
|
|
|
|
|
5/5
|
|
|
|
|
|
|
|
|
|
|
|
5/5
|
|
|
|
7/7
|
|
|
12/12 (100%)
|
Dick Green
|
|
|
|
|
|
|
|
|
|
|
5/5
|
|
|
|
|
|
|
|
5/5
|
|
|
|
6/7
|
|
|
11/12 (92%)
|
Lynda Haverstock
|
|
|
|
|
|
|
5/5
|
|
|
|
|
|
|
|
|
|
|
|
5/5
|
|
|
|
7/7
|
|
|
12/12 (100%)
|
Gregg Keating
|
|
|
4/4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/4
|
|
|
|
7/7
|
|
|
11/11 (100%)
|
Michael OBrien
|
|
|
|
|
|
|
5/5
|
|
|
|
|
|
|
|
1/1
|
|
|
|
6/6
|
|
|
|
7/7
|
|
|
13/13 (100%)
|
Paul Pew
|
|
|
4/4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/4
|
|
|
|
7/7
|
|
|
11/11 (100%)
|
Jeff Royer
|
|
|
4/4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/4
|
|
|
|
7/7
|
|
|
11/11 (100%)
|
Brad Shaw
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1
|
|
|
|
1/1
|
|
|
|
7/7
|
|
|
8/8 (100%)
|
Jim Shaw
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
7/7
|
|
|
7/7 (100%)
|
JR Shaw
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1
|
|
|
|
1/1
|
|
|
|
7/7
|
|
|
8/8 (100%)
|
JC Sparkman
|
|
|
|
|
|
|
|
|
|
|
5/5
|
|
|
|
1/1
|
|
|
|
6/6
|
|
|
|
6/7
|
|
|
12/13 (92%)
|
Carl Vogel
|
|
|
4/4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/4
|
|
|
|
7/7
|
|
|
11/11 (100%)
|
Sheila Weatherill
|
|
|
|
|
|
|
|
|
|
|
5/5
|
|
|
|
|
|
|
|
5/5
|
|
|
|
7/7
|
|
|
12/12 (100%)
|
Willard Yuill
|
|
|
|
|
|
|
|
|
|
|
5/5
|
|
|
|
|
|
|
|
5/5
|
|
|
|
7/7
|
|
|
12/12 (100%)
|
In Camera Sessions
The Board mandate provides that the Board shall hold in conjunction with each Board meeting
in camera
sessions at which non-independent directors and members of management are not in attendance.
At each
in camera
session all independent directors and the Executive Chair meet without any other member of management and then the independent directors meet without any member of management or the Executive Chair. The Lead Director chairs
the independent director
in camera
sessions.
The committees of the Board met
in camera
in fiscal 2012 as follows:
|
|
|
|
|
Audit Committee
|
|
|
4 times
|
|
Corporate Governance and Nominating Committee
|
|
|
5 times
|
|
Human Resources and Compensation Committee
|
|
|
4 times
|
|
Interlocking Directorships
The interlocking directorships are listed below. The Board is of the view that neither of these interlocking directorships affects the independence of the respective members of the Board.
|
|
|
|
|
Issuer
|
|
Director
|
|
Position with Issuer
|
Liberty Global, Inc.
|
|
Richard Green
|
|
director and member of corporate governance committee
|
|
|
JC Sparkman
|
|
director and chair of the compensation committee
|
|
|
|
Universal Electronics Inc.
|
|
JC Sparkman
|
|
director and chair of the compensation committee and member of the corporate governance and nominating committee
|
|
|
Carl E. Vogel
|
|
director and member of audit committee
|
The Board addresses interlocking directorships on a case-by-case basis. The Corporate Governance and Nominating
Committee considers the effect of interlocking directorships on director independence when considering nominees as new directors. Existing directors are subject to the Corporations Outside Directorship Guidelines.
Committees of the Board
Subject to applicable law, the Board delegates certain of its powers, duties and responsibilities to committees of the Board. The Board has established four standing committees as discussed below.
36
Audit Committee
The Audit Committee is comprised of Paul K. Pew (Chair), Jeffrey C. Royer, Carl E. Vogel and Gregg Keating. Each member of the Audit Committee
is an independent director and is considered to be financially literate. Each of Paul K. Pew, Jeffrey C. Royer and Carl E. Vogel also qualify as a financial expert under the Sarbanes-Oxley Act and other applicable regulatory
requirements.
A copy of the full written Audit Committee charter is included in the Corporations AIF and is available on the
Corporations website.
Duties
The Audit Committee of the Board is responsible for overseeing the integrity of the Corporations financial reporting process. In this regard, the Audit Committee duties include:
|
|
reviewing the Corporations annual and interim financial statements and related public disclosure;
|
|
|
monitoring the effectiveness and integrity of the Corporations financial reporting, internal control and related management information systems;
|
|
|
monitoring the effectiveness and integrity of the Corporations disclosure processes and controls,
|
|
|
evaluating the qualifications and performance of the Corporations external auditors and implementing practices to preserve their independence, including
reviewing engagements to be provided by the external auditors, and
|
|
|
reviewing the engagement of the external auditors, including any engagement of the external auditors to perform non-audit services;
|
|
|
reviewing the audit plan with the external auditors and management and overseeing the audits conducted by the Corporations external auditors; and
|
|
|
reviewing all significant auditing and accounting practices and policies and any proposed changes with respect thereto.
|
With respect to internal controls over financial reporting, the Corporation has conducted an evaluation of the effectiveness of its system of
internal controls over financial reporting and concluded that the Corporations system of internal controls over financial reporting was effective as of August 31, 2012 and that the Corporation is in compliance with the requirements of
Section 302 of the Sarbanes-Oxley Act.
Internal Audit
The Audit Committee is also responsible for overseeing the work of the Corporations Risk and Compliance Department (internal audit) whose
mandate is to provide objective audit services in order to evaluate and improve the effectiveness of internal controls, disclosure processes and risk management activities. In that regard, the Audit Committee reviews the internal audit procedures
and all reports issued by the internal auditor.
Risks
In respect of those risk areas that the Board has assigned oversight responsibility, the Audit Committee identifies and reviews with management the
principal risks facing the Corporation and ensures that management has in place policies and systems to assess and manage these risks. As part of this process, the Audit Committee regularly reviews reports and discusses significant risk areas with
the Corporations external auditors.
37
Whistleblower and Fraud
As part of its oversight of the integrity of the Corporations internal controls, the Audit Committee specifically reviews and addresses fraud
prevention and other procedures. Under the Corporations Business Conduct Standards, the Corporation has also implemented procedures to ensure that concerns and complaints with respect to accounting, auditing, internal control and public
disclosure matters, among others, are brought to the attention of the Audit Committee.
Chair
The mandate of the Audit Committee outlines the chairs responsibilities, which include: organizing the committees affairs, chairing its
meetings, providing guidance to the members, retaining outside experts as required and reporting to the Board on the committees work.
Corporate Governance and Nominating Committee
The
Corporate Governance and Nominating Committee is comprised of Michael OBrien (Chair), Adrian Burns, George Galbraith and Lynda Haverstock. Each member of the Corporate Governance and Nominating Committee is an independent director.
A copy of the full written Corporate Governance and Nominating Committee charter is available on the Corporations website.
Duties
The Corporate
Governance and Nominating Committee of the Board is responsible for developing and monitoring the Corporations approach to corporate governance in accordance with good corporate practice and applicable laws and policies. In particular, the
Corporate Governance and Nominating Committee is responsible for overseeing the role, composition, structure and effectiveness of the Board and its committees. In this regard, the Corporate Governance and Nominating Committees duties include:
|
|
establishing and reviewing the mandates of the Board and its committees;
|
|
|
identifying and evaluating candidates for nomination to the Board;
|
|
|
overseeing the orientation and education programs for directors;
|
|
|
assessing the effectiveness of the Board, its committees and individual directors;
|
|
|
establishing, reviewing and assessing compliance with general corporate policies and practices, such as the code of conduct, the related party transaction
policies and securities trading guidelines; and
|
|
|
managing the orderly succession of directors to maintain an appropriate complement of experience and skills on the Board.
|
Nomination of Directors
With the Executive Chair and the Lead Director, the Corporate Governance and Nominating Committee identifies and reviews the qualifications of potential candidates for the Board. In particular, the Corporate
Governance and Nominating Committee assesses, among other factors, industry experience, functional expertise, financial literacy and expertise, board experience and diversity of background. Upon such review, and after conducting appropriate due
diligence, the Corporate Governance and Nominating Committee makes recommendations on candidates to the Board.
38
Orientation and Continuing Education
The Corporate Governance and Nominating Committee is responsible for the orientation for new directors. The orientation includes an overview of the
Corporations history and operations, a review of industry conditions and competition, an introduction to the Corporations management team and corporate and business information such as the Corporations written policies and
guidelines.
The Board members are expected to be informed about issues affecting the Corporations business, governance and other
related issues. In this regard, the Corporation undertakes ongoing education initiatives. Director education requirements are overseen by the Corporate Governance and Nominating Committee. Presentation topics are selected by management or requested
by Board members. A summary of topics covered in fiscal 2012 is outlined in the table below.
|
|
|
|
|
|
|
Attendees
|
|
Timing
|
Corporate governance updates on new requirements and emerging issues and practices
|
|
Corporate Governance and Nominating Committee
|
|
Quarterly
|
|
|
|
Changes in generally accepted accounting principles
|
|
Audit Committee
|
|
Quarterly
|
|
|
|
Compensation trends and benchmarking
|
|
Human Resources and Compensation Committee
|
|
Quarterly
|
|
|
|
Strategic Initiatives, including corporate initiatives, market trends, technological developments
|
|
Full Board
|
|
October 2012
April 2012
October 2011
April 2011
|
|
|
|
Senior management presentation on performance and emerging issues
|
|
Full Board
|
|
Quarterly
|
Board and Committee Assessments
The Corporate Governance and Nominating Committee reviews the effectiveness of the Board, its committees and individual directors through written
evaluations which are completed by all directors on an annual basis and collected and analyzed by an independent consultant. The Corporate Governance and Nominating Committee reviews recommendations arising out of the evaluations and recommends for
implementation such changes arising therefrom as it considers appropriate.
Review of Charters
Each of the Audit Committee and the Human Resources and Compensation Committee review annually their committee charters and recommend any changes to
the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee considers these recommendations and reviews annually the charters for each of the Board committees and the mandate of the Board and recommends any
changes to the Board for consideration and approval.
Chair
The mandate of the Corporate Governance and Nominating Committee outlines the chairs responsibilities, which include: organizing the
committees affairs, chairing its meetings, providing guidance to the members, retaining outside experts as required and reporting to the Board on the committees work.
Human Resources and Compensation Committee
The
Human Resources and Compensation Committee is comprised of Willard Yuill (Chair), Dick Green, JC Sparkman and Sheila Weatherill. Each member of the Human Resources and Compensation Committee is an independent director.
39
A copy of the full written Human Resources and Compensation Committee charter is available on the
Corporations website.
The Human Resources and Compensation Committee is responsible for the Corporations approach to human
resources issues, including compensation of Board members and management. In addition, the Human Resources and Compensation Committee reviews and approves changes to the Corporations compensation policies in respect of matters such as
incentive-compensation (bonus) plans, pension plans, employee benefit plans and the structure and granting of stock options, RSUs and other equity-based compensation. The Human Resources and Compensation Committee also approves the appointment of
senior management recruited from outside the Corporation, as well as the promotion of senior management within the Corporation.
Compensation of Management
In respect of management, the Human Resources and Compensation Committee is responsible for ensuring that appropriate and effective human resource recruitment, development, compensation, retention, succession
planning (including appointing, training and monitoring senior management) and performance evaluations programs are developed and implemented in conformity with the Corporations strategic objectives and with a view to attracting and retaining
the best qualified management and employees. The committee annually reviews, approves and reports to the Board the compensation of the senior executives of the Corporation, and recommends for approval by the Board compensation for the NEOs. The
performance of the Corporation and its individual executive officers during the fiscal year is taken into consideration when the Committee conducts its annual executive compensation review. The Committee also takes into consideration the
compensation of similar positions within the Corporations comparator group to ensure that the level of executive compensation is competitive and effective in attracting and retaining outstanding executive talent.
Chief Executive Officer
The Human Resources and Compensation Committee monitors the corporate objectives that the Chief Executive Officer is responsible for meeting on an annual basis and regularly reviews whether such objectives are
being met.
Compensation of the Board
In respect of the Board, the Human Resources and Compensation Committee is charged with the responsibility of reviewing the adequacy and form of the compensation of directors. It considers time commitment,
responsibilities and fees paid by the Corporations peer group in determining remuneration to ensure the Corporation continues to retain and attract the best individuals. Directors may receive their compensation in the form of DSUs, cash or a
combination of the two.
Compensation Consultants
From time to time, the Human Resources and Compensation Committee retains independent human resources consultants to provide expert advice and opinions on compensation and other matters. In respect of fiscal 2011,
the Human Resources and Compensation Committee retained Mercer in connection with a review of director and senior executive compensation and in respect of fiscal 2012, the Corporation retained Aon Hewitt Associates and Mercer to provide actuarial
and other pension-related services. (For fee detail, see Statement of Executive Compensation Executive Compensation-Related Fees.)
40
Chair
The mandate of the Human Resources and Compensation Committee outlines the chairs responsibilities, which include: organizing the committees affairs, chairing its meetings, providing guidance to the
members, retaining outside experts as required and reporting to the Board on the committees work.
Executive Committee
The Executive Committee is comprised of JR Shaw (Chair), Adrian Burns, Michael OBrien, Brad Shaw and JC Sparkman. Each of Adrian Burns, Michael OBrien, and JC Sparkman is an independent director.
A copy of the full written Executive Committee charter is available on the Corporations website.
The Executive Committee carries out all matters that may be specifically and lawfully delegated to it by the Board. In particular, the Executive
Committee exercises the powers of the Board in circumstances where, following initial approval of a matter by the full Board, the Board delegates approval of certain aspects to the Executive Committee. Matters reviewed and approved by the Executive
Committee are in most circumstances referred back to the full Board for ratification, confirmation and approval at the next meeting of the Board.
Corporate Governance Policies
Code of Conduct
The Corporation has adopted a set of Business Conduct Standards, which apply to all directors, officers and employees of the
Corporation. The Corporate Governance and Nominating Committee, with the assistance of the Corporations Business Conduct Standards Committee (a committee of management representatives from each of the Operations, Human Resources, Legal and
Finance departments which meets regularly throughout the year), is responsible for monitoring compliance with the Business Conduct Standards and for approving waivers of such standards. No such waivers for directors or officers of the Corporation
have been granted as of the date hereof.
The Corporations Business Conduct Standards address such matters as conflicts of
interest, confidential information, and the protection and proper use of the Corporations assets. The Business Conduct Standards also include procedures for the submissions of complaints or concerns that employees may have regarding compliance
with corporate policies or applicable laws or with respect to accounting, internal control and auditing matters.
The Board monitors
compliance with the Business Conduct Standards through the Corporate Governance and Nominating Committee and the Audit Committee, with the assistance of the Corporations Business Conduct Standards Committee, a committee comprised of management
representatives from each of the Operations, Human Resources, Legal and Finance departments. Each such Board committee receives updates on matters relating to the Business Conduct Standards that are relevant to it.
No material change reports have been filed since the beginning of the Corporations most recently completed financial year that pertain to any
conduct of a director or executive officer that constitutes a departure from the Business Conduct Standards.
Related Party
Transaction Policy
Transactions or agreements in respect of which a director or executive officer of the Corporation has a
material interest are subject to the Related Party Transaction Policy. For any such
41
transactions or agreements, the director or officer is required to disclose his or her interest in accordance with the Related Party Transaction Policy, the Business Conduct Standards and the
Business Corporations Act
(Alberta). When applicable, he or she is also required to excuse him or herself from any consideration or vote relating to such transaction or agreement.
At each quarterly meeting, each of the Audit Committee and the Corporate Governance and Nominating Committee reviews the fairness of any potential
transactions in which a director or officer of the Corporation may be involved or connected, if any.
Communications Policy
The Corporation has adopted corporate disclosure guidelines with respect to the dissemination of material information in a
timely manner to all shareholders in accordance with applicable securities laws. Under such guidelines, the Board, upon recommendation of the Audit Committee, approves annual and quarterly reports to shareholders, as well as other material public
communications.
All quarterly and annual financial statements, material press releases, investor presentations and other corporate
governance-related materials are posted immediately on the Corporations website. With respect to the release of its quarterly financial results, the Corporation provides Internet and telephone conference call access to interested parties.
Investor enquiries receive a response through the finance department of the Corporation or through an appropriate officer of the
Corporation.
42
DIRECTOR APPROVAL
The contents and sending of this proxy circular have been approved by the Board of Directors of the Corporation.
(signed) P
ETER
A. J
OHNSON
General Counsel and Corporate Secretary
November 21, 2012
43
EXHIBIT A
MANDATE OF THE BOARD OF DIRECTORS
This Mandate of the Board of Directors (the Board) of Shaw Communications Inc. (the Corporation) was adopted June 28, 2012.
The Board has responsibility for supervising and overseeing management of the business and affairs of the Corporation consistent with its powers and obligations under the
Business Corporations Act
(Alberta)
(the ABCA) and under other legal and regulatory requirements applicable to a corporation that is a reporting issuer in Canada and the United States and whose securities are listed on the Toronto Stock Exchange and the New York Stock
Exchange.
In this regard, the Board shall, in accordance with the Corporations Articles and By-laws:
|
|
manage the business and affairs of the Corporation;
|
|
|
act honestly and in good faith with a view to the best interests of the Corporation; and
|
|
|
exercise the care, diligence and skill that reasonably prudent people would exercise in comparable circumstances.
|
The Board will fulfill its mandate primarily by carrying out the responsibilities and duties set forth in Section IV of this Mandate.
Pursuant to the terms of the Articles of the Corporation, the Board shall consist of a minimum of 8 and a maximum of 20 directors. In accordance with applicable regulatory requirements, at least 80% of the members
of the Board shall be Canadian citizens.
The Board shall be comprised of a majority of directors that meet the independence, expertise
and other membership requirements under applicable laws and any other applicable policies established by the Board.
The members of the
Board shall be elected annually by shareholders of the Corporation or as otherwise provided by the Articles. Each member of the Board shall serve until the next annual general meeting of shareholders of the Corporation or until his or her earlier
resignation or removal from the Board.
The Chair of the Board shall be appointed by the Board from among its members and shall carry out
the responsibilities and duties set forth in Section VI of this Mandate. The Board may also appoint, from time to time, an independent Lead Director from among its members to provide leadership to the independent directors of the Board and carry out
the responsibilities and duties set forth in Section VII of this Mandate.
The Board shall meet at least quarterly and more frequently as circumstances require or as requested by a member of the Board or a senior officer of the Corporation.
Notice of each meeting of the Board shall be given to each member of the Board as far in advance of the time for the meeting as practicable, but in
any event, not later than 24 hours preceding the time of the meeting (unless waived by all members of the Board). Each notice of meeting shall state the nature of the business to be transacted at the meeting in reasonable detail and to the extent
practicable, be accompanied by copies of documentation to be considered at the meeting.
A-1
A quorum for the transaction of business at a meeting shall consist of not less than a majority of the
members of the Board. Members of the Board may participate in any meeting by means of such telephonic, electronic or other communication facilities as permit all persons participating in the meeting to communicate adequately with each other, and a
member participating by any such means shall be deemed to be present at that meeting.
Senior management of the Corporation and other
parties may attend meetings of the Board, as may be deemed appropriate by the Board. The Board shall schedule
in camera
independent director sessions to be held in conjunction with each Board meeting. The independent directors may
also meet
in camera
at other appropriate times. The Lead Director shall chair
in camera
independent director sessions.
Minutes shall be kept of all meetings of the Board (other than
in camera
sessions) and shall be signed by the Chair and Secretary of the
meeting.
IV.
|
Responsibilities and Duties of the Board
|
To fulfill its mandate, the Board shall be charged with the specific responsibilities and duties set out in this Section IV. To the extent permissible under applicable law and the Corporations Articles and
By-laws, the Board may delegate such responsibilities and duties to committees of the Board constituted in accordance with Section V of this Mandate.
While the ABCA and Corporations By-laws provide that the Board shall manage the business and affairs of the Corporation, the Board operates by delegating certain of its authorities to management
of the Corporation and by reserving certain powers to itself.
In this regard, the Board expects management of the Corporation, including
the Chief Executive Officer (the CEO) and other senior executives of the Corporation, to provide day-to-day leadership and management of the Corporation and to achieve the overall objectives and policies established by the Board. In
particular, the CEO is expected to lead the Corporation and to formulate corporate strategies and policies that are presented to the Board for approval. The Board approves the strategies of the Corporation and the objectives and policies within
which it is managed, and then evaluates the performance of the CEO and management. Reciprocally, the CEO and management shall keep the Board fully informed, in a timely and candid manner, of the progress of the Corporation towards the achievement of
the goals, objectives or policies established by the Board. Once the Board has approved the strategies and policies, it shall act in a unified and cohesive manner in supporting and guiding the CEO and senior management of the Corporation.
The Boards principal responsibilities and duties fall into the general categories described below.
1.
|
Selection and Oversight of Management
|
The Board has the responsibility to:
|
|
|
select and appoint the CEO and senior management of the Corporation;
|
|
|
|
review the performance of the CEO and senior management;
|
|
|
|
approve the compensation of the CEO and senior management;
|
|
|
|
ensure that plans have been made for management succession, training and development;
|
|
|
|
provide advice and counsel to the CEO and senior management in the execution of their duties; and
|
|
|
|
satisfy itself as to the integrity of the CEO and senior management, and
|
|
|
|
ensure that such officers create a culture of integrity throughout the Corporation.
|
A-2
The Board has the responsibility to:
|
|
|
review and approve the Corporations long-term strategic objectives and monitor the Corporations progress in reaching such strategic objectives;
|
|
|
|
review and approve the business plans, consolidated budgets and other similar plans of the Corporation on an annual basis and monitor the implementation of
such plans;
|
|
|
|
review and approve significant strategic transactions that are not considered to be in the ordinary course of business as well as other items of significance,
including significant acquisitions, dispositions and financings; and
|
|
|
|
identify and review other matters of significance that require approval or input of the Board.
|
The Board has the responsibility to:
|
|
|
identify and assess the principal risks inherent in the business activities of the Corporation and ensure that management takes all reasonable steps to
implement appropriate systems to manage such risks;
|
|
|
|
ensure that management implements and maintains effective internal controls over financial reporting, disclosure controls and procedures and management
information systems;
|
|
|
|
develop, review and monitor the Corporations approach to corporate governance, including developing the Corporations corporate governance
guidelines and measures for receiving shareholder feedback; and
|
|
|
|
adopt and monitor compliance with, a code of business conduct applicable to directors, officers and employees of the Corporation.
|
The Board has the responsibility to:
|
|
|
ensure that the operational and financial performance of the Corporation, as well as any developments that may have a significant and material impact on the
Corporation, are adequately reported to shareholders, regulators and stakeholders on a timely and regular basis;
|
|
|
|
ensure that the financial performance of the Corporation is reported fairly and in accordance with the Corporations disclosed accounting principles and
applicable laws and regulations; and
|
|
|
|
develop, implement and oversee a disclosure policy to enable the Corporation to communicate effectively with its shareholders and other stakeholders.
|
The Board is responsible for ensuring overall compliance with legal and regulatory requirements applicable to the Corporation.
The Board also has the responsibility for considering, as a full Board, the following matters that in law may not be delegated to
management of the Corporation or to a committee of the Board:
|
|
|
any submission to shareholders of the Corporation of a question or matter requiring their approval;
|
|
|
|
filling of a vacancy among the directors or in the office of auditors of the Corporation;
|
A-3
|
|
|
issuance of securities;
|
|
|
|
declaration of dividends;
|
|
|
|
purchase, redemption or any other form of acquisition of shares issued by the Corporation;
|
|
|
|
payment of a commission to any person in consideration of such person purchasing or agreeing to purchase shares of the Corporation from the Corporation or
from any other person, or procuring or agreeing to procure purchasers for any such shares;
|
|
|
|
approval of management proxy circulars;
|
|
|
|
approval of any take-over bid circular or directors circular;
|
|
|
|
approval of annual financial statements, management discussion and analysis and annual information forms; and
|
|
|
|
adoption, amendment or repeal of the By-laws.
|
The Board has the responsibility to:
|
|
|
manage its own affairs, including developing its own agendas and procedures;
|
|
|
|
consider, on an annual basis, the composition and size of the Board and its impact, if any, on the Boards effectiveness;
|
|
|
|
identify and approve prospective nominees to the Board;
|
|
|
|
ensure that there is a comprehensive orientation session for directors, as well as other continuing education opportunities;
|
|
|
|
regularly assess the effectiveness and contribution of the Board, its committees and each individual director;
|
|
|
|
determine the compensation of directors; and
|
|
|
|
otherwise establish and review its own policies and practices from time to time.
|
V.
|
Committees of the Board
|
The Board may establish committees of the Board and delegate its duties and responsibilities to such committees, where legally permissible. The Board shall appoint the members to any such committee and shall
oversee their performance.
In accordance with applicable laws, policies and guidelines of securities regulatory authorities, the Board
shall appoint the following standing committees, each comprised of at least a majority of independent directors:
|
|
|
Corporate Governance and Nominating Committee; and
|
|
|
|
Human Resources and Compensation Committee.
|
In addition, the Board has appointed an Executive Committee. The Executive Committee will have not fewer than a majority of independent directors.
VI.
|
Terms of Reference for the Chair
|
To fulfill his or her responsibilities and duties, the Chair of the Board shall:
|
|
|
facilitate the effective operation and management of, and provide leadership to, the Board;
|
|
|
|
act as chair of meetings of the Board;
|
A-4
|
|
|
assist in setting the agenda for each meeting of the Board and in otherwise bringing forward for consideration matters within the mandate of the Board;
|
|
|
|
facilitate the Boards interaction with management of the Corporation;
|
|
|
|
act as a resource and mentor and provide leadership for other members of the Board; and
|
|
|
|
perform such other duties and responsibilities as may be delegated to the Chair by the Board from time to time.
|
VII.
|
Terms of Reference for Lead Director
|
The Lead Director will facilitate the functioning of the Board independently of the Corporations management and will also maintain and enhance the quality of Shaws corporate governance practices.
The Lead Director will:
|
|
|
in conjunction with the Corporate Governance and Nominating Committee of the Board, provide leadership to ensure that the Board functions independently of
management of the Corporation;
|
|
|
|
act as chair of
in camera
independent director sessions and
,
in the absence of the Executive Chair and the Vice Chair, act as chair of meetings
of the Board;
|
|
|
|
recommend, where necessary, the holding of special meetings of the Board;
|
|
|
|
review with the Executive Chair and Chief Executive Officer items of importance for consideration by Board;
|
|
|
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as may be required from time to time, consult and meet with any or all of Shaws independent directors at the discretion of either party and with or
without the attendance of the Executive Chair, and represent such directors in discussions with management of the Corporation on corporate governance issues and other matters;
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serve as Board ombudsman, so as to ensure that questions or comments of individual directors are heard and addressed;
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with the Corporate Governance and Nominating Committee, ensure that the Board, committees of the Board, individual directors and senior management of the
Corporation understand and discharge their duties and obligations under the Corporations system of corporate governance;
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mentor and counsel new members of the Board to assist them in becoming active and effective directors;
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with the Corporate Governance and Nominating Committee, facilitate the process of conducting director evaluations;
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with the Corporate Governance and Nominating Committee, promote best practices and high standards of corporate governance; and
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perform such other duties and responsibilities as may be delegated to the Lead Director by the Board from time to time.
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VIII.
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Terms of Reference for Individual Directors
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As a member of the Board, each director will act honestly, in good faith and in the best interests of the Corporation. Each director will exercise the care, diligence and skill of a reasonably prudent person and
will fulfil all legal and fiduciary obligations of a director.
Each director is expected to:
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act and speak honestly and with integrity;
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demonstrate high ethical standards;
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A-5
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support principled and ethical business practices and a culture of integrity;
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maintain a solid understanding of the role, responsibilities and duties of a director;
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understand conflict of interest issues and declare real or perceived conflicts;
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be an effective ambassador and representative of the Corporation; and
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comply with applicable laws, the Corporations Articles, By-laws, business conduct standards and other policies.
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Each director shall:
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demonstrate skills and experience that are complementary to other directors of the Board and that are valuable in light of the Corporations business and
strategic direction;
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develop and maintain a strong understanding of the Corporations business, operations, products, financial position, industry and markets;
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apply his or her knowledge, experience and expertise to issues confronting the Corporation;
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participate in on-going training and continuing education as may be required or desirable; and
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serve as a helpful resource to the Board and to management, where necessary or appropriate.
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3.
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Preparation, Attendance and Availability
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Each director shall:
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maintain an excellent attendance record for meetings of both the Board and committees of the Board;
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prepare for meetings of the Board and committees of the Board, by reading reports and background materials and by otherwise preparing in a manner that will
assist the director in evaluating and adding value to meeting agenda items;
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be available and accessible to other members of the Board and to management of the Corporation, as needed; and
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have the necessary time and commitment to fulfill all responsibilities as a member of the Board and committees of the Board.
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4.
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Communication and Interaction
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Each director shall:
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participate fully and frankly in Board deliberations and discussions and contribute meaningfully and knowledgeably to Board discussions;
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work effectively with, and be collegial and respectful towards, fellow directors and management of the Corporation;
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encourage free and open discussion by the Board with respect to the business and affairs of the Corporation;
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communicate with the Chair and Chief Executive Officer of the Corporation, as appropriate, including when planning to introduce significant or new information
or material at a meeting of the Board;
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act and speak independently and exercise independent judgment; and
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respect confidentiality.
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A-6
Each director is expected to:
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participate as a member of a committee of the Board, when requested; and
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become knowledgeable about the purpose and objectives of any committee of the Board on which the director serves.
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The Board shall have the authority to retain legal, accounting and other outside consultants and advisors to advise it. The Board, shall also implement a system whereby individual directors may engage an outside
advisor, at the expense of the Corporation, to provide consultation and advice in appropriate circumstances.
A-7
Exhibit 2
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SHAW COMMUNICATIONS INC.
CLASS A PARTICIPATING SHARES
PROXY
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THIS PROXY IS SOLICITED BY MANAGEMENT OF SHAW COMMUNICATIONS INC. (THE
CORPORATION
) FOR THE
ANNUAL GENERAL MEETING (THE
MEETING
) OF SHAREHOLDERS OF THE CORPORATION TO BE HELD ON WEDNESDAY, JANUARY 9, 2013 AT 11:00 A.M. (MOUNTAIN TIME) AND AT ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
The undersigned shareholder of the Corporation hereby appoints JR SHAW of Calgary, Alberta, or failing him, BRADLEY S. SHAW of Calgary,
Alberta, or instead of either of the foregoing,
of
as the nominee of the
undersigned to attend and act for the undersigned at the Meeting, in the same manner, to the same extent and with the same power as if the undersigned were present at the Meeting or at any adjournment or adjournments thereof, including the right to
appoint a substitute proxyholder; and without limiting the general authorization and powers hereby given, the undersigned shareholder specifies and directs the persons above named that the shares registered in the name of the undersigned shall be
voted as indicated below.
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Vote
For
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Vote
Withhold
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Peter Bissonnette
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¨
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¨
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Adrian Burns
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¨
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¨
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George Galbraith
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¨
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¨
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Richard Green
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¨
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¨
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Lynda Haverstock
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¨
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¨
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Gregory Keating
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¨
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¨
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Michael OBrien
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¨
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¨
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Paul Pew
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¨
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¨
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Vote
For
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Vote
Withhold
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Jeffrey Royer
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¨
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¨
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Bradley Shaw
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¨
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¨
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Jim Shaw
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¨
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¨
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JR Shaw
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¨
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¨
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JC Sparkman
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¨
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¨
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Carl Vogel
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¨
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¨
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Sheila Weatherill
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¨
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¨
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Willard Yuill
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¨
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¨
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2.
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Appointment of Ernst & Young as Auditors
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¨
Vote
For
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¨
Vote
Withhold
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Unless otherwise indicated above, this proxy is to be voted in favour of each of the resolutions in respect of
the election of directors and the appointment of the auditors, all as referred to above. If any amendments or variations to matters identified in the notice of meeting are proposed at the Meeting or if any other matters properly come before the
Meeting, discretionary authority is hereby conferred with respect thereto.
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Dated the
day of
,
.
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Signature of Shareholder
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Name of Shareholder
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(please print)
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Notes:
1.
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This form of proxy is for use of holders of Class A Participating Shares of the Corporation only.
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2.
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This proxy is solicited on behalf of the management of the Corporation and the costs thereof will be borne by the Corporation.
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3.
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A shareholder has the right to appoint a proxyholder (who need not be a shareholder) to attend and act for the shareholder at the Meeting other than the
persons designated above. To exercise this right, the shareholder may insert the name of the desired person in the blank space provided above and strike out the other names or may submit another appropriate proxy.
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4.
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This form of proxy should be dated and must be executed by the shareholder or his or her attorney authorized in writing or, if the shareholder is a
corporation, under its corporate seal or by an officer or attorney thereof duly authorized. If this form of proxy is not dated, it will be deemed to bear the date on which it is mailed to the shareholder.
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5.
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In order for this proxy to be effective it must be deposited at the offices of CIBC Mellon Trust Company, c/o Canadian Stock Transfer Company Inc., 600 The
Dome Tower, 333 - 7th Avenue S.W., Calgary, Alberta, T2P 2Z1 (mailing address: CIBC Mellon Trust Company, c/o Canadian Stock Transfer Company Inc., Proxy Dept., P.O. Box 721, Agincourt, Ontario, M1S 0A1), not less than 48 hours, excluding Saturdays,
Sundays and holidays, before the time for holding the Meeting or any adjournment thereof.
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6.
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If this proxy is duly deposited with CIBC Mellon Trust Company, c/o Canadian Stock Transfer Company Inc., the shares represented thereby will be voted or
withheld from voting as directed by the shareholder, but if no direction is made, they will be voted in favour of the above matters. If the shareholder specifies in this proxy with respect to any matters to be acted upon, such shares shall, in the
event of a poll on such matters, be voted in accordance with the specifications so made.
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