UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 May 2024
Commission File No.: 001-41083
TELESAT CORPORATION
(Name of Registrant)
160 Elgin Street, Suite 2100, Ottawa, Ontario,
Canada K2P 2P7
(Address of Principal Executive Office)
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 ☒ Form 40-F ☐
EXHIBITS
The following information is furnished to the Securities and Exchange
Commission as part of this report on Form 6-K:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
|
TELESAT CORPORATION |
| |
|
|
|
| Date: May 20, 2024 |
By: |
/s/ CHRISTOPHER S. DIFRANCESCO |
| |
|
Name: |
Christopher S. DiFrancesco |
| |
|
Title: |
Vice President, General Counsel and Secretary |
2
Exhibit 99.1
NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that
the annual general and special meeting (the “Meeting”) of the holders (collectively, the “Shareholders”)
of Class A Common Shares, Class B Variable Voting Shares, Class C Fully Voting Shares, and Class C Limited Voting Shares (collectively,
the “Telesat Corporation Shares”) of Telesat Corporation (“Telesat” or the “Company”),
as well as the holder of the Class A Special Voting Share, the Class B Special Voting Share, the Class C Special Voting Share (collectively,
the “Special Voting Shares”) and the Golden Share of Telesat will be held in a virtual only meeting format via live
audio webcast online at https://meetnow.global/MZCGDNP at 2:00 p.m. (Ottawa time) on June 18, 2024.
The Meeting is being held to consider
the following matters:
| 1. | to receive the audited consolidated financial statements of the Company for the fiscal year ended December
31, 2023, together with the auditors’ report thereon; |
| 2. | to elect the members of the board of directors of the Company (the “Board”); |
| 3. | to re-appoint the auditors of the Company for the ensuing year and authorize the Board to fix the remuneration
to be paid to such auditors; |
| 4. | to consider, and if thought fit, pass with or without amendment, an ordinary resolution to amend the Company’s
long-term equity incentive plan to increase the number of Class A Shares and Class B Variable Voting Shares in the capital of Telesat
available for issuance under the plan, the full text of which is set forth in the Information Circular; and |
| 5. | to transact such other or further business as may properly come before the Meeting
or any adjournment or postponement thereof. |
The management
information circular (the “Information Circular”) provides additional information relating to proxies and the matters
to be dealt with at the Meeting and forms part of this notice. Shareholders should access and review all of the information contained
in the Information Circular before voting.
Each person who is a holder of record
of Telesat Corporation Shares at the close of business on April 25, 2024 (the “Record Date”) is entitled to receive
notice of, and to attend and vote at, the Meeting, and any adjournment or postponement thereof. In addition, holders of Class A Units,
Class B Units and Class C Units (collectively, “Exchangeable Units”) of Telesat Partnership LP at the close of business
on April 25, 2024 are entitled to receive notice of, and to attend and vote at, the Meeting, and any adjournment or postponement thereof.
Holders of such Exchangeable Units will be entitled to vote at the Meeting pursuant to the Special Voting Shares and the Trust Voting
Agreement, as further described in the Information Circular.
The Company is electing to hold the
Meeting in a virtual only format, which will be conducted via live audio webcast. Shareholders will not be able to physically attend the
Meeting.
Registered Shareholders, holders
of Exchangeable Units, and duly appointed proxyholders will be able to attend, ask questions and vote at the Meeting online. Non-registered
Shareholders (being those who beneficially own Telesat Corporation Shares that are registered in the name of an intermediary such as a
bank, trust company, securities broker or other nominee, or in the name of a depository of which the intermediary is a participant) who
have not duly appointed themselves as proxyholder will be able to attend the Meeting online as guests, but guests will not be able to
vote or ask questions at the Meeting.
Registered Shareholders not planning
or unable to attend the Meeting are requested to read the Information Circular and the form of proxy which accompanies this notice and
to complete, sign, date and deliver the form of proxy, together with the power of attorney or other authority, if any, under which it
was signed (or a notarially certified copy thereof) to the Company’s transfer agent, Computershare Investor Services Inc. (“Computershare”),
either in person, by mail or courier, to 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, or via the internet at www.investorvote.com.
To be effective, proxies must be received by Computershare not later than 2:00 p.m. (Ottawa time) on June 14, 2024 or 48 hours (excluding
Saturdays, Sundays and holidays) prior to any adjournment or postponement of the Meeting. Late proxies may be accepted or rejected by
the chair of the Meeting in his or her discretion, and the chair is under no obligation to accept or reject any particular late proxy.
If you are holder of Exchangeable Units, you must provide your voting instructions to Telesat Corporation, as general partner of the Partnership,
not later than 5:00 p.m. (Ottawa time) on June 12, 2024 or 48 hours prior to the proxy cut-off for any adjournment or postponement of
the Meeting. Holders of Exchangeable Units must provide instructions to appoint a proxy, as described in the voting information form,
by 5:00 pm on June 11, 2024.
Non-registered Shareholders who received
the proxy through an intermediary must deliver the proxy in accordance with the instructions given by such intermediary.
A Shareholder who wishes to appoint
a person other than the Telesat proxyholder nominees identified on the form of proxy or voting instruction form (including a non-registered
Shareholder who wishes to appoint themselves as proxyholder in order to attend and vote at the Meeting online) must carefully follow the
instructions in the Information Circular and on their form of proxy or voting instruction form accompanying this notice. These instructions
include the additional step of registering such proxyholder with Computershare after submitting a form of proxy or voting instruction
form. Failure to register will result in the proxyholder not receiving an invite code, which is used as their online sign-in credentials
and is required for them to vote at the Meeting. Without an invite code, such proxyholder will only be able to attend the Meeting online
as a guest. Non-registered Shareholders located in the United States must also provide Computershare with a duly completed legal proxy
by email to uslegalproxy@computershare.com, or by courier to Computershare Investor Services Inc., 100 University Avenue, 8th Floor, Toronto,
ON M5J 2Y1, if they wish to vote at the Meeting or appoint a third-party as their proxyholder.
The Company is using the “notice-and-access”
procedures adopted by the Canadian Securities Administrators for the delivery of the Information Circular, the Company’s audited
annual financial statements for the year ended December 31, 2023 along with the related management’s discussion and analysis. Under
“notice-and-access”, Shareholders as of the Record Date are to receive a proxy form or voting instruction form enabling such
holder to vote at the Meeting and a notice-and-access notification containing information about how to electronically access the Information
Circular and Telesat’s audited annual financial statements for the year ended December 31, 2023 along with the related management’s
discussion and analysis. Shareholders are reminded to review the Information Circular prior to voting. The Information Circular,
the Company’s audited annual financial statements and the associated management’s discussion and analysis can be viewed online
at https://www.telesat.com/investor-relations/ or under the Company’s profile on SEDAR+ at www.sedarplus.com and on EDGAR
at www.sec.gov. Registered Shareholders and non-registered Shareholders who have previously provided standing instructions to receive
paper copies will receive such documents by mail.
For more information regarding notice-and-access
or to obtain a paper copy of these documents you may call Computershare toll-free at 1-866-962-0498 (or from outside of North America:
1 (514) 982-8716)
DATED at Ottawa, Ontario this 25th day of
April, 2024.
BY ORDER OF THE BOARD OF DIRECTORS,
(signed) “Christopher DiFrancesco”
Christopher DiFrancesco
Vice President, General Counsel and Secretary
Exhibit 99.2
Exhibit 99.3
Exhibit 99.4
TELESAT CORPORATION
NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING
OF SHAREHOLDERS
TO BE HELD ON JUNE 18, 2024
AND
MANAGEMENT INFORMATION CIRCULAR
April 25, 2024
April 25, 2024
Dear Shareholder,
We are pleased to enclose the Notice of Meeting
for the annual general and special meeting (“Meeting”) of Telesat Corporation (“Telesat” or the
“Company”). The Meeting will be held in a virtual-only meeting format via live webcast online at 2:00 p.m. (Ottawa
time) on June 18, 2024.
Registered Shareholders, holders of Exchangeable
Units, and duly appointed proxyholders will be able to attend, ask questions, and vote at the Meeting online. If you will not be attending,
appointment of a proxyholder by shareholders may be completed at http://www.computershare.com/telesat and voting may be completed at
www.investorvote.com. Holders of Exchangeable Units should follow the directions to appoint a proxy as set out in the voting instruction
form they received and as described in the Management Information Circular that follows. Additional proxy deadline details are outlined
in the Management Information Circular that follows.
The Meeting is being held to review the audited
consolidated financial statements of Telesat for the fiscal year ended December 31, 2023, elect the board of directors (“Board”)
of the Company, re-appoint the auditors of the Company for the ensuing year and authorize the Board to fix the remuneration to be paid
to the auditors, and to consider a proposed amendment to the Company’s long-term equity incentive plan to increase the number of
Telesat shares available for issuance under the plan. The Management Information Circular provides additional information relating to
the proxies and the matters to be dealt with at the Meeting. Shareholders should access and review all of the information in the Management
Information Circular before voting.
Recommendation:
Your Board believes that the resolutions contained
in the Notice of Meeting are in the best interests of the Company and Shareholders as a whole and recommends you to vote in favour of
them, as your directors intend to do in respect of their beneficial shareholdings.
Yours sincerely,
| (signed)
“Mark H. Rachesky” |
|
(signed)
“Daniel S. Goldberg” |
| |
|
|
| Mark H. Rachesky |
|
Daniel S. Goldberg |
| Chair of the Board |
|
President and Chief Executive
Officer |
| Telesat Corporation |
|
Telesat Corporation |
NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING
OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual
general and special meeting (the “Meeting”) of the holders (collectively, the “Shareholders”) of
Class A Common Shares, Class B Variable Voting Shares, Class C Fully Voting Shares, and Class C Limited Voting Shares
(collectively, the “Telesat Corporation Shares”) of Telesat Corporation (“Telesat” or the “Company”),
as well as the holder of the Class A Special Voting Share, the Class B Special Voting Share, the Class C Special Voting
Share (collectively, the “Special Voting Shares”) and the Golden Share of Telesat will be held in a virtual only meeting
format via live audio webcast online at https://meetnow.global/MZCGDNP at 2:00 p.m. (Ottawa time) on June 18, 2024.
The Meeting is being held to consider the following
matters:
| 1. | to receive the audited consolidated financial statements of the Company for the fiscal year ended December
31, 2023, together with the auditors’ report thereon; |
| 2. | to elect the members of the board of directors of the Company (the “Board”); |
| 3. | to re-appoint the auditors of the Company for the ensuing year and authorize the Board to fix the remuneration
to be paid to such auditors; |
| 4. | to consider, and if thought fit, pass with or without amendment, an ordinary resolution to amend the Company’s
long-term equity incentive plan to increase the number of Class A Shares and Class B Variable Voting Shares in the capital of
Telesat available for issuance under the plan, the full text of which is set forth in the Information Circular; and |
| 5. | to transact such other or further business as may properly come before the Meeting or any adjournment
or postponement thereof. |
The management information circular (the “Information
Circular”) provides additional information relating to proxies and the matters to be dealt with at the Meeting and forms part
of this notice. Shareholders should access and review all of the information contained in the Information Circular before voting.
Each person who is a holder of record of Telesat
Corporation Shares at the close of business on April 25, 2024 (the “Record Date”) is entitled to receive notice of,
and to attend and vote at, the Meeting, and any adjournment or postponement thereof. In addition, holders of Class A Units, Class B
Units and Class C Units (collectively, “Exchangeable Units”) of Telesat Partnership LP at the close of business
on April 25, 2024 are entitled to receive notice of, and to attend and vote at, the Meeting, and any adjournment or postponement thereof.
Holders of such Exchangeable Units will be entitled to vote at the Meeting pursuant to the Special Voting Shares and the Trust Voting
Agreement, as further described in the Information Circular.
The Company is electing to hold the Meeting in
a virtual only format, which will be conducted via live audio webcast. Shareholders will not be able to physically attend the Meeting.
Registered Shareholders, holders of Exchangeable
Units, and duly appointed proxyholders will be able to attend, ask questions and vote at the Meeting online. Non-registered Shareholders
(being those who beneficially own Telesat Corporation Shares that are registered in the name of an intermediary such as a bank, trust
company, securities broker or other nominee, or in the name of a depository of which the intermediary is a participant) who have not duly
appointed themselves as proxyholder will be able to attend the Meeting online as guests, but guests will not be able to vote or ask questions
at the Meeting.
Registered Shareholders not planning or unable
to attend the Meeting are requested to read the Information Circular and the form of proxy which accompanies this notice and to complete,
sign, date and deliver the form of proxy, together with the power of attorney or other authority, if any, under which it was signed (or
a notarially certified copy thereof) to the Company’s transfer agent, Computershare Investor Services Inc. (“Computershare”),
either in person, by mail or courier, to 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, or via the internet at www.investorvote.com.
To be effective, proxies must be received by Computershare not later than 2:00 p.m. (Ottawa time) on June 14, 2024 or 48 hours (excluding
Saturdays, Sundays and holidays) prior to any adjournment or postponement of the Meeting. Late proxies may be accepted or rejected by
the chair of the Meeting in his or her discretion, and the chair is under no obligation to accept or reject any particular late proxy.
If you are holder of Exchangeable Units, you must provide your voting instructions to Telesat Corporation, as general partner of the
Partnership, not later than 5:00 p.m. (Ottawa time) on June 12, 2024 or 48 hours prior to the proxy cut-off for any adjournment or postponement
of the Meeting. Holders of Exchangeable Units must provide instructions to appoint a proxy, as described in the voting information form,
by 5:00 pm on June 11, 2024.
Non-registered Shareholders who received the proxy
through an intermediary must deliver the proxy in accordance with the instructions given by such intermediary.
A Shareholder who wishes to appoint a person
other than the Telesat proxyholder nominees identified on the form of proxy or voting instruction form (including a non-registered Shareholder
who wishes to appoint themselves as proxyholder in order to attend and vote at the Meeting online) must carefully follow the instructions
in the Information Circular and on their form of proxy or voting instruction form accompanying this notice. These instructions include
the additional step of registering such proxyholder with Computershare after submitting a form of proxy or voting instruction form. Failure
to register will result in the proxyholder not receiving an invite code, which is used as their online sign-in credentials and is required
for them to vote at the Meeting. Without an invite code, such proxyholder will only be able to attend the Meeting online as a guest.
Non-registered Shareholders located in the United States must also provide Computershare with a duly completed legal proxy by email to
uslegalproxy@computershare.com, or by courier to Computershare Investor Services Inc., 100 University Avenue, 8th Floor, Toronto, ON
M5J 2Y1, if they wish to vote at the Meeting or appoint a third-party as their proxyholder.
The Company is using the “notice-and-access”
procedures adopted by the Canadian Securities Administrators for the delivery of the Information Circular, the Company’s audited
annual financial statements for the year ended December 31, 2023 along with the related management’s discussion and analysis. Under
“notice-and-access”, Shareholders as of the Record Date are to receive a proxy form or voting instruction form enabling such
holder to vote at the Meeting and a notice-and-access notification containing information about how to electronically access the Information
Circular and Telesat’s audited annual financial statements for the year ended December 31, 2023 along with the related management’s
discussion and analysis. Shareholders are reminded to review the Information Circular prior to voting. The Information Circular,
the Company’s audited annual financial statements and the associated management’s discussion and analysis can be viewed online
at https://www.telesat.com/investor-relations/ or under the Company’s profile on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov.
Registered Shareholders and non-registered Shareholders who have previously provided standing instructions to receive paper copies
will receive such documents by mail.
For more information regarding notice-and-access
or to obtain a paper copy of these documents you may call Computershare toll-free at 1-866-962-0498 (or from outside of North America:
1 (514) 982-8716)
DATED at Ottawa, Ontario this 25th
day of April, 2024.
BY ORDER OF THE BOARD OF DIRECTORS,
(signed) “Christopher DiFrancesco”
Christopher DiFrancesco
Vice President, General Counsel and Secretary
MANAGEMENT INFORMATION CIRCULAR
FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
OF TELESAT CORPORATION
About this Management Information Circular
This management information circular (the “Information
Circular”) is furnished in connection with the solicitation of proxies by or on behalf of management of Telesat Corporation
(together with Telesat Partnership LP and its applicable subsidiaries, “Telesat” or the “Company”)
for use at the annual general meeting (the “Meeting”) of the holders (collectively, the “Shareholders”)
of Class A Common Shares, Class B Variable Voting Shares, Class C Fully Voting Shares, and Class C Limited Voting
Shares (collectively, the “Telesat Corporation Shares”), as well as the holder of the Class A Special Voting Share,
the Class B Special Voting Share, the Class C Special Voting Share and the Golden Share to be held at 2:00 p.m. (Ottawa time)
on June 18, 2024 online in a virtual only format, and any adjournment(s) or postponement(s) thereof.
Holders of Class A Units, Class B Units,
and Class C Units (collectively, the “Exchangeable Units”) of Telesat Partnership LP (the “Partnership”)
are entitled to receive notice of, and to attend and vote at, the Meeting, and any adjournment or postponement thereof. Holders of such
Exchangeable Units will be entitled to vote at the Meeting pursuant to the Special Voting Shares and the Trust Voting Agreement, as further
described in this Information Circular.
Telesat Corporation is the sole general partner
of the Partnership. Telesat Corporation and the Partnership are each reporting issuers in each of the provinces and territories of Canada
and, as a result, are subject to Canadian continuous disclosure and other reporting obligations under Canadian securities law. The Partnership
has received exemption relief dated November 16, 2021 from the Canadian securities administrators that effectively allows the Partnership
to satisfy its continuous disclosure obligations by relying on the Canadian continuous disclosure documents filed by Telesat Corporation,
for so long as certain conditions are satisfied. For additional information on this exemptive relief and the disclosure required by such
relief, see “General Matters – Exemptions from Canadian Securities Law”.
No person has been authorized to give any information
or make any representation in connection with any matters to be considered at the Meeting other than those contained in this Information
Circular and, if given or made, any such information or representation must not be relied upon as having been authorized by the Company
or management.
All references in this Information Circular to
“Telesat”, the “Company”, “we” “our”, “ours”, and “us” refer to
Telesat Corporation and its subsidiaries, including Telesat Partnership LP. Except as otherwise stated, the information in this Information
Circular is given as of April 25, 2024. Unless otherwise indicated, all references to “$” or “dollars” are to
the currency of Canada and “US$” are to the currency of the United States.
Capitalized terms not otherwise defined in this
Information Circular have the meaning ascribed to them in the “Glossary”, which is attached to this Information Circular at
Appendix “A”.
table
of contents
| NOTICE-AND-ACCESS |
1 |
| PROXY SOLICITATION INFORMATION |
1 |
| ATTENDING AND VOTING AT THE VIRTUAL MEETING |
6 |
| VOTING AT MEETING AND QUORUM |
7 |
| BUSINESS TO BE CONDUCTED AT THE MEETING |
7 |
| EXECUTIVE COMPENSATION |
25 |
| DIRECTOR COMPENSATION |
47 |
| INDEBTEDNESS OF DIRECTORS AND OFFICERS |
54 |
| SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS |
54 |
| STATEMENT OF GOVERNANCE PRACTICES |
55 |
| DESCRIPTION OF SHARE CAPITAL AND VOTING STRUCTURE |
69 |
| GENERAL MATTERS |
75 |
| APPROVAL OF THIS INFORMATION CIRCULAR |
81 |
| April 25, 2024 |
|
| APPENDIX
“A” GLOSSARY |
A-1 |
| APPENDIX
“B” MANDATE OF THE BOARD |
B-1 |
| APPENDIX
“C” AUDIT COMMITTEE CHARTER |
C-1 |
| APPENDIX
“D” AMENDED AND RESTATED OMNIBUS LONG-TERM INCENTIVE PLAN |
D-1 |
NOTICE-AND-ACCESS
The Company has elected to use the “notice-and-access”
provisions under NI 54-101 (as defined below) for distribution of the Notice of Meeting, this Information Circular, the audited consolidated
financial statements of Telesat for the fiscal year ended December 31, 2023 (“Audited Financial Statements”) and accompanying
management’s discussion and analysis (“MD&A”) to both Registered Holders and Non-Registered Holders. Such
materials are posted online for Shareholders to access instead of being mailed to Shareholders. Notice-and-access reduces printing and
mailing costs and is more environmentally friendly as it uses less materials and energy consumption. Shareholders will receive a package
in the mail which will include, among other information: (i) a form of proxy or voting instruction form with instructions on how to vote
their Telesat Corporation Shares; (ii) basic information about the Meeting and the matters to be voted on; (iii) instructions on how to
receive a paper copy of the remaining Meeting Materials; and (iv) a plain-language explanation of how to access the remaining Meeting
Materials electronically. Registered Holders and Non-Registered Holders who have previously provided standing instructions to receive
paper copies will receive such documents by mail.
In order to receive a paper copy of the Information
Circular, Audited Financial Statements and accompanying MD&A free of charge, requests by Shareholders can be made to Computershare
Investor Services Inc. (“Computershare”) via their email at Service@Computershare.com, or by phone at 1-866-9620498
(from Outside of North America: 1 (514) 982-8716). Paper copies must be requested by June 7, 2024 in order to be received prior to 2:00
p.m. (Ottawa time) on June 14, 2024, which is the deadline for the submission of voting instructions.
Shareholders with questions about notice-and-access
can call Computershare toll-free at 1-866-964-0492, or their intermediary as applicable.
PROXY SOLICITATION INFORMATION
This Information Circular is furnished in connection
with the solicitation of proxies by or on behalf of the management of Telesat for use at the Meeting and any adjournment or postponement
thereof. The Meeting will be held in a virtual only format, which will be conducted via live audio webcast at https://meetnow.global/MZCGDNP.
Shareholders will not be able to physically attend the Meeting. For a summary of how Shareholders may to attend the Meeting online, see
“Attending and Voting at the Virtual Meeting” below.
Shareholder’s proxies are being solicited
by the management of the Company and the associated costs are being borne by the Company. The solicitation is being made primarily by
sending certain proxy-related materials to Shareholders by mail, and with respect to the delivery of the Notice of Meeting and this Information
Circular, by posting the Notice of Meeting and this Information Circular on the Company’s profile on SEDAR+ at www.sedarplus.com
and by making such materials electronically available at a website hosted by Computershare, as provided in the package received by Shareholders,
pursuant to the notice-and-access mechanism. Shareholder proxies may also be solicited personally or by telephone, facsimile, oral communication
or in person by officers or directors of the Company, at a nominal cost. In accordance with National Instrument 54-101 – Communication
with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”), arrangements have been made with
brokerage houses and other intermediaries, clearing agencies, custodians, nominees and fiduciaries to forward solicitation materials to
the non-registered (beneficial) owners of Telesat Corporation Shares (“Non-Registered Holders”) held of record by such
persons and the Company may reimburse such persons for reasonable fees and disbursements incurred by them in doing so.
Registered Shareholders and Holders of Exchangeable
Units
A Shareholder is a registered Shareholder (a “Registered
Holder”) if shown on April 25, 2024 (the “Record Date”) on the list of Shareholders kept by Computershare,
as registrar and transfer agent of the Company. Registered Holders will receive a form of proxy from Computershare representing the Telesat
Corporation Shares held by the Registered Holder.
Registered Holders may attend, ask questions and
vote at the virtual only Meeting via live audio webcast online at https://meetnow.global/MZCGDNP. See “Attending and Voting
at the Virtual Meeting” below.
Registered holders of Exchangeable Units of the
Partnership shown on the Record Date on the list of holders of Exchangeable Units kept by Computershare will receive a voting instruction
form representing an equal number of votes such holder of Exchangeable Units would have if such Exchangeable Units were exchanged and
converted into the corresponding class of Telesat Corporation Share. Holders of Exchangeable Units are indirectly entitled to vote in
respect of matters on which holders of Telesat Corporation Shares are entitled to vote, including in respect of the election of directors
of Telesat, through the Special Voting Shares.
The Special Voting Shares are held by the TSX
Trust Company (in its capacity as “Trustee” of the Voting Trust), entitling the Trustee to that number of votes on applicable
matters on which holders of Telesat Corporation Shares are entitled to vote that is equal to the number of Telesat Corporation Shares
into which the Exchangeable Units held by the holders of such Exchangeable Units on the applicable record date are convertible. Pursuant
to the amended and restated Telesat Partnership LP limited partnership agreement (the “Partnership Agreement”), each
holder of Exchangeable Units has the right to direct Telesat Corporation as to how to instruct the Trustee to vote the voting power of
the Special Voting Shares corresponding to such holder’s Exchangeable Units. Telesat, the Partnership and the Trustee have entered
into the Trust Voting Agreement (a copy of which has been filed under the Company’s profile on SEDAR+ at www.sedarplus.com
and on EDGAR at www.sec.gov). Pursuant to the Trust Voting Agreement, the Trustee is required to cast such votes in accordance
with voting instructions provided to it by Telesat Corporation, in its capacity as general partner of the Partnership. For further information,
see “Description of Share Capital and Voting Structure.”
Advice to Non-Registered Shareholders
In many cases, Telesat Corporation Shares beneficially
owned by a Non-Registered Holder are registered either:
| 1. | in the name of an intermediary (an “Intermediary”)
that the Non-Registered Holder deals with in respect of the Telesat Corporation Shares. Intermediaries include banks, trust companies,
securities dealers or brokers and trustees or administrators of self-administered registered retirement savings plans, registered education
savings plans, registered disability savings plans, tax-free savings accounts (as such terms are used in the Tax Act and the regulations
thereunder, as amended from time to time) and similar plans; or |
| 2. | in the name of a depository or clearing agency (such as CDS
& Co.) of which the Intermediary is a participant. |
Non-Registered Holders do not appear on the list
of Shareholders of the Company maintained by Computershare.
In accordance with Canadian securities laws, the
Company has distributed copies of the notice-and-access notice and voting instruction form directly to non-objecting Non-Registered Holders
and to Intermediaries for onward distribution to Non-Registered Holders that are objecting beneficial owners. Non-Registered Holders who
have previously provided standing instructions will receive a printed copy of the Meeting Materials.
Intermediaries are required to forward Meeting
Materials to Non-Registered Holders unless a Non-Registered Holder has waived the right to receive them. Typically, Intermediaries will
use a service company to forward the Meeting Materials to Non-Registered Holders. Non-Registered Holders, other than non-objecting beneficial
owners, will receive either a voting instruction form or, less frequently, a form of proxy. The purpose of these forms is to permit Non-Registered
Holders to direct the voting of the Telesat Corporation Shares they beneficially own. Non-Registered Holders who have not waived the right
to receive Meeting Materials should follow the procedures set out below, depending on which type of form they receive:
| 1. | Voting Instruction Form. In most cases, a Non-Registered
Holder will receive, as part of the Meeting Materials, a voting instruction form. If the Non-Registered Holder does not wish to attend
and vote at the Meeting (or have another person attend and vote on the holder’s behalf), the voting instruction form must be completed,
signed and returned in accordance with the directions on the form. If a Non-Registered Holder wishes to attend and vote at the Meeting
(or have another person attend and vote on the holder’s behalf), the Non-Registered Holder must complete, sign and return the voting
instruction form in accordance with the directions provided and a form of proxy giving the right to attend and vote will be forwarded
to the Non-Registered Holder; or |
| 2. | Form of Proxy. Less frequently, a Non-Registered Holder
will receive, as part of the Meeting Materials, a form of proxy that has already been signed by the Intermediary (typically by a facsimile,
stamped signature) which is restricted as to the number of Telesat Corporation Shares beneficially owned by the Non-Registered Holder
but which is otherwise uncompleted. If the Non-Registered Holder does not wish to attend and vote at the Meeting (or have another person
attend and vote on the holder’s behalf), the Non-Registered Holder must complete the form of proxy and deposit it with Computershare,
either in person, by mail or courier, to 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, or via the internet at www.investorvote.com.
If a Non-Registered Holder wishes to attend and vote at the Meeting (or have another person attend and vote on the holder’s behalf),
the Non-Registered Holder must insert the Non-Registered Holder’s (or such other person’s) name in the blank space provided,
and register the Non-Registered Holder (or such other person) for the online Meeting by contacting Computershare. See “Appointment
of Proxies” below. |
In either case, the purpose of these procedures
is to permit Non-Registered Holders to direct the voting of the Telesat Corporation Shares which they beneficially own. Non-Registered
Holders should carefully follow the instructions on the form of proxy or voting instruction form that they receive from their Intermediary
in order to vote the Telesat Corporation Shares that are held through that Intermediary. In addition, Non-Registered Holders are reminded
that registering a Non-Registered Holder or third-party proxyholder online, as applicable, is an additional step to be completed after
submitting the proxy authorization form if such persons are to receive an invite code (“Invite Code”) and vote at the
Meeting.
See “Attending and Voting at the Virtual
Meeting” below.
Non-Objecting Beneficial Owners
The notice-and-access notice and voting instruction
form are being sent to both Registered Holders and Non-Registered Holders. If you are a Non-Registered Holder, and the Company or its
agent has sent these materials directly to you, your name and address and information about your holdings of securities have been obtained
in accordance with applicable securities regulatory requirements from the Intermediary holding on your behalf. By choosing to send these
materials to you directly, the Company (and not the Intermediary holding on your behalf) has assumed responsibility for: (i) delivering
these materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the
request for voting instructions or form of proxy delivered to you.
Appointment of Proxies – Holders of
Telesat Corporation Shares
The persons named in the accompanying form of
proxy, Daniel S. Goldberg, or failing him, Christopher DiFrancesco (the “Management Nominees”), have been selected
by the Board, and have indicated their willingness, to represent Shareholders who appoint them as their proxy for the Meeting.
The Management Nominees named in the accompanying
form of proxy are directors or officers of the Company. A Shareholder has the right to designate a person (who need not be a Shareholder)
other than the Management Nominees to represent him, her or it at the Meeting. Such right may be exercised by striking out the names of
the specified persons and inserting in the space provided for that purpose on the enclosed form of proxy the name of the person to be
designated or by completing another proper form of proxy. Such Shareholder should notify the nominee of the appointment, obtain his or
her consent to act as proxy and should provide instructions on how the Telesat Corporation Shares held by the Shareholder are to be voted.
In any case, a form of proxy should be dated and executed by the Shareholder or an attorney authorized in writing, with proof of such
authorization attached where an attorney has executed the form of proxy.
Shareholders who wish to appoint someone other
than the Management Nominees to attend the Meeting as their proxy and vote their Telesat Corporation Shares MUST submit their form
of proxy or voting instruction form, as applicable, appointing that person as proxyholder, AND register that proxyholder, as described
below. Registering the proxyholder is an additional step that must be completed AFTER the form of proxy or voting instruction form
has been submitted. Failure to register the proxyholder will result in the proxyholder not receiving an Invite Code, which is used as
their online sign-in credentials and is required for them to vote at the Meeting.
| ● | Step 1 – Submit form of proxy or voting instruction
form. Registered Holders unable to attend the Meeting are requested to complete, sign and date the accompanying form of proxy, and
to return it, together with the power of attorney or other authority, if any, under which it was signed or a notarially certified copy
thereof, to the Company’s transfer agent, Computershare, either in person, by mail or courier, to 100 University Avenue, 8th Floor,
Toronto, Ontario, M5J 2Y1, or via the internet at www.investorvote.com. This must be completed before registering the proxyholder
to attend the Meeting online, which is an additional step completed once the form of proxy or voting instruction form is submitted. |
Non-Registered Holders who receive the
proxy through an Intermediary must deliver the proxy in accordance with the instructions given by such Intermediary.
To be effective, proxies must be received
by Computershare not later than 2:00 p.m. (Ottawa time) on June 14, 2024 or 48 hours (excluding Saturdays, Sundays and holidays) prior
to any adjournment or postponement of the Meeting. Late proxies may be accepted or rejected by the chair of the Meeting in his or her
discretion, and the chair is under no obligation to accept or reject any particular late proxy.
| ● | Step 2 - Register your proxyholder: To register a
third party proxyholder, Shareholders must visit http://www.computershare.com/telesat by 2:00 p.m. (Ottawa time) on June 14, 2024,
or 48 hours (excluding Saturdays, Sundays and holidays) prior to any adjournment or postponement of the Meeting, and provide Computershare
with the required proxyholder contact information so that Computershare may provide the proxyholder with an Invite Code by email. Without an
Invite Code, proxyholders will not be able to vote or ask questions at the Meeting. They will only be able to attend the Meeting online
as a guest. |
Revocation of Proxies
A Shareholder who has given a form of proxy may
revoke it as to any matter on which a vote has not already been held pursuant to its authority by an instrument in writing executed by
the Shareholder or by the Shareholder’s attorney duly authorized in writing or, if the Shareholder is a corporation, by an officer
or attorney thereof duly authorized and deposited at either the above mentioned office of Computershare by not later than 2:00 p.m. (Ottawa
time) on June 14, 2024 or 48 hours (excluding Saturdays, Sundays and holidays) prior to any adjournment or postponement of the Meeting.
Late proxies may be accepted or rejected by the chair of the Meeting in his or her discretion, and the chair is under no obligation to
accept or reject any particular late proxy. Notwithstanding the foregoing, if a Registered Holder attends personally at the Meeting, such
Registered Holder may revoke the proxy and vote at the Meeting.
Only Registered Holders have the right to revoke
a proxy. Non-Registered Holders who wish to change their vote must arrange for their respective Intermediary to revoke the proxy on their
behalf.
A Shareholder who logs in to the Meeting online
using their Control Number (as defined below) and accepts the terms and conditions will be revoking any and all previously submitted proxies,
and will be provided the opportunity to vote online by ballot. See “Attending and Voting at the Virtual Meeting” below.
Voting of Proxies
The persons named in the accompanying form of
proxy will vote the Telesat Corporation Shares in respect of which they are appointed in accordance with the direction of the Shareholder
appointing them. In the absence of such direction, the Telesat Corporation Shares represented by such Shareholder’s proxy or
voting instruction form will be voted by the persons named in the enclosed form of proxy: (i) IN FAVOUR of the election of the
nominees for the Telesat Corporation Board named herein (the “Director Nominees”) as members of the Board; (ii) IN FAVOUR
of the re-appointment of Deloitte LLP Chartered Professional Accountants as auditors of the Company and for the Board to fix such auditors’
remuneration; and (iii) IN FAVOUR of the amendment to the Company’s long-term equity incentive plan to increase the number
of Telesat Public Shares available for issuance under the plan.
Exercise of Discretion of Proxy
The accompanying form of proxy confers discretionary
authority upon the persons named therein, including the Management Nominees, with respect to any amendments or variations to matters identified
in the Notice of Meeting and this Information Circular and with respect to matters that may properly come before the Meeting. As of the
date of this Information Circular, management of the Company does not know of any amendments, variations or other matters to come before
the Meeting other than the matters referred to in the Notice of Meeting and this Information Circular. With respect to amendments to matters
identified in the Notice of Meeting or other matters that may properly come before the Meeting or any adjournment or postponement thereof,
Telesat Corporation Shares represented by properly executed proxies will be voted by the persons so designated in their discretion.
No Other Business
The Company knows of no matter to come before
the Meeting other than those set forth above and in the Notice of Meeting. However, if any other matters do arise, the Management Nominees
named in the proxy intend to vote on any poll, in accordance with their best judgment, exercising discretionary authority with respect
to amendments or variations of matters set out in the Notice of Meeting and other matters which may properly come before the Meeting or
any adjournment or postponement of the Meeting.
Appointment of Proxies – Holders of
Exchangeable Units
Should a holder of Exchangeable Units want to
exercise personally the votes attributable to such Exchangeable Units (the “Beneficiary Votes”), such holder must provide
instructions to Telesat Corporation, as general partner of the Partnership, by no later than 5:00 pm on June 11, 2024 and Telesat Corporation
will instruct the Trustee to sign and deliver to such holder (or its designee) a proxy to the holder (or its designee) permitting the
holder or such designee to attend the Meeting and exercise personally, as proxy of the Trustee, the Beneficiary Votes.
ATTENDING AND VOTING AT THE VIRTUAL MEETING
The Meeting will be held in a virtual only format,
which will be conducted via live audio webcast. Registered Holders and duly appointed proxyholders will have an opportunity to attend,
ask questions and vote at the Meeting online. Shareholders and proxyholders will not be able to physically attend the Meeting.
Registered Holders and duly appointed proxyholders
will be able to attend, participate and vote at the Meeting online by ballot at the appropriate times. The 15-digit control number (“Control
Number”) located on the proxy form Registered Holders will receive is the Control Number for purposes of logging in to the Meeting
online. Duly appointed proxyholders will receive, via email notification from Computershare, an Invite Code for purposes of logging in
to the Meeting online. In order to participate in the Meeting online, Registered Holders must have a valid Control Number and duly appointed
proxyholders must have received an email from Computershare containing an Invite Code. See “How to Attend the Meeting”
below for additional information on how to log in to the Meeting online.
Non-Registered Holders who have not duly appointed
themselves as proxyholders may attend the Meeting as guests. Guests will be able to listen to the Meeting online, but will not be able
to vote or ask questions at the Meeting. This is because our transfer agent, Computershare, does not have a record of the Non-Registered
Holders and, as a result, will have no knowledge of their shareholdings or entitlement to vote, unless Non-Registered Holders appoint
themselves as proxyholder. Non-Registered Holders who wish to vote at the Meeting must (i) appoint themselves as proxyholder by inserting
their name in the space provided for appointing a proxyholder on the voting instruction form and (ii) follow all of the applicable instructions,
including the deadline, provided by their Intermediary. See “How to Attend the Meeting” below for additional information
on how to log in to the Meeting online.
How to Attend the Meeting
Registered Holders and duly appointed proxyholders,
including Non-Registered Holders who have duly appointed themselves as proxyholder, will be able to attend, ask questions and vote at
the Meeting online at https://meetnow.global/MZCGDNP. It is recommended that Shareholders and duly appointed proxyholders log in
one hour before the Meeting starts. To do so, please go to https://meetnow.global/MZCGDNP prior to the start of the meeting to
login. Click on “Shareholder” and enter your 15-digit Control Number or click on “Invitation” and enter your Invite
Code, as applicable.
| ● | Registered Holders: Each Registered Holder’s Control
Number is located on the form of proxy sent to that Registered Holder. |
| ● | Duly appointed proxyholders: Computershare will provide the
proxyholder with an Invite Code after the proxy voting deadline has passed and the proxyholder has been duly appointed AND registered
as described in “Appointment of Proxies.” |
Guests, including Non-Registered Holders who have
not duly appointed themselves as proxyholder, can listen to the Meeting. Guests are not able to vote or ask questions at the Meeting.
Log in online at https://meetnow.global/MZCGDNP select “Guest”, and then complete the online registration form.
It is important that attendees at the Meeting
remain connected to the internet for the duration of the Meeting in order to vote when balloting commences. It is the responsibility of
Shareholders and duly appointed proxyholders attending the Meeting to ensure that they remain connected. Please allow ample time to check-in
to the Meeting online. Online check-in will begin one hour prior to the meeting on June 18, 2024 at 1:00 p.m. (Ottawa time). The meeting
will begin promptly at 2:00 p.m. (Ottawa time) on June 18, 2024, unless otherwise adjourned or postponed.
VOTING AT MEETING AND QUORUM
Unless otherwise required by law or the Telesat
Corporation Articles, any matter coming before the Meeting or any adjournment or postponement thereof shall be decided by the majority
of the votes duly cast in respect of the matter by Shareholders entitled to vote thereon.
The Board has fixed April 25, 2024 as the Record
Date for the purpose of determining which Shareholders are entitled to receive the Notice of Meeting and vote at the Meeting or any adjournment
or postponement thereof, either at the Meeting or by proxy. No person acquiring Telesat Corporation Shares after that date shall, in respect
of such Telesat Corporation Shares, be entitled to receive the Notice of Meeting and vote at the Meeting or any adjournment or postponement
thereof.
The Class A Common Shares and Class B
Variable Voting Shares are listed on both the TSX and the NASDAQ under the symbol “TSAT”.
The Telesat Corporation Articles provide that,
subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for any meeting shall
be the presence in person or by proxy of shareholders holding shares representing not less than a majority of the votes entitled to be
cast at the meeting.
BUSINESS TO BE CONDUCTED AT THE MEETING
The Company will address the following items at
the Meeting:
| 1. | Placing the Audited Financial Statements together with the auditors’
report thereon, before the Shareholders; |
| 2. | The election of the directors who will serve until the next
annual meeting of Shareholders; and |
| 3. | The appointment of the external auditors who will serve until
the end of the next annual meeting of Shareholders and authorizing the directors to fix their remuneration; and |
| 4. | The proposed amendment to the Omnibus Plan (as defined below
under “Long Term Incentives — Omnibus Long Term Incentive Plan”) to increase the number of Telesat Public Shares available
for issuance under the Omnibus Plan. |
The Company will consider any other business that
may properly come before the Meeting. As of the date of this Information Circular, the Company is not aware of any changes to the items
above or any other business to be considered at the Meeting. If there are changes or new items, your proxyholder can vote on these items
as he or she sees fit. If any other matters properly come before the Meeting, it is the intention of the persons named in the form of
proxy to vote in respect of those matters in accordance with their judgment.
The Audited Financial Statements, together with
the auditors’ report thereon, will be placed before the Shareholders at the Meeting for their consideration. The Audited Financial
Statements have been reviewed and recommended for approval by the audit committee of the Board (the “Audit Committee”)
and the Board. A copy of the Audited Financial Statements, together with the auditors’ report thereon and the accompanying MD&A,
are available on the SEDAR+ website at www.sedarplus.com, and will be available during the Meeting via live webcast online. Shareholders
are not required to vote on the Audited Financial Statements.
The Telesat Corporation Articles provide that
the Company shall initially have a board of directors consisting of 10 persons, and thereafter, as adjusted by the board from time to
time, subject to the provisions of the BCBCA, provided that:
| (a) | a reduction in the number of directors shall not shorten
the term of any then-sitting director; |
| (b) | no change to the number of directors shall be made pursuant
to the Telesat Corporation Articles unless, in addition to the obtaining of any approval of a Designator required under the Investor
Rights Agreement (as defined below) to which such Designator and the Company are party, until such time as neither Designator is a 5%
Holder, a majority of the Specially Designated Directors then in office have approved such change; and |
| (c) | prior to the occurrence of an Unwind Trigger, at least a
majority of the board must be CbyC Directors (as defined in the Telesat Corporation Articles); provided, that the Company’s temporary
inability to meet this requirement as a result of death, resignation, disqualification or removal of a director shall not result in the
Company being deemed to be acting ultra vires pursuant to the Telesat Corporation Articles; provided, further, that the Company shall
use reasonable best efforts to ensure any such deficiency is cured promptly. |
It is intended that on any resolution or ballot
that may be called for relating to the election of the directors, the Telesat Corporation Shares represented by proxies in favour of the
Management Nominees will be voted IN FAVOUR of the election, separately, of each of the Director Nominees as a director, unless
a Shareholder has specified in his or her proxy that his or her Telesat Corporation Shares are to be withheld from voting on the election
of directors.
Management does not contemplate that any of the
proposed Director Nominees will be unable to serve as a director, but if that should occur for any reason prior to the Meeting, it is
intended that discretionary authority shall be exercised to vote the Telesat Corporation Shares represented by such proxies for the election
of such other person or persons as directors nominated in accordance with the Telesat Corporation Articles and their discretion for a
substitute nominee or nominees. The directors are to be elected by the Shareholders at each annual meeting of Shareholders to hold office
for a term expiring at the close of the next annual meeting of Shareholders, or until a successor is appointed. Each of the Director Nominees
is currently a director and has demonstrated the eligibility and willingness to serve as a director.
Investor Rights Agreement
Telesat Corporation and MHR Fund Management LLC
(“MHR”), on the one hand, and Telesat Corporation and Public Sector Pension Investments Board (“PSP Investments”),
on the other hand, entered into the Investor Rights Agreements dated as of November 23, 2020, pursuant to which, among other things, each
of PSP Investments and MHR will be entitled to nominate three directors to the board of directors of Telesat and have the exclusive right
to fill vacancies of any directorship for which it has the right to nominate a director. The number of designees each of PSP Investments
and MHR will be entitled to designate to the board of directors of Telesat will be reduced to two, one and zero upon PSP Investments or
MHR, respectively, owning less than 25%, 15% or 5% of the Telesat Corporation Shares and the Exchangeable Units (on an “as-exchanged”
basis) outstanding as of the completion of the Transaction. The number of independent directors that the Nominating & Corporate Governance
Committee (as defined below) may designate will be increased by one each time the number of designees PSP Investments or MHR is entitled
to designate is so reduced.
The Director Nominees of PSP Investments for election
at the Meeting are: Michael Boychuk, David Morin and Guthrie Stewart. The Director Nominees of MHR for election at the Meeting are: Mark
H. Rachesky, Michael B. Targoff and Janet Yeung.
Advanced Notice Requirements
The Telesat Corporation Articles contain an advanced
notice requirement that, subject to the provisions of the BCBCA and applicable Canadian securities laws and for so long as the Company
is a public company, provide that only persons who are nominated in accordance with the procedures set out in the Telesat Corporation
Articles shall be eligible for election as directors to the board. Nominations of persons for election to the board may only be made at
an annual meeting of shareholders, or at a special meeting of shareholders called for any purpose which includes the election of directors
to the board, as follows:
| (a) | by or at the direction of the board or an authorized officer
of the Company, including pursuant to a notice of meeting; |
| (b) | by or at the direction or request of one or more shareholders
(each a “Proposing Shareholder” and together the “Proposing Shareholders”) pursuant to a proposal
made in accordance with the provisions of the BCBCA or a requisition of shareholders (each a “Requisitioning Shareholder”
and together the “Requisitioning Shareholders”) made in accordance with the provisions of the BCBCA, provided that
any proposal or requisition of shareholders made in whole or in part for the purpose of replacing one or more directors of the board
must be in written form and prepared in accordance with Section 21.4 of the Telesat Corporation Articles; and |
| (c) | by any person (a “Nominating Shareholder”),
who: (A) is, at the close of business on the date of giving notice provided for in the Telesat Corporation Articles (and described below)
and at the close of business on the record date for notice of such meeting, either entered in the central securities register of the
Company as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled
to be voted at such meeting; and (B) has given timely notice in proper written form as set forth in Telesat Corporation Articles. |
For a nomination made by a Nominating Shareholder
to be timely notice (a “Timely Notice”), the Nominating Shareholder’s notice must be in written form prepared
in accordance with the requirements of Section 21.4 of the Telesat Corporation Articles and received by the corporate secretary of the
Company at the principal executive offices of the Company:
| (a) | in the case of an annual meeting of shareholders, not later
than the close of business on the 30th day before the date of the meeting; provided, however, if the first public announcement made by
the Company of the date of the annual meeting (the “Notice Date”) is less than 50 days prior to the meeting date,
not later than the close of business on the 10th day following the Notice Date; and |
| (b) | in
the case of a special meeting (which is not also an annual meeting) of shareholders called for any purpose which includes the election
of directors to the board, not later than the close of business on the 15th day following the day on which the first public announcement
of the date of the special meeting is made by the Company |
provided that, in either (a) or (b) above, if
notice-and-access (as defined in NI 54-101) is used for delivery of proxy related materials in respect of a meeting described in
(a) or (b) above, and the Notice Date in respect of the meeting is not less than 50 days prior to the date of the applicable meeting,
the notice must be received not later than the close of business on the 40th day before the applicable meeting (but in any event, not
prior to the Notice Date); provided, however, that in the event that the meeting is to be held on a date that is less than 50 days after
the Notice Date, notice by the Nominating Shareholder shall be made, in the case of an annual meeting of shareholders, not later than
the close of business on the 10th day following the Notice Date and, in the case of a special meeting of shareholders, not later than
the close of business on the 15th day following the Notice Date.
A copy of the Telesat Corporation Articles is
available on our website at www.telesat.com and under the Company’s profile on SEDAR+ at www.sedarplus.com and on
EDGAR at www.sec.gov.
Majority Voting Policy
In accordance with the requirements of the TSX,
the Board has adopted a “Majority Voting Policy” that will require a nominee for election as a director who does not receive
a greater number of votes “for” than votes “withheld” with respect to the election of directors by shareholders
to tender a resignation to the Chair promptly following the applicable meeting of shareholders. Under the terms of the Majority Voting
Policy, our Nominating & Corporate Governance Committee will be required to consider such resignation and make a recommendation to
the Board on whether such resignation should be accepted. The Majority Voting Policy requires that the Board shall promptly accept the
resignation unless it determines, in consultation with the Nominating & Corporate Governance Committee, that there are exceptional
circumstances that should delay the acceptance of the resignation or justify rejecting it. The Board will be required to make its decision
and announce it in a press release within 90 days following the meeting of shareholders. A director who tenders a resignation pursuant
to the Majority Voting Policy will not be permitted to participate in any meeting of the Board or the Nominating & Corporate Governance
Committee at which the resignation is considered.
Description of Proposed Director Nominees
The following descriptions set forth the name,
age as of December 31, 2023 and residence of each of the Director Nominees, their respective principal occupations during the last five
(5) years and whether they are a director of other issuers that are reporting issuers in any Canadian or other jurisdiction, the date
each of them became a director, and information as to voting and other securities of the Company beneficially owned, or controlled or
directed, directly or indirectly, by each of them as at April 25, 2024.
The Board recommends you vote IN FAVOUR
of each of the Director Nominees.
| Michael Boychuk |
| |
| Place of Residence: |
Baie-D-Urfe, Quebec, Canada |
| |
|
| Date Became a Director: |
Mr. Boychuk became a director of Telesat Corporation on November 16, 2021 and has served as a director of Telesat Canada since July 17, 2015. |
| |
|
| Independent: |
Yes |
| |
|
| Principal Occupations During the Past Five Years: |
Corporate Director |
| |
|
| Directorships with Other Reporting Issuers: |
Laurentian Bank of Canada from August 2013 to present GDI Integrated Facility Services Inc. from May 2015 to present |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Mr. Boychuk holds 17,681 Telesat Corporation DSUs. |
| |
|
| Bio: |
Michael T. Boychuk (Age 68) is a retired senior executive who, since his retirement in 2015, serves as a professional corporate director. He has been a professional Chartered Accountant since 1979 and was in 2012 made a fellow of the Order of Chartered Accountants of Quebec. Prior to his retirement, Mr. Boychuk held senior executive positions within the BCE group of companies, including President of Bimcor, BCE’s pension investment subsidiary and Senior Vice President and Corporate Treasurer of both BCE Inc. and Bell Canada. As a professional Chartered Accountant. Mr. Boychuk is deemed to be a financial expert, and currently serves on the boards of a number of public and private companies. He has been serving on boards for over 20 years and has extensive experience with audit committees as well as risk and governance and human resources. Mr. Boychuk brings to Telesat Corporation a wide array of financial and strategic expertise and knowledge of the satellite industry attained through his past experience at BCE Inc. and the other public companies he is associated with. He is currently a member of the following Boards of Directors: (Public) Laurentian Bank of Canada, GDI Integrated Facility Services Inc. and (Private) Cadillac Fairview Corporation and Finchley Pharmaceuticals Inc. Mr. Boychuk is also a Governor Emiritus of McGill University and previous chair of the university’s audit and pension committees. |
| Jane Craighead |
| |
| Place of Residence: |
Elizabethtown, Ontario, Canada |
| |
|
| Date Became a Director: |
Ms. Craighead became a director of Telesat Corporation on November 16, 2021 and has served as a director of Telesat Canada since November 18, 2021. |
| |
|
| Independent: |
Yes |
| |
|
| Principal Occupations During the Past Five Years: |
Corporate Director; Senior Vice President, Scotiabank |
| |
|
| Directorships with Other Reporting Issuers: |
Wajax Corporation from November 2021 to present
Crombie Real Estate Investment Trust (REIT) from
May 2021 to present |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Ms. Craighead holds 25,475 Telesat Corporation DSUs. |
| |
|
| Bio: |
Jane Craighead (Age 64) is a Chartered Professional Accountant (CPA) and a Chartered Accountant with over 20 years of international experience with public company boards, and over 30 years of experience in accounting and finance. She retired from Scotiabank in 2019 where she was Senior Vice President Global Human Resources for eight years. As a CPA, Ms. Craighead is deemed to be a financial expert. She is currently a member of the Board of Directors of Wajax Corporation where she is a member of the Audit Committee and chairs the Human Resources Committee and of Crombie Real Estate Investment Trust (REIT) where she is a member of the Human Resources Committee and chairs the Governance and Nominating Committee. Jane retired from the Jarislowsky Fraser board after five years at the end of 2023. She was a director of Intertape Polymer Group Inc. from 2020 until its privatization in July 2022 where she was chair of the Human Resources Committee and a member of the ESG Committee, and of Clearwater Seafoods Incorporated from 2015 until its privatization in 2021 where she served as the chair of the Human Resources Development and Compensation Committee, and a member of the Finance and Audit committees and the Special Committee for the sale process. She was also previously a director of Park Lawn Corporation where she served as chair of the Investment Committee and a member of the Audit Committee, HR Committee and Governance Committee. Ms. Craighead is Co-Vice Chair of the McGill University Hospital Centre (MUHC) Foundation and was Vice Chair of the Board of Regents of Mount Allison University from 2019 to 2021. She holds a PhD in Management from McGill University, has published research on executive compensation and corporate governance, and has been recognized as one of Canada’s Top 100 Most Powerful Women by the Women’s Executive Network. |
| Richard Fadden |
| |
| Place of Residence: |
Ottawa, Ontario, Canada |
| |
|
| Date Became a Director: |
Mr. Fadden became a director of Telesat Corporation on November 16, 2021 and has served as a director of Telesat Canada since August 3, 2016. |
| |
|
| Independent: |
Yes |
| |
|
| Principal Occupations During the Past Five Years: |
Corporate Director/Advisor |
| |
|
| Directorships with Other Reporting Issuers: |
N/A |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Mr. Fadden holds 17,681 Telesat Corporation DSUs. |
| |
|
| Bio: |
Richard Fadden (Age 72) was the National Security Advisor to the Prime Minister of Canada from January 2015 to March 2016. Previously he was the Deputy Minister of National Defence starting in 2013 and served as the Director of the Canadian Security Intelligence Service from 2009 until 2013. Mr. Fadden has also served as the Deputy Minister for Citizenship and Immigration Canada from 2006 to 2009, the Deputy Minister of Natural Resources Canada from 2005 to 2006, President of the Canadian Food Inspection Agency from 2002 to 2005, and Deputy Clerk and Counsel in the Privy Council Office from 2000 to 2002, during which time he assumed the additional duties of Security and Intelligence Coordinator in February 2001. Earlier in his career, Mr. Fadden worked in a variety of positions throughout the Government of Canada including in the Department of External Affairs, the Office of the Auditor General of Canada, Natural Resources Canada and the Treasury Board Secretariat. Since his retirement, he is a Strategic Advisor to Awz HLS Fund. He is also a member of L3 Harris’ Canadian Advisory Board and Vice chair of the Board of the Canadian Red Cross. |
| Daniel S. Goldberg |
| |
| Place of Residence: |
Ottawa, Ontario, Canada |
| |
|
| Date Became a Director: |
Mr. Goldberg became a director of Telesat Corporation on November 16, 2021 and has served as a director of Telesat Canada since November 18, 2021. |
| |
|
| Independent: |
No |
| |
|
| Principal Occupations During the Past Five Years: |
President and Chief Executive Officer, Telesat Canada |
| |
|
| Directorships with Other Reporting Issuers: |
Algonquin Power & Utilities Corp. from March 30, 2022 to present |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Mr. Goldberg holds: 388,125 Class A Common Shares; 360,442 Telesat Corporation Options; 352,706 Telesat Corporation PSUs; and 718,106 Telesat Corporation RSUs. |
| |
|
| Bio: |
Daniel S. Goldberg (Age 58) became Telesat Canada’s President and Chief Executive Officer in September 2006. Prior to September 2006, Mr. Goldberg served as Chief Executive Officer of SES New Skies, a position he held since March 2006 following the purchase of New Skies by SES. Mr. Goldberg served as the Chief Executive Officer of New Skies Satellites from 2002 to 2006 and prior to that as Chief Operating Officer of New Skies since February 2000. Prior to that time, he had served as New Skies General Counsel since 1998. Prior to joining New Skies, Mr. Goldberg worked at PanAmSat as the Associate General Counsel and Vice President of Government and Regulatory Affairs during 1998. From 1993 to 1997, he was an associate at Goldberg, Godles, Wiener & Wright, a law firm in Washington, D.C. Mr. Goldberg currently serves on the Board of Directors of Algonquin Power & Utilities Corp and is a former member of the Board of MDC Partners Inc. He received a Bachelor of Arts degree from the University of Virginia, graduating with highest honors, and a Juris Doctor degree, cum laude, from Harvard Law School. |
| Henry (Hank) Intven |
| |
| Place of Residence: |
Victoria, British Columbia, Canada |
| |
|
| Date Became a Director: |
Mr. Intven became a director of Telesat Corporation upon its incorporation on October 26, 2020 and has served as a director of Telesat Canada since October 31, 2007. |
| |
|
| Independent: |
Yes |
| |
|
| Principal Occupations During the Past Five Years: |
President, Haro Strait Consulting Inc. |
| |
|
| Directorships with Other Reporting Issuers: |
N/A |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Mr. Intven holds 17,681 Telesat Corporation DSUs. |
| |
|
| Bio: |
Henry (Hank) Intven (Age 75) is President of Haro Strait Consulting Inc. For twenty-five years, he was a partner in the Toronto office of McCarthy Tétrault LLP, a leading Canadian law firm. He has held a number of senior advisory and executive positions with the Canadian Government and the Canadian Radio-television and Telecommunications Commission. Over the past 40 years, he has advised businesses and governments on many of the major commercial, regulatory and policy developments in the Canadian telecommunications industry. He has also advised on business, policy and regulatory matters involving the telecommunications industry in more than 20 other countries. |
| David Morin |
| |
| Place of Residence: |
Montreal, Quebec, Canada |
| |
|
| Date Became a Director: |
February 7, 2023 |
| |
|
| Independent: |
Yes |
| |
|
| Principal Occupations During the Past Five Years: |
Managing Director, Private Equity, PSP Investments |
| |
|
| Directorships with Other Reporting Issuers: |
N/A |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Nil |
| |
|
| Bio: |
David Morin (Age 43) is Managing Director, Private Equity at PSP. Mr. Morin joined PSP in 2013 and has led a number of investments across industries and geographies with a focus on sourcing, execution, as well as asset management. Mr. Morin’s qualifications for service on the board of directors of Telesat Corporation include his significant experience with negotiation, corporate finance and operational matters, underpinned by his 20 years of investment and finance experience. Mr. Morin currently serves on the Board of Directors of American Wholesale Insurance Holding Company, LLC (Amwins), Convex Group Limited and Bon Topco SAS (HAVEA). Mr. Morin holds a bachelor’s degree from HEC Montréal and an MBA from INSEAD. |
| Dr. Mark H. Rachesky |
| |
| Place of Residence: |
New York, NY, USA |
| |
|
| Date Became a Director: |
Dr. Rachesky became a director of Telesat Corporation on November 16, 2021 and has served as a director of Telesat Canada since October 31, 2007 |
| |
|
| Independent: |
Yes |
| |
|
| Principal Occupations During the Past Five Years: |
Founder and Chief Investment Officer, MHR Fund Management LLC |
| |
|
| Directorships with Other Reporting Issuers: |
Lions Gate Entertainment Corp. from 2009 to present
Titan International, Inc. from 2014 to present |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Mr. Rachesky directly holds 15,000 Class B Units; 46,136 Class B Variable Voting Shares; and 26,139 Telesat Corporation DSUs. Mr. Rachesky is also the founder and Chief Investment Officer of MHR, affiliated funds of which hold 18,035,092 Class B Units of Telesat Partnership. |
| |
|
| Bio: |
Mark H. Rachesky, M.D. (Age 64) is the Founder and Chief Investment Officer of MHR, of which affiliate Fund Management LLC, a New York-based investment firm that takes a private equity approach to investing. MHR manages approximately US$5 billion of capital and has holdings in public and private companies in a variety of industries. He has been the Independent Chairman of the Board of Directors of Telesat Corporation since November 2021 and a member of its Human Resources and Compensation Committee and Nominating and Corporate Governance Committee. Dr. Rachesky has been Chairman of the Telesat Canada Board of Directors since 2007 and from 2007 to 2021 was also a member of the Telesat Canada Compensation and Corporate Governance Committee. He was Non-executive Chairman of the Board of Directors of Loral Space & Communications Inc. from 2006 – 2021 and was Chairman of the Loral Compensation Committee and a member of the Loral Executive Committee. Dr. Rachesky is Non-executive Chairman of the Board of Directors of Lions Gate Entertainment Corp and a director of Titan International, Inc. He previously served on the Board of Directors of Navistar International Corporation and Emisphere Technologies, Inc. Dr. Rachesky holds an MBA from the Stanford University School of Business, an MD from the Stanford University School of Medicine and a BA in Molecular Aspects of Cancer from the University of Pennsylvania. Dr. Rachesky has demonstrated leadership skills as well as extensive financial expertise and broad-based business knowledge and relationships. In addition, Dr. Rachesky has significant expertise and perspective as a member of the board of directors of private and public companies engaged in a wide range of businesses. |
| Guthrie Stewart |
| |
| Place of Residence: |
Westmount, Quebec, Canada |
| |
|
| Date Became a Director: |
Mr. Stewart became a director of Telesat Corporation on November 16, 2021 and has served as a director of Telesat Canada since August 8, 2016. |
| |
|
| Independent: |
Yes |
| |
|
| Principal Occupations During the Past Five Years: |
Corporate Director; Executive, PSP Investments |
| |
|
| Directorships with Other Reporting Issuers: |
N/A |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Mr. Stewart holds 17,681 Telesat Corporation DSUs. |
| |
|
| Bio: |
Guthrie Stewart (Age 68) was, until his retirement in June 2021, an executive with global pension fund manager PSP Investments. Most recently, Mr. Stewart was Vice Chair Investment Committee from June 2020 to June 2021. Prior to that he was Executive Vice-President and Global Head of Private Investments overseeing PSP Investments global teams managing private equity and infrastructure from September 2015 to June 2020. He has been a Director of Telesat since 2016. Mr. Stewart has broad business and investing experience, including more than 12 years in telecommunications and more than ten years in investment management. For eight years until 2000, he was an executive with Teleglobe Inc., the listed shareholder of Teleglobe Canada (at the time Canada’s international telecom carrier), including two years as CEO and President of Teleglobe Canada. Teleglobe Canada had varied satellite investments, including as a member and distributor of Inmarsat and Intelsat, and also as founding investor in Orbcomm. Mr. Stewart was a partner in one of Canada’s largest mid- market buyout firms, EdgeStone Capital Partners, from 2001 until the end of 2007 following the sale of majority interest. He is a director of the global consulting firm Alix Partners, LLP. He holds an LL.B from Osgoode Hall (Toronto, Canada) and an M.B.A. from INSEAD in Europe. He also holds the ICD.D designation from the Canadian Institute of Corporate Directors. Through his career, he has participated as a Director on numerous private and public boards and as a member at various times of all major Committees. |
| Michael B. Targoff |
| |
| Place of Residence: |
Jupiter, Florida, USA |
| |
|
| Date Became a Director: |
Mr. Targoff became a director of Telesat Corporation on November 16, 2021 and has served as a director of Telesat Canada since October 31, 2007. |
| |
|
| Independent: |
No |
| |
|
| Principal Occupations During the Past Five Years: |
Vice Chairman, Loral Space & Communications Inc. |
| |
|
| Directorships with Other Reporting Issuers: |
N/A |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Mr. Targoff holds 101,872 Class B Variable Voting Shares and 24,729 Telesat Corporation DSUs. |
| |
|
| Bio: |
Michael B. Targoff (Age 79) was Vice Chairman of Loral Space & Communications Inc. from November 21, 2005 to November 2021 and a consultant to Loral from December 15, 2012 to November 2021. Mr. Targoff was Chief Executive Officer of Loral from March 1, 2006 to December 14, 2012 and President of Loral from January 8, 2008 to December 14, 2012. Mr. Targoff was also a Director and member of the Audit Committee of Telesat Canada from the time that Loral acquired its interest in Telesat in October 2007 until November 2021. From 1998 to February 2006, Mr. Targoff was founder and principal of Michael B. Targoff & Co., a private investment company. Mr. Targoff’s qualifications for service on the board of directors of Telesat Corporation include his extensive understanding and knowledge of its business and the satellite industry, as well as demonstrated leadership skills and operating experience, acquired during more than 20 years of serving as a senior executive of Loral and its predecessors. As a current or former director of other public and private companies in the telecommunications industry, Mr. Targoff also brings to Telesat Corporation a broad-based business knowledge and substantial financial expertise. |
| Janet Yeung |
| |
| Place of Residence: |
New York, NY, USA |
| |
|
| Date Became a Director: |
Ms. Yeung became a director of Telesat Corporation on August 2, 2023. |
| |
|
| Independent: |
Yes |
| |
|
| Principal Occupations During the Past Five Years: |
Principal and General Counsel, MHR Fund Management LLC |
| |
|
| Directorships with Other Reporting Issuers: |
N/A |
| |
|
| Securities beneficially owned, or controlled or directed, directly or indirectly, as at April 25, 2024: |
Ms. Yeung holds 13,885 Class B Variable Voting Shares and 4,799 Telesat Corporation DSUs. |
| |
|
| Bio: |
Janet Yeung (Age 59) has been Principal
and General Counsel of MHR Fund Management LLC since 2012. Ms. Yeung currently serves on the boards of a number of private companies operating
across a variety of industries. From May 2015 to November 2021, Ms. Yeung served as a director of Loral Space & Communications Inc.
Ms. Yeung also served as a director of Navistar International Corporation and was a member of its Audit Committee and Compensation Committee
from December 2020 until its acquisition by the Traton Group in July 2021. Ms Yeung holds a J.D., cum laude, from Georgetown University
Law Center and an A.B. in Economics from Cornell University.
|
Skills
Each director nominee has a wealth of experience
in leadership, governance and strategic planning and collectively they possess the skills and expertise that enable the Board to carry
out its responsibilities. The skills matrix set out below is used to assess the Board’s overall strengths and to assist in the Board’s
ongoing renewal process, which balances the need for experience and knowledge of the Corporation’s business with the benefit of
board renewal and diversity. Although the director nominees have a breadth of experience in many areas, the skills matrix lists 14 important
qualifications determined by the Nominating & Corporate Governance Committee and the Board and highlights the key skills for each
director nominee. The matrix is not intended to be an exhaustive list of each director nominee’s skills.
| Director |
|
|
|
|
Henry |
|
|
|
|
|
| Skills |
Michael
Boychuk |
Jane
Craighead |
Richard
Fadden |
Daniel
Goldberg |
(Hank)
Intven |
David
Morin |
Mark
H.
Rachesky |
Guthrie
Stewart |
Michael
Targoff |
Janet
Yeung |
| Government/
Regulatory Affairs |
X |
|
X |
X |
X |
|
|
|
X |
|
| Capital
markets |
X |
X |
|
X |
|
X |
X |
X |
X |
|
| Finance/
Accounting |
X |
X |
|
|
|
X |
X |
X |
X |
|
| Risk
Management |
X |
X |
|
|
|
X |
X |
|
X |
X |
| CEO/Senior
Management |
X |
X |
X |
X |
|
X |
X |
X |
X |
X |
| M&A |
X |
X |
|
X |
X |
X |
X |
X |
X |
X |
| Marketing/
Sales |
|
|
|
X |
|
|
|
|
X |
|
| Human
Resources |
|
X |
|
X |
|
X |
|
X |
|
|
| Governance |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
| International |
|
|
X |
X |
X |
X |
|
X |
X |
|
| Technology/
Security |
|
|
X |
|
|
|
|
|
X |
|
| Satellite/
Telecom |
X |
|
|
X |
X |
|
X |
|
X |
X |
| Business
Strategy |
X |
X |
|
X |
|
X |
X |
X |
X |
|
| ESG |
X |
X |
|
|
X |
X |
X |
|
|
|
Each director nominee was nominated in large part
because of the nominee’s key leadership attributes. The director nominees have demonstrated informed judgment, knowledge of important
business issues and a commitment to operational excellence. Every director is expected to act ethically and with integrity. Directors
must understand the Corporation’s strategic objectives and reflect its values. Directors are expected to prepare for and actively
participate in Board and committee meetings.
Corporate Cease Trade Orders or Bankruptcies
To the knowledge of the Company, and based on
the information furnished to the Company by the directors and executive officers, none of Company’s directors is, as at the date
of this Information Circular, or has been within the ten years prior to the date of this Information Circular: (a) a director, chief executive
officer or chief financial officer of any company (including Telesat Corporation and its other subsidiaries) that was subject to an order
that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial
officer; (b) was subject to an order that was issued after the director or executive officer ceased to be a director, chief executive
officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director,
chief executive officer or chief financial officer; or (c) a director or executive officer of any company (including Telesat Corporation
and its other subsidiaries) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that
capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted
any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.
For the purposes of the above paragraph, “order” means a cease trade order, an order similar to a cease trade order or an
order that denied the relevant company access to any exemption under securities legislation, in each case, that was in effect for a period
of more than 30 consecutive days.
Penalties or Sanctions
To the knowledge of the Company, and based on
the information furnished to the Company by the directors and executive officers, other than as set out below, none of Company’s
directors is, as at the date of this Information Circular, or has, within the ten years prior to the date of this Information Circular,
been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority
or has entered into a settlement agreement with a securities regulatory authority or been subject to any other penalties or sanctions
imposed by a court or regulatory body that would likely be considered important to a reasonable investor making an investment decision.
For the purposes of this section, a self-regulatory
authority means a professional self-regulatory body that governs the activities of professional persons.
Personal Bankruptcies
To the knowledge of the Company, and based on
the information furnished to the Company by the directors and executive officers, other than as set out below, none of Company’s
directors is, as at the date of this Information Circular, or has, within the ten years prior to the date of this Information Circular,
become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings,
arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold his or her assets.
Conflicts of Interest
Certain of our directors and officers are associated
with other companies or entities, which may give rise to conflicts of interest. In accordance with Part 5 — Division 3 — Conflicts
of Interest under the BCBCA, in the event that a director or senior officer (i) has a material interest in a contract or proposed contract
or transaction that is material to an issuer or (ii) is a director or senior officer of, or has a material interest in, a person who has
a material interest in the contract or transaction (a “disclosable interest”), the director or senior officer shall disclose
his or her disclosable interest in such contract or transaction and he director shall refrain from voting on any matter in respect of
such contract or transaction, subject to and in accordance with the BCBCA. To the extent that conflicts of interest arise, such conflicts
will be resolved in accordance with the provisions of the BCBCA and applicable internal corporate governance or polices of the Telesat
Corporation Board, as applicable.
| 3. | Appointment of Auditors |
Telesat’s current auditors are Deloitte
LLP Chartered Professional Accountants (“Deloitte”). Deloitte has been the auditors of the Company since its formation
on October 26, 2020, and Telesat Canada since 1993.
Information about the fees paid to Deloitte for
the financial years ended December 31, 2023 and 2022 can be found in the Annual Information Form on Form 20-F under item 16.C
“Principal Accountant Fees and Services”, which is available at the Company’s profile on SEDAR+ at www.sedarplus.com
and on EDGAR at www.sec.gov.
The Management Nominees intend to vote at the
Meeting IN FAVOUR of this resolution, unless the Shareholder has specified in the form of proxy that such Shareholder’s Telesat
Corporation Shares are to be withheld from voting on the resolution.
| 4. | Proposed Amendment to the Omnibus Plan |
The Omnibus Plan was adopted in 2021 in connection
with Telesat becoming a public company and includes a fixed maximum number of Telesat Public Shares that may be issued under the Omnibus
Plan. The maximum number of Telesat Public Shares reserved for issuance under our Omnibus Plan is currently 2,972,816 Telesat Public Shares,
which represents 5.9% of the aggregate number of issued and outstanding Telesat Corporation Shares, on a diluted basis assuming the exchange
of all Exchangeable Units into Telesat Corporation Shares (not including any awards outstanding under the Historic Plans).
The purpose of the Omnibus Plan is to advance
the interests of the Company by: (i) providing eligible persons with additional incentive; (ii) encouraging stock ownership by such eligible
persons; (iii) increasing the proprietary interest of eligible persons in the success of the Company; (iv) promoting growth and profitability
of the Company; (v) encouraging eligible persons to take into account long-term corporate performance; (vi) rewarding eligible persons
for sustained contributions to the Company and/or significant performance achievements of the Company; and (vii) enhancing the Company’s
ability to attract, retain and motivate eligible persons.
As of the date of this Information Circular, 220,333
Telesat Public Shares have been issued upon the exercise of equity based awards under the Omnibus Plan, resulting in 2,752,483 Telesat
Public Shares being available for issuance, which represents 5.5% of the aggregate number of issued and outstanding Telesat Corporation
Shares, on a diluted basis assuming the exchange of all Exchangeable Units into Telesat Corporation Shares (not including any awards outstanding
under the Historic Plans). Of this reserve, 2,646,224 Telesat Public Shares are issuable pursuant to outstanding equity based awards under
the Omnibus Plan, leaving a reserve of 106,259 Telesat Public Shares available for issuance pursuant to future equity based awards under
the Omnibus Plan. The remaining reserve represents 0.2% of the aggregate number of issued and outstanding Telesat Corporation Shares,
calculated on the same basis as set forth earlier in this paragraph.
The Company proposes to increase the number of
Telesat Public Shares available for issuance under the Omnibus Plan by 2,044,585 Telesat Public Shares. Following such amendment, the
maximum number of Telesat Public Shares reserved for issuance under the Omnibus Incentive Plan would be equal to 5,017,401 Telesat Public
Shares, which represents 10% of the aggregate number of issued and outstanding Telesat Corporation Shares, on a diluted basis assuming
the exchange of all Exchangeable Units into Telesat Corporation Shares (not including any awards outstanding under the Historic Plans).
The Company believes that the proposed increase
of the reserve under the Omnibus Plan is reasonable and appropriate in the circumstances, particularly in lieu of the reasoned dilution
that will result from the increase and the historical annual share utilization (burn rate) under the Omnibus Plan. See “Executive
Compensation — Burn Rate”.
Shareholder approval is required to amend the
Omnibus Plan to increase the maximum number of shares issuable thereunder. If the proposed amendment is not approved at the Meeting, the
Omnibus Plan would have only a limited number of Telesat Public Shares remaining available for issuance in connection with future awards.
Once this remaining reserve is used, the Company would no longer be permitted to grant awards under the Omnibus Plan, other than awards
which would not result in any new issuance of Telesat Public Shares. This would limit the Company’s ability to continue its current
practice of granting equity based awards to eligible persons as a critical component of their at-risk compensation. This would, in turn,
require the Company to provide an alternate form of long-term incentive compensation.
The Board has approved an amendment to the Omnibus
Plan to increase the fixed number of Telesat Public Shares reserved for issuance under the Omnibus Plan, subject to receiving the approval
of the TSX and shareholder approval at the Meeting. A copy of the amended and restated Omnibus Plan in the form approved by the Board
is attached to this Information Circular as Appendix “D”. The amendment has been conditionally approved by the TSX and, to
be effective, must be approved by a majority of votes cast by shareholders at the Meeting. Accordingly, at the Meeting, the Company’s
shareholders will be asked to consider and, if thought fit, pass with or without amendment, the following resolution:
“BE IT RESOLVED, as an ordinary resolution
of the holders of Class A Common Shares, Class B Variable Voting Shares, Class C Fully Voting Shares, the Class A Special Voting Share,
the Class B Special Voting Share, the Class C Special Voting Share, and the Golden Share of Telesat Corporation (the “Company”):
| (a) | as approved by the board of directors of the Company, the
amendment to the long-term equity incentive plan adopted by Telesat Corporation (the “Omnibus Plan”) to increase the
aggregate number of Class A Common Shares and Class B Variable Voting Shares issuable under the Omnibus Plan from 2,972,816 to 5,017,401
be and is hereby approved and authorized in accordance with the Omnibus Plan and the rules of the Toronto Stock Exchange; and |
| (b) | any director or officer of the Company be and is hereby authorized
and directed for and on behalf and in the name of the Company to execute, deliver and file all such further documents, authorizations
and instruments and to take any and all such further action as he or she may in his or her sole discretion determine to be necessary
or desirable in connection with, or to carry out the provisions of, the foregoing resolution, the execution of such documentation and
the doing of such things to be conclusive evidence of such determination.” |
The Management Nominees intend to vote at the
Meeting IN FAVOUR of this resolution, unless the Shareholder has specified in the form of proxy that such Shareholder’s Telesat
Corporation Shares are to be voted against the resolution.
EXECUTIVE COMPENSATION
Overview
We operate in a dynamic, highly competitive and
rapidly evolving global market. To succeed in this environment and to achieve our business and financial objectives, we need to attract,
retain and motivate a highly talented team of executive officers, available on a limited basis internationally. Key talents include strong
leadership and management capabilities that are suited to our culture and the evolving nature of our industry, global telecommunications
experience, and advanced space and network engineering experience. Our executive officers demonstrate a proven ability to successfully
lead and manage our growth and operational objectives in a dynamic and evolving market. They are also key to inspiring a culture of operational
excellence which is at the foundation of our success and our ability to foster growth.
Our executive officer compensation program is
designed to achieve the following objectives:
| ● | provide market-competitive compensation opportunities in
order to attract and retain talented, high-performing and experienced executive officers, whose knowledge, skills and performance are
critical to our success; |
| ● | motivate our executive officers to achieve our business and
financial objectives; |
| ● | align the interests of our executive officers with those
of our Shareholders by tying a meaningful portion of compensation directly to the long-term value and growth of our business; and |
| ● | provide incentives that encourage appropriate levels of risk-taking
by our executive officers and provide a strong pay-for-performance relationship. |
Before we became a publicly traded company, we
offered our executive officers cash compensation in the form of base salary, an annual bonus and, following a year in which we made distributions
to shareholders, a special bonus in lieu of an adjustment to equity-based compensation for such distributions. We also offered our executive
officers an equity-based or equity-like compensation which was historically awarded in the form of Telesat Options, Telesat Tandem SARs
and RSUs under various equity plans. See “— Long Term Incentives — Historic Plans”.
In connection with becoming a public company,
holders of existing equity incentive awards under the Historic Plans were given the opportunity to exchange those awards for corresponding
equity incentive awards of Telesat. Going forward, we will not be granting awards to executives or employees under the Historic Plans.
Rather, we expect that all equity compensation awards will be made under our Omnibus Plan that we adopted in connection with the completion
of the Transaction.
We believe that equity-based compensation motivates
our executive officers to achieve our business and financial objectives, and also aligns their interests with the long-term interests
of our Shareholders. We provide base salary to compensate executive officers for their day-to-day responsibilities, at levels that we
believe are necessary to attract and retain executive officer talent. While we have determined that our current executive officer compensation
program is effective at attracting and maintaining executive officer talent, we evaluate our compensation practices on an ongoing basis
to ensure that we are providing market-competitive compensation opportunities for our executive team. See “— Principal Elements
of Compensation.”
As a publicly traded company, we evaluate our
compensation philosophy and compensation program as circumstances require, which may include the periodic review of our compensation program
and the mix of components made available to our executive team. As part of this review process, we expect to be guided by the philosophy
and objectives outlined above, as well as other factors which may become relevant, such as the evolution and growth of our business and
the cost of replacing or enhancing our talent composition as needs may require.
2023 Named Executive Officers
The Chief Executive Officer (“CEO”),
Chief Financial Officer (“CFO”) and the Company’s three other most highly compensated executives (together with
the CEO and CFO, the “NEOs”), who are the subject of this Compensation Discussion and Analysis, are set forth in the
following table:
| Named Executive Officer | |
Position |
| Daniel S. Goldberg | |
President and Chief Executive Officer |
| Andrew Browne | |
Chief Financial Officer |
| Michael Schwartz | |
Senior Vice President, Corporate & Business Development |
| David Wendling | |
Chief Technical Officer |
| Glenn Katz | |
Chief Commercial Officer |
Compensation Philosophy, Policies and Practices
Our compensation philosophy is to pay fair, reasonable
and competitive compensation with a significant equity-based component to align the interests of our executive officers with those of
our Shareholders. Our compensation policies and practices are designed to retain, motivate and reward our executive officers for their
performance and contribution to our short- and long-term success. We compensate executive officers by combining short-term cash and long-term
equity and cash incentives. We also seek to reward the achievement of corporate and individual performance objectives, and to align executive
officers’ incentives with our performance. The Company has adopted the following pay practices that reflect the Company’s
compensation philosophy:
| What
We Do |
|
What
We Don’t Do |
| ● |
Link executive
pay to Company performance through short- and long-term incentive plans |
|
● |
Allow executives
or directors to hedge or pledge equity holdings |
| ● |
Balance among short- and long-term
incentives, cash and equity, and fixed and variable pay |
|
● |
Reprice underwater stock
options |
| ● |
Compare executive compensation
and company performance to relevant peer group companies |
|
● |
Maintain pay policies or
practices that pose material adverse risk to the Company |
| ● |
Retain an independent compensation
consultant |
|
● |
Provide excessive perquisites |
Compensation Governance
The Human Resources & Compensation Committee
is responsible for assisting the Board in fulfilling its governance and supervisory responsibilities, and overseeing our human resources,
succession planning, and compensation policies, processes and practices.
The Human Resources & Compensation Committee
is also responsible for ensuring that our compensation policies and practices provide an appropriate balance of risk and reward consistent
with Telesat Corporation’s risk profile. The Human Resources & Compensation Committee’s oversight includes reviewing objectives,
evaluating performance and ensuring that total compensation paid to our executive officers, personnel who report directly to the CEO and
various other key executive officers and managers is fair, reasonable and consistent with the objectives of our philosophy and compensation
program. The Human Resources & Compensation Committee is comprised of three independent directors, Jane Craighead (Chair), Guthrie
Stewart and Mark Rachesky.
Please see “Committees of our Board of Directors
— Human Resources & Compensation Committee” below.
The charter for the Human Resources & Compensation
Committee sets out its responsibilities for administering our compensation programs and reviewing and making recommendations to the Board
concerning the level and nature of the compensation payable to our directors and officers. The Human Resources & Compensation Committee
is responsible for reviewing our compensation program to ensure it continues to meet its objectives and remain aligned with industry best
practices, and make recommendations for any changes to our board of directors, as appropriate. As part of this review, the Human Resources
& Compensation Committee engages independent compensation consultants to evaluate our executive compensation program against market
practice.
We originally retained Pay Governance in 2020
to assist us in connection with executive officer and director compensation matters, including, among other things, the following:
| ● | assist in reviewing the competitiveness of our current cash
and equity-based compensation program for our executive officers; and |
| ● | assist in designing a new incentive awards framework for
our executive officers. |
In 2021, the Human Resources & Compensation
Committee first retained Mercer as its independent compensation consultant to assist the committee in benchmarking executive pay and designing
short- and long-term incentive plans for 2022.
In 2023, Mercer advised the Human Resources &
Compensation Committee on all aspects of executive compensation including base salaries, short term incentives, and the design of the
long-term incentive awards. Mercer conducted a market compensation review to validate and/or establish compensation values for the NEOs
and other senior executives. Mercer considered compensation at similarly-sized Canadian and US peers in the Aerospace & Defence, Telecommunications
and High Tech/Software industries, considering Telesat’s size based on revenues, EBITDA, assets and market capitalization. Mercer
also assisted the Committee and the Company on compensation structures and benchmarking for the Company’s non-executive employees.
The compensation peer group used by Mercer and
approved the Human Resources & Compensation Committee and used for making informed compensation adjustments to our NEOs for Fiscal
2023 consisted of the following organizations:
| Cae Inc. |
Ducommun Incorporated |
| Viasat, Inc. |
Iridium Communications Inc. |
| Hexcel Corporation |
Comtech Telecommunications Corp. |
| Mercury Systems, Inc. |
Redwire Corporation |
| Converge Technology Solutions Corp. |
Magellan Aerospace Corporation |
| Kratos Defense & Security & Solutions Inc. |
Globalstar, Inc. |
| Axon Enterprise, Inc. |
Héroux-Devtek Inc. |
| EchoStar Corporation |
Calian Group Ltd. |
| Kaman Corporation |
Enghouse Systems Limited |
| Kinaxis Inc. |
MDA Ltd. |
Executive Compensation-Related Fees
The total fees incurred in consideration of the
executive compensation-related services provided in 2022 by Pay Governance was $975 and by Mercer was $288,490.
The total fees incurred in consideration of the
services provided in 2023 by Pay Governance was $0 and by Mercer was $242,096.
No other fees were paid to Pay Governance and
Mercer for fiscal years 2023 and 2022.
Principal Elements of Compensation
The compensation of our executive officers includes
three major elements: (i) base salary; (ii) short-term incentives, consisting of an annual cash incentive award; (iii) long-term
equity and cash incentive awards.
In 2023, NEO long-term incentives consisted of
Telesat Corporation Options, Telesat Corporation PSUs, Telesat Corporation RSUs under our Omnibus Plan, see “Omnibus Long–term
Incentive Plan” below and a long-term incentive cash award.
NEOs also participate in our defined benefit pension
plan and supplemental executive retirement plan, and receive certain perquisites and personal benefits that are provided to each of our
NEOs under their respective employment agreements, see “Employment Agreements” below.
|
Pay Element |
|
Objectives |
|
Features |
| Base Salary |
|
Provide a fixed level of cash compensation for performing day-to-day responsibilities |
|
Based on individual’s role, duties, responsibilities, experience, performance and delivery of results |
| Annual Cash Incentive Awards |
|
Reward short-term financial, operational and individual performance |
|
Cash payments based on meeting Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) performance goals |
| Long-Term Incentive Compensation |
|
Align management interests with those of Shareholders, encourage retention and reward long-term Company performance |
|
2023: Telesat Corporation RSUs, Telesat Corporation Stock Options and Telesat Corporation PSUs, were granted under our Omnibus Plan along with a long-term incentive cash component, payable conditonal upon the vesting of the RSU and PSU awards |
Base Salaries
Base salary is provided as a fixed source of compensation
for our executive officers. Base salaries are determined on an individual basis taking into account the scope of the executive officer’s
responsibilities and their prior experience. Base salaries are set out in each NEO’s employment agreement, see “Employment
Agreements” below. Adjustments to base salaries are determined annually by the Board on the recommendation of the Human Resources
& Compensation Committee and may be increased based on the executive officer’s performance, as well as to maintain market competitiveness.
Additionally, base salaries can be adjusted as warranted throughout the year to reflect promotions or other changes in the scope or breadth
of an executive officer’s role or responsibilities.
The following table sets forth each NEO’s
annual base salary rates for Fiscal 2023:
| Named Executive Officer |
|
2023
Annual Base
Salary Rate |
Daniel S. Goldberg
President and Chief Executive Officer |
|
$1,427,856 |
Andrew Browne
Chief Financial Officer |
|
$752,081 |
Michael Schwartz(1)
Senior Vice President, Corporate & Business Development |
|
$726,445 |
David Wendling
Chief Technical Officer |
|
$430,560 |
Glenn Katz
Chief Commercial Officer |
|
$694,404 |
Note:
| (1) | Mr. Schwartz was paid in U.S. dollars and these amounts were
converted to Canadian dollars based on an average exchange rate for 2023 of CAD 1.3493 to $USD1.0. All other NEO’s were paid in
Canadian dollars. |
Annual Incentive Awards
Annual incentive awards are designed to motivate
our executive officers to meet our business and financial objectives generally and our annual financial performance targets in particular.
In 2023, annual incentive awards were earned and measured with reference to Adjusted EBITDA1
performance for the fiscal year. When the annual budget and Adjusted EBITDA targets are established for the upcoming fiscal year, the
Human Resources & Compensation Committee establishes performance targets connected to the Adjusted EBITDA targets. In assessing performance
against the Adjusted EBITDA targets, the Human Resources & Compensation Committee has discretion to consider unforeseen events and
make additional one-time adjustments in the event it determines such adjustments are warranted in the circumstances to ensure NEOs are
not penalized, or do not receive a windfall, for events outside of their control, including changes in foreign exchange rates or other
one-time, non-recurring items, certain unbudgeted items or to take into account significant achievements that may be unrelated to Adjusted
EBITDA performance.
| 1 | Adjusted EBITDA is a non-IFRS financial measure. For more information
on the Company’s use of non-IFRS financial measures and a reconciliation to the most closely comparable IFRS measure, see “Management’s
Discussion & Analysis of Financial Condition and Results of Operations – Non-IFRS Measures” in the Company’s 2022
Annual Information Form on Form 20-F available on SEDAR+ at www.sedarplus.com. |
The annual incentive pay-outs can increase or
decrease, compared to the target bonus applicable to each NEO (either 60% or 100% of base salary, in either case the “Target
Bonus,”), depending on the level of achievement as determined by the Human Resources & Compensation Committee with respect
to the Adjusted EBITDA targets for the fiscal year. The key metrics followed by Telesat in 2023 were:
| Adjusted EBITDA Performance | |
Annual Incentive Award |
| <95% of target amount | |
Nil |
| 95% of target amount | |
50% of Target Award |
| 97.5% of target amount | |
75% of Target Award |
| 100% of target amount | |
100% of Target Award |
| 102.5% of target amount | |
150% of Target Award |
| ≥105% of target amount | |
200% of Target Award |
| Actual performance: | |
Actual incentive awards |
| 103.085% of target amount | |
Actual incentive awards equal 161.7% of Target |
For 2023, award opportunities, pay-out ranges
and actual awards as a percentage of each NEO’s base salary were as follows:
| Named Executive Officer |
|
2023 Salary
Level |
|
|
2023 AIP
Target
(% of Base
Salary) |
|
Payout Range
(% of Target) |
|
Target Award
($) |
|
|
Actual Award
($) |
|
Daniel S. Goldberg
President and Chief Executive Officer |
|
$ |
1,427,856 |
|
|
100% |
|
100-200%(1) |
|
$ |
1,427,856 |
|
|
$ |
2,308,843 |
|
Andrew Browne
Chief Financial Officer |
|
$ |
752,081 |
|
|
100% |
|
0-200% |
|
$ |
752,081 |
|
|
$ |
1,216,115 |
|
Michael Schwartz
Senior Vice President, Corporate & Business Development |
|
$ |
726,445 |
|
|
100% |
|
0-200% |
|
$ |
726,445 |
|
|
$ |
1,176,526 |
|
David Wendling
Chief Technical Officer |
|
$ |
430,560 |
|
|
60% |
|
0-200% |
|
$ |
258,336 |
|
|
$ |
417,729 |
|
Glenn Katz
Chief Commercial Officer |
|
$ |
694,404 |
|
|
60% |
|
0-200% |
|
$ |
416,642 |
|
|
$ |
673,711 |
|
Note:
| (1) | Pursuant to his employment agreement executed in 2008, Mr. Goldberg
is entitled to a minimum bonus equal to 100% of his base salary. |
For 2023, the Board approved Adjusted EBITDA target
was $514 million, which is based on exchange rates of USD/CAD = 1.33
and BRL/CAD = 0.25. Actual performance was $529 million.
In assessing performance against the 2023 Adjusted
EBITDA target, the committee made adjustments for: foreign exchange rate changes to reflect the actual fluctuation in exchange rates for
the year; non-cash pension expenses associated with the current contribution holiday the company is experiencing; and to eliminate expense
savings associated with delays in the Telesat Lightspeed program.
We currently make annual incentive award payments
in cash and anticipate continuing to do so in the future.
Long-Term Incentives
Type of awards under Omnibus Long-Term Incentive
Plan
In connection with becoming a public company,
we adopted a new long-term equity incentive plan (the “Omnibus Plan”) to allow for a variety of equity based awards
that provide different types of incentives to be granted to certain of our directors, executive officers, and employees, including options
(“Telesat Corporation Options”), performance share units (“Telesat Corporation PSUs”), restricted
share units (“Telesat Corporation RSUs”) and deferred share units (“Telesat Corporation DSUs”).
Telesat Corporation Options, Telesat Corporation PSUs, Telesat Corporation RSUs and Telesat Corporation DSUs are collectively referred
to herein as “Awards”. Each Award will represent the right to receive Telesat Public Shares or, in the case of Telesat Corporation
PSUs, Telesat Corporation RSUs and Telesat Corporation DSUs, Telesat Public Shares or cash, in accordance with the terms of the Omnibus
Plan. The following discussion is qualified in its entirety by the text of the Omnibus Plan, which is available on SEDAR+ at www.sedarplus.com.
Under the Omnibus Plan, the Board, or an authorized
Board committee, may grant Awards to eligible participants, as applicable. Participation in the Omnibus Plan is voluntary and, if an eligible
participant agrees to participate, the grant of Awards will be evidenced by a grant agreement with each such participant. As at December
31, 2023 there were 2,087,743 equity awards issued and outstanding under the Omnibus Plan, which represents 15.3% of the aggregate number
of Telesat Corporation Shares issued and outstanding as at December 31, 2023 (or 4.2%, assuming the exchange of all Exchangeable Units
into Telesat Corporation Shares). As of the date of this Information Circular, there were 2,646,224 equity awards issued and outstanding
under the Omnibus Plan, with 106,259 remaining available to be issued.
Telesat Corporation Options
A Telesat Corporation Option is exercisable during
a period established by the Board which begins on the date of the grant and ends no later than 10 years after the date of the granting
of the Telesat Corporation Option or such shorter period as the Telesat Corporation Board may determine. The minimum exercise price
of a Telesat Corporation Option is determined based on the closing price of the Telesat Public Shares on the last trading day before the
date such option is granted. The Omnibus Plan provides that the exercise period will automatically be extended if the date on which it
is scheduled to terminate falls during a blackout period. In these cases, the extended exercise period terminates 10 business days after
the last day of the black-out period. To facilitate the payment of the exercise price of the options, the Omnibus Plan has a cashless
exercise feature under which a participant may elect to undertake either a broker assisted “cashless exercise” or an “option
surrender” as set out in the Omnibus Plan, and including the consent of the Board, where required. As at December 31, 2023, there
were 803,265 Telesat Corporation Options issued and outstanding under the Omnibus Plan, which represents 5.9% of the aggregate number
of Telesat Corporation Shares issued and outstanding as at December 31, 2023 (or 1.6%, assuming the exchange of all Exchangeable Units
into Telesat Corporation Shares). See “Details of the Omnibus Long-Term Incentive Plan” below. As of the date of this Information
Circular, there were 803,265 Telesat Corporation Options issued and outstanding under the Omnibus Plan.
Telesat Corporation RSUs, PSUs, and DSUs
The terms and
conditions of grants of Telesat Corporation RSUs, Telesat Corporation PSUs and Telesat Corporation DSUs, including the quantity, type
of award, grant date, vesting conditions, vesting periods, termination provisions, settlement date and other terms and conditions with
respect to these Awards, will be set out in the participant’s grant agreement. The purchase price for the Telesat Public Shares
underlying the participant’s grant of Telesat Corporation RSUs, Telesat Corporation PSUs and Telesat Corporation DSUs, as applicable,
is determined by the Board and may be zero. As at December 31, 2023 there were 784,725 RSUs, 375,137 PSUs and 124,616 DSUs issued and
outstanding under the Omnibus Plan, which represents 9.4% of the aggregate number of Telesat Corporation Shares issued and outstanding
as at December 31, 2023 (or 2.6%, assuming the exchange of all Exchangeable Units into Telesat Corporation Shares). See “Details
of the Omnibus Long-Term Incentive Plan” below. As of the date of this Information Circular, there were 904,604 RSUs, 786,025 PSUs
and 152,330 DSUs issued and outstanding under the Omnibus Plan.
Types of Awards under Historic Plans
Telesat Holdings Inc. (the predecessor entity
to Telesat Canada and Telesat Corporation), adopted a management stock incentive plan in September 2008, as amended (the “2008
Telesat Plan”), a second management stock incentive plan in April 2013, as amended (the “2013 Telesat Plan”)
and in April 2021 adopted an RSU Plan (the “RSU Plan” and together with the 2008 Telesat Plan and the 2013 Plan, the
“Historic Plans”). Types of awards under the Historic Plans included Telesat Options, Telesat Stock Appreciation Rights
and Telesat Restricted Share Units (“RSUs”), as discussed below.
In connection with the completion of the Transaction
in November 2021, no further Telesat Options, Telesat Tandem SARs, and Telesat RSUs will be granted under the Historic Plans. Accordingly,
there have been no Telesat Options, Telesat Tandem SARs or Telsat RSUs granted under the Historic Plans since 2021.
Telesat Options
The Historic Plans provided that, unless otherwise
specified in the grant agreement or employment agreement of a participant, the Telesat Options granted to any participant would vest as
to 20% each year over five years. No Telesat Options have been granted to NEOs since 2021, and prior to the Transaction all vested and
unvested stock options issued after 2009 (except 445,662 underwater option awards with a strike price of $58.52 that our CEO retained,
all of which have subsequently expired) and outstanding with respect to each NEO, were cancelled for nominal value, since the awards had
no value and were no longer an effective retention vehicle.
The exercise price of any Telesat Option granted
under the Historic Plans was fixed by the board of directors of Telesat Canada (the “Telesat Canada Board”) when Telesat
Options were granted, at not less than fair market value. The Historic Plans provide that a Telesat Option will be exercisable during
a period established by the Telesat Canada Board which would commence on the date of the grant and terminate no later than 10 years after
the date of the granting of the option or such shorter period as the Telesat Canada Board may determine. However, in 2018 the Telesat
Canada Board and Telesat Canada Compensation Committee determined it would be in the best interests of Telesat to extend the expiry date
of Telesat Options issued under the 2008 Telesat Plan by five years. The result is that these Telesat Options expiration dates were extended
to between 2023 and 2025.
Telesat Stock Appreciation Rights
The Historic Plans also provided for the issue
of tandem share appreciation rights (referred to as “Telesat Tandem SARs”) which may be granted in connection with
Telesat Options granted under the Historic Plans, at or after the time of grant of such Telesat Options. Telesat Tandem SARs entitle the
recipient to surrender to Telesat, unexercised, the right to subscribe for Non-Voting Participating Preferred Shares pursuant to the related
Telesat Option and to receive from Telesat Canada cash or Non-Voting Participating Preferred Shares in an amount equal to the excess of
the market value of a Telesat Option over the exercise price under the related Telesat Option, net of any applicable withholding taxes
and other required source deductions. Telesat Tandem SARs were only awarded to certain executive officers and there are no remaining Tandem
SARs issued and outstanding.
Telesat Restricted Share Units
A Telesat Canada restricted share unit (a “Telesat
RSU”) entitled the recipient to receive Non-Voting Participating Preferred Shares of Telesat Canada, which were convertible
at the discretion of the holder into Telesat Common Shares, cash or other property equal in value to of the Telesat Common Shares.
In connection with the completion of the Transaction,
each holder of Telesat Options, Telesat Tandem SARs and Telesat RSUs pursuant to the Historic Plans was provided with the option to enter
into an exchange agreement with Telesat Corporation in respect of his or her Telesat Options, Telesat Tandem SARs and Telesat RSUs (the
“Optionholder Exchange Agreements”). Pursuant to the Optionholder Exchange Agreements, each holder of the Telesat Options,
Telesat Tandem SARs and Telesat RSUs had the right to exchange his or her Telesat Options, Telesat Tandem SARs and Telesat RSUs for corresponding
options, restricted share units and tandem share appreciation rights, as applicable, of Telesat Corporation. The corresponding incentive
securities have similar vesting terms as the Telesat Options, Telesat Tandem SARs and Telesat RSUs, however, the number of underlying
Telesat Public Shares and exercise prices, as applicable, were adjusted to take into consideration the Telesat-to-Telesat Corporation
Exchange Ratio. In connection with the completion of the Transaction certain necessary modifications and amendments were made to the Historic
Plans and RSU Plan to meet the requirements of the NASDAQ and TSX, including amendments (i) to give effect to the changes in our corporate
structure contemplated by the Transaction; and (ii) include provisions and restrictions relating to amendment of the Historic Plans and
RSU Plan or outstanding awards thereunder.
2023 Long-term Incentive Awards
Grants to the NEOs in 2023 under the Omnibus Plan
consisted of RSUs, Telesat Corporation Options, PSUs and, in order to mitigate dilution to Telesat’s shareholders, a portion of
the long-term incentive award was payable in cash. RSUs and Telesat Corporation Options vest rateably over three years with one-third
vesting at the end of each year. PSUs vest over a three-year term based on meeting key milestones. The cash component of the long-term
incentive award is payable conditional upon the vesting of the RSU and PSU awards.
Defined Benefit and Supplemental Retirement
Plans for Designated Employees
We sponsor two non-contributory defined benefit
pension arrangements for our executives: (i) the “Pension Plan for Designated Employees of Telesat Canada,” which is a registered
pension plan as defined in the Income Tax Act; and (ii) a supplemental employee retirement pension that covers pension benefits in excess
of the tax limits imposed on the registered pension plan.
Both pension programs provide for an annual pension
based on service and final average earnings and include survivor benefits. The pension can commence without reduction as early as age
60 or 35 years of service. Earlier retirement is possible with a reduction of 1/4% for each month before the unreduced
retirement date. Pensions are indexed to 50% of the consumer price index for each year.
Prerequisites and Other Benefits
The Company does not provide significant perquisites
to the NEOs, but they do receive medical insurance coverage, relocation payments, as applicable, and in the case of our CEO, as discussed
in the Employment Agreement section below, tax equalization payments. For certain NEOs, we provide US health insurance coverage.
Compensation Risk Oversight
As part of the review of the compensation paid
to our executives, the Board and Human Resources & Compensation Committee consider the potential risks associated with the structure
and design of our various compensation plans. Our compensation programs do not encourage excessive or unnecessary risk-taking behavior.
Overall, we found that there were no significant risks arising from our executive compensation programs that were reasonably likely to
have a material adverse effect on Telesat.
Historically, our NEOs were awarded Telesat Options
and, in certain cases, Telesat Tandem SARs with vesting schedules that were aligned with mid and long-term decision making, which discourages
excessive risk taking for short-term gains and aligns our NEOs’ interests with those of our shareholders. As a public company, the
Board and Human Resources & Compensation Committee will continue to work with our compensation consultant to enhance our compensation
program by considering additional measures designed to discourage excessive risk taking and promote long-term thinking.
Insider Trading and Hedging Policy
We have adopted a customary insider trading policy,
which, among other things, prohibits our executive officers and directors from purchasing financial instruments that are designed to hedge
or offset any decrease in market value of Telesat Corporation’s equity securities granted as compensation or held, directly or indirectly,
by the executive officer or director.
Executive Stock Ownership Guidelines
We have implemented share ownership guidelines
for our executives to align the interests of such executives with those of our Shareholders. The ownership guidelines establish minimum
equity ownership levels for each of our executives based on a multiple of their annual base salary. Such executives are expected to meet
the prescribed ownership levels within five years of the later of (i) completion of the Transaction and (ii) the date of their appointment
to their executive position. Common Shares and the value of equity-based awards will be included in determining an individual’s
equity ownership value. The ownership guideline for our CEO is 5x his annual base salary. The ownership guideline for our other NEOs is
2x their annual base salary and the ownership guideline for our other executives is 1x their annual base salary.
Clawback Policy
In 2023, the Board adopted a specific policy to
recoup or claw back incentive compensation under appropriate circumstances. The Board currently has discretion under the plans
to reduce current or future awards should that be appropriate.
Summary Compensation Table
The following table sets out information concerning
the compensation earned by, paid to, or awarded to our NEOs in the three most recently completed fiscal years:
| | |
| | |
| | |
| | |
| | |
Non-equity Incentive Plan Compensation ($) | | |
| | |
| | |
| |
| Name and Principal Position | |
Fiscal
Year | | |
Salary
($) (1) | | |
Share-
based
Awards
($)(2)(3) | | |
Option-
Based
Awards
($)(4) | | |
Annual
Incentive
plan ($)(5) | | |
Long-
term
incentive
plans ($) | | |
Pension
Value ($) | | |
All Other
Compensation
($)(6) | | |
Total
Compensation
($) | |
| Daniel
S. Goldberg | |
| 2023 | | |
| 1,427,856 | | |
| 3,962,128 | | |
| 1,506,877 | | |
| 2,308,843 | | |
| 525,003 | | |
| 821,000 | | |
| 907,029 | | |
| 11,458,736 | |
| President and Chief | |
| 2022 | | |
| 1,372,938 | | |
| 2,452,952 | | |
| 967,413 | | |
| 2,581,673 | | |
| - | | |
| 1,078,000 | | |
| 886,256 | (8) | |
| 8,452,976 | |
| Executive Officer(7) | |
| 2021 | | |
| 1,326,510 | | |
| 53,177,000 | | |
| - | | |
| 2,629,143 | | |
| - | | |
| 1,079,000 | | |
| 5,884,565 | (9) | |
| 58,211,653 | |
| Andrew Browne | |
| 2023 | | |
| 752,081 | | |
| 943,341 | | |
| 358,778 | | |
| 1,216,115 | | |
| 125,023 | | |
| 13,000 | | |
| 132,772 | | |
| 3,541,110 | |
| Chief Financial | |
| 2022 | | |
| 723,155 | | |
| 584,031 | | |
| 230,336 | | |
| 1,359,821 | | |
| - | | |
| 6,000 | | |
| 123,840 | | |
| 3,027,183 | |
| Officer | |
| 2021 | | |
| 698,775 | | |
| 7,782,000 | | |
| - | | |
| 1,384,823 | | |
| - | | |
| - | | |
| 98,959 | (10) | |
| 9,865,598 | |
| Glenn
Katz | |
| 2023 | | |
| 694,404 | | |
| 754,682 | | |
| 287,023 | | |
| 673,711 | | |
| 100,009 | | |
| 139,000 | | |
| 502,854 | (14) | |
| 2,648,829 | |
| Chief Commercial | |
| 2022 | | |
| 667,696 | | |
| 467,218 | | |
| 184,265 | | |
| 753,321 | | |
| - | | |
| 158,000 | | |
| 1,081,767 | (11) | |
| 2,230,500 | |
| Officer | |
| 2021 | | |
| 126,542 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 52,000 | | |
| 16,053 | | |
| 194,595 | |
| Michael
Schwartz | |
| 2023 | | |
| 726,445 | | |
| 754,682 | | |
| 287,023 | | |
| 1,176,526 | | |
| 100,009 | | |
| - | | |
| 29,118 | | |
| 3,073,803 | |
| Senior Vice President, | |
| 2022 | | |
| 675,120 | | |
| 467,218 | | |
| 184,265 | | |
| 1,269,143 | | |
| - | | |
| 442,000 | | |
| 82,338 | | |
| 3,120,084 | |
| Corporate & Business Development | |
| 2021 | | |
| 682,517 | | |
| 9,208,700 | | |
| - | | |
| 1,352,749 | | |
| - | | |
| 552,000 | | |
| 376,209 | (12) | |
| 11,795,966 | |
| David
Wendling | |
| 2023 | | |
| 430,560 | | |
| 754,682 | | |
| 287,023 | | |
| 417,729 | | |
| 100,009 | | |
| 152,000 | | |
| 29,400 | | |
| 2,171,403 | |
| Chief Technical | |
| 2022 | | |
| 414,000 | | |
| 467,218 | | |
| 184,265 | | |
| 467,091 | | |
| - | | |
| 227,000 | | |
| 29,400 | | |
| 1,788,974 | |
| Officer | |
| 2021 | | |
| 400,000 | | |
| 3,891,000 | | |
| - | | |
| 356,760 | | |
| - | | |
| 178,000 | | |
| 133,180 | (13) | |
| 4,825,760 | |
Notes:
| (1) | Mr. Schwartz was paid in U.S. dollars and converted to Canadian dollars based on an average exchange rate
for 2023 of CAD $1.3493 to $USD 1.0. All other NEOs were paid in Canadian dollars. Represents total base salary payable in fiscal year
2023. |
| (2) | The value attributed to the Share-based Awards in 2023 of $11.89 was derived from the Telesat Corporation
share price on the NASDAQ on date of grant, converted into Canadian dollars and multiplied by the number of RSUs and PSUs granted. The
value attributed to the Share-based Awards in 2022 of $16.64 was derived from the Telesat Corporation share price on the NASDAQ on date
of grant, converted into Canadian dollars and multiplied by the number of RSUs and PSUs granted. |
| (3) | The value attributed to the Share-based Awards in 2021 is derived from observable transactions of Telesat
Canada equity which took place at or about the time of grant at a value the equivalent of $62.72 per Telesat Corporation Share, multiplied
by the number of Telesat RSUs granted. This differs from the value used to expense these share-based awards under IFRS 2 — Share
based payment (accounting fair value). The value used to expense these options under IFRS 2 was derived from a valuation based on discounted
projected future cash flows of Telesat’s GEO business and planned Telesat Lightspeed constellation, as at April 20, 2021, conducted
by an independent third party engaged by Telesat during the fourth quarter of 2021. That independent third-party evaluation implied a
fair value of a share at the time of grant equivalent to $109.38 per Telesat Corporation Share. Accordingly, for expense purposes the
value of the share-based awards with time-based vesting criteria, has been calculated based on a value of $109.38 per Telesat Corporation
Share and the value of the share-based awards with time and performance based vesting criteria, has been calculated based on a value of
$66.10 per Telesat Corporation Share (discounted from $109.38 to reflect the potential that the performance criteria may not be met and
the awards would therefore not vest). The accounting value substantially exceeds the value of the observable transactions at or about
the time of grant, as well as the implied value of a Telesat Corporation Share of $45.26 based upon the closing price of Loral shares
on the NASDAQ on April 20, 2021. We believe that the observable value of $62.72 per Telesat Corporation Share is a more appropriate measure
of these Share-based awards to our NEOs than the accounting fair value under IFRS 2. |
| (4) | The value attributed to the Option-based Awards in 2023 was calculated using Black Scholes methodology,
which results in a value of $6.10 per Option, multiplied by the number of Options granted and was derived from the Telesat Corporation
share price on the NASDAQ on date of grant, converted into Canadian dollars, which was $11.89. The value attributed to the Option-based
Awards in 2022 was calculated using Black Scholes methodology, which results in a value of $8.53 per Option, multiplied by the number
of Options granted and was derived from the Telesat Corporation share price on the NASDAQ on date of grant, converted into Canadian dollars,
which was $16.64. |
| (5) | These awards were made by the Telesat Human Resources & Compensation Committee following review of
Telesat’s performance for the applicable year in accordance with the methodology set out under “Principal Elements of Compensation
— Annual Bonuses.” |
| (6) | These amounts include all other compensation paid to a NEO during the course of the year, including medical
insurance coverage, special bonuses, perquisites, tax equalization payments and relocation payments, as applicable. |
| (7) | All compensation paid to Mr. Goldberg is in consideration of his service as President and Chief Executive
Officer of Telesat. Mr. Goldberg does not receive compensation for being a director of Telesat. |
| (8) | Includes a $750,000 tax equalization payment to Mr. Goldberg pursuant to his employment agreement to compensate
him for the additional tax costs incurred as a result of living in Ontario, Canada as opposed to the U.S. |
| (9) | Includes a going-public transaction bonus payment of $5,000,000 as per Mr. Goldberg’s bonus agreement
executed in 2013. |
| (10) | Includes a one-time relocation payment of $88,296 paid in connection with Mr. Browne’s relocation
to Ontario, Canada in 2020 following his acceptance of employment with Telesat. |
| (11) | Includes compensation payments of US$201,250 and US$540,000 paid to Mr. Katz for bonuses that would have
been received from his prior employer and prior employer equity that would have vested, respectively, had he not terminated his prior
employment to join Telesat. |
| (12) | Includes a cash award of $285,994, pursuant to the special bonus paid in connection with a distribution
to shareholders. |
| (13) | Includes a cash award of $103,780 pursuant to the special bonus paid in connection with a distribution
to shareholders. |
| (14) | Includes compensation payment of US$270,000 paid to Mr. Katz for prior employer equity that would have
vested had he not terminated his prior employment to join Telesat. |
Performance Graph
The following graph compares the Company’s
cumulative shareholder return to the S&P/TSX Composite Index on a quarterly basis over the time period November 19, 2021 (being the
date the Company’s Class A common shares and Class B variable voting shares began trading on the TSX) until December 31,
2023, assuming a reinvestment of any dividends and considering a $100 investment on November 19, 2021.
The market price of Telesat Common Shares is subject
to fluctuation based on several factors, many of which are outside Telesat’s control. These include market perception of the Company’s
ability to achieve business goals, trading volume of Telesat Common Shares, changes in economic conditions and the financial markets and
other general developments in the industry that affect the Company. Accordingly, the Telesat Common Share price and total shareholder
return over the measurement period may not be reflective of the Company’s financial performance or management’s efforts in
enhancing shareholder value. For the period since the Company became a reporting issuer, the total compensation of the NEOs is not directly
correlated with the trend of the return on investment of the Telesat Common Shares shown in the above graph.
While a significant portion of the compensation
of NEOs is performance-based, it is difficult to correlate compensation to the trends shown in the above performance graph. As described
in our “Compensation Discussion and Analysis”, base salaries are not determined based on share price, benchmarks or a specific
formula, but rather are set to be competitive with industry levels and are determined on an individual basis taking into account the scope
of the executive officer’s responsibilities and their prior experience. Adjustments to base salaries are determined annually by
the Board on the recommendation of the Human Resources & Compensation Committee and may be increased based on the executive officer’s
performance, as well as to maintain market competitiveness. Additionally, base salaries can be adjusted as warranted throughout the year
to reflect promotions or other changes in the scope or breadth of an executive officer’s role or responsibilities. Similarly, annual
cash incentive awards are measured with reference to Adjusted EBITDA performance goals for the fiscal year. Total shareholder return and
share price are not factored into annual cash incentive awards. Long-term incentives (Telesat Corporation Options, Telesat Corporation
RSUs, Telesat Corporation PSUs and Telesat Corporation DSUs) are awarded and vest as described in this circular. The price of Telesat
Common Shares at the time long-term incentives are awards will influence the number of units granted (in the case of Telesat Corporation
RSUs, Telesat Corporation PSUs and Telesat Corporation DSUs) and the number of Telesat Corporation Options granted, along with their exercise
price. Once long-term incentives vest, the value that an NEO may realize fluctuates based on the Telesat Common Share price, aligning
the interests of NEOs with those of Telesat’s shareholders.
Employment Agreements
We have written employment agreements with each
of our NEOs and each executive is entitled to receive compensation established by us as well as other benefits in accordance with plans
available to the most senior employees of Telesat. Certain NEOs are, however, entitled to extended health benefits that are not otherwise
available to other senior employees of Telesat.
Daniel S. Goldberg, President and Chief
Executive Officer
Mr. Goldberg’s employment agreement executed
in September 2008 provides for base salary, an annual performance bonus, an annual tax gross up payment (that compensates Mr. Goldberg
for the higher taxes he is required to pay in Ontario, Canada as compared to the taxes he would pay if he resided in the United States),
health benefits, and participation in the Historic Plans and successor plans.
The employment agreement with Mr. Goldberg specifies
the amounts or items payable, including severance, to Mr. Goldberg in the event that he is terminated without cause or resigns with good
reason. The payment of severance to Mr. Goldberg is conditioned on his execution of a release of claims.
If Mr. Goldberg is terminated without cause or
resigns with good reason, Mr. Goldberg will be entitled to: (i) his accrued but unpaid base salary, vacation pay, and any expenses, amounts
or benefits which have accrued to the termination date, (ii) any earned but unpaid bonus from the previous year, (iii) a prorated bonus
for the year in which termination occurs based on the prior year’s bonus, (iv) an amount equal to two and a half times the sum of
his base salary and the greater of the minimum bonus set out in the bonus agreement (see below) and his bonus paid in the previous year,
(v) a payment for outplacement services and moving expenses up to US$25,000, and (vi) a monthly payment in lieu of continuing medical
coverage for 30 months to ensure Mr. Goldberg can maintain equivalent medical coverage to that which was in place on the date of
termination.
If Mr. Goldberg is terminated with cause or due
to his resignation, Mr. Goldberg will be entitled to: (i) his accrued but unpaid base salary, vacation pay, and any expenses, amounts
or benefits which have accrued to the termination date and (ii) any earned but unpaid bonus from the previous year. Mr. Goldberg’s
employment agreement also entitles him to participate in Telesat’s pension plan for designated employees and its supplemental retirement
plan for designated employees.
Mr. Goldberg’s employment agreement also
contains customary confidentiality and non-disparagement covenants and certain restrictive covenants that will continue to apply following
the termination of his employment, including non-solicitation and non-competition provisions which are in effect during Mr. Goldberg’s
employment and for one year following the termination of his employment.
Andrew Browne, Chief Financial Officer
Mr. Browne’s employment agreement provides
for base salary, an annual performance bonus, benefits and participation in the Historic Plans and successor plans.
The employment agreement with Mr. Browne specifies
the amounts or items payable, including severance, to Mr. Browne in the event that he is terminated without cause or resigns with good
reason. The payment of severance to Mr. Browne is conditioned on his execution of a release of claims.
If Mr. Browne is terminated without cause or resigns
with good reason, Mr. Browne will be entitled to: (i) his accrued but unpaid base salary, and vacation pay, and any expenses, amounts
or benefits which have accrued to the termination date, (ii) one month’s base salary, (iii) any earned but unpaid signing bonus
or annual from the previous year, (iv) a prorated bonus based on the prior year’s bonus, (v) an amount equal to two times the sum
of his base salary and the greater of his bonus paid for either of the two previous years, (vi) a payment for outplacement services and
moving expenses, and (vii) a monthly payment in lieu of continuing medical coverage for 24 months.
If Mr. Browne is terminated with cause or due
to his resignation, Mr. Browne will be entitled to: (i) his accrued but unpaid base salary, vacation pay, and any expenses, amounts or
benefits which have accrued to the termination date, (ii) one month’s base salary, and (iii) any earned but unpaid bonus from the
previous year.
Mr. Browne’s employment agreement also entitles
him to participate in Telesat’s pension plan for designated employees and its supplemental retirement plan for designated employees.
Mr. Browne’s employment agreement also contains
customary confidentiality and non-solicitation covenants and certain restrictive covenants that will continue to apply following the termination
of his employment, including non-solicitation and non-competition provisions which are in effect during Mr. Browne’s employment
and for one year following the termination of his employment.
Michael Schwartz, Senior Vice President,
Corporate and Business Development
Mr. Schwartz’s employment agreement provides
for base salary, an annual performance bonus, benefits and participation in the Historic Plans and successor plans.
The employment agreement with Mr. Schwartz specifies
the amounts or items payable, including severance, to Mr. Schwartz in the event that he is terminated without cause or resigns with good
reason. The payment of severance to Mr. Schwartz is conditioned on his execution of a release of claims.
If Mr. Schwartz is terminated without cause or
resigns with good reason, Mr. Schwartz will be entitled to: (i) his accrued but unpaid base salary, vacation pay, and any expenses, amounts
or benefits which have accrued to the termination date, (ii) one month’s base salary, (iii) any earned but unpaid bonus from the
previous year, (iv) a prorated bonus based on the prior year’s bonus, (v) an amount equal to two times the sum of his base salary
plus the greater of his bonus paid for either of the two previous years, (vi) a payment for outplacement services and moving expenses,
and (vii) a monthly payment in lieu of continuing medical coverage for 24 months.
If Mr. Schwartz is terminated with cause or due
to his resignation, Mr. Schwartz will be entitled to: (i) his accrued but unpaid base salary, vacation pay, and any expenses, amounts
or benefits which have accrued to the termination date, (ii) one month’s base salary, and (iii) any earned but unpaid bonus from
the previous year. Mr. Schwartz’s employment agreement also entitles him to participate in Telesat’s pension plan for designated
employees and its supplemental retirement plan for designated employees.
Mr. Schwartz’s employment agreement also
contains customary confidentiality and non-disparagement covenants and certain restrictive covenants that will continue to apply following
the termination of his employment, including non-competition and non-solicitation provisions which are in effect during Mr. Schwartz
employment and for the one year following the termination of his employment, respectively.
David Wendling, Chief Technical Officer
Mr. Wendling’s employment agreement provides
for base salary, an annual performance bonus, benefits and participation in the Historic Plans and successor plans.
The employment agreement with Mr. Wendling specifies
the amounts or items payable, including severance, to Mr. Wendling in the event that he is terminated without cause or resigns with good
reason. The payment of severance to Mr. Wendling is conditioned on his execution of a release of claims.
If Mr. Wendling is terminated without cause or
resigns with good reason, Mr. Wendling will be entitled to: (i) his accrued but unpaid base salary, vacation pay, and any expenses, amounts
or benefits which have accrued to the termination date, (ii) any earned but unpaid bonus from the previous year, (iii) a prorated bonus
based on the prior year’s bonus, (iv) an amount equal to two times his base salary plus his bonus, based on his average bonus for
the three previous years, and his monthly expense allowance for 24 months, (v) a monthly payment in lieu of continuing group health benefits
for 24 months; and (vi) payment for outplacement services.
If Mr. Wendling is terminated with cause or resigns
for good reason, Mr. Wendling will be entitled to: (i) his accrued but unpaid base salary, vacation pay, and any expenses, amounts or
benefits which have accrued to the termination date and (ii) any earned but unpaid bonus from the previous year.
Mr. Wendling’s employment agreement also
entitles him to participate in Telesat’s pension plan for designated employees and its supplemental retirement plan for designated
employees.
Mr. Wendling’s employment agreement also
contains customary confidentiality and non-disparagement covenants and certain restrictive covenants that will continue to apply following
the termination of his employment, including non-competition and non-solicitation provisions which are in effect during Mr. Wendling
employment and for one year following the termination of his employment.
Glenn Katz, Chief Commercial Officer
Mr. Katz’s employment agreement provides
for base salary, an annual performance bonus, benefits and participation in the Omnibus Plan and any successor plans.
The employment agreement with Mr. Katz specifies
the amounts or items payable, including severance, to Mr. Katz in the event that he is terminated without cause or resigns with good reason.
The payment of severance to Mr. Katz is conditioned on his execution of a release of claims.
If Mr. Katz is terminated without cause or resigns
with good reason, Mr. Katz will be entitled to: (i) his accrued but unpaid base salary, and vacation pay, and any expenses, amounts or
benefits which have accrued to the termination date, (ii) any earned but unpaid signing bonus or annual from the previous year, (iii)
a prorated bonus based on the prior year’s bonus, (iv) an amount equal to a Severance Factor times the sum of his base salary and
the greater of his bonus paid for either of the two previous years, (v) a payment for outplacement services and moving expenses, and (vi)
a monthly payment in lieu of continuing medical coverage for 6 months. The Severance Factor is 0.5 if termination without cause or resignation
with good reason occurs within 5 years of commencement his employment and is equal to 1.0 if it occurs thereafter.
If Mr. Katz is terminated with cause or due to
his resignation, Mr. Katz will be entitled to: (i) his accrued but unpaid base salary, vacation pay, and any expenses, amounts or benefits
which have accrued to the termination date and (ii) any earned but unpaid bonus from the previous year.
Mr. Katz’s employment agreement also entitles
him to participate in Telesat’s pension plan for designated employees and its supplemental retirement plan for designated employees.
Outstanding Option-Based Awards and Share-Based
Awards
The following table sets out information concerning
the option-based and share-based awards granted to our NEOs outstanding as at December 31, 2023:
| | |
Option-based Awards | |
| | |
| | |
Shared-based Awards | |
| Name and Principal Position | |
Number
of
Common
Shares
underlying
unexercised
options(1) | | |
Option
exercise
price
($) | |
Option
Expiration
Date | |
Value of
unexercised
in-the-
money
options(1) ($) | | |
Number
of
Shares
that
have
vested | | |
Number
of
Shares
that
have not
vested | | |
Market or
payout
value of
share-
based
awards
that
have not
vested(1)
($) | | |
Market or
payout
value of
vested
share-
based
awards
not paid
out or
distributed
($) | |
Daniel S. Goldberg
President and Chief Executive Officer | |
| 360,442 | | |
11.89 to 16.64 | |
April 2032 to May 2033 | |
| 476,766 | | |
| — | | |
| 801,512 | | |
| 11,076,896 | | |
| — | |
Andrew Browne
Chief Financial Officer | |
| 85,819 | | |
11.89 to 16.64 | |
April 2032 to May 2033 | |
| 113,515 | | |
| — | | |
| 145,207 | | |
| 2,006,761 | | |
| — | |
Glenn Katz
Chief Commercial Officer | |
| 68,655 | | |
11.89 to 16.64 | |
April 2032 to May 2033 | |
| 90,812 | | |
| — | | |
| 83,077 | | |
| 1,148,124 | | |
| — | |
Michael Schwartz
Senior Vice President, Corporate & Business Development | |
| 68,655 | | |
11.89 to 16.64 | |
April 2032 to May 2033 | |
| 90,812 | | |
| — | | |
| 132,019 | | |
| 1,824,503 | | |
| — | |
David Wendling
Chief Technical Officer | |
| 68,655 | | |
11.89 to 16.64 | |
April 2032 to May 2033 | |
| 90,812 | | |
| 41,360 | | |
| 103,757 | | |
| 1,433,922 | | |
| 571,595 | |
Note:
| (1) | Based on the closing share price per the TSX as of December 31, 2023, which was $13.82. |
Incentive Plan Awards — Value Vested
or Earned During the Year
The following table indicates, for each of our
NEOs, a summary of the value of the option-based and share-based awards vested in accordance with their terms during the year ended December
31, 2023:
| Name and Principal Position | |
Option-Based
Awards – Value
Vested During the Year
($) | | |
Share-Based Awards
–Value Vested During
the Year
($) | | |
Non- equity incentive
plan compensation –
Value earned during the year
($) | |
Daniel S. Goldberg,
President and Chief Executive Officer | |
| — | | |
| 3,755,820 | | |
| — | |
Andrew Browne,
Chief Financial Officer | |
| — | | |
| 671,956 | | |
| — | |
Glenn Katz
Chief Commercial Officer | |
| — | | |
| 80,924 | | |
| — | |
Michael Schwartz,
Senior Vice President, Corporate &Business Development | |
| — | | |
| 756,686 | | |
| — | |
David Wendling,
Chief Technical Officer | |
| — | | |
| 366,092 | | |
| — | |
Defined Benefits Plan Table
Telesat maintains a defined benefit pension plan
for certain of its employees, including the NEOs. Benefits under this defined benefit plan are based on the employee’s years of
service and the plan’s benefit formula.
Benefits under the defined benefit pension plan
are calculated by adding (i) 1/4% of the three-year average of the annual maximum pensionable earnings (which was
$66,600 for 2023); and (ii) 2.0% of the three-year average earnings in excess of the annual maximum
pensionable earnings. For the purposes of this formula, earnings include the annual salary and 75% of the lesser of actual or target performance
inventive for the specific year.
In respect of the NEOs, below is a table related
to Telesat’s defined benefit plan:
| | |
| | |
Annual benefits payable | | |
| | |
| | |
| | |
| |
| Name and Principal Position | |
Number of
years of
credited
service | | |
At
year
end(1) | | |
At age
65 | | |
Closing
present
value of
defined
benefit
obligation
($) | | |
Compensatory
change ($) | | |
Non-compensatory
change ($)(2) | | |
Opening
present
value of
defined
benefit
obligation
($) | |
Daniel
S. Goldberg,
President and Chief Executive Officer | |
| 17.3 | | |
| 826,000 | | |
| 1,128,000 | | |
| 12,658,000 | | |
| 821,000 | | |
| 1,747,000 | | |
| 15,226,000 | |
Andrew Browne,
Chief
Financial Officer | |
| 4.1 | | |
| 101,000 | | |
| 101,000 | | |
| 777,000 | | |
| 13,000 | | |
| 423,000 | | |
| 1,213,000 | |
Glenn Katz
Chief
Commercial Officer | |
| 2.2 | | |
| 41,000 | | |
| 105,000 | | |
| 168,000 | | |
| 139,000 | | |
| 308,000 | | |
| 615,000 | |
Michael Schwartz,
Senior
Vice President, Corporate & Business Development | |
| 10.8 | | |
| 249,000 | | |
| 249,000 | | |
| 3,856,000 | | |
| 0 | | |
| 254,000 | | |
| 4,110,000 | |
David Wendling,
Chief
Technical Officer | |
| 31.3 | | |
| 355,000 | | |
| 397,000 | | |
| 5,028,000 | | |
| 152,000 | | |
| 657,000 | | |
| 5,837,000 | |
Notes:
| (1) | As at December 31, 2023. |
| (2) | Non-compensatory changes include interest on liabilities and impact of any assumption changes. The values
shown are estimated based on assumptions and represent entitlements that may change over time. |
Termination and Change of Control Benefits
The following table describes the impact of certain
events upon the rights of holders of Telesat Corporation equity awards under the Omnibus Plan and the terms of participants’ employment
agreements and grant agreements, including termination for cause, resignation, retirement and termination other than for cause, termination
following a change of control, and death or long-term disability, except as may be otherwise determined by the Telesat Corporation Board
in its sole discretion:
|
Event |
|
Provisions |
| Termination for cause |
|
Immediate forfeiture of all vested and unvested equity awards |
| |
|
|
| Resignation, retirement and termination other than for cause |
|
Forfeiture of all unvested equity awards and expiry of vested equity awards the earlier of the original expiry date and 90 days after resignation, retirement or termination |
| |
|
|
| Termination without cause or resignation for good reason within 12 months following a change of control |
|
Acceleration of all unvested equity awards. Expiry of all equity awards 90 days after termination or resignation |
| |
|
|
| Long-term disability |
|
Forfeiture of all unvested equity awards and expiry of vested equity awards the earlier of the original expiry date and 12 months after date of long-term disability. |
| |
|
|
| Death |
|
Continued vesting of unvested equity awards for a period of 12 months and expiry of equity awards, including those that vest during such 12-month period, the earlier of the original expiry date and 12 months after date of death. |
The table below shows the incremental payments
that would be made to our NEOs under the terms of their employment and other agreements upon the occurrence of certain events, if such
events had occurred on December 31, 2023.
| Name and Principal Position | |
Event | |
Severance(1) | | |
Acceleration of
equity-based
awards ($)(2) | | |
Other
Payments ($) | | |
Total ($) | |
Daniel
S. Goldberg
President and Chief Executive Officer | |
Termination without cause or resignation with good reason | |
| 12,332,666 | | |
$ | 11,553,662 | | |
| 333,561 | | |
$ | 24,219,888 | |
Andrew Browne
Chief Financial Officer | |
Termination without cause or resignation with good reason | |
| 5,542,596 | | |
$ | 2,120,276 | | |
| 449,999 | | |
$ | 8,112,871 | |
Glenn Katz
Chief Commercial Officer | |
Termination without cause or resignation with good reason | |
| 1,397,574 | | |
$ | 1,238,936 | | |
| 51,777 | | |
$ | 2,688,287 | |
Michael Schwartz
Senior Vice President, Corporate & Business Development | |
Termination without cause or resignation with good reason | |
| 5,397,853 | | |
$ | 1,915,315 | | |
| 118,027 | | |
$ | 7,431,195 | |
David
Wendling
Chief Technical Officer | |
Termination without cause or resignation with good reason | |
| 1,998,930 | | |
$ | 1,524,734 | | |
| 133,835 | | |
$ | 3,657,499 | |
Notes:
| (1) | Severance payments are calculated based on the base salary and most recent annual bonus we paid to our
NEOs. |
| (2) | The value of equity-based awards was determined based upon the closing share price of the Class A
Common and Class B Variable Voting Shares on the TSX on December 31, 2023, which was $13.82. |
DIRECTOR COMPENSATION
Telesat has implemented a director compensation
program that attracts and retains global talent to serve on the Board, taking into account the risks and responsibilities of being an
effective director. Our objective regarding director compensation is to follow the best practices with respect to retainers and the format
and weighting of the cash and equity components of compensation, and the implementation of share ownership guidelines. We believe the
selected approaches have helped attract, and will help to attract and retain, strong members for the Board who will be able to fulfil
their fiduciary responsibilities without competing interests. The Board, through the Nominating & Corporate Governance Committee,
will be responsible for reviewing and approving any changes to the directors’ compensation arrangements.
Following best practice, Telesat does not offer
a meeting fee for directors. The total non-executive director retainer is deemed to be full payment for the role of director. The exception
to this approach would be in the event of a merger or acquisition, or other special circumstance that required more meetings than are
typically required, in which case a “special” fee may be granted. Also, an additional retainer premium is provided to the
chair and each of the members of the Audit Committee, the Human Resources & Compensation Committee and Nominating & Corporate
Governance Committee, as well as the lead director, to the extent one is appointed, to reflect the additional time commitment, level of
responsibility and skills required in such role.
The fee schedule for Telesat’s non-executive
directors is as follows:
| Type of Fee |
|
Position |
|
Amount(1) |
| Board Retainer |
|
Board Member |
|
$75,000
$100,000 Telesat
Corporation DSU Award(2) |
| |
|
|
|
|
| Committee Retainer |
|
Audit Committee Chair
Audit Committee Member
Human Resources & Compensation Committee Chair
Human Resources & Compensation Committee Member
Nominating & Corporate Governance Committee Chair
Nominating & Corporate Governance Committee Member |
|
$25,000
$10,000
$15,000
$7,500
$15,000
$7,500
$15,000
$7,500 |
| |
|
|
|
|
| Meeting Fees |
|
Board and Committee Meetings |
|
Nil |
Notes:
| (1) | Fees are paid in cash unless otherwise noted and subject to a non-execuitve director’s right to
elect receive DSUs in lieu of cash. |
| (2) | Represents the portion of the directors’ annual retainer initially taken as Telesat Corporation
DSUs. Any non-executive director may elect to receive up to 100% of their annual retainer in the form of DSUs in lieu of cash. All DSU
awards are payable upon cessation of membership on the Board. |
All directors are entitled to be reimbursed for
expenses reasonably incurred by them in their capacity as directors.
The table below shows compensation earned by directors
for the financial year ended December 31, 2023.
| Name | |
Fees
earned
($) | | |
Share-
based Awards
($) | | |
Option-Based Awards
($) | |
Non-equity incentive plan compen-sation ($) | |
Pension Value
($) | | |
All Other Compen-sation
($) | |
Total
($) | |
| Mr. Michael Boychuk | |
| 100,000 | | |
| 100,034 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 200,034 | |
| Mr. Jason A. Caloras(1) | |
| 44,153 | | |
| 58,983 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 103,136 | |
| Ms. Jane Craighead | |
| — | | |
| 207,522 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 207,552 | |
| Mr. Richard Fadden | |
| 82,500 | | |
| 100,034 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 182,534 | |
| Mr. Daniel Goldberg(2) | |
| N/A | | |
| N/A | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| N/A | |
| Mr. Henry Intven | |
| 100,000 | | |
| 100,034 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 200,034 | |
| Mr. David Morin(3) | |
| N/A | | |
| N/A | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| — | |
| Dr. Mark H. Rachesky | |
| — | | |
| 190,022 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 190,022 | |
| Mr. Guthrie Stewart | |
| 82,500 | | |
| 100,034 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 182,534 | |
| Mr. Michael B. Targoff | |
| — | | |
| 175,107 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 175,107 | |
| Ms. Melanie Bernier(4) | |
| N/A | | |
| N/A | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| — | |
| Ms. Janet Yeung (5) | |
| 31,048 | | |
| 41,323 | | |
N/A | |
N/A | |
| N/A | | |
N/A | |
| 72,371 | |
Notes:
| (1) | Mr. Caloras is an employee of MHR Fund Management LLC. Mr. Caloras resigned from his position as a director
of Telesat on August 2, 2023. |
| (2) | Mr. Goldberg is the Chief Executive Officer of Telesat and receives no compensation in his capacity as
a director of Telesat. |
| (3) | Mr. Morin is an employee of PSP Investments. In accordance with PSP Investments policy, PSP Investments’
nominees on the Board who are employees of PSP Investments are not eligible to receive Telesat Corporation DSUs or director fees. Mr.
Morin was appointed as a director of Telesat on February 7, 2023 |
| (4) | Ms. Bernier is an employee of PSP Investments. In accordance with PSP Investments policy, PSP Investments’
nominees on the Board who are employees of PSP Investments are not eligible to receive Telesat Corporation DSUs or director fees. Ms.
Bernier resigned from her position as a director of Telesat on February 7, 2023. |
| (5) | Ms. Yeung is an employee of MHR Fund Management LLC. Ms. Yeung was appointed as a director of Telesat
on August 2, 2023. |
Outstanding Share-Based Awards
The following table sets out information concerning
the share-based awards granted to our directors outstanding as at December 31, 2023:
| | |
| |
Option-based Awards | |
| | |
Share-based Awards | |
| Name | |
Number of Common
Shares underlying unexercised options(1) | |
Option exercise price
($) | |
Option expiration date | |
Value of unexercised in-the-money options
($) | | |
Number of
Shares that have not vested | | |
Market
or payout value of share-based awards that have not vested(1)
($) | | |
Market or payout value of vested share-based awards not paid out or distributed ($)(6) | |
| Mr. Michael Boychuk | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 189,641 | |
| Mr. Jason A. Caloras(1) | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 178,226 | |
| Ms. Jane Craighead | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 270,460 | |
| Mr. Richard Fadden | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 189,641 | |
| Mr. Daniel Goldberg(2) | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| N/A | | |
| N/A | | |
| N/A | |
| Mr. Henry Intven | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 189,641 | |
| Mr. David Morin(3) | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| - | |
| Dr. Mark H. Rachesky | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 257,304 | |
| Mr. Guthrie Stewart | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 189,641 | |
| Mr. Michael B. Targoff | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 246,027 | |
| Ms. Melanie Bernier(4) | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| - | |
| Ms. Janet Yeung(5) | |
N/A | |
N/A | |
N/A | |
| N/A | | |
| - | | |
| - | | |
| 11,609 | |
Notes:
| (1) | Mr. Caloras resigned from his position as a director of Telesat on August 2, 2023. |
| (2) | Mr. Goldberg is the Chief Executive Officer of Telesat and receives no compensation in his capacity as
a director of Telesat. |
| (3) | Mr. Morin was appointed as a director of Telesat on February 7, 2023 |
| (4) | Ms. Bernier resigned from her position as a director of Telesat on February 7, 2023. |
| (5) | Ms. Yeung was appointed as a director of Telesat on August 2, 2023. |
| (6) | The value of equity-based awards was determined based upon the closing share price of the Class A
Common and Class B Variable Voting Shares on the TSX on December 31, 2023, which was $13.82. |
Director Share Ownership Guidelines
We have implemented director share ownership guidelines
for directors to further align the interests of such directors with those of our Shareholders. The ownership guidelines establish minimum
equity ownership levels for each of our directors based on a multiple of their annual Board retainer. Such directors are expected to meet
the prescribed ownership levels within five years of the later of (i) completion of the Transaction and (ii) the date of their appointment
to the Board. Common Shares and the value of DSUs and any other equity-based awards will be included in determining an individual’s
equity ownership value. The ownership guideline for these directors is 3x their annual Board cash retainer.
Details of the Omnibus Long-Term Incentive
Plan
The interest of any participant in any Award is
not assignable or transferable, whether voluntary, involuntary, by operation of law or otherwise, other than by will or the laws of descent
and distribution, provided, however, that with the Board’s prior written consent and subject to certain conditions as the Board
may stipulate, Teleast Corporation Options may be transferred or assigned by a participant to a participant’s family or retirement
savings trust or any registered retirement savings plans or registered retirement income funds of which the participant is and remains
the annuitant.
The Omnibus Plan provides that appropriate adjustments,
if any, will be made by the Board in connection with a reclassification, reorganization or other change of our shares, share split or
consolidation, distribution, merger, arrangement or amalgamation, in the Telesat Public Shares issuable or amounts payable to preclude
a dilution or enlargement of the benefits under the Omnibus Plan.
The maximum number of Telesat Public Shares reserved
for issuance under our Omnibus Plan is currently 2,972,816 Telesat Public Shares, which represents 5.9% of the aggregate number of Telesat
Corporation Shares issued and outstanding as at December 31, 2023, on a diluted basis assuming the exchange of all Exchangeable Units
into Telesat Corporation Shares (not including any awards outstanding under the Historic Plans). At the Meeting, the Company will seek
the approval of Shareholders to increase the number of Telesat Public Shares reserved for issuance under the Omnibus Plan to 5,017,401,
which represents 10% of the aggregate number of Telesat Corporation Shares issued and outstanding as at the date of this Information Circular,
calculated on the same basis as set forth earlier in this paragraph. Shareholders of the Company are being asked to approve the increase
by a majority of votes cast and the full text of the resolution is set forth above in “Business to be Conducted at the Meeting —
Proposed Amendment to the Omnibus Incentive Plan”. For the purposes of calculating the maximum number of Telesat Public Shares reserved
for issuance under the Omnibus Plan and the Historic Plans, any issuance from treasury by Telesat that is issued in reliance upon an exemption
under applicable stock exchange rules applicable to equity based compensation arrangements used as an inducement to person(s) or company(ies)
not previously employed by and not previously an insider of Telesat shall not be included. All of the Telesat Public Shares covered by
Awards that are exercised or settled in cash or cancelled or terminated will again become available Telesat Public Shares for the purposes
of Awards that may be subsequently granted under the Omnibus Plan.
The maximum number of Telesat Public Shares that
are: (i) issued to insiders of Telesat within any one-year period; and (ii) issuable to insiders of Telesat at any time, in each case,
under the Omnibus Plan alone, or when combined with all of Telesat’s other security-based compensation arrangements cannot exceed
10% of the aggregate number of Telesat Corporation Shares issued and outstanding from time to time, on a diluted basis assuming the exchange
of all Exchangeable Units into Telesat Corporation Shares.
The total annual grant to any one non-employee
director under all share compensation arrangements shall not exceed an aggregate grant value of $100,000 in Options and $150,000 in equity,
other than with respect to any DSUs granted to a non-employee director in lieu of their cash retainer.
The Omnibus Plan does not provide for a maximum
number of shares which may be issued to an individual, other than an insider, pursuant to the Omnibus Plan and any other share compensation
arrangement (expressed as a percentage or otherwise).
Unless the Board determines otherwise at the time
of grant or issuance of the Award, when normal cash dividends (other than stock dividends) are paid on Telesat Public Shares, participants
shall receive additional DSUs, RSUs and/or PSUs, as applicable as of the dividend payment date (“Dividend Share Units”).
Dividend Share Units granted to a participant in accordance with the Omnibus Plan shall be subject to the same vesting conditions and
settlement terms as applicable to the related DSUs, RSUs and/or PSUs in accordance with the respective Award Agreement.
In connection with a change of control event of
Telesat, the Board may take such action as the Board in its sole discretion considers appropriate in the circumstances, including, without
limitation, (i) changing the vesting or manner of settlement of any Award, (ii) changing the expiry date or term of any Award, (iii) providing
for the substitution or replacement of Awards, including with awards of the surviving entity, or (iv) providing for the cancellation of
Awards, provided that all Awards to be so cancelled will first vest and become exercisable prior to such change of control event in accordance
with the provisions of the Omnibus Plan.
The Board may, in its sole discretion, suspend
or terminate the Omnibus Plan at any time, or from time to time, amend, revise or discontinue the terms and conditions of the Omnibus
Plan or of any Award granted under the Omnibus Plan and any grant agreement relating thereto, subject to compliance with applicable law
and any required shareholder, regulatory and/or NASDAQ, and, if applicable the TSX, approval, provided that any such amendment or revision
may not materially adversely affect the rights of a participant under the Omnibus Plan without such participant’s consent.
Pursuant to the terms of the Omnibus Plan, shareholder
approval is not required for the following amendments, and the Board may make any amendments to the Omnibus Plan or to any Awards from
time to time which may include but are not limited to:
| ● | any amendment to the vesting provisions, if applicable, or assignability provisions of Awards; |
| ● | any amendment regarding the effect of termination of a participant’s employment, engagement, contract
or office; |
| ● | any amendment which accelerates the date on which any Award may be exercised under the Omnibus Plan; |
| ● | any amendment to the definition of persons eligible to be participants under the Omnibus Plan; |
| ● | any amendment to add provisions permitting for the granting of cash-settled awards, a form of financial
assistance, or clawback and any amendment to a cash-settled award, financial assistance, dividend equivalent or clawback provision which
is adopted; |
| ● | any amendment necessary to comply with applicable law or the requirements of the NASDAQ, and, if applicable
the TSX, or any other regulatory body; |
| ● | any amendment of a “housekeeping” nature, including, without limitation, to clarify the meaning
of an existing provision of the Omnibus Plan, correct or supplement any provision of the Omnibus Plan that is inconsistent with any other
provision of the Omnibus Plan, correct any grammatical or typographical errors or amend certain definitions in the Omnibus Plan; |
| ● | any amendment regarding the administration of the Omnibus Plan; and |
| ● | any other amendment that does not require the approval of shareholders pursuant to the amendment provisions
of the Omnibus Plan, provided that the alteration, amendment or variance does not: (i) increase the maximum number of Telesat Public Shares
issuable under the Omnibus Plan, other than an adjustment pursuant to a change in capitalization; (ii) reduce the exercise price or purchase
price, as applicable, of Awards; (iii) extend the expiration date of an Award benefitting an insider, except in the case of an extension
due to a black-out period; (iv) remove or exceed the insider participation limits; (v) permit the transferability or assignability of
Awards, except as otherwise provided in the Omnibus Plan; or (vi) amend the amendment provisions of the Omnibus Plan. |
Pursuant to the terms of the Omnibus Plan, shareholder
approval is required for the following amendments:
| ● | any amendment to increase in the maximum number of Telesat Public Shares that may be issuable pursuant
to Awards granted under the Omnibus Plan other than an adjustment in the event of any stock dividend, stock split, combination or exchange
of Telesat Public Shares, merger, consolidation, spin-off or other distribution (other than normal cash dividends) of the Company’s
assets to Shareholders, or any other change in the Telesat Public Shares; |
| ● | any amendment that causes a (i) reduction in the exercise price or purchase price (in respect of the settlement
of RSUs, PSUs and/or DSUs) of an Award, as applicable, (ii) extension of the term of an Award, including the expiry date of an Option,
benefitting an insider, except in case of an extension due to a black-out period, or (iii) amendment providing for the cancellation and
reissue of Awards, other than an adjustment in the event of any stock dividend, stock split, combination or exchange of Telesat Public
Shares, merger, consolidation, spin-off or other distribution (other than normal cash dividends) of the Company’s assets to shareholders,
or any other change in the Telesat Public Shares; |
| ● | any amendment to remove or to exceed the insider participation limit set out in the Omnibus Plan; |
| ● | any amendment which would permit Options to be transferable or assignable other than by will or the laws
of descent and distribution (provided that Options may be transferred or assigned by a participant to a Permitted Assign (as defined in
the Omnibus Plan) with the Board’s prior written consent and subject to such conditions as the Board may stipulate; and |
| ● | any amendment to the sections dealing with which amendments require the approval of shareholders. |
Burn Rate
The annual burn rate for the Omnibus Plan, for
Fiscal 2022 and 2023, expressed as a percentage and calculated by dividing the number of equity awards granted during the financial year
by the weighted average number of Telesat Corporation Shares and Exchangeable Units outstanding is 1.6% and 2.8%, respectively. The burn
rate for Fiscal 2023 set forth below does not contemplate any awards made between January 1, 2024, and the date of this Information Circular.
| Burn rate |
|
2023 (%) |
|
2022 (%) |
| Number of equity awards granted /Basic weighted average number of Telesat Corporation Shares, Exchangeable Units and other securities outstanding at year end |
|
1,487,778 / 52,716,012 = 2.8% |
|
854,672/52,203,846 = 1.6% |
Equity Interests Subject to the Omnibus Long-Term
Incentive Plan and Historic Plans
The Omnibus Plan reserved a certain number of
Telesat Public Shares for issuance. The maximum number of Telesat Public Shares reserved for issuance under our Omnibus Plan is 2,972,816
Telesat Public Shares, which represents 5.9% of the aggregate number of Telesat Corporation Shares issued and outstanding as at December
31, 2023, on a diluted basis assuming the exchange of all Telesat Partnership Units into Telesat Corporation Shares (not including
any awards outstanding under the Historic Plans). During 2023, Telesat granted 550,519 stock options, 577,536 RSUs, 281,683 PSUs and 78,040
DSUs. As at April 25, 2024, 803,265 stock options, 904,604 RSUs, 786,205 PSUs and 152,329 DSUs are issued and outstanding.
The 2008 Telesat Plan reserved a certain number
of Telesat Non-Voting Participating Preferred Shares for issuance upon due exercise of Telesat Options. The 738,667 Telesat Options issued
and outstanding immediately prior to the completion of the Transaction were converted into 305,499 Telesat Corporation Options, of which
69,386 remain issued outstanding as at April 25, 2024. No further Telesat Options will be granted under the 2008 Telesat Plan.
The 2013 Telesat Plan reserved a certain number
of Telesat Non-Voting Participating Preferred Shares for issuance upon due exercise of Telesat Options. The 1,446,797 Telesat Options
issued and outstanding immediately prior to the completion of the Transaction were converted into 595,290 Telesat Corporation Options,
of which 54,283 remain issued outstanding as at April 25, 2024. No further Telesat Options will be granted under the 2013 Telesat Plan.
The RSU Plan reserved a certain number of Telesat
Non-Voting Participating Preferred Shares for issuance upon vesting of the Telesat RSUs awarded under the plan. The 3,530,000 Telesat
RSUs issued and outstanding under the RSU Plan (of which nil have vested) immediately prior to the completion of the Transaction were
converted into 1,460,008 Telesat Corporation RSUs, of which 641,768 remain issued and outstanding as at April 25, 2024. No further RSUs
will be granted under the RSU Plan.
INDEBTEDNESS OF DIRECTORS AND OFFICERS
None of the proposed directors or executive officers
of the Company are indebted to the Company.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table shows information, as at December
31, 2023, on the equity compensation plans under which shares are authorized for issuance.
|
Plan Category |
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a) |
Weighted-average
exercise price of
outstanding
options, warrants
and rights
(b) |
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in column (a))
(c) |
| Equity compensation plans approved by securityholders |
Historical plans |
199,634 stock options
641,768 restricted share units |
$38.76
- |
-
- |
| Omnibus Long Term Incentive Plan |
803,265 stock options
784,725 restricted share units
375,137 performance share units
124,616 deferred share units |
$13.38
-
-
- |
88,580
178,945
516,708
24,025 |
| Equity compensation plans not approved by securityholders |
- |
- |
- |
| Total |
2,087,743 |
$18.44 |
808,258 (1) |
Note:
| (1) | This figure represents 5.94% of the aggregate number of Telesat Corporation Shares issued and outstanding
as at December 31, 2023 (or 1.62%, assuming the exchange of all Exchangeable Units into Telesat Corporation Shares). |
For more information on the material features
of our equity-based compensation plans, see “Equity Interests Subject to the Historic Plans” and “Omnibus Long Term
Incentive Plan” above.
STATEMENT
OF GOVERNANCE PRACTICES
Capitalized
terms note otherwise defined in this Statement of Governance Practices have the meanings ascribed to such term in the “Glossary”
attached to this Information Circular at Appendix A.
Composition
of the Telesat Corporation Board of Directors
Under
the Telesat Corporation Articles and the Investor Rights Agreements, for so long as either PSP Investments or MHR (or, if applicable,
a person to whom PSP Investments or MHR has delegated its right to designate directors to the Telesat Corporation Board under the Telesat
Corporation Articles), is a 5% Holder, the Telesat Corporation Board will consist of ten directors, unless a change to the number of
directors of the Telesat Corporation Board is approved by a majority of the Specially Designated Directors then in office (in addition
to being approved by PSP Investments or MHR as required under their respective Investor Rights Agreements and the Telesat Corporation
Articles, if applicable).
The
Telesat Corporation Board, as constituted, includes the Chief Executive Officer of Telesat Corporation, three directors designated by
PSP Investments and its affiliates, three directors designated by MHR and its affiliates, and three independent directors who are unaffiliated
with MHR and PSP Investments designated by the Nominating & Corporate Governance Committee, each of whom must qualify as a Specially
Designated Director. Thereafter, the number of directors shall be set by resolution of the shareholders or as adjusted by the Telesat
Corporation Board from time to time, subject to the provisions of the BCBCA.
Until
the Special Nomination Termination Date, any designee of the Nominating & Corporate Governance Committee may be rejected by the Telesat
Corporation Board only for Good Cause (as defined in the Telesat Corporation Articles), in which case the Nominating & Corporate
Governance Committee shall have the right to designate a substitute designee.
Following
the Special Nomination Termination Date, approval of the Telesat Corporation Board will be required for the appointment of three of the
designees proposed by the Nominating & Corporate Governance Committee, though until the Special Board Date, such approval is not
to be unreasonably withheld and approval of at least a majority of the Specially Designated Directors then in office, not to be unreasonably
withheld, will also be required. In addition, for purposes of Telesat Corporation’s annual meeting of shareholders to be held in
calendar year 2024, three of the designees proposed by the Nominating & Corporate Governance Committee may instead be designated
by a subset of its members selected by the Telesat Corporation Board, with any such subset of the members of the Nominating & Corporate
Governance Committee to be selected by the Telesat Corporation Board and to include at least the three members required to be appointed
to the Nominating & Corporate Governance Committee under the Telesat Corporation Articles.
Pursuant
to the Investor Rights Agreements, if PSP Investments or MHR, respectively, decreases their respective aggregate ownership of Telesat
Corporation Shares and Exchangeable Units at any time such that it owns less than 25%, 15% or 5%, respectively, of all of the issued
and outstanding Telesat Corporation Shares and Exchangeable Units as of the completion of the Transaction, the number of directors which
such party is entitled to designate to the Telesat Corporation Board will decrease to two, one and zero, respectively. The number of
independent directors that the Nominating & Corporate Governance Committee may designate to the Telesat Corporation Board will be
increased by one each time the number of designees PSP Investments or MHR (or, if applicable, a person to whom PSP Investments or MHR
has delegated its right to designate directors to the Telesat Corporation Board under the Telesat Corporation Articles) is entitled to
designate is reduced by one, until there are no such designees. In general, such independent directors must be Canadian.
Directors
of Telesat Corporation may only be removed with an affirmative vote of at least 75% of the votes attached to the outstanding Telesat
Corporation Shares and Special Voting Shares, voting together as a single class. However, if PSP Investments or MHR (or one of its respective
assignees, if applicable) provides written notice to Telesat Corporation that one of the directors that it had designated to the Telesat
Corporation Board will resign, the delivery of such notice will be deemed such designator’s resignation.
Such
resignation will be effective immediately upon receipt of such written notice by Telesat Corporation without consent or acceptance of
the Telesat Corporation Board or any of its shareholders.
The
Telesat Corporation Board has established three committees in accordance with the terms of the Telesat Corporation Articles: the Audit
Committee, the Nominating & Corporate Governance Committee, and the Human Resources & Compensation Committee (each as defined
below). See the remainder of this section and “— Committees of our Board of Directors” for a further description of
the committees.
Canadian
Director and Committee Member Requirements
The
Telesat Corporation Articles include certain requirements of directors of Telesat Corporation, so Telesat Corporation may maintain its
status as a Canadian (for the purposes of this section, as defined in the Investment Canada Act) controlled entity. These requirements
include that, prior to the occurrence of an Unwind Trigger, at least a majority of the Telesat Corporation Board be comprised of directors
who are both (i) Canadian (as defined in the Investment Canada Act) and (ii) nominated for election by either: (x) the Nominating
& Corporate Governance Committee, if comprised of a majority of Canadian directors, (y) PSP Investments, or its affiliates, or (z)
a shareholder who is Canadian.
Additionally,
until the occurrence of an Unwind Transaction, at least a majority of the directors serving on each of the Audit Committee, the Nominating
& Corporate Governance Committee, the Human Resources & Compensation Committee and any other committee formed in accordance with
the Telesat Corporation Board, is required to be both (i) Canadian and (ii) nominated for election by either: (x) the Nominating &
Corporate Governance Committee, if comprised of a majority of Canadian directors, (y) PSP Investments, or its affiliates, or (z) a Shareholder
who is Canadian; provided that no committee member designated by MHR (or its assignee, if applicable) shall be required to be Canadian.
Nomination
Rights of Principal Shareholders
As
described above, under the Investor Rights Agreements, Telesat Corporation’s principal shareholders, namely PSP Investments and
MHR and their affiliates, are each granted a right to nominate three directors to the Telesat Corporation Board. Further, so long as
the applicable principal shareholder has the right to designate at least one director to the Telesat Corporation Board, it will have
the right, though not the obligation, to select one of the directors it designated to the Telesat Corporation Board to serve on or be
an observer to Telesat Corporation’s Audit Committee, Human Resources & Compensation Committee, and Nominating & Corporate
Governance Committee or any other committee which may be formed in accordance with Telesat Corporation’s Articles (provided that
the mandate of such committee is not solely to consider any contract or transaction between Telesat Corporation and the applicable principal
shareholder or any of its affiliates).
Pursuant
to the Investor Rights Agreements, PSP Investments and MHR agree, among other things, to not (i) call or knowingly facilitate the calling
of a special meeting of the shareholders of Telesat Corporation or the partners of Telesat Partnership for the purpose of the election
or removal of any directors of Telesat Corporation or amendments to the Telesat Corporation Articles or the Partnership Agreement, (ii)
initiate proposals for action by the shareholders of Telesat Corporation or the partners of Telesat Partnership for the purpose of the
election or removal of any directors of Telesat Corporation or amendments to the Telesat Corporation Articles or the Partnership Agreement
or (iii) request that Telesat Corporation or the Telesat Corporation Board take any action that is inconsistent with the foregoing.
The
Investor Rights Agreements allow each of PSP Investments and MHR to transfer its respective right to designate one member of the Telesat
Corporation Board to a third party if the applicable principal shareholder transfers an amount of Telesat Public Shares, Class C
Shares, Exchangeable Units or any right or security that is exercisable for, convertible into or exchangeable for Telesat Corporation
Shares representing (i) at least 9.9% of the issued and outstanding Telesat Corporation Shares on a fully diluted basis as of the completion
of the Transaction and (ii) at least 5% of the issued and outstanding Telesat Corporation Shares on a fully diluted basis at the time
of such transfer. The acquirer’s right to designate one member to the Telesat Corporation Board will terminate upon the date that
such acquirer holds Telesat Corporation Shares, Exchangeable Units or any right or security that is exercisable for, convertible into
or exchangeable for Telesat Corporation Shares representing less than 5% of the issued and outstanding Telesat Corporation Shares on
a fully diluted basis. Telesat Corporation agrees to take certain actions to reasonably cooperate with PSP Investments and/or MHR to
facilitate a sale of PSP Investments’ or MHR’s Telesat Corporation Shares or Exchangeable Units, as applicable, to a third
party, at PSP Investments’ and/or MHR’s sole cost and expense, for so long as PSP Investments or MHR, as applicable, beneficially
owns at least 10% of the Telesat Corporation Shares or Exchangeable Units on a fully diluted basis.
Additional
negotiated rights of PSP Investments and MHR are contained in the Telesat Corporation Articles and Partnership Agreement, and are discussed
under “Description of Share Capital and Voting Structure.”
Director
Independence
Pursuant
to NASDAQ Rule 5605, an “independent director” means a person other than an executive officer or employee of the company
to whose board they are appointed to or any other individual having a relationship which, in the opinion of such company’s board
of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In addition,
the NASDAQ Marketplace Rules contain certain “bright-line” tests of independence that a board of directors must consider
before making a determination of independence. Under NI 58-101, a director is considered to be independent if he or she is independent
within the meaning of Section 1.4 of National Instrument 52-110 — Audit Committees of the securities commissions and similar regulatory
authorities in all of the provinces and territories in Canada (“NI 52-110”). Pursuant to NI 52-110, an independent
director is a director who is free from any direct or indirect material relationship with Telesat which could, in the view of the Telesat
Corporation Board, be reasonably expected to interfere with the exercise of a director’s independent judgment.
Based
upon information requested from and provided by each director concerning his or her background, employment and affiliations, including
family relationships, the Telesat Corporation Board has determined that all of the members of the Telesat Corporation Board, other than
Daniel S. Goldberg and Michael Targoff, representing two of its ten directors, are “independent” within the meaning of NI 58-101
and NASDAQ Rule 5605. Telesat’s Chief Executive Officer, Daniel S. Goldberg, is not independent as a result of his position with
Telesat Corporation. Michael Targoff is not independent because he received certain consulting fees under a consulting agreement entered
into between Mr. Targoff and Loral on December 14, 2012, pursuant to which he was engaged as a part-time consultant to the board of directors
of Loral to assist with respect to the oversight of strategic matters relating to Telesat Canada and XTAR, LLC. Mr. Targoff received
consulting fees of US$120,000 per month before deduction of certain net expenses for which he reimbursed Loral. For the year ended December
31, 2021, Mr. Targoff earned US$1,272,000 (before his expense reimbursement to Loral of US$39,750). This agreement was terminated effective
November 18, 2021.
Pursuant
to the Telesat Corporation Articles, the Telesat Corporation Board must also include three Specially Designated Directors for so long
as either PSP Investments or MHR (or either of their respective affiliates) has the right to designate at least one director to the Telesat
Corporation Board pursuant to their respective Investor Rights Agreements, as described above under “— Composition of the
Telesat Corporation Board and Committees.” A “Specially Designated Director” is a director who (i) is initially designated
as a Specially Designated Director or is nominated as a Specially Designated Director by the Nominating & Corporate Governance Committee
(or, for purposes of Telesat Corporation’s annual meeting of shareholders to be held in calendar year 2024, a subset thereof) and
not designated to the Telesat Corporation Board by either PSP Investments or MHR, (ii) (x) satisfies the independence requirements of
the applicable U.S. and/or Canadian securities exchanges on which the Telesat Public Shares are listed, (y) is “independent”
of Telesat Corporation within the meaning of NI 52-110 and (z) is “independent” of Telesat Corporation within the meaning
of Section 10A(m)(3)(B) of the United States Securities Exchange Act of 1934, (iii) is not an affiliate or associate of MHR, PSP Investments
or any other person with a contractual right to designate director nominees (or their respective affiliates), (iv) together with such
person’s immediate family and affiliates, has not received compensation or payments from MHR, PSP Investments or any other person
with a contractual right to designate director nominees (or their respective affiliates) in any of the past three years in an amount
in excess of US$120,000 per annum, excluding for these purposes any directors fees, and (v) is Canadian (as defined in the Investment
Canada Act).
Director
Term Limits and Other Mechanisms of Telesat Corporation Board Renewal
The
Telesat Corporation Board has not adopted director term limits or other automatic mechanisms of renewal of its members. Rather than adopting
formal term limits, mandatory age-related retirement policies and other mechanisms of board renewal, the Nominating & Corporate Governance
Committee of the Telesat Corporation Board will seek to maintain the composition of the Telesat Corporation Board in a way that provides,
in the judgment of the Telesat Corporation Board, the best mix of skills and experience to provide for Telesat Corporation’s overall
stewardship. The Nominating & Corporate Governance Committee also is expected to conduct an annual assessment of the Telesat Corporation
Board, each committee, the Chair, each committee chair and each director regarding their effectiveness, efficiency and performance, and
to report evaluation results to the Telesat Corporation Board. See also “— Nominating & Corporate Governance Committee”
and “— Diversity Policy”.
Meetings
of Independent Directors and Conflicts of Interest
The
Telesat Corporation Board holds regularly scheduled meetings, as well as ad hoc meetings from time to time. The independent members of
the Telesat Corporation Board meet regularly, and upon any member’s request without the non-independent directors and members of
management, and as may be required by NASDAQ or, if applicable, TSX listing standards from time to time. The Telesat Corporation Board
has appointed an independent chair of the Telesat Corporation Board (the “Chair”).
In
2023, the independent members of the Telesat Corporation Board met without the non-independent directors and management three times.
To
the extent that Telesat Corporation does not have an independent Chair, it will arrange for the appointment of a lead director (the “Lead
Director”) whose responsibilities will be to ensure that the directors who are independent have opportunities to meet without
management and non-independent directors present, as required, and to provide leadership for the independent directors on the Telesat
Corporation Board. To the extent required, a Lead Director will be appointed and replaced from time to time by a majority vote of the
directors who are independent, provided that such Lead Director is and will be at all times an independent director (as determined under
the NASDAQ rules and NI 58-101). The Telesat Corporation Board will adopt a written position description for a Lead Director, to
the extent one is appointed, which provides, among other things, that the Lead Director will be responsible for: (a) providing leadership
to ensure that the Telesat Corporation Board functions independently of management of Telesat Corporation, (b) providing leadership
to foster the effectiveness of the Telesat Corporation Board, (c) suggesting items of importance for consideration on the agenda for
Telesat Corporation Board meetings, (d) chairing each board meeting, or the portion thereof, at which only independent directors are
present, as may be required from time to time, (e) ensuring that the independent directors have the opportunity to meet separately in
camera, without non-independent directors and senior executives present, (f) working with the Chair and the Chief Executive Officer to
enhance the effectiveness and performance of the Telesat Corporation Board, as well as the committees and individual directors of the
Telesat Corporation Board, and (g) performing additional duties as requested by the Telesat Corporation Board.
Conflicts
of Interest and Related Party Transactions
Certain
of our directors and officers are associated with other companies or entities, which may give rise to conflicts of interest. In accordance
with Part 5 — Division 3 — Conflicts of Interest under the BCBCA, in the event that a director or senior officer (i) has
a material interest in a contract or proposed contract or transaction that is material to an issuer or (ii) is a director or senior officer
of, or has a material interest in, a person who has a material interest in the contract or transaction (a “disclosable interest”),
the director or senior officer shall disclose his or her disclosable interest in such contract or transaction and the director shall
refrain from voting on any matter in respect of such contract or transaction, subject to and in accordance with the BCBCA. To the extent
that conflicts of interest arise, such conflicts will be resolved in accordance with the provisions of the BCBCA and applicable internal
corporate governance or polices of the Telesat Corporation Board, as applicable.
The
Nominating & Corporate Governance Committee assists the Telesat Corporation Board in relation to related party transactions and other
matters involving conflicts of interest unless such matters are within the mandate of the Company’s Audit Committee. The Audit
Committee establishes and periodically reviews the Company’s policies and procedures for reviewing and approving or ratifying related
party transactions. The Company has adopted a written Code of Ethics which provides that all members of senior management (defined therein
as the CEO and direct reports of the CEO) of the Company and the Telesat Corporation Board shall disclose to the CFO or CEO any material
proposed transaction, including related party transactions, or a relationship that could be expected to give rise to a conflict. The
CFO or CEO will coordinate with the General Counsel to notify the Audit Committee, as may be necessary. No action may be taken with respect
to such transaction or party unless and until such action has been approved by the Telesat Corporation Board or a duly authorized committee
of the Telesat Corporation Board. A copy of the Code of Ethics can be obtained on the Company’s website at www.telesat.com.
Quorum
A
quorum at any meeting of the Telesat Corporation Board consists of a majority of the directors then in office. Until the Special Board
Date, such quorum will also require a majority of the Specially Designated Directors then in office. Further, prior to the occurrence
of an Unwind Trigger, a quorum will also require that a majority of the members of the Telesat Corporation Board present must be comprised
of directors who are both (i) Canadian (for the purposes of this section, as defined in the Investment Canada Act) and (ii) nominated
for election by either: (x) the Nominating & Corporate Governance Committee, if comprised of a majority of Canadian directors, (y)
PSP Investments, or its affiliates, or (z) a shareholder who is Canadian. A director holding a disclosable interest in a contract or
transaction to be considered at a meeting, if present at the meeting, is to be counted in a quorum notwithstanding such director’s
interest.
Majority
Voting Policy
In
accordance with the requirements of the TSX, the Telesat Corporation Board has adopted a “Majority Voting Policy” that will
require a nominee for election as a director who does not receive a greater number of votes “for” than votes “withheld”
with respect to the election of directors by shareholders to tender a resignation to the Chair promptly following the applicable meeting
of shareholders. Under the terms of the Majority Voting Policy, our Nominating & Corporate Governance Committee will be required
to consider such resignation and make a recommendation to the Telesat Corporation Board on whether such resignation should be accepted.
The Majority Voting Policy requires that the Telesat Corporation Board shall promptly accept the resignation unless it determines, in
consultation with the Nominating & Corporate Governance Committee, that there are exceptional circumstances that should delay the
acceptance of the resignation or justify rejecting it. The Telesat Corporation Board will be required to make its decision and announce
it in a press release within 90 days following the meeting of shareholders. A director who tenders a resignation pursuant to the Majority
Voting Policy will not be permitted to participate in any meeting of the Telesat Corporation Board or the Nominating & Corporate
Governance Committee at which the resignation is considered.
Diversity
Policy
The
members of the Telesat Corporation Board and Telesat Corporation’s executive team have varying backgrounds and expertise and were
selected or nominated, both by Telesat Corporation and by MHR and PSP Investments (pursuant to the terms of the Investor Rights Agreements
further described herein), on the belief that Telesat Corporation and its stakeholders will benefit from a broad range of talent and
cumulative experience. As a result, Telesat Corporation has not adopted a formal written policy with respect to board diversity, and
in particular gender diversity. However, Telesat Corporation is committed to increasing diversity on the Telesat Corporation Board and
has set a goal of having women represent at least 30% of the members of the Telesat Corporation Board. Following the Meeting, and assuming
that all director nominees are elected, two of Telesat Corporation’s ten directors (or 20% of the Telesat Corporation Board) will
be women and one of the four directors nominated by Telesat Corporation (or 25%) will be a woman. As Telesat Corporation has now completed
its second full year as a public company, Telesat Corporation is diligently working towards identifying appropriate and qualified candidates
to join the Telesat Corporation Board in an effort to achieve the 30% goal that has been set.
While
Telesat Corporation believes that the current composition of the Board is highly effective, Telesat Corporation is mindful of the benefits
that increased diversity on the Telesat Corporation Board and in the executive team can bring to Telesat Corporation, including enhanced
performance, effectiveness, and decision-making abilities. To this end, in searches for new candidates, as one of several factors, Telesat
Corporation considers the level of diversity, including female representation, on the Telesat Corporation Board and in executive officer
roles. Further, Telesat Corporation continuously monitors the level of female representation and seeks to recruit qualified female candidates
as part of its overall recruitment and selection process to fill openings, as the need arises, through vacancies, growth or otherwise.
Consistent with the Corporation Governance Guidelines, the Nominating & Corporate Governance Committee must take into account a variety
of criteria, including skills, qualifications, experience and diversity, with consideration to the level of representation of women and
other diverse candidates, when identifying, reviewing and evaluating candidates to serve as directors and executive officers of Telesat
Corporation. Further, the Telesat Corporation Board may identify for the Nominating & Corporate Governance Committee certain business,
financial, industry, diversity or other general attributes desirable in any of such persons, and request that the Nominating & Corporate
Governance Committee (i) nominate a candidate for election at the next meeting of shareholders, or (ii) fill an actual or anticipated
vacancy on the Telesat Corporation Board, in each case, with an individual who has such attributes and who is approved in accordance
with the Telesat Corporation Articles and, in each case, the Nominating & Corporate Governance Committee shall use its reasonable
efforts to comply with any such requests. The Telesat Corporation Board will also continue to assess, on an annual basis, whether a formal
diversity policy is necessary in order to retain and recruit the best candidates for available openings.
Orientation
and Continuing Education
The
Telesat Corporation Board conducts an orientation program for new directors under which a new director will meet with the Chair, members
of senior management and Telesat Corporation’s secretary. New directors will be provided with comprehensive orientation and education
as to the nature and operation of Telesat Corporation and its business, the role of the Telesat Corporation Board and its committees,
and the contribution that an individual director is expected to make. The Nominating & Corporate Governance Committee is responsible
for overseeing director continuing education designed to maintain or enhance the skills and abilities of the directors and to ensure
that their knowledge and understanding of Telesat Corporation’s business and operations remains current. The chair of each committee
is responsible for coordinating orientation and continuing director development programs relating to the committee’s mandate.
Position
Descriptions
The
Telesat Corporation Board has adopted a written position description for the Chair, setting out the Chair’s key responsibilities,
including, among others, duties relating to setting meeting agendas for the Telesat Corporation Board, chairing board and shareholder
meetings of Telesat Corporation, director development and communicating with shareholders and regulators.
The
Telesat Corporation Board has adopted a written position description for each of the committee chairs, which sets out such committee
chair’s key responsibilities, including, among others, duties relating to setting committee meeting agendas, chairing committee
meetings and working with the committee and management to ensure, to the greatest extent possible, the effective functioning of the committee.
The
Telesat Corporation Board has adopted a written position description for Telesat Corporation’s Chief Executive Officer, setting
out its key responsibilities, including, among others, duties in relation to providing overall leadership, ensuring the development of
a strategic plan and recommending such plan to the Telesat Corporation Board for consideration, ensuring the development of an annual
corporate plan and budget that supports the strategic plan and recommending such plan to the Telesat Corporation Board for consideration
and supervising day-to-day management and communicating with shareholders and regulators.
Mandate
of the Telesat Corporation Board
The
Telesat Corporation Board is responsible for supervising the management of the business and affairs of Telesat Corporation, including
providing guidance and strategic oversight to management. The Telesat Corporation Board has adopted a formal mandate, set forth at Appendix
“B”, that includes the following:
| ● | selecting,
appointing and supervising the Chief Executive Officer and approving the compensation of the Chief Executive Officer; |
| ● | taking
steps to satisfy itself as to the integrity of the Chief Executive Officer and other senior executive officers and that the Chief Executive
Officer and other senior executive officers create a culture of integrity throughout the organization; |
| ● | adopting
a strategic planning process and approving management’s strategic and business plans; and |
| ● | risk
identification and ensuring that procedures are in place for the management of those risks. |
The
following table shows meeting attendance records for all Directors from January 1, 2022 to December 31, 2023.
| Name
of Director | |
Board | |
Audit
Committee | |
Nominating
&
Corporate
Governance
Committee | |
Human
Resources
& Compensation
Committee |
| Michael
Boychuk | |
4/4 | |
4/4 | |
N/A | |
N/A |
| Jason
A. Caloras(1) | |
2/2 | |
N/A | |
N/A | |
N/A |
| Jane Craighead | |
4/4 | |
4/4 | |
3/3 | |
4/4 |
| Richard Fadden | |
4/4 | |
N/A | |
2/3 | |
N/A |
| Daniel Goldberg | |
4/4 | |
4/4 | |
3/3 | |
4/4 |
| Henry Intven | |
4/4 | |
4/4 | |
3/3 | |
N/A |
| David Morin | |
3/4 | |
N/A | |
3/3 | |
N/A |
| Mark H. Rachesky | |
4/4 | |
N/A | |
3/3 | |
4/4 |
| Guthrie Stewart | |
3/4 | |
N/A | |
N/A | |
4/4 |
| Michael Targoff | |
4/4 | |
N/A | |
N/A | |
N/A |
| Janet
Yeung(2) | |
2/2 | |
N/A | |
N/A | |
N/A |
Note:
| (1) | Mr.
Caloras resigned from the Telesat Corporation Board of Directors on August 2, 2023. |
| (2) | Ms.
Yeung joined the Telesat Corporation Board of Directors on August 2, 2023. |
Directors’
Service Contracts
There
are no directors’ service contracts with Telesat Corporation or any of its subsidiaries providing for benefits upon termination
of employment. One of our directors, Daniel S. Goldberg, also serves as Chief Executive Officer of Telesat Canada. For information regarding
the benefits upon termination of employment contained in his employment agreement, see Employment Agreements, Termination and Change
of Control Benefits — Daniel S. Goldberg, President and Chief Executive Officer.
Committees
of our Board of Directors
Under
the Telesat Corporation Articles, in addition to the three committees described below, and subject to the rights of PSP Investments and
MHR contained in their respective Investor Rights Agreements, prior to both the Special Board Date and the Unwind Trigger, the Telesat
Corporation Board may establish additional committees of Telesat Corporation with the approval of a majority of the Specially Designated
Directors then in office. Prior to the occurrence of an Unwind Trigger, at least a majority of the members of each committee must meet
the requirements to maintain Telesat Corporation’s status as a Canadian controlled entity described above under “Statement
of Governance Practices — Canadian Director and Committee Member Requirements.”
Subject
to the rights of PSP Investments and MHR contained in their respective Investor Rights Agreements and the rights of the Specially Designated
Directors provided in the Telesat Corporation Articles, each as described above, the Telesat Corporation Board has the ability to change
the membership of, or fill vacancies in, or appoint members or observers to, any of its committees.
The
members of the Telesat Corporation Board may delegate to a new committee any of their powers, other than: the power to fill vacancies
in the Telesat Corporation Board, the power to change the membership of (or fill vacancies in) any committee of the Telesat Corporation
Board, the power to declare dividends or other distributions to the Telesat Corporation’s shareholders, the power to appoint or
remove officers appointed by the Telesat Corporation Board and, subject to limited exceptions, the power to issue securities of Telesat
Corporation. However, such delegation requires the approval of a majority of all of the directors then in office, which must include
at least one designee appointed by PSP Investments, if one is serving, at least one designee appointed by MHR, if one is serving, and
one Specially Designated Director, for so long as either PSP Investments or MHR is a 5% Holder.
Audit
Committee
The
Audit Committee must be comprised of at least three members, including at least one designee appointed by PSP Investments, for so long
as PSP Investments has the right to designate at least one director to the Telesat Corporation Board pursuant to its Investor Rights
Agreement, one designee appointed by MHR, for so long as MHR has the right to designate at least one director to the Telesat Corporation
Board pursuant to its Investor Rights Agreement, and one Specially Designated Director. The Audit Committee is comprised of Michael Boychuk,
Jane Craighead and Henry Intven. Michael Boychuk serves as the chair of the Audit Committee. Except for Mr. Boychuk as the first
chair of the Audit Committee, the chair of the Audit Committee is required to be a Specially Designated Director. All members of the
Audit Committee are persons determined by the Telesat Corporation Board to be both independent directors and financially literate within
the meaning of NI 52-110. Each of the Audit Committee members has an understanding of the accounting principles used to prepare
financial statements and varied experience as to the general application of such accounting principles, as well as an understanding of
the internal controls and procedures necessary for financial reporting.
The
Telesat Corporation Board has adopted a written charter attached to this Information Circular at Appendix “C” setting forth
the purpose, composition, authority and responsibility of the Audit Committee, consistent with NI 52-110 and NASDAQ Rule 5605(c)(1).
The Audit Committee assists the Telesat Corporation Board in fulfilling its oversight of:
| ● | the
integrity of Telesat Corporation’s financial statements and related information; |
| ● | Telesat
Corporation’s compliance with applicable legal and regulatory requirements; |
| ● | the
independence, qualifications and appointment of Telesat Corporation’s auditor; |
| ● | risk
management and internal control over financial reporting and disclosure controls and procedures; and |
| ● | the
administration, funding and investment of Telesat Corporation’s pension plans and pension fund. |
| ● | The
Audit Committee is also responsible for: |
| ● | appointing,
compensating, retaining and overseeing the work of Telesat Corporation’s principal accounting firm; |
| ● | establishing
procedures for (a) the receipt, retention and treatment of complaints received by Telesat Corporation regarding accounting, internal
controls or auditing matters and (b) confidential, anonymous submission of complaints by employees regarding questionable accounting
or auditing matters; |
| ● | pre-approving
all engagements for permitted non-audit services provided by Telesat Corporation’s auditor to Telesat Corporation; and |
| ● | reviewing
with management and recommending to the Telesat Corporation Board for approval, the annual consolidated financial statements of Telesat
Corporation. |
Pursuant
to its charter, the Audit Committee has the authority to engage outside counsel and other outside advisors as it deems appropriate to
assist it in the performance of its functions.
External
Auditor Service Fee
For
the year ended December 31, 2023 (“Fiscal 2023”) and the year ended December 31, 2022 (“Fiscal 2022”),
Telesat, including some of our subsidiaries, incurred the following fees by its external auditor, Deloitte:
| (in
thousands of Canadian dollars) | |
Fiscal
2023 | | |
Fiscal
2022 | |
| Audit fees(1) | |
$ | 3,531 | | |
$ | 3,934 | |
| Audit-related fees(2) | |
| 229 | | |
| 240 | |
| Tax fees(3) | |
| 88 | | |
| 112 | |
| All
other fees(4) | |
| 4 | | |
| 3 | |
| Total
fees paid | |
$ | 3,672 | | |
$ | 4,289 | |
Notes:
| (1) | Audit fees were for professional services rendered by Deloitte for
the audit of Telesat’s annual financial statements and for the reviews of its quarterly financial statements for the year ended
December 31, 2023 and 2022. In addition, in the year ended December 31, 2022, the fees included services associated with the
proxy statement/prospectus in connection with the Transaction. |
| (2) | The
audit related fees for both periods also include fees for the audits of Telesat Canada’s
pension plans, the French translation of the financial statements and for other miscellaneous
audits. |
| (3) | The
2023 and 2022 tax fees include amounts related to Scientific Research & Experimental
Development tax credit services. |
| (4) | The
2023 and 2022 other fees related to access to on-line accounting research services. |
The
Audit Committee must approve all audit, audit-related and permitted non-audit services to be provided by Deloitte and their related fees.
Fees related to the annual audits of Telesat Corporation’s consolidated financial statements are specifically approved by the Audit
Committee on an annual basis. All fees for other audit and audit-related services are pre-approved annually or more frequently, if required.
The Audit Committee considers whether the provision of non-audit services is compatible with maintaining Deloitte’s independence.
Human
Resources & Compensation Committee
The
Human Resources & Compensation Committee must be comprised of at least three members, including at least one designee appointed by
PSP Investments, for so long as PSP Investments has the right to designate at least one director to the Telesat Corporation Board pursuant
to its Investor Rights Agreement, one designee appointed by MHR, for so long as MHR has the right to designate at least one director
to the Telesat Corporation Board pursuant to its Investor Rights Agreement, and one Specially Designated Director.
The
three directors comprising the Human Resources & Compensation Committee are Jane Craighead, Guthrie Stewart and Mark Rachesky, all
of whom have extensive executive and senior management experience required to provide effective oversight to the Company’s human
resources and compensation plans. The members of the Human Resources & Compensation Committee acquired their knowledge and skills
through prior roles, some of which include other senior executive officer positions of large, publicly traded companies and other directorship
roles. Jane Craighead serves as chair of the Human Resources & Compensation Committee and has direct experience that is relevant
to her responsibilities in executive compensation. Under U.S. and Canadian securities laws and applicable exchange rules, there are heightened
independence standards for members of the Human Resources & Compensation Committee. All of the Human Resources & Compensation
Committee members meet this heightened standard and will also be independent for purposes of NI 58-101 and NASDAQ 5605.
For
more information on the occupations, skills, experience and independence of each Human Resources & Compensation Committee member,
please refer to the director profiles contained in the “Business to be Conducted at the Meeting” section of this Information
Circular.
The
Telesat Corporation Board has adopted a written charter setting forth the purpose, composition, authority and responsibility of the Human
Resources & Compensation Committee pursuant to the rules of the NASDAQ and the SEC, and consistent with the Corporate Governance
Guidelines (subject to the rights of MHR and PSP Investments under the Telesat Corporation Articles and the Investor Rights Agreements).
The Human Resources & Compensation Committee’s purpose is to assist the Telesat Corporation Board in its oversight of executive
compensation, management development and succession, director compensation and executive compensation disclosure.
The
principal responsibilities and duties of the Human Resources & Compensation Committee include:
| ● | reviewing
at least annually Telesat Corporation’s executive compensation plans; |
| ● | reviewing
annually the compensation of Telesat Corporation’s Chief Executive Officer, taking into account the performance of Telesat Corporation’s
Chief Executive Officer in light of pre-established goals and performance objectives and, based on such evaluation, recommending to the
Telesat Corporation Board the Chief Executive Officer’s annual compensation; |
| ● | reviewing
on an annual basis the compensation structure for Telesat Corporation’s senior executive officers taking into account the performance
of such senior executive officers’ in light of preestablished goals and performance objectives and make recommendations to the
Telesat Corporation Board with respect to the compensation for such officers; |
| ● | assessing
the competitiveness and appropriateness of Telesat Corporation’s policies relating to the compensation of executive officers on
an annual basis; and |
| ● | reviewing
and, if appropriate, recommending to the Telesat Corporation Board the approval of any adoption, amendment and termination of Telesat
Corporation’s incentive compensation plans, overseeing their administration, and discharging any duties imposed on the Human Resources
& Compensation Committee by any of those plans. |
Further
particulars of the process by which compensation for Telesat Corporation’s executive officers is determined is provided under the
heading “Executive Compensation.”
Nominating
& Corporate Governance Committee
Until
the Special Nomination Termination Date, the Nominating & Corporate Governance Committee must be comprised of one designee appointed
by PSP Investments, for so long as PSP Investments has the right to designate at least one director to the Telesat Corporation Board
pursuant to its Investor Rights Agreement, one designee appointed by MHR, for so long as MHR has the right to designate at least one
director to the Telesat Corporation Board pursuant to its Investor Rights Agreement, and three Specially Designated Directors.
Following
the Special Nomination Termination Date, the Nominating & Corporate Governance Committee will be comprised of one designee appointed
by PSP Investments, for so long as PSP Investments has the right to designate at least one director to the Telesat Corporation Board
pursuant to its Investor Rights Agreement, one designee appointed by MHR, for so long as MHR has the right to designate at least one
director to the Telesat Corporation Board pursuant to its Investor Rights Agreement, and one Specially Designated Director.
The
Nominating & Corporate Governance Committee is comprised of Jane Craighead, Richard Fadden, Henry Intven, David Morin and Mark Rachesky,
each of whom is independent for purposes of NI 58-101 and NASDAQ 5605. The Chair of the Nominating & Corporate Governance Committee,
Henry Intven, is a Specially Designated Director.
The
Telesat Corporation Board has adopted a written charter setting forth the purpose, composition, authority and responsibility of the Nominating
& Corporate Governance Committee. The Nominating & Corporate Governance Committee’s purpose will be to assist the Telesat
Corporation Board in:
| ● | identifying
individuals qualified to become members of the Telesat Corporation Board; |
| ● | selecting
or recommending that the Telesat Corporation Board select director nominees for the next annual meeting of shareholders and determining
the composition of the Telesat Corporation Board and its committees; |
| ● | developing
and overseeing a process to annually assess the Telesat Corporation Board, the Chair, the committees of the Telesat Corporation Board,
the chairs of such committees and individual directors; |
| ● | reviewing
and assessing the environmental, social, humanitarian, and other social responsibility related policies, systems, and activities of Telesat
Corporation; and |
| ● | developing
and implementing Telesat Corporation’s policies regarding corporate governance, including principles contained in the Corporate
Governance Guidelines. |
In
identifying new candidates for the Telesat Corporation Board, the Nominating & Corporate Governance Committee considers what competencies
and skills the Telesat Corporation Board, as a whole, should possess and assess what competencies and skills each existing director possesses,
considering the Telesat Corporation Board as a group, and the personality and other qualities of each director, as these may ultimately
determine the boardroom dynamic.
It
is the responsibility of the Nominating & Corporate Governance Committee to regularly evaluate the overall efficiency of the Telesat
Corporation Board and the Chair and all Telesat Corporation Board committees and their chairs. As part of its mandate, the Nominating
& Corporate Governance Committee conducts the process for the assessment of the Telesat Corporation Board, each committee and each
director regarding his, her or its effectiveness and contribution, and report evaluation results to the Telesat Corporation Board on
a regular basis.
ESG
Oversight and Governance
As
set out above, the Nominating & Corporate Governance Committee oversees, and advises the Board, on the Company’s policies and
practices with respect to ethics, integrity and ESG matters as well as the Company’s public reporting thereon. The Board formally
adopted an ESG policy in November 2022, based on the Committee’s recommendation. The policy articulates the Company’s approach
and commitments in the areas of business ethics and integrity, environmental health and safety, fair and honest treatment of stakeholders,
employee relations, human rights and community investment. In 2023, the Company launched its inaugural ESG Impact Report for Fiscal Year
2022, and will publish an updated report in 2024 covering Fiscal Year 2023. A copy of the Company’s most recent ESG Impact Report
is available on the Company’s website at https://www.telesat.com/investor-relations/corporate-governance/.
Going forward, the Company plans to look for opportunities to define targets for improvement where appropriate and sustainable,
and to provide appropriate and meaningful reporting on progress in meeting its ESG objectives.
Telesat
Partnership Governance
Telesat
Partnership is managed by its sole general partner, Telesat Corporation. Under the Telesat Partnership Agreement, until no Telesat Corporation
Shares remain outstanding, the general partner is restricted from consummating any transaction unless (a) the terms of such transaction
do not impair any of the rights, duties, powers and authorities of the other parties to the Telesat Partnership Agreement in any material
respect and (b) its successor entity resulting from such transaction becomes bound by the terms of the Telesat Partnership Agreement
and the Trust Voting Agreement, such that they step into the shoes of Telesat Corporation and assume all obligations of Telesat Corporation
as general partner of Telesat Partnership. In addition, Telesat Partnership must obtain the approval (i) of a majority of the Specially
Designated Directors then in office or (ii) approval by at least a simple majority of the votes cast by the holders of the Telesat
Corporation Shares and the Special Voting Shares, voting together as a single class, but excluding shares of Telesat Corporation beneficially
owned by PSP Investments, MHR, or their respective affiliates or associates and Special Voting Shares to the extent that the vote thereof
is directed by PSP Investments, MHR, or their respective affiliates or associates.
Because
of the limited liability of the limited partners of the Partnership, the authority of the limited partners is strictly limited. The Partnership
Agreement will govern Telesat Partnership and set out the terms of the Exchangeable Units and Telesat Partnership GP Units, as summarized
in this section and under “Description of Exchangeable Units and GP Units” below.
Purpose
of Telesat Partnership
The
purpose of Telesat Partnership as described in the Partnership Agreement is to: (a) acquire and hold direct and indirect equity interests
in Loral, Telesat, Telesat CanHoldco and, subject to the approval of Telesat Corporation, in its capacity as general partner, any other
persons, (b) engage in activities related to the capitalization and financing of Telesat Partnership’s interests in such corporations
and such other persons and (c) engage activities incidental to or in furtherance of the foregoing purposes or any other business that
it deems appropriate that is approved by its general partner and which complies with all applicable laws and the Partnership Agreement.
Amendments
to the Partnership Agreement
Generally,
the Partnership Agreement may only be amended in writing and subject to the approval of holders of Telesat Corporation Shares or Exchangeable
Units. However, the general partner of Telesat Partnership may also amend certain administrative provisions of the Partnership Agreement
without the consent of any limited partners, such as completing a name change of Telesat Partnership and certain changes relating to
taxation, provided that amendments to certain provisions of the Partnership Agreement that may be made without the consent of any limited
partners may only be made with the approval of a majority of the Specially Designated Directors then in office. Telesat Partnership’s
general partner is required to notify its limited partners of any amendment in writing within 30 days from when such amendment takes
effect.
Power
of Attorney
Pursuant
to the Partnership Agreement, Telesat Corporation, as general partner, manages the Telesat Partnership, and, by entering into the Partnership
Agreement, each limited partner has appointed Telesat Corporation, in its capacity as general partner, as such limited partner’s
attorney for property to act on its behalf in connection with Telesat Partnership’s administrative and operational matters. As
limited partners, the liability of each of the holders of Exchangeable Units for the debts, liabilities and obligations of Telesat Partnership
will, subject to applicable law, be limited to the amount of such limited partner’s capital contribution into Telesat Partnership,
plus their share of any undistributed income of Telesat Partnership.
Reciprocal
Changes
Holders
of Exchangeable Units will have the right to exchange their Exchangeable Units for Telesat Corporation Shares and will vote at Telesat
Corporation through the Trust by way of the Special Voting Shares. Because of this, and to avoid dilution of the voting powers of the
holders of Exchangeable Units, the Partnership Agreement provides that, generally, for so long as any Exchangeable Units not owned by
the general partner are outstanding, Telesat Corporation may not issue or distribute new shares in the capital of, or other interests
in, Telesat Corporation to holders of Telesat Corporation Shares (in their capacity as such) unless Telesat Partnership also issues or
distributes an equivalent class and type of securities to the holders of Exchangeable Units.
Additional
restrictions on Telesat Corporation’s ability to take certain actions without effecting a substantially similar action at the Telesat
Partnership level are described under “Description of Exchangeable Units and GP Units — Economic and Voting Rights —
Economic Rights.”
Removal/Withdrawal
of the General Partner
Telesat
Corporation, as general partner of Telesat Partnership, may not be removed as general partner of Telesat Partnership and, until no Exchangeable
Units are owned by any person other than the general partner or any of its subsidiaries, not voluntarily withdraw from being the general
partner.
DESCRIPTION
OF SHARE CAPITAL AND VOTING STRUCTURE
Telesat
Corporation
The
authorized capital of Telesat consists of: (a) an unlimited number of Class A Common Shares, Class B Variable Voting Shares,
Class C Fully Voting Shares, and Class C Limited Voting Shares (together, the “Class C Shares”); (b) the
Class A Special Voting Share, Class B Special Voting Share, and Class C Special Voting Share; (c) the Golden Share; and
(d) an unlimited number of Telesat Corporation “blank check” Class A Preferred Shares.
As
of April 25, 2024, there are 13,641,019 Class A Common Shares and Class B Variable Voting Shares; 112,841 Class C Fully
Voting Shares; Nil Class C Limited Voting Shares; one Class A Special Voting Share; one Class B Special Voting Share;
one Class C Special Voting Share; and the Golden Share issued and outstanding in the capital of Telesat. To the knowledge of the
Company there are 1,721,308 Class A Common Shares and 11,919,711 Class B Variable Voting Shares issued and outstanding as of
April 22, 2024.
All
of the Telesat Corporation Shares have equivalent economic rights, and no subdivision or consolidation of such of the outstanding Telesat
Corporation Shares is permitted unless a corresponding subdivision or combination of all other classes of Telesat Corporation Shares,
as applicable, and a corresponding subdivision or combination of the Class A Units, Class B Units or Class C Units of
Telesat Partnership LP is made. The Special Voting Shares and the Golden Share have no material economic rights.
The
following is a summary of the material rights, privileges, restrictions and conditions that attach to the Telesat Corporation Shares,
the Special Voting Shares and the Golden Share. This is a summary only and is subject to the detailed provisions of the Telesat Corporation
Articles, which are available at www.sedarplus.com and www.sec.gov.
Pursuant
to the Telesat Corporation Articles and formation documents of Telesat Partnership LP, the Class A Common Shares of Telesat Corporation
and the Class A Units of Telesat Partnership LP, as applicable, may only be beneficially owned or controlled, directly or indirectly,
by Canadians (as defined in the Investment Canada Act). Shareholders will be required to complete a declaration of Canadian status
contained in the form of proxy and voting instruction form to inform the Company whether such Shareholder is Canadian. In this regard,
the outstanding number of Class A Common Shares may increase or decrease prior to the Meeting as a result of the declarations of
Canadian status received in advance of the Meeting.
Meetings
of Shareholders and Voting Rights
The
holders of Class A Shares, Class B Variable Voting Shares, Class C Shares, Special Voting Shares, and the Golden Share
are generally entitled to receive notice of and attend meetings of Telesat Corporation’s shareholders and receive copies of all
proxy materials, information statements and other written communications, including from third parties, given in respect of Telesat Corporation
Shares.
Holders
of Telesat Corporation Shares have one vote for each Telesat Corporation Share held at all meetings of the shareholders of Telesat Corporation,
except meetings at which only holders of another class or of a particular series shall have the right to vote, and provided that holders
of Class C Limited Voting Shares are not entitled to vote on the election of directors of Telesat Corporation.
The
Telesat Corporation Articles provide that the holders of the Telesat Corporation Shares will vote together as a single class with the
Exchangeable Units (via the Special Voting Shares), and the Golden Share, with a simple majority of votes required to pass the majority
of matters (other than the election of directors of Telesat Corporation, which shall be decided by a plurality of votes cast). Until
the occurrence of an Unwind Transaction, a simple majority of votes cast by the holders of Telesat Corporation Shares and Special Voting
Shares, voting together as a single class, will be required to approve a Second Tabulation Matter, as defined and described below.
The
following table summarizes the voting power of the different classes of Telesat Corporation Shares and Exchangeable
Units:
Class |
|
Voting
for Directors |
|
All
Other Votes |
|
Second
Tabulation Votes |
| Class
A Shares |
|
1
vote per share |
|
1
vote per share |
|
1
vote per share |
| |
|
|
|
|
|
|
| Class
B Variable Voting Shares |
|
1
vote per share; provided that any voting power of a single holder in excess of one-third of the outstanding voting power of the Telesat
Corporation Shares and Exchangeable Units (via the Special Voting Shares) and the Golden Share Canadian Votes (described below under
“-Golden Share Mechanic”) will effectively be transferred to the Golden Share. |
|
1
vote per share |
| |
|
|
|
|
| Class
C Fully Voting Shares |
|
1
vote per share |
|
1
vote per share |
|
1
vote per share |
| |
|
|
|
|
|
|
| Class
C Limited Voting Shares |
|
No
votes |
|
1
vote per share |
|
1
vote per share |
| |
|
|
|
|
|
|
Class
A Units (voted via the
Class A Special Voting Share) |
|
1
vote per unit |
|
1
vote per unit |
|
1
vote per unit |
| |
|
|
|
|
|
|
Class
B Units (voted via the
Class B Special Voting Share) |
|
1
vote per unit; provided that any voting power of a single holder in excess of one-third of the outstanding voting power of the Telesat
Corporation Shares and Exchangeable Units (via the Special Voting Shares) and the Golden Share Canadian Votes (described below under
“- Golden Share Mechanic”) will effectively be transferred to the Golden Share. |
|
1
vote per unit |
| |
|
|
|
|
Class
C Units (voted via the
Class C Special Voting Share) |
|
Limited
votes to ensure compliance with restrictions applicable to PSP Investments pursuant to its constating legislation. |
|
1
vote per unit |
Golden
Share |
|
A
number of votes equal to the sum of:
● A
number of votes such that the votes cast by the holders of Class A Shares and Class A Units, Class C Shares and Class C
Units, and the Golden Share represent a simple majority of the votes cast; and
● The
number of votes transferred from the Class B Variable Voting Shares and Class B Units, if applicable. |
|
No
votes |
Voting
Matters
Second
Tabulation Matters
Votes
on resolutions regarding Second Tabulation Matters to be duly passed must be passed in accordance with the Business Corporations Act
(British Columbia) (the “BCBCA”) and by a simple majority of the votes cast by the holders of the Telesat Corporation
Shares and the Special Voting Shares, voting together as a single class. The Non-Canadian Voting Limitation, defined and described below
under the heading “Golden Share Mechanic”, do not apply to a vote on a Second Tabulation Matter. A “Second Tabulation
Matter” means a resolution to effect:
| ● | An
increase or decrease of the maximum number of authorized shares of Telesat Corporation Shares, or an increase in the maximum number of
authorized shares another class or type with special rights or restrictions equal or superior to the Telesat Corporation Shares; |
| ● | An
exchange, reclassification or cancellation of all or part of the Telesat Corporation Shares; |
| ● | An
addition, change or removal of the special rights and restrictions attached to the Telesat Corporation Shares; |
| ● | An
increase in the rights or privileges of any class of shares in the capital of Telesat that has rights or privileges equal or superior
to the Telesat Corporation Shares; |
| ● | The
creation of a new class of Telesat Corporation Shares equal or superior to the Telesat Corporation Shares; |
| ● | The
making of any class of shares in the capital of Telesat Corporation with rights or privileges inferior to the Telesat Corporation Shares
equal or superior to the Telesat Corporation Shares; |
| ● | An
exchange or creation of a right of exchange of all or part of another class of shares in the capital of Telesat Corporation into Telesat
Corporation Shares; |
| ● | A
constraining of the issuance, transfer or ownership of the Telesat Corporation Shares or a change or removal of such constraint; |
| ● | A
change to the Telesat Corporation Articles; |
| ● | The
taking of any steps to wind up, dissolve, reorganize or terminate Telesat Corporation; |
| ● | A
sale, lease, exchange, encumbrance, transfer or other disposition of all or substantially all of Telesat Corporation’s assets; |
| ● | The
removal of a director of Telesat Corporation from office; or |
| ● | The
taking of action to effect an amalgamation, merger or other combination of Telesat Corporation with another person or to consolidate,
recapitalize or reorganize Telesat Corporation or to continue Telesat Corporation under the laws of another jurisdiction. |
Golden
Share Mechanic
In
order to maintain Telesat Corporation’s status as Canadian-controlled, Telesat Corporation has issued a “Golden Share”,
which is held and voted by the Trust.
The
Golden Share is entitled to participate in a particular vote only when (i) in the event of a vote with respect to the election of directors
of Telesat Corporation, the number of fully diluted Class B Variable Voting Shares is greater than the aggregate number of fully
diluted Class A Shares and Class C Fully Voting Shares, (ii) in the event of a vote with respect to any matter other than the
election of directors of Telesat Corporation, the number of fully diluted Class B Variable Voting Shares is greater than the aggregate
number of fully diluted Class A Shares and Class C Shares, or (iii) a person who is not Canadian (as defined in the Investment
Canada Act) beneficially owns or controls more than one-third of the sum of (a) the number of votes attached to the Telesat Corporation
Shares and the Special Voting Shares then outstanding, and (b) the Golden Share Canadian Votes, as defined and described below (such
person, a “Non-Canadian Principal Shareholder” and such limitation, the “Non-Canadian Voting Limitation”).
Voting
power is attributed to the Golden Share in two ways. First, the Golden Share is attributed with the number of votes required in order
to ensure that the votes cast by the holders of Class A Shares and Class A Units, Class C Shares and Class C Units
and the Golden Share, together, represent a simple majority of the votes cast and entitled to vote (such voting power, the “Golden
Share Canadian Votes”). Second, the Golden Share is attributed with the number of votes in excess of the Non-Canadian Voting
Limitation exercised by a Non-Canadian Principal Shareholder.
The
Golden Share voting rights are voted pro rata consistent with the sum of the aggregate votes of the Class A Shares and the Class A
Special Voting Share (in each case, excluding any votes cast by or on behalf of PSP Investments and/or its affiliates), the votes of
each of which are controlled by holders that can demonstrate that they are Canadian. However, if (i) one or more holders other than PSP
Investments or its controlled affiliates holds an aggregate amount of Class A Shares and/or Class A Units exceeding 5% of the
aggregate number of outstanding Telesat Corporation Shares and Exchangeable Units taken as a whole as of the record date for the applicable
vote (each such holder, a “5% Voter”) and (ii) the 5% Voters together hold over 50% of the aggregate number of outstanding
Class A Shares and Class A Units (in each case, excluding any Class A Shares or Class A Units held by or on behalf
of PSP Investments and/or its affiliates) taken as a whole as of the record date for the applicable vote, one-half of the voting rights
attached to the Golden Share will be voted pro rata consistent with the aggregate votes cast on the applicable matter as described in
the first sentence of this paragraph and the other half will be voted pro rata consistent with the aggregate votes cast on the applicable
matter by the holders of Class A Shares and the Class A Special Voting Share (in each case, excluding any votes cast by or
on behalf of the 5% Voters and PSP Investments and/or its affiliates).
Voting
of the Special Voting Shares and the Golden Share
The
holders of Exchangeable Units are indirectly entitled to vote in respect of matters on which holders of Telesat Corporation Shares are
entitled to vote, including in respect of the election of directors of Telesat Corporation, through the Special Voting Shares., Telesat
Corporation, Telesat Partnership and TSX Trust Company (in its capacity as “Trustee” of the Trust) entered into the Trust
Voting Agreement. This summary is qualified in its entirety by reference to that agreement, which is available at the Company’s
profile on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov.
The
Special Voting Shares are held by the Trustee, entitling the Trustee to that number of votes on applicable matters on which holders of
Telesat Corporation Shares are entitled to vote that is equal to the number of Telesat Corporation Shares into which the Exchangeable
Units held by the holders of such Exchangeable Units on the applicable record date are convertible. Pursuant to the Partnership Agreement,
each holder of Exchangeable Units has the right to direct Telesat Corporation as to how to instruct the Trustee to vote the voting power
of the Special Voting Shares corresponding to such holder’s Exchangeable Units. Pursuant to the Trust Voting Agreement, the Trustee
is required to cast such votes in accordance with voting instructions provided to it by Telesat Corporation, in its capacity as general
partner of Telesat. In the absence of instructions from Telesat Corporation with respect to all or any such votes, the Trustee will not
exercise those votes.
Pursuant
to the Partnership Agreement and the articles of Telesat Corporation, Telesat Corporation, will instruct the Trust how to vote. Telesat
Corporation will also instruct the Trust how to vote the Golden Share. In the absence of instructions from Telesat Corporation with respect
to how to vote the Golden Share, the Trustee will not vote the Golden Share.
Unwind
of Canadian Structure
Upon
a determination by the Telesat Corporation Board that the structure designed to ensure sufficient Canadian voting power and control over
Telesat Corporation is no longer required for Telesat Corporation’s business, then an Unwind Transaction may be effected. In order
for an Unwind Transaction to be consummated, any necessary governmental approvals must have been obtained and the Telesat Corporation
Board must not have identified any breach or acceleration issues under material contracts of Telesat Corporation. Upon the consummation
of an Unwind Transaction, each issued and outstanding Class B Variable Voting Share will immediately be converted into one Class A
Share automatically and without any further act of Telesat Corporation or the holder thereof, and Telesat Corporation will redeem the
Golden Share and the Special Voting Shares. Additionally, the requirements regarding the Second Tabulation Matters and the Canadian composition
of the Telesat Corporation Board described in the Telesat Corporation Articles will terminate.
Quorum
The
Telesat Corporation Articles provide that, subject to the special rights and restrictions attached to the shares of any class or series
of shares, the quorum for any meeting shall be the presence in person or by proxy of shareholders holding shares representing not less
than a majority of the votes entitled to be cast at the meeting.
Conversion
of Telesat Corporation Shares
Prior
to the consummation of an Unwind Transaction, an issued and outstanding Class A Share will immediately be converted into a Class B
Variable Voting Share automatically and without any further act of Telesat Corporation or the holder thereof, if such Class A Share
is or becomes beneficially owned or controlled, directly or indirectly, by a person who is not a Canadian (as defined in the Investment
Canada Act). In contrast, if an issued and outstanding Class B Variable Voting Share becomes beneficially owned and controlled,
directly or indirectly, by a person who is Canadian, then (i) such holder of Class B Variable Voting Shares may notify Telesat Corporation
of such holder’s status as Canadian, and (ii) upon providing evidence satisfactory to Telesat Corporation to confirm such holder’s
status as Canadian, the Class B Variable Voting Shares will be converted into an equal number of Class A Shares.
Generally,
if an offer is made to purchase either Class A Shares or Class B Variable Voting Shares and the offer is required to be made
to all or substantially all of the holders of such class of Class A Shares or Class B Variable Voting Shares, as the case may
be, under applicable securities legislation or stock exchange rules, then each share of the other class of Class A Shares or Class B
Variable Voting Shares, as applicable, will be convertible at the option of its holder into one Class A Shares or Class B Variable
Voting Shares, as applicable, of the class for which the offer has been made at any time while the offer is in effect until one day after
the time prescribed by the applicable securities legislation for the offeror to take up and pay for such Class A Shares or Class B
Variable Voting Shares, as applicable, pursuant to the offer.
An
issued and outstanding Class C Share will immediately be converted into (i) a Class A Share if such Class C Share is or
becomes beneficially owned or controlled, directly or indirectly, by a person who is Canadian (as defined in the Investment Canada
Act) but not PSP Investments or Red Isle, or (ii) a Class B Variable Voting Share, automatically and without any further act
of Telesat Corporation if such Class C Share is or becomes beneficially owned or controlled, directly or indirectly, by a person
who is not a Canadian (as defined in the Investment Canada Act). In addition, an issued and outstanding Class C Share
may, at any time at the option of its holder, (i) be converted into one Class A Share or one Class B Variable Voting Share,
(ii) in the case of a Class C Limited Voting Share, be converted into a Class C Fully Voting Share, or (iii) in the case of
a Class C Fully Voting Share, be converted into a Class C Limited Voting Share.
Description
of Exchangeable Units and GP Units
The
authorized units of Telesat Partnership consist of: (i) an unlimited number of Class A Units, held by the limited partners (other
than Red Isle, Red Isle’s permitted transferees that are wholly owned by PSP Investments or any holder of Class D limited
partnership units of Telesat Partnership (“Class D Units”) in their capacity as such) who can demonstrate to Telesat Partnership
that they are Canadian (as defined in the Investment Canada Act); (ii) an unlimited number of Class B Units, held by the limited
partners (other than Red Isle, Red Isle’s permitted transferees that are wholly owned by PSP Investments or any holder of Class D
Units in their capacity as such); (iii) Class C Units, held by Red Isle or its permitted transferees that are wholly owned by PSP
Investments; and (iv) Telesat Partnership GP Units, held by Telesat Corporation as the general partner of Telesat Partnership. Class D
Units will also be authorized from and after the Effective Time but may be issued only to a wholly owned subsidiary of the general partner
of Telesat Partnership immediately before the Exchangeable Units cease to be outstanding.
As
of the date of this Information Circular, there are (i) 12,500 Class A Units; (ii) 18,309,292 Class B Units; and 18,098,362
Class C Units; 12,805,291 GP Units; and no Class D Units issued and outstanding in the capital of the Partnership.
The
following is a summary of the material rights, privileges, restrictions and conditions that attach to the Exchangeable Units and the
Telesat Partnership GP Units. This is a summary only and is subject to the detailed provisions of the Partnership Agreement, which is
available at the Company’s profile on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov.
Economic
and Voting Rights
The
Exchangeable Units are intended to provide economic rights that are substantially equivalent, and voting rights with respect to Telesat
Corporation that are substantially equivalent, to the corresponding rights afforded to holders of Telesat Corporation Shares, as applicable.
Economic
Rights
All
Exchangeable Units have the same economic rights. Further, for so long as Telesat Corporation is general partner of Telesat Partnership,
if any shares in the capital of Telesat Corporation other than the Telesat Corporation Shares are issued by Telesat Corporation (“New
Shares”), Telesat Corporation will (either immediately before or after such issuance), (A) cause Telesat Partnership to create
a corresponding new class of Exchangeable Units (“New Units”) that have corresponding distribution rights to such
New Shares, (B) cause Telesat Partnership to issue one or more New Units to Telesat Corporation in exchange for the contribution by Telesat
Corporation of the proceeds from, or other consideration received in connection with, the issuance of such New Shares to Telesat Partnership
and (C) effect such amendments to the Partnership Agreement as are described in the Partnership Agreement.
Other
material economic rights, privileges, restrictions and conditions attaching to the Exchangeable Units under the terms of the Partnership
Agreement include the following:
| ● | Exchangeable
Units vote on a pass-through basis with corresponding classes of Telesat Corporation Shares. |
| ● | Telesat
Corporation may not issue or distribute rights, options or warrants or other securities or assets of Telesat Corporation to all or substantially
all of the holders of Telesat Corporation Shares unless a corresponding distribution is made to holders of the Exchangeable Units. |
| ● | No
subdivision or combination of the outstanding Telesat Corporation Shares is permitted unless a corresponding subdivision or combination
of Exchangeable Units is made. |
| ● | Telesat
Corporation and the Telesat Corporation Board are prohibited from proposing or recommending an offer for the Telesat Corporation Shares
or for the Exchangeable Units unless the holders of the Exchangeable Units and the holders of Telesat Corporation Shares are entitled
to participate to the same extent and on equitably equivalent basis. |
| ● | Approval
of holders of the Exchangeable Units is required for an action (such as an amendment to the Partnership Agreement) that would affect
the economic rights of an Exchangeable Unit relative to a Telesat Corporation Share, as applicable. |
| ● | Canadian
securities regulatory authorities may intervene in the public interest (either on application by an interested party or by staff of a
Canadian securities regulatory authority) to prevent an offer to holders of Telesat Corporation Shares or Exchangeable Units being made
or completed where such offer is abusive of the holders of one of those security classes that are not subject to that offer. |
GENERAL
MATTERS
Interest
of Certain Persons in Matters to Be Acted Upon
To
the knowledge of the directors and executive officers of Telesat, other than as disclosed in this Information Circular, no person who
has been a director or officer of the Company at any time since the beginning of the Company’s last financial year, nor any Director
Nominee, nor any associate or affiliate of any of them, has any material interest, direct or indirect, by way of beneficial ownership
of securities or otherwise, in any matter to be acted on at the Meeting.
Interest
of Informed Persons in Material Transactions
Other
than as described elsewhere in this Information Circular and in our Annual Information Form on Form 20-F under the heading
“Related Party Transactions”, no informed person of the Company, proposed director, or any associate or affiliate of any
informed person or proposed director has any material interest, direct or indirect, in any transaction since the commencement of our
most recently completed financial year or in any proposed transaction that has materially affected or is reasonably expected to materially
affect us or any of our subsidiaries.
Principal
Securityholders
The
following table sets forth the ownership of holders that are the beneficial owners of 10% or more of each class of shares of Telesat
Corporation or each class of units of Telesat Partnership as of the date of this Information Circular (unless otherwise indicated).
In
the table, the percentage of Telesat Corporation Shares beneficially owned is based on Telesat Corporation Shares outstanding as of the
date of this Information Circular (unless otherwise indicated).
These
amounts assume all Class A Units, Class B Units and Class C Units have been exchanged into Telesat Corporation Shares
on a one-for-one basis.
As
of the date of the circular, the aggregate number of Class A Shares, Class B Variable Voting Shares or Class C Shares,
Class A Units, Class B Units and Class C Units, were 50,174,014.
| Name | |
Class A
Shares | | |
Class B
Variable
Voting Shares | | |
Class C
Shares | | |
Class B
Units | | |
Class C
Units | | |
Fully exchanged and
converted basis(1)(2) |
| PSP Investments(3) | |
| - | | |
| - | | |
| 112,841 | | |
| - | | |
| 18,098,362 | | |
18,211,203 (36.30%) |
| Mark H. Rachesky, M.D.(4) | |
| - | | |
| 46,136 | | |
| - | | |
| 18,050,092 | | |
| - | | |
18,096,228 (36.07%) |
| MHR | |
| - | | |
| - | | |
| - | | |
| 18,035,092 | | |
| - | | |
18,035,092 (35.95%) |
| GAMCO Investors, Inc. (5) | |
| - | | |
| 3,308,663 | | |
| - | | |
| - | | |
| - | | |
3,308,663 (6.59%) |
| Heard Capital LLC(6) | |
| - | | |
| 1,778,837 | | |
| - | | |
| - | | |
| - | | |
1,778,837 (3.55%) |
| Rubric Capital Management LP(7) | |
| - | | |
| 959,764 | | |
| - | | |
| - | | |
| - | | |
959,764 (1.91%) |
| Daniel Lau and Christine Man(8) | |
| - | | |
| 897,000 | | |
| - | | |
| - | | |
| - | | |
897,000 (1.79%) |
| Philosophy Capital Management LLC(9) | |
| - | | |
| 667,287 | | |
| - | | |
| - | | |
| - | | |
667,287 (1.33%) |
Notes:
| (1) | Certain
individuals and entities hold Class A Units, Class B Units or Class C Units
of Telesat Partnership, which are redeemable, at the election of such holder, for newly issued
shares of Class A Shares, Class B Variable Voting Shares or Class C Shares,
respectively, on a one-for-one basis (and such holders’ Class A Units, Class B
Units or Class C Units, as the case may be, will be cancelled on a one-for-one basis
upon any such issuance). The number of Class A Shares beneficially owned and percentages
of beneficial ownership set forth in the table assume that all Class A Units have been
exchanged for Class A Shares (and the corresponding Class A Units have been cancelled).
The numbers of Class B Variable Voting Shares beneficially owned and percentages of
beneficial ownership set forth in the table assume that all Class B Units have been
exchanged for Class B Variable Voting Shares (and the corresponding Class B Units
have been cancelled). The numbers of Class C Shares beneficially owned and percentages
of beneficial ownership set forth in the table assume that all Class C Units have been
exchanged for Class C Shares (and the corresponding Class C Units have been cancelled). |
| (2) | Percentage
of combined voting power represents voting power with respect to all of our Telesat Corporation
Shares and all Exchangeable Units on an as converted basis. In order to maintain Telesat
Corporation’s status as Canadian, the Telesat Corporation Articles employ a variable
voting mechanism by way of, amongst other controls, the “Golden Share;” the voting
power attributed to the Golden Share will vary to ensure that the aggregate number of votes
cast by Canadians, including Red Isle, with respect to a particular matter, will equal a
simple majority of all votes cast in respect of such matter, resulting in the dilution of
the voting power of Telesat Corporation’s non-Canadian shareholders. See “Description
of Share Capital and Voting Structure.” |
| (3) | Red
Isle Private Investments Inc. is a wholly owned subsidiary of PSP Investments and is the
legal owner of the Telesat Corporation Shares and Units attributed to PSP Investments in
the table above. The number of Telesat Corporation Shares set out above represents PSP Investments’
interests in both the Class C Fully Voting Shares and Class C Limited Voting Shares
on a combined basis. The Class C Limited Voting Shares are not entitled to vote to elect
the directors of the Company. |
| (4) | Includes
the 18,035,092 held by funds affiliated with MHR and 46,136 shares and 15,000 units held
directly by Dr. Mark Rachesky. |
| (5) | This
share amount is based on a schedule 13D filing by GAMCO Investors Group filed on August 2,
2023. |
| (6) | This
share amount is based on a schedule a 13G filing by Rubric Capital Management filed on February
12, 2024. |
| (7) | This
share amount is based on a schedule a 13G filing by Heard Capital LLC filed on February 13,
2024. |
| (8) | This
share amount is based on a schedule 13G filing by Philosophy Capital Management LLC on February
9, 2024. |
| (9) | This
share amount is based on a schedule 13G filing by Daniel Lau and Christine Man on April 8,
2024. |
Exemptions
from Canadian Securities Law
Telesat
Corporation has received exemptive relief from securities regulatory authorities in the provinces and territories of Canada (the “CSA”),
such that:
| (a) | an
offer to acquire outstanding Class A Shares or Class B Variable Voting Shares which would constitute a take-over bid under
applicable securities legislation as a result of the securities subject to the offer to acquire, together with the offeror’s securities,
representing in the aggregate 20% or more of the outstanding Class A Shares or Class B Variable Voting Shares, as the case
may be, at the date of the offer to acquire, be exempt from the requirements set out in Part 2 of National Instrument 62-104 –
Take-Over Bids and Issuer Bids (“NI 62-104”) applicable to take-over bids (the “TOB Relief”);
provided that the securities subject to the offer to acquire, together with the offeror’s securities, would not represent in the
aggregate 20% or more of the outstanding Class A Shares and Class B Variable Voting Shares, as the case may be, calculated
using (i) a denominator comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares, determined in
accordance with subsection 1.8(2) of NI 62-104 on a combined basis, as opposed to a per-class basis, and (ii) a numerator including
as offeror’s securities all of the Class A Shares and Class B Variable Voting Shares, as applicable, that constitute
offeror’s securities; |
| (b) | an
acquiror who acquires, during a take-over bid or an issuer bid, beneficial ownership of, or control or direction over, Class A Shares
or Class B Variable Voting Shares, as the case may be, that, together with the acquiror’s securities of that class, would
constitute 5% or more of the outstanding Class A Shares or Class B Variable Voting Shares, as the case may be, be exempt from
the requirement set out in section 5.4 of NI 62-104 to issue and file a news release (the “News Release Relief”);
provided that the Class A Shares or Class B Variable Voting Shares, as the case may be, that the acquiror acquires beneficial
ownership of, or control or direction over, when added to the acquiror’s securities of that class, would not constitute 5% or more
of the outstanding Class A Shares or Class B Variable Voting Shares, as the case may be, calculated using (i) a denominator
comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares, determined in accordance with subsection
1.8(2) of NI 62-104 on a combined basis, as opposed to a per-class basis, and (ii) a numerator including as acquiror’s securities,
all of the Class A Shares and Class B Variable Voting Shares, as applicable, that constitute acquiror’s securities; |
| (c) | an
acquiror who triggers the disclosure and filing obligations pursuant to the early warning requirements set out in applicable securities
legislation with respect to the Class A Shares or Class B Variable Voting Shares, as the case may be, be exempt from such requirements
(the “Early Warning Relief”); provided that (i) the acquiror complies with the early warning requirements, except
that, for the purpose of determining the percentage of outstanding Class A Shares or Class B Variable Voting Shares, as the
case may be, that the acquiror has acquired or disposed of beneficial ownership, or acquired or ceased to have control or direction over,
the acquiror calculates the percentage using (A) a denominator comprised of all of the outstanding Class A Shares and Class B
Variable Voting Shares, determined in accordance with subsection 1.8(2) of NI 62-104, on a combined basis, as opposed to a per-class
basis, and (B) a numerator including, as acquiror’s securities, all of the Class A Shares and Class B Variable Voting
Shares, as applicable, that constitute acquiror’s securities; or (ii) in the case of an acquiror that is an eligible institutional
investor, the acquiror complies with the requirements of the alternative monthly reporting system set out in Part 4 of National Instrument
62-103 — The Early Warning System and Related Take-Over Bid and Insider Reporting Issues (“NI 62-103”) to the
extent it is not disqualified from filing reports thereunder pursuant to section 4.2 of NI 62-103, except that, for purposes of
determining the acquiror’s securityholding percentage, the acquiror calculates its securityholding percentage using (A) a denominator
comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares determined in accordance with subsection
1.8(2) of NI 62-104 on a combined basis, as opposed to a per-class basis, and (B) a numerator including all of the Class A
Shares and Class B Variable Voting Shares, as applicable, beneficially owned or controlled by the eligible institutional investor; |
| (d) | an
issuer bid made by the Company in the normal course on a published market, other than a designated exchange, with respect to Class A
Shares or Class B Variable Voting Shares, as the case may be, be exempt from the requirements in Part 2 of NI 62-104 applicable
to issuer bids (the “NCIB Relief” and, together with the TOB Relief, the News Release Relief and the Early Warning
Relief, the “Bid Relief”); provided that the Company complies with the conditions in subsection 4.8(3) of NI 62-104,
except that: (i) the bid is for not more than 5% of the outstanding Class A Shares and Class B Variable Voting Shares on a
combined basis, as opposed to a per class basis, and (ii) the aggregate number of Class A Shares and Class B Variable Voting
Shares acquired in reliance on the NCIB Relief by the Issuer and any person acting jointly or in concert with the Issuer within any 12-month
period does not exceed 5% of the outstanding Class A Shares and Class B Variable Voting Shares on a combined basis, as opposed
to a per-class basis, at the beginning of such 12-month period; and |
| (e) | the
Company be exempt (the “Alternative Disclosure Relief”, and together with the Bid Relief, the “Aggregation
Relief”) from the disclosure requirements in Item 6.5 of Form 51-102F5 — Information Circular (“Form 51-102F5”);
provided that the Company provides the disclosure required by Item 6.5 of Form 51-102F5 except that for the purposes of determining
the percentage of voting rights attached to the Class A Shares or Class B Variable Voting Shares, the Issuer calculates the
voting percentage using (i) a denominator comprised of all of the outstanding Class A Shares and Class B Variable Voting Shares
on a combined basis, as opposed to a per class basis, and (ii) a numerator including all of the Class A Shares and Class B
Variable Voting Shares beneficially owned, or over which control or direction is exercised, directly or indirectly, by any person who,
to the knowledge of the Issuer’s directors or executive officers, beneficially owns, controls or directs, directly or indirectly,
voting securities carrying 10% or more of the voting rights attached to the outstanding Class A Shares and Class B Variable
Voting Shares on a combined basis, as opposed to a per-class basis. |
Telesat
Corporation has also received exemptive relief from: (i) subsections 12.2(3) and 12.2(4) of NI 41-101; (ii) Item 1.13(1) of Form 41-101F1;
(iii) Item 1.12(1) of Form 44-101F1 — Short Form Prospectus (including in respect of any equivalent disclosure in a prospectus
or prospectus supplement filed pursuant to National Instrument 44-102 — Shelf Distributions); (iv) subsection 10.1(a), 10.1(4)
and 10.1(6) of National Instrument 51-102 — Continuous Disclosure Obligations (“NI 51-102”); and (v) subsections
2.3(1)(1.), 2.3(1)(3.) and 2.3(2) of Ontario Securities Commission Rule 56-501 — Restricted Shares, in each case relating to the
use of restricted security terms; provided that (A) the Class B Variable Voting Shares be referred to as “Class B Variable
Voting Shares”, (B) the Class C Limited Voting Shares be referred to as “Class C Limited Voting Shares”, and (C)
the Class B Units be referred to as “Class B Units” (the “Nomenclature Relief”). In connection with
the Nomenclature Relief, the Company has filed an undertaking with the Ontario Securities Commission (the “OSC”) pursuant
to which it has agreed that until such time that the articles of the Company are amended to remove the Super Voting Shares from the Company’s
authorized share capital, no Super Voting Shares will be issued.
In
addition, the Aggregation Relief and the Nomenclature Relief require that the Company disclose such relief and their terms and conditions
in each of its annual information forms and management information circulars filed on SEDAR+ and in any other filing where the characteristics
of its securities are described.
Telesat
Partnership received from the CSA exemptive relief from the continuous disclosure requirements of NI 51-102, allowing Telesat Partnership
to satisfy its Canadian continuous disclosure obligations by relying on the Canadian continuous disclosure documents filed by Telesat
Corporation, for so long as certain conditions are satisfied. In connection therewith, Telesat Partnership received an exemption from
the requirements of National Instrument 52-109 — Certification of Disclosure in Issuers’ Annual and Interim Filings (the
“Certification Requirements”), the requirements of National Instrument 52-110 -— Audit Committees (the “Audit
Committee Requirements”) and the requirements of National Instrument 58- 101 — Disclosure of Corporate Governance Practices
(the “Corporate Governance Requirements”) permitting Telesat Partnership to also satisfy the Certification Requirements,
Audit Committee Requirements, and Corporate Governance Requirements by relying on the continuous disclosure documents prepared and certified
by the Company and the audit committee and corporate governance practices implemented by the Company.
Telesat
Partnership also received from the CSA exemptive relief from the “insider reporting requirements” (as defined in under National
Instrument 14-101 – Definitions) in respect of Telesat Partnership; provided that, among other things, (i) a filer insider complies
with the conditions in sections 13.3(3)(a) and (c) of NI 51-102 and (ii) the Company and the Partnership continue to satisfy relief
granted to the Company and the Partnership in respect of certain continuous disclosure requirements.
The
Company has also filed an undertaking with the OSC pursuant to which it has agreed to provide reasonable prior notice to the OSC in the
event the Company intends to issue a series of preferred shares that: (a) carry a greater number of votes on a per share basis, irrespective
of the number or percentage of preference shares owned, than the Telesat Corporation Shares or (b) would cause any of the factors
set out in section 4.1 of OSC Rule 56-501 — Restricted Shares to be present in relation to the Telesat Corporation Shares regardless
of any existing restrictions on the Telesat Corporation Shares due to the existence of the preferred shares.
Additionally,
to satisfy certain disclosure conditions to the exemptive relief that Telesat Partnership received from the CSA, we are providing a summary
of certain terms of the Exchangeable Units. This summary is not complete and is qualified in its entirety by the complete text of the
Partnership Agreement and the Trust Voting Agreement, copies of which are available on SEDAR+ at www.sedarplus.com
and at www.sec.gov.
The
Exchangeable Units of the Partnership are intended to provide economic rights that are substantially equivalent, and voting rights with
respect to the Company that are equivalent, to the corresponding rights afforded to holders of Class A Shares, Class B Variable
Voting Shares and Class C Shares. Under the terms of the Partnership Agreement, the rights, privileges, restrictions and conditions
attaching to the Exchangeable Units include the following:
| ● | The
Exchangeable Units are now exchangeable at any time, at the option of the holder, on a one-for-one basis for the corresponding class
of the Telesat Corporation Shares. |
| ● | After
making distributions to the Company required pursuant to the Partnership Agreement for expenses related to taxes, operations, administration,
and contractual obligations, the Partnership may make pro rata distributions to each Exchangeable Unit and the Company based on the respective
number of outstanding Issuer Shares and outstanding Exchangeable Units at the time of distribution. |
| ● | If
the Company issues the Telesat Corporation Shares in the form of a dividend or distribution on the Telesat Corporation Shares, the Partnership
will issue to each holder of Exchangeable Units, in respect of each Exchangeable Unit held by such holder, a number of Exchangeable Units
equal to the number of Telesat Corporation Shares issued in respect of each Telesat Corporation Share. |
| ● | If
the Company issues or distributes rights, options or warrants or other securities or assets of the Company to all or substantially all
of the holders of Telesat Corporation Shares, the Partnership is required to make a corresponding distribution to holders of the Exchangeable
Units. |
| ● | No
subdivision or combination of the outstanding shares of Telesat Corporation Shares is permitted unless a corresponding subdivision or
combination of Exchangeable Units is made. |
| ● | The
Company and its board of directors are prohibited from proposing or recommending an offer for the Telesat Corporation Shares or for the
Exchangeable Units unless the holders of the Exchangeable Units and the holders of the Telesat Corporation Shares are entitled to participate
to the same extent and on equitably equivalent basis. |
| ● | Upon
a dissolution and liquidation of the Partnership, if Exchangeable Units remain outstanding and have not been exchanged for the corresponding
class of the Telesat Corporation Shares, then the distribution of the assets of the Partnership between holders of Telesat Corporation
Shares and holders of Exchangeable Units will be made on a pro rata basis based on the number of Telesat Corporation Shares and Exchangeable
Units outstanding. Prior to this pro rata distribution, the Partnership is required to pay to the Company sufficient amounts to fund
the expenses or other obligations of the Company to ensure that any property and cash distributed to the Company in respect of the Telesat
Corporation Shares will be available for distribution to holders of Telesat Corporation Shares in an amount per share equal to distributions
in respect of each Exchangeable Unit. |
| ● | Approval
of holders of the Exchangeable Units is required for an action (such as an amendment to the Partnership Agreement) that would affect
the economic rights of an Exchangeable Unit relative to a Telesat Corporation Shares. |
| ● | The
holders of Exchangeable Units are indirectly entitled to vote in respect of matters on which holders of Telesat Corporation Shares are
entitled to vote through Special Voting Shares of the Company. The Special Voting Shares are held by a trustee, entitling the trustee
to that number of votes on matters on which holders of Telesat Corporation Shares are entitled to vote equal to the number of Exchangeable
Units outstanding. The trustee is required to cast such votes in accordance with voting instructions provided by the Company on behalf
of holders of Exchangeable Units in accordance with the Trust Voting Agreement. The trustee will exercise each vote attached to the Special
Voting Shares only as directed by the Company on behalf of the relevant holder of Exchangeable Units. |
Additional
Information
Financial
information is provided in the Audited Financial Statements and accompanying MD&A for its most recently completed financial year.
Additional information relating to the Company may be found under the Company’s profile on SEDAR+ at www.sedarplus.com
and EDGAR at www.sec.gov.
Shareholders
may contact the Company at 160 Elgin Street, Suite 2100, Ottawa, Ontario or IR@telesat.com to obtain copies of the Company’s annual
information form, consolidated financial statements, and management’s discussion and analysis for the most recently completed fiscal
year. Financial information of the Company is provided in the Company’s comparative consolidated financial statements and management’s
discussion and analysis for its most recently completed financial year. Copies of documents will be provided free of charge to security
holders of the Company. The Company may require the payment of a reasonable charge from any person or company who is not a securityholder
of the Company, who requests a copy of any such document.
APPROVAL
OF THIS INFORMATION CIRCULAR
April
25, 2024
The
board of directors has approved the contents of this Information Circular and authorized it to be sent to each Shareholder who is eligible
to receive notice of and vote his/her or its Telesat Corporation Shares or Exchangeable Units at the Meeting, as well as to each director
of the Company, the Trustee, and to the auditors of the Company.
By
Order of the Board
| Per: |
(signed)
“Christopher DiFrancesco” |
|
| |
Christopher DiFrancesco |
|
| |
Vice President, General
Counsel and |
|
| |
Secretary |
|
APPENDIX
“A”
GLOSSARY
The
following terms used in this Information Circular have the meanings set out below:
“Aggregation
Relief” has the meaning ascribed thereto under the heading “General Matters – Exemptions from Canadian Securities Law”.
“Alternative
Disclosure Relief” has the meaning ascribed thereto under the heading “General Matters – Exemptions from Canadian Securities
Law”.
“Audit
Committee” means the audit committee of the Board.
“Audit
Committee Requirements” means the requirements of National Instrument 52-110 – Audit Committees.
“Audited
Financial Statements” has the meaning ascribed thereto under the heading “Notice-And-Access”.
“Beneficiary
Votes” has the meaning ascribed thereto under the heading “Proxy Solicitation Information – Appointment of Proxies”.
“BCBCA”
means the Business Corporations Act (British Columbia).
“Board”
means the board of directors of Telesat Corporation.
“CbyC
Director” means a director who both (i) is Canadian, and (ii) was nominated for election by either: (x) the Nominating & Corporate
Governance Committee, if comprised of a majority of Canadian directors, (y) a Designator who is Canadian, or (z) a shareholder who is
Canadian. For the avoidance of doubt, Contractual Designees nominated by the Polaris Designator shall qualify as CbyC Directors pursuant
to either subclauses (y) or (z) of this definition.
“CEO”
means the Chief Executive Officer of Telesat Corporation.
“Certification
Requirements” means the requirements of National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual
and Interim Filings.
“CFO”
means the Chief Financial Officer of Telesat Corporation.
“Chair”
means the independent chair of the Board of Telesat Corporation.
“Change
of Control” means (i) any person who, together with its affiliates and associates, acquires beneficial ownership of at least a
majority of the Telesat Corporation Shares on a fully diluted basis, including by way of any arrangement, amalgamation, merger, consolidation,
combination or acquisition of the Company with, by or into another corporation, entity or person in one or more related transactions,
or (ii) the sale of all or substantially all of the assets of the Company to a third party.
“Class
A Shares” means the Class A common shares of Telesat Corporation.
“Class
A Common Shares” means the Class A common shares of Telesat Corporation.
“Class
A Special Voting Share” means the Class A Special Voting Share of Telesat Corporation.
“Class
A Units” means the Class A units of Telesat Partnership.
“Class
B Variable Voting Shares” means the Class B variable voting shares of Telesat Corporation.
“Class
B Special Voting Share” means the Class B Special Voting Share of Telesat Corporation.
“Class
B Units” means the Class B units of Telesat Partnership.
“Class
C Fully Voting Shares” means the Class C fully voting shares of Telesat Corporation.
“Class
C Limited Voting Shares” means the Class C limited voting shares of Telesat Corporation.
“Class
C Shares” means, together, the Class C Fully Voting Shares and the Class C Limited Voting Shares.
“Class
C Special Voting Share” means the Class C Special Voting Share of Telesat Corporation.
“Class
C Units” means the Class C units of Telesat Partnership.
“Class
D Units” means the Class D Units of Telesat Partnership.
“Company”
means Telesat Corporation (together with Telesat Partnership LP and its applicable subsidiaries).
“Computershare”
means Computershare Investor Services Inc.
“Contractual
Designee” means each such nominee of a Designator while such Designator has the contractual right to designate one or more nominees
for election as directors of the Company.
“Control
Number” has the meaning ascribed thereto under the heading “Attending and Voting at the Virtual Meeting”.
“Corporate
Governance Requirements” means the requirements of National Instrument 58-101 – Disclosure of Corporate Governance Practices.
“CSA”
means the securities regulatory authorities in the provinces and territories of Canada.
“Deloitte”
means Deloitte LLP Chartered Professional Accountants.
“Designator”
means either (i) PSP investments or its affiliates, or (ii) MHR or its affiliates, as applicable, in each case as provided under an investor
rights agreement between such Designator and the Company.
“Director
Nominees” means the nominees for the Board of Telesat Corporation named under the heading “Business to be Conducted at the
Meeting – 2. Election of Directors”.
“Dividend
Share Units” means additional DSUs, RSUs and/or PSUs to be received by Particpants in the Omnibus Plan when normal cash dividends
(other than stock dividends) are paid on Shares, unless the Board determines otherwise at the time of grant or issuance of such Award.
“Early
Warning Relief” has the meaning ascribed thereto under the heading “General Matters – Exemptions from Canadian Securities
Law”.
“Exchangeable
Units” means, together, the Class A Units, Class B Units and Class C Units of Telesat Partnership.
“Fiscal
2022” means the year ended December 31, 2022.
“Fiscal
2023” means the year ended December 31, 2023.
“Form
51-102F5” means Form 51-102F5 – Information Circular.
“Golden
Share” means the Golden Share without par value in the capital of Telesat Corporation.
“Historic
Plans” means collectively, the RSU Plan, the 2008 Telesat Plan and the 2013 Telesat Plan adopted in April 2021, September 2008
and April 2013, respectively, by Telesat Holdings Inc.
“Human
Resources & Compensation Committee” means the human resources & compensation committee of the Board of Telesat Corporation.
“IFRS”
means the International Financing Reporting Standards as issued by the International Accounting Standards Board.
“Independent
Audit Committee Director” means a director who (i) satisfies the independence requirements of the applicable U.S. and/or Canadian
securities exchanges on which the Telesat Public Shares are listed, (ii) is “independent” of Telesat Corporation within the
meaning of National Instrument 52-110 — Audit Committees of the Canadian Securities Administrators and (iii) is “independent”
of Telesat Corporation within the meaning of Section 10A(m)(3)(B) of the United States Securities Exchange Act of 1934.
“Information
Circular” has the meaning ascribed thereto under the heading “About this Management Information Circular”.
“Intermediary”
has the meaning ascribed thereto under the heading “Proxy Solicitation Information – Advice to Non-Registered Shareholders”.
“Investor
Rights Agreements” means, together, the two separate investor rights agreements entered into between Telesat Corporation and each
of MHR and PSP Investments on November 23, 2020.
“Invite
Code” has the meaning ascribed thereto under the heading “Proxy Solicitation Information – Advice to Non-Registered
Shareholders”.
“Lead
Director” means lead director of the Board of Telesat Corporation.
“Management
Nominees” has the meaning ascribed thereto under the heading “Proxy Solicitation Information – Appointment of Proxies”.
“MD&A”
has the meaning ascribed thereto under the heading “Notice-And-Access”.
“Meeting”
means the annual general meeting of Telesat Corporation.
“Meeting
Materials” means the Notice of Meeting, the Information Circular, the Audited Financial Statements and accompanying MD&A, voting
instruction form and form of proxy.
“MHR”
has the meaning ascribed thereto under the heading “Business to be Conducted at the Meeting – Election of Directors –
Investor Rights Agreement”.
“MHR
Designators” means any Contractual Designees to be designated by MHR or its affiliates.
“NCIB
Relief” has the meaning ascribed thereto under the heading “General Matters – Exemptions from Canadian Securities Law”.
“NEOs”
means collectively, the CEO, CFO, and the Company’s three other most highly compensated executives.
“New
Shares” has the meaning ascribed thereto under the heading “Description of Share Capital and Voting Structure – Economic
Rights”.
“New
Units” has the meaning ascribed thereto under the heading “Description of Share Capital and Voting Structure – Economic
Rights”.
“News
Release Relief” has the meaning ascribed thereto under the heading “General Matters – Exemptions from Canadian Securities
Law”.
“NI 51-102”
means National Instrument 51-102 – Continuous Disclosure Obligations.
“NI 54-101”
means National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer.
“NI 58-101”
means National Instrument 58-101 – Corporate Governance Requirements.
“NI 62-103”
means National Instrument 62-103 – Early Warning System and Related Take-Over Bid and Insider Reporting Issues.
“NI 62-104”
means National Instrument 62-104 – Take-Over Bids and Issuer Bids.
“Nominating
Shareholder” has the meaning ascribed thereto under the heading “Business to be Conducted at the Meeting – Advance
Notice Requirements”.
“Nominating
& Corporate Governance Committee” means the nominating & corporate governance committee of the Board of Telesat Corporation.
“Nomenclature
Relief” has the meaning ascribed thereto under the heading “General Matters – Exemptions from Canadian Securities Law”.
“Non-Registered
Holders” means the non-registered (beneficial) owners of Telesat Corporation Shares.
“Notice
Date” has the meaning ascribed thereto under the heading “Business to be Conducted at the Meeting – Advance Notice
Requirements”.
“Omnibus
Plan” means the long-term equity incentive plan adopted by Telesat Corporation.
“Optionholder
Exchange Agreements” means the exchange agreement between Telesat Corporation and holders of Telesat Options, Telesat Tandem SARs
and Telesat RSUs whereby each holder of Telesat Options, Telesat Tandem SARs and Telesat RSUs had the right to exchange his or her Telesat
Options, Telesat Tandem SARs and Telesat RSUs for corresponding options, restricted share units and tandem share appreciation rights,
as applicable, of Telesat Corporation.
“OSC”
means the Ontario Securities Commission.
“Partnership
Agreement” has the meaning ascribed thereto under the heading “Proxy Solicitation Information – Registered Shareholders”.
“Proposing
Shareholders” has the meaning ascribed thereto under the heading “Business to be Conducted at the Meeting – Advance
Notice Requirements”.
“PSP
Investments” has the meaning ascribed thereto under the heading “Business to be Conducted at the Meeting – Election
of Directors – Investor Rights Agreement”.
“PSP
Investments Designators” means any Contractual Designees to be designated by PSP Investments or its affiliates.
“Record
Date” has the meaning ascribed thereto under the heading “About this Management Information Circular”.
“Registered
Holder” has the meaning ascribed thereto under the heading “Proxy Solicitation Information” – “Registered
Shareholders”.
“Requisitioning
Shareholders” has the meaning ascribed thereto under the heading “Business to be Conducted at the Meeting – Advance
Notice Requirements”.
“RSU
Plan” has the meaning ascribed thereto under the heading “Executive Compensation – Types of Awards under Historic Plans”.
“SEC”
means the U.S. Securities and Exchange Commission.
“Shareholders”
means the holders of Class A Common Shares, Class B Variable Voting Shares, Class C Fully Voting Shares and Class C
Limited Voting Shares.
“Special
Board Date” means the date that the number of (a) Contractual Designees permitted to be nominated by the PSP Investments Designators
pursuant to the investor rights agreement between the Polaris Designators and the Company plus (b) the Contractual Designees permitted
to be nominated by the MHR Designees pursuant to the investor rights agreement between the MHR Designators and the Company collectively
constitutes, in the aggregate, less than 50% of the number of directors of the Company (as such number is determined in accordance with
Article 10.3 of the Telesat Corporation Articles, without taking into account any vacancies on the board).
“Special
Nomination Termination Date” means the earlier of: (i) Telesat Corporation’s annual meeting of shareholders held in calendar
year 2024 (unless that meeting is held more than 30 days prior to the one-year anniversary of Telesat Corporation’s annual meeting
of shareholders held in calendar year 2023, in which case, Telesat Corporation’s annual meeting of shareholders held in calendar
year 2025), and (ii) the Special Board Date.
“Special
Voting Shares” means, together, the Class A Special Voting Share, the Class B Special Voting Share and the Class C
Special Voting Share.
“Specially
Designated Director” means a person who:
| (i) | is
designated as a director pursuant to Article 10.2(a)(iii) of the Telesat Corporation Articles; |
| (ii) | meets
the criteria for an Independent Audit Committee Director; |
| (iii) | is
not an affiliate or associate of PSP Investments, MHR or their permitted assignees (or any of their respective affiliates); |
| (iv) | together
with such person’s immediate family and affiliates, has not received compensation or payments from PSP Investments, MHR or their
permitted assignees (or any of their respective affiliates) in any of the past three (3) years in an amount in excess of US$120,000 per
annum, excluding for these purposes any directors’ fees; and |
“Target
Bonus” has the meaning ascribed thereto under the heading “Executive Compensation – Annual Incentive Awards”.
“Telesat”
means Telesat Corporation (together with Telseat Partnership LP and its applicable subsidiaries).
“Telesat
Canada Board” means the board of directors of Telesat Canada.
“Telesat-to-Telesat
Corporation Exchange Ratio” means 0.4136 Telesat Corporation Shares for each Telesat Common Share, Telesat Non-Voting Participating
Preferred Share or Telesat Voting Participating Preferred Share (including all outstanding shares in the capital of Telesat underlying
Telesat Options, Telesat Tandem SARs and Telesat RSUs).
“Telesat
Corporation Articles” means the organizational documents of Telesat Corporation, as amended and restated.
“Telesat
Corporation DSUs” means deferred share units that represent the right to receive Telesat Public Shares or cash, in accordance with
the terms of the Omnibus Plan.
“Telesat
Corporation Options” means options to purchase Telesat Public Shares in accordance with the terms of the Omnibus Plan.
“Telesat
Corporation PSUs” means performance share units that represent the right to receive Telesat Public Shares or cash, in accordance
with the terms of the Omnibus Plan.
“Telesat
Corporation Shares” has the meaning ascribed thereto under the heading “About this Management Information Circular”.
“Telesat
Options” means options to purchase Telesat Non-Voting Participating Preferred Shares.
“Telesat
Partnership GP Units” means the general partnership units of Telesat Partnership.
“Telesat
Public Shares” means, together, the Class A Shares and Class B Variable Voting Shares of Telesat Corporation.
“Telesat
RSUs” means restricted stock units that represent the right to receive Telesat Non-Voting Participating Preferred Shares.
“Telesat
Tandem SARs” means tandem stock appreciation rights accompanying certain Telesat Options.
“Timely
Notice” has the meaning ascribed thereto under the heading “Business to be Conducted at the Meeting – Advance Notice
Requirements”.
“TOB
Relief” has the meaning ascribed thereto under the heading “General Matters – Exemptions from Canadian Securities Law”.
“Transaction”
means the integration transaction completed on November 18, 2021, and November 19, 2021, by and among Telesat, Telesat Canada, Loral
Space & Communications Inc., Telesat Partnership LP, Telesat CanHold Corporation, Lion Combination Sub Corporation, Public Sector
Pension Investment Board, and Red Isle Private Investments Inc., as further described in the Company’s Annual Information Form on
Form 20-F filed on SEDAR+ and EDGAR.
“Trust”
means the Telesat Corporation Trust, an irrevocable trust formed under the laws of the Province of Ontario pursuant to the Trust Agreement.
“Trust
Agreement” means the trust agreement establishing the Trust, entered into between the settlor of the Trust and the Trustee on the
First Closing Day.
“Trust
Voting Agreement” means the voting agreement entered into between the Trustee, Telesat Corporation and Telesat Partnership on the
First Closing Day.
“Trustee”
means the trustee of the Trust, as determined from time to time in accordance with the Trust Agreement, who will initially be TSX Trust
Company.
“TSX”
means the Toronto Stock Exchange.
“Unwind
Transaction” means, collectively, (i) the conversion of all of the Class B Variable Voting Shares into Class A Shares
and (ii) the other transactions, events and occurrences specified in the Telesat Corporation Articles to occur upon an Unwind Trigger,
including the redemption of the Golden Share and the Special Voting Shares and the expiration of the provisions in Part 24 of the Telesat
Corporation Articles.
“Unwind
Trigger” means the occurrence of both clauses (i) and (ii): (i) the occurrence of any one of the following: (A) the election of
Telesat Corporation (which election, until the Special Board Date, must be made with the approval of the majority of the Specially Designated
Directors then in office) to effect the Unwind Transaction, if: (a) no person who is not a Canadian, or any voting group comprised of
any persons who are not Canadians, in each case, beneficially owns or controls, directly or indirectly, one-third or more of the fully
diluted Telesat Corporation Shares, (b) Telesat Corporation becomes widely held, such that at least 70% of the fully diluted Telesat
Corporation Shares are held by holders that do not beneficially own or control, directly or indirectly (and are not members of any group
that beneficially owns or controls, directly or indirectly), 10% or more of the fully diluted Telesat Corporation Shares, collectively,
or are entitled to report their ownership interest in Telesat Corporation for purposes of U.S. federal securities laws on (i) Form 13F
or (ii) Schedule 13G pursuant to Rule 13d-1(b) or Rule 13d-1(c) promulgated under the Exchange Act, and (c) a majority of the members
of the Telesat Corporation Board remain Canadian (as defined in the Investment Canada Act) at the time of the Unwind Transaction or (B) a
Change of Control; and (ii) both (1) the absence of any determination by the Telesat Corporation Board that the Unwind Transaction would
constitute a breach of, or an acceleration of the performance of any obligation under, any material agreement of Telesat Corporation,
in each case, within 60 days of written notice to the Telesat Corporation Board of the occurrence of any event set forth in (i) above;
provided, however, that in the event of the occurrence of a Change of Control, the fact that such occurrence could be deemed as a Change
of Control under Telesat Corporation’s outstanding indebtedness or other material agreements shall be excluded for purposes of
this subclause (1) if such indebtedness is refinanced or intended to be refinanced in connection with the occurrence of such Change of
Control; and (2) receipt by Telesat Corporation of all required governmental authorizations for the Unwind Transaction.
“2008
Telesat Plan” has the meaning ascribed to it under the heading “Executive Compensation – Types of Awards under Historic
Plans”.
“2013
Telesat Plan” has the meaning ascribed to it under the heading “Executive Compensation – Types of Awards under Historic
Plans”.
APPENDIX
“B”
MANDATE OF THE BOARD
The
board of directors (the “Board”) of Telesat Corporation (“Telesat” or the “Company”)
is elected by the shareholders of Telesat and is responsible for the stewardship of Telesat. The purpose of this mandate is to describe
the principal duties and responsibilities of the Board, as well as some of the policies and procedures that apply to the Board in discharging
its duties and responsibilities.
The
Board has approved this mandate, which, together with the corporate governance guidelines, the charters for the committees of the Board,
the position descriptions for the Board chair, lead director and committee chairs, the articles of Telesat, as amended and restated (the
“Telesat Corporation Articles”) and the separate investor rights agreements dated November 23, 2020 entered into between
Telesat and each of MHR Fund Management LLC (“MHR”) and Public Sector Pension Investment Board (“PSP”)
(as may be amended from time to time, the “Investor Rights Agreements”) provide the general framework for the governance
of the Company. In the event of any conflict between this policy and the Telesat Corporation Articles or the Investor Rights Agreements,
or any of the rights, privileges, arrangements, or powers set forth therein, the Telesat Corporation Articles and the Investor Rights
Agreements shall prevail and this policy shall not and shall be interpreted not to, directly or indirectly interfere with, limit or restrict
or otherwise disrupt, any of such rights, privileges, arrangements or powers. The Board intends that policy will continue to evolve to
address all applicable regulatory and stock exchange requirements relating to corporate governance and will be modified and updated as
circumstances warrant.
The
Board will be comprised in accordance with the relevant provisions of the Telesat Corporation Articles and shall include a minimum of
three (3) independent directors who are unaffiliated with MHR and PSP, with a view to ensuring that a majority of the directors are independent
within the meaning of Section 1.4 of National Instrument 52-110 – Audit Committees (“NI 52-110”)
and NASDAQ Rule 5605. The Board will annually review and make a determination on the independence of each director as required under
applicable securities laws and the rules of any stock exchange upon which the securities of the Company are listed, including under Section
1.2 of National Instrument 58-101 and NASDAQ Rule 5605(a)(2).
The
Board, as required, may have an independent (as set forth under Section 1.2 of National Instrument 58-101 and NASDAQ Rule 5605(a)(2))
Director to carry out the functions of a lead director. If Telesat has a non-executive, independent (as set forth under Section 1.2 of
National Instrument 58-101 and NASDAQ Rule 5605(a)(2)) Chair, then the role of the lead director will be filled by the non-executive
Chair.
| 3. | Role
and Responsibilities of the Board |
The
Board is responsible for providing independent, effective leadership in supervising the management of the business and affairs of Telesat,
including providing guidance and strategic oversight to management with a view to maximizing shareholder value and conducting the business
and affairs of Telesat ethically and in accordance with the highest standards of corporate governance.
In
discharging their duties, directors must act honestly and in good faith, with a view to the best interests of the Company. Each director
must also exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. The responsibilities
of the Board include:
| a) | adopting
a strategic planning process and approving management’s strategic and business plans; |
| b) | risk
identification and ensuring that procedures are in place for the management of those risks; |
| c) | reviewing
and approving annual operating plans and budgets; |
| d) | corporate
social responsibility, ethics and integrity; |
| e) | succession
planning, including the selection and appointment of senior management; |
| f) | delegations
and general approval guidelines for management; |
| g) | monitoring
financial reporting and management; |
| h) | monitoring
internal control and management information systems; |
| i) | corporate
disclosure and communications; |
| j) | adopting
measures for receiving feedback from stakeholders; and |
| k) | adopting
key corporate policies designed to ensure that Telesat and its directors, officers and employees
comply with applicable laws, rules and regulations and conduct their business ethically and
with honesty and integrity. |
Meetings
of the Board will be held as many times per year as necessary to effectively carry out the Board’s responsibilities, but in any
event not less than four (4) times per year.
| 4. | Strategic
Planning Process and Risk Management |
The
Board will adopt a strategic planning process to establish objectives and goals for Telesat’s business and will review, approve
and modify as appropriate the strategies proposed by senior management to achieve such objectives and goals. The Board will periodically
review and approve, as necessary, a strategic plan which takes into account, among other things, the opportunities and risks of Telesat’s
business and affairs.
The
Board, in conjunction with management, will identify the principal risks of Telesat’s business and oversee management’s implementation
of appropriate systems to effectively monitor, manage and mitigate the impact of such risks. Pursuant to its duty to oversee the implementation
of effective risk management policies and procedures, the Board may delegate to applicable Board committees the responsibility for assessing
and implementing appropriate policies and procedures to address specified risks, including delegation of financial and related risk management
to the Audit Committee, delegation of risks associated with compensation policies and practices to the Human Resources & Compensation
Committee and delegation of risks associated with corporate governance to the Nominating & Corporate Governance Committee. The Board
will work in conjunction with each Committee, respectively, to oversee the implementation of such policies and procedures.
The
Board, in conjunction with management, is responsible for understanding and monitoring the political, cultural, legal and business risks
and environments in which Telesat operates and providing input to management on emerging trends, risks and issues.
| 5. | Corporate
Social Responsibility, Ethics and Integrity |
The
Board will provide leadership to Telesat in support of its commitment to corporate social responsibility, set the ethical tone for Telesat
and its management and foster ethical and responsible decision-making by management. The Board will take reasonable steps to satisfy
itself of the integrity of the President and Chief Executive Officer and management and satisfy itself that the President and Chief Executive
Officer and management create a culture of integrity throughout the organization.
| 6. | Succession
Planning, Appointment and Supervision of Management |
The
Board will approve the succession plan for Telesat management upon the recommendation of the Human Resources & Compensation Committee,
including the selection, appointment and supervision of the President and Chief Executive Officer and the other senior officers of Telesat,
and will also approve the compensation of the President and Chief Executive Officer and the other senior officers of Telesat.
| 7. | Delegations
and Approval Authorities |
The
Board will delegate to the President and Chief Executive Officer and senior management authority over the day-to-day management of the
business and affairs of Telesat and will oversee such senior officers appropriately. This delegation of authority will be subject to
specified financial limits and any transactions or arrangements in excess of general authority guidelines will be reviewed by and subject
to the prior approval of the Board.
The
Board may delegate certain matters it is responsible for to Board committees, presently consisting of the Audit Committee, Nominating
& Corporate Governance Committee and Human Resources & Compensation Committee. The Board will, however, retain its oversight
function and ultimate responsibility for these matters and any delegated responsibilities.
| 8. | Monitoring
of Financial Reporting and Management |
The
Board will review and/or approve, as applicable, all material securities filings, including the annual audited consolidated financial
statements, interim financial statements, the notes and management discussion and analysis accompanying such consolidated financial statements,
quarterly and annual reports, management proxy circulars, proxy statements, annual information forms, prospectuses, and equity financings,
borrowings and all annual operating plans and budgets.
The
Board, with the assistance of the Audit Committee, will adopt procedures that seek to: (i) ensure the integrity of internal controls
and management information systems; (ii) ensure compliance with applicable laws, rules and regulations; and (iii) prevent violations
of applicable laws, rules and regulations relating to financial reporting and disclosure, violation of Telesat’s Code of Ethics
and fraud against shareholders.
| 9. | Corporate
Disclosure and Communications |
The
Board will seek to ensure that Telesat’s corporate disclosure complies with applicable laws, rules and regulations and the rules
and regulations of the stock exchanges upon which Telesat’s securities are listed. In addition, the Board will adopt procedures
that seek to ensure the Board receives feedback from securityholders on material issues.
The
Board will adopt and annually review policies and procedures designed to ensure that Telesat and its directors, officers and employees
comply with applicable laws, rules and regulations and conduct Telesat’s business ethically and with honesty and integrity.
The
Nominating & Corporate Governance Committee will review and assess annually the adequacy of this mandate and recommend any proposed
changes to the Board for consideration.
The
Board may, from time to time, permit departures from the terms of this mandate, either prospectively or retrospectively. The terms of
this mandate are not intended to give rise to civil liability on the part of the Company or its directors or officers to shareholders,
securityholders, customers, suppliers, vendors, contractors, partners, competitors, employees or other persons, or to any other liability
whatsoever on their part.
| Dated: |
November 4, 2022 |
|
| |
|
|
| Approved by: |
Board of Directors |
|
APPENDIX
“C”
AUDIT COMMITTEE CHARTER
This
charter (the “Charter”) sets forth the purpose, composition, responsibilities and authority of the Audit Committee
(the “Committee”) of the Board of Directors (the “Board”) of Telesat Corporation (“Telesat”
or the “Company”).
Certain
aspects of the composition and organization of the Committee are prescribed and/or governed by the Business Corporations Act (British
Columbia), the articles of Telesat, as amended and restated (the “Telesat Corporation Articles”) and applicable agreements,
including the separate investor rights agreements dated November 23, 2020 entered into between Telesat and each of MHR Fund Management
LLC and Public Sector Pension Investment Board (as may be amended from time to time, the “Investor Rights Agreements”).
Certain of the provisions of this Charter may be modified or superseded by the provisions of the Telesat Corporation Articles and the
Investor Rights Agreements. In the event of any conflict between this Charter and the Telesat Corporation Articles or the Investor Rights
Agreements, or any of the rights, privileges, arrangements, or powers set forth therein, the Telesat Corporation Articles and the Investor
Rights Agreements shall prevail and this Charter shall not and shall be interpreted not to, directly or indirectly interfere with, limit
or restrict or otherwise disrupt, any of such rights, privileges, arrangements or powers.
The
purpose of the Committee is to assist the Board in fulfilling its oversight responsibilities with respect to:
| (a) | financial
reporting and disclosure requirements, including the integrity of the Company’s financial
statements and related information; |
| (b) | compliance
with applicable legal and regulatory requirements; |
| (c) | risk
management and internal control over financial reporting and disclosure controls and procedures; |
| (d) | the
work of Telesat’s financial management, external and internal auditors, including the
qualifications and appointment of the external auditor; |
| (e) | enterprise
risk management and to monitor such matters; |
| (f) | the
auditing, accounting and financial reporting process generally; and |
| (g) | the
administration, funding and investment of the Company’s pension plans and pension fund. |
| 13. | Composition
and Membership |
| (a) | The
Board will appoint the members (the “Members”) of the Committee. The Members
will be appointed to hold office until the next annual general meeting of shareholders of
Telesat after their appointment or until their successors are appointed and qualified. The
Board may remove a Member at any time and may fill any vacancy occurring on the Committee.
A Member may resign at any time and a Member will automatically cease to be a Member upon
ceasing to be a director. The Board will fill any vacancy if the membership of the Committee
is less than three directors. Whenever there is a vacancy on the Committee, the remaining
members may exercise all of the powers of the Committee as long as a quorum remains in office. |
| (b) | The
Committee shall consist of as many directors of the Board as the Board may determine, but
in any event, not less than 3 (three) Members and such members shall be designated in accordance
with the Telesat Corporation Articles. Each Member will meet the criteria for independence,
experience and financial literacy established by applicable laws and the rules of any stock
exchange upon which Telesat’s securities are listed, including Section 10A(m)(3) of
the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”),
including Rule 10A-3(b)(1), as in effect from time to time and as such requirements are interpreted
by the Board in its business judgment as well as National Instrument 52-110 — Audit
Committees (“NI 52-110”) and NASDAQ Rule 5605. In addition, each
director will be free of any relationship which could, in the view of the Board, reasonably
interfere with the exercise of a Member’s independent judgment and a Member’s
ability to be independent from management in connection with his or her duties as a Member
of the Committee. Each Member will have an understanding of the accounting principles used
to prepare financial statements and varied experience as to the general application of such
accounting principles, as well as an understanding of the internal controls and procedures
necessary for financial reporting. No member of the Committee shall have participated in
the preparation of the financial statements of the Company in the past three years. At least
one member of the Audit Committee shall be an “audit committee financial expert”
as defined by the SEC. These membership requirements shall be subject to exemptions and cure
periods permitted by the rules of NASDAQ and the SEC, as in effect from time to time. |
| (c) | Subject
to the Telesat Corporation Articles, the Board will appoint one of the independent directors
of the Board to act as the chair of the Committee (the “Chair”). The secretary
of Telesat (the “Secretary”) will be the secretary of all meetings and
will maintain minutes of all meetings and deliberations of the Committee and will circulate
such minutes of each meeting of the Committee to the Members and to the chair of the Board
(and to any other member of the Board that requests that they be circulated) on a timely
basis. If the Secretary is not in attendance at any meeting, the Committee will appoint another
person who may, but need not, be a Member to act as the secretary of that meeting. |
| (d) | The
Committee may, to the extent permissible by applicable laws and the rules of any stock exchange
upon which Telesat’s securities are listed, delegate any or all of its functions to
any of its Members or any sub-set thereof, or other persons, from time to time as it sees
fit. |
| (a) | Meetings
of the Committee will be held at such times and places as the Chair may determine, but in
any event not less than four (4) times per year. Forty-eight (48) hours advance notice of
each meeting will be given to each Member orally, by telephone or by email, unless all Members
are present and waive notice, or if those absent waive notice before or after a meeting.
Members may attend all meetings either in person or by telephone, video or other electronic
means. Powers of the Committee may also be exercised by written resolutions signed by all
Members. |
| (b) | At
the request of the external auditors of Telesat, the President and Chief Executive Officer
or the Chief Financial Officer of Telesat or any Member, the Chair shall convene a meeting
of the Committee. Any such request shall be required to set out in reasonable detail the
business proposed to be conducted at the meeting so requested. |
| (c) | The
Chair, if present, will act as the chair of meetings of the Committee. If the Chair is not
present at a meeting of the Committee the Members in attendance may select one of their number
to act as chair of the meeting. |
| (d) | Subject
to the Telesat Corporation Articles, a majority of Members will constitute a quorum for a
meeting of the Committee. Each Member will have one vote and decisions of the Committee will
be made by an affirmative vote of the majority. The Chair will not have a deciding or casting
vote in the case of an equality of votes. The powers of the Committee may be exercised at
a meeting where a quorum is present or by resolution in writing signed by all Members. |
| (e) | The
Committee may invite from time to time, at its discretion, senior executives of the Company
or such persons as it sees fit to attend its meetings and to take part in the discussion
and consideration of the affairs of the Committee. The Committee will be given the opportunity
to meet in camera without members of management in attendance for a portion of each meeting
of the Committee. |
| (f) | To
the extent possible, in advance of every regular meeting of the Committee, the Chair, with
the assistance of the Secretary, will prepare and distribute to the Members and others as
deemed appropriate by the Chair, an agenda of matters to be addressed at the meeting together
with appropriate briefing materials. The Committee may require officers and employees
of Telesat to produce such information and reports as the Committee may deem appropriate
in order for it to fulfill its duties. |
| 15. | Exercise
of Power between Meetings |
Between
meetings, the Chair or any Member designated for such purpose by the Committee, may, if required under the circumstances, exercise any
power delegated by the Committee on an interim basis. The Chair or other designated Member will promptly report to the other Members
in any case in which this interim power is exercised.
| 16. | Duties
and Responsibilities |
The
duties and responsibilities of the Committee as they relate to the following matters, are as follows:
Financial
Reporting and Disclosure
| (a) | review
with the external auditors and management and approve each set of interim financial statements
and related management’s discussion and analysis accompanying such financial statements,
and review with the external auditors and management and recommend to the Board for approval
the annual audited financial statements (including with respect to any pension fund), including
the auditor’s report thereon, and related management’s discussion and analysis,
financial reports or other documents of the Company containing financial information and
guidance with respect to earnings per share to be provided to analysts and rating agencies,
prior to their being filed with the appropriate regulatory authorities and/or publicly disclosed.
The Committee shall satisfy itself that the financial statements are presented in accordance
with applicable accounting principles, with such documents to indicate whether such information
has been reviewed by the Board or the Committee. The Committee shall also satisfy itself
that, in the case of the annual financial statements, the audit function has been effectively
carried out by the auditors and, in the case of the interim financial statements, that the
review function has been effectively carried out; |
| (b) | review
and discuss with management press releases containing disclosure regarding financial information
that are required to be reviewed by the Committee under any applicable laws or otherwise
pursuant to the policies of the Company before the Company publicly discloses this information,
including the type and presentation of information, paying particular attention to any forward-looking
guidance, pro forma or non-IFRS measures. The Committee shall recommend to the Board the
approval of the annual earnings releases. The Committee shall have the authority to approve
the interim earnings releases and shall review matters related to the interim earnings releases
with the Board; |
| (c) | review
and recommend to the Board for approval, where appropriate, other public disclosure documents
containing audited or unaudited financial information prior to their being filed with the
appropriate regulatory authorities and/or publicly disclosed, including any prospectuses,
annual information forms, annual report to shareholders, management information circular,
material change disclosures of a financial nature and similar disclosure documents prior
to the public disclosure of such information; |
| (d) | review
with management of Telesat, and with external auditors, significant disclosure issues regarding
accounting principles, practices, and judgments of management and alternative treatments
under International Financial Reporting Standards (“IFRS”), with a view
to gaining reasonable assurance that financial statements are accurate, complete and present
fairly the Company’s financial position and the results of its operations in accordance
with IFRS, as applicable; |
| (e) | seek
to ensure that adequate procedures are in place for the review of Telesat’s public
disclosure of financial information extracted or derived from Telesat’s financial statements,
the Company’s disclosure controls and procedures and periodically assess the adequacy
of those procedures and recommend any proposed changes to the Board for consideration; |
Internal
Controls and Audit
| (f) | review
the adequacy and effectiveness of Telesat’s system of internal control and management
information systems through discussions with management and the external auditor to ensure
that Telesat maintains: (i) the necessary books, records and accounts in sufficient detail
to accurately and fairly reflect Telesat’s transactions; (ii) effective internal control
systems; and (iii) adequate processes for assessing the risk of material misstatement in
the financial statements and other identified risks, including detecting control weaknesses
and detecting fraud, in each case to ensure compliance with applicable laws and regulations.
From time to time the Committee shall assess whether it is necessary or desirable to establish
a formal internal audit department having regard to the size and stage of development of
Telesat at any particular time; |
| (g) | satisfy
itself that management has established adequate procedures for the review of Telesat’s
disclosure of financial information extracted or derived directly from Telesat’s financial
statements; |
| (h) | satisfy
itself, through discussions with management, that the adequacy of internal controls, systems
and procedures has been periodically assessed in order to ensure compliance with regulatory
requirements and recommendations; |
| (i) | review
and discuss Telesat’s major financial risk exposures and the steps taken to monitor
and control such exposures, including the use of any financial derivatives and hedging activities; |
| (j) | review,
and in the Committee’s discretion make recommendations to the Board regarding, the
adequacy of Telesat’s risk management policies and procedures with regard to identification
of Telesat’s principal risks and implementation of appropriate systems to manage such
risks including an assessment of the adequacy of insurance coverage maintained by Telesat; |
| (k) | recommend
the appointment, or if necessary, the replacement or succession of the head of Telesat’s
internal audit process; |
| (l) | annually
or more frequently as it deems necessary or appropriate, evaluate the internal auditors,
including their activities, organizational structure, independence, objectivity, qualifications
and effectiveness; |
| (m) | establish
and periodically review the Company’s policies and procedures for reviewing and approving
or ratifying related-party transactions; |
| (n) | review
with the chief executive officer, president, chief financial officer and independent auditors,
periodically, the following: |
| (i) | all
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information; and |
| (ii) | any
fraud, whether or not material, that involves management or other employees who have a significant
role in the Company’s internal control over financial reporting; |
External
Audit
| (o) | review
and, if advisable, recommend to the Board a firm of external auditors to be nominated for
appointment as the external auditor of Telesat; |
| (p) | ensure
the external auditors report directly to the Committee on a regular basis; |
| (q) | at
least annually, review the independence of the external auditors, including a written report
from the external auditors respecting their independence, delineating all relationships between
the external auditor and the Company and consideration of applicable auditor independence
standards; |
| (r) | actively
engage in a dialogue with the external auditor with respect to any disclosed relationships
or services that may impact the objectivity and independence of the external auditor and
take appropriate action to oversee the independence of the external auditor; |
| (s) | review
and recommend to the Board the fee, scope and timing of the audit and other related services
rendered by the external auditors; |
| (t) | at
least annually, review the audit plan of the external auditors prior to the commencement
of the audit; |
| (u) | establish
and maintain an open and direct line of communication with Telesat’s external and internal
auditors; |
| (v) | meet
at least once a year in camera with only the external auditors, and with only the members
of the Committee; |
| (w) | oversee
the performance of the external auditors who are accountable to the Committee and the Board
as representatives of the shareholders, including, at least annually, reviewing the qualifications
and performance of the lead partner(s) of the independent auditors team and ensuring the
rotation of the lead (and concurring) audit partner(s) having primary responsibility for
the audit and the audit partner responsible for reviewing the audit as required by applicable
laws, with respect to preparing and issuing an audit report or performing other audit, review
or attest services for Telesat, including the resolution of issues between management of
Telesat and the external auditors regarding financial disclosure; |
| (x) | review
the results of the external audit and the report thereon including, without limitation, a
discussion with the external auditors as to the quality of accounting principles used, any
alternative treatments of financial information that have been discussed with management
of Telesat, the ramifications of their use as well as any other material changes; |
| (y) | review
any material written communications between management of the Company and the external auditors
and any significant disagreements between management and the external auditors regarding
financial reporting; |
| (z) | discuss
with the external auditors their perception of Telesat’s financial and accounting personnel,
records and systems, the cooperation which the external auditors received during their course
of their review and availability of records, data and other requested information and any
recommendations with respect thereto; |
| (aa) | discuss
with the external auditors their perception of Telesat’s identification and management
of risks, including the adequacy or effectiveness of policies and procedures implemented
to mitigate such risks; |
| (bb) | review
the reasons for any proposed change in the external auditors which is not initiated by the
Committee or Board and any other significant issues related to the change, including the
response of the incumbent auditors, and enquire as to the qualifications of the proposed
auditors before making its recommendations to the Board; |
| (cc) | review
annually a report from the external auditors in respect of their internal quality-control
procedures, any material issues raised by the most recent internal quality-control review,
or peer review of the external auditors, or by any inquiry or investigation by governmental
or professional authorities, within the preceding five years, respecting one or more independent
audits carried out by the external auditors, and any steps taken to address any such issues; |
| (dd) | pre-approve
all non-audit services to be provided to Telesat or any subsidiary entities by its external
auditors or by the external auditors of such subsidiary entities, subject to the de minimis
exception for non-audit services described in Section 10A of the Exchange Act and Section
2.4 of NI 52-110 that are approved by the Committee prior to completion of the audit,
and otherwise in accordance with applicable laws and the rules of any stock exchange upon
which Telesat’s securities are listed. The Committee may delegate to one or more of
its members the authority to pre-approve non-audit services but pre-approval by such member
or members so delegated shall be presented to the full Committee at its first scheduled meeting
following such pre-approval; |
| (ee) | obtain
from the external auditors assurance that Section 10A(b) of the Exchange Act has not been
implicated; |
| (ff) | review
and approve in advance any services provided by the Company’s external auditors to
the Company’s executive officers or members of their immediate families; |
| (gg) | the
Committee will require the external auditors to provide to the Committee, and the Committee
will review and discuss with the external auditors, all reports which the external auditors
are required to provide to the Committee or the Board under rules, policies or practices
of professional or regulatory bodies applicable to the external auditors, and any other reports
which the Committee may require; |
Compliance
| (hh) | monitor
and periodically review the Whistleblower Policy and associated procedures for: |
| (i) | the
receipt, retention and treatment of complaints received by Telesat regarding accounting,
internal accounting controls or auditing matters; |
| (ii) | the
confidential, anonymous submission by directors, officers and employees of Telesat of concerns
regarding questionable accounting or auditing matters; and |
| (iii) | any
violations of any applicable law, rule or regulation that relates to corporate financial
reporting and disclosure, or violations of Telesat’s Code of Ethics with respect to
financial matters; |
| (ii) | review
and approve Telesat’s hiring policies regarding employees and partners, and former
employees and partners, of the present and former external auditors of Telesat; |
| (jj) | review
and monitor the implementation of the Company’s Code of Ethics; |
Pension
Plans and Funds
| (kk) | review
and advise the Board with respect to any proposed changes to the Company’s pension
plans, including the impact on liabilities and funding of such plans; |
| (ll) | review
and approve long-term funding objectives in relation to pension plan liabilities; |
| (mm) | at
least annually, confirm or approve changes to the Company’s Statement of Investment
Policies and Procedures of the pension fund, including the long-term asset mix to be followed; |
| (nn) | approve
the appointment or removal of the actuary or auditors of the pension fund; |
| (oo) | recommend
to the Board for approval, the appointment or removal of any custodian, trustee or investment
manager of the pension fund; |
| (pp) | obtain
and review on a periodic basis a report on the investment performance of the pension fund; |
| (qq) | review
at least annually the policies and procedures related to the Company’s responsibility
as employer and administrator of the pension plans and pension fund; |
| (rr) | perform
such other functions necessary to the oversight of the pension plans and pension fund, including
with respect to strategy and policies, delegation and high-level monitoring; |
Other
Duties
| (ss) | direct
and supervise the investigation into any matter brought to its attention within the scope
of the Committee’s duties; |
| (tt) | meet
periodically with the Company’s general counsel and outside counsel when appropriate,
to review legal and regulatory matters, including (i) any matters that may have a material
impact on the financial statements of the Company and (ii) any matters involving potential
or ongoing material violations of law or breaches of fiduciary duty by the Company or any
of its directors, officers, employees, or agents or breaches of fiduciary duty to the Company;
and |
| (uu) | perform
such other duties as may be assigned to it by the Board from time to time or as may be required
by applicable law. |
While
the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits
or to determine that Telesat’s financial statements are complete and accurate or comply with IFRS and other applicable requirements.
These are the responsibilities of management and the external auditors. The Committee, the Chair and any Members identified as having
accounting or related financial expertise are members of the Board, appointed to the Committee to provide broad oversight of the financial,
risk and control related activities of Telesat, and are specifically not accountable or responsible for the day to day operation or performance
of such activities. Although the designation of a Member as having accounting or related financial expertise for disclosure purposes
is based on that individual’s education and experience, which that individual will bring to bear in carrying out their duties on
the Committee, such designation does not impose on such person any duties, obligations or liability that are greater than the duties,
obligations and liability imposed on such person as a member of the Committee and Board in the absence of such designation. Rather, the
role of a Member who is identified as having accounting or related financial expertise, like the role of all Members, is to oversee the
process, not to certify or guarantee the internal or external audit of Telesat’s financial information or public disclosure.
This
Charter is not intended to change or interpret the Telesat Corporation Articles or other organizational documents of the Company or applicable
law or stock exchange rule to which the Company is subject, and this Charter should be interpreted in a manner consistent with all such
applicable laws and rules.
The
Board may, from time to time, permit departures from the terms of this Charter, either prospectively or retrospectively. This Charter
is not intended to give rise to civil liability on the part of the Company or its Directors or officers to shareholders, securityholders,
customers, suppliers, vendors, contractors, partners, competitors, employees or other persons, or to any other liability whatsoever on
their part.
| 18. | Reporting
and Evaluation |
The
Chair will report to the Board at each Board meeting on the Committee’s activities since the last Board meeting. The Committee
will annually review and approve the Committee’s report for inclusion in the Company’s annual information form. The Secretary
will circulate the minutes of each meeting of the Committee to the members of the Board.
The
Committee shall periodically evaluate its own performance and report to the Nominating & Corporate Governance Committee on such evaluation.
The performance of the Committee shall be evaluated by the Nominating & Corporate Governance Committee as part of its regular evaluation
of the Board committees.
| 19. | Access
to Information and Authority to Retain Independent Advisors |
The
Committee shall have unrestricted access to all information regarding Telesat that is necessary or desirable to fulfill its duties and
all directors, officers and employees will be directed to cooperate as requested by Members.
The
Committee has the authority to retain, at Telesat’s expense, independent legal, financial and other advisors, consultants and experts,
to assist the Committee in fulfilling its duties and responsibilities, including sole authority to retain and to approve any such firm’s
fees and other retention terms without prior approval of the Board. The Committee also has the authority to communicate directly with
internal and external auditors.
The
Committee shall discharge its responsibilities and shall assess the information provided by the Company’s management and the external
advisers, in accordance with its business judgment. Members are entitled to rely, absent knowledge to the contrary, on the integrity
of the persons and organizations from whom they receive information, and on the accuracy and completeness of the information provided.
Nothing in this Charter is intended or may be construed as imposing on any member of the Committee or the Board a standard of care or
diligence that is in any way more onerous or extensive than the standard to which the directors are subject under applicable law.
The
Committee will review and assess annually the adequacy of this Charter and recommend any proposed changes to the Board for consideration.
| Dated: |
November
4, 2022 |
|
| |
|
|
| Approved
by: |
Audit
Committee |
|
| |
Board of Directors |
|
APPENDIX
“D”
AMENDED AND RESTATED OMNIBUS LONG-TERM INCENTIVE PLAN
[See
attached]
TELESAT CORPORATION
AMENDED AND RESTATED OMNIBUS LONG-TERM INCENTIVE
PLAN
Effective as
of June [18], 2024
TABLE OF CONTENTS
| RECITALS |
D-1 |
| |
|
| Article 1 PURPOSE |
D-1 |
| |
|
| |
Section 1.1 |
Purpose |
D-1 |
| |
|
|
|
| Article 2 INTERPRETATION |
D-1 |
| |
|
| |
Section 2.1 |
Defined Terms |
D-1 |
| |
|
|
|
| Article 3 PURPOSE AND ADMINISTRATION |
D-10 |
| |
|
| |
Section 3.1 |
Administration |
D-10 |
| |
Section 3.2 |
Eligible Persons |
D-11 |
| |
Section 3.3 |
Shares Reserved |
D-11 |
| |
|
|
|
| Article 4 OPTIONS |
D-12 |
| |
|
| |
Section 4.1 |
Grants of Options |
D-12 |
| |
Section 4.2 |
Exercise Price |
D-13 |
| |
Section 4.3 |
Vesting |
D-13 |
| |
Section 4.4 |
Exercise of Options |
D-13 |
| |
Section 4.5 |
Cashless Exercise |
D-14 |
| |
Section 4.6 |
Termination |
D-15 |
| |
|
|
|
| Article 5 SHARE UNITS |
D-15 |
| |
|
| |
Section 5.1 |
Nature of Share Units |
D-15 |
| |
Section 5.2 |
Share Unit Awards |
D-16 |
| |
Section 5.3 |
Performance Criteria and Performance Period Applicable to PSU Awards |
D-17 |
| |
|
|
|
| Article 6 DEFERRED SHARE UNITS |
D-17 |
| |
|
| |
Section 6.1 |
Nature of DSUs |
D-17 |
| |
Section 6.2 |
DSU Awards |
D-17 |
| |
Section 6.3 |
Redemption or Settlement of DSUs |
D-18 |
| |
|
|
|
| Article 7 CHANGE OF CONTROL |
D-19 |
| |
|
| |
Section 7.1 |
Change of Control |
D-19 |
| Article 8 ADJUSTMENTS AND AMENDMENTS |
D-20 |
| |
|
| |
Section 8.1 |
Adjustment |
D-20 |
| |
Section 8.2 |
Dividend Share Units |
D-20 |
| |
Section 8.3 |
Amendment or Discontinuance |
D-21 |
| |
|
|
|
| Article 9 GENERAL CONDITIONS |
D-22 |
| |
|
| |
Section 9.1 |
General Conditions Applicable to Awards |
D-22 |
| |
|
|
|
| Article 10 MISCELLANEOUS |
D-25 |
| |
|
| |
Section 10.1 |
Right to Adopt Other Share Compensation Arrangements |
D-25 |
| |
Section 10.2 |
Right to Issue Other Shares |
D-25 |
| |
Section 10.3 |
Non-qualified Stock Options; Exemption from Section 409A |
D-25 |
| |
Section 10.4 |
Discretionary Nature of Awards |
D-25 |
| |
Section 10.5 |
Future Value of Shares |
D-26 |
| |
Section 10.6 |
No Rights to Property or Assets of the Corporation |
D-26 |
| |
Section 10.7 |
Foreign Jurisdictions |
D-26 |
| |
Section 10.8 |
Compliance with Legislation |
D-26 |
| |
Section 10.9 |
Use of an Administrative Agent and Trustee |
D-28 |
| |
Section 10.10 |
Notice |
D-28 |
| |
Section 10.11 |
Successors and Assigns |
D-28 |
| |
Section 10.12 |
Severability |
D-28 |
| |
Section 10.13 |
No Liability |
D-28 |
| |
Section 10.14 |
Governing Law |
D-28 |
| |
Section 10.15 |
Effective Date |
D-28 |
TELESAT CORPORATION
AMENDED AND RESTATED
OMNIBUS LONG-TERM INCENTIVE PLAN
RECITALS
WHEREAS the omnibus
long-term incentive plan was adopted in 2021 (“2021 Omnibus Plan”) by Telesat Corporation (the “Corporation”)
and included a fixed maximum number of Class A Common shares (“Class A Shares”) and Class B Variable Voting shares
(“Class B Shares”) of the Corporation (collectively, the “Shares”) that were issuable under the
2021 Omnibus Plan such number being 2,972,816 Shares (the “2021 Maximum Issuable”).
AND WHEREAS the board
of directors of the Corporation (the “Board”) has authorized and approved an amendment to the Omnibus Plan on May 7,
2024 to increase the number of Shares available for issuance under this Amended and Restated Omnibus Long-Term Incentive Plan (the “Plan”)
to 5,017,401 Shares, representing the aggregate of 2021 Maximum Issuable and an additional 2,044,585 Shares (the “2024 Additional
Issuable” together with the 2021 Maximum Issuable, the “Maximum Issuable”).
AND WHEREAS following
such amendment, the Maximum Issuable under the Plan would be equal to 5,017,401 Shares.
NOW THEREFORE the 2021
Omnibus Plan is hereby amended and restated so that as amended and restated it reads as follows:
Article 1
PURPOSE
Section 1.1 Purpose
The purpose of this Amended and Restated Omnibus
Long-Term Incentive Plan (the “Plan”) is to advance the interests of Telesat Corporation (the “Corporation”)
by: (i) providing Eligible Persons (as defined below) with additional incentive; (ii) encouraging stock ownership
by such Eligible Persons; (iii) increasing the proprietary interest of Eligible Persons in the success of the Corporation; (iv) promoting
growth and profitability of the Corporation; (v) encouraging Eligible Person to take into account long-term corporate performance;
(vi) rewarding Eligible Persons for sustained contributions to the Corporation and/or significant performance achievements of the
Corporation; and (vii) enhancing the Corporation’s ability to attract, retain and motivate Eligible Persons.
Article 2
INTERPRETATION
Section 2.1 Defined Terms
For the purposes of this Plan, the following terms
have the following meanings:
| (a) | “Active Engagement” means any period in which a Participant who is not an employee
of the Corporation or an Affiliate provides services to the Corporation or an Affiliate. For certainty, “Active Engagement”
shall exclude any period that follows, or ought to have followed, a Participant's last day of providing services to the Corporation or
an Affiliate, including at common law; |
| (b) | “Affiliate” means any Person that controls or is controlled by the Corporation or that
is controlled by the same Person that controls the Corporation; provided that with respect to the Corporation or the Employer, the term
‘Affiliate’ shall be limited to any direct or indirect subsidiary of the Corporation with respect to which the Corporation
beneficially owns more than 50% of the outstanding voting securities or has the power to elect a majority of its directors; |
| (c) | “Awards” means Options, RSUs, PSUs and/or DSUs granted to a Participant pursuant to
the terms of this Plan; |
| (d) | “Award Agreement” means, individually or collectively, a Stock Option Certificate,
RSU Agreement, PSU Agreement and/or DSU Agreement, as the context requires; |
| (e) | “Associate” has the meaning specified in Section 1 of the Securities Act (Ontario); |
| (f) | “Black-Out Period” means the period of time when, pursuant to the Corporation’s
policies in effect from time to time, securities of the Corporation may not be traded by Insiders or other specified persons, as applicable; |
| (g) | “Board” means the board of directors of the Corporation as constituted from time to
time; |
| (h) | “Broker” has the meaning specified in Section 9.1(8); |
| (i) | “Business Day” means any day of the year, other than a Saturday, Sunday or any day
on which Canadian chartered banks are authorized or obligated by law to close for business in Toronto, Ontario or a day on which the NASDAQ
Stock Market or the Toronto Stock Exchange is closed for trading; |
| (j) | “Canadian Participant” shall mean a Participant who is employed in or resides in any
of the provinces or territories of Canada; |
| (k) | “Cause” shall mean, when used in connection with the termination of a Participant’s
Employment, unless otherwise provided in the Participant’s Award Agreement or an Employment Agreement (in which event, as regards
to such Participant, the definition of “Cause” or words to similar effect set out therein shall apply in place of the following
definition), the termination of the Participant’s Employment on account of (i) a failure of the Participant to substantially
perform his or her duties (other than as a result of physical or mental illness or injury); (ii) the Participant’s willful
misconduct or gross negligence which is materially injurious to the Corporation or any of its Affiliates; (iii) a breach by a Participant
of the Participant’s fiduciary duty or duty of loyalty to the Corporation and its Affiliates; (iv) the Participant’s
unauthorized removal from the premises of the Corporation or an Affiliate of any document (in any medium or form) relating to the Corporation
or an Affiliate or the customers or suppliers of, or investors in, the Corporation or an Affiliate; (v) a material breach by the
Participant of a policy of the Corporation or an Affiliate to which the Participant is subject or a breach by the Participant of a code
of conduct adopted from time to time by the Corporation; (vi) the commission by the Participant of an act of insubordination; (vii) the
commission by the Participant of any felony or other serious crime involving moral turpitude; or (viii) with respect to Canadian
Participants only, any act or omission of the Participant which would, pursuant to the Canada Labour Code, permit an employer to,
without notice or provision of wages in lieu of notice, terminate the employment of an employee. Any rights the Corporation or an Affiliate
may have hereunder in respect of the events giving rise to Cause shall be in addition to the rights the Corporation or Affiliate may have
under any other agreement with the Participant or at law or in equity. If, subsequent to a Participant’s termination of Employment,
it is discovered that such Participant’s Employment could have been terminated for Cause, the Participant’s Employment shall,
at the election of the Board, in its sole discretion, be deemed to have been terminated for Cause retroactively to the date the events
giving rise to Cause occurred; |
| (l) | “Cash Equivalent” means: |
| (i) | in the case of Share Units, the amount of money equal to the Market Price multiplied by the number of
vested Share Units in the Participant’s Account, net of any applicable taxes in accordance with Section 9.1(7), on the applicable
settlement date; and |
| (ii) | in the case of DSU Awards, the amount of money equal to the Market Price multiplied by the whole number
of DSUs then recorded in the Participant’s Account which the Participant requests to redeem, net of any applicable taxes in accordance
with Section 9.1(7), on the date the Corporation receives, or is deemed to receive, the redemption notice; |
| (m) | “Change of Control Event” means, unless the Board determines otherwise or as otherwise
provided in an Award Agreement, the happening, in a single transaction or in a series of related transactions, of any of the following
events: |
| (i) | all or substantially all of the assets of the Corporation (which, for greater certainty, includes the
assets of Telesat Partnership) are sold, leased, exchanged, licensed or otherwise disposed of in a single transaction or in a series of
related transactions, other than to MHR, PSP or Affiliates of either of them or of the Corporation; |
| (ii) | any Person or group of Persons who are acting jointly or in concert pursuant to the provisions of the
Securities Act (Ontario), other than (A) PSP and its Affiliates or a successor in whole or in part, to PSP or its Affiliates,
or (B) MHR or its Affiliates or a successor in whole or in part, to MHR or its Affiliates, acquires, directly or indirectly, ownership
of 50% or more of either the outstanding Shares or securities having aggregate voting power for the election of directors of the Corporation,
assuming the conversion of all outstanding securities of the Corporation or Telesat Partnership that could be converted into fully voting
securities of the Corporation, including securities that are convertible under circumstances that do not then exist because of the nature
of the current registered owner of such shares; |
| (iii) | during any period of two consecutive years, individuals who at the beginning of such period constitute
the Board, together with any new directors whose election or appointment by such Board, or whose nomination for election was approved
by a vote of a majority of the directors of the Corporation then still in office who were entitled to vote and who were either directors
of the Corporation at the beginning of such period or whose election or appointment, or whose nomination for election, was previously
approved (such persons referred to here as the “Continuing Directors”), cease for any reason to constitute a majority
of the Board; provided that any director appointed by PSP or MHR or their respective Affiliates or a successor in whole or in part, to
MHR, PSP or their respective Affiliates shall constitute a Continuing Director; |
| (iv) | a final determination by the Board or Shareholders to (A) liquidate all or substantially all of the
assets of the Corporation, (B) wind up the Corporation’s business, or (C) commence proceedings for such a liquidation,
winding-up or rearrangement pursuant to a plan of compromise or plan of arrangement under the Companies’ Creditors Arrangement Act;
or |
| (v) | notwithstanding any of the foregoing, any other matter specifically determined by the Board to be a Change
of Control Event for purposes of this Plan; |
| (n) | “Class A Shares” means the Class A common shares of the Corporation; |
| (o) | “Class B Shares” means the Class B variable voting shares of the Corporation; |
| (p) | “Class C Fully Voting Shares” means the Class C fully voting shares of the
Corporation; |
| (q) | “Class C Limited Voting Shares” means the Class C limited voting shares of
the Corporation; |
| (r) | “Class C Shares” means, together, the Class C Fully Voting Shares and the
Class C Limited Voting Shares; |
| (s) | “Code” means the United States Internal Revenue Code of 1986, as amended; |
| (t) | “Corporation” means Telesat Corporation, a Corporation existing under the laws of British
Columbia, and includes any successor company thereto; |
| (u) | “Consultant” means an individual, other than an employee, executive officer or director
of the Corporation or of an Affiliate, that for a period of 12 months or more, |
| (i) | is engaged to provide services to the Corporation or an Affiliate, other than services provided in relation
to a distribution of the Corporation’s securities; |
| (ii) | provides the services under a written contract with the Corporation or an Affiliate; and |
| (iii) | spends or will spend a significant amount of time and attention on the affairs and business of the Corporation
or an Affiliate; |
and includes, for an individual consultant,
a Corporation of which the individual consultant is an employee or shareholder, and a partnership of which the individual consultant is
an employee or partner;
| (v) | “Disability Termination” means, when used in connection with the termination of a Participant’s
Employment, unless otherwise provided in a Award Agreement or an Employment Agreement (in which event as regards such Participant, the
definition of “Disability Termination” or words of similar effect set out therein shall apply in place of the following definition),
the termination of the Participant’s employment due to their inability to substantially fulfil their duties on behalf of the Employer
as a result of illness or injury for a continuous period of nine (9) months or more or for an aggregate period of twelve (12) months
or more during any consecutive twenty-four (24) month period, despite the provision of reasonable accommodations by the Employer; |
| (w) | “Dividend Share Units” has the meaning ascribed thereto in Section 8.2 hereof; |
| (x) | “DSU” means a deferred share unit, which is a bookkeeping entry equivalent in value
to a Share credited to a Participant’s Account in accordance with Article 6 hereof; |
| (y) | “DSU Agreement” means a notice from the Corporation to a Participant evidencing the
grant of DSUs and the terms and conditions thereof as the Board may approve from time to time; |
| (z) | “DSU Redemption Deadline” has the meaning ascribed thereto in Section 6.3(1) hereof; |
| (aa) | “DSU Redemption Notice” has the meaning ascribed thereto in Section 6.3(1) hereof; |
| (bb) | “Effective Date” has the meaning specified in Section 10.15; |
| (cc) | “Eligible Person” has the meaning specified in Section 3.2; |
| (dd) | “Employed” or “Employment” means the period in which a Participant
who is an employee or officer of the Employer performs work for the Employer. For certainty, “Employed” or “Employment”
shall be deemed to include in the case of an employee (including an employee who is an officer), as applicable, (i) any period of
vacation, disability (but only to the extent prior to a Disability Termination), or other leave permitted by legislation, and (ii) any
period constituting the minimum notice of termination period that is required to be provided to an employee pursuant to applicable employment
standards legislation or labour code (if any). For certainty, “Employed” or “Employment” shall be deemed to exclude
any other period that follows or ought to have followed, as applicable, the later of (i) the end of the minimum notice of termination
period that is required to be provided to an employee pursuant to applicable employment standards legislation or labour code (if any),
or (ii) the Participant's last day of performing work for the Employer (including any period of vacation, disability, or other leave
permitted by legislation) whether that period arises from a contractual or common law right; |
| (ee) | “Employer” means the Corporation or an Affiliate of the Corporation for which a Participant
is Employed and in the event that the employer of a Participant is changed from the Corporation or an Affiliate to the Corporation or
another Affiliate of the Corporation, as applicable, then the Corporation or such Affiliate shall become the “Employer” hereunder; |
| (ff) | “Employment Agreement” means a written employment agreement by and between the Participant
and the Employer, if any; |
| (gg) | “Exercise Price” has the meaning specified in Section 4.2; |
| (hh) | “Expiry Date” has the meaning specified in Section 4.4(1); |
| (ii) | “Insider” means a “reporting insider” of the Corporation as defined in
National Instrument 55-104 – Insider Reporting Requirements and Exemptions and the TSX Company Manual in respect of the rules
governing security-based compensation arrangements, as amended from time to time; |
| (jj) | “Investment Canada Act” means the Investment Canada Act (R.S.C., 1985, c. 28)
and the regulations thereunder, as the same may be amended and supplemented from time to time; |
| (kk) | “Legacy Plans” means, together, the Corporation’s Amended and Restated Management
Stock Incentive Plan, initially effective as of March 14, 2013, Amended and Restated Management Stock Incentive Plan, initially effective
as of September 19, 2008 and Amended and Restated Restricted Share Unit Plan, initially effective as of April 17, 2021; |
| (ll) | “Market Price” means at any date when the market value of Shares of the Corporation
is to be determined: (a) if the Shares are listed on any Stock Exchange, the closing price for the Shares on such Stock Exchange
on the last trading day before such date; or (b) if the Shares are not listed on any Stock Exchange, then the price determined by
the Board using good faith discretion and, for U.S. Participants, in a manner consistent with the requirements of Section 409A; |
| (mm) | “Maximum Issuable” is described in the Recitals as further defined in Section 3.3(3). |
| (nn) | “MHR” means MHR Management Fund LLC and any funds or other investment vehicles managed
by MHR Management Fund LLC or any of its Affiliates; |
| (oo) | “Non-U.S. Participant” means a Participant that is not a U.S. Participant; |
| (pp) | “Option” means an option to purchase Shares granted to an Eligible Person pursuant
to the terms of this Plan; |
| (qq) | “Option Period” has the meaning specified in Section 4.4(1); |
| (rr) | “Participant” means an Eligible Person to whom Awards have been granted and are outstanding; |
| (ss) | “Participant’s Account” means an account maintained by the Corporation to reflect
each Participant’s participation in RSUs, PSUs and/or DSUs under this Plan; |
| (tt) | “Performance Criteria” means criteria established by the Board which, without limitation,
may include criteria based on the Participant’s personal performance, the financial performance of the Corporation and/or of its
Affiliates and/or achievement of corporate goals and strategic initiatives, and that may be used to determine the vesting of the Awards,
when applicable; |
| (uu) | “Performance Period” means the period determined by the Board pursuant to Section 5.3; |
| (vv) | “Permitted Assign” means for any Participant: |
| (i) | a trustee, custodian or administrator acting solely on behalf of, or for the benefit of such person or
a spouse of such person; |
| (ii) | a wholly owned or controlled holding entity of such person or the spouse of such person; |
| (iii) | an RRSP or an RRIF of such person or the spouse of such person; or |
| (iv) | a spouse of such person; |
| (ww) | “Plan” means this Amended and Restated Telesat Corporation Omnibus Long-Term Incentive
Plan, as it may be further amended from time to time; |
| (xx) | “PSP” means Public Sector Pension Investment Board; |
| (yy) | “PSU” means a performance share unit awarded to a Participant to receive a payment
in the form of Shares (the Cash Equivalent or a combination of Shares and the Cash Equivalent) as provided in Article 5 hereof and
subject to Performance Criteria and the terms and conditions of this Plan; |
| (zz) | “PSU Agreement” means a notice from the Corporation to a Participant evidencing the
grant of PSUs and the terms and conditions thereof as the Board may approve from time to time; |
| (aaa) | “RSU” means a restricted share unit awarded to a Participant to receive a payment in
the form of Shares (the Cash Equivalent or a combination of Shares and the Cash Equivalent) as provided in Article 5 hereof and subject
to the terms and conditions of this Plan; |
| (bbb) | “RSU Agreement” means a notice from the Corporation to a Participant evidencing the
grant of RSUs and the terms and conditions thereof as the Board may approve from time to time; |
| (ccc) | “Restriction Period” means any period of time during which a Share Unit is not vested
and the Participant holding such Share Unit remains ineligible to receive Shares as determined by the Board in its absolute discretion; |
| (ddd) | “Retirement” means the cessation of the employment of a Participant with the Corporation
or an Affiliate which is deemed to be a retirement by a resolution of the Board in its sole discretion; |
| (eee) | “Section 409A” means section 409A of the Code and the regulations and guidance
promulgated thereunder; |
| (fff) | “Shares” means, together, the Class A Shares and Class B Shares in the capital
of the Corporation; |
| (ggg) | “Share Compensation Arrangement” means any stock option, stock option plan, employee
stock purchase plan or any other compensation or incentive mechanism of the Corporation involving the issuance or potential issuance of
Shares from treasury, including a share purchase from treasury which is financially assisted by the Corporation by way of a loan, guarantee
or otherwise, including without limitation this Plan, but excludes any compensation or incentive mechanism of the Corporation involving
the issuance or potential issuance of Shares in accordance with section 613(c) of the TSX Company Manual; |
| (hhh) | “Share Unit” means an RSU and/or PSU, as the context requires; |
| (iii) | “Share Unit Vesting Determination Date” means the date on which the Board determines
if the Performance Criteria and/or other vesting conditions with respect to an RSU and/or PSU have been met, and as a result, establishes
the number of RSUs and/or PSUs that become vested, if any; |
| (jjj) | “Shareholders” means the holders of voting shares in the capital of the Corporation,
as the context requires; |
| (kkk) | “Stock Exchanges” means the Toronto Stock Exchange and the Nasdaq Stock Market or,
if the Shares are not listed or posted for trading on the Toronto Stock Exchange or the Nasdaq Stock Market at a particular date, any
other stock exchange on which the majority of the trading volume and value of the Shares are listed or posted for trading; |
| (lll) | “Stock Option Certificate” means a notice from the Corporation to a Participant evidencing
the grant of Options and the terms and conditions thereof, as the Board may approve from time to time; |
| (mmm) | “Subsidiary” means a company, partnership or other body corporate that is controlled,
directly or indirectly, by the Corporation; |
| (nnn) | “Tax Act” means the Income Tax Act (Canada) and its regulations thereunder,
as amended from time to time; |
| (ooo) | “Telesat Partnership” means Telesat Partnership LP; |
| (ppp) | “Telesat Partnership Units” means, together, the class A units, class B units
and class C units of Telesat Partnership exchangeable into Class A Shares, Class B Shares and Class C Shares, respectively,
of the Corporation; |
| (qqq) | “Termination Date” means the date on which a Participant ceases to be an Eligible Person
as a result of the termination of their employment or retention with the Employer for any reason, including death, Retirement, resignation
or termination with Cause or without Cause, or in the event of a Disability Termination. For the purposes of this definition and the Plan,
a Participant’s employment or retention with the Employer shall be considered to have terminated on the last day of the Participant’s
Employment or Active Engagement with the Employer, whether such date is selected by mutual agreement with the Participant, or unilaterally
by the Participant or the Employer, and whether with or without advance notice to the Participant; |
| (rrr) | “TSX” means the Toronto Stock Exchange; |
| (sss) | “U.S. Participant” means any Participant who is a citizen or resident of the United
States, or who is otherwise subject to taxation under the Code; and |
| (ttt) | “Withholding Obligations” has the meaning specified in Section 9.1(7). |
| (uuu) | “2021 Maximum Issuable” means the maximum number of Shares issuable under the 2021
Omnibus Plan as described in the Recitals. |
| (vvv) | “2021 Omnibus Plan” has the meaning specified in the Recitals. |
In this Plan, words importing the singular number
include the plural and vice versa and words importing a gender include any other gender. Unless otherwise specified, all references to
money amounts are to United States currency and all section references are to sections of this Plan.
Article 3
PURPOSE AND ADMINISTRATION
Section 3.1 Administration
| (1) | This Plan shall be administered and interpreted by the Board, or where the Board has delegated the administration
and operation of this Plan, in whole or in part, to a committee of the Board and/or to any member of the Board, such committee or member.
In such circumstances, all references to the Board in this Plan include reference to such committee and/or member of the Board, as applicable,
except as otherwise determined by the Board. |
| (2) | Subject to the terms and conditions set forth in this Plan, the Board is authorized to provide for the
granting, exercise or settlement and method of exercise or settlement of Awards, all at such times and on such terms (which may vary between
Awards granted from time to time) as it determines. In addition, the Board shall have the sole and absolute discretion to: (i) designate
Participants; (ii) determine the type, size, and terms, and conditions (including Performance Criteria) of Awards to be granted;
(iii) determine the method by which an Award may be canceled, forfeited, or suspended; (iv) determine the circumstances under
which the delivery of cash with respect to an Award may be deferred either automatically or at the Participant’s or the Board’s
election; (v) interpret and administer, reconcile any inconsistency in, correct any defect in, and supply any omission in the Plan,
any Award Agreement and any Award granted under, the Plan; (vi) establish, amend, suspend, or waive any rules and regulations and
appoint such agents as the Board shall deem appropriate for the proper administration of the Plan; (vii) accelerate the vesting,
delivery, or exercisability of, or payment for or lapse of restrictions on, or waive or impose any condition, restriction or requirement
in respect of, Awards (including for greater certainty in respect of any leave of absence of a Participant); (viii) with respect
to any Share Unit, add provisions permitting for the granting of a dividend equivalent subject to the same vesting conditions applicable
to the related Share Units; and (ix) make any other determination and take any other action that the Board deems necessary or desirable
for the administration of the Plan or to comply with any applicable law. |
| (3) | No member of the Board will be liable for any action or determination taken or made in good faith in the
administration, interpretation, construction or application of this Plan, any Award Agreement or other document or any Award granted pursuant
to this Plan. |
| (4) | Unless otherwise expressly provided in this Plan, all designations, determinations, interpretations, and
other decisions regarding this Plan or any Award or any documents evidencing any Award granted pursuant to this Plan shall be within the
sole discretion of the Board, may be made at any time, and shall be final, conclusive, and binding upon all persons or entities, including,
without limitation, the Corporation, any Affiliate, any Participant, any holder or beneficiary of any Award, and any Shareholder. |
| (5) | The day-to-day administration of this Plan may be delegated to such officers and employees of the Corporation
as the Board determines. |
Section 3.2 Eligible Persons
| (1) | The persons who shall be eligible to receive Options, RSUs and PSUs shall be the officers, employees or
Consultants of or to the Corporation or a Subsidiary, providing ongoing services to the Corporation and/or its Subsidiaries, and the persons
who shall be eligible to receive DSUs shall be the non-employee directors of the Corporation (collectively, “Eligible Persons”). |
| (2) | Participation in this Plan shall be entirely voluntary and any decision not to participate shall not affect
an Eligible Person’s relationship, employment or appointment with the Corporation or an Affiliate. |
| (3) | Notwithstanding any express or implied term of this Plan to the contrary, the granting of an Award pursuant
to this Plan shall in no way be construed as a guarantee of employment or appointment by the Corporation or an Affiliate. |
| (4) | Awards to issue or purchase Class A Shares may be granted hereunder to Eligible Persons who are “Canadian”
as such term is defined in the Investment Canada Act and Awards to issue or purchase Class B Shares may be granted hereunder
to Eligible Persons that are not “Canadian” as such term is defined in the Investment Canada Act. At the discretion
of the General Counsel, a declaration of residency may be required from an Eligible Participant prior to the settlement of an Award hereunder
in Class A Shares or Class B Shares, as applicable. |
Section 3.3 Shares Reserved
| (1) | Subject to Section 8.1, the securities that may be acquired by Participants under this Plan will
consist of authorized but unissued Shares. |
| (2) | The Corporation will at all times during the term of this Plan ensure that it is authorized to issue such
number of Shares as are sufficient to satisfy the requirements of this Plan. |
| (3) | Subject to Section 3.3(6), the aggregate number of Shares issuable under this Plan shall not exceed
5,017,401 Shares (“Maximum Issuable”)1. |
| (4) | Any Shares subject to an Award which has been exercised or settled in cash by a Participant or for any
reason is cancelled, forfeited or terminated without having been exercised or settled in Shares will again be available for grants under
this Plan. Fractional shares will not be issued and will be treated as specified in Section 9.1(4). |
| (5) | All Shares issued from treasury pursuant to the exercise or the vesting of Awards granted under this Plan
shall, when the applicable Exercise Price or purchase price (in respect of the settlement of RSUs, PSUs or DSUs), if any, is received
by the Corporation in connection therewith, be so issued as fully paid and non-assessable Shares. |
1 Being the aggregate number of Shares
of the 2021 Maximum Issuable and the 2024 Additional Issuable.
| (6) | Shares underlying Options issued and outstanding under the Legacy Plans on the Effective Date, and any
issuance from treasury by the Corporation that is or was issued in reliance upon an exemption under applicable Stock Exchange rules applicable
to security based compensation arrangements used as an inducement to person(s) or company(ies) not previously employed by and not previously
an Insider of the Corporation shall not be included in determining the Maximum Issuable under Section 3.3(3). For the avoidance of
doubt, in no event shall any further awards be issued pursuant to the Legacy Plans from and after the Effective Date. |
| (7) | The number of Shares that are (i) issued to Insiders within any one year period, and (ii) issuable
to Insiders at any time, in each case, under this Plan alone or when combined with all other Share Compensation Arrangements, shall not
exceed 10% of the total number of Shares issued and outstanding from time to time, on a diluted-basis assuming the exchange of all Class C
Shares and all Telesat Partnership Units into Shares of the Corporation. |
| (8) | Despite the foregoing and for greater certainty, the total annual grant to any one non-employee director
under all Share Compensation Arrangements shall not exceed an aggregate grant value of $100,000 in Options and $150,000 in equity, other
than with respect to any DSUs granted to a non-employee director in lieu of their cash retainer. |
Article 4
OPTIONS
Section 4.1 Grants of Options
| (1) | Options will be evidenced by a Stock Option Certificate, which shall be in a form approved for use under
this Plan from time to time. |
| (2) | Subject to the provisions of this Plan, the Board has the authority to determine the limitations, restrictions
and conditions, if any, in addition to those set forth in Section 3.1(2) and Section 4.3, applicable to the exercise of an Option.
An Eligible Person may receive Options on more than one occasion under this Plan and may receive separate Options on any one occasion. |
| (3) | The Board may from time to time, in its discretion, grant Options to any Eligible Person upon the terms,
conditions and limitations set forth in this Plan and such other terms, conditions and limitations permitted by and not inconsistent with
this Plan as the Board may determine, provided that Options granted to any Participant must be approved by the Shareholders if the rules
of any Stock Exchange require such approval. Despite the foregoing, no Option will be granted where such grant is restricted pursuant
to the terms of any trading policies or other restrictions imposed by the Corporation. |
Section 4.2 Exercise Price
An Option may be exercised at a price (the “Exercise
Price”) established by the Board at the time that the Option is granted. The Exercise Price shall not be less than the Market
Price. The Exercise Price is subject to adjustment in accordance with the provisions of Section 8.1 hereof.
Section 4.3 Vesting
Subject to Section 4.6, unless as otherwise
provided in a Participant’s Employment Agreement or Stock Option Certificate or as otherwise determined by the Board, in its sole
discretion, all Options granted under this Plan will vest over a four-year period following the date of the grant, with twenty percent
(20%) of the total number of Options forming part of any grant to vest on the date of grant and thereafter on each anniversary date after
the date of the grant. Options may be subject to additional vesting conditions as may be determined by the Board at the time of grant,
including performance vesting conditions.
Section 4.4 Exercise of Options
| (1) | The period during which an Option may be exercised (the “Option Period”) will be determined
by the Board at the time the Option is granted and set out in the Stock Option Certificate in respect of such Option, provided that: |
| (a) | all Options expire on the date (the “Expiry Date”) set out by the Board on the date
of grant and as described in the applicable Stock Option Certificate provided that no Option will be exercisable for a period exceeding
ten (10) years from the date the Option is granted; |
| (b) | Options may not be exercised until they have vested; |
| (c) | the Option Period will be automatically reduced in accordance with Section 4.6 upon the occurrence
of any of the events referred to in such section; and |
| (d) | no Option in respect of which Shareholder approval is required under the rules of any Stock Exchange will
be exercisable until such time as such Option has been approved by the Shareholders. |
| (2) | Despite any other provision of this Plan, if the Expiry Date of an Option falls during a Black-Out Period
or within nine (9) Business Days immediately following a date upon which a Participant is prohibited from exercising an Option due
to a Black-Out Period (but, for greater certainty, not a cease trade order or other restriction imposed by any person other than the Corporation),
then the Expiry Date of such Option will be automatically extended to the tenth (10th) Business Day following the date the relevant
Black-Out Period is lifted, terminated or removed (provided that, for U.S. Participants such extension does not violate Section 409A). |
| (3) | Subject to Section 9.1(7) and Section 4.5, the Exercise Price of each Share purchased under
an Option must be paid in full in cash or by bank draft or certified cheque at the time of such exercise, and upon receipt of payment
in full, the number of Shares in respect of which the Option is exercised will be duly issued as fully paid and non-assessable. |
| (4) | Subject to Section 9.1(7), upon the exercise of Options pursuant to this Section 4.4, the Corporation
will immediately deliver, or cause the registrar and transfer agent of the Shares to deliver, to the relevant Participant (or his or her
legal or personal representative) or to the order thereof, the number of Shares with respect to which Options have been exercised. |
| (5) | Subject to the other provisions of this Plan and any vesting limitations imposed by the Board at the time
of grant, Options may be exercised, in whole or in part, at any time or from time to time, by a Participant by notice given to the Corporation
as required by the Board from time to time. |
Section 4.5 Cashless Exercise
Notwithstanding Section 4.4(3), subject to
any conditions or limitations established by the Board, a grant of Options may specify that the Exercise Price will be payable, at the
option of the Participant and with the agreement of the Board, in the form of: (i) a broker assisted “cashless exercise”
pursuant to which the Corporation or its designee (including third party administrators) may deliver a copy of irrevocable instructions
to a Broker engaged for such purposes to sell the Shares otherwise deliverable upon the exercise of the Options and to deliver promptly
to the Corporation an amount equal to the Exercise Price and all applicable required Withholding Obligations against delivery of the Shares
to settle the applicable trade in accordance with Section 9.1(7); or (ii) an “option surrender” procedure effected
by withholding the minimum number of Shares otherwise deliverable in respect of a surrender of an Option that are needed to pay for the
Exercise Price and all applicable required Withholding Obligations, whereby the Participant elects to receive (a) a cash payment
equal to the Market Price of the Shares as at the date of Surrender less the aggregate Exercise Price and all applicable required Withholding
Obligations, or (b) that number of Shares calculated using the following formula, provided that arrangements satisfactory to the
Corporation have been made to pay any applicable Withholding Obligations:
X = (Y * (A-B)) / A
Where:
X = the number of Shares to be issued
to the Participant upon exercising such Options; provided that if the foregoing calculation results in a negative number, then no Shares
shall be issued
Y = the number of Shares underlying
the Options to be Surrendered
A = the Market Value of the Shares as
at the date of the Surrender
B = the Exercise Price of such Options
In all events of a cashless exercise or option
surrender pursuant to this Section 4.5: (a) the Participant shall comply with Section 9.1(7) of the Plan with regards to
any applicable required Withholding Obligations; and (b) shall comply with all such other procedures and policies as the Board may
prescribe or determine to be necessary or advisable from time to time including prior written consent of the Board, in connection with
such exercise.
Section 4.6 Termination
Except as otherwise set out in a Participant’s
Employment Agreement or Award Agreement or as otherwise determined by the Board, in its sole discretion:
| (a) | if a Participant (A) ceases to be an Eligible Person as a result of his or her resignation or Retirement,
(B) is no longer serving as a director of the Corporation, or (C) ceases to be an Eligible Person as a result of such Participant’s
Active Engagement or Employment having been terminated without Cause, each vested Option will cease to be exercisable on the earlier of
the original Expiry Date of the Option and ninety (90) days following the Termination Date; |
| (b) | if a Participant ceases to be an Eligible Person by reason of death, each unvested Option held by such
Participant will continue to vest for a period of 12 months from the Termination Date and all vested Options, including those that
vest during such 12 month period, held by such Participant will continue to be exercisable for a period of up to the earlier of 12 months
from the Termination Date and the original Expiry Date of the Option, and afterwards each vested Option held by such Participant will
cease to be exercisable and all unvested Options will terminate and become void; |
| (c) | if a Participant ceases to be an Eligible Person by reason of Disability Termination, all vested Options
held by such Participant will continue to be exercisable for a period of up to the earlier of 12 months from the Termination Date
and the original Expiry Date of the Option, and afterwards each vested Option held by such Participant will cease to be exercisable and
all unvested Options will terminate and become void; and |
| (d) | if a Participant ceases to be an Eligible Person as a result of such Participant’s Active Engagement
or Employment having been terminated for Cause, each Option, whether vested or unvested will automatically terminate and become void on
the Termination Date. |
Article 5
SHARE UNITS
Section 5.1 Nature of Share
Units
A Share Unit is an Award of RSUs or PSUs entitling
the recipient to acquire Shares, at such purchase price (which may be zero) as determined by the Board, subject to such restrictions,
limitations and conditions as the Board may determine at the time of grant. Conditions may be based on continuing employment (or other
service relationship) and/or achievement of pre-established Performance Criteria.
Section 5.2 Share Unit Awards
| (1) | Subject to the provisions of this Plan, or any approval of Shareholders or Stock Exchange approval which
may be required, the Board shall, from time to time, in its sole discretion: (i) designate the Eligible Persons who may receive RSUs
and/or PSUs under this Plan; (ii) fix the number of RSUs and/or PSUs, if any, to be granted to each Eligible Person and the date
or dates on which such RSUs and/or PSUs shall be granted; and (iii) determine the relevant conditions and vesting provisions (including,
in the case of PSUs, the applicable Performance Period and Performance Criteria, if any) and Restriction Period of such RSUs and/or PSUs,
in each case to the terms and conditions prescribed in this Plan and in any RSU Agreement or PSU Agreement, as applicable. For greater
certainty, the Board may reduce or eliminate any Restriction Period in respect of an RSU or PSU from time to time and at any time and
for any reason, including but not limited to circumstances involving death or Disability Termination of a Participant. |
| (2) | Each RSU will be evidenced by an RSU Agreement that sets forth the restrictions, limitations and conditions
for each RSU and may include, without limitation, the vesting and terms of the RSUs and the provisions applicable in the event employment
or service terminates, and shall contain such terms that may be considered necessary in order that the RSUs will comply with any provisions
respecting RSUs in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time
be a resident or citizen or the rules of any Stock Exchange having authority over the Corporation. |
| (3) | Each PSU will be evidenced by a PSU Agreement that sets forth the restrictions, limitations and conditions
for each PSU and may include, without limitation, the applicable Performance Period and Performance Criteria, vesting and terms of the
PSUs and the provisions applicable in the event employment or service terminates, and shall contain such terms that may be considered
necessary in order that the PSUs will comply with any provisions respecting RSUs in the income tax or other laws in force in any country
or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any Stock Exchange having authority
over the Corporation. |
| (4) | Any RSUs or PSUs that are awarded to an Eligible Person who is a resident of Canada or employed in Canada
(each for purposes of the Tax Act) may be structured so as to be considered to be a plan described in section 7 of the Tax Act and
shall in any event be structured in such other manner to ensure that such award is not a “salary deferral arrangement” as
defined in the Tax Act (or any successor to such provisions). |
| (5) | Subject to the vesting and other conditions and provisions set forth herein and in the RSU Agreement and/or
PSU Agreement, the Board shall determine whether each RSU and/or PSU awarded to a Participant shall entitle the Participant: (i) to
receive one Share issued from treasury or purchased on the secondary market; (ii) to receive the Cash Equivalent of one Share; (iii) to
receive either one Share from treasury, the Cash Equivalent of one Share or a combination of cash and Shares, as the Board may determine
in its sole discretion on settlement; or (iv) to elect to receive either one Share from treasury, the Cash Equivalent of one Share
or a combination of cash and Shares. |
| (6) | The applicable settlement period in respect of a particular Share Unit shall be determined by the Board.
Except as otherwise provided in the Award Agreement or any other provision of the Plan, all vested RSUs and PSUs shall be settled as soon
as practicable following the Share Unit Vesting Determination Date, as applicable, but in all cases (unless otherwise provided in the
Award Agreement) prior to (i) December 31st of the third year following the date of grant of Share Unit, if such Share
Unit shall be settled by payment of the Cash Equivalent or through purchases by the Corporation on the Participant’s behalf on the
open market, or (ii) December 31st of the tenth year following the date of grant of Share Unit, if the RSU Agreement
or PSU Agreement, as applicable, provides that such Share Unit shall be settled by issuance of Shares from treasury. Following the receipt
of such settlement, the PSUs and RSUs so settled shall be of no value whatsoever and shall be removed from the Participant’s Account.
For Participants who are U.S. Participants, settlement of RSUs and PSUs shall occur as soon as practicable following vesting of the Award,
or in such other manner as does not result in the imposition of tax on such Participant by operation of Section 409A. |
Section 5.3 Performance Criteria
and Performance Period Applicable to PSU Awards
For each award of PSUs, the Board shall establish
(i) any Performance Criteria and other vesting conditions; and (ii) the period in which any Performance Criteria and other vesting
conditions must be met (the “Performance Period”), in order for such PSUs to be considered vested and for the Participant
to be entitled to have his or her PSUs settled in accordance with Section 5.2(5) above in exchange for all or a portion of the PSUs
held by such Participant.
Article 6
DEFERRED SHARE UNITS
Section 6.1 Nature of DSUs
A DSU is a unit granted to directors of the Corporation
representing the right to receive a Share or the Cash Equivalent, subject to restrictions and conditions as the Board may determine at
the time of grant. Conditions may be based on continuing service as a director (or other service relationship), vesting terms and/or achievement
of pre-established Performance Criteria, as applicable.
Section 6.2 DSU Awards
| (1) | Subject to the Corporation’s director compensation policies determined by the Board from time to
time, each director who is an Eligible Person may receive all or a portion of his or her annual retainer fee in the form of a grant of
DSUs in each fiscal year. The number of DSUs shall be calculated as the amount of the director’s annual retainer fee to be paid
by way of DSUs divided by the Market Price on the date of grant. At the discretion of the Board, fractional DSUs will not be issued and
any fractional entitlements will be rounded down to the nearest whole number. As applicable, any election made by a director who is an
Eligible Person to receive an additional portion of his or her annual retainer fee in the form of DSUs must be irrevocably made, completed,
signed and delivered to the Corporation by the end of the fiscal year preceding the fiscal year to which such election is to apply. Subject
to the Corporation’s director compensation policies and any minimum amount of the directors’ annual retainer fee that may
be required to be received in the form of DSUs, if no such election is made in respect of a particular fiscal year, an Eligible Participant
will receive all or the remainder, as applicable, of the director’s annual retainer fee in cash. |
| (2) | Each DSU will be evidenced by an DSU Agreement that sets forth the restrictions, limitations and conditions
for each DSU and may include, without limitation, the vesting and terms of the DSUs and the provisions applicable in the event service
terminates, and shall contain such terms that may be considered necessary in order that the DSUs will comply with any provisions respecting
DSUs in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident
or citizen or the rules of any Stock Exchange having authority over the Corporation. |
| (3) | Any DSUs that are awarded to a person who is a resident of Canada or employed in Canada (each for purposes
of the Tax Act) shall be structured so as to be considered to be a plan described in section 7 of the Tax Act or to meet requirements
of paragraph 6801(d) of the Income Tax Regulations adopted under the Tax Act (or any successor to such provisions). |
| (4) | Subject to vesting and other conditions and provisions set forth herein and in the DSU Agreement, the
Board shall determine whether each DSU awarded shall entitle the Participant (i) to receive one Share issued from treasury; (ii) to
receive the Cash Equivalent of one Share; (iii) to receive either one Share from treasury, the Cash Equivalent of one Share or a
combination of cash and Shares, as the Board may determine in its sole discretion on redemption; or (iv) to entitle the Participant
to elect to receive either one Share from treasury, the Cash Equivalent of one Share or a combination of cash and Shares. |
Section 6.3 Redemption or Settlement
of DSUs
| (1) | Unless otherwise specified in a Grant Agreement, a Non-U.S. Participant shall be entitled to redeem his
or her DSUs during the period commencing on the Business Day immediately following the Termination Date and ending on the earlier of (i) the
date that is not later than the 90th date following the Termination Date, or such shorter redemption period set out in the
relevant DSU Agreement, and (ii) December 31st of that calendar year, and which period (the “DSU Redemption Deadline”),
by providing a written notice of settlement to the Corporation setting out the number of DSUs to be settled and the particulars regarding
the registration of the Shares issuable upon settlement, if applicable (the “DSU Redemption Notice”). In the event
of the death of a director who is not a U.S. Participant, the DSU Redemption Notice shall be filed by the administrator or liquidator
of the estate. |
| (2) | If a DSU Redemption Notice is not received by the Corporation on or before the DSU Redemption Deadline,
the Participant shall be deemed to have delivered a DSU Redemption Notice on the DSU Redemption Deadline and, if not otherwise set out
in the DSU Agreement, the Board shall determine the number of DSUs to be settled by way of Shares, the Cash Equivalent or a combination
of Shares and the Cash Equivalent and delivered to the Participant or Administrator or liquidator of the estate of the Participant, as
applicable. |
| (3) | The settlement of DSUs held by a Participant who is a U.S. Participant shall be made in accordance with
the relevant DSU Agreement and any applicable deferral election. Such settlement shall comply with or be exempt from Section 409A. |
Article 7
CHANGE OF CONTROL
Section 7.1 Change of Control
| (1) | Despite any other provision of this Plan or any Award Agreement and subject to Section 10.8, in the
event of a Change of Control Event, the Board may take such action as the Board in its sole discretion considers appropriate in the circumstances,
including, without limitation, (i) changing the vesting or manner of settlement of any Award, (ii) changing the Expiry Date
or term of any Award, or (iii) providing for the substitution or replacement of Awards, including with awards of the surviving Corporation
resulting from the Change of Control Event (or any affiliate thereof) or the potential successor (or any affiliate thereto). |
| (2) | No fractional Shares or other security will be issued upon the exercise or settlement of any Award and
accordingly, if as a result of a Change of Control Event, a Participant would become entitled to a fractional Share or other security,
such Participant will have the right to acquire only the next lowest whole number of Shares or other security and no payment or other
adjustment will be made with respect to the fractional interest so disregarded. |
| (3) | Despite anything else to the contrary in this Plan or any Award Agreement, in the event of a potential
Change of Control Event, the Board will have the power, in its sole discretion, to modify the terms of this Plan and/or the Awards to
assist the Participants in tendering to a take-over bid or other transaction leading to a Change of Control Event. For greater certainty,
in the event of a take-over bid or other transaction leading to a Change of Control Event, subject to applicable law (including the requirements
of Section 409A), the Board has the power, in its sole discretion, to accelerate the vesting of Awards and to permit Participants
to conditionally exercise or settle their Awards, as applicable, such conditional exercise to be conditional upon the take-up by such
offeror of the Shares or other securities tendered to such take-over bid in accordance with the terms of the take-over bid (or the effectiveness
of such other transaction leading to a Change of Control Event). If, however, the potential Change of Control Event referred to in this
Section 7.1(3) is not completed within the time specified (as the same may be extended), then despite this Section 7.1(3) or
the definition of “Change of Control Event”: (i) any conditional exercise or settlement of vested Awards, as applicable,
will be deemed to be null, void and of no effect, and such conditionally exercised or settled Awards will for all purposes be deemed not
to have been exercised or settled, and (ii) Awards which vested pursuant to this Section 7.1(3) will be returned by the Participant
to the Corporation and reinstated as authorized but unissued Shares and the original terms applicable to such Awards will be reinstated. |
| (4) | If the Board has, pursuant to the provisions of Section 7.1(3), permitted the conditional exercise
or settlement of Awards in connection with a potential Change of Control Event, then the Board will have the power, in its sole discretion,
to terminate, immediately following actual completion of such Change of Control Event and on such terms as it sees fit, any Awards not
exercised or settled (including all unvested Awards), as applicable. |
Article 8
ADJUSTMENTS AND AMENDMENTS
Section 8.1 Adjustment
In the event of any stock dividend, stock split,
combination or exchange of Shares, merger, consolidation, spin-off or other distribution (other than normal cash dividends) of the Corporation’s
assets to Shareholders, or any other change in the Shares, the Board will make such proportionate adjustments, if any, as the Board in
its discretion, subject to regulatory approval, may deem appropriate to reflect such change (for the purpose of preserving the value of
the Awards), with respect to (i) the number or kind of Shares or other securities reserved for issuance pursuant to the Plan; and
(ii) the number or kind of Shares or other securities subject to unexercised Awards previously granted and the exercise price of
those Awards provided, however, that no substitution or adjustment will obligate the Corporation to issue or sell fractional Shares. The
existence of any Awards does not affect in any way the right or power of the Corporation or an Affiliate or any of their respective Shareholders
to make, authorize or determine any adjustment, recapitalization, reorganization or any other change in the capital structure or the business
of, or any amalgamation, merger or consolidation involving, to create or issue any bonds, debentures, shares or other securities of, or
to determine the rights and conditions attaching thereto, to effect the dissolution or liquidation of or any sale or transfer of all or
any part of the assets or the business of, or to effect any other corporate act or proceeding relating to, whether of a similar character
or otherwise, the Corporation or such Affiliate, whether or not any such action would have an adverse effect on the Plan or any Award
granted hereunder.
Section 8.2 Dividend Share
Units
Unless the Board determines otherwise at the time
of grant or issuance of the Award, when normal cash dividends (other than stock dividends) are paid on Shares, Participants shall receive
additional DSUs, RSUs and/or PSUs, as applicable (“Dividend Share Units”) as of the dividend payment date. The number
of Dividend Share Units to be granted to the Participant shall be determined by multiplying the aggregate number of DSUs, RSUs and/or
PSUs, as applicable, held by the Participant on the relevant record date by the amount of the dividend paid by the Corporation on each
Share, and dividing the result by the Market Price on the dividend payment date, which Dividend Share Units shall be in the form of DSUs,
RSUs and/or PSUs, as applicable. Dividend Share Units granted to a Participant in accordance with this Section 8.2 shall be subject
to the same vesting conditions and settlement terms as applicable to the related DSUs, RSUs and/or PSUs in accordance with the respective
Award Agreement.
Section 8.3 Amendment or Discontinuance
| (1) | The Board may suspend or terminate this Plan at any time, or from time to time amend or revise the terms
of this Plan or of any Award granted under this Plan and any Award Agreement or other agreement or document relating to it, provided that
no such suspension, termination, amendment or revision will be made: |
| (a) | except in compliance with applicable law and with the prior approval, if required, of (i) any Stock
Exchange or any other regulatory body having authority over the Corporation, this Plan or (ii) the Shareholders; and |
| (b) | in the case of an amendment or revision to an outstanding Award, if it would materially adversely affect
the rights of any Participant, without the consent of the Participant. |
| (2) | If this Plan is terminated, the provisions of this Plan and any administrative guidelines and other rules
and regulations adopted by the Board and in force on the date of termination will continue in effect as long as any Award or any rights
granted pursuant to this Plan remain outstanding and, despite the termination of this Plan, the Board may make such amendments to this
Plan or to the terms of any outstanding Awards as they would have been entitled to make if this Plan were still in effect. |
| (3) | Subject to any applicable rules of any Stock Exchange and Section 8.3(1), the Board may from time
to time, in its absolute discretion and without the approval of Shareholders, make amendments to this Plan or any Awards, which may include
but are not limited to: |
| (a) | any amendment to the vesting and assignability provisions of this Plan and any Award; |
| (b) | any amendment regarding the effect of any termination of a Participant’s employment, engagement,
contract, service or office; |
| (c) | any amendment which accelerates the date on which any Award may be exercised under this Plan; |
| (d) | any amendment to the definition of an Eligible Person; |
| (e) | any amendment to add provisions permitting for the granting of cash-settled awards, a form of financial
assistance, or clawback and any amendment to a cash-settled award, financial assistance, dividend equivalent or clawback provision which
is adopted; |
| (f) | any amendment necessary to comply with applicable law or the requirements of any Stock Exchange or any
other regulatory body having authority over the Corporation, this Plan or the Shareholders; |
| (g) | any amendment of a “housekeeping” nature, including, without limitation, to clarify the meaning
of an existing provision of this Plan or any agreement ancillary thereto, correct or supplement any provision of this Plan that is inconsistent
with any other provision of this Plan, correct any grammatical or typographical errors or amend the definitions in this Plan regarding
administration of this Plan; |
| (h) | any amendment regarding the administration of this Plan; and |
| (i) | any other amendment, fundamental or otherwise, that does not require the approval of Shareholders under
Section 8.3(4). |
| (4) | Shareholder approval is required for the following amendments to this Plan: |
| (a) | any increase in the maximum number of Shares that may be issuable pursuant to Awards granted under this
Plan as set out in Section 8.3(3), other than an adjustment pursuant to Section 8.1; |
| (b) | any (i) reduction in the Exercise Price or purchase price (in respect of the settlement of RSUs,
PSUs and/or DSUs) of an Award, as applicable, (ii) extension of the term of an Award, including the Expiry Date of an Option, benefitting
an Insider, except in case of an extension due to a Black-Out Period or (iii) amendment providing for the cancellation and reissue
of Awards, other than an adjustment pursuant to Section 8.1; |
| (c) | any amendment to remove or to exceed the insider participation limit set out in Section 3.3(7); |
| (d) | any amendment which would permit Options to be transferable or assignable other than by will or the laws
of descent and distribution (provided that Options may be transferred or assigned by a Participant to a Permitted Assign with the Board’s
prior written consent and subject to such conditions as the Board may stipulate, as set out in Section 9.1(3)); and |
| (e) | any amendment to Section 8.3(3) or Section 8.3(4). |
Article 9
GENERAL CONDITIONS
Section 9.1 General Conditions
Applicable to Awards
Each Award, as applicable, shall be subject to
the following conditions:
| (1) | No Rights as a Shareholder – Neither the Participant nor such Participant’s personal
representatives or legatees shall have any rights whatsoever as shareholder in respect of any Shares covered by such Participant’s
Awards until the date of issuance of a share certificate to such Participant (or to the liquidator, executor or administrator, as the
case may be, of the estate of the Participant) or the entry of such person’s name on the share register for the Shares. Without
in any way limiting the generality of the foregoing, no adjustment shall be made for dividends or other rights for which the record date
is prior to the date such share certificate is issued or entry of such person’s name on the share register for the Shares. |
| (2) | Conformity to Plan – In the event that an Award is granted or an Award Agreement is executed
which does not conform in all particulars with the provisions of the Plan, or purports to grant Awards on terms different from those set
out in the Plan, the Award or the grant of such Award shall not be in any way void or invalidated, but the Award so granted will be adjusted
to become, in all respects, in conformity with the Plan. |
| (3) | Non-Transferability – Except as set forth herein, Awards are not transferable. Awards may
be exercised only by: |
| (a) | the Participant to whom the Awards were granted; |
| (b) | with the Board’s prior written approval and subject to such conditions as the Board may stipulate,
such Participant’s family or retirement savings trust or any registered retirement savings plans or registered retirement income
funds of which the Participant is and remains the annuitant; |
| (c) | upon the Participant’s death, by the legal representative of the Participant’s estate; or |
| (d) | upon the Participant’s incapacity, the legal representative having authority to deal with the property
of the Participant; |
provided that any such legal representative
shall first deliver evidence satisfactory to the Corporation of entitlement to exercise any Award. A person exercising an Award may subscribe
for Shares only in the person’s own name or in the person’s capacity as a legal representative.
| (4) | Fractional Shares – No fractional Shares will be issued upon the exercise or settlement of
Awards granted under this Plan and, accordingly, if a Participant would become entitled to a fractional Share upon the exercise or settlement
of an Award, or from an adjustment pursuant to Section 8.1, such Participant will only have the right to purchase the next lowest
whole number of Shares, and no payment or other adjustment will be made with respect to the fractional interest so disregarded. |
| (5) | No Guarantee – For greater certainty, the granting of Awards to a Participant shall not impose
any obligation on the Corporation to grant any Awards in the future nor shall it entitle the Participant to receive future grants. No
amount will be paid to or in respect of a Participant under the Plan or pursuant to any other arrangement, and no Awards will be granted
to such Participant to compensate for any downward fluctuation in the price of the Shares, nor will any other form of benefit be conferred
upon or in respect of the Participant for such purpose. |
| (6) | Quotation of Shares – So long as the Shares are listed on any Stock Exchange, the Corporation
must apply to such Stock Exchange for the listing or quotation, as applicable, of the Shares issued upon the exercise or settlement of
all Awards granted under this Plan, however, the Corporation cannot guarantee that such Shares will be listed or quoted on such Stock
Exchange. |
| (7) | Tax Withholdings – Despite any other provision contained in this Plan, in connection with
the exercise or settlement of an Award by a Participant from time to time, the Corporation may withhold from any amount payable to a Participant,
including the issuance of Shares to a Participant upon the exercise or settlement of such Participant’s Awards, such amounts as
are required by law to be withheld or deducted as a consequence of his or her exercise or settlement of Awards or other participation
in this Plan (“Withholding Obligations”). The Corporation has the right, in its sole discretion, to satisfy any Withholding
Obligations by: |
| (a) | selling or causing to be sold, on behalf of any Participant, such number of Shares issued to the Participant
on the exercise or settlement of Awards as is sufficient to fund the Withholding Obligations; |
| (b) | retaining the amount necessary to satisfy the Withholding Obligations from any amount which would otherwise
be delivered, provided or paid to the Participant by the Corporation, whether under this Plan or otherwise; |
| (c) | requiring the Participant, as a condition of exercise to (i) remit the amount of any such Withholding
Obligations to the Corporation in advance; (ii) reimburse the Corporation for any such Withholding Obligations; or (iii) cause
a broker who sells Shares acquired by the Participant on behalf of the Participant to withhold from the proceeds realized from such sale
the amount required to satisfy any such Withholding Obligation and to remit such amount directly to the Corporation; and/or |
| (d) | making such other arrangements as the Corporation may reasonably require. |
| (8) | Broker Assisted Exercise – The sale of Shares by the Corporation, or by a broker engaged
by the Corporation (the “Broker”), under Section 4.5 or under any other provision of the Plan will be made on
any Stock Exchange. The Participant consents to such sale and grants to the Corporation an irrevocable power of attorney to effect the
sale of such Shares on his or her behalf and acknowledges and agrees that (i) the number of Shares sold will be, at a minimum, sufficient
to fund the Withholding Obligations net of all selling costs, which costs are the responsibility of the Participant and which the Participant
hereby authorizes to be deducted from the proceeds of such sale; (ii) in effecting the sale of any such Shares, the Corporation or
the Broker will exercise its sole judgment as to the timing and the manner of sale and will not be obligated to seek or obtain a minimum
price; and (iii) neither the Corporation nor the Broker will be liable for any loss arising out of such sale of the Shares including
any loss relating to the pricing, manner or timing of the sales or any delay in transferring any Shares to a Participant or otherwise.
The Participant further acknowledges that the sale price of the Shares will fluctuate with the market price of the Shares and no assurance
can be given that any particular price will be received upon any sale. |
| (9) | Clawback – In the sole discretion of the Board, all Awards granted under the Plan, and Shares
delivered upon exercise or settlement of vested Awards or the Cash Equivalent thereof, are subject to clawback and recapture in accordance
with (a) the Corporation’s applicable clawback policies in effect from time to time, and (b) any applicable clawback or
similar provisions in the Participant’s (i) employment agreement, and/or (ii) Award Agreement, in each case to the extent
permitted by law. |
| (10) | Termination – No Participant shall have any entitlement to damages or other compensation
arising from or related to not receiving any Awards which would have, but for this Plan or any Award Agreement, vested or accrued to the
Participant after such Participant’s Termination Date, including but not limited to damages in lieu of notice of termination at
common law. However, nothing herein is intended to limit any statutory entitlements on termination and such statutory entitlements shall,
if required, apply despite this language to the contrary. |
| (11) | Acceptance of Terms – Participation in the Plan by any Participant shall be construed as
acceptance of the terms and conditions of the Plan by the Participant and as to the Participant's agreement to be bound thereby. |
Article 10
MISCELLANEOUS
Section 10.1 Right to Adopt
Other Share Compensation Arrangements
Nothing contained in this Plan will prevent the
Board from adopting other or additional Share Compensation Arrangements or compensation arrangements, subject to any required Shareholder
or Stock Exchange approval.
Section 10.2 Right to Issue
Other Shares
The Corporation is not by virtue of this Plan
restricted in any way from declaring and paying stock dividends, issuing further Shares, or varying or amending its share capital or corporate
structure.
Section 10.3 Non-qualified
Stock Options; Exemption from Section 409A
Options granted to U.S. Participants are not intended
to satisfy the requirements of Section 422 of the Code as “incentive stock options”. Despite any provision of the Plan
to the contrary, it is intended that Awards granted under the Plan to U.S. Participants be exempt from or comply with the requirements
of Section 409A, and all provisions of the Plan will be construed and interpreted in a manner consistent with such intention. In
furtherance of the foregoing and notwithstanding anything to the contrary in the Plan or otherwise, any Option issued to a U.S. Participants
shall have an Exercise Price that is no less than “fair market value” on the grant date which value shall be determined in
accordance with Section 409A.
Section 10.4 Discretionary
Nature of Awards
This Plan does not grant any Participant or any
employee of the Corporation or its Affiliates the right or obligation to serve or continue to serve as a Consultant, director, officer
or employee, as the case may be, of the Corporation or its Affiliates. The awarding of Awards to any Eligible Person is a matter to be
determined solely in the discretion of the Board. This Plan will not in any way fetter, limit, obligate, restrict or constrain the Board
with regard to the allotment or issue of any Shares or any other securities in the capital of the Corporation other than as specifically
provided for in this Plan. The grant of an Award to, or the exercise or settlement of an Award by, a Participant under this Plan does
not create the right for such Participant to receive additional grants of Awards under this Plan.
Section 10.5 Future Value of
Shares
The Participant further acknowledges that the
sale price of the Shares will fluctuate with the market price of the Shares and no assurance can be given that any particular price will
be received upon any sale. The Corporation makes no representation or warranty as to the future market value of the Shares or with respect
to any present or future income tax matters affecting the Participant resulting from the grant or exercise or settlement of an Award and/or
transactions in the Shares. Neither the Corporation, nor any of its directors, officers, employees, Shareholders or agents will be liable
for anything done or omitted to be done by such person or any other person with respect to the price, time, quantity or other conditions
and circumstances of the issuance of Shares under this Plan, with respect to any fluctuations in the market price of Shares or in any
other manner related to this Plan. For greater certainty, no amount will be paid to, or in respect of, a Participant under this Plan or
pursuant to any other arrangement, and no additional Awards will be granted to such Participant to compensate for a downward fluctuation
in the price of the Shares, nor will any other form of benefit be conferred upon, or in respect of, a Participant for such purpose.
Section 10.6 No Rights to Property
or Assets of the Corporation
Participants (and their legal personal representatives)
have no legal or equitable rights, claims, or interest in any specific property or assets of the Corporation or any Affiliate. No assets
of the Corporation or any Affiliate will be held in any way as collateral security for the fulfillment of the obligations of the Corporation
or any Affiliate under this Plan. Any and all of the Corporation’s or any Affiliate’s assets are, and remain, the general
unpledged, unrestricted assets of the Corporation or Affiliate. The Corporation’s or any Affiliate’s obligation under this
Plan are merely that of an unfunded and unsecured promise of the Corporation or such Affiliate to pay money and/or issue Shares in the
future, and the rights of Participants (and their legal personal representatives) are no greater than those of unsecured general creditors.
Section 10.7 Foreign Jurisdictions
The Board may adopt such rules or regulations
and vary the terms of this Plan and any Award issued in accordance with this Plan as it considers necessary to address tax or other requirements
of any applicable non-Canadian jurisdiction, including, without limitation, Section 409A.
Section 10.8 Compliance with
Legislation
| (1) | This Plan, the terms of the issue or grant of, and the grant and exercise or settlement of, any Award
under this Plan, and the Corporation’s obligation to sell and deliver Shares upon the exercise or settlement of Awards, is subject
to all applicable federal, provincial and foreign laws, rules and regulations, the rules and regulations of any Stock Exchange and to
such approvals by any regulatory or governmental agency as may, in the opinion of counsel to the Corporation, be required. The Corporation
is not obliged by any provision of this Plan or the grant of any Award under this Plan to issue or sell Shares if, in the opinion of the
Board, such action would constitute a violation by the Corporation or a Participant of any laws, rules and regulations, including the
rules and regulations of any Stock Exchange, or any condition of such approvals. |
| (2) | The Participant agrees to fully cooperate with the Corporation in doing all such things, including executing
and delivering all such agreements, undertakings or other documents or furnishing all such information as is reasonably necessary to facilitate
compliance by the Corporation with such laws, rule and requirements, including all tax withholding and remittance obligations and such
representations or agreements as the Corporation or counsel for the Corporation may consider appropriate to avoid violation of applicable
securities laws. |
| (3) | No Award will be granted, and no Shares issued under this Plan, where such grant, issue or sale would
require registration of this Plan or of Shares under the securities laws of any foreign jurisdiction, and any purported grant of any Award
or purported issue of Shares under this plan in violation of this provision is void. |
| (4) | The Corporation shall be prohibited from offering to sell or selling, any Shares pursuant to an Award
to any U.S. Participants unless such Shares have been properly registered for sale pursuant to the U.S. Securities Act of 1933, as amended
(the “Securities Act”), with the Securities and Exchange Commission or unless such shares may be offered or sold without
such registration pursuant to and in compliance with the terms of an available exemption. The Corporation shall be under no obligation
to register for sale under the U.S. Securities Act any of the Shares to be offered or sold under the Plan. Shares issued or sold to Participants
pursuant to the exercise or settlement of Awards may be subject to limitations on sale or resale under applicable securities laws. Without
limiting the generality of the foregoing, the Board may cause a legend or legends to be put on any such certificates of Shares delivered
under the Plan to make appropriate reference to such restrictions or may cause such Shares delivered under the Plan in book-entry form
to be held subject to the Corporation’s instructions or subject to appropriate stop-transfer orders or other restrictions. |
| (5) | If Shares cannot be issued to a Participant upon the exercise or settlement of an Award due to legal or
regulatory restrictions, the obligation of the Corporation to issue such Shares will terminate and any funds paid to the Corporation in
connection with the exercise or settlement of such Award will be returned to the applicable Participant as soon as practicable. |
| (6) | Any Awards issued to a Participant that is a U.S. Participants shall be subject to the special terms and
conditions set forth in the Addendum hereto, or as otherwise noted in the Plan. |
Section 10.9 Use of an Administrative
Agent and Trustee
The Board may in its sole discretion appoint from
time to time one or more entities to act as administrative agent to administer the Awards granted under the Plan and to act as trustee
to hold and administer the assets that may be held in respect of Awards granted under the Plan, the whole in accordance with the terms
and conditions determined by the Board in its sole discretion. The Corporation and the administrative agent will maintain records showing
the number of Awards granted to each Participant under the Plan.
Section 10.10 Notice
Any notice required to be given by this Plan must
be in writing and be given by registered mail, prepaid postage, or delivered by courier or by facsimile transmission addressed, if to
the Corporation, to the office of the Corporation in Toronto, Ontario, Attention: Legal Department; or if to a Participant, to such Participant
by electronic mail at his or her email address, by hand delivery or courier at his or her address as it appears on the books of the Corporation
or in the event of the address of any such Participant not so appearing, then to the last known address of such Participant; or if to
any other person, to the last known address of such person.
Section 10.11 Successors and
Assigns
The Plan shall be binding on all successors and
assigns of the Corporation and a Participant, including without limitation, the personal legal representatives of a Participant, or any
receiver or trustee in bankruptcy or representative of the Corporation’s or Participant’s creditors.
Section 10.12 Severability
The invalidity or unenforceability of any provision
of the Plan shall not affect the validity or enforceability of any other provision and any invalid or unenforceable provision shall be
severed from the Plan.
Section 10.13 No Liability
No member of the Board, or any committee or other
subdelegate shall be liable for any action or determination taken or made in good faith in the administration, interpretation, construction
or application of the Plan or any Award granted hereunder.
Section 10.14 Governing Law
This Plan is governed by the laws of British Columbia
and the federal laws of Canada applicable therein.
Section 10.15 Effective Date
This Plan has been effective since November 19,
2021 and was Amended & Restated as of June [18], 2024, as will be amended or amended and restated from time to time (the “Effective
Date”).
ADDENDUM FOR U.S.
PARTICIPANTS
TELESAT CORPORATION
AMENDED AND RESTATED OMNIBUS LONG-TERM INCENTIVE PLAN
The provisions of this Addendum apply to Awards
held by a U.S. Participant. All capitalized terms used in this Addendum but not defined in Section 1 below have the meanings attributed
to them in the Plan. The Section references set forth below match the Section references in the Plan. This Addendum shall have no other
effect on any other terms and provisions of the Plan except as set forth below.
“Separation from Service” means,
with respect to a U.S. Participant, any event that may qualify as a separation from service under U.S. Treasury Regulation Section 1.409A-1(h).
“Shares” means, with respect
to a U.S. Participant, a Class B Share in the capital of the Corporation.
“Specified Employee” has the
meaning set forth in U.S. Treasury Regulation Section 1.409A-1(i).
| 2. | Settlement and Termination of Employment |
| (i) | Notwithstanding anything to the contrary in the Plan, and except as otherwise set forth in an Award Agreement
or otherwise, any RSUs or PSUs issued to a U.S. Participant shall be settled within thirty (30) days following the earlier of
(a) the scheduled vesting date of the Award, which shall be set forth in writing in the applicable Award Agreement, or (b) any
earlier vesting date as a result of a Change in Control Event, termination of employment or other circumstance, as specified in the Plan
or Award Agreement. In addition, for the avoidance of doubt, in no event shall a U.S. Participant have discretion with respect to the
timing of the settlement date of any RSUs or PSUs. |
| (ii) | Subject to Section 9.1(7), in connection with the settlement of any Share Units issued to a U.S.
Participant, the Corporation shall (a) issue from treasury the number of Shares that is equal to the number of vested Share Units
held by the U.S. Participant (rounded down to the nearest whole number), as fully paid and non-assessable Shares, (b) deliver to
the U.S. Participant an amount in cash (net of the applicable tax withholdings) equal to the number of vested Share Units held by the
U.S. Participant multiplied by the Market Price as at such date, or (c) a combination of (a) and (b). Upon settlement of such Share
Units, the corresponding number of Share Units shall be cancelled, and the U.S. Participant shall have no further rights, title or interest
with respect thereto. |
| (i) | Each grant of Share Units to a U.S. Participant is intended to be exempt from Code Section 409A.
However, to the extent any Award is subject to Section 409A, then all payments to be made upon a U.S. Participant’s Termination
Date shall only be made upon a Separation from Service. |
| (ii) | If on the date of the U.S. Participant’s Separation from Service the Corporation’s shares
(or shares of any other Corporation that is required to be aggregated with the Corporation in accordance with the requirements of Section 409A)
is publicly traded on an established securities market or otherwise and the U.S. Participant is a Specified Employee, then the benefits
payable to the Participant under the Plan that are payable due to the U.S. Participant’s Separation from Service, to the extent
subject to Section 409A, shall be postponed until the date that is six months following the U.S. Participant’s Separation from
Service, or, if earlier, the U.S. Participant’s death. Following any applicable six month delay, all such delayed payments will
be paid in a single lump sum on the earliest date permitted under Section 409A. |
| (iii) | In the event that the timing of payments in respect of any Award that would otherwise be considered “nonqualified
deferred compensation” subject to Section 409A would be accelerated upon the occurrence of (a) a Change of Control Event,
no such acceleration shall be permitted unless the event giving rise to the Change of Control Event constitutes a “change in the
ownership or effective control” of the Corporation or a “change in the ownership of a substantial portion of the assets”
of the Corporation within the meaning of U.S. Treasury Regulation Sections 1.409A-3(a)(5) and 1.409A-3(i)(5) shall not be treated
as a Change of Control Event; or (b) a “disability” or “incapacity”, no such acceleration shall be permitted
unless the “disability” or “incapacity” also satisfies the definition of “Disability” pursuant to
Section 409A. |
| (i) | If any provision of the Plan, an Award Agreement or any Award issued to a U.S. Participant contravenes
Section 409A or could cause the U.S. Participant to incur any tax, interest or penalties under Section 409A, the Board may,
in its sole discretion and without the U.S. Participant’s consent, modify such provision to the minimum extent necessary to: (a) comply
with, or avoid being subject to, Section 409A, or to avoid incurring taxes, interest and penalties under Section 409A; and/or
(b) maintain, to the maximum extent practicable, the original intent and economic benefit to the U.S. Participant of the applicable
provision without materially increasing the cost to the Corporation or contravening Section 409A. |
| (ii) | Notwithstanding anything to the contrary in the Plan or otherwise, the Board shall retain the power and
authority to amend or modify this Addendum to the extent the Board in its sole discretion deems necessary or advisable to comply with
any guidance issued under Section 409A. Such amendments may be made without the approval of any U.S. Participant. |
| (iii) | The Corporation shall have no obligation to modify the Plan or any Share Unit and does not guarantee that
Share Units will not be subject to taxes, interest and penalties under Section 409A. Each Participant is solely responsible and liable
for the satisfaction of all taxes and penalties that may be imposed on or in respect of such Participant in connection with the Plan or
any Award granted thereunder (including any taxes and penalties under Section 409A), and none of the Corporation or any of its Affiliates
shall have any obligation to indemnify or otherwise hold such Participant (or any beneficiary) harmless from any or all of such taxes
or penalties. |
D-30
Exhibit 99.5
Exhibit 99.6
Exhibit 99.7
Exhibit 99.8
Exhibit 99.9
Exhibit 99.10
Telesat (NASDAQ:TSAT)
Historical Stock Chart
From Dec 2024 to Jan 2025
Telesat (NASDAQ:TSAT)
Historical Stock Chart
From Jan 2024 to Jan 2025
