EXHIBIT 3
CANWEST GLOBAL COMMUNICATIONS CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of CanWest
Global Communications Corp. (the "Company") will be held at the Design Exchange,
234 Bay Street, Toronto, Ontario, on Thursday, the 27th day of January, 2005 at
the hour of 2:30 p.m. (Eastern Standard Time) for the following purposes:
1. to receive the annual report, including the financial statements of the
Company for the fiscal year ended August 31, 2004, together with the
report of the auditors thereon;
2. to elect directors for the ensuing year;
3. to appoint auditors for the ensuing year and to authorize the directors to
fix the remuneration to be paid to the auditors;
4. to transact such other business as may properly come before the meeting
and any adjournment thereof.
DATED at Winnipeg, Canada this 24th day of November, 2004.
By Order of the Board of Directors
/s/ Gail S. Asper
Gail S. Asper
Secretary
CANWEST GLOBAL COMMUNICATIONS CORP.
MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES
The information contained in this management information circular ("Circular")
is furnished in connection with the solicitation of proxies to be used at the
annual meeting of shareholders (the "Meeting") of the Company to be held on
Thursday, January 27, 2005 at 2:30 p.m. (Eastern Standard Time) at the Design
Exchange, 234 Bay Street, Toronto, Ontario, and at all adjournments thereof, for
the purposes set forth in the accompanying notice of meeting. It is expected
that the solicitation will be made primarily by mail but proxies may also be
solicited personally by employees of the Company. THE SOLICITATION OF PROXIES BY
THIS CIRCULAR IS BEING MADE BY OR ON BEHALF OF THE MANAGEMENT OF THE COMPANY AND
THE TOTAL COST OF THE SOLICITATION WILL BE BORNE BY THE COMPANY. The information
contained herein is given as at November 24, 2004, except as otherwise noted.
PROXY INSTRUCTIONS
As a shareholder of the Company it is important that you read this information
carefully and then vote your shares, either by proxy or in person at the
Meeting. A proxy form is included with this Circular.
The persons who are named on the enclosed form of proxy are representatives of
management of the Company and are directors and/or officers of the Company.
These persons will vote the shares of the shareholder unless the shareholder
appoints someone else to be his or her proxyholder. If a shareholder appoints
someone else, he or she must be present at the Meeting to vote the shareholder's
shares.
A shareholder who wishes to appoint some other person to represent him/her at
the Meeting may do so by inserting such person's name in the blank space
provided in the form of proxy. Such other person need not be a shareholder of
the Company.
TO BE VALID, PROXIES MUST BE DEPOSITED WITH COMPUTERSHARE TRUST COMPANY OF
CANADA ("COMPUTERSHARE") AT 9TH FLOOR, 100 UNIVERSITY AVENUE, TORONTO, ONTARIO,
CANADA M5J 2Y1, OR COMPLETED OVER THE TELEPHONE OR INTERNET IN THE MANNER SET
OUT IN THE ENCLOSED FORM OF PROXY, NOT LATER THAN THE CLOSE OF BUSINESS ON
JANUARY 25, 2005 OR, IF THE MEETING IS ADJOURNED, 48 HOURS (EXCLUDING SATURDAYS
AND HOLIDAYS) BEFORE ANY ADJOURNMENT OF THE MEETING.
VOTING BY REGISTERED SHAREHOLDERS
A shareholder is a registered shareholder if the shareholder's name appears on
the shareholder's share certificate.
By proxy:
- - By telephone:
IF THE SHAREHOLDER CHOOSES THE TELEPHONE, THE SHAREHOLDER CANNOT APPOINT
ANYONE OTHER THAN THE PERSONS NAMED ON THE PROXY FORM AS THE SHAREHOLDER'S
PROXYHOLDER.
- - On the Internet:
To vote by Internet, go to the following website:
www.computershare.com/ca/proxy.
- - By mail:
Sign and return the enclosed form of proxy to Computershare Trust Company
of Canada at 9th floor, 100 University Avenue, Toronto, Ontario, Canada
M5J 2Y1, so as to arrive not later than the close of business on January
25, 2005 or, if the Meeting is adjourned, 48 hours (excluding Saturdays
and holidays) before any adjournment of the Meeting.
- - BY APPOINTING ANOTHER PERSON TO GO TO THE MEETING TO VOTE THE
SHAREHOLDER'S SHARES ON THE SHAREHOLDER'S BEHALF:
This person does not have to be a shareholder. You also have to make
certain that the person who is appointed is aware that he or she is
appointed and attends the Meeting.
In person:
- - THE SHAREHOLDER DOES NOT NEED TO COMPLETE OR RETURN THE PROXY FORM. VOTING
IN PERSON AT THE MEETING WILL AUTOMATICALLY CANCEL ANY PROXY COMPLETED
EARLIER BY THE SHAREHOLDER.
VOTING BY NON-REGISTERED SHAREHOLDERS
A shareholder is a non-registered (or beneficial) shareholder if (1) an
intermediary (such as a bank, trust company, securities dealer or broker,
trustee or administrators of RRSPs, RRIFs, RESPs and similar plans) or (2) a
clearing agency (such as The Canadian Depository for Securities Limited) of
which the intermediary is a participant, holds the shareholder's shares for the
shareholder ("Intermediary(ies)").
Only registered shareholders of Multiple Voting Shares, Subordinate Voting
Shares or Non-Voting Shares of the Company, or the persons whom they appoint as
their proxies, are permitted to attend the Meeting and only registered
shareholders of Multiple Voting Shares and Subordinate Voting Shares, or the
persons whom they appoint as their proxies, are permitted to vote at the
Meeting. However, in many cases, Multiple Voting Shares, Subordinate Voting
Shares or Non-Voting Shares of the Company beneficially owned by a shareholder
may be registered in the name of an Intermediary.
In accordance with the requirements of Canadian securities laws, the Company has
distributed copies of the notice of meeting, this Circular, the form of proxy
(except for holders of Non-Voting Shares) and the 2004 annual report (which
includes management's discussion and analysis) (collectively, "meeting
materials") to the Intermediaries for onward distribution to non-registered
shareholders. Effective for annual meetings of shareholders taking place on or
after September 1, 2004, the Company is permitted to distribute meeting
materials directly to non-registered (or beneficial) shareholders who do not
object to the issuers of securities they own knowing who they are. Accordingly,
in accordance with applicable Canadian securities laws, meeting materials are
being sent by the Company to registered shareholders and to non-registered (or
beneficial) shareholders who have not objected to the disclosure of their name
and address and information about their security holdings to the Company.
Intermediaries are required to forward meeting materials to non-registered
shareholders unless a non-registered shareholder has waived the right to receive
them. Very often, Intermediaries will use service companies to forward the
meeting materials to non-registered shareholders. Generally, non-registered
shareholders (except for holders of Non-Voting Shares) who have not waived the
right to receive meeting materials will either:
A. be given a form of proxy which has already been signed by the Intermediary
(typically by a facsimile, stamped signature) which is restricted as to
the number of shares beneficially owned by the non-registered shareholder
but which is otherwise uncompleted. This form of proxy need not be signed
by the non-registered shareholder. In this case, the non-registered
shareholder who wishes to submit a proxy should otherwise properly
complete the form of proxy and deposit it with Computershare Trust Company
of Canada at 9th Floor, 100 University Avenue, Toronto, Ontario, Canada
M5J 2Y1 as described above;
or
B. more typically, be given a voting instruction form which must be
completed, signed and delivered by the non-registered shareholder in
accordance with the directions on the voting instruction form (which may,
in some cases, permit the completion of the voting instruction form by
telephone).
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The purpose of these procedures is to permit non-registered shareholders to
direct the voting of the shares that they beneficially own. Should a
non-registered shareholder who receives a form of proxy wish to attend and vote
at the Meeting in person (or have another person attend and vote on behalf of
the non-registered shareholder), the non-registered shareholder should strike
out the names of the persons named in the proxy and insert the non-registered
shareholder's (or such other person's) name in the blank space provided, or, in
the case of a voting instruction form, follow the information on the form. IN
EITHER CASE, NON-REGISTERED SHAREHOLDERS SHOULD CAREFULLY FOLLOW THE
INSTRUCTIONS THEY RECEIVE, INCLUDING THOSE REGARDING WHEN AND WHERE THE PROXY OR
THE VOTING INSTRUCTIONS FORM IS TO BE DELIVERED.
REVOCATION OF PROXIES
A registered shareholder who has given a proxy may revoke the proxy (a) by
completing and signing a proxy bearing a later date and depositing it with
Computershare as aforesaid; or (b) by depositing an instrument in writing
executed by him/her, or by his/her attorney authorized in writing (i) at the
registered office of the Company at any time up to and including the last
business day preceding the day of the Meeting, or any adjournment thereof, at
which the proxy is to be used, or (ii) with the chairperson of the Meeting prior
to the commencement of the Meeting on the day of the Meeting or any adjournment
thereof; or (c) in any other manner permitted by law.
A non-registered shareholder may revoke a voting instructions form or a waiver
of the right to receive meeting materials and to vote given to an Intermediary
at any time by written notice to the Intermediary, except that an Intermediary
is not required to act on a revocation of a voting instruction form or of a
waiver of the right to receive materials and to vote that is not received by the
Intermediary at least seven days prior to the Meeting.
VOTING OF PROXIES
The management representatives designated in the enclosed form of proxy will
vote, or withhold from voting, the shares in respect of which they are appointed
by proxy on any ballot that may be called in accordance with the instructions of
the shareholder as indicated on the proxy and, if the shareholder has specified
a choice with respect to any matter to be acted upon, the shares will be voted
accordingly.
IN THE ABSENCE OF SUCH DIRECTION, SUCH SHARES WILL BE VOTED BY THE MANAGEMENT
REPRESENTATIVES AS FOLLOWS:
(a) for the election of directors; and
(b) for the appointment of auditors and the authorization of the
directors to fix the remuneration of auditors.
The enclosed form of proxy confers discretionary authority upon the management
representatives designated therein with respect to amendments to matters
identified in the notice of meeting and with respect to other matters which may
properly come before the Meeting. At the date of this Circular, management of
the Company knows of no such amendments or other matters.
VOTING SECURITIES AND PRINCIPAL HOLDERS
OF VOTING SECURITIES
The directors have established the close of business on December 15, 2004 as the
record date ("Record Date") for determining the shareholders entitled to receive
notice of the Meeting. In accordance with the provisions of the Canada Business
Corporations Act ("CBCA"), the Company will prepare a list of the registered
holders of Subordinate Voting Shares and Multiple Voting Shares as of the close
of business on the Record Date. Each registered shareholder of Subordinate
Voting Shares and Multiple Voting Shares will be entitled at the Meeting to vote
the shares shown opposite the shareholder's name.
HOLDERS OF SUBORDINATE VOTING SHARES AND MULTIPLE VOTING SHARES
The holders of Subordinate Voting Shares and Multiple Voting Shares are entitled
to receive notice of any meeting of shareholders of the Company and to attend
and vote thereat, except those meetings where only the holders of shares of
another class or of a particular series are entitled to vote. On November 24,
2004, the Company had outstanding 99,052,678 Subordinate Voting Shares and
76,785,976 Multiple Voting Shares. Each shareholder of record at the close of
business on the Record Date will be entitled to one vote for each Subordinate
Voting Share and ten votes per share for each Multiple Voting Share held by
him/her on all matters proposed to come before the Meeting.
HOLDERS OF NON-VOTING SHARES
The Company also has authorized an unlimited number of Non-Voting Shares to
facilitate foreign investment in the Company. Holders of Non-Voting Shares are
entitled to receive notice of and attend any meeting of shareholders of the
Company, except those meetings where only the holders of shares of another class
or of a particular series are entitled to vote. The Company's outstanding
Multiple Voting Shares and Subordinate Voting Shares are convertible on a
one-for-one basis into Non-Voting Shares at the option of the holder, while the
Non-Voting Shares are convertible on a one-for-one basis into Subordinate Voting
Shares only if transferred to or held by a "Canadian" holder (as defined in
"Restrictions on Issuance and Transfer of Shares" contained in the Articles of
Amendment of the Company filed June 4, 1996). Generally speaking, a "Canadian"
is a citizen or permanent resident of Canada or a corporation or other entity
where the chief executive officer and 80% of the board members are Canadian, 80%
of the voting shares are beneficially owned and controlled by Canadians, and, if
it is a subsidiary, 66-2/3% of the voting shares of its parent corporation are
held by Canadians, and, where relevant, the
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parent does not influence any programming decisions of the subsidiary. On
November 24, 2004, the Company had outstanding 1,441,965 Non-Voting Shares.
PRINCIPAL HOLDERS OF VOTING SECURITIES
As at November 24, 2004, the only persons or companies who owned of record, or
who, to the knowledge of the directors and officers of the Company, owned
beneficially, directly or indirectly, or exercised control or direction over,
shares of the Company carrying more than 10% of the voting rights attached to
any class of outstanding shares of the Company entitled to vote in connection
with any matters being proposed for consideration at the Meeting were as
follows:
TYPE OF NO. OF PERCENTAGE
NAME AND ADDRESS CLASS OF SECURITIES OWNERSHIP SECURITIES OF CLASS
---------------- ------------------- --------- ---------- --------
CanWest Communications Multiple Voting Shares Direct 76,785,976 100.0%
Corporation (1) Subordinate Voting Shares Direct 3,462,874 3.5%
31st Floor, CanWest Global Place
201 Portage Avenue
Winnipeg, Manitoba, Canada
R3B 3L7
AIM Funds Group Subordinate Voting Shares Direct 15,922,875 16.08%
120 Bloor Street East
Toronto, Ontario
M4W 1B7
(1) Indirectly owned and controlled by trusts for the benefit of members of
the family of the late I.H. Asper, including David Asper, Gail Asper and
Leonard Asper who are senior officers and directors of the Company and
Mrs. Ruth M. Asper. Mrs. Ruth M. Asper and the relevant trusts indirectly
own and control 100% of the voting shares of CanWest Communications
Corporation ("CanWest Communications") (see "Voting Trust Agreement").
VOTING TRUST AGREEMENT
All of the Company's Multiple Voting Shares and 3,462,874 of its Subordinate
Voting Shares are held by CanWest Communications, the shares of which are
indirectly owned and controlled by Mrs. Ruth M. Asper, and trusts for the
benefit of members of the family of the late I.H. Asper, including his three
children, David Asper, Gail Asper and Leonard Asper, who are senior officers and
directors of the Company.
CanWest Communications, certain of its affiliates, the trusts, Mrs. Ruth M.
Asper and her three children (as voting trustees) have entered into a voting
trust agreement which requires the Multiple Voting Shares held by CanWest
Communications to be voted as Mrs. Ruth M. Asper and the three children together
determine.
The voting trust agreement also requires the Multiple Voting Shares held by
CanWest Communications to be voted in favour of nominees to the Board of
Directors (the "Board") who are nominated by David Asper, Gail Asper and Leonard
Asper, and who, together, will be sufficient to constitute at least a majority
of the Board, but as close to a simple majority as possible. For this purpose,
each of David Asper, Gail Asper and Leonard Asper are entitled to nominate an
equal number of the nominees making up that majority. Such nominees will be
provided to the Governance and Nominating Committee of the Board which has
overall responsibility for recommending nominees to the Board.
STOCK EXCHANGE REQUIRED AGREEMENT REGARDING MULTIPLE VOTING SHARES
In compliance with the rules of certain Canadian stock exchanges, CanWest
Communications entered into a trust agreement dated October 9, 1991 with the
Company and Montreal Trust Company of Canada (as trustee for the holders of the
Subordinate Voting Shares, from time to time), as amended by a trust agreement
amendment dated May 15, 1996 and a trust amendment dated January 29, 1998 (as
amended, the "MVS Agreement"). The MVS Agreement provides the holders of
Subordinate Voting Shares with certain rights in the event that a take-over bid
having certain characteristics is made for the Multiple Voting Shares. A
take-over bid, generally defined, is an offer to acquire outstanding equity or
voting shares where, as a result thereof, the offeror would own more than 20% of
the shares of the class which is the subject of the bid. Under applicable
securities law, an offer to purchase Multiple Voting Shares would not
necessarily require that an offer be made to purchase Subordinate Voting Shares.
The MVS Agreement would prevent the sale, directly or indirectly, of Multiple
Voting Shares owned by CanWest Communications pursuant to a take-over bid, at a
price per share in excess of 115% of the then current market price of the
Subordinate Voting Shares as determined under such legislation. This prohibition
would not apply if (a) such sale is made pursuant to an offer to purchase
Multiple Voting Shares made to all holders of Multiple Voting Shares and an
offer identical in all material respects is made concurrently to purchase
Subordinate Voting Shares, which identical offer has no condition attached other
than the right not to take-up and pay for shares tendered if no shares are
purchased pursuant to the offer for Multiple Voting Shares; or (b) there is a
concurrent unconditional offer to purchase all
4
of the Subordinate Voting Shares at a price per share at least as high as the
highest price per share paid pursuant to the take-over bid for the Multiple
Voting Shares.
The MVS Agreement will not prevent certain indirect sales resulting from the
acquisition of shares of a corporation which, directly or indirectly, controls
or is controlled by, CanWest Communications or the Company where the transferor
and transferee are members of the Asper Family, the transferee is the child or
grandchild of the transferor, and the sale is otherwise made in accordance with
applicable law. The phrase "Asper Family" is defined to mean (i) the late I.H.
Asper, (ii) Mrs. Ruth M. Asper, (iii) any issue of the late I.H. Asper
(treating, for this purpose, any legally adopted descendant as a natural
descendant), (iv) his estate, (v) any trust primarily for the benefit of the
issue of the late I.H. Asper, spouses of such issue, and Mrs. Ruth M. Asper and
(vi) any and all corporations which are directly or indirectly 100% controlled
by one or more of the foregoing. "Spouse" includes a person's widow or widower.
The MVS Agreement will also not prevent sales of Multiple Voting Shares,
directly or indirectly, to The Asper Foundation Inc. or any other charitable
foundation which is a registered charity for the purposes of the Income Tax Act
(Canada) (a "Foundation"), provided that a majority of the directors of the
Foundation at the time of the sale are one or more of a spouse, a child or
grandchild, or a spouse of a child or grandchild of the transferor (where spouse
includes a widow or widower), or certain indirect sales of Multiple Voting
Shares in circumstances in which the purchaser would not, as a result of the
sale, hold indirectly more than 20% of the Multiple Voting Shares.
On January 20, 2000, shareholders approved an amended and restated trust
agreement (the "Amended and Restated MVS Agreement") to which certain Asper
family trusts would become a party. The amendment is pursuant to an estate plan
which was prepared for the late I.H. Asper and his family which, if implemented,
would result in the 76,785,976 Multiple Voting Shares and 3,462,874 Subordinate
Voting Shares of the Company currently held by CanWest Communications
Corporation becoming registered in the names of the trustees of three family
trusts: The David Asper Trust, The Gail Asper Trust and The Leonard Asper Trust.
The shares of the Company held by CanWest Communications would be split equally
among the three trusts. The trustees of each of the trusts are Mrs. Ruth M.
Asper, Fred de Koning and Richard Leipsic, and the beneficiaries of the trusts
are members of the Asper family, the Asper Foundation and other charitable
organizations.
The Amended and Restated MVS Agreement contains terms and conditions very
similar to the existing MVS Agreement except for a number of technical changes
reflecting that the registered owners of Multiple Voting Shares will be the
family trusts as opposed to CanWest Communications, and except for amendments to
paragraphs 2(c) and 2(d) of the Trust Agreement which are designed to provide
the Asper family with certain flexibility required to implement the proposed
estate plan. This flexibility consists of (i) permitting Mrs. Ruth M. Asper and
the issue of the late Mr. I.H. Asper to be eligible direct holders of Multiple
Voting Shares; (ii) permitting Mrs. Ruth M. Asper and the issue of the late Mr.
I.H. Asper to be eligible as beneficiaries of a trust which holds Multiple
Voting Shares; (iii) permitting a trust which is primarily, rather than
exclusively, for the benefit of the issue of the late Mr. I.H. Asper, spouses of
such issue, or Mrs. Ruth M. Asper, to hold Multiple Voting Shares; and (iv)
permitting a corporation which is 100% controlled by, rather than 100% owned and
controlled by, Mrs. Ruth M. Asper, any issue of the late Mr. I.H. Asper or any
trust primarily for the benefit of any issue of the late Mr. I.H. Asper or
spouses of such issue to hold Multiple Voting Shares.
The Amended and Restated MVS Agreement will be entered into and become effective
upon the trusts becoming the registered owners of the Multiple Voting Shares and
Subordinate Voting Shares currently registered in the name of CanWest
Communications or on a date specified by the Board. No determination has been
made to take these steps.
CONSTRAINED SHARE PROVISIONS
The Company's articles state, in effect, that (i) the maximum aggregate holdings
of voting shares by non-Canadian holders are limited to 33 1/3% of the total
number of voting shares of the Company; and (ii) the maximum individual holdings
of the shares of the Company by any single shareholder and its associates are
limited to (a) the maximum number of shares which a person may, in the opinion
of the Board, own, beneficially own or control, without (I) changing the
effective control of the Canadian broadcasting undertakings of the Company; (II)
resulting in a person, or a person and its associates, who controls less than
30% of the issued voting shares of the Company or of any person that directly or
indirectly has effective control of the Company, having control of 30% or more
of such voting shares; (III) resulting in a person, or a person and its
associates, who owns less than 50% of the issued shares of the Company or of any
person that directly or indirectly has effective control of the Company, owning
50% or more of such issued shares; or (IV) conflicting with the conditions of
the broadcasting licences held by the Company or its subsidiaries with respect
to changes in the ownership or effective control of the Company's broadcasting
undertakings (any of the events described in clauses (I), (II), (III) and (IV)
being a "Change of Control Transaction") where the Change of Control Transaction
does not have the prior approval of the Canadian Radio-television and
Telecommunications Commission; and (b) the maximum number of voting shares that
may be issued or transferred to a non-Canadian holder without non-Canadian
holders, in the aggregate, holding voting shares in excess of the maximum
aggregate holdings. The Company's articles also describe as the "Constrained
Class" the class of persons to whom an issue or transfer of shares may, in the
opinion of the Board, adversely affect the Company's ability to qualify under
any law to carry on its business or to obtain or retain any broadcasting
license, including in relation to the maximum aggregate holdings, a non-Canadian
holder and, in relation to the maximum individual holdings, any person who is a
non-Canadian holder or who, in the opinion of the directors, intends to engage
in a Change of Control transaction without the prior approval of the Canadian
Radio-television and Telecommunications Commission.
In the event that an issuance or transfer of shares to a shareholder would cause
the shareholder to hold shares in excess of the maximum individual holdings or
would result in the number of shares held by persons in the Constrained Class
exceeding the maximum aggregate holdings described above, then the articles of
the Company authorize the Board to refuse to issue a share or register a
transfer of a share to such shareholder.
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Pursuant to the regulations under the CBCA, if Voting Shares held by or on
behalf of a person in the Constrained Class exceed the maximum individual
holdings, the Shares held by or on behalf of that person may not be voted. The
regulations under the CBCA also provide that any corporation or trust which was
not a person in the Constrained Class but becomes a person in the Constrained
Class will no longer be permitted to exercise the voting rights attached to the
voting shares that it holds.
ELECTION OF DIRECTORS
The number of directors to be elected at the Meeting has been set by the Board
pursuant to the by-laws of the Company to be nine. The management
representatives designated in the enclosed form of proxy intend to vote for the
election as directors of the proposed nominees whose names are set out below.
Except as indicated below, all such nominees are now directors and have been
directors since the dates indicated below. Each director elected will hold
office until the next annual meeting or until his/her successor is elected or
appointed. In fiscal 2004, the Company had an Audit Committee, a Compensation
Committee, a Pensions Committee and a Governance and Nominating Committee. The
members of such committees are indicated below.
DAVID A. ASPER EXECUTIVE VICE PRESIDENT OF THE COMPANY AND CHAIRMAN OF (1)
Winnipeg, Manitoba THE NATIONAL POST
Mr. Asper, a lawyer, joined the Company in 1992 and has 63,622 stock options
Director since January 1997 had various responsibilities covering corporate
development and broadcast operations. Mr. Asper has been
Executive Vice-President (2) actively engaged in the planning and implementation of
(4) broad corporate strategy.
GAIL S. ASPER SECRETARY OF THE COMPANY (1)
Winnipeg, Manitoba Ms. Asper, a lawyer, has been with the Company since 1989
serving as General Counsel until 1998 and as Corporate 33,850 stock options
Director since February 1992 Secretary since 1990. While her primary responsibilities
relate directly to the Company's Board, she is also
Secretary (2) President of the CanWest Global Foundation. She is also
managing director of The Asper Foundation, a private
charitable foundation, and serves as a director on the
boards of a number of major public companies, such as
Great-West Life Assurance Company, Great-West Life Co.
Inc., London Life Insurance Group Inc. and Canada Life
Assurance Company.
LEONARD J. ASPER PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE COMPANY 14,000 Subordinate Voting Shares (1)
Winnipeg, Manitoba Mr. Asper, a lawyer, joined CanWest in 1991 as Associate
General Counsel for the Company's Global Television
Director since January 1997 station in Ontario. Thereafter, he held various positions 181,525 stock options
in corporate development and was Chief Operating Officer.
President and Chief Mr. Asper took over the Presidency of the Company in
Executive Officer (2) 1999. He serves as Chairman of the board of the Global
Television Network and various other CanWest Global
subsidiaries.
DR. LLOYD I. BARBER, PRESIDENT EMERITUS, UNIVERSITY OF REGINA 1,000 Subordinate Voting Shares
C.C., S.O.M., LL.D. Dr. Barber is President Emeritus of the
Regina, Saskatchewan University of Regina. He was appointed an Officer of the 46,706 stock options
Order of Canada in 1978 and was elevated to Companion
Director since February 1992 of the Order in 1993. He serves as a director of 6,394 DSUs
several major public Canadian companies such as Teck
Director (2)(3)(4)(5) Comihco Ltd., Greystone Capital Management and
Fording Trust.
RONALD J. DANIELS DEAN, FACULTY OF LAW, UNIVERSITY OF TORONTO 5,228 DSUs
Toronto, Ontario Mr. Daniels is the Dean of the Faculty of Law,
University of Toronto, a position he has held since
Director since January 2004 1995. He is active in public policy reformation
and has contributed to several public task forces. He
Director (2)(3) was chair of the Ontario Task Force on Securities
Regulation and is a member of the Toronto Stock
Exchange Commission on Corporate Governance. He also
serves as a director on the board of several public
companies such as Great Lakes Power Inc., Rockwater
Capital Corporation and ACS Income Trust.
6
DAVID J. DRYBROUGH, FCA BUSINESS CONSULTANT 7,500 stock options
East St. Paul, Manitoba A Chartered Accountant by training, Mr. Drybrough was
Vice President, Finance of Winnipeg-based Gendis Inc. 5,397 DSUs
Director since March 2003 until December 2003, since his retirement in 1997 from
the accounting firm PricewaterhouseCoopers LLP (then
Director (2)(5) known as Coopers & Lybrand). Mr. Drybrough serves as a
director and chair of the Audit Committee of Fort
Chicago Energy Partners LP. He is on the Board's Audit
Committee, increasing the strength of professional
accounting expertise on that committee.
PAUL V. GODFREY, C.M. PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE TORONTO BLUE 6,698 DSUs
Toronto, Ontario JAYS BASEBALL CLUB
Mr. Godfrey is President and Chief Executive Officer
Director since January 2004 of the Toronto Blue Jays Baseball Club, a position he has
held since September 1, 2000. From November 1992 until
Director (2)(4) June 2000, Mr. Godfrey was President and Chief
Executive Officer of The Toronto Sun. He serves as a
director of a number of major public Canadian
companies such as Astral Media Inc., The Hospital for
Sick Children Foundation and the Molson Indy Board of
Trustees and is actively involved in many charitable
organizations. Mr. Godfrey has received many honours
including the City of Toronto's highest award, the
Civic Award of Merit, and is a member of the Order of
Canada.
FRANK W. KING, O.C., PRESIDENT OF METROPOLITAN INVESTMENT CORP.
P. ENG. Mr. King has been an Investment Manager for more than
Calgary, Alberta the past five years, and is President of Metropolitan
Investment Corporation. He is the former Chairman and
Director since November 2004 Chief Executive Officer of the XV Olympic Winter
Games, which were held in Calgary in 1988. Mr. King,
Director (2) 68, is a Director of the Calgary Chamber of Commerce,
Acclaim Energy Inc., Networc Health Inc., The Westaim
Corporation, Agrium Inc., and Wi-Lan Inc. and is a
Trustee of Rio-Can Real Estate Investment Trust.
THE HONOURABLE FRANK J. COUNSEL, MCINNES COOPER 2,000 Subordinate Voting Shares
MCKENNA, P.C., Q.C. A lawyer, politician, and businessman, Mr. McKenna won
Moncton, New Brunswick three mandates as Premier of New Brunswick and 33,797 stock options
achieved national prominence for his leadership. After
Director since July 1999 ten years as Premier, Mr. McKenna decided to leave 16,784 DSUs
politics in 1997 and now devotes his time to the
Chairman of the Board practice of law with McInnes Cooper, an Atlantic
(2)(3)(5) Canada law firm. As well, he serves as a director on
the board of a number of major public companies such
as Bank of Montreal, Shoppers Drug Mart Corporation
and Noranda Inc.
(1) Trusts for the benefit of members of the family of the late I.H. Asper,
including David Asper, Gail Asper and Leonard Asper, and Mrs. Ruth M.
Asper indirectly own and control CanWest Communications which, in turn,
owns 100% of the Multiple Voting Shares and 3,462,874 Subordinate Voting
Shares. See "Voting Securities and Principal Holders of Voting
Securities".
(2) Member of the Governance and Nominating Committee.
(3) Member of the Compensation Committee.
(4) Member of the Pensions Committee.
(5) Member of the Audit Committee.
Each of the foregoing directors, with the exception of Mr. King, were elected to
his or her present term of office by the shareholders of the Company at a
meeting in respect of which the Company circulated a management information
circular to shareholders. Unless otherwise indicated, all the directors are
resident in Canada. Ms. Bennett decided not to stand for re-election to the
Board in 2005 and Mr. Strike and Mr. Camilleri resigned from the Board on
November 2, 2004.
7
BOARD OF DIRECTORS MEETINGS HELD
AND ATTENDANCE OF DIRECTORS
The information presented below reflects Board and Committee meetings held and
attendance of Directors for the year ended August 31, 2004 for those Directors
that are nominated for election at the Meeting that were Directors during that
period.
Summary of Board and Committee Meetings Held:
Board of Directors 8
(a) Audit Committee 5
(b) Compensation Committee 5
(c) Pensions Committee 2
(d) Governance and Nominating Committee 1
Summary of Attendance of Directors:
BOARD MEETINGS COMMITTEE MEETINGS
ATTENDED ATTENDED
David A. Asper 8 of 8 3 of 3
Gail S. Asper 8 of 8 1 of 1
Leonard J. Asper 8 of 8 1 of 1
Dr. Lloyd I. Barber 8 of 8 13 of 13
Ronald J. Daniels 3 of 3 3 of 3
David J. Drybrough 8 of 8 6 of 6
Paul V. Godfrey 3 of 3 3 of 3
The Hon. Frank J. McKenna 8 of 8 11 of 11
STATEMENT OF EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Summary Compensation Table details compensation information for the three
fiscal years ended August 31, 2004, for the Chief Executive Officer, the Chief
Financial Officer and the three other most highly compensated executive officers
of the Company (the "named executive officers") for services rendered in all
capacities with respect to the fiscal year ended August 31, 2004.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------------ SECURITIES ALL
NAME AND OTHER ANNUAL UNDER OTHER
PRINCIPAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
POSITION YEAR $ $ $(1) GRANTED (2) $
-------- ---- ------- ------- ------------ ------------ ------------
D.A. Asper 2004 360,000 105,000 - 12,500 -
Executive Vice President 2003 350,000 72,000 - 7,500 -
CanWest Global 2002 350,000 - - 7,500 -
Communications Corp.
L.J. Asper 2004 650,000 73,125 - 30,000 -
President & Chief 2003 650,000 678,906 - 60,000 -
Executive Officer
CanWest Global 2002 540,800 - - - -
Communications Corp.
R.C. Camilleri (3) 2004 600,000 73,800 - 20,000 -
President 2003 600,000 360,000 - 50,000 -
CanWest MediaWorks 2002 100,000 - - - -
J.E. Maguire 2004 275,625 59,500 - 12,500 -
Chief Financial Officer 2003 262,500 118,125 - 25,000 -
CanWest Global 2002 250,000 17,000 - - -
Communications Corp.
8
T.C. Strike(4) 2004 520,000 78,000 10,493 20,000 -
President 2003 500,000 316,500 12,714 40,000 -
CanWest MediaWorks 2002 500,000 60,000 13,278 - -
International
(1) The value of perquisites and benefits for each named executive officer is
less than the lesser of $50,000 and 10% of the total annual base
compensation and bonuses. Amounts shown reflect imputed interest benefit
on loans pursuant to other indebtedness.
(2) Option exercise price per share is the market price per share of the
Subordinate Voting Shares as at the date the options were granted.
(3) Mr. Camilleri was appointed to the position of Chief Operating Officer
(Operations) on July 1, 2002. He was appointed to his present position on
October 4, 2004.
(4) Mr. Strike was appointed to the position of Chief Operating Officer
(Corporate) in September 1999. He was appointed to his present position on
October 4, 2004.
OPTIONS
OPTIONS GRANTED DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
Information as to options granted in respect of fiscal 2004 to named executive
officers of the Company under the Executive Stock Option Plan is shown in the
table below:
Market Value of
% of Total Subordinate Voting
Subordinate Voting Options Granted Shares Underlying
Shares Under to Employees Exercise Options on the Date
Option in respect of Price of Grant Expiration
Name # fiscal 2004 $/Security $/Security Date
D.A. Asper 12,500 2.4% 12.90 12.90 November 2013
L.J. Asper 30,000 5.7% 12.90 12.90 November 2013
R.C. Camilleri 20,000 3.8% 12.90 12.90 November 2013
J. E. Maguire 12,500 2.4% 12.90 12.90 November 2013
T.C. Strike 20,000 3.8% 12.90 12.90 November 2013
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
AND FINANCIAL YEAR END OPTION VALUES
Information as to options exercised during the year and unexercised and
outstanding options to purchase Subordinate Voting Shares pursuant to the
Executive Stock Option Plan in respect of the named executive officers of the
Company is shown in the table below:
VALUE OF UNEXERCISED
SECURITIES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED AGGREGATE AT AUGUST 31, 2004 AT AUGUST 31, 2004
ON VALUE
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME # $ # # $ $
---- -------- -------- ----------- ------------- ----------- -------------
D.A. Asper - - 49,588 12,500 19,125 -
L. J. Asper - - 63,416 118,109 - 76,500
R.C. Camilleri - - 16,500 73,500 26,730 105,270
J.E. Maguire - - 41,356 55,129 - 31,875
T.C. Strike - - 30,932 88,526 - 51,000
9
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
Named executive officers are entitled to retirement compensation benefits under
a Retirement Compensation Arrangement as described below.
RETIREMENT COMPENSATION ARRANGEMENT
Certain senior executives of the Company are covered under a Retirement
Compensation Arrangement (RCA). Under the RCA, the benefit accrual is equal to
2.25% of the executive's Final Average Earnings multiplied by the number of
years the executive has been continuously employed by the Company. Final Average
Earnings are defined as the average of the executive's salary plus incentive
bonus in each of the best three consecutive years out of the last ten years of
the executive's employment with the Company. Normal retirement is at age 62 and
the pension is payable for only the lifetime of the executive. Participants can
retire as early as age 50 with 5 years' service. Pensions payable on early
retirement will be reduced by 0.5% for each month that retirement occurs prior
to age 62. For purposes of the RCA benefits payable to the named executive
officers indicated below, the Final Average Earnings are capped at $500,000.
Benefits accrued under the RCA are not reduced by any social security or Canada
Pension Plan benefits. The table below shows the pension amounts which would be
payable at normal retirement based on various levels of compensation and
service.
PENSION PLAN TABLE
YEARS OF CREDITED SERVICE
FINAL AVERAGE
EARNINGS 15 20 25 30 35
-------- ---------- ---------- ---------- ---------- ----------
$125,000 42,187.50 56,250.00 70,312.50 84,375.00 98,437.50
150,000 50,625.00 67,500.00 84,375.00 101,250.00 118,125.00
175,000 59,062.50 78,750.00 98,437.50 118,125.00 137,812.50
200,000 67,500.00 90,000.00 112,500.00 135,000.00 157,500.00
225,000 75,937.50 101,250.00 126,562.50 151,875.00 177,187.50
250,000 84,375.00 112,500.00 140,625.00 168,750.00 196,875.00
300,000 101,250.00 135,000.00 168,750.00 202,500.00 236,250.00
400,000 135,000.00 180,000.00 225,000.00 270,000.00 315,000.00
500,000 168,750.00 225,000.00 281,250.00 337,500.00 393,750.00
The above table is applicable to D.A. Asper, L.J. Asper, R.C. Camilleri, J.E.
Maguire and T.C. Strike. Credited service at January 1, 2005 will be as follows:
Mr. D.A. Asper, 13.33 years
Mr. L.J. Asper, 13.83 years;
Mr. R.C. Camilleri, 2.50 years;
Mr. J.E. Maguire, 14.33 years; and
Mr. T.C. Strike, 18.42 years
TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS
The Company has the following employment agreements with named executive
officers:
LEONARD J. ASPER
The Company has entered into a management services agreement with CanWest
Direction Ltd. ("Direction") with respect to the services of Leonard Asper. In
respect of services provided by Leonard Asper as President and Chief Executive
Officer ("CEO") of the Company, the agreement provides for a base annual fee of
$650,000 and incentive fees up to 150% of base fee based upon agreed financial
and personal objectives and includes health, life insurance, pension and similar
benefits available to all the Company's executives. The agreement requires that
Mr. Asper not engage or invest in, own, manage, operate, finance, control or
participate in any business that competes with the Company for a period of 12
months following expiration of his employment with the Company. Should Direction
terminate the agreement within six months following a change in control of the
Company, Direction is entitled to receive 18 months basic fees and pro-rated
incentive fees for the fiscal year in which the termination occurs.
RICHARD C. CAMILLERI
The Company has entered into an employment agreement with Richard C. Camilleri,
its President, CanWest MediaWorks. For fiscal 2004, the agreement provides for a
base annual salary of $600,000, incentive compensation up to 60% of base salary
based upon agreed financial and personal objectives and includes health, life
insurance, pension and similar benefits available to all the Company's
executives. The
10
agreement provides the Company with the right to preclude Mr. Camilleri from
employment by companies other than CanWest in the countries in which CanWest has
operations for a period of up to 18 months subsequent to leaving CanWest. Under
such circumstances, Mr. Camilleri is entitled to continue to receive salary and
health benefits for a period up to 18 months.
THOMAS C. STRIKE
The Company has entered into an employment agreement with Thomas C. Strike, its
President, CanWest MediaWorks International. For fiscal 2004, the agreement
provides for a base annual salary of $520,000, incentive compensation up to 60%
of base salary based upon agreed financial and personal objectives and includes
health, life insurance, pension and similar benefits available to all the
Company's executives. In the event of termination following a change of control
of the Company, Mr. Strike is entitled to a payment equivalent to two years base
salary.
COMPOSITION OF THE COMPENSATION COMMITTEE
During the year ended August 31, 2004, the following were members of the
Company's Compensation Committee: The Hon. Frank J. McKenna, P.C., Q.C. (Chair),
Dr. Lloyd I. Barber, C.C., S.O.M., LL.D. and Ms. Jalynn H. Bennett, C.M.
REPORT ON EXECUTIVE COMPENSATION
The Company's compensation policies are designed to recognize and reward the
services of highly skilled executives, as well as provide compensation packages,
with incentives, commensurate with industry standards.
Compensation packages reflect responsibilities and the marketplace, designed to
be competitive with that of other publicly traded companies which, similar to
the Company, are involved in the media and entertainment industry and with other
publicly traded companies of comparable size in terms of revenue. In addition,
the Company has analyzed compensation surveys and studies to compare the
compensation packages to generally accepted practices for publicly traded
companies. The major elements of the executive compensation packages consist of
base salary, annual performance-based incentives, long-term stock options and
perquisites. The Compensation Committee (the "Committee") has the responsibility
to annually review and recommend for approval by the Board, corporate goals and
objectives relevant to the CEO's compensation package, as well as review and
approve the CEO's compensation based on the Committee's evaluation of the CEO's
performance. The Committee is also responsible to review, evaluate and recommend
compensation packages for (i) the Chair of the Board, (ii) each executive
officer who reports to the CEO, and (iii) any other employee that the Committee
determines appropriate from time to time.
Base salary has been determined for each named executive officer based upon
individual performance and, in relation to comparable positions within the media
industry. Base salary levels are intended to attract and retain executives,
provide fair and competitive compensation commensurate to an executive's
experience, as well as to reward individual performance and one's achievement of
objectives. Annual performance-based incentives are designed to encourage and
award improved performance from year to year.
The amount of annual incentive payment is tied to two components: (i)
achievement of improved financial results and (ii) achievement of personal
objectives. The achievement of financial criteria and personal objectives have
weightings of 75% and 25% respectively in the calculation of annual incentive
payments. The financial criteria include a minimum year over year increase in
the share price, a minimum year over year increase in net earnings and a minimum
return on average shareholders' equity.
The long term stock option program (Executive Stock Option Plan) is designed to
reward executives for their performance and contribution to the Company. Under
the Executive Stock Option Plan, the Board may grant options to acquire
Subordinate Voting Shares or Non-Voting Shares (see "Securities Authorized for
Issuance Under Equity Compensation Plans"). Each participant in the plan is
entitled to receive an annual grant of options, 50% of which is
performance-based and dependent upon the financial performance of the Company.
Specifically, for these performance-based options to be granted, the Company had
to achieve at least two of the following three performance criteria: a minimum
year over year increase in the share price, a minimum year over year increase in
net earnings/operating earnings (as applicable) and a minimum return on average
shareholders' equity. For fiscal 2004, these performance criteria were not
achieved and therefore 50% of the option entitlement was not awarded. Options
granted to executives in fiscal 2004 vest as follows: 40% vest two years after
the grant, with an additional 20% three, four and five years after. The Company
has determined that the maximum dilutive impact of outstanding stock options
shall not exceed 5% and, accordingly, believe this Plan to be more restrictive
than the majority of such plans of companies in the comparison groups.
Submitted by: Hon. Frank J. McKenna, P.C., Q.C.
Dr. Lloyd I. Barber, C.C., S.O.M., LL.D.
Jalynn H. Bennett, C.M.
Ronald J. Daniels
11
COMPENSATION OF THE CEO
In fiscal 2004, the CEO was paid a base salary of $650,000, a bonus of $73,125
and was granted options to acquire 30,000 Subordinate Voting Shares under the
Executive Stock Option Plan. The annual performance based incentive of up to
150% of base salary was based upon agreed financial and personal objectives. In
fiscal 2004, the incentive was based upon 60% achievement of personal
objectives. The financial objectives were not fully achieved. The determination
of the CEO's compensation is based on objectives determined and approved by the
Board, as well as peer compensation (of other Chief Executive Officers of the
media and entertainment companies on group and other Canadian company group). A
comprehensive survey by a third party consulting firm was undertaken in 2004 in
order to assist the Compensation Committee with its determination. As a result
of the survey, the Compensation Committee will be implementing a new
compensation package for the CEO.
PERFORMANCE GRAPH
The following graph shows changes over the past five year period in the value of
$100 invested in: (1) CanWest's Subordinate Voting Shares; (2) the S&P/TSX
Composite Index as of August 31, 2004; and (3) the TSX Media Index.
CANWEST COMPARISON OF 5-YEAR TOTAL SHAREHOLDERS' RETURN
SUBORDINATE VOTING SHARES
TOTAL RETURN INDEX VALUES (SUBORDINATE VOTING SHARES)
[PERFORMANCE GRAPH]
1999/8 2000/8 2001/8 2002/8 2003/8 2004/8
------ ------ ------ ------ ------ ------
CanWest Global CGS.SV 100.0 95.33 68.76 34.81 56.88 52.03
S & P / TSX Composite Index 100.0 163.42 109.01 99.05 114.81 130.30
TSX Media Index 100.0 119.76 95.93 70.91 76.40 83.10
Assuming an investment of $100 and the reinvestment of dividends
12
CANWEST COMPARISON OF 5 YEAR TOTAL SHAREHOLDERS' RETURNS
NON-VOTING SHARES
The following graph shows changes over the past five year period in the value of
$100 invested in (1) CanWest's Non-Voting Shares; (2) the S&P/TSX Composite
Index as of August 31, 2004; and (3) the TSX Media Index. The Non-Voting Shares
also trade on the New York Stock Exchange.
TOTAL RETURN INDEX VALUES (NON - VOTING SHARES)
[PERFORMANCE GRAPH]
1999/8 2000/8 2001/8 2002/8 2003/8 2004/8
------ ------ ------ ------ ------ ------
CanWest Global CGS.NV 100.0 95.06 67.70 34.68 56.10 51.61
S & P / TSX Composite Index 100.0 163.42 109.01 99.05 114.81 130.30
TSX Media Index 100.0 119.76 95.93 70.91 76.40 83.10
Assuming an investment of $100 and the reinvestment of dividends
COMPENSATION OF DIRECTORS
Directors of the Company who are employees or otherwise retained by the Company
are not entitled to receive any additional remuneration for serving as
directors. All directors are entitled to receive an annual director's fee of
$30,000 and a maximum of $1,500 for each meeting attended. The Chairman of the
Board receives an additional annual fee of $120,000. The Chairman of each
committee of the Board of Directors is entitled to an additional $5,000 per
annum for acting as such and directors are entitled to $3,000 per annum for each
committee on which they serve. All directors are reimbursed for travel and other
reasonable expenses incurred in attending Board meetings. In fiscal 2004
aggregate remuneration to directors was $364,833 of which directors elected to
receive $170,167 in cash and $194,666 in DSUs.
Until fiscal 2004, the directors were also entitled to participate in the
Executive Stock Option Plan. The Board has determined that directors will not
receive grants of options in the future and have approved a Deferred Share Unit
(DSU) Plan. The purpose of the plan is to promote a greater alignment of
interests between the individual director and the shareholders of the Company.
The Board has also introduced stock ownership guidelines which require
non-executive directors to own stock equivalent to four times the annual
directors' fee. Directors will have a period of five years to meet this
guideline. Under the DSU Plan, non-executive directors may elect to receive
their remuneration in cash, DSUs or a combination thereof. DSUs have a value
equivalent to the value of the Company's Subordinate Voting Shares at any time.
DSUs may only be redeemed for cash and are redeemable only at the time the
director ceases to be a director or for a period of time thereafter. Directors
will receive, in respect of their DSUs, an amount equivalent to the amount of
any dividends paid on the Company's Subordinate Voting Shares in the form of
additional DSUs. Until the stock ownership threshold is reached, directors will
be required to receive 50% of their annual retainer in DSUs. On November 2,
2004, the Chairman of the Board was issued 6,600 DSUs with a value of $79,180
and the other non-executive directors were each issued 4,400 DSUs with a value
of $52,787 in respect of the 2004 fiscal year.
13
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Company has purchased, for the benefit of the Company, its subsidiaries and
their directors and officers, insurance against liability incurred by the
directors or officers in their capacity as directors or officers of the Company
or any subsidiary. The following are particulars of such insurance:
(a) the total amount of insurance is $30,000,000 and, subject to the
deductible portion referred to below, up to the full face amount of the
policy is payable, regardless of the number of directors and officers
involved;
(b) the annual premium for the current financial year is $722,925. The policy
does not specify that a part of the premium is paid in respect of either
directors as a group or officers as a group; and
(c) the policy provides for deductibles as follows:
(i) with respect to the directors and officers, there is no deductible
applicable; and
(ii) with respect to reimbursement of the Company, there is a deductible
of $2,000,000 per occurrence.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER
EQUITY COMPENSATION PLANS
EQUITY COMPENSATION PLAN INFORMATION
Number of securities
remaining available for
future issuance under
Number of securities to Weighted-average equity compensation
be issued upon exercise exercise price of plans (excluding
of outstanding options, outstanding options, securities reflected in
PLAN CATEGORY warrants and rights warrants and rights first column)
------------- ------------------- ------------------- -------------
EQUITY COMPENSATION PLANS
APPROVED BY SECURITYHOLDERS 2,940,904 $13.33 10,988,758
EQUITY COMPENSATION PLANS NOT
APPROVED BY SECURITYHOLDERS N/A N/A N/A
TOTAL 2,940,904 $13.33 10,988,758
The Company has adopted an Executive Stock Option Plan as part of its Amended
and Restated Combined Share Compensation Plan under which directors and eligible
executives of the Company are entitled to receive options to acquire Subordinate
Voting Shares or Non-Voting Shares, depending upon each executive's citizenship.
The Executive Stock Option Plan is administered by the Board of the Company,
which establishes the option price per share on the date on which any options
are granted. In all cases, the option price per share has been the market value
of the Subordinate Voting Shares as at the date the option was granted and in no
case has the option term exceeded ten years. Options granted up to December 31,
1995 are exercisable in equal annual instalments over a five year period at any
time in each year, unless the Board determines otherwise. Options granted from
January 1, 1996 to January 1, 2000 vest in equal annual instalments over five
years in the twelfth month of each year of the option with the exceptions of
options granted to Directors which vest immediately. Options granted after
January 1, 2000 and before November 2002 are exercisable over a six year period
with one third of the options vesting after every two years. Options granted
subsequent to November 2002 are exercisable over a five year period with 40%
vesting after two years and 20% vesting each year thereafter. The aggregate
number of Subordinate Voting Shares and Non-Voting Shares which have been
reserved for issue under this plan, together with any Subordinate Voting Shares
and Non-Voting Shares reserved for issue under any options for service or other
employee stock purchase or option plans established from time to time, may not
exceed an aggregate of approximately 13.8 million shares and no individual
optionee may hold options to purchase an aggregate number of Subordinate Voting
Shares and Non-Voting Shares in excess of 5% of the issued and outstanding
Subordinate Voting Shares and Non-Voting Shares at the date of the grant of the
option.
Options granted to Executives since November 2002 have been granted according to
a formula which is, in part, based upon achievement of specified financial
objectives. Directors of the Company received options in November 2003 in
respect of the fiscal year ended August 31, 2003. The Board has determined that
directors will not receive grants of options in the future and have introduced a
DSU Plan (see "Compensation of Directors").
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
With the exception of certain senior executives, Company employees are eligible
to participate in the Employee Share Purchase Plan or Management Share Purchase
Plan, each of which are part of the Company's Amended and Restated Combined
Share Compensation Plan. Participants may acquire, annually, Subordinate Voting
Shares or Non-Voting Shares of the Company, depending upon the participant's
14
citizenship, with a purchase price equal to the market price per share of the
relevant shares up to a maximum amount of 5% of their annual base compensation
in the case of other participants in the Employee Share Purchase Plan; and 10%
of their annual base compensation in the case of participants in the Management
Share Purchase Plan. All participants are eligible to receive interest-free
share purchase loans from the Company. Such loans are to be repaid in full by
December 31 of the year in which the loans were made.
AGGREGATE INDEBTEDNESS
AGGREGATE INDEBTEDNESS ($)
To the Company or its
Purpose Subsidiaries To Another Entity
Share purchases 89,000 NIL
Other (1) 519,393 NIL
(1) These loans, which are secured by mortgages, were outstanding prior to the
enactment of the Sarbanes Oxley Act of 2002.
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER SECURITIES PURCHASE AND
OTHER PROGRAMS
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER
(1) SECURITIES PURCHASE AND (2) OTHER PROGRAMS
Financially
Largest Assisted
Amount Securities
Outstanding Amount Purchases Amount Forgiven
During Year Outstanding During Year During Year
Involvement of Ending August as at November Ending August Ending August
Name and Company or 31, 2004 24, 2004 31, 2004 Security for 31, 2004
Principal Position Subsidiary ($) ($) (#) Indebtedness ($)
Securities Purchase Programs
N/A N/A - - - - -
Other Programs (1)
T.C. Strike Lender 384,765 350,000 - mortgage -
(1) This loan was outstanding prior to the enactment of the Sarbanes Oxley Act
of 2002.
APPOINTMENT OF AUDITORS
The management representatives designated in the enclosed form of proxy intend
to vote in favour of the reappointment of PricewaterhouseCoopers LLP as auditors
of the Company to hold office until the next annual meeting of shareholders.
PricewaterhouseCoopers LLP (or their predecessors Coopers & Lybrand) have served
as auditors of the Company since 1985.
The resolution to appoint PricewaterhouseCoopers LLP as auditors of the Company
and to authorize the directors to fix the auditors' remuneration must be passed
by at least 50% of the votes cast by the holders of the Multiple Voting Shares
and Subordinate Voting Shares of the Company voting together as a group, either
present in person or represented by proxy at the Meeting.
AUDITORS' FEES
For the year ended August 31, 2004, the Audit Committee has approved fees to
PricewaterhouseCoopers LLP and its affiliates as follows:
$000'S
Audit services 3,655.0
Audit related services 279.9
Tax services 426.8
-------
4,361.7
=======
Prior to approval of any engagement of PricewaterhouseCoopers LLP, the Audit
Committee ensures the provision of such services is compatible with maintaining
the auditors' independence.
15
SHAREHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
The CBCA permits certain eligible shareholders of the Company to submit
shareholder proposals to the Company, which proposals may be included in a
management proxy circular relating to an annual meeting of shareholders. The
final date by which the Company must receive shareholder proposals for the
annual meeting of shareholders of the Company to be held in 2006 is August 25,
2005.
STATEMENT OF
CORPORATE GOVERNANCE PRACTICES
The Toronto Stock Exchange (the "TSX") requires that every listed company
disclose its corporate governance practices annually and relate their corporate
governance practices to each of the "TSX Guidelines for Effective Corporate
Governance" (the "TSX Guidelines"). A description of the Company's corporate
governance practices follows, referring to each of the guidelines established in
the TSX Guidelines.
TSX GUIDELINES THE COMPANY'S GOVERNANCE PRACTICES
-------------- ----------------------------------
1. The Board should explicitly assume The general mandate of the Board is to
responsibility for the Company's stewardship. supervise the management of the
Company's business and affairs, to
act with a view to the Company's
best interests and to exercise the
care, skill and diligence that a
reasonably prudent person would
exercise in comparable
circumstances. In doing so, the
Board acts in accordance with:
- the CBCA, the Broadcasting Act,
other laws that apply to media
companies, as well as laws of
general application
- the Company's articles of
incorporation and by-laws
- written charters of the Board and
Board committees
- the Company's Code of Ethics and
other internal policies
Copies of the Company's Code of
Ethics, its Board Mandate and
committee charters are found at
www.canwestglobal.com.
As part of its overall stewardship
responsibilities, the Board is responsible for
the following matters:
(a) General Strategic Direction and Significant - Reviewing and assessing the
Initiatives Company's operations with a view
to ensuring the best performance is
achieved;
- Reviewing and approving the
Company's major development
activities, including major
acquisitions, investments and
divestitures outside the ordinary
course of business;
- Adopting a strategic planning
process and approving, on at least
an annual basis, a strategic plan
which takes into account, among
other things, the opportunities
and risks of the business;
- Approving operating and capital
budgets;
- Reviewing and approving the
dividend policy and declaration of
dividends; and
- Reviewing and approving major
financing and any offering of our
securities.
(b) Risk Management - Identifying the principal risks of
the Company's business (including
financial, accounting and legal
risks) and ensuring the
implementation of appropriate
systems to manage these risks;
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TSX GUIDELINES THE COMPANY'S GOVERNANCE PRACTICES
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- Reviewing and ensuring the
integrity of the Company's
internal control and management
information systems;
- Satisfying itself from time to
time that the Company's operations
are in material compliance with
applicable laws and regulations;
- Reviewing and approving the
external auditor to be nominated
for the purpose of preparing or
issuing an auditor's report or
performing other audit, review or
attest services for the Company,
taking into account the
recommendations of the Audit
Committee; and
- Reviewing and approving the
compensation of the external
auditor, taking into account
recommendations of the Audit
Committee.
(c) Human Resources and Compensation (including - Appointing the President and CEO;
the President and CEO)
- Reviewing and approving position
descriptions for the Chair of the
Board and the CEO, and, in the
case of the CEO, taking into
account the recommendation of the
Compensation Committee;
- Reviewing and evaluating the
performance of (i) the Chair of
the Board, (ii) each executive
officer who reports to the CEO,
and (iii) any other employee that
the Compensation Committee
determines appropriate from time
to time, taking into account
evaluations provided by the
Compensation Committee;
- Reviewing and approving
compensation for (i) the Chair of
the Board, (ii) each executive
officer who reports to the CEO,
and (iii) any other employee that
the Compensation Committee
determines appropriate from time
to time, including base salary,
long-term stock options and
perquisites, taking into account
the recommendations of the
Compensation Committee;
- Reviewing and approving the
remuneration of each director,
taking into account the
recommendations of the
Compensation Committee;
- Reviewing and approving the
Company's Amended and Restated
Combined Share Compensation Plan
and Deferred Share Unit Plan (the
"Equity Plans") and Executive
Annual Incentive Plan;
- Reviewing and approving grants
under the Equity Plans, taking
into account the recommendations
of the Compensation Committee;
- Reviewing and approving any
incentive or equity based
compensation to be granted outside
the Equity Plans or the Executive
Annual Incentive Plan, taking into
account recommendations of the
Compensation Committee;
- Reviewing and approving the
Company's compensation and
benefits programs for its
executive officers generally,
taking into account
recommendations of the
Compensation Committee;
- Succession planning (including
appointing, training and
monitoring the Company's executive
officers);
- Satisfying itself as to the
integrity of the CEO and other
executive officers and that the
CEO and other executive officers
create a culture of integrity
throughout the organization; and
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- Overseeing and monitoring the
Company's pension plans and other
retirement arrangements, or, to
the extent this function is
delegated to the Pensions
Committee, requesting updates and
other relevant information from
the Pensions Committee from time
to time.
(d) Communications and Disclosure - Reviewing with management from
time to time the Company's
procedures for receiving feedback
from shareholders, including
written and electronic feedback,
and satisfying itself that
appropriate procedures are in
place or recommending changes
where desirable; and
- Reviewing and approving the
Company's (i) quarterly and annual
financial statements and
accompanying management's
discussion and analysis, (ii)
annual report, (iii) annual
information form, (iv) annual and
quarterly press releases, and (v)
annual notice of meeting,
management information circular
and proxy form, taking into
account the recommendations of the
Audit Committee, where applicable.
(e) Corporate Governance - Reviewing and approving a set of
corporate governance principles
applicable to the Company, taking
into account recommendations of
the Governance and Nominating
Committee.
2. The Board should be constituted with a The Company's Board currently
majority of individuals who qualify as consists of ten directors. The Board
"unrelated directors" (i.e. independent of has determined that the number of
management and free from any business or other directors to be elected at the
relationship which could, or could reasonably Meeting will be nine. The proposed
be perceived to, materially interfere with the Board will consist of six unrelated
director's ability to act with a view to the directors and three related
Company's best interests other than interests directors. The six unrelated
and relationships arising from shareholding). directors are: Dr. Lloyd I. Barber,
C.C., S.O.M., LL.D.; Mr. Frank W.
If the Company has a significant shareholder, King, O.C., P. Eng.; Mr. Ronald J.
in addition to a majority of unrelated Daniels; Mr. David J. Drybrough,
directors, the Board should include a number FCA; Mr. Paul V. Godfrey, C.M. and
of directors who do not have interests in or The Hon. Frank J. McKenna, P.C.,
relationships with either the Company or the Q.C.. The remaining three directors
significant shareholder and which fairly are related. Accordingly, the Board
reflects the investment in the Company by will be constituted with a majority
shareholders other than the significant of individuals who qualify as
shareholder (a significant shareholder being a unrelated directors.
shareholder with the ability to exercise a
majority of the votes for the election of the The Company is indirectly controlled
Board). by Mrs. Ruth M. Asper, David Asper,
Gail Asper and Leonard Asper. Each
of David Asper, Gail Asper and
Leonard Asper are senior officers of
the Company and proposed for
election as directors. Mrs. Ruth M.
Asper and trusts for the benefit of
members of the late I.H. Asper's
family including David Asper, Gail
Asper and Leonard Asper, directly or
indirectly own all of the Multiple
Voting Shares of the Company and
3,462,874 Subordinate Voting Shares
of the Company, which, together,
represent approximately 89% of the
total votes and 45% of the total
equity and therefore, together, are
a "significant shareholder" of the
Company within the meaning of the
TSX Guidelines. CanWest
Communications, the Trusts, and the
noted individuals have entered into
a voting trust which governs how the
Company's shares held by CanWest
Communications are to be voted. (See
"Voting Securities and Principal
Holders of Securities" for further
particulars.)
The Subordinate Voting Shares which
are held by shareholders ("public
shareholders") other than the
Corporation's significant
shareholder and any of its
affiliates represent approximately
11% of the total votes and together
with the Non-Voting Shares which are
held by public shareholders
represent 55% of the total equity.
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The directors believe that the six
unrelated directors do not have
interests in or relationships with
either the Company or the
significant shareholder.
Approximately 55% of the equity
shares of the Company are held by
public shareholders and the
directors therefore believe that the
membership on the Board of these six
unrelated directors, being
two-thirds of the total number of
directors, fairly reflects the
investment in the Company by public
shareholders.
3. The Board has responsibility for applying the In determining whether the directors
definition of "unrelated director" to each were unrelated, the Board examined
individual director and for disclosing the factual circumstances of each
annually the analysis of the application of director and considered them in the
the principles supporting this definition and context of many factors and
whether the Board has a majority of unrelated concluded that a majority of the
directors. directors in question were
unrelated.
4. The Board should appoint a committee of The Governance and Nominating
directors composed exclusively of outside Committee is responsible for
(i.e. non-management) directors, a majority of considering and recommending
whom are unrelated directors, with the nominees for election to the Board.
responsibility for proposing new nominees to This committee is also responsible
the Board and for assessing directors on an for establishing procedures to
ongoing basis. evaluate the Board and each director
and overseeing such evaluation. In
considering nominees for election to
the Board, the Governance and
Nominating Committee takes into
account geographic diversity and
considers the primary markets in
which the Company operates as well
as the appropriate expertise and
background to contribute support the
Company's strategy and operations.
Currently, all of the members of the
Board are members of the committee.
The Governance and Nominating
Committee is composed of a majority
of unrelated directors. Going
forward, the Board has agreed that
the Governance and Nominating
Committee will be composed of three
directors, all of whom will be
unrelated.
5. The Board should implement a process to be The Governance and Nominating
carried out by the appropriate committee for Committee is responsible for
assessing the effectiveness of the Board, its reviewing annually the structure and
committees and the contributions of individual mandates of each Board committee
directors (including this committee) and
assessing the effectiveness of each
Board committee. In addition, issues
regarding quality of information,
suggestions regarding the
appointment of new directors and
issues regarding Board performance
have also been raised and have been
regularly explored at meetings of
the Board. It is also the
responsibility of the Chair of the
Board to ensure effective operation
of the Board and to ensure the Board
discharges its responsibilities.
6. The Board should provide an orientation and New directors are given the
education program for new directors opportunity to individually meet
with senior management to improve
their understanding of the Company's
operations and tours are arranged of
several of the Company's key
operations for the new directors.
New directors are also provided with
a reference binder that contains
information on the Company's
organizational structure, the
structure of the Board and its
committees, Company policies,
articles and by-laws, as well as
Board materials for the preceding 12
months. On an ongoing basis, during
regularly scheduled Board meetings,
directors are given presentations on
various aspects of the Company's
activities and functions. In
addition, regardless of whether a
meeting of the Board is scheduled,
all directors regularly receive
information on the Company's
operations including a report from
the CEO, a report on corporate
development activities, operations
reports, a financial overview and
other pertinent information. All
executives are available for
discussions with directors
concerning any questions or comments
which may arise between meetings.
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7. The Board should examine its size and, with a The Company's Board currently
view to determining the impact of the number consists of ten directors. The Board
upon effectiveness, undertake where has determined that the number of
appropriate, a program to reduce the number of directors to be elected at the
directors to a number which facilitates Board Meeting will be nine. The relatively
effectiveness. small size of the Board has enabled
it to be extremely flexible with
regard to scheduling meetings,
including unplanned meetings which
are called in order to review new
opportunities. The Board is thus
able to act quickly and remain well
informed at all times. Management
has been able to liaise regularly
with the Board to seek approval for
any activities outside the normal
course of business.
The Board believes that its current
size and range of expertise and
skills facilitates Board
effectiveness.
8. The Board should review the adequacy and form The Compensation Committee reviews
of compensation of directors in light of the how directors are compensated for
risks and responsibilities involved in being serving on the Board and its
an effective director. committees and recommends any
changes to the Board. In this
regard, the Compensation Committee
compares the directors' compensation
to that of similar companies.
9. Committees of the Board should generally be The Board has four committees. The
composed of outside directors, a majority of Chair of the Board is an ex-officio
whom should be unrelated. member of all committees of the
Board, subject to the limitations
set out in the Company's by-laws.
- The Audit Committee is composed
entirely of outside directors, all
of whom are unrelated. Under the
terms of the Audit Committee
charter, the committee is
responsible for, among other
things, reviewing the Company's
financial reporting procedures,
internal controls, recommending
the appointment of the external
auditors, as well as reviewing the
performance of the Company's
external auditors. The Audit
Committee also establishes the
external auditors' compensation.
Since fiscal 2002, the Audit
Committee has had in place a
policy limiting the scope of the
external auditors' services to
audit and audit related
activities, including tax
services. Prior approval of any
audit related expenses in excess
of $50,000 is required. The Audit
Committee is also responsible for
reviewing the quarterly and the
annual financial statements and
related news releases, as well as
Management's Discussion and
Analysis of Financial Results
prior to their approval by the
Board. The Audit Committee also
receives and reviews quarterly,
managements' report on compliance
with the Company's policy on full
and non-selective disclosure of
material information. The Company
has an Internal Audit group which
reports to the Audit Committee.
- The Compensation Committee is
composed entirely of outside
directors, all of whom are
unrelated directors. The
Compensation Committee makes
recommendations to the Board on,
among other things, executive
compensation, approves the
compensation of the CEO, and
reviews other aspects of executive
compensation, such as the
Company's share compensation
plans. The Compensation Committee
also ensures that the Company
complies with corporate and
securities legislation with
respect to executive compensation
disclosure in the annual
information circular.
- The Pensions Committee is composed
of four members. Three of the
members are outside directors, all
of whom are unrelated directors.
One member of the Pensions
Committee is related. The Pensions
Committee is responsible for
overseeing matters relating to the
investment policies and
performance of the Company's
pension funds.
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- The Governance and Nominating
Committee is currently composed of
all members of the Board, a
majority of whom are unrelated.
(See items 4, 5 and 10 for the
responsibilities of this
Committee.)
10. The Board should expressly assume The Governance and Nominating
responsibility for, or assign to a committee Committee is responsible for
the general responsibility for, developing the developing and recommending to the
Company's approach to governance issues. Board a set of corporate governance
principles applicable to the
Company. This Committee also
monitors compliance with any rules,
regulations, procedures or
guidelines promulgated by regulatory
authorities having jurisdiction over
the Company (including applicable
stock exchanges) relating to
corporate governance. The Board is
responsible for reviewing and
approving the set of corporate
governance principles recommended by
the Governance and Nominating
Committee. The Corporate Secretary,
who is also a director, is
responsible for ensuring all
corporate governance matters are
reviewed by the Board and the
Governance and Nominating Committee,
as appropriate.
11. The Board, together with the CEO, should A position description has been
develop position descriptions for the Board developed for the CEO. The
and for the CEO, including the definition of Compensation Committee is
the limits to management's responsibilities. responsible for reviewing and
The Board should approve or develop corporate approving the corporate objectives
objectives, which the CEO is responsible for (financial and personal) which the
meeting and assess the CEO against these CEO is responsible for meeting. This
objectives. committee also conducts the annual
assessment of the CEO's performance
against these objectives. The
results of the assessment are
reported to the Board.
In addition to those matters which
must by law be approved by the
Board, the Board reviews and
approves dispositions, acquisitions
or investments which are outside the
ordinary course of business of the
Company. The Board also reviews and
approves operating and capital
budgets. The Board also reviews the
recommendations of the Compensation
Committee as to the adequacy and
form of compensation of the
directors to ensure that
compensation realistically reflects
the responsibilities and risks
involved in being an effective
director. The Board also approves
changes in senior management. The
directors have access to management
and the Company's advisors in order
to assist in their understanding of
proposed Board actions and the
implications of voting for or
against such actions.
12. The Board should have in place appropriate In order to ensure that the Board
structures and procedures to ensure the Board can function independently from
can function independently of management. management, the Company has
separated the roles of Chair and CEO
through the appointment of the Hon.
Frank J. McKenna, P.C., Q.C. as
Chair of the Board and Mr. Leonard
Asper as CEO.
The majority of the Board members
are independent directors.
At regularly scheduled Board and
committee meetings, the independent
directors meet separately from
management.
13. The Audit Committee should be composed only of The Audit Committee is composed only
unrelated directors. The roles and of unrelated and independent
responsibilities of the Audit Committee should directors. The roles and
be specifically defined so as to provide responsibilities of the Audit
appropriate guidance to Audit Committee Committee are set out in its charter
members as to their duties. The Audit (see item 9, Audit Committee, for
Committee should have direct communication further particulars.)
channels with the internal and external
auditors to discuss and review specific issues All of the members of the Audit
as appropriate. The Audit Committee duties Committee are financially literate.
should include oversight responsibility for
management reporting on internal controls. The Audit Committee has direct
While it is management's responsibility to communications channels with the
design and implement an effective system of internal and external auditors to
internal controls, it is the Audit Committee's discuss and review specific issues
responsibility to ensure that management has as appropriate.
done so.
The Audit Committee Charter is
reviewed by the Board at least
annually.
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The Audit Committee meets with the
Company's external and internal
auditors absent management at all
regularly scheduled meetings.
The Audit Committee annually carries
out a self-assessment by means of a
questionnaire, the results of which
are reported to the Chair of the
Governance and Nominating Committee.
14. The Board should implement a system to enable Individual directors may, with the
an individual director to engage an outside consent of the Chair of the
advisor at the Company's expense in Governance and Nominating Committee,
appropriate circumstances. The engagement of engage outside advisors at the
the outside advisor should be subject to the expense of the Company. Committees
approval of an appropriate committee of the of the Board are authorized by the
Board. Board from time to time, and as
appropriate, to retain outside
advisors at the Company's expense.
In addition, the Compensation
Committee is permitted, without any
separate approval being required, to
retain consulting firms at the
expense of the Company, to assist
the committee in the evaluation of
the CEO and other executive officers
and in setting executive
compensation.
SHAREHOLDER FEEDBACK
The Company has a Director of Communications who, working with the Secretary and
other senior executives of the Company, responds promptly to all shareholder
inquiries. To date, the Company believes that all shareholder inquiries have
been dealt with in a manner satisfactory to the particular shareholder.
AVAILABILITY OF DISCLOSURE DOCUMENTS
Copies of the Company's latest annual information form (together with the
documents incorporated therein by reference), the comparative financial
statements of the Company for the fiscal year ended August 31, 2004, together
with the report of the auditors thereon, management's discussion and analysis of
the Company's financial condition and results of operations for the fiscal year
ended August 31, 2004, the interim financial statements of the Company for
periods subsequent to August 31, 2004 and this Circular are available upon
request from the Secretary of the Company, and without charge to security
holders of the Company. Additional information related to the Company is on
SEDAR at www.sedar.com.
DIRECTORS' APPROVAL
The contents of this Circular and the sending thereof to shareholders of the
Company have been approved by the directors of the Company.
By Order of the Board of Directors
/s/ Gail S. Asper
Gail S. Asper
Secretary
Winnipeg, Canada
November 24, 2004
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